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A sampling of real-life litigation involving heter iskas
    Supreme Court, Kings County, New York. Decided: January 27, 1998 Reingold & Tucker, Brooklyn, for plaintiffs. Israel Weinstock, Belle Harbor, for defendants. This action by Plaintiffs claiming damages against Defendants for fraud seeks to enforce the rights of the corporate Plaintiff and its sole stockholder against Defendant Joseph Berkovitz a/k/a Joseph Berkowitz personally based upon his alleged guarantee of the promissory note executed by him on behalf of the corporate Defendant Formadyne Industries, Inc. on June 12, 1990 (“Note”) and further seeks to invalidate various transfers to Defendants alleged to have been made in violation of Debtor and Creditor Law §§ 273 and 276 and the alleged fiduciary duty of the individual Defendants to the creditors of Formadyne.   Plaintiffs' complaint demands a judgment against all Defendants in the amount of $250,000. with interest, plus attorney's fees and punitive damages. A non-jury trial was held before Mr. Justice Frank Vaccaro on October 22, 24, 25 and 28, 1996.   At the conclusion of trial, Justice Vaccaro, by order dated October 29, 1996, sua sponte enjoined Defendants from transferring any property pending the final decision of the court, and counsel for the parties were given the opportunity to provide proposed Findings of Fact and post-trial memoranda of law.   Following the death of Justice Vaccaro at the end of February, 1997, this matter was transferred to me for decision, upon the agreement of the parties' attorneys.   Decision was delayed by the loss of the original exhibits and counsels' delay in providing duplicates thereof.   Upon review of the testimony and documentary evidence adduced at the bench trial, the Court makes the following Findings of Fact and Conclusions of Law. FINDINGS OF FACT Plaintiff Lawrence Heimbinder was the sole shareholder of Redi-Records Industries, Inc. (“Redi-Records”) which was in the business of printing commercial forms.   On June 12, 1990, Redi-Records sold its assets to Defendant Formadyne Industries, Inc. (“Formadyne”) for $300,000., of which $50,000. was paid at closing, with the balance of $250,000. to be paid, pursuant to the terms of the promissory note executed by Defendant Joseph Berkovitz as President of Formadyne, monthly over a period of five years, commencing October 15, 1990, with interest of 10% on the balance and 15% on any defaulted principal and interest (Exhibit 3).   Defendants Joseph Berkovitz and his wife, Barbara Berkovitz (sued herein as Barbara Jeremias Berkowitz), were the sole shareholders of Formadyne.   At the closing, Joseph Berkovitz produced a document, called a “heter iska,” originally printed in Hebrew (a language not understood by Plaintiff Heimbinder) but which was translated into English by Mr. Berkovitz and signed by both Mr. Heimbinder and Mr. Berkovitz.   Plaintiffs contend this document personally guaranteed the payment of the Note. Only the English translation (Exhibit 4) will be considered by this Court. Included in the sale were Redi-Records' inventory, equipment, trade name, customer orders, customer list, and certain enumerated machinery.   Redi-Records subsequently changed its name to R & R Closing Corp. (“R & R”).  Immediately after the sale, Mr. Berkovitz hired a trucker who, over a period of several days, loaded at least 10 trucks and vans, some 40 feet long, with the inventory and equipment in the Redi-Records' plant in Bay Shore for delivery to the Formadyne plant in Brooklyn.   Pursuant to the Employment Agreement (Exhibit 5, which has been lost and cannot be duplicated), Mr. Heimbinder continued to work for Defendants at Formadyne for two and a half weeks so as to effect a smooth transition of the business.   On July 2, 1990, Defendants filed a business certificate in Kings County indicating that they were doing business as “Redi-Records.” On October 15, 1990, Defendants failed to make the first payment on the Note to Plaintiff.   No payment on the promissory note was ever made.   Mr. Berkovitz testified that the reason for nonpayment was that he did not have the money.   Following the default on the Note, in November 1990, Plaintiff R & R brought an action against Formadyne for judgment on such Note. A judgment against Formadyne was entered on February 28, 1991, in Supreme Court, Suffolk County (Defendants' Exhibit C).   It is undisputed that the parties had agreed on June 12, 1990, that R & R would be entitled to receive the proceeds on pending orders that were to be completed before June 30, 1990, and Formadyne would complete and receive the proceeds on any pending orders for delivery after June 30, 1990.   Following the default on the Note by Formadyne, R & R stopped paying over the monies collected after October 15, 1990, which would have belonged to Formadyne.   The amount thus accumulated by R & R is $14,000., which R & R has retained as execution on account of its judgment against Formadyne.   The balance of the judgment obtained against Formadyne remains uncollected. Despite early assurances by Defendants Berkovitz that payment would be made on the Note, testimony by Defendants' accountant Lee Hanover clearly established that Defendants had no such intention.   The debt to Plaintiffs was never recorded in Defendants' records and in conversation, Joseph Berkovitz explicitly stated he did not want to pay and needed legal advice.   Moreover, portions of the original inventory that were warehoused were abandoned by Defendants and were ultimately sold at auction to satisfy the warehouse lien. At the end of November 1990, immediately following the onset of the lawsuit in Suffolk County, Formadyne was abandoned;  all production and sale in the Formadyne name ceased, and production and sales were thereafter conducted under the corporate name of Defendant Colonial Redi-Records Co., Inc. (“Colonial”).   Mr. and Mrs. Berkovitz are the sole shareholders of Colonial.   Testimony was adduced establishing that Joseph Berkovitz remained in control of the day to day operation of Colonial, as he had been of Formadyne.   All monies received by Formadyne, which were substantial, were disbursed by Mr. Berkovitz immediately upon receipt.   There were substantial preferential payments of Formadyne funds to Berkovitz family members directly and to third parties in payment of Berkovitz's personal debts.   All Formadyne debts were paid except for the debt to Plaintiffs.   After the Formadyne bank account was exhausted, Colonial paid all remaining Formadyne creditors.   Colonial also continued to make monthly mortgage payments on the two commercial buildings and on the residence owned personally by Mr. and Mrs. Berkovitz.   On January 8, 1991, Colonial issued a $25,000. check to Formadyne which, Mr. Berkovitz testified, was for the sale to Colonial of some of Formadyne's inventory and one year's use of Formadyne's equipment.   