Court Denies Motion for Summary Judgment in Lieu of Complaint Because Note and Related Asset Purchase Agreement Were “Inextricably intertwined”
Print Article- Posted on: Jan 9 2026
In today’s BLOG article, we again discuss summary judgment in lieu of complaint pursuant to CPLR 3213,[1] which provides, in relevant part:
When an action is based upon an instrument for the payment of money only or upon any judgment, the plaintiff may serve with the summons a notice of motion for summary judgment and the supporting papers in lieu of a complaint. The summons served with such motion papers shall require the defendant to submit answering papers on the motion within the time provided in the notice of motion…. If the motion is denied, the moving and answering papers shall be deemed the complaint and answer, respectively, unless the court orders otherwise….
CPLR 3213 is a procedural device that “is intended to provide a speedy and effective means of securing a judgment on claims presumptively meritorious. In the actions to which it applies, a formal complaint is superfluous, and even the delay incident upon waiting for an answer and then moving for summary judgment is needless.” Interman Industrial Products, LTD v. R.S.M. Electron Power, Inc., 37 N.Y.2d 151, 154 (1975) (citation and internal quotation marks omitted); see also Counsel Financial II LLC v. Bortnick, 214 A.D.3d 1388, 1390 (4th Dep’t 2023).
As provided for in the statute, the procedural device is available when the suit is upon “an instrument for the payment of money only….” Kitchen Winners NY, Inc. v. Triptow, 226 A.D.3d 989, 990-91 (2nd Dep’t 2024) (citations and internal quotation marks omitted). “Under the stringent requirement that the action be based upon an instrument for the payment of money only, a document comes within CPLR 3213 if a prima facie case would be made out by the instrument and a failure to make the payments called for by its terms.” Counsel Financial II LLC v. Bortnick, 214 A.D.3d 1388, 1390 (4th Dep’t 2023) (citations and internal quotation marks omitted). Conversely, an instrument does not qualify if outside proof is needed, other than “simple proof of nonpayment or a mere de minimis deviation from the face of the document.” Kitchen Winners, 226 A.D.3d at 991 (citations, internal quotation marks and brackets omitted). For example, a guaranty generally qualifies for treatment under CPLR 3213 as an instrument for the payment of money only. See, e.g., Pearl River Campus, LLC v. ReadyScrip, LLC, 240 A.D.3d 610, 611 (2nd Dep’t 2025); Museum Building Holdings, LLC v. Schreiber, 236 A.D.3d 526, 527 (1st Dep’t 2025). In Pearl River, which involved a guaranty of a lease agreement, the Court found that CPRL 3213 relief was unavailable because “a determination of the defendant’s obligations to the plaintiff under the guaranty requires review of outside proof that goes well beyond a mere de minimis deviation from the face of the guaranty.” Pearl River. 240 A.D.3d at 611-12 (citation and internal quotation marks omitted). The Pearl River Court noted that “to determine the existence and amount of the underlying debt asserted by the plaintiff, the Supreme Court would have been required to examine material outside the lease agreement and make calculations that were not shown by the plaintiff in the affidavit of its operations manager or supporting documents.” Id. at 612.
Against this backdrop, we discuss NGS Med. Mgt. LLC v. Kornitzer, a case decided on December 3, 2025, by the Supreme Court of the State of New York, Kings County.[2] The defendants in NGS are members of an entity that owns medical imaging practices (the “Imaging Business”). The defendants’ Imaging Business purchased an existing imaging practice owned by the plaintiff (the “Subject Business”). The Subject Business consisted of two interrelated parts: (1) an imaging office; and (2) a management services company. The sale was reflected in an asset purchase agreement. The sale transaction also involved entering into a lease agreement for the space from which the Subject Business operated. The landlord was an entity owned by one of the principals of the plaintiff. Part of the purchase price for the Subject Business was paid by a promissory note by which the defendants promised to pay the plaintiff $500,000.00. Upon the defendants’ alleged default, the plaintiff commenced an action to enforce the note by moving for summary judgment in lieu of complaint.
In opposition to the motion, the defendants argued, inter alia, that the note and asset purchase agreement were “inextricably intertwined” and that the note was delivered as part of the consideration for the purchase of the Subject Business, which, due to alleged fraud, left the Subject Business without value.
The court denied the plaintiff’s motion and converted the matter to a plenary action. While the court found that the plaintiff met its prima facie burden “by demonstrating the existence of the note, executed and delivered by the defendants, containing an unequivocal and unconditional obligation to repay, and the failure by defendants to pay in accordance with the terms of the note (citations omitted), the defendants “raised issues of fact as to whether they had valid defenses to the note, including failure of consideration” (citations omitted).
The court stated that while “generally the breach of a related contract cannot defeat a motion for summary judgment on an instrument for money only, that rule does not apply where the contract and instrument are intertwined.” (Citation and internal quotation marks omitted.) As explained by the court, “where the note and the contract are inextricably intertwined as part of the same transaction, a breach of the related contract may create a defense to payment on the note.” (Citation and internal quotation marks omitted.) Thus, the court found that:
Here, the note was executed and delivered contemporaneously with the [asset purchase agreement] and represented partial consideration for the integrated business purchased by defendants. The [asset purchase agreement] specifically referred to the note, and a copy of the note was attached thereto. Further and significantly, the note did not include any waiver of the right to an offset for counterclaims. Thus, defendants’ defense on the [asset purchase agreement] was sufficiently intertwined with plaintiff’s action to recover on the note. [Citations and internal quotation marks omitted.]
In addition, the court found that the defendants stated a valid defense of fraud in the inducement, which, if proved, could result in an inability to enforce the note.
Jonathan H. Freiberger is a partner and co-founder of Freiberger Haber LLP.
This article is for informational purposes and is not intended to be and should not be taken as legal advice.
[1] This BLOG has written numerous of articles addressing summary judgment in lieu of complaint pursuant to CPLR 3213. To find such articles, please see the BLOG tile on our website and type “CPLR 3213” into the “search” box.
[2] Some of the background facts discussed herein was obtained from the underlying court records available on the NYSCEF system.
Tagged with: Business Litigation, Commercial Litigation, CPLR 3213, promissory notes, summary judgment in lieu of complaint
