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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NASSAU
BERNARD V. STRIANESE, : Index No. 600934/2010
Plaintiff,
v.
BERNADETTE STRIANESE and RITA CUSIMANO,
Defendants.
MEMORANDUM OF LAW OF DEFENDANT RITA CUSEMANO IN OPPOSITION TO
BERNARD V. STRIANESE’S MOTION FOR SUMMARY JUDGMENT IN LIEU OF
COMPLAINT AND IN SUPPORT OF HER COUNTERCLAIM
Wilson, Elser, Moskowitz, Edelman & Dicker LLP
Attorneys for Defendant Rita Cusimano
150 East 42" Street
New York, New York 10017
212-490-3000
3006660.1TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT .
POINT I
STANDARD FOR SUMMARY JUDGMENT ....---..ccccsscsscsuseeesesssnneeesieennnnersennrecssnneenses 3
POINT UL
TRIABLE ISSUES OF FACT EXIST WITH REGARD TO
BOTH NOTE 1 AND NOTE 2...cccccceceeceeecsrerseeneenesneaeenstiesnsnetansessuetsseetassenanesssansseneasnanteecton 4
NOTE 1 HAS BEEN SATISFIED ooo. cccccccecceseeceecseseeseeneeneeneeneeceenenneneenenenaseaceessansesanesssnsns 3
NOTE 2 1S NOT A NOTE EXECUTED BY DEFENDANT CUSIMANO .......seessees 6
POINT II
THE STATUTE OF LIMITATIONS PARTIALLY BARS RECOVERY ON NOTE | AND
NOTE 2 oc ecccesccececseseeseenenesssesesssssstssscsseneseenesssesesseneareseasaeeeessnsneneersssassesesssnsseseeesesnunssenasteensnne 8
CONCLUSION oo ceccecccsssseesssseeseseseesesnssnsseresseesssssesseneessterusasencanevenesensearseagesasenressansnssvsnnnaneensrasss® 10
30066601TABLE OF AUTHORITIES
CASES
Banco Popular N. Am. y. Victory Taxi Mgmt., | N.Y.3d 381, 383, 774 N.Y.S.2d 480, 482
(Ct. of Appeals 2004). ceeeeeeceveveaceesrseneseaversareneaeenereenes 5, 6,7
S.2d 24
Cicale v. Wachovia Bank N.A., 56 A.D.3d 392, 869 N.
(Ist Dep't 2008). eceneessereee
Diplacidi v. Gruder, 135 A.D.2d 395, 522 N.Y.S.2d 1 (ist Dep't VOB) oeesceeseesceteeeteneeneseeeee
Federal Financial Co. v. Levine, 248 A.D.2d 25, 679 N.Y.S.2d 679 (2d Dep't 1998) ....
Hess Corp. v. Magnone, 2010 NY Slip Op 50811U, *4, 2010 N.Y. Mise. LEXIS 973, *9
(Sup. Ct. NY Co. 2010)(J. Wooten)..
Khoury v. Khoury, 280 A.D.2d 453, 719 N.Y.S.2d 716 (2d Dep't 2001) scesscnsseneensineenee ds 6
Metropolitan Coffee Service Corp. v. Metropolitan Spring Coffee Inc., 2008 NY S 2008
N.Y. Misc. LEXIS 7361 (Sup. Ct. Nassau Co. 2008)... cceseerereessestecseesnsenesessecneennaenttes 5,6
New York Coll. of Health Professions v. Sohn, 2005 NY Slip Op 52187U, *2, 2005 N.Y.
Misc. LEXIS 2979 (Sup. Ct. Nassau Co. 2005)(J. Austin) 0.0.0.0
Seaboard Surety C Co. v. Earthline re Corp. 262 A.D.2d 253, 692 N.Y.S.2d 375 5 Uist Dept
1999)... pees . peseueeeseveanecessscsssrecceneeenoneraneenanene® vesieeeseeeeeOy 7, 8
Tars Uluslararasi Dis Ticaret Turzim ve Sanayi Lid., v. Leonard, 26 A.D.3d 298, 810
N.Y.S.2d 157 (1st Dep't 2006)... cccecceeeeeeesecreneenesissrenenesssnrennsnarssrseneensrecsittaaereasersaseseey 8
U.S. Bank National Associate v. Lax, 2010 NY S 2010 N.Y. Misc. LEXIS 395 5 ep. Ct.
Kings Co. 2010)... sect cesesneeaeenerstesnsseesererseceneneeiees
Woodlaurel, Inc. v. Wittman, 199 A.D.2d 497, 606 N.Y.S.2d 39 (2d Dep't 1993) oes 8
STATUTES
CPLR §3213 3,4
3006660.PRELIMINARY STATEMENT
Defendant Rita Cusimano (“Cusimano”), by and through her attorneys, Wilson, Elser,
Moskowitz, Edelman & Dicker LLP, respectfully submits this Memorandum of Law and her
accompanying Affidavit in opposition to Plaintiff Bernard V. Strianese’s (“Plaintiff”) Motion for
Summary Judgment in lieu of complaint and in Support of her Counterclaim.
STATEMENT OF FACTS
Plaintiff filed this action on October 25, 2010 against Bernardette Strianese and Rita
Cusimano seeking a judgment against his daughters on two Promissory Notes that he claims
relate to loans he made to Berita Realty LLC (“Berita”), an entity owned by his two daughters.
