770 Fifth Ave. Co. v 770 Frame LLC

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770 Fifth Ave. Co. v 770 Frame LLC 2023 NY Slip Op 30492(U) February 15, 2023 Supreme Court, Kings County Docket Number: Index No. 508376/2022 Judge: Leon Ruchelsman Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. INDEX NO. 508376/2022 FILED: KINGS COUNTY CLERK 02/16/2023 01:56 PM NYSCEF DOC. NO. 38 RECEIVED NYSCEF: 02/16/2023 OF NEW YORK COMMERCIAL PART 8 TERM: CIVIL : KINGS OF COUNTY _. ____ ·---------. ··--·---.-. - . -----------· ---· ·-- ---x 7·-70 FIFTH AVENUE COMPANY, .SUPREME CC)UR!J' OF THE STATE Plaintiff, Decision .and orde=r r:ndex No. 5'0S376/2022 - against ·-· 7 7 0 FRAME LLC and SCHNEUR MIN:SKY, De:l;:enqant.~ ,.. ----------- ------------ - ---- ----------x PRESE~1: HO~~ LEO~ RUC~ELSMAN F~Qr1J.ary .1.5, 2.0.23 Motion S~quenc& #3 The defendants nave moved pursuant:. to CPLR §2221 seeking to r:eargue a _decisi-911 and order dated August 25-, 2022 which· -denied a .motion to .dismiss the motion. complaint. Theo p.i.aintif_f has oppo.se:d the. Papers were submitted by the parties. a,nd after reviewing -all the ar_g.uhlents this, court now ,rna'kes the following detetm:inatio n. As recqrded in the -prior order the- defendant ·e-xecuted a prom:i,.s-sory ·ti.ate in favo_r of the plainti£f. iri the amount o·f $330.,QQO. The note required monthly payments of $~, 000 for five years -and a- final. 'payment of ·$150, 000 dµe Jnly 2018. the defendant Schnelir Min.sky exec.ut~d a Further, personal g_u.ar:anty which guaranteed t"he payments pursuant to the note. The· complaint a·11ege_s the defe-ndant:S failed to ·ma-ke th~- final payment -and that as 0£ the filing of the comRlaint the deferidants o~e $211,402~.99 compris.in.g principa-1 ·-and interest. ·The defendants mov·ed see.king to· dismi-ss the lawsuit on the ground:.s the g-µaran~y p.:r::e-dated the promissory note and thus could not have been intended to g1-1aranty a loan that had not yet ta.ken place. [* 1] The court -r-E:!jec:ted that 1 of 6 --------- --------- --------- --··········· -···------ --------- INDEX NO. 508376/2022 FILED: KINGS COUNTY CLERK 02/16/2023 01:56 PM NYSCEF DOC. NO. 38 RECEIVED NYSCEF: 02/16/2023 "'~xgumen_t noti11g that the inc9rrect. -date c_:;onta.ined on the g,uarahty was a mere_ tlerical error arid there waa hb other riote to whith More.over, the court r.ejected the guaranty could have referred. the q.rgqment the_ nature _of the no.ta.ry a.cknowleogme:n .t: page required dismissal of the lawsuit. Upon reargumerit the defendants argue the court mi-sapprehend ed the :arguments presented about-. the notary. a,cknowledgrne ·nt page and refo.-rmation of th.e . cont:r,3.ct and the cqurt should cbrrect facts asserted that are indeed disputed by the· p.arties. Conclusions of Law· A. motion t:q rearg:u·e must ·be based ·upon the fa-ct the :.court overlo'oked o.r misapprehend ed fact or law or for some other reason mista·kE:mly a_rrived at iri its earlier decision -{Deutsche Bank National Trust C-o.; v. Russo, 170 AD3d 9:52, 96:- NYS2.c;l 61 7 [.2d Dept., 2019] ) , C-0.ncerning the no.tary ·_ac:knowledgm~ nt page; the prio"r deci:siort cu:riowsly noted that .suc:t"). pag~ _.,i..s li$.ted a,s the third page of a five pa.ge document, the first f-our pages comprising the guara:nty itself. HcYw:ev~r, tr.le co.ur-t cqnclucl:ed that ~i thout any evidence of p.ny impropriety on the part of the notary that mere cu.riosi ty wa:s trnt a· ·basis- to d·is·iniss the ],_awstdt-.. The defendants argue that the natu're of the acknowl~dgme nt pag_e as page 3 of a five page doc_ument means the acknowledgme nt page was not part of 2 [* 2] 2 of 6 INDEX NO. 508376/2022 FILED: KINGS COUNTY CLERK 02/16/2023 01:56 PM NYSCEF DOC. NO. 38 RECEIVED NYSCEF: 02/16/2023 the guaranty at all. The defendants assert that ''on its face, the acknowledgement page is NOT part of the alleged personal guaranty. Tb the contrary, the acknowledgement page seems as though it came from an entirely different document - a document with only two pag-es preceding the acknowledgement page" (see, Affirmation in Support, <n:26 [NYSCEF Doc. No. 31]). Of course, there is no conclusive pr'oof as to the nature of this acknowledgment page and whether it was acknowledging the guaranty or some other two page document. Surely there are questions in this regard and these questions require further discovery. The lawsuit cannot be dismissed merely because an acknowledgment page may have been misriumbered. Next, concerning the argument any reformation of the