Stephens v Abrahami
Annotate this Case
Download PDF
Stephens v Abrahami 2016 NY Slip Op 30723(U) February 29, 2016 Supreme Court, New York County Docket Number: 158918/12 Judge: Joan A. Madden Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. [* 1] SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: lAS PART 11 -------------------------------------x ALICE STEPHENS, Index No. 158918/12 Plaintiff, I -againstKENNETH ABRAHAMI, Defendant. -------------------------------------x JOAN A. MADDEN, J.: Plaintiff Alice Stephens ("StephensH) moves for partial summary judgment on'her claim against defendant Kenneth Abrahami ("Abrahami H ), in the amount due and owing under five promissory notes, and for reasonable attorneys' fees. Abrahami opposes the motion. Background This action arises out of four separate loans made by Stephens to Abrahami in.2005, totaling $319,000. The money was used by Abrahami to finance his investment in a Teal estat~ construction company called Keneli LLC ("KeneliH). At the time of the loan, Stephens and Abrahami.were involved in a romantic relationship, that began in.2000, and ended in 2011. The loans are memorialized by five promissory. notes ("the Notes H ), wh~ch were prepared by Abrahami. The first loan, made on October 12, 2004, is in the amount of $45,000, as evidenced by two notes for the same loan both which specify an annual interest rate of 15%. One of the two notes, which is signed by Abrahami as the debtor and guarantor, does not specify a payment date. The other note is signed by Abrahami as a.representative 2 of 18 of j [* 2] ------------------------------------------- "Kenelie (sic) Properties" and as a guarantor of Keneli's obligations, and provides that the principal amount is payable in full on October 12, 2005, and includes a 6% late charge in the event any of the loan is not paid in full by that date. The second loan, for $175,000, was made on January 6, 2005, and specified an interest rate of 9%, and is payable on demand.' The third loan is in the amount of $25,000 and was made on June 12, 2005, and is memorialized in a note with an interest rate of 9%, and has no payment date. The'note identified "Keneli Prop," as "Borrower," but ihere was no signature on the note by any, representative of that company. guarantor. Abrahami signed the note as a The last loan was made on February 2, 2006, in the, amount of $74,000, and is evidenced by a note which specified interest at 12.5%, and has no payment date; Abrahami signed his name on the note as borrower. With the exception of one of the notes memorializing the first loan, which provides for a 6% late charge, the Notes each provide that in the event the note is in default and placed ,in collection, that the borrower will pay reasonable attorneys' fees and the costs of collection. 'The note includes an RAttachment" which provides that it was payable upon demand, acknowledges that Abrahami had borrowed the moneys that were being loaned, and sets forth Abrahami's agreement that the interest rate could Rfloat" to make sure that it would always be at least 3% above whatever rate Stephens was paying on money she had borrowed. 2 3 of 18 [* 3] Abrahami Notes until paid requesting 2009. July (hereinafter "the that twice that he would By letter basis the rates [and which payments $6,019.92, during Abrahami the record did contains not issue and schedule,H and principal to stating Attached for the full payment two written agreement. There responses would is no evidence indicating of the debt in the amount,nf notes. from require and requesting that In addition, Stephens that the stating, interest be included that Abrahami responded be in the to request. However, from July monthly payments 2009 until April from Abrahami, on the amortization . Specifically, in July payment stopped schedule in approximate attached in September of. $6,113.06 until paying 2012, Stephens 2009, Stephens and August of $6,053.53, and beginning Abrahami [come] to Stephens. new promissory prime, a monthly "be computed a five year period .. above indicated the Notes to Stephens Securities,H notes of interest two points accepted under is an "amortization inter alia, that any agreement Stephens' wrote would] ... always new promissory a debt of $319,000' and providing by 60 monthly Abrahami of the 20, 2009, 5 year U.S. Treasury issue the terms July dated 2009 letterH), July 2009 letter to the July in accordance.with the interest on a semi-annual approx. interest Stephens. 3 4 of 18 to the accepted 2009, Stephens April 2012, after amount letter . payments accepted which [* 4] .' FOllowing including Abrahami's in an email Abrahami failed commenced this Abrahami's action default as well accounting amortization with and financial prepared planning demands, which and seeks After Stephens alleges to recover a total as of December attorneys' as exhibit payment 8, 2012. 