According to Bernard Strianese’s Affidavit, the first Promissory Note (“Note 1°), in the amount
of $485,426.00, is dated January 1, 1998 and was executed by Bernadette Strianese and Rita
Cusimano on September 14, 1999. Under the terms of Note 1, and the attached schedule, the
principal balance and interest at a rate of 10% per annum was to be paid by Bernadette Strianese
and Rita Cusimano in monthly payments, with payment in full by December 2005. As stated in
the affidavit of Rita Cusimano, the underlying loan was paid in full as of December 31, 2005.
(A).
Bernard Strianese claims in his sworn affidavit “[o]n December 2005, the entire principle
amount of $485,426.00, with interest thereon remained due and owing to plaintiff.” He goes on
to state that “as of the date of this Affidavit, no principle or interest has been paid to me in
connection with Note [1].”
Plaintiff also claims in his sworn Affidavit that the second Promissory Note (“Note 2”),
dated December 31, 2001, was executed by Bernadette Strianese and “Rita Cusimano on
January 1, 2002.” Rita Cusimano has been told that both Notes relate io loans made by Plaintiff
3006660.1
teto Greenbriar Associates “and other properties” on behalf of Berita. Defendant has no
knowledge of any other properties or loans and, insofar as Greenbriar Associates is concerned,
its records show Plaintiff being handsomely repaid. Under the terms of Note 2, and the attached
schedule, annexed to Plaintiff's moving papers, the principal balance and interest at the rate of
10% per annum was to be paid by Bemadette Strianese and Rita Cusimano in quarterly
payments, with payment in full by December 31, 2013.
Bernard Strianese also asserts that “defendants have failed to make an aggregate of 33
quarterly payments of principle and interest (in the amount of $55,000)” on Note 2 and therefore
owe him $1,815,000. Plaintiff makes these claims despite the fact that Rita Cusimano, at least,
knows that she never executed Note 2 as alleged by Plaintiff. See Cusimano Affidavit { 6.
Indeed, Cusimano has no recollection of having seen Note 2 before this action. Further,
Cusimano has not received any consideration for Note 2, nor does it appear as an obligation on
Berita’s tax returns for 2004 or 2005. As a result, Cusimano disputes this claim in its entirety.
Bernard Strianese never recites whether, in what manner, or to whom he ever delivered the
consideration warranting the enforceability of these notes. All these disputes raise fact issues
that fall within Article 3-305 of the Uniform Commercial Code. As a result, summary judgment
must be denied, and Defendant Cusimano can proceed with her counterclaims.
POINT IL
STANDARD FOR SUMMARY JUDGMENT
The usual standards for summary judgment apply to motions for summary judgment in
lieu of complaint. See U.S. Bank Nat. Assoc. v. Lax, 2010 NY Slip Op 50326U, 2010 N.Y. Misc.
LEXIS 395 (Sup. CL Kings Co. 2010). Demarest)[“The usual standards for summary judgment
apply to CPLR §3213 motions]. In this regard, “summary judgment is a drastic remedy that
3406660.
Wwshould be granted only if no triable issues of fact exist and the movant is entitled to judgment as
a matter of law.” Hess Corp. v. Magnone, 2010 NY Slip Op 50811U, *4, 2010 N.Y. Mise.
LEXIS 973, *9 (Sup. Ct. NY Co. 2010)(. Wooten). “The party moving for summary judgment
must make a prima facie showing of entitlement to judgment as a matter of law, tendering
sufficient evidence in admissible form demonstrating the absence of material issues of fact.” dd.
When deciding a summary judgment motion, “the Court’s role is solely to determine if any
triable issues exist, not to determine the merits of any such issues.” Td. at *4, *10. “The Court
views the evidence in the light most favorable to the nonmoving party, and gives the nonmoving
party the benefit of all reasonable inferences that can be drawn from the evidence.” /d. If there
is any doubt as to the existence of a triable issue, summary judgment should be denied. /d.
Indeed, Courts have held that “even the color of a triable issue forecloses the remedy.” New
York Coll. of Health Professions v. Sohn, 2005 NY Slip Op 521870, *2, 2005 N.Y. Misc. LEXIS
2979 (Sup. Ct. Nassau Co. 2005)(J. Austin).
Here, it is respectfully submitted that material issues of fact exist with regard to
both promissory notes. As such, Plaintiff's motion for summary judgment should be denied.
POINT
TRIABLE ISSUES OF FACT EXIST WITH REGARD TO BOTH NOTE 1 AND NOTE 2
In order to establish a prima facie case pursuant to CPLR §3213, the moving party “must
submit proof of the existence of a promissory note and the defendant’s failure to make payment
in accordance with its terms.” New York Coll. of Health Professions at *3. Assuming the
plaintiff is able to meet this burden, “the burden then shifts to the defendant to establish the
existence of a triable issue of fact or a bona fide defense.” Hess Corp. at *4, *11. In this regard,
“fa] defendant can defeat a CPLR 3213 motion by offering evidentiary proof sufficient to raise a
3006600. 4triable issue of fact.” Rance Popular N. Am. v, Victory Taxi Mgnit., 1 N.Y 3d 381, 383, 774
N.Y.S.2d 480, 482 (Ct. of Appeals 2004).
