Issues of Fact Preclude Summary Judgment In lieu of Complaint

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Posted on: Jun 11 2025

This Blog has written about the process known as “summary judgment in lieu of a complaint” on several occasions.[1] The process, codified in CPLR 3213, is a procedure that is unique to New York practice.

CPLR 3213 allows a plaintiff to move for summary judgment before the complaint is filed, directly challenging the defendant’s ability to contest the underlying claim. It bypasses traditional pleading and discovery and is available when the action is based on an instrument for the payment of money only.[2] The purpose of CPLR 3213 “is to provide an accelerated procedure where liability for a certain sum is clearly established by the instrument itself.”[3]

Under CPLR 3213, a promissory note may qualify as an instrument for the payment of money only, so long as the plaintiff submits proof of the existence of the note and of the defendant’s failure to make payment.[4] However, “[w]here the instrument requires something in addition to defendant’s explicit promise to pay a sum of money, CPLR 3213 is unavailable.”[5] A plaintiff’s prima facie proof “cannot be drawn from sources outside the agreement itself.”[6] In other words, summary judgment in lieu of complaint is not available to a plaintiff where “the right to payment [can] not be ascertained solely from the face of the debt instrument[]” and the instrument “refer[s] to other documents with regard to events of default.”[7] As discussed below, that was the case in YA II PN, Ltd. v. Triller Group Inc., 2025 N.Y. Slip Op. 31974(U) (Sup. Ct., N.Y. County May 19, 2025) (here).

In 2024, plaintiff advanced millions of dollars in financing to fund defendant’s operations while it sought to consummate a merger pursuant to an agreement and plan of merger (the “Merger”). The financing was memorialized by a promissory note, executed by defendant, which was subsequently amended and restated (the “Note”). Relevant to the motion court’s decision, the Note permitted plaintiff to accelerate the debt “if any Event of Default ha[d] occurred.”

Accompanying the Note were guarantees. Under the guarantees, the guarantors not only guaranteed defendant’s payment obligations under the Note but also guaranteed defendant’s performance obligations under the transaction documents.

Under Section 2(a)(i) of the Note, an event of default would occur if defendant failed to pay plaintiff any amounts due under the Note or “any other Transaction Document.” Under Section 2(a)(xv), an event of default would occur if, essentially, defendant failed to consummate the planned merger by a particular date. Under Section 2(a)(xvi), a default would occur if any defendant failed “to observe or perform any material covenant or agreement contained in … any other Transaction Document.” The “Transaction Documents” referenced in the Note included the Note itself and a registration rights agreement (“Registration Rights Agreement”), among others.

The Registration Rights Agreement imposed a filing deadline as “the [earlier] of (i) the 15th calendar day following the date upon which the Company … cleared substantially all of the comments from the SEC on the preliminary proxy statement on Form 14A relating to the approval of the Merger and (ii) the 30th calendar day following the consummation of the Merger.” Plaintiff maintained that the Merger was consummated in October 2024, months after the date set forth in the Note.

On November 14, 2024, plaintiff issued a notice of default and acceleration to defendants, demanding immediate repayment in cash of the full, unpaid principal amount of the Note. The notice of default was premised on six separate events of default arising under the three aforementioned provisions. According to plaintiff, defendants allegedly failed to: (1) timely file the registration statement within 15 days of clearing the SEC’s comments to the preliminary proxy statement, as required by the Registration Rights Agreement; (2) make payment triggered by the aforementioned breach of the Registration Rights Agreement; (3) timely issue commitment shares to plaintiff after closing the merger; (4) provide plaintiff with notice after defendant undertook a stock split; (5) obtain plaintiff’s written consent prior to undertaking two stock splits; and (6) consummate the merger by August 12, 2024. There was no dispute that the Note would not have matured if not accelerated by the events of default.

Plaintiff moved pursuant to CPLR 3213 for summary judgment in lieu of complaint to recover $35,347,996.44 under the Note and two guaranty agreements. Defendants—the borrower, Triller Group Inc. (formerly AGBA Group Holding Limited), and three guarantors, Triller Corp., Triller Hold Co LLC, and Convoy Global Holdings Limited—opposed the motion. As discussed below, the motion court denied the motion and converted the matter to a plenary action.

