Holding A Note That References Another Document? It Still May Permit You To Obtain Summary Judgment in Lieu of Complaint


In Zyskind v. FaceCake Marketing Technologies, Inc., Index No. 651240/10 (Sup. Ct., NY County, Dec. 15, 2010) (“FaceCake Marketing”), Justice Bernard J. Fried granted summary judgment in lieu of complaint to plaintiffs Beryl Zyskind and Joel Gold, holding that ten notes issued to them (the "Notes") on account of investment loans they made to the defendant, FaceCake Marketing Technologies, Inc. ("FaceCake"), were instruments "for the payment of money only."

On September 28, 2004, Beryl Zyskind and Joel Gold (the "Plaintiffs") each executed separate, identical stock purchase agreements with FaceCake (the "Agreements"). Under the terms of the Agreements, Plaintiffs each promised to invest $625,000 in FaceCake. In exchange for each investment, Zyskind and Gold were to receive a corresponding note and FaceCake stock.

Pursuant to the Agreements and in exchange for each investment loan made by Zyskind and Gold, FaceCake issued the Notes to the Plaintiffs, totaling $650,000. Each Note recited a sum certain to be paid to the holder of the Note. Each Note also contained an unconditional promise to pay and a waiver of all defenses to enforcement of the Note, stating that "[t]he obligations to make the payments provided for in this Note are absolute and unconditional and not subject to any defense, set-off, counterclaim, rescission, recoupment, or adjustment whatsoever."

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