17, 2012, reasonable Attached July and interest as a penalty, demanded her payment the Notes, in principal schedule dated on December under ,fees. Stephens to Abrahami to comply of $205,976.13, 2012, default, fees 31, and B to the complaint by Gilman firm retained & Ciocia by Stephens is an ("G&C"), a tax in.connection , with this action, interest which due and owing $204,178.35, under a 6% penalty loan in the amount monthly shows interest that the total the notes these balance for a total on the four loans does not challenge as of December on the unpaid of $1,797.78, principal totaling and 31, 2012 .is of .the $45,000 of $205,976.13, with $1,729.14.'Abrahami calculations based on the terms of the an answer asserting defenses (1) Notes. Abrahami modification, estoppel, interposed (2) cancellation (4) statute He also asserted conditional including in 2001, gifts of limitations, counterclaims allegedly an engagement and renunciation, (1) seeking made (3) promissory and of moneys 4 5 of 18 (6) offset. the return in contemplation ring purchased and contributions (5) .usury, of of of marriage, for Stephens for improvements by Abrahami and [* 5] .•• _- to furnishings City; to Stephens' (2) tor unjust the engagement Stephens' with based used and failure to return relationship of contract of implied Stephens for after trust ring filed of in connection ring the engagement ended. retention for improvements (3) for breach (4) for breach and New York on Stephens' withhol'Cling the engagement did not marry; parties' and moneys two homes; Stephens' in the Berkshires enrichment ring Stephens' homes the parties based after a reply on the to the counterclaims. After the majority complete, Stephens made complaint in the amount this motion owing from May second 2012 depositi6n attorneys' in which as to the amounts Stephens of the Notes, he testifies as evidenced payment, interest the $45,000 of her motion, copies demanding payments, of reasonable affidavit, stephens consists due and owing memorializing an award In support which a July and an amortization due and owing In her affidavit, Stephens under states 5 6 of 18 on her of in May under 2012, due and. the Plaintiff loan. fe~s. her own from Abrahami's that he obtained in the Notes, was allegedly submits an excerpt action judgment to May 2015,. and a 6% penalty of two notes also seeks allegedly making in this for summary of $256,121.19, $19.0,345.23 in principal when Abrahami. ceased of the discovery the money 8, 2012 schedule from email prepared by G&C the loans. that she made the four [* 6] loans to Abrahami the payments that while not agree of interest she accepted payment. With is attached expressed due under respect to her affidavit, a wiliingness receiving more position, Stephens interested print 2009, 2012, letter, states rate in excess submits "floated" out of an email above prime. purportedly Abrahami she to the terms on the moneys of prime, that dated that did not Stephens in discovery also submits that rate of she she her of As evidence letter like. the interest Abrahami of which of this July 29, include submits from her to Abrahami.dated produced inter alia, that she would In opposition, any proposal for that while she was paying. her handwritten she did a copy any changes .that did not assure than 2009; Abrahami to her demands interest she rejected 31, 2009,' which Stephens July made and attached she was paying interest that July adjustments him at a floating not consider until to consider had loaned in which after to the July 2009 that 2009, made and that after April the loans, could the Notes her and did not respond since that Abrahami of the July 2009 letter schedule; paying by the Notes; paYments to the terms amortization stopped as evidenced an a July states, tied his affidavit to prime. in which 'Stephens states that she does not recall writing the email and that the language does not appear to her to be the type of language she would use. However,.she asserts that "[the email] is consistent with many of the things I said to Mr. Abrahami after I received his proposal to change the terms of the Notes" (Stephens Aff. , 27). 6 7 of 18 [* 7] he does not deny that he borrowed $319,000 however, he argues that payments as income on her tax returns, payments to her of $337,041, Abrahami promissory since also estoppel, she agreed relies 2009 letter modified, that based their that which as he waived on stale he argues reliance, notes is void Abrahami her promise " he relied argues and relying (Abrahami, the Notes of this were 23, 2009, Aff. on Stephens' the usury that' Stephens argument, "novated, and including ~ 33). Abrahami promise of limitations on the Notes of 'of the $319,000 and on a note with under paid.' attached. to the July [on] June the statute he made of the .Notes and he relied that the Notes for payment further since under schedule and interest" payments recover terms and cancelled the interest on' the doctrine on the amortization an agreement argues fully In support both principal detriment cannot and his own statement with and that she has been Stephens Stephens; did not report on this promise. renounced replaced argues to change to his detriment Abrahami as Stephens from to his by making a 15% interest laws. In view is.estopped rate, of such from denying. to recover' from him. JAbrahami also argues that there are facially defects to certain of the Notes, including that the Note evidence the loan for $175,000, states that it is for "one hundreth (sic)' of seventy-five dollars." This argument is without merit as Abrahami prepared the Notes and this typographical error is insufficient to raise an issue of fact particularly as the figures are unambiguous and are controlling. See NY UCC ~3-118. 