There were no documents to evidence the sale or lease, or listing the inventory or equipment.   The Formadyne equipment is still being used by Colonial without any further payment. The testimony and evidence before the Court demonstrated that the business premises, employees, administration, management, and machinery of Colonial are the same as those used by Formadyne.   Colonial uses the same equipment, produces the same products, sells to the same customers, buys from the same suppliers, and has the same bookkeeper, lawyer, accountant, and bank as Formadyne.   Colonial uses the Redi-Records' name and logo in its corporate name and business papers and continues to market the same line of products as Formadyne had produced after the purchase from Redi-Records using the names “Colonial Formadyne,” “Redi-Records,” “R & R,” and “Colonial R-R.” It is further clear from the records in evidence that Formadyne, presumptively and apparently solvent prior to the transfer of Plaintiffs' assets, was rendered insolvent and essentially liquidated by the direct and indirect transfer of its assets to Defendants. CONCLUSIONS OF LAW  In this action to enforce the judgment of February 28, 1991, and to set aside the allegedly fraudulent transfer of assets, Defendants' affirmative defenses of “res judicata”, “statute of frauds” and “laches” are unavailing.   See Julien J. Studley, Inc. v. Lefrak, 48 N.Y.2d 954, 425 N.Y.S.2d 65, 401 N.E.2d 187 (1979), affirming, 66 A.D.2d 208, 412 N.Y.S.2d 901 (2d Dep't).   Plaintiffs concede, however, that they have retained $14,000. in money collected upon pending orders which properly belonged to Formadyne in partial satisfaction of the judgment obtained by R & R in the Supreme Court, Suffolk County.   This sum must be offset upon Defendants' counterclaim against any recovery by Plaintiffs.  Plaintiffs' first cause of action asserts a claim of fraud against Defendants Berkovitz alleging that the Berkovitzes made misrepresentations that Formadyne was solvent and intended to pay the money due to R & R under the promissory note when, in fact, they intended to breach the contract.   The gravamen of this claim is indistinguishable from the claims of fraud brought pursuant to Debtor and Creditor Law §§ 273 and 276.   Moreover, an independent claim for fraud does not arise where such claim relates only to an intention to breach a contract.  Tesoro Petroleum Corp. v. Holborn Oil Co., 108 A.D.2d 607, 484 N.Y.S.2d 834 (1st Dep't, 1985);  cf., C.B. Western Financial Corp. v. Computer Consoles, Inc., 122 A.D.2d 10, 12, 504 N.Y.S.2d 179 (2d Dep't, 1986).   In light of the fact that a judgment has already been entered on the underlying breach of contract and Note, and whereas Plaintiffs are afforded complete relief under their third cause of action, infra, the first claim is redundant, as is the second pleaded cause of action against the corporate Defendants, alleged to be “alter egos” of the Berkovitzes. Plaintiffs' third cause of action seeks damages against all Defendants under Debtor and Creditor Law §§ 273 and 276 for the alleged fraudulent conveyance of the property of judgment debtor Formadyne.  Debtor and Creditor Law § 273 provides: Every conveyance made and every obligation incurred by a person who is or will be thereby rendered insolvent is fraudulent as to creditors without regard to his actual intent if the conveyance is made or the obligation is incurred without a fair consideration.  Plaintiffs contend that the transfers of assets from Formadyne to Colonial and other Defendants were made without fair consideration and rendered Formadyne insolvent, and, therefore, were presumptively fraudulent conveyances pursuant to Debtor and Creditor Law § 273.   Defendants assert that the $25,000. paid by Colonial was only for a portion of the inventory of Formadyne and that most of the inventory purchased from Redi-Records is still in storage at Colonial's factory.   The fact remains, however, that all of such inventory remains in possession of Colonial and that Colonial continues to use the equipment of Formadyne without any further payment.   Thus, the Court finds that Colonial's payment of $25,000. to Formadyne did not constitute fair consideration for its assets, which included those assets that had been purchased from Redi-Records just five months earlier for $300,000., and that the subject transfers were thus constructively fraudulent conveyances pursuant to Debtor and Creditor Law § 273.   See Julien J. Studley, Inc. v. Lefrak, supra, 66 A.D.2d 208, 412 N.Y.S.2d 901;  Southern Industries, Inc. v. Jeremias, 66 A.D.2d 178, 411 N.Y.S.2d 945 (2d Dep't, 1978).   This conclusion is equally applicable to money paid to Defendants Joseph and Barbara Berkowitz directly and indirectly to their personal creditors and relatives without any identifiable consideration to Formadyne, without which Formadyne would have had sufficient assets to pay its debt to R & R Closing Corp. As the Court found in Julien J. Studley, Inc. v. Lefrak, 66 A.D.2d at 215-216, 412 N.Y.S.2d 901: The manipulation of corporate assets by the [defendants] in the face of the [plaintiff's] rights by preferring the interests of those in control of the corporation reflects bad faith and deprives the [defendants] of the status of transferees for fair consideration.   The transfers stripped the corporations of their assets, rendering them insolvent (citation omitted);  they took place when the corporations were ostensibly engaged in business, leaving them an unreasonably small capital (citation omitted);  and they were made when the corporations knew that debts would be incurred beyond their ability to pay as the debts matured (citation omitted). So also have the Defendants herein improperly converted the assets of Formadyne and are thus liable to Plaintiffs for their fraudulent conveyances pursuant to Section 273 of the Debtor and Creditor Law.  Debtor and Creditor Law § 276 provides: Every conveyance made and every obligation incurred with actual intent, as distinguished from intent presumed in law, to hinder, delay, or defraud either present or future creditors, is fraudulent as to both present and future creditors. “The burden of proof to establish actual fraud under Debtor and Creditor Law § 276 is upon the creditor who seeks to have the conveyance set aside (citation omitted), and the standard for such proof is clear and convincing evidence (citations omitted).”  Marine Midland Bank v. Murkoff, 120 A.D.2d 122, 126, 508 N.Y.S.2d 17 (2d Dep't, 1986).  “[F]raudulent intent, by its very nature, is rarely susceptible to direct proof and must be established by inference from the circumstances surrounding the allegedly fraudulent act” (id. at 128, 508 N.Y.S.2d 17).   The circumstances in the case at bar clearly and convincingly evidence Defendants' actual intent to defraud.  The formation of Colonial and the transfers to it occurred shortly after the commencement of an action to enforce the Note against Formadyne.   