Summary judgment plays an important role in litigation. So important, in fact, that many of our blog posts are devoted to the topic. Last week, my colleague Matthew Donovan discussed the policy against allowing successive summary judgment motions. A few weeks prior to that, in Summary Judgment 101, I discussed the basic, yet often forgotten requirement that a summary judgment motion be supported with “evidentiary proof in admissible form.” This week, I will discuss another member of the summary judgment family: the CPLR 3213 motion for summary judgment in lieu of complaint. Most are aware of it, but many have trepidation to use it. So, what is it and when should it be used?
Like a “3212” summary judgment motion, CPLR 3213 provides an accelerated procedure for obtaining a judgment on the merits. But, unlike CPLR 3212, CPLR 3213 recognizes that some claims have a greater presumption of merit than others, and are permitted to be brought on by a summary judgment motion at the outset of the litigation. There are no pleadings, and there is no discovery. Because this procedure is so refreshingly expeditious, many practitioners attempt to use it for claims that fall short of what CPLR 3213 actually contemplates. Indeed, CPLR 3213 provides only two, narrow bases for such a motion: (1) when it is based upon “an instrument for the payment of money”, or (2) when it is based upon “any judgment.” This blog post will explore the “money instrument” category, because it is by far the most commonly utilized, and yet, so often misunderstood. As the late Professor Siegel noted, “[t]he plaintiff waves a paper at the court and insists it’s ‘an instrument for the payment of money only,’ but it often falls short of the mark” (Siegel, NY Practice [6th ed], at 543).
While most CPLR 3213 “money instrument” cases involve promissory notes, other instruments may also be worthy of CPLR 3213’s special treatment. For example, in Whiteman, Osterman & Hanna, LLP v Preserve Assoc., LLC (2019 NY Slip Op 29056 [Sup Ct, Albany County]), the Commercial Division, Albany County (Platkin, J.) recently considered whether two agreements constituted “money instruments” within the meaning of CPLR 3213. In Whiteman, the plaintiff law firms each brought separate CPLR 3213 motions pursuant to two written agreements (the “Agreements”) for the payment of past-due legal fees and expenses. The Agreements recited, in sum and substance:
that the plaintiff law firms rendered legal services to defendants in connection with the development of a ski lodge and resort;
that the plaintiff law firms agreed to accept deferred payment of their past-due legal fees;
that defendants acknowledged and reaffirmed their indebtedness to plaintiffs on an annual basis;
that defendants were to repay their debt to each respective law firm by September 2017; and
the specific amounts due and owing to each plaintiff.
Critically, the Agreements themselves recited defendants’ explicit acknowledgement that the Agreements were “unconditional instrument[s] for the payment of money only.” After defendants failed to make payments pursuant to the Agreements, plaintiffs commenced two separate collection actions by filing motions for summary judgment in lieu of complaint.
The threshold issue for the court to decide was whether the Agreements were “for the payment of money only.” As the court explained, “[i]f an instrument contains an unconditional promise to pay a sum certain over a stated period of time, it is considered an instrument for the payment of money only.” But, “where the instrument requires something in addition to defendant’s explicit promise to pay a sum of money, CPLR 3213 is unavailable. Put another way, 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” (citations omitted).
Applying these principles, the court held that the Agreements clearly set forth defendants’ unconditional promise “to pay a specified sum at a prescribed time.” The court noted that the plaintiff law firms “did not owe any executory performance to defendants, and no proof outside the Agreements is necessary to establish defendants’ defaults or the amounts owed to plaintiffs.” Furthermore, the Agreements themselves included defendants’ explicit acknowledgement that the Agreements were in fact “unconditional instrument[s] for the payment of money only.”
But, a motion for summary judgment in lieu of complaint cannot always be used to recover outstanding legal fees (see Emery Celli Brinkerhoff & Abady, LLP v Rose, 2010 NY Slip Op 33300 [U] [Sup Ct, NY County Nov, 23, 2010] [denying a CPLR 3213 motion because plaintiff relied on implied account stated, rather than express agreement to pay]; Emperor Industries, Inc. v Rothbaum, 17 Misc 3d 1125 [A] [Sup Ct, NY County 2007] [denying a CPLR 3213 motion on an account stated where the amount of balance could not be determined without reference to outside proof]; compare Barraco v Rosendale, 162 AD2d 899 [3d Dept 1990] [CPLR 3213 could be used to recover legal fees based on signed letter from defendant client to an escrow agent acknowledging that the attorney’s final bill was accurate and authorizing escrow agent to pay sum to principal of law firm]). These cases show that summary judgment pursuant to CPLR 3213 will be denied where proof outside of the purported instrument is required to prove the movant’s claim.
And so, to qualify as a CPLR 3213 “money instrument,” two things must be shown: (1) the instrument itself, and (2) proof of non-payment. The instrument does not qualify as a “money instrument” within the meaning of CPLR 3213 if it calls for something in addition to the payment of money, or if outside proof is needed to prove a plaintiff’s claim. A party contemplating whether or not to bring a motion pursuant to CPLR 3213 should make sure his or her instrument clearly qualifies as a money instrument. If a plaintiff has any doubt as to whether an instrument qualifies, he or she should instead commence an ordinary action, wait until the defendant interposes an answer, and then make a conventional motion for summary judgment pursuant to CPLR 3212. Otherwise, time, money and resources may be wasted, and the court may become distracted by a procedural battle over whether CPLR 3213 was properly invoked, rather than focusing on the substantive merits of the claim.