Defendant Cusimano has successfully defeated Plaintiff's motions by offering proof that
the first loan at issue was satisfied and challenging by affidavit Plaintiff's statement as to the
execution of Note 2. See e.g. Khoury v. Khoury, 280 A.D.2d 453, 719 N.Y.S.2d 716 (2d Dep't
2001)[satisfaction]; Cicale v. Wachovia Bank N.A., 56 A.D.3d 392, 869 N.Y.8.2d 24 (1* Dep’t
2008)[forgery].' Defendant Cusimano has submitted admissible proof relating to both of these
defenses. As discussed more at length below, Cusimano has raised material issues of fact
concerning both Note 1] and Note 2. With regard to Note 1, Cusimano has submitted a schedule
of payments demonstrating that the note was paid and proof that the loans do not appear on
Berita’s books and records. As for Note 2, Cusimano has submitted admissible proof that she
did not sign the Note as alleged by Plaintiff. Moreover, since Defendant Cusimano has been told
that the Notes were in connection with advances made by Berita to Greenbriar Associates, LLC,
the records of Greenbriar show cash distributions to Berita in excess of $4,000,000 since 1992,
totally repaying any advances. Moreover, there is nothing submitted which indicates when these
funds were allegedly advanced. As such, Cusimano has met her burden in raising material issues
of fact with regard to both notes. Therefore, Plaintiff's motion for summary judgment in lieu of
complaint should be denied in all respects.
NOTE 1 HAS BEEN SATISFIED
In Metro Coffee Service Corp., the plaintiff claimed nonpayment of a promissory note
establishing a debt of $260,000 that was required to be paid with interest over four years. See
Metro Coffee Service Corp, v. Metro Spring Coffee Inc., 2008 NY Shp Op 52623U, *2, 2008
" Defendant Rita Cusimano will also rely on any common fact issues raised by her sister in her answering papers.
3006660, 1 5N.Y. Misc. LEXIS 7361 (Sup. Ct. Nassau Co. 2008)(J. Austin). In response, the defendants
submitted as evidence of payment two checks totaling $100,000 and argued that they prepaid 17
months of the debt under the note. See id. Although the plaintiffs asserted that the $100,000
payment had nothing to do with the note obligation, but rather were paid in connection with
other obligations, Judge Austin found an issue of fact was presented and denied summary
judgment. See id. at *4. Similarly, in Khoury, the Appellate Division affirmed the Supreme
Court’s denial of plaintiffs motion for summary judgment in lieu of complaint where the
defendant raised triable issues of fact as to whether the note was satisfied and, if not, the amount
owed. See Khoury at *454, *2.
Here, like the defendants in Metro Coffee Services Corp., Cusimano has
submitted documentary evidence demonstrating that payments were made on Notes 1 and 2.
Indeed, Berita Realty’s 2004 and 2005 tax returns which conclusively fail to show any
indebtedness by Berita, the entity Defendant Cusimano was told received the funds documented
by the Notes and since Plaintiff was the Manager of Berita in those years, he is estopped from
challenging these returns. Based on this evidence, and in line with the Court’s holdings in Metro
Coffee and Khoury, Cusimano has raised triable issues of fact with regard to Plaintiff's claims
related to Note 1. As such, Plaintiff's motion for summary judgment should be denied.
NOTE 2 IS NOT A NOTE EXECUTED BY DEFENDANT CUSIMANO
New York Courts have consistently held that a defendant can raise triable issues of fact
with assertions of forgery in response to motions for summary judgment in lieu of complaint.
See e.g. Banco Popular N. Am. v. Victory Taxi Mgmt., \ N.Y 34 381, 774 N-Y.S.2d 480 (Ct. of
Appeals 2004); Cicale vy. Wachovia Bank N.A., 56 A.D.3d 392, 869 N.Y.S.2d 24 (1" Dep't
2008); Diplacidi v. Gruder, 135 A.D.2d 395, $22 N.Y.S.2d 1 (" Dep't 1987); Seaboard Surety
3006660. 1 6Co. v. Earthline Corp., 262 A.D.2d 253, 692 N.Y.S.2d 375 (1" Dep’t 1999). “[S]omething more
than a bald faced assertion of forgery is required to create an issue of fact contesting the
authenticity of a signature.” Banco Popular, at 384, 482. In this regard, Courts consider, among
other pieces of evidence, writing samples submitted by the defendant, the factual detail of the
defendant’s affidavit, whether the plaintiff had access to the defendant’s signature, and whether
any consideration was given for the note in question. See e.g. Diplacidi, 135 A.D.2d at 395;
Cicali, 56 A.D.3d. at 393.
While Courts do not follow a set rubric in determining whether the defendant has raised a
triable issue of fact, it is clear that an expert’s affidavit is not required. See Baneo Popular, |
N.Y .3d at 384, 482. Indeed, in Seaboard, the Court deemed the expert affidavit submitted by the
plaintiff to be insufficient to support plaintiff's claim even when the defendant did not submit an
expert affidavit in opposition, and his purported signature was notarized. See Seaboard Surety,
262 A.D.2d at 253-254.
In Diplacidi, the First Department reversed the Supreme Court’s order granting plaintiff's
motion for summary judgment in lieu of complaint where defendant attested that his signature
was forged by the plaintiff on two promissory notes. See Diplacidi, at 396, 2. In reaching its
decision, the Court recounted three arguments raised by defendant supporting his forgery claim.