Additionally, as noted above, the evidence establishes, inter alia, that Colonial continues to use the same equipment, produce the same products, use the same inventory, and has the same business premises as Formadyne.   The stockholders of Colonial are the same as those of Formadyne.   The retention of control over property following a conveyance is an indication that such conveyance was fraudulent.   See, Marine Midland Bank v. Murkoff, supra at 129, 508 N.Y.S.2d 17;  Scola v. Morgan, 66 A.D.2d 228, 232, 412 N.Y.S.2d 893 (1st Dep't, 1979);  Southern Industries v. Jeremias, supra, 66 A.D.2d at 181, 411 N.Y.S.2d 945.   Moreover, the obligation to R & R was never recorded in Defendants' books.   Rather, such records reveal payment of charitable contributions and personal obligations of Defendants Berkovitz to third parties and transfers of substantial sums to Joseph Berkovitz and his relatives far in excess of any cognizable consideration therefor during the period immediately preceding Formadyne's becoming defunct in or about December, 1990.   Intrafamilial transfers are inherently suspect and are often indicia of fraudulent intent.  Polkowski v. Mela, 143 A.D.2d 260, 262, 532 N.Y.S.2d 159 (2d Dep't, 1988).   In December 1990, following commencement of Plaintiffs' suit in Suffolk County, Defendant Joseph Berkovitz withdrew from Formadyne on his own account $39,313.75, a sum much greater than that taken in any prior month, in addition to “donations” of $800. and “mortgage” and “rent” payments of $6,945., also deemed to be for his personal benefit as the owner of the premises (Exhibit 11). The Court, therefore, finds that there was clear and convincing evidence adduced sufficient to show that the transfers of money and property from Formadyne to the Defendants were made with actual intent to hinder, delay or defraud Plaintiffs.   In view of the Court's determination, the conveyances must be set aside to the extent necessary to satisfy the judgment previously granted against Formadyne.   See 10-4 West 108th St. Realty, Ltd. v. Redwood Development, Ltd., 220 A.D.2d 279, 632 N.Y.S.2d 538 (1st Dep't, 1995).   Since the total value of these transfers exceeds the amount due on the Note, judgment will be entered for Plaintiffs upon the balance remaining on the Note plus interest after deducting the $14,000. retained by Plaintiffs.  Having established an actual intent to defraud under Debtor and Creditor Law § 276, Plaintiffs are entitled to recover reasonable attorneys' fees.  Polkowski v. Mela, supra, 143 A.D.2d at 262, 532 N.Y.S.2d 159;  Scola v. Morgan, supra, 66 A.D.2d at 234, 412 N.Y.S.2d 893.   On or about April 14, 1997, Plaintiffs' counsel submitted an unsigned “Attorneys Affirmation” seeking counsel fees totaling $160,000. plus $6,740.40 in disbursements.   Apart from the fact that the affirmation is unsigned, it does not include any representations regarding actual fees or computation of hourly rates and time expended.   While the sum requested may be reasonable in light of the protracted nature of the litigation, this issue must be resubmitted to the Court upon proper papers served on notice.   It is noted that Plaintiffs were awarded attorneys' fees in the Suffolk County judgment.  Plaintiffs' complaint also seeks punitive damages for intentional fraud.   Punitive damages may be awarded upon a finding of actual intent to defraud under Debtor and Creditor Law § 276 only where a defendant's conduct was gross and wanton and involved high moral culpability.   Blakeslee v. Rabinor, 182 A.D.2d 390, 392, 582 N.Y.S.2d 132 (1st Dep't, 1992).   It has been held that “the act of removing property from the reach of a creditor is not misconduct so ‘gross and wanton’ as to justify * * * an award [of punitive damages].”  Marine Midland v. Murkoff, supra, 120 A.D.2d at 132, 508 N.Y.S.2d 17;  see also, James v. Powell, 19 N.Y.2d 249, 260, 279 N.Y.S.2d 10, 225 N.E.2d 741 (1967);  Blakeslee v. Rabinor, supra.   Accordingly, the Court finds that an award of punitive damages is not appropriate herein. Plaintiffs' fourth cause of action, which alleges a violation of Business Corporation Law § 1007, is without merit and must be dismissed as there has been no non-judicial dissolution of Formadyne pursuant to Business Corporation Law, Article 10.  Plaintiffs' fifth cause of action alleges that the Berkovitzes violated their fiduciary duty to the creditors of Formadyne.   Such fiduciary duty is based on “the duty corporate directors and officers owe to creditors deriving from the principle that the corporate assets constitute a trust fund for the benefit of creditors.”  Marine Midland Bank v. Murkoff, supra, 120 A.D.2d at 133, 508 N.Y.S.2d 17;  see also, Julien J. Studley, Inc. v. Lefrak, supra, 66 A.D.2d at 213, 412 N.Y.S.2d 901.   It has been held, however, that the creditor's remedy is limited to reaching the assets which would have been available to satisfy his or her judgment if there had been no conveyance.  Marine Midland Bank v. Murkoff, supra at 133, 508 N.Y.S.2d 17.   Thus, although Plaintiffs are limited to the relief provided under Plaintiffs' third cause of action, they are also entitled to recover under this alternative theory against the individual Defendants as constructive trustees of the assets of Formadyne held for the benefit of Plaintiff creditor. Plaintiffs seek judgment on their sixth cause of action against Defendant Joseph Berkovitz based on an alleged personal guarantee of payment.   The document, known as a “heter iska,” reads as follows (Exhibit 4): I the undersigned agree that the money due to Mr. Larry Heimbinder is in the amount of $250,000 and is a business matter.   I will fufill [sic] my obligation that I will use this money to my understanding to generate profits.   Therefore, we are partners in this deal, but I agree to pay Mr. Heimbinder $250,000 and 10% profit on [illegible] deal although he does not participate in the conduction of business.   The balance remaining [profit? (illegible) ] will belong to Joseph Berkovitz for his work and conduction of business even though the profit will exceed 10% I have no right to claim loss under [the?] terms of payment agreed in our contract.   Attached to this is the Hebrew text. agreed to _  (signed) Lawrence Heimbinder agreed to _  (signed) Joseph Berkovitz As explained by Judge Baer in Leibovici v. Rawicki, 57 Misc.2d 141, 144, 290 N.Y.S.2d 997 (CCCNY, NYCo., 1968): “Hetter Isske” or “heter iska” was a device developed in the 12th to 14th centuries to overcome the Biblical prohibition against charging interest by one Jew to another (Lev. 25, 36-38;  Deut. 23, 19-20).   It was patterned upon an agreement of partnership or joint venture.   The “lender” would supply the money and the “borrower” or working partner had complete freedom to use the capital, and he guaranteed the investment against loss.   He also guaranteed a minimum return (Horowitz, Spirit of Jewish Law, § 265, p. 492).  