Court Rules That Promissory Note’s References To An Operating Agreement And Attorneys’ Fees Do Not Prevent Summary Judgment In Lieu Of Complaint

Posted: July 9, 2025 / Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. Turner / Category Summary Judgment in Lieu of Complaint

Court Rules That Promissory Note’s References To An Operating Agreement And Attorneys’ Fees Do Not Prevent Summary Judgment In Lieu Of Complaint

On June 13, 2025, Justice Andrea Masley granted summary judgment in lieu of complaint, overruling a defendant’s arguments that references in the note to other agreements and payment of fees of an unspecified amount disallowed the expedited procedures of CPLR 3213. In BLT Fund 9 Dayton’s LLC v. 601 Minnesota Investor LLC, Index No. 650483/2024, the plaintiff moved for summary judgment in lieu of complaint under CPLR 3213 after the defendant failed to repay a promissory note with interest. Plaintiff contended the expedited procedures in CPLR 3213 were appropriate because the promissory note was “an instrument for the payment of money only.”

The defendant disagreed, arguing that CPLR 3213’s special procedure was not available because the note referenced other agreements, including an operating agreement, that required complex interpretation to determine the maturity date and events of default. The defendant also objected to use of the procedure to seek sums that had not been identified with certainty in the promissory note, such as attorneys’ fees.

The Court rejected these arguments, explaining:

Defendant contends that the Note is not an instrument for the payment of money only because it references another agreement, the Operating Agreement, and thus, falls outside the ambit of CPLR 3213. . . . However, “[r]eferences to other agreements in the instrument do not necessarily qualify or alter the obligation to pay on the instrument.” . . . Next, defendant contends that the Note does not call for repayment of a certain sum because it does not provide for a certain sum of attorneys’ fees and other fees or a certain sum of damages if there was an “Event of Default,” and thus, it falls outside the purview of CPLR 3213. “However, an instrument is not rendered ineligible for CPLR 3213 treatment merely because it does not cite a sum certain on its face.” . . . [A] determination of the amount of attorneys’ fees owed does not prevent a determination on the issue of liability pursuant to CPLR 3213 where the Note provides for attorneys’ fees.

The attorneys at Schlam Stone & Dolan frequently advise clients concerning the availability of special procedures that expedite litigation such as summary judgment in lieu of complaint. Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning such issues.