Summary
This Appellate Division decision reviews a lower court order granting summary judgment in favor of a plaintiff seeking to recover on two promissory notes. The court reversed the grant of summary judgment because the plaintiff failed to establish prima facie standing as either the holder or assignee of the notes at the time the action was commenced. However, the court affirmed the denial of the defendant's cross-motion for summary judgment based on his affirmative defense alleging deceptive business practices by the educational institution that funded the loans.
Topics
Practice areas
Questions Presented
- Whether the plaintiff established standing as holder or assignee of the promissory notes for purposes of summary judgment
- Whether the defendant’s deceptive‑conduct claim under General Business Law § 349 warrants dismissal of the complaint
Holdings
- The plaintiff failed to establish standing because it did not attach endorsed copies of the notes or a bill of sale showing assignment; therefore the plaintiff’s motion for summary judgment on the complaint must be denied.
- The defendant’s claim was not addressed because the court affirmed the denial of the plaintiff’s summary‑judgment motion; the deceptive‑conduct allegation therefore does not affect the disposition.
Key quotations
“To establish a prima facie case in an action to recover on a promissory note, the plaintiff must submit the note, along with evidence of the defendants' failure to make payments on the note according to its terms.” (212 AD3d at 742)
“A plaintiff can establish its standing by demonstrating that it was either the holder or assignee of the underlying note at the time the action was commenced.” (212 AD3d at 743)
Factual background
In April 2012 the defendant and his son executed a $25,296 promissory note payable to Sallie Mae for tuition and housing at Full Sail University, and in December 2012 a second $30,000 note. The plaintiff seeks recovery on those notes. The plaintiff did not attach endorsed copies of the notes to the complaint, nor provide an assignment bill of sale.
Procedural history
The plaintiff sued to recover on two promissory notes. The Supreme Court, Queens County entered an order on May 26, 2023 granting the plaintiff summary judgment on the complaint and denying the defendant's cross‑motion. The defendant appealed the order.