Santander Bank, N.A. v. Chef's Orchid-The Grille, Inc.

Summary

The Appellate Division, Second Department, affirmed a judgment awarding Santander Bank $167,764.70 against Chef's Orchid-The Grille, Inc. and Otis Stone based on a promissory note and personal guaranty. The court held that service on Stone was valid, denial of the defendants' untimely amended answer was proper, and Santander established entitlement to summary judgment. The court also rejected the defendants' claims concerning notice and an alleged oral extension of the maturity date under the statute of frauds.

Holdings

1. Three attempts by the process server to personally serve Stone at his residence satisfied CPLR 308(4)'s due-diligence requirement, and Stone's conclusory assertions did not overcome the presumption of valid service created by the process server's affidavit.
2. The Supreme Court providently exercised its discretion in denying defendants leave to serve an amended answer or to compel Santander to accept it because defendants interposed the amended answer after the twenty-day amendment-as-of-right period and without leave of court or a stipulation.
3. Santander established prima facie entitlement to judgment as a matter of law by submitting the note, the guaranty, evidence of the borrower's receipt of the loan proceeds, the repayment obligation, proper notice of the upcoming maturity, and defendants' default; defendants failed to raise a triable issue of fact.
4. Defendants' contention that the maturity date was orally extended was barred by General Obligations Law § 5-701 because the alleged extension was not contained in a signed writing, and defendants' continued payments did not constitute unequivocally referable part performance sufficient to create an exception.

Questions Presented

1. Whether service on Stone by affixing the summons and complaint to his residence and mailing them satisfied the due-diligence requirement for nail-and-mail service under CPLR 308(4).
2. Whether Stone overcame the presumption of valid service and established a lack of personal jurisdiction.
3. Whether defendants should have been permitted to serve or compel acceptance of an amended answer asserting new counterclaims and affirmative defenses after the amendment-as-of-right period had expired.
4. Whether Santander established prima facie entitlement to summary judgment on the promissory note and guaranty and whether defendants raised a triable issue of fact regarding notice or the alleged oral maturity-date extension.
5. Whether the alleged oral extension of the repayment date was barred by the statute of frauds and whether defendants' continued payments constituted sufficient part performance to avoid that bar.

Disposition

affirmed