Rediscount Corp. of America v. Duke

34 A.D.2d 898, 311 N.Y.S.2d 226, 1970 N.Y. App. Div. LEXIS 4599

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: June 4, 1970
• Status: Published

Opinions

Appeal from an order of the Supreme Court, New York County, entered July 29, 1969, which denied a motion by plaintiff for summary judgment and denied cross motions by defendants-respondents-appellants for summary judgment.

Memorandum by the Court. Order entered July 29, 1969, affirmed, with $50 costs and disbursements to defendants-respondents appearing herein. We predicate our affirmance on the ground that the record discloses issues of fact precluding the granting of summary judgment and we do not reach the question of whether or not CPLR 3213 is proeedurally available under the circumstances here so as to authorize the making of a motion in advance of the service of a complaint. (Cf. Holmes v. Allstate Ins., 33 A D 2d 96; Goodman v. Solow, 27 A D 2d 920.) As reiterated by the Court of Appeals in an action upon written agreements of guarantee involving some of the parties to this action, the general rule is that “ the ‘ drastic remedy ’ of summary judgment should not be granted where there is any doubt as to the existence ‘ of [factual] issues ’ ” (Millerton Agway Coop. v. Briarcliff Farms, 17 N Y 2d 57, 61). “ This-drastic remedy should not be granted where there is any doubt as to the existence of such issues, or where the issue is ‘arguable’.” (Glick & Dolleck v. Tri-Pac Export Corp., 22 N Y 2d 439, 441.)

Issues of fact discernible in the record include those arising from defendant’s allegations of advances by plaintiff to the principal debtor corporation in violation of the terms of the collateral loan agreement that plaintiff would limit its advances to the corporation to 80% of the unpaid accounts receivable assigned to it. Other arguable issues derive from defendants’ allegations that plaintiff took control of the corporation and, while in control, improvidently managed its affairs whereby the collateral was dissipated and destroyed.

The alleged defense, grounded on the Statute of Limitations, also presents an arguable basis for factual issues. There is evidence that the plaintiff’s action is based upon a cause of action which accrued in the District of Columbia and, inasmuch as plaintiff is not a resident of New York, CPLR 202 may apply to bar the action. Although CPLR 202 would not apply where the contract sued on specifically designated an applicable statute of limitations (see Baker v. Commercial Travelers Assn., 3 A D 2d 265, 266), here, the general provision in the collateral loan agreement calling for governance by the laws of Virginia in proceedings concerning the “ validity, interpretation, enforcement and effect” of the agreement does not indicate that clear intent necessary, irrespective of circumstances, to bind the parties to the Virginia Statute of Limitations. (See Dorff v. Taya, 194 App. Div. 278.)

Furthermore, there is coneededly an issue as to whether the books of the plaintiff were approved by the principal debtor and thereby constitute conclusive evidence as to the balance of the debtor’s account. There also exist the disputed claims of the defendants to certain credits against the account. We have noted plaintiff’s contention that the issues involving what may be owing by the debtor could be resolved on an assessment of damages but, certainly, these issues, as the principal issues of this action, are so related to the primary question of liability on the collateral guaranties, that summary judgment would be inappropriate. In this case where complicated issues relative to the amount due may entail extensive pretrial proceedings and the trial itself may require considerable court time, “ The relief afforded by summary judgment is " 6 * illusory. No time or effort of either the court or the litigants is spared by resort to it." (Toussoupoff v. Columbia Broadcasting System [concurring op. Steuer, J.], 19 A D 2d 865, 866; see, also, Schwartz v. New England Mut. Life Ins. Co. of Boston, 20 A D 2d 688; Harold Ohringer, Inc. v. Kass, 28 A D 2d 1117.)

Finally, we conclude that, under the circumstances here, a proper record for the determination of the rights of the parties, in the interests of justice, requires pleading statements of the respective claims of the parties and the usual opportunity for pretrial proceedings.