See id. at 395, 1. The defendant argued that “[plaintiff] had access to his signature,” that there
were “discernible distinctions between his real signature and the forgeries” and that the
defendant “denied that he ever received anything of value from [plaintiff] which would require
him to sign promissory notes...” fd. at 395-396, 1, The Court ultimately held that the defendant
raised sufficient questions of fact with respect to his claim of forgery to defeat summary
3006660.1 7:
:
'
;
judgment. /d, at 396, 2. Cusimano specifically rejects the sworn allegations of Plaintiff that she
signed this note on January 1, 2002.
Cusimano has also attested that she received nothing of value as consideration for Note 1
or 2. Moreover, Cusimano has submitted documentary evidence that if the funds were being
advanced by Berita to Greenbriar Associates, which is what she has been told, Berita has been
more than repaid. Cusimano has submitted copies of Berita’s tax returns for 2004 and 2005
which show no indebtedness outstanding. Note 2 does not appear on either tax return. If the
note were legitimate, as contended by Plaintiff, it should appear as an obligation on Berita’s tax
returns and since Bernard was the Manager for Berita at this time, he cannot disavow his own
work.
For the foregoing reasons, and in line with the Court’s holdings in Diplacidi, Seaboard
and Cicale, Cusimano respectfully submits that there are material issues of fact warranting denial
of summary judgment and permitting her to go forward with her counterclaim.
POINT IIT
THE STATUTE OF LIMITATIONS PARTIALLY BARS RECOVERY
ON NOTE 1 AND NOTE 2
Assuming arguendo, that the Court does not find that Cusimano has raised a triable issue
of fact with regard to Note 1 and/or Note 2, Cusimano respectfully submits that the applicable
statute of limitations partially bars recovery on these notes.
Under New York law, a six-year statute of limitations period apples to actions to recover
on promissory notes. See e.g. Tars Uluslararasi Dis Ticaret Turzim ve Sanayi Lid., v. Leonard,
26 A.D.3d 298, 299, 810 N.Y.S.2d 157, 158 (1" Dep’t 2006); Federal Financial Co. v. Levine,
248 A.D.2d 25, 27, 679 N.Y.S.2d 679, 680 (2d Dep’t 1998). The Statute of Limitations period
begins to “run when the cause of action accrues, even if the plaintiff is unaware that he or she has
30066601 8acause of action.” Woodlaurel, Inc. v. Wittman, 199 A.D.2d 497, 498, 606 N.Y.S.2d 39, 40 (2d
Dep't 1993). In the context of a cause of action for nonpayment, the limitations period accrues
when the plaintiff is “entitled to make its demand for payment...” /d.
Here, based on Bernard Strianese’s affidavit, the alleged default on Note 1 occurred
immediately, as “no principal or interest has been paid to me in connection with Note {u
Further, under the terms of Note 1, payments of principal and interest were due “as per schedule
attached...” The schedule shows that payments of principal and interest were due monthly from
January 31, 1998 to December 31, 2005. As the payments were due on a monthly basis,
Plaintiff's cause of action for nonpayment accrued for statute of limitations purposes every
month that passed without payment (which plaintiff contends was every month). As such,
Plaintiff is barred from collecting any of the monthly payments and interest payments that were
due and owing prior to October 25, 2004 as this action was commenced on October 25, 2010.
As for Note 2, Plaintiff's own schedule contains a notation that two payments were made
on this note, on March 31, 2002 and June 30, 2002 respectively. Plaintiff admits these payments
in paragraph 10. Indeed, it appears based on the general ledger of Berita, there were at least
eight additional payments made of $55,000. Notwithstanding all this, Plaintiff contends that no
other payments were made. Indeed, Plaintiff states in his affidavit, “defendants have failed to
make an aggregate of 33 quarterly payments of principal and interest...” Like Note 1, the terms
of Note 2 make payments of principal and interest due “as per schedule attached...” Here, the
attached schedule, and Plaintiff's affidavit, indicates that payments of principal and interest were
due quarterly from March 31, 2002 to December 31, 2013. As the payments were due quarterly,
and defendants allegedly failed to make any payments after June 30, 2002, Plaintiff's cause of
action for nonpayment accrued for statute of limitations purposes every quarter that passed
3006660.1 9TO: Alan A. Heller, Esq.
Attorneys for Plaintiff Bernard V. Strianese
Heller, Horowitz & Feit
292 Madison Avenue
New York, NY 10017-6312
Peter Terraciano, Esq.
Attorneys for Defendant Bernadette Strianese
Joseph & Terracciano LLP
2 Roosevelt Avenue, Suite 200
Syosset, New York 11791
3000660.1 Wfollowing June 30, 2002. As such, Plaintiff is barred from collecting any of the quarterly
payments of principal and interest that were due and owing prior to October 25, 2004 as this
action was commenced on October 25, 2010.
Based on the foregoing, Cusimano respectfully requests that the Court deny Plaintiffs
motion for summary judgment to the extent it seeks the collection of payments that are barred by
the statute of limitations.
CONCLUSION
For the foregoing reasons, Cusimano respectfully requests that the Court deny
Plaintiff's motion for summary judgment in lieu of complaint in its entirety. Defendant
Cusimano also requests that the Court recognize Cusimano’s counterclaim to be established by
the accounting action but believed to be at least $1.6 million, based upon her “negative capital
account” as of December 31, 2009. Cusimano requests that the Court deny Plaintiff's summary
judgment motion to the extent it seeks the collection of payments that are barred by the statute of
limitations.