The motion court held that summary judgment under CPLR 3213 was not appropriate because the “right to payment require[d] an analysis of the parties’ obligations under multiple documents to determine performance and defaults.”[8] The motion court said that “[t]his [was] particularly true” because “some default events [were] non-monetary, or not simply based on failure to pay.”[9] The motion court noted that “[t]he acceleration … [was] predicated on several events of default which [were] tied to separate agreements.”[10] In particular, the motion court explained that “plaintiff’s recovery based on the first and second events of default would require it to demonstrate that the filing of the Registration Statement in November 2024 was not timely. Such a showing would require a determination of when the defendants cleared ‘substantially all’ of the SEC’s comments to the preliminary proxy statement.”[11]

To the extent plaintiff’s motion was based on “the delayed merger closing” (i.e., the sixth event of default), the motion court held that relief under CPLR 3213 was unavailable as the non-monetary default was disputed.[12]

With regard to the third, fourth, and fifth events of default, which related to the issuance of shares and defendants’ compliance with notice and consent requirements associated with the undertaking of stock split transactions, “also nonmonetary defaults,” the motion court held that relief was similarly unavailable.[13] This was especially so, noted the motion court, since plaintiff failed to submit any evidence of default.[14]

The motion court rejected plaintiff’s contention that the outside evidence necessary to prove the default was a “de minimus deviation from the face of the document or a simple, readily verified fact, confirmed by documentary evidence in the record” such as a party’s resignation date.[15] In doing so, the motion court relied on a recent decision by the Appellate Division, First Department, in which the Court held that a deviation is not de minimus where the subject “guaranty permit[ted] the guarantor to raise payment and performance as a defense and there is a colorable dispute as to whether the amount due has been satisfied.”[16] The motion court found that the “facts here are even more compelling against the availability of CPLR 3213.”[17]

Finally, in denying the motion, the motion court deemed the plaintiff’s motion papers to be its complaint and the answering papers as defendants’ answer.

Takeaway

A plaintiff may seek relief under CPLR 3213 when the action is based upon an instrument for the payment of money only. YA II PN reinforces the rule that CPLR 3213 is not available when the instrument references other documents for determining default and/or the default is non-monetary or disputed.

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Jeffrey M. Haber 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] To find articles related to the CPLR 3213 or summary judgment in lieu of complaint, visit the “Blog” tile on our website and enter the search terms “CPLR 3213” and “summary judgment in lieu of complaint” or any other related search term in the “search” box.

[2] See HSBC Bank USA v. Community Parking Inc., 108 A.D.3d 487 (1st Dept. 2013); Allied Irish Banks, P.L.C. v. Young Men’s Christian Assn. of Greenwich, 105 A.D.3d 516 (1st Dept. 2013); German Am. Capital Corp. v. Oxley Dev. Co., LLC, 102 A.D.3d 408 (1st Dept. 2013).

[3] G.O.V. Jewelry, Inc. v United Parcel Serv., 181 A.D.2d 517, 517 (1st Dept. 1992).

[4] See Bonds Fin., Inc. v Kestrel Techs., LLC, 48 A.D.3d 230 (1st Dept. 2008).

[5] Weissman v. Sinorm Deli, 88 N.Y.2d 437, 444 (1996).

[6] Rhee v. Meyers, 162 A.D.2d 397, 398 (1st Dept. 1990); Ian Woodner Family Collection, Inc. v Abaris Brooks, Ltd., 284 A.D.2d 163 (1st Dept. 2001).

[7] Matter of Estate of Peck, 191 A.D.3d 537, 537 (1st Dept. 2021).

[8] Slip Op. at *3.

[9] Id. (citation omitted).

[10] Id.

[11] Id. at *3-*4.

[12] Id. at *4 (citing Bonds Fin., Inc. v. Kestrel Techs., LLC, 48 A.D.3d 230 (1st Dept. 2008) (closing of a transaction constitutes a non-monetary default)).

[13] Id.

[14] Id.

[15] Id. (internal quotation marks and citations omitted).

[16] Id. (quoting Kaplan, Inc. v. WebMD Health Corp., 236 A.D.3d at 435 (1st Dept. 2025)). It should be noted that an agreement that guarantees both payment and performance does not qualify for CPLR 3213 treatment. Punch Fashion, LLC v. Merch. Factors Corp., 180 A.D.3d 520 (1st Dept. 2020) (citation omitted).

[17] Id.