7 8 of 18 [* 8] Alternatively, limitations Abrahami on the 'three demand 12, 2005 and February of the notes February 6, 2012), limitations expired dated expired or more January six years 6, 2011, and therefore 17, 2012, that the statute notes 6, 2006, (i.e. on January on December these argues June 10 months on the last demand note after also that Stephens next owes ring. to marry, invested I of as to in the rate I and violates 11, 2002, other $80,000 for ring acknowledged In addition, demands in, and made Abrahami for various of offset 12, 2005, General according and requests, repairs for these submits which items precludes to Abrahami, and because they than the for the ring dated the ring at $91,000 Abrahami 8 9 of 18 and' In support" of his an appraisal purchased. to in to, Stephens' 'two homes, homes. values to her occasions (other a states he gave on numerous he paid' for items of jewelry furnishing statements, February the statute 'In his affidavit, .Abrahami him at least to Stephens' purchased is usurious that his defense judgment. be an engagement ring), argues he asserts," Stephens planned was commenced Law ~~ '5-501 and 5-511. of summary response and is due and o,:"ingon October which a 6% late charge Abrahami which, the date iSluntimely that the 15% interest argues 12, 2004 note and includes grant June i Abrahami Obligations after which notes. October 6, 2005, 12, 2011, this action, than of states and receipts that the [* 9] i , amounts he spent for Stephens' on the ring and other daughter's law school items, tuition, ~nd total he paid " approximately I $140,000. In reply, the loans argues money I Stephens were made notes that Abrahami for his business that the loans, do~s not deny that ventures,! and therefore I as memorialized by the rotes, are separate I ! and distinct sought transactions that cannot in the counterclaims relationship. Stephens arising also " be offset by the amounts I out of the! parties' argues that the h~r I personal cl~im is timely I since Abrahami's limitations debt payments running in the July on the Notes startedi the statute anew, "and his written 2009 letter revived acknbwledgment any time parred of of his claim in I accordance with General Obligations Law (MGOL-) S 17-101. i As for Abrahami's estoppel precludes argument Stephens Notes, she argues agreed to the new proposed detrimentally statute that With that doctrine does new terms interest interest not apply by her with rate, accrues under the as she never of payment, to the usury of promissory recovery as he acknowledged respect that 15% is a legal indicate from seeking rely on any promise of limitations 2009 letter. that the doctrine nor did Abrahami respect the debt defense, to the in the July Stephens and that the note does notes not on the late charge. Discussion On a motion for summary judgment, 9 10 of 18 the proponent Mmust make a [* 10] prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case ..'" Winegrad v. New York Univ. Med. Center, 64 NY2d 851, 852 (1985). Once the proponent has made this showing, the burden of'.prof shifts to the.party opposing the motion to produce ev'identiary proof in admissible form to I establish that material issues of fact exist which require a trial. Alvarez v. Prospect Hospital, 68 NY2d 320, 324 (1986). ,, In this case, Stephens has made a prima facie showing entitling her to summary judgment based on pro?f of Abrahami's obligations to repay the four loans under the terms of the Notes, and his default on these obligations. See Fleet Bank v. M& Z Headwear, Inc., 308 AD2d 507 (2d Dept 2003) (plaintiff established a prima facie entitlement to judgment as a matter of law by , demonstrating that the defendant corporation d~faulted on the i loan agreement and the individual defendants f~iied to meet their . I obligations as guarantors of the loan); Marianl v. Dyer, 193 AD2d 456 (l'tDept 1993), Iv. denied 82 NY2d 658 (1~93) (citations I omitted) (holding that "[a]n affidavit showi~g ~ue execution and , default in payment on a promissory note ... est~blishes a prima , i facie case, and a plaintiff is entitled to summary judgment I unless the defendant submits evidentiary proo~ sufficient to raise a triable issue of fact with respect to ~sserted ,, defenses"); E.D.S. Security Systems, Inc. v. ~llyn, 262 AD2d 351 ! 