Dated: New York, New York
February 3, 2011
Respectfully submitted,
WILSON, ELSER, MOSKOWITZ, EDELMAN &
By: 6
Edward J. Boyle
Morgan R. McCord
Attormeys for Defendant Rita Cusimano
150 East 42nd Street
New York, New York 10017-5639
(212) 490-3000
File No. 12166,00002
3006660. 10
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SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NASSAU BERNARD V. STRIANESE, : Index No. 600934/2010 Plaintiff, v. BERNADETTE STRIANESE and RITA CUSIMANO, Defendants. MEMORANDUM OF LAW OF DEFENDANT RITA CUSEMANO IN OPPOSITION TO BERNARD V. STRIANESE’S MOTION FOR SUMMARY JUDGMENT IN LIEU OF COMPLAINT AND IN SUPPORT OF HER COUNTERCLAIM Wilson, Elser, Moskowitz, Edelman & Dicker LLP Attorneys for Defendant Rita Cusimano 150 East 42" Street New York, New York 10017 212-490-3000 3006660.1TABLE OF CONTENTS Page PRELIMINARY STATEMENT . POINT I STANDARD FOR SUMMARY JUDGMENT ....---..ccccsscsscsuseeesesssnneeesieennnnersennrecssnneenses 3 POINT UL TRIABLE ISSUES OF FACT EXIST WITH REGARD TO BOTH NOTE 1 AND NOTE 2...cccccceceeceeecsrerseeneenesneaeenstiesnsnetansessuetsseetassenanesssansseneasnanteecton 4 NOTE 1 HAS BEEN SATISFIED ooo. cccccccecceseeceecseseeseeneeneeneeneeceenenneneenenenaseaceessansesanesssnsns 3 NOTE 2 1S NOT A NOTE EXECUTED BY DEFENDANT CUSIMANO .......seessees 6 POINT II THE STATUTE OF LIMITATIONS PARTIALLY BARS RECOVERY ON NOTE | AND NOTE 2 oc ecccesccececseseeseenenesssesesssssstssscsseneseenesssesesseneareseasaeeeessnsneneersssassesesssnsseseeesesnunssenasteensnne 8 CONCLUSION oo ceccecccsssseesssseeseseseesesnssnsseresseesssssesseneessterusasencanevenesensearseagesasenressansnssvsnnnaneensrasss® 10 30066601TABLE OF AUTHORITIES CASES Banco Popular N. Am. y. Victory Taxi Mgmt., | N.Y.3d 381, 383, 774 N.Y.S.2d 480, 482 (Ct. of Appeals 2004). ceeeeeeceveveaceesrseneseaversareneaeenereenes 5, 6,7 S.2d 24 Cicale v. Wachovia Bank N.A., 56 A.D.3d 392, 869 N. (Ist Dep't 2008). eceneessereee Diplacidi v. Gruder, 135 A.D.2d 395, 522 N.Y.S.2d 1 (ist Dep't VOB) oeesceeseesceteeeteneeneseeeee Federal Financial Co. v. Levine, 248 A.D.2d 25, 679 N.Y.S.2d 679 (2d Dep't 1998) .... Hess Corp. v. Magnone, 2010 NY Slip Op 50811U, *4, 2010 N.Y. Mise. LEXIS 973, *9 (Sup. Ct. NY Co. 2010)(J. Wooten).. Khoury v. Khoury, 280 A.D.2d 453, 719 N.Y.S.2d 716 (2d Dep't 2001) scesscnsseneensineenee ds 6 Metropolitan Coffee Service Corp. v. Metropolitan Spring Coffee Inc., 2008 NY S 2008 N.Y. Misc. LEXIS 7361 (Sup. Ct. Nassau Co. 2008)... cceseerereessestecseesnsenesessecneennaenttes 5,6 New York Coll. of Health Professions v. Sohn, 2005 NY Slip Op 52187U, *2, 2005 N.Y. Misc. LEXIS 2979 (Sup. Ct. Nassau Co. 2005)(J. Austin) 0.0.0.0 Seaboard Surety C Co. v. Earthline re Corp. 262 A.D.2d 253, 692 N.Y.S.2d 375 5 Uist Dept 1999)... pees . peseueeeseveanecessscsssrecceneeenoneraneenanene® vesieeeseeeeeOy 7, 8 Tars Uluslararasi Dis Ticaret Turzim ve Sanayi Lid., v. Leonard, 26 A.D.3d 298, 810 N.Y.S.2d 157 (1st Dep't 2006)... cccecceeeeeeesecreneenesissrenenesssnrennsnarssrseneensrecsittaaereasersaseseey 8 U.S. Bank National Associate v. Lax, 2010 NY S 2010 N.Y. Misc. LEXIS 395 5 ep. Ct. Kings Co. 2010)... sect cesesneeaeenerstesnsseesererseceneneeiees Woodlaurel, Inc. v. Wittman, 199 A.D.2d 497, 606 N.Y.S.2d 39 (2d Dep't 1993) oes 8 STATUTES CPLR §3213 3,4 3006660.PRELIMINARY STATEMENT Defendant Rita Cusimano (“Cusimano”), by and through her attorneys, Wilson, Elser, Moskowitz, Edelman & Dicker LLP, respectfully submits this Memorandum of Law and her accompanying Affidavit in opposition to Plaintiff Bernard V. Strianese’s (“Plaintiff”) Motion for Summary Judgment in lieu of complaint and in Support of her Counterclaim. STATEMENT OF FACTS Plaintiff filed this action on October 25, 2010 against Bernardette Strianese and Rita Cusimano seeking a judgment against his daughters on two Promissory Notes that he claims relate to loans he made to Berita Realty LLC (“Berita”), an entity owned by his two daughters. According to Bernard Strianese’s Affidavit, the first Promissory Note (“Note 1°), in the amount of $485,426.00, is dated January 1, 1998 and was executed by Bernadette Strianese and Rita Cusimano on September 14, 1999. Under the terms of Note 1, and the attached schedule, the principal balance and interest at a rate of 10% per annum was to be paid by Bernadette Strianese and Rita Cusimano in monthly payments, with payment in full by December 2005. As stated in the affidavit of Rita Cusimano, the underlying loan was paid in full as of December 31, 2005. (A). Bernard Strianese claims in his sworn affidavit “[o]n December 2005, the entire principle amount of $485,426.00, with interest thereon remained due and owing to plaintiff.” He goes on to state that “as of the date of this Affidavit, no principle or interest has been paid to me in connection with Note [1].” Plaintiff also claims in his sworn Affidavit that the second Promissory Note (“Note 2”), dated December 31, 2001, was executed by Bernadette Strianese and “Rita Cusimano on January 1, 2002.” Rita Cusimano has been told that both Notes relate io loans made by Plaintiff 3006660.1 