Peach, Inc. v. RJR Servs., Inc.

Opinion

Peach, Inc. v RJR Servs., Inc.

2026 NY Slip Op 05322

September 16, 2026

Appellate Division, Second Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This decision is uncorrected and subject to revision before publication in the Official Reports.

Peach, Inc., respondent,

v

RJR Services, Inc., etc., et al., appellants.

Supreme Court of the State of New York, Appellate Division, Second Judicial Department

Decided on September 16, 2026

2024-06825, (Index No. 606588/23)

Francesca E. Connolly, J.P.

Cheryl E. Chambers

William G. Ford

James P. McCormack, JJ.

Scott Lockwood, Deer Park, NY, for appellants.

Elan Markewitz, Riverhead, NY, for respondent.

[*1]

DECISION & ORDER

In an action to recover on a promissory note, commenced by motion for summary judgment in lieu of complaint pursuant to CPLR 3213, the defendants appeal from a judgment of the Supreme Court, Suffolk County (George Nolan, J.), dated March 11, 2024. The judgment, insofar as appealed from, upon an order of the same court dated August 29, 2023, granting that branch of the plaintiff's motion which was for summary judgment on the issue of liability and directing a hearing on the issue of damages, and upon a decision of the same court dated February 27, 2024, made after a hearing on the issue of damages, is in favor of the plaintiff and against the defendants in the sum of $65,197.

ORDERED that the judgment is modified, on the law and the facts, by deleting the provision thereof which is in favor of the plaintiff and against the defendants in the sum of $65,197, and substituting therefor a provision which is in favor of the plaintiff and against the defendants in the sum of $12,152 for the balance due on the promissory note plus interest due under the terms of the promissory note; as so modified, the judgment is affirmed insofar as appealed from, with costs to the defendants, and the matter is remitted to the Supreme Court, Suffolk County, for a calculation of interest due under the terms of the promissory note and the entry of an appropriate amended judgment thereafter.

The defendant RJR Services, Inc., doing business as Hamlet Window Cleaning and Power Washing (hereinafter RJR), executed a promissory note dated October 9, 2020, in favor of the plaintiff (hereinafter the note). The note is in the principal sum of $100,0000, with interest from October 9, 2020, on the unpaid principal at the rate of 5% per annum. The defendant Jason Reusch personally guaranteed RJR's obligations under the note. After RJR and Reusch defaulted on the note, the plaintiff commenced this action to recover on the promissory note by motion for summary judgment in lieu of complaint pursuant to CPLR 3213 seeking, inter alia, to recover damages in the amount of $65,197.20, representing the alleged outstanding principal due under the note plus interest through March 1, 2023. In opposition to the motion, the defendants acknowledged liability but disputed the amount due and owing. In an order dated August 29, 2023, the Supreme Court granted that branch of the motion which was for summary judgment on the issue of liability and directed a hearing on the issue of damages.

At the hearing, the plaintiff's president testified, among other things, that he and [*2]Reusch orally agreed to a purchase price of $150,000 for the sale of the plaintiff's business, the note was given as partial consideration, and the defendants paid $50,000 at closing. Reusch, on the other hand, testified that the $50,000 paid at closing constituted partial payment of the $100,000 purchase price. The defendants submitted a business purchase agreement for the sale of the business (hereinafter the BPA), which the parties executed at the same time as the note. The BPA reflected a purchase price of $100,000 and referred to the note.

Following the hearing on damages, in a decision dated February 27, 2024, upon crediting, inter alia, the plaintiff's representation as to the alleged $150,000 purchase price of the business, the Supreme Court determined that the plaintiff had established its entitlement to, among other things, damages in the amount of $65,197. A judgment was entered, inter alia, in favor of the plaintiff and against the defendants in the sum of $65,197. The defendants appeal.

In reviewing a determination made after a nonjury trial, the power of this Court is as broad as that of the trial court, and this Court may render the judgment it finds warranted by the facts, bearing in mind, in a close case, that the trial judge had the advantage of seeing and hearing the witnesses (see Northern Westchester Professional Park Assoc. v Town of Bedford, 60 NY2d 492, 499; Diederich v Wetzel, 170 AD3d 954, 954).

Generally, "'separate contracts relating to the same subject matter and executed simultaneously by the same parties may be construed as one agreement'" (Nationstar Mtge., LLC v Hoar, 209 AD3d 864, 866, quoting Williams v Mobil Oil Corp., 83 AD2d 434, 439). When an agreement is clear and unambiguous on its face, "evidence of what may have been agreed orally between the parties prior to the execution of [an] integrated written instrument cannot be received to vary the terms of the writing" (Hoeg Corp. v Peebles Corp., 153 AD3d 607, 609; see Braten v Bankers Trust Co., 60 NY2d 155, 162). Moreover, where an agreement contains a merger clause, "a court is obliged to require full application of the parol evidence rule in order to bar the introduction of extrinsic evidence to vary or contradict the terms of the writing" (Schron v Troutman Sanders LLP, 20 NY3d 430, 436 [internal quotation marks omitted]; see Parizat v Meron, 231 AD3d 736, 739).

Here, construing the note and the BPA as one agreement, they clearly and unambiguously express the parties' intent with respect to the purchase price (see Rogers v Smith, 47 NY 324, 327). As such, their terms could not be varied by extrinsic evidence (see W.W.W. Assoc. v Giancontieri, 77 NY2d 157, 162; Zaidi v New York Bldg. Contrs., Ltd., 99 AD3d 705, 707). Further, the BPA contained a merger clause. Accordingly, the Supreme Court should not have considered the plaintiff's evidence regarding an alleged prior oral agreement in determining the purchase price of the business and the outstanding balance on the note (see Zaidi v New York Bldg. Contrs., Ltd., 99 AD3d at 707; cf. Vivir of L I, Inc. v Ehrenkranz, 127 AD3d 962, 964).

The evidence at the hearing established an outstanding balance in the principal sum of $12,152 on the note. As the plaintiff is entitled to interest under the terms of the note, we remit the matter to the Supreme Court, Suffolk County, for a determination of the amount of interest due under the terms of the note and the entry of an appropriate amended judgment thereafter.

CONNOLLY, J.P., CHAMBERS, FORD and MCCORMACK, JJ., concur.

ENTER:

Darrell M. Joseph

Clerk of the Court