Plaintiffs submit, in support of their contention that the “heter iska” was a personal guarantee, the decision of the Hon. Jules L. Spodek of this Court entered in Berger v. Baruch Ha' Levi Moskowitz, Kings Co. Sup.Ct. Index No. 15600/91, in which Justice Spodek found a similar instrument to be one for the payment of money and entered judgment thereon under CPLR § 3213.   However, Justice Spodek was confronted with a situation distinguishable from that here in that the only document before him was the “heter iska,” found to be the contract in its entirety between the individual (not corporate) parties, and which contained the following unequivocal language not contained in the document before this Court:  “I, also hereby guarantee for this loan, and give my house located on 683 Bedford Boulevard, which is registered under my name, as a collateral.”   It is obvious that the intent of that document was not the same as that of the one before this Court. In an examination before trial (Defendants' Exhibit A), Michael Schlanger, Plaintiffs' attorney at the June 12, 1990, closing, testified that he had requested a personal guarantee from Mr. Berkovitz prior to the closing and that it had been refused by Berkovitz's Attorney Segal.   Mr. Schlanger did not request a personal guarantee at the closing and did not recall Mr. Heimbinder making such a request.   The document known as a “heter iska” was produced and translated by Mr. Berkovitz and it was at Defendant Berkovitz's insistence that such document was signed. Plaintiffs' Exhibit 2 in evidence is a “Security Agreement” between Formadyne and Redi-Records securing the indebtedness of $300,000 with a schedule of personal property and inventory, signed by Joseph Berkovitz as President of Formadyne.   At the end of the document is a provision for a “Guarantee,” next to which is handwritten the word “omit.”   The name “Joseph Berkovitz,” which had been typed beneath the signature line for the guarantor, has been crossed out.   Mr. Heimbinder testified at trial that “The lawyers.   Which one, I don't know” had written “omit” at closing and that he had been unaware that the guarantee provision was in the document (Trans. pp. 88-89).   Mr. Heimbinder further testified that Mr. Berkovitz had explained to him that the heter iska was necessary because under Jewish law he was “not supposed to be charged interest” (Trans. p. 91) and that Mr. Berkovitz had produced the heter iska from his pocket at the conclusion of the closing after there had been a discussion of guarantees.   Mr. Heimbinder concluded:  “There were no guarantees.   They couldn't reach an agreement” (Trans. p. 67).   It is clear that the heter iska was not intended to be a personal guarantee of the corporate debt of Formadyne but was “merely a compliance in form with Hebraic law.”   See Barclay Commerce Corp. v. Finkelstein, 11 A.D.2d 327, 328, 205 N.Y.S.2d 551 (1st Dep't, 1960). Accordingly, Plaintiff R & R Closing is entitled to judgment in its favor and against all Defendants on the third cause of action in the sum of $250,000. plus interest thereon from February 22, 1991, and reasonable attorney's fees.   Defendant Formadyne is entitled to judgment against Plaintiff R & R based on its counterclaim in the amount of $14,000. which sum shall be off-set against Plaintiff's recovery. CAROLYN E. DEMAREST, Justice.
    Today (Tuesday), for the first time, the Israeli ISA has published a staff position regarding the "Heter Iska" (literally meaning exemption contract, which is an Halachic method of evading the anti-usury laws) on bonds investments, allowing the "Heter Iska" agreement existence in order to allow the Orthodox public to purchase bonds without having to bother about entering interest prohibition. This is the ISA's first reply to the subject since its establishment 50 years ago. According to the ISA's position, signed by Meir Levin Esq. and Accountant Jacob Yudkevic Esq, companies will be able to allow bond buyers who wish to contact them directly via an "Heter Iska" document, to do so, thus allowing them to avoid the risk of interest on the one hand, without effecting other investors who don't wish to do so on the other. "The staff is hereby announcing that on his part, there is no reason for a corporation to not offer holders the option to contact them via a separate agreement as mentioned and is free to do so with any holder it wished to. Provided that the separate agreement states that it is valid only with respect to the holders who have contacted the company by it and in regards to the duration of owning the bonds and that its implementation will be done directly between said holders and the corporation, without requiring the intervention of the holders' trustee", the document stated. The ISA added that the solution published is not designed to suppress or cripple the validity of other solutions implemented today by certain companies. As a practical suggestion for the implementation of its' position in the bonds of many companies, the ISA suggests that a designated website will be setup, through which Bond investors will be able to receive a single company's Bond "Heter Iska" agreement or for the Bonds of many companies who wish to take part in it. According to the "Heter Iska", originally found in papers dating back as far back as the days of 'Rishonim', the borrower and the lender agree among themselves that half of the amount will be used as an interest-free loan and that the other half as a deposit for a shared investment carrying a high minimum return rate. The permit document includes rigorous rules for proving lose, which include a harsh oath, in order to avoid a situation in which the lender loses its money in case the deal for which the loan was given, fails. Professor Shmuel Hauser, Chairman of the ISA, welcomed the move saying "The corporate bond market is an important investment channel in the capital market in Israel, but it is inaccessible to part of the Orthodox public in Israel and worldwide. This situation harms both the Orthodox public and the companies issuing the bonds. Publishing the position is therefore expected to benefit both the companies, who will use the mechanism described in it and the Orthodox public which will have more investment channels opened to it." The ISA sought to thank the Chairman of the Knesset's Finance committee, MK Rabbi Moshe Gafni, for his assistance in promoting the position published today. In light of the publishment, MK Rabbi Gafni said that "This is a significant and important step by the ISA on behalf of the investors, to make all investors from all groups of the population, to be capable of acting without Halachic hesitation".