teto Greenbriar Associates “and other properties” on behalf of Berita. Defendant has no knowledge of any other properties or loans and, insofar as Greenbriar Associates is concerned, its records show Plaintiff being handsomely repaid. Under the terms of Note 2, and the attached schedule, annexed to Plaintiff's moving papers, the principal balance and interest at the rate of 10% per annum was to be paid by Bemadette Strianese and Rita Cusimano in quarterly payments, with payment in full by December 31, 2013. Bernard Strianese also asserts that “defendants have failed to make an aggregate of 33 quarterly payments of principle and interest (in the amount of $55,000)” on Note 2 and therefore owe him $1,815,000. Plaintiff makes these claims despite the fact that Rita Cusimano, at least, knows that she never executed Note 2 as alleged by Plaintiff. See Cusimano Affidavit { 6. Indeed, Cusimano has no recollection of having seen Note 2 before this action. Further, Cusimano has not received any consideration for Note 2, nor does it appear as an obligation on Berita’s tax returns for 2004 or 2005. As a result, Cusimano disputes this claim in its entirety. Bernard Strianese never recites whether, in what manner, or to whom he ever delivered the consideration warranting the enforceability of these notes. All these disputes raise fact issues that fall within Article 3-305 of the Uniform Commercial Code. As a result, summary judgment must be denied, and Defendant Cusimano can proceed with her counterclaims. POINT IL STANDARD FOR SUMMARY JUDGMENT The usual standards for summary judgment apply to motions for summary judgment in lieu of complaint. See U.S. Bank Nat. Assoc. v. Lax, 2010 NY Slip Op 50326U, 2010 N.Y. Misc. LEXIS 395 (Sup. CL Kings Co. 2010). Demarest)[“The usual standards for summary judgment apply to CPLR §3213 motions]. In this regard, “summary judgment is a drastic remedy that 3406660. Wwshould be granted only if no triable issues of fact exist and the movant is entitled to judgment as a matter of law.” Hess Corp. v. Magnone, 2010 NY Slip Op 50811U, *4, 2010 N.Y. Mise. LEXIS 973, *9 (Sup. Ct. NY Co. 2010)(. Wooten). “The party moving for summary judgment must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence in admissible form demonstrating the absence of material issues of fact.” dd. When deciding a summary judgment motion, “the Court’s role is solely to determine if any triable issues exist, not to determine the merits of any such issues.” Td. at *4, *10. “The Court views the evidence in the light most favorable to the nonmoving party, and gives the nonmoving party the benefit of all reasonable inferences that can be drawn from the evidence.” /d. If there is any doubt as to the existence of a triable issue, summary judgment should be denied. /d. Indeed, Courts have held that “even the color of a triable issue forecloses the remedy.” New York Coll. of Health Professions v. Sohn, 2005 NY Slip Op 521870, *2, 2005 N.Y. Misc. LEXIS 2979 (Sup. Ct. Nassau Co. 2005)(J. Austin). Here, it is respectfully submitted that material issues of fact exist with regard to both promissory notes. As such, Plaintiff's motion for summary judgment should be denied. POINT TRIABLE ISSUES OF FACT EXIST WITH REGARD TO BOTH NOTE 1 AND NOTE 2 In order to establish a prima facie case pursuant to CPLR §3213, the moving party “must submit proof of the existence of a promissory note and the defendant’s failure to make payment in accordance with its terms.” New York Coll. of Health Professions at *3. Assuming the plaintiff is able to meet this burden, “the burden then shifts to the defendant to establish the existence of a triable issue of fact or a bona fide defense.” Hess Corp. at *4, *11. In this regard, “fa] defendant can defeat a CPLR 3213 motion by offering evidentiary proof sufficient to raise a 3006600. 4triable issue of fact.” Rance Popular N. Am. v, Victory Taxi Mgnit., 1 N.Y 3d 381, 383, 774 N.Y.S.2d 480, 482 (Ct. of Appeals 2004). Defendant Cusimano has successfully defeated Plaintiff's motions by offering proof that the first loan at issue was satisfied and challenging by affidavit Plaintiff's statement as to the execution of Note 2. See e.g. Khoury v. Khoury, 280 A.D.2d 453, 719 N.Y.S.2d 716 (2d Dep't 2001)[satisfaction]; Cicale v. Wachovia Bank N.A., 56 A.D.3d 392, 869 N.Y.8.2d 24 (1* Dep’t 2008)[forgery].' Defendant Cusimano has submitted admissible proof relating to both of these defenses. As discussed more at length below, Cusimano has raised material issues of fact concerning both Note 1] and Note 2. With regard to Note 1, Cusimano has submitted a schedule of payments demonstrating that the note was paid and proof that the loans do not appear on Berita’s books and records. As for Note 2, Cusimano has submitted admissible proof that she did not sign the Note as alleged by Plaintiff. Moreover, since Defendant Cusimano has been told that the Notes were in connection with advances made by Berita to Greenbriar Associates, LLC, the records of Greenbriar show cash distributions to Berita in excess of $4,000,000 since 1992, totally repaying any advances. Moreover, there is nothing submitted which indicates when these funds were allegedly advanced. As such, Cusimano has met her burden in raising material issues of fact with regard to both notes. Therefore, Plaintiff's motion for summary judgment in lieu of complaint should be denied in all respects. NOTE 1 HAS BEEN SATISFIED In Metro Coffee Service Corp., the plaintiff claimed nonpayment of a promissory note establishing a debt of $260,000 that was required to be paid with interest over four years. See Metro Coffee Service Corp, v. Metro Spring Coffee Inc., 2008 NY Shp Op 52623U, *2, 2008 " Defendant Rita Cusimano will also rely on any common fact issues raised by her sister in her answering papers. 