10 .I , I 1 11 of 18 [* 11] (znd Dept 1999) ("plaintiffs demonstrating their submitting proof guarantee, sustained their initial entit-lement to judgment of the existence and the failure burden as a matter of an underlyi~g of of law by note, to make payment in accordance -has failed to meet his burden a with -their terms"). Moreover, evidence Abrahami to rebut plaintiff's prima facie to summary judgment, Abrahami's argument the amount he has paid exceeds the principal that the Notes require interest ignores Abrahami's that payments due and owing amortization contrary and his'defenses showing table report -the interest Next, Stephens' of limitations action claim loan, With of-the loan In fact, to the interest Z009 _letter. Stephens' First, in full as amount equal apparent does in the Moreover, failure to not alter of the Notes. is not barred under CPLR 213(2) the exception the Notes loans on her tax returns the terms provided on a note. the $45,000 position, merit. he-acknowledged tho the July payments under which the of entitlement payments. July Z009.were Notes, annexed to Abrahami's his obligations he has paid back before under the are without of offering are demand by the six-year statute for commencement of an of one of the two notes notes' and are thus 'Where Notes do not specify a payment date, they are payable upon demand. See NY UCC 5 3-l08(providing that [i)nstruments payable on demand include those payable at sight or on presentation and those in which no time for payment is stated"); see also, Farhadi. Inc. v. Anavian, 58 11 12 of 18 for [* 12] payable immediately delivery, statute u~on and no demand of limitations. Dept 2006); NYUCC makes "st.rt[sl the statute Marshall, 307 AD2d until July Stephens, .revived partial v. Williams, That being payments 274, 274 on a demand July the $319,000 the limitations running is timely. 2009 letter, the running said, the terms note, each anewN which See Banco and Barbuda,. 268 AD2d 75, 77 (2d a repayment v. as Abrahami. of the Notes Moreover, 762 when Grant He=e, of the 761, however, at least as argued by unambiguously debt. and his obligation period. and 34 AD3d (2d Dept 2003). with the action execution to start of limitations Abrahami's of Antiuga Lynford in accordance 2009, acknowledges is necessary ~ 3-122(3); defendant made payments the date of their to pay do Brasil (1" Dept it, S.A. v. State 2000);. GOL ~ 17-101.' As for Abrahami's to prevent Notes, such argument defense shown AD2d Stephens based that 546 that promissory from enforcing is unavailing. on the doctrine there 546, argument is a "clear (1" Dept estoppel the repayment terms.of To demonstrate of promissory and unambiguous applies a claim estoppel promise the or it must that 1977). 'GOL ~ 17-101 provides that "[a]n acknowledgment or promise contained in writing signed by the party to be charged thereby is the only competent evidence of a new or continuing contract whereby to take an action out of the operation of the provisions of limitations of time for commencing actions under the [CPLR].N 12 13 of 18 be [* 13] ..give[s] Estate rise to detrimental Securities, Abrahami does to alter Inc., the terms paid induce 703 382, 384 of the Notes, a clear amount reliance 70 AD3d (I"' Dept of the v. Alexader (l't Dept 2009), Here; by Stephens of moneys by Abrahami promise v. UBS Real 2008). of a promise proposed Thome 88, 104 Bank and her acceptance and unambiguous detrimental Foundation, 49 AD3d Emigrant not .point to any evidence in the approximate constitute reliance" does not kind that would & Louisa Calder Iv denied, 15 NY3d (2010)." The court based also on allegations purchase purchases that the'qefense in the counterclaims of the engagement at the alleged relationship, Stephens' finds does favor. counterclaim request In this connection, "apart and are not inextricably of Stephens a denial from payments during of summary it has been [a] defendant's intertwined which is as to Abrahami's ring and his various not warrant arises of offset, with, and their judgment when loan in a obligati'on or inseparable from "The two cases cited by Abrahami in support of his argument that promissory estoppel applies here are not to the contrary. Notably, both cases recite the standard for promissory estoppel, including the requirements of a clear and unambiguous promise and detrimental reliance. In Matlin Patterson ATA HOldings LLC v. Federal Express Corp., 87 AD3d .836 (I" Dept 2011), Iv denied 21 NY3d 853 (2013) the doctrine was held to be. inapplicable for reasons not relevant here, whereas in Clifford R. Gray. Inc. v LeChase Construction Services, LLC, 31 AD3d 983 (3d Dept 2006), issues of fact were found as to the promissory estoppel claim based on evidence of a clear promise and detrimental reliance. . 13 14 of 18 [* 14] it," it.is propei amounts to sever due on the loan. it and allow See Banco do Estado Mendes Junior International Company, 1998). Here, as Abrahami's obligations independent from those to the parties' do not provide personal a basis the execution argument with usury does of usury imposed only Accordingly, in the amount respect apply 97 AD3d under note's Stephens the Notes under the Notes from 641, or staying merit as the note at is one percentage See GOL ~ 5-501; 296 AD2d 301, 301 (1" apparent it has on default. obligations. 