    CAROLYN E. DEMAREST, J. In this action by plaintiff against defendants to recover on a promissory note and guaranty, plaintiff moves, under motion sequence number two, for: (1) summary judgment in his favor as against Deutsch in the amount of $800,000, plus interest from March 27, 2008 through June 9, 2008 at the rate of 12% per annum, and interest from June 10, 2008 at the default rate of 24% per annum, together with legal fees incurred by him in bringing this action, and (2) discontinuing this action as against Plasticware. BACKGROUND Plaintiff loaned $800,000 to Plasticware. The terms of the loan were evidenced by a promissory note dated March 27, 2008, which was executed and given by Plasticware to plaintiff. The note provided that Plasticware promised to pay to the order of plaintiff the principal sum of $800,000, and interest at the greater of 12% per annum or prime (as published in the WSJ) plus 5%, to be paid monthly, the rate to be adjusted annually. Pursuant to paragraph 1 of the note, the loan was required to be repaid by June 9, 2008, 75 days from the date of the note. Paragraph 3 of the note provided that a default would occur if Plasticware failed to make a payment of principal or interest. This paragraph further provided that upon the occurrence of an event of default, Plasticware agreed to pay all costs and expenses, including attorneys' fees, arising in connection with any enforcement or collection action by plaintiff, and that all such costs and expenses of collection would be added to and become part of, the principal of the note, and would be collectible as part of such principal and bear interest from the date of advance until paid. This paragraph further provided that as long as an event of default continued, all outstanding obligations would bear interest at the default rate of 24%, which would apply from the demand for payment until all amounts due under the note were paid in full. In paragraph 4 of the note, however, Plasticware waived any demand or presentment for payment. Paragraph 10 of the note stated that the note would be governed and construed in accordance with the laws of the State of New York. Paragraph 11 of the note, entitled "Beis Din," provided that "[t]he parties agree that any conflicts of the terms of this note . . . will be decided by Mechon L'Hoyroa." Paragraph 14 of the note states: "[t]his transaction is being done within the parameters of a Heter Iska as defined in Jewish Law." Paragraph 15 of the note stated that Modechai E. Neustein (Neustein) and Samuel Meth (Meth) represented that they were the sole shareholders of Plasticware and were fully authorized to execute the note on behalf of Plasticware, and pledged their interests in Plasticware as collateral to the note. This paragraph further stated that by signing the note, Neustein, Meth, and Deutsch jointly and severally guaranteed the full and complete performance of Plasticware, as the borrower, under the terms of the note. The note was executed by Meth, on behalf of Plasticware, as the borrower. The note was also executed by Meth, Neustein, and Deutch, as joint and several guarantors of the repayment of the note. Following Plasticware's failure to make any payments on the note, plaintiff served a notice of intention to arbitrate, dated July 18, 2013, on Deutsch, Meth, Plasticware, and Neustein. This notice provided that pursuant to the terms of the note, plaintiff intended to conduct an arbitration of the conflict between him and them in connection with their obligations to repay the loan before the Rabbinical Court of Mechon L'Hoyroa. The notice further provided that, pursuant to CPLR 7503 (c), unless Plasticware, Meth, Neustein, and Deutsch applied for a stay of arbitration within twenty days, they would, thereafter, be precluded from objecting that a valid agreement was not made or has not been complied with, and from asserting in court the bar of a limitation of time. Certified mail receipts indicate service on July 19, 2013 on Plasticware, Meth, Neustein, and Deutsch, of the notice of intention to arbitrate, together with a cover letter from plaintiff's counsel. On October 8, 2013, Plasticware, Meth, and Neustein executed an agreement to submit their dispute to binding arbitration before three arbitrators of the Rabbinical Court of Mechon L'Hoyroa and proceeded to arbitration. Deutsch, however, did not respond or apply to stay arbitration pursuant to CPLR 7503 (b). On October 17, 2013, after hearing testimony and considering the evidence presented, the arbitrators rendered an award, which provided that Plasticware, Neustein, and Meth were required to pay plaintiff the sum of $800,000, and that each of them was personally responsible for this entire sum. On August 14, 2014, plaintiff brought a proceeding, pursuant to CPLR 7510, to confirm the October 17, 2013 arbitration award (Kirzner v Neustein, Sup Ct, Kings County, index No. 507442/2014). By an order dated November 12, 2014, the court granted plaintiff's petition confirming the arbitration award in its entirety, and granted a judgment against Neustein, Meth, and Plasticware jointly and severally in the amount of $800,000 plus interest at the statutory rate of nine percent from October 17, 2013, plus the costs and disbursements of that action. The November 12, 2014 order directed the Kings County clerk to enter a judgment forthwith and for plaintiff to have execution therefor. On April 14, 2014, plaintiff filed this action against Deutsch and Plasticware. Plaintiff's complaint alleges that Plasticware failed to pay him any portion of the principal amount of $800,000 or the accrued interest when due, and that, after demand for payment was made to Plasticware, it failed to pay the amounts due. Plaintiff's complaint, in its first cause of action, alleges that there is due and owing to him from Plasticware, under the note, the principal sum of $800,000 plus interest due from March 27, 2008 through June 9, 2009 at the rate of 12% per annum, and, thereafter, at the default rate of 24% per annum. Plaintiff's second cause of action alleges that Deutsch, as a guarantor of the note, was summoned to the Rabbinical Court of Mechon L'Hoyroa to arbitrate this dispute, but did not appear, and that the above principal sum plus interest is owed by Deutsch. Plaintiff's third cause of action seeks the recovery of his attorney's fees and expenses as provided by paragraph 3 of the note. This action has not been brought as against Neustein or Meth, the other two guarantors of the note, due to their participation in the arbitration. On June 10, 2014, Leopold Gross PLLC (Gross) appeared as the attorneys of record for Deutsch in the present action and entered into a stipulation with plaintiff's counsel extending Deutsch's time to answer. On July 10, 2014, Gross moved, by order to show cause, under motion sequence number one, pursuant to CPLR 321 (b) (2), to withdraw as attorneys for Deutsch, and, pursuant to CPLR 2201, for a stay of all proceedings for 30 days in order to afford Deutsch the opportunity to obtain substitute counsel. By order dated July 23, 2014, the court granted Gross' order to show cause and stayed this case until September 10, 2014 except that Deutsch was directed to answer the complaint by September 3, 2014, and was further directed to appear on September 10, 2014 with new counsel. On September 3, 2014, Deutsch served a pro se