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The Appellate Division, First Department, Holds that a Commercial Landlord is Entitled to Summary Judgment in Lieu of Complaint Pursuant to CPLR 3213 With Respect to a Lease Guaranty

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  • Posted on: Jun 19 2019

Rule 3213 of the CPLR – which permits a litigant to move for summary judgment in lieu of filing a complaint to streamline litigation in situations where the statute is applicable – provides:

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. The minimum time such motion shall be noticed to be heard shall be as provided by subdivision (a) of rule 320 for making an appearance, depending upon the method of service. If the plaintiff sets the hearing date of the motion later than the minimum time therefor, he may require the defendant to serve a copy of his answering papers upon him within such extended period of time, not exceeding ten days, prior to such hearing date. No default judgment may be entered pursuant to subdivision (a) of section 3215 prior to the hearing date of the motion. If the motion is denied, the moving and answering papers shall be deemed the complaint and answer, respectively, unless the court orders otherwise. 

The Court of Appeals has described CPLR 3213 as a procedural device that “for the limited matters within its embrace, melded pleading and motion practice into one step, allowing a summary judgment motion to be made before issue was joined.”  Weissman v. Sinorm Deli, Inc., 88 N.Y.2d 437, 443 (1996).  The provision is “intended to provide a speedy and effective means of securing a judgment on claims presumptively meritorious … [and where] a formal complaint is superfluous and even the delay incident upon waiting for an answer and then moving for summary judgment is needless.”  Interman Indus. Products, Ltd. v. R.S.M. Electron Power, Inc., 37 N.Y.2d 151, 154 (1975) (citations and internal quotation marks omitted).  “CPLR 3213 begins with the seemingly straightforward – though stringent – requirement that the action be based on an instrument for the payment of money only or a judgment … [and t]he prototypical example of an instrument within the ambit of the statute is of course a negotiable instrument for the payment of money – an unconditional promise to pay a sum certain, signed by the maker and due on demand or at a definite time.”  Weissman, 88 N.Y.2d at 443 – 44 (citations, internal quotation marks and footnote omitted).

While CPLR 3213 is designed to simplify litigation, courts and commentators have noted that the application of CPLR 3213 could be problematic.  See Interman Indus., 37 N.Y.2d at 155 (listing cases in which CPLR 3213 was accepted and rejected).  The Court of Appeals, in Interman Indus. noted:

However, in order to qualify for CPLR 3213 treatment, it is incumbent upon the appellant to show that the accounts stated, on which its action is based, ‘(are) instruments for the payment of money only.’ The question of what constitutes an ‘instrument for the payment of money only’ may appear to be a vexing problem (4 Weinstein-Korn-Miller, NYCivPrac, par 3213.02a), and, according to one commentator, there is already a plethora of irreconcilable case law on this subject (Siegel, Practice Commentaries, McKinney’s Cons.Laws of N.Y., Book 7B, CPLR 3213:3, p. 829). The Advisory Committee’s reports do not define what is meant by ‘an instrument for the payment of money only’ nor is case law prior to the enactment of the CPLR informative, since CPLR 3213 had no earlier counterpart (4 Weinstein-Korn-Miller, NYCivPrac, par 3213.02a).

Interman Indus., 37 N.Y.2d at 154.  In Interman Indus. the Court of Appeals affirmed the ruling of the Appellate Division that “an account stated does not constitute an instrument of the payment of money only, and … that appellant may not avail itself of the procedure provided in CPLR 3213.”  Interman Indus., 37 N.Y.2d at 152.  In Weissman, the Court of Appeals reversed the Appellate Division and determined that the indemnification agreement at issue “falls far short of satisfying the 3213 threshold requirement.”  Weissman, 88 N.Y.2d at 444.

On June 18, 2019, the Appellate Division, First Department, decided SpringPrince, LLC v. Elie Tahari, Ltd., and determined that the guaranty in defendant’s commercial lease fell within the purview of CPLR 3213.  The SpringPrince Court found that there was “no dispute that defendant guaranteed the payment of the tenant’s rent obligations, and that the tenant ceased making rent payments thereunder [and that] defendant is obligated under the guaranty for the tenant’s default under the lease.”  The Court rejected defendant’s argument that its obligations under the guaranty were “relieved” because “subsequent to the signing of the lease and guaranty, the tenant and the landlord signed an agreement to reduce the tenant’s rent obligation for a period of time, to which defendant alleges it did not consent.” The SpringPrince Court found that the “subsequent agreement between the tenant and the landlord reducing the tenant’s obligations did not discharge defendant’s obligations under the guaranty as it merely constituted leniency on the part of the landlord and did not create a new contract between the parties.”

TAKEAWAY

CPLR 3213 can be a useful device to streamline the duration and cost of litigation when used appropriately.  A significant amount of litigation, however, has resulted from plaintiffs that attempt to utilize CPLR 3213 in situations where the instrument sued upon was not the type contemplated by the statute.  

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