NY Supreme Court Decision Highlights Creditors’ Ability to Obtain Quick Judgments Against Defaulting Debtors

In Pollack v. Haberman, 2011 NY Slip Op 32508(U), September 22, 2011, the New York County Supreme Court granted summary judgment in favor of plaintiff Pollack following defendant Haberman’s failure to repay the principal amounts due under two promissory notes executed by Haberman in conjunction with $300,000 worth of loans provided to him by Pollack. The case is unremarkable except as a reminder that creditors can often significantly speed up the process of obtaining judgments against defaulting debtors by initiating their suits using a procedural device known as a motion for summary judgment in lieu of complaint, which is how Pollack brought his suit against Haberman.

The standard path for obtaining a civil judgment – even summary judgment – can be frustratingly lengthy and expensive. The plaintiff ordinarily must file and serve a complaint, which is then responded to by the defendant with an answer (with or without counterclaim(s)) or a motion to dismiss. If an answer is filed, the parties proceed to discovery (document exchanges, depositions, etc.), and then one or both parties may file a motion for summary judgment in which they would argue that the accumulated evidence collected in discovery indisputably allows the court to render a judgment without the further necessity of trial. If a motion to dismiss is filed, the process can drag out even further as the parties brief and argue the motion, and then, assuming the motion is denied, move into discovery and subsequent summary judgment motion practice.

Under New York law, however, this complicated and time consuming procedure is not necessary in the vast majority of collection matters many creditors are regularly involved in. Rather, under CPLR § 3213, “When an action is based upon an instrument for the payment of money only or upon any judgment, the plaintiff may serve with the summons a notice of motion for summary judgment and the supporting papers in lieu of a complaint.” In other words, if the creditor is seeking only money from the defendant, and the creditor is in possession of a document obligating the defendant to pay that money, the creditor can begin his action with a motion for summary judgment and avoid the months-long delay that would otherwise ordinarily be necessary.

Thus, in Pollack, the plaintiff obtained a swift judgment against the defendant debtor simply by initiating his suit with a motion for summary judgment in lieu of complaint to which he attached copies of the promissory notes evidencing the defendant’s obligation to pay the funds the plaintiff was seeking to recover in his lawsuit.

The motion for summary judgment in lieu of complaint is not available in every case, but where it is, it can save creditors time, legal fees, and a lot of frustration.