641 where in excess (2d Dept 2012) (holding promissory of. the note at statutory default). is entitled which ($190,345.23) to summary' judgment consists of principal and interest the May 2012 default , I I, of offset the loan usurious, based did not apply of $269,885.67, owing I relate of the to Abrahami's makes a rate of interest after by law. v. Fal1eder, the late ch~rge v. Mendelsohn, that defense maximum is without rate of 15%, which Borowski Moreover; been held that issue of usury the 16% rate allowable that See Kraus are which motion the resolution S.A. v. (l,t Dept the Notes his assertions Stephens' pending interest Law ~ 14-a; Dept 2002). 138 on Id. issue has a legal Banking under 137; Paulo in the counterclaims for denying the defense point. below to be entered de Sao 249 AD2d relationship, of judgment counterclaims. Next, at issue judgment 14 I ,, . I 15 of 18 until due on the due and and owing the date of this [* 15] decision ($79,5AO,44).' However, although Stephens is entitled to attorneys' fees under the terms of the Notes, a hearing is required to determine the reasonable amount of such fees.' First National Bank of Islip v. Brower, 42 NY2d 471 (1977). Conclusion Accordingly, it is ORDERED that Stephens is entitled to summary judgment on the 'complaint against Abrahami in the amount of $269,885.67, and the Clerk shall enter judgment accordingly, and the complaint is severed; and it is further ORDERED that portion of Stephens' action seeking recover of attorneys' fees due and owing in connection with collection under the Notes and the issue of the amount of reasonable attorneys fees is referred to the Special Referee' Clerk in the General Clerk's Office (Room 119M, 646-386-3028 or spref@court.state.ny.us) for placement at the earliest possible date on calendar of the Special Referee Part (which are posted on the website of this court at www.nycourts.gov/supctmanh at the 'The interest is based on a calculation of $1,729.14 interest per note per month for 38 months (May 2012 to February 2016), and as specified in the calculations provided by Stephens' accountants G&A, which calculations have not been challenged by Abrahami. 'The court declines to assess a 6% penalty based on one of the notes for the $45,000 loan, since the other note for the same loan does not allow for such a penalty but permits reasonable attorneys' .fees, for which Abrahami is being held liable. 15 16 of 18 [* 16] References link this matter above; Courthouse to a Special procedures), Referee to hear who shall and report assign as specified and it is further; ORDERED limited that further ORDERED the Special specific that when Stephens and time to each of written ORDERED- that specific breakdown performed, appear findings performed; and category not be it is further before of her a summary-and provided; and the and counsel files so that inspection shall they are and-_ and it is further report attributed with of services, identifying and the hours copies services for the Referee's the_Referee's and shall at the hearing together of the Court work of the nature in the CPLR; of legal category at the hearing Referee shall provide records, for the requisition evaluation include the parties of the categories available of the Special as set forth Referee, attributed arrange the powers than billing breakdown hours under and recommendations counsel's hourly of the legal to each shal~ rate and a services category; and it is further ORDERED this decision fax that and order (212-401-9186) accessed counsel submit or email at the References all the information practical for Stephens thereafter, called shall, to the Special an Information the Special Referee Sheet link of the Court for therein within Referee Clerk Clerk of by (which can be website) and that, 15 days containing as soon shall as advise_ 16 ! . 17 of 18 [* 17] "') 0- counsel of the date fi~ed for the appearance on the matter upon the calenda~ of the Speci~l Referee Part; and it is further ORDERED that the parties shall appear at the hearing, including with all witnesses and evidence they seek to present, and shall be ready to proceed on the date fixed by the Special Referee Clerk subject only to any adjournment that may be authorized by the Special_Referee-Part in accordance with the rules of that Part; and it is further ORDERED that the hearing shall be conducted in the same manner as a trial before a Justice without a jury (CPLR 4320 (a))(the proceeding wil-lbe recorded by a court reporter, the rules of evidence apply, etc) and, except as otherwise directed by the assigned Special Referee for good cause shown, the trial of the issues specified above shall proceed -from day to day until completed; and it is further ORDERED that the motion to confirm or reject the Report of the Special Referee shall be made within the time specified in CPLR 4403 and Section 202.44 of the Uniform Rules for -the Trial Courts; and it is further ORDERED that the action shall continue as to the k-.-/ counterclaims. DATED; Februaryc)r, 2016 HON. YAW-A. MADDEN ~:::'._~~._., J.S.C. 17 18 of 18 _ .••• - ::>0 ...• ••
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