answer by both e-mail and regular mail on plaintiff's counsel, Mark M. Kranz, Esq. (Kranz), which contained general denials. On September 10, 2013, Deutsch did not appear before the court with new counsel, which was noted on the record. Thereafter, Deutsch retained Zvi A. Storch, Esq. (Storch) to represent him in this action, and, on September 22, 2014, Storch filed and served upon Kranz a notice of appearance in this action, an amended answer on Deutsch's behalf, and a notice to take the deposition of plaintiff. Defendant's amended answer contains general denials, and asserts 19 affirmative defenses. By letter dated September 23, 2014, Kranz rejected Deutsch's amended answer, asserting that Deutsch was already in default. Thereafter, Storch served Kranz with discovery demands, dated September 29, 2014, consisting of combined demands and interrogatories. On October 20, 2014, plaintiff e-filed his instant motion, seeking a default judgment, pursuant to CPLR 3215, against Deutsch, or, in the alternative, summary judgment, pursuant to CPLR 3212, for the sums due under the note. On January 6, 2015, Deutsch e-filed a cross motion (motion sequence number three), for an order, pursuant to CPLR 3012 (d), compelling plaintiff to accept his amended answer, and, pursuant to CPLR 3124 and 3212 (f), compelling plaintiff to respond to his discovery demands and to set a time for a deposition. At oral argument on January 14, 2015, the court denied plaintiff's motion insofar as it sought a default judgment, granted Deutsch's cross motion compelling plaintiff to accept Deutsch's amended answer, and reserved decision on plaintiff's motion insofar as it sought summary judgment. Presently before the court is plaintiff's motion for summary judgment, to be decided in light of Deutsch's amended answer.1 Plaintiff also raises, in reply, the argument that the court should alternatively compel Deutsch to submit this dispute to binding arbitration before the Beth Din of Mechon L'Hoyroa. DISCUSSION With respect to the suggestion that the court should compel Deutsch to submit this dispute to binding arbitration, Deutsch does not seek to have this dispute arbitrated and has submitted to the jurisdiction of this court. While, pursuant to CPLR 7503 (a), "[a] party aggrieved by the failure of another to arbitrate may apply for an order compelling arbitration," plaintiff never applied for an order compelling arbitration. CPLR 7503 (c) provides that "[a] party may serve upon another party a demand for arbitration or a notice of intention to arbitrate, specifying the agreement pursuant to which arbitration is sought and the name and address of the party serving the notice . . ., and stating that unless the party served applies to stay the arbitration within twenty days after such service he [or she] shall thereafter be precluded from objecting that a valid agreement was not made or has not been complied with and from asserting in court the bar of a limitation of time." This section requires that "[s]uch notice or demand shall be served in the same manner as a summons or by registered or certified mail, return receipt requested," and that "[a]n application to stay arbitration must be made by the party served within twenty days after service upon him [or her] of the notice or demand, or he shall be so precluded." It is undisputed that plaintiff served a notice of intention to arbitrate, and that Deutsch did not bring an application to stay arbitration within 20 days of such notice, which would have precluded Deutsch from objecting that a valid agreement to arbitrate was not made. However, plaintiff did not name Deutsch as a party respondent in the arbitration proceeding, and the arbitrators, therefore, did not render a default judgment against him. Nor did plaintiff seek to compel Deutsch's participation in the arbitration. Furthermore, the named respondents to the arbitration executed an arbitration agreement on October 8, 2013, prior to the hearing of the dispute by the arbitration panel, which did not include Deutsch, who did not in any way participate in the arbitration. Thus, Deutsch was not bound by the October 12, 2013 arbitration award. While plaintiff asserts that Deutsch should now submit to arbitration, it is well established that a litigant may not compel arbitration when his or her use of the courts is "clearly inconsistent with [his or her] later claim that the parties were obligated to settle their differences by arbitration" (Stark v Molod Spitz DeSantis & Stark, P.C., 9 N.Y.3d 59, 66 [2007] [citation and internal quotation marks omitted]; see also Flores v Lower E. Side Serv. Ctr., Inc., 4 N.Y.3d 363, 372 [2005], rearg denied 5 N.Y.3d 746 [2005]; Sherrill v Grayco Bldrs., 64 N.Y.2d 261, 272 [1985]; LZG Realty, LLC v H.D.W. 2005 Forest, LLC, 71 A.D.3d 642, 643 [2d Dept 2010] Fein v General Elec. Co., 40 A.D.3d 807, 808 [2d Dept 2007]). Therefore, a party's "prior commencement of a judicial action or proceeding wherein the claims sought to be redressed embrace the same issues as those contained in the claim for which arbitration is sought," operates as a waiver of arbitration of such claim (Great N. Assoc. v Continental Cas. Co., 192 A.D.2d 976, 979 [3d Dept 1993]; see also De Sapio v Kohlmeyer, 35 N.Y.2d 402, 405 [1974]; Matter of Waldman v Mosdos Bobov, Inc., 72 A.D.3d 983, 983 [2d Dept 2010], lv denied 15 N.Y.3d 715 [2010]; Tengtu Intl. Corp. v Pak Kwan Cheung, 24 A.D.3d 170, 171 [1st Dept 2005]). Thus, plaintiff has waived whatever right to arbitration he may have had under the note by bringing this court action for determination of his claim and moving for summary judgment (see Sherrill, 64 NY2d at 272; Matter of United Paper Mach. Corp. [Di Carlo], 14 N.Y.2d 814, 815 [1964] [where it was held that an action commenced three days after the making of a demand for arbitration constituted a waiver]; Matter of Waldman, 72 AD3d at 983; Matter of Hawthorne Dev. Assoc. v Gribin, 128 A.D.2d 874, 875 [2d Dept 1987]; Bell v Herzog, 39 A.D.2d 813, 815 [3d Dept 1972]; Matter of Redmond v Redmond, 39 A.D.2d 527, 527 [1st Dept 1972], affd 32 N.Y.2d 644 [1973]). Consequently, this action is properly before the court for determination and it is for the court to resolve plaintiff's present motion for summary judgment. In support of his motion, plaintiff has annexed the note and, in his affidavit, attests that he loaned $800,000 to Plasticware to be repaid by June 9, 2008, that one of the guarantors of the note was Deutsch, and that no part of the loan, including interest, has ever been paid. Plaintiff has thus made a prima facie showing of his entitlement to judgment as a matter of law by submitting evidence of the existence of the note and Deutsch's personal guaranty, which was absolute and unconditional, and Plasticware's failure to make payment in accordance with the terms of the note (see Manufacturers & Traders Trust Co. v Capital Bldg. & Dev., Inc., 114 A.D.3d 912, 912-913 [2d Dept 2014]; Griffon V, LLC v 11 E. 36th, LLC, 