3006660, 1 5N.Y. Misc. LEXIS 7361 (Sup. Ct. Nassau Co. 2008)(J. Austin). In response, the defendants submitted as evidence of payment two checks totaling $100,000 and argued that they prepaid 17 months of the debt under the note. See id. Although the plaintiffs asserted that the $100,000 payment had nothing to do with the note obligation, but rather were paid in connection with other obligations, Judge Austin found an issue of fact was presented and denied summary judgment. See id. at *4. Similarly, in Khoury, the Appellate Division affirmed the Supreme Court’s denial of plaintiffs motion for summary judgment in lieu of complaint where the defendant raised triable issues of fact as to whether the note was satisfied and, if not, the amount owed. See Khoury at *454, *2. Here, like the defendants in Metro Coffee Services Corp., Cusimano has submitted documentary evidence demonstrating that payments were made on Notes 1 and 2. Indeed, Berita Realty’s 2004 and 2005 tax returns which conclusively fail to show any indebtedness by Berita, the entity Defendant Cusimano was told received the funds documented by the Notes and since Plaintiff was the Manager of Berita in those years, he is estopped from challenging these returns. Based on this evidence, and in line with the Court’s holdings in Metro Coffee and Khoury, Cusimano has raised triable issues of fact with regard to Plaintiff's claims related to Note 1. As such, Plaintiff's motion for summary judgment should be denied. NOTE 2 IS NOT A NOTE EXECUTED BY DEFENDANT CUSIMANO New York Courts have consistently held that a defendant can raise triable issues of fact with assertions of forgery in response to motions for summary judgment in lieu of complaint. See e.g. Banco Popular N. Am. v. Victory Taxi Mgmt., \ N.Y 34 381, 774 N-Y.S.2d 480 (Ct. of Appeals 2004); Cicale vy. Wachovia Bank N.A., 56 A.D.3d 392, 869 N.Y.S.2d 24 (1" Dep't 2008); Diplacidi v. Gruder, 135 A.D.2d 395, $22 N.Y.S.2d 1 (" Dep't 1987); Seaboard Surety 3006660. 1 6Co. v. Earthline Corp., 262 A.D.2d 253, 692 N.Y.S.2d 375 (1" Dep’t 1999). “[S]omething more than a bald faced assertion of forgery is required to create an issue of fact contesting the authenticity of a signature.” Banco Popular, at 384, 482. In this regard, Courts consider, among other pieces of evidence, writing samples submitted by the defendant, the factual detail of the defendant’s affidavit, whether the plaintiff had access to the defendant’s signature, and whether any consideration was given for the note in question. See e.g. Diplacidi, 135 A.D.2d at 395; Cicali, 56 A.D.3d. at 393. While Courts do not follow a set rubric in determining whether the defendant has raised a triable issue of fact, it is clear that an expert’s affidavit is not required. See Baneo Popular, | N.Y .3d at 384, 482. Indeed, in Seaboard, the Court deemed the expert affidavit submitted by the plaintiff to be insufficient to support plaintiff's claim even when the defendant did not submit an expert affidavit in opposition, and his purported signature was notarized. See Seaboard Surety, 262 A.D.2d at 253-254. In Diplacidi, the First Department reversed the Supreme Court’s order granting plaintiff's motion for summary judgment in lieu of complaint where defendant attested that his signature was forged by the plaintiff on two promissory notes. See Diplacidi, at 396, 2. In reaching its decision, the Court recounted three arguments raised by defendant supporting his forgery claim. See id. at 395, 1. The defendant argued that “[plaintiff] had access to his signature,” that there were “discernible distinctions between his real signature and the forgeries” and that the defendant “denied that he ever received anything of value from [plaintiff] which would require him to sign promissory notes...” fd. at 395-396, 1, The Court ultimately held that the defendant raised sufficient questions of fact with respect to his claim of forgery to defeat summary 3006660.1 7: : ' ; judgment. /d, at 396, 2. Cusimano specifically rejects the sworn allegations of Plaintiff that she signed this note on January 1, 2002. Cusimano has also attested that she received nothing of value as consideration for Note 1 or 2. Moreover, Cusimano has submitted documentary evidence that if the funds were being advanced by Berita to Greenbriar Associates, which is what she has been told, Berita has been more than repaid. Cusimano has