Friends Lumber, Inc. v. Cornell Development Corp.

Appeal from a judgment of the Supreme Court (Lynch, J.), entered March 20, 1996 in Schenectady County, which granted plaintiffs motion for summary judgment in lieu of complaint.

From 1987 through 1994 defendant Cornell Development Corporation purchased lumber from plaintiff in conjunction with a residential real estate project. In 1989, Cornell Development’s accounts payable to plaintiff began to increase and by 1992 the outstanding debt was quite substantial. Between 1992 and June 1993, efforts were made between the parties to resolve the issue of payment on the outstanding account, to no avail. During this time period, Cornell Development continued to purchase lumber from plaintiff.

By letter dated June 2, 1993, defendant Peter J. Cornell, president of Cornell Development, proposed that promissory notes be executed to pay the outstanding debt. Thereafter, on June 16, 1993, two promissory notes in the amount of $305,457.56 and $20,000, respectively, were signed by Cornell personally and as president of Cornell Development. The prom

Plaintiff

Annual income $6,500

less PICA 427

Adjusted gross income $6,073

Defendant

Annual income $23,450 less PICA 1,794

Adjusted gross income $21,656

Combined parental income: $27,729

Total child support obligation ($27,729 X 29%) 8,041

Defendant’s pro rated share ($8,041 X 78%) 6,272

Defendant’s weekly obligation ($6,272 -h 52 = $120 — $40) 80

As instruments for the payment of money only, the promissory notes are entitled to the expedited procedure outlined in CPLR 3213 (see, R-H-D Constr. Co. v Miller, 222 AD2d 802 , 803; Lavelle v Urbach, Kahn & Werlin, 198 AD2d 751 ). The prima facie case proven by plaintiff—demonstration of the execution of the notes and defendants’ default in payment (see, Seaman-Andwall Corp. v Wright Mach. Corp., 31 AD2d 136 , affd 29 NY2d 617 )—can be defeated only by proof demonstrating the existence of a triable issue of fact with respect to a bona fide defense (see, Lavelle v Urbach, Kahn & Werlin, supra). Defendants have failed in this regard.

It is beyond contradiction that the promissory notes relate to defendants’ antecedent obligations to plaintiff for lumber purchases. Accordingly, the failure of consideration defense cannot be considered a “bona fide” defense barring the CPLR 3213 motion (see, McCarthy v Sessions, 170 AD2d 25 ; Crumbliss v Swerdlow, 158 AD2d 502 , lv denied 75 NY2d 710 ; Perlstein v Kullberg Amato Picacone/ABP, 158 AD2d 251 , 252; Tabor v Logan, 114 AD2d 894 ; see also, UCC 3-303 [b]; 3-408).

Cornell claims that he was fraudulently induced into executing the notes based upon oral representations by plaintiff’s officers and agents that the one-year term would not be enforced. With respect to this affirmative defense, we note several points. First, evidence in support of this claim is limited to Cornell’s own general and unsubstantiated allegations (cf., Amirana v Howland, 202 AD2d 783 , 785). Moreover, the execution of promissory notes was proposed by Cornell, an experienced business person, and he was responsible for drafting them (see, Chimart Assocs. v Paul, 66 NY2d 570 , 571; Keeseville Natl. Bank v Gulati, 194 AD2d 970 , 971, lv denied 82 NY2d 663 ). Finally, and most importantly, Cornell’s claim in this regard is

Nor are defendants’ vague and conclusory assertions of economic duress sufficient to defeat the motion. The alleged threat by plaintiffs officers and agents that plaintiff would sue defendants for the outstanding debt if Cornell did not sign the notes does not constitute economic duress and is therefore not a bona fide defense to the claim (cf., Sosnoffv Carter, 165 AD2d 486 ). The existence of economic duress is demonstrated by proof that one party to a contract has threatened to breach the contract by withholding performance unless the other party agrees to some further demand (see, 805 Third Ave. Co. v M.W. Realty Assocs., 58 NY2d 447 ; Austin Instrument v Loral Corp., 29 NY2d 124 , 130). Indeed, defendants must establish that they were compelled to agree to the terms of the promissory notes because of a wrongful threat by plaintiff which precluded the exercise of their free will (see, id.). Just as a party cannot be guilty of economic duress for refusing to do that which he or she is not legally required to do (see, 805 Third Ave. Co. v M.W. Realty Assocs., supra; MLI Indus. v New York State Urban Dev. Corp., 205 AD2d 998 ), the threatened exercise of a legal right does not amount to economic duress (see, Niagara Frontier Transp. Auth. v Patterson-Stevens, 237 AD2d 965 ; Wall St. Clearing Co. v Ainbinder, 212 AD2d 488 ; Marine Midland Bank v Hallman's Budget Rent-A-Car, 204 AD2d 1007 ; Marine Midland Bank v Mitchell, 100 AD2d 733 ; Marine Midland Bank v Stukey, 75 AD2d 713 , affd 55 NY2d 633 ).

Finally, plaintiffs claim for the money due under the promissory notes and defendants’ counterclaims relating to the purchased lumber are not so inseparable that the counterclaims should preclude summary judgment to plaintiff. With respect to the counterclaims interposed, “[generally, a counterclaim that does not itself meet the criteria of CPLR 3213 should not be allowed to obstruct a claim brought thereunder” (Vinciguerra v Northside Partnership, 188 AD2d 861 , 862).

Here, the promissory notes were executed by defendants with full knowledge of the alleged defective lumber. Moreover, defendants’ failure to make the agreed-upon payments was not based upon alleged defects in the lumber; rather, Cornell Development’s financial problems and lack of capital prevented

Crew III, J. P., White, Yesawich Jr. and Spain, JJ., concur. Ordered that the judgment is affirmed, with costs.