90 A.D.3d 705, 706-707 [2d Dept 2011]; City of New York v Clarose Cinema Corp., 256 A.D.2d 69, 71 [1st Dept 1998]). Thus, the burden shifted to Deutsch to raise a genuine issue of fact with respect to a bona fide defense in opposition to plaintiff's motion (see Griffon V, LLC, 90 AD3d at 707; Jin Sheng He v Sing Huei Chang, 83 A.D.3d 788, 789 [2d Dept 2011]; Cutter Bayview Cleaners, Inc. v Spotless Shirts, Inc., 57 A.D.3d 708, 710 [2008]; Provident Bank v Tropp, 43 Misc.3d 1204[A], 2014 NY Slip Op 50488[U], *3 [Sup Ct, Kings County 2014]). Deutsch, in opposition to plaintiff's motion, contends that he has several meritorious defenses. In his affirmation in opposition to plaintiff's motion, Deutsch asserts that he has reviewed the note and does not recognize his signature, and that he is "not sure" if he ever signed the note.2 He attaches his driver's license, in which his signature differs from his signature on the note. However, Deutsch's claimed uncertainty as to his signature is unavailing since he stated, at paragraph 15 of his affirmation in support of his cross motion, that "[t]he guarantee [he] signed only guarantee[d] repayment of this note,'" thereby admitting that he, in fact, signed the guarantee. Furthermore, Deutsch does not actually deny signing the note despite the fact that the question of whether he signed the note is a matter which is necessarily within his own knowledge. Thus, Deutsch's claimed uncertainty as to signing the note is patently insufficient to create a genuine issue of fact to defeat plaintiff's entitlement to summary judgment. Deutsch also argues that the note sued upon is not a debt instrument, but, rather, a partnership document under a Heter Iska. He states that at the time the note was drafted, he was considering entering into a business enterprise with Meth and Neustein, and, as part of that partnership, he was going to guarantee the note, but the partnership "fell through." Other than this conclusory statement, Deutsch does not provide any details whatsoever of this alleged partnership or its relationship to the note. Deutsch, however, points to paragraph 14 of the note, which stated that "[t]his transaction is being done within the parameters of a Heter Iska as defined in Jewish law." He asserts that he cannot be liable for the non-payment of money due to a business loss because the guaranty that he signed only guaranteed repayment of the note and not partnership losses. This argument must be rejected. A Heter Iska "was a device developed in the 12th to 14th centuries to overcome the Biblical prohibition against charging interest by one Jew to another" (Leibovici v Rawicki, 57 Misc.2d 141, 144 [Civil Ct, NY County 1968], affd 64 Misc.2d 858[App Term 1969]; see also Arnav Indus., Inc. Empl. Retirement Trust v Westside Realty Assoc, 180 A.D.2d 463, 463 [1st Dept 1992]; Madison Park Investors LLC v 488-486 Lefferts LLC, 2015 WL 471786, *10 n 3; 2015 NY Slip Op 30178[U] [Sup Ct, Kings County 2015]; Wiesel v Rubinstein, 12 Misc.3d 1168[A], 2006 NY Slip Op 51107[U], *1 [Sup Ct, Nassau County 2006] [noting that a Heter Iska is a Talmudic doctrine which was devised to avoid the religious proscription against lending money for interest"]). It has been described as a "loan structured in a certain way under Jewish law that allows interest" (Muller v Wertzberger, 39 Misc.3d 1237[A], 2013 NY Slip Op 50915[U], *4 n 2 [Sup Ct, Kings County 2013], rearg denied 41 Misc.3d 1229[A], 2013 NY Slip Op 51928[U] [Sup Ct, Kings County 2013]). It has been held that a Heter Iska constitutes "merely a compliance in form with Hebraic law,'" and does not create a partnership, joint venture, or profit sharing agreement (Arnav Indus., Inc. Empl. Retirement Trust, 180 AD2d at 464, quoting Barclay Commerce Corp. v Finkelstein, 11 A.D.2d 327, 328 [1st Dept 1960], appeal denied 11 A.D.2d 1019 [1st Dept 1960]; see also Barclays Discount Bank v Levy, 743 F.2d 722, 724 n 2 [9th Cir 1984]; VNB New York Corp. v Lynbrook LLC, 2012 NY Slip Op 30207[U] [Sup Ct, Nassau County 2012]; Jedwab v Brite Candle & Gifts, Inc., 2006 WL 4547646 [Sup Ct, NY County 2006]; Heimbinder v Berkovitz, 175 Misc.2d 808, 818 [Sup Ct, Kings County 1998], mod on other grounds 263 A.D.2d 466 [2d Dept 1999], lv denied 94 N.Y.2d 755 [1999]). Here, Deutsch has not shown that any separate Heter Iska or partnership agreement exists which could be asserted to vary the terms of the note. Rather, the explicit language of the note designated Plasticware as a borrower and provides for payment of the note, without any terms relating to a partnership agreement. The note merely states that the loan evidenced by the note was "being done within the parameters of a Heter Iska," indicating an intent to avoid religious restrictions so as to allow the charging of interest and comply with the requirements of Jewish Law. Moreover, it has been specifically held that "a Heter Iska agreement does not alter the clear civil law terms of a note" (VNB New York Corp., 2012 NY Slip Op 30207[U]). Here, paragraph 10 of the note provided that the note "in any and all respects shall be governed by, and construed in accordance with the laws of the State of New York." This explicit language reflects the parties' clear and unambiguous intent to be bound by the civil laws of New York. An agreement must be construed according to the expressed intent of the parties (see Lobacz v Lobacz, 72 A.D.3d 653, 654 [2d Dept 2010]; Ditmars-31'St. Dev. Corp. v Punia, 17 A.D.2d 357, 361 [2d Dept 1962]). Consequently, the note is governed by New York law, not Hebraic law. In addition, in the arbitration proceeding, this same note was enforced as a note (as opposed to a partnership agreement), according to its terms, and Plasticware, Neustein, and Meth, who are in privity with Deutsch, were directed to pay the principal amount $800,000. Moreover, in his affirmation, Deutsch does not, in any way, describe any partnership agreement that existed between him and plaintiff, Meth, or Neustein. Thus, Deutsch's claim regarding a Heter Iska fails to raise any genuine issue of fact (see Barclay Commerce Corp., 11 AD2d at 328). Deutsch, in opposing plaintiff's motion, also contends that the note provided for a usurious rate of interest under General Obligations Law § 5-501 and Banking Law § 14-a (1).3 This contention is wholly devoid of merit. A transaction is usurious under civil law when it imposes an annual interest rate exceeding 16%" (Abir v Malky, Inc., 59 A.D.3d 646, 649 [2d Dept 2009]; see also General Obligations Law § 5-501 [1]; Banking Law §14-a [1]). It "is usurious under criminal law when it imposes an annual interest rate exceeding 25%" (Abir, 59 AD3d at 649; see also Penal Law §§ 190.40, 190.42). "A usurious contract is void and relieves the [borrower] of the obligation to repay principal and interest thereon" (Abir, 59 AD3d at 649; see also General Obligations Law § 5-511; Seidel v 18 E. 17th St. Owners, 79 N.Y.2d 735, 740 [1992]; Stanley Weisz, P.C. Retirement Plan v