contract cannot take place since the statute of limitations for such reformation has passed, the prior motion did not utilize reformation at all. Indeed, there are questions of fact whether reformation is even necessary. Supp 7 51 In U.S. v. Schoenha.rd, 819 F. [Northern Divisiqn of Illinois 1993:] the court held that where a guaranty pre-dated the date of the note, in clear error, then "such a minor oversight, under these circumstances, should not provide the basis for defendant to esca.pe his obligations under the guaranty" (id). contemplated. No mention of reformation was The defendants. argue that U.S. v. Lowy, 703 F.Supp 1040 [EElstern Dis.trict of New York 1989] upon which the court [* 3] 3 of 6 INDEX NO. 508376/2022 FILED: KINGS COUNTY CLERK 02/16/2023 01:56 PM NYSCEF DOC. NO. 38 RECEIVED NYSCEF: 02/16/2023 based it:s prior determination is not "established precedent" (see, Affirmation in Support, '][35. [NYSCEF Doc. No. 31]) precisely because that case failed to contemplate any reformation of the guaranty. However, there. are numerous case.s that hold a gµaranty which predates or is contemporaneous with a note sufficiently . . . guarantees such note notwithstanding the date of the guaranty and without resorting to reformation of the contract (see, Branch ·sanking and Trust Cofupany v. kiiig, Cotton & Sanders P. C., 20111 WL 13228765 [Northern District of Alabama 2011]), Bank of Idaho v. Colley, 647 P2d 776 Tallahassee Bank & [Court of Appeals of Idaho 1982], Fewox v. Trust Company, 249 So2d 55 [District Court of Appeal of Florida First District 1971]). the guaranty is not required. Thus, reformation of Whether the guaranty was executed on July 3 as· indicated or July 10 and the g,uaranty merely contains the wrong date there is certainly substantial evidence As the above cases make the guaranty referred to the note. clear, the mere incorrect date contained within a guaranty is not a basis upon wriich to absolve the requirements pursuant to that guaranty. Thus; a court may "as a matter of interpretation, carry out the intention of a contract by transposing, rejecting; or supplying words to make the meaning of the contract clearer arid that any such "interpretation'' is not considered to be a reformation of the contract" (see, NCCMI Inc.; v, Bersin Properties LLC;. 74 Misc3d 1221 (Al , 162 NYS3d 921 [Supreme Court 4 [* 4] 4 of 6 INDEX NO. 508376/2022 FILED: KINGS COUNTY CLERK 02/16/2023 01:56 PM NYSCEF DOC. NO. 38 RECEIVED NYSCEF: 02/16/2023 New York County 2022, :citing· Castellano v. State, 43 NY2:d 909, 4.03 NYS2<:i 724 [1_978]) .. Ther.efore, there are questions concerning the nature of applying the pre,-da:ted guaranty to the promissory n.ote in· thi-s case.. The·se qu.e.stiohs must be e_~.plored thro_ugh any party discovery ~nd at the conc:Lusion of all discovery may make any appropriate supstaritive motion in this rega-rd. -Co_ns e gu.en t 1 y, the mot ion see king re argument is- denied. The def-endant' s motion seeking the court correct certain The cour.t stated in. the prior ·factual assumptions is _grante..d. decision that "it must be noted that there is .. really is no dispute the defendant has Oecis,i_on, page 3 not repaid the money owed" (see, Prior (NYSCE"F Doc_. ·No. 21]). Tri f.act, .the def·endants The court, therefore, retracts dispute that any funds ar·e owed, a.ny stich finding· o·f fact purporting to estahl_ish there i:s no .disput-e. abo_ut the -repa-ym_ent 0£ any funds. Further,. the ·co.urt stated that "it is clear the guaranty specifically refers to the ··.rtote and a mere --·clerical mistake was: the, -caqse- of wrpng date" (id at pa9.e .5). Whiie the amount of insertiil_g the. the 91,1.?:i::~nty matches the amount of the note there is no specific evidence the guaranty refers to- the_ note:, although a.s noted the=re arequestions bf fact .iri this regard. Again, the court retracts that characteriza tion of' facts ·that are in dispute. There can be no law "6f the ca.se· conclusions drawn f:r:.0:r:ri. tho:se e2ca-rlier s_tatements of the court, J:>pth regarding to the repayment of any debt and whether the guaranty coridltisi vely ref·errred. 5 [* 5] 5 of 6 to the note. FILED: KINGS COUNTY CLERK 02/16/2023 01:56 PM NYSCEF DOC. NO. 38 INDEX NO. 508376/2022 RECEIVED NYSCEF: 02/16/2023 Thus, that portion of the defendant;s motion is granted. So ordered. ENTER: DATED: February 15; 2023 Brooklyn N.Y~ Hon. JSC 6 [* 6] .......................·-·····-·... 6 of 6 ----------------------------------

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