submitted copies of Berita’s tax returns for 2004 and 2005 which show no indebtedness outstanding. Note 2 does not appear on either tax return. If the note were legitimate, as contended by Plaintiff, it should appear as an obligation on Berita’s tax returns and since Bernard was the Manager for Berita at this time, he cannot disavow his own work. For the foregoing reasons, and in line with the Court’s holdings in Diplacidi, Seaboard and Cicale, Cusimano respectfully submits that there are material issues of fact warranting denial of summary judgment and permitting her to go forward with her counterclaim. POINT IIT THE STATUTE OF LIMITATIONS PARTIALLY BARS RECOVERY ON NOTE 1 AND NOTE 2 Assuming arguendo, that the Court does not find that Cusimano has raised a triable issue of fact with regard to Note 1 and/or Note 2, Cusimano respectfully submits that the applicable statute of limitations partially bars recovery on these notes. Under New York law, a six-year statute of limitations period apples to actions to recover on promissory notes. See e.g. Tars Uluslararasi Dis Ticaret Turzim ve Sanayi Lid., v. Leonard, 26 A.D.3d 298, 299, 810 N.Y.S.2d 157, 158 (1" Dep’t 2006); Federal Financial Co. v. Levine, 248 A.D.2d 25, 27, 679 N.Y.S.2d 679, 680 (2d Dep’t 1998). The Statute of Limitations period begins to “run when the cause of action accrues, even if the plaintiff is unaware that he or she has 30066601 8acause of action.” Woodlaurel, Inc. v. Wittman, 199 A.D.2d 497, 498, 606 N.Y.S.2d 39, 40 (2d Dep't 1993). In the context of a cause of action for nonpayment, the limitations period accrues when the plaintiff is “entitled to make its demand for payment...” /d. Here, based on Bernard Strianese’s affidavit, the alleged default on Note 1 occurred immediately, as “no principal or interest has been paid to me in connection with Note {u Further, under the terms of Note 1, payments of principal and interest were due “as per schedule attached...” The schedule shows that payments of principal and interest were due monthly from January 31, 1998 to December 31, 2005. As the payments were due on a monthly basis, Plaintiff's cause of action for nonpayment accrued for statute of limitations purposes every month that passed without payment (which plaintiff contends was every month). As such, Plaintiff is barred from collecting any of the monthly payments and interest payments that were due and owing prior to October 25, 2004 as this action was commenced on October 25, 2010. As for Note 2, Plaintiff's own schedule contains a notation that two payments were made on this note, on March 31, 2002 and June 30, 2002 respectively. Plaintiff admits these payments in paragraph 10. Indeed, it appears based on the general ledger of Berita, there were at least eight additional payments made of $55,000. Notwithstanding all this, Plaintiff contends that no other payments were made. Indeed, Plaintiff states in his affidavit, “defendants have failed to make an aggregate of 33 quarterly payments of principal and interest...” Like Note 1, the terms of Note 2 make payments of principal and interest due “as per schedule attached...” Here, the attached schedule, and Plaintiff's affidavit, indicates that payments of principal and interest were due quarterly from March 31, 2002 to December 31, 2013. As the payments were due quarterly, and defendants allegedly failed to make any payments after June 30, 2002, Plaintiff's cause of action for nonpayment accrued for statute of limitations purposes every quarter that passed 3006660.1 9TO: Alan A. Heller, Esq. Attorneys for Plaintiff Bernard V. Strianese Heller, Horowitz & Feit 292 Madison Avenue New York, NY 10017-6312 Peter Terraciano, Esq. Attorneys for Defendant Bernadette Strianese Joseph & Terracciano LLP 2 Roosevelt Avenue, Suite 200 Syosset, New York 11791 3000660.1 Wfollowing June 30, 2002. As such, Plaintiff is barred from collecting any of the quarterly payments of principal and interest that were due and owing prior to October 25, 2004 as this action was commenced on October 25, 2010. Based on the foregoing, Cusimano respectfully requests that the Court deny Plaintiffs motion for summary judgment to the extent it seeks the collection of payments that are barred by the statute of limitations. CONCLUSION For the foregoing reasons, Cusimano respectfully requests that the Court deny Plaintiff's motion for summary judgment in lieu of complaint in its entirety. Defendant Cusimano also requests that the Court recognize Cusimano’s counterclaim to be established by the accounting action but believed to be at least $1.6 million, based upon her “negative capital account” as of December 31, 2009. Cusimano requests that the Court deny Plaintiff's summary judgment motion to the extent it seeks the collection of payments that are barred by the statute of limitations. Dated: New York, New York February 3, 2011 Respectfully submitted, WILSON, ELSER, MOSKOWITZ, EDELMAN & By: 6 Edward J. Boyle Morgan R. McCord Attormeys for Defendant Rita Cusimano 150 East 42nd Street New York, New York 10017-5639 (212) 490-3000 File No. 12166,00002 3006660. 10