NCHD Assoc, 237 A.D.2d 276, 277 [2d Dept 1997]). As to the defense of civil usury, however, the interest rate charged under the terms of the note is 12% per annum, which is well under the 16% rate and, thus, is not usurious. Furthermore, pursuant to Limited Liability Company Law § 1104 (a), a limited liability company is not entitled to impose a defense based upon civil usury in any action, except in circumstances not applicable here.4 Plasticware would be precluded from raising the defense of civil usury as a matter of law, and Deutsch, as "an individual guarantor may be viewed as standing in the shoes of the principal," can avail himself of only those defenses which would be available to Plasticware (see General Phoenix Corp. v Cabot, 300 N.Y. 87, 95 [1949]; Schneider v Phelps, 41 N.Y.2d 238, 239 [1977]; European Am. Bank & Trust Co. v Boyd, 131 A.D.2d 629, 630-631 [2d Dept 1987]; Manganello v Park Slope Advanced Med. PLLC, 42 Misc.3d 1222[A], 2014 NY Slip Op 50141[U], *2 [Sup Ct, Suffolk County 2014]; Nextbridge Arc Fund, LLC v Vadodra Prop., LLC, 31 Misc.3d 1202[A], 2011 NY Slip Op 50466[U], *2 [Sup Ct, Queens County 2011]; East W. Bank v 7128 Fresh Meadows, LLC, 31 Misc.3d 1228[A], 2011 NY Slip Op 50892[U], *6 [Sup Ct, Queens County 2011], rearg denied 34 Misc.3d 1242[A], 2012 NY Slip Op 50506[U] [Sup Ct, Queens County 2012]). Consequently, Deutsch, as a guarantor of the note, is precluded from relying upon the defense of civil usury since Plasticware is a limited liability company prohibited from interposing this defense (see General Phoenix Corp., 300 NY at 95; European Am. Bank & Trust Co., 131 AD2d at 630-631).5 Furthermore, with respect to the default rate of interest of 24% per annum, it is well settled that "the defense of usury does not apply where . . . the terms of the . . . note impose a rate of interest in excess of the statutory maximum only after default or maturity'" (Kraus v Mendelsohn, 97 A.D.3d 641, 641 [2d Dept 2012], quoting Miller Planning Corp. v Wells, 253 A.D.2d 859, 860 [2d Dept 1998]; see also Hicki v Choice Capital Corp., 264 A.D.2d 710, 711 [2d Dept 1999]; Zara Realty Holding Corp. v E & J Deli & Grocery, Inc., 34 Misc.3d 1234[A], 2012 NY Slip Op 50364[U], *7 [Sup Ct, Queens County 2012]). Therefore, apart from the fact that the rate does not constitute a criminally usurious rate (see Penal Law §§ 190.40, 190.42), such defense is not available to Deutsch since the 24% applies only upon default (General Obligations Law § 5-501 [6]). Deutsch also claims, upon information and belief, that the note was modified, extended, and/or voided by plaintiff and Plasticware, who entered into either a new note or modified the terms of the note.6 He has submitted an unsigned Amended and Restated Promissory Note, dated February 2009. The terms of this purported note provided that Deutsch similarly personally guaranteed the payment of the principal sum of $800,000, but extended the maturity date of the note to January 1, 2016 and provided for additional interest-only payments of $9,000 per month, to commence on May 1, 2009 and continue to the maturity date. Deutsch argues that this purported second note voids the guaranty that he made. This argument must be rejected. Plaintiff sued on the original note, and Deutsch has submitted no evidence whatsoever that this replacement note was ever executed. Indeed, Deutsch admits that he was contacted about consenting to this amended note, and that he refused to sign and guarantee this second note. Moreover, plaintiff, in response to this assertion by Deutsch, has submitted a supplemental affidavit, in which he specifically attests that the terms of the original note were never modified, extended, and/or voided. Furthermore, Deutsch's assertion that the note was invalidated by a replacement note is belied by the arbitration award on the note, which found Plasticware and the other guarantors responsible for payment under the note, thereby evidencing that the maturity date of the note had not been extended. Thus, such unsubstantiated speculation and surmise by Deutsch are insufficient to defeat plaintiff's motion for summary judgment (see Friedman v Hyperion Assoc., 157 A.D.2d 963, 964 [3d Dept 1990]). Deutsch further argues that plaintiff has failed to provide any evidence of the default under the note, except for his own self-serving statements. He states that plaintiff has not provided any letters or other demands for payment which state that the note has not been paid. He contends that he needs to conduct discovery in order to have an opportunity to examine the records of plaintiff, subpoena non-parties, and cross-examine plaintiff as to his statements regarding the default under the note. The court rejects Deutsch's argument that because no discovery has yet taken place, this motion must be denied as premature in order to afford him an opportunity to conduct such discovery. CPLR 3212 (f) provides that if it appears from affidavits submitted in opposition to the motion for summary judgment "facts essential to justify opposition may exist but cannot be stated, the court may deny the motion or may order a continuance to permit affidavits to be obtained or disclosure to be had and may make such other order as may be just." However, "[m]ere hope and speculation that additional discovery might uncover evidence sufficient to raise a triable issue of fact is not sufficient" to warrant denial of a motion for summary judgment (Sasson v Setina Mfg. Co., Inc., 26 A.D.3d 487, 488 [2d Dept 2006]). The granting of a summary judgment motion should not be postponed to allow for discovery where the proponent of the additional discovery has failed "to demonstrate that the discovery sought would produce relevant evidence" (Frith v Affordable Homes of Am., 253 A.D.2d 536, 537 [2d Dept 1998]). "A grant of summary judgment cannot be avoided by a claimed need for discovery unless some evidentiary basis is offered to suggest that discovery may lead to relevant evidence" (Bailey v New York City Tr. Auth., 270 A.D.2d 156, 157 [1st Dept 2000]; see also Freiman v JM Motor Holdings NR 125-139, LLC, 82 A.D.3d 1154, 1156 [2d Dept 2011]; Dempaire v City of New York, 61 A.D.3d 816, 817 [2d Dept 2009]; Conte v Frelen Assoc., LLC, 51 A.D.3d 620, 621 [2d Dept 2008]; Lopez v WS Distrib., Inc., 34 A.D.3d 759, 760 [2d Dept 2006]; Ruttura & Sons Constr. Co. v Petrocelli Constr., 257 A.D.2d 614, 615 [2d Dept 1999], lv dismissed in part, denied in part 93 N.Y.2d 956 [1999]). "A party's mere hope that further discovery will reveal the existence of triable issues of fact is insufficient to delay determination on the issue of summary judgment" (Lambert v Bracco, 18 A.D.3d 619, 620 [2005]; see also Wyllie v District Attorney of County of Kings, 2 A.D.3d 714, 717 [2d Dept 2003]; Weltmann v RWP Group, 232 A.D.2d 550, 551 [2d Dept 1996]). Here, Deutsch has failed to offer any basis to believe that any relevant evidence could possibly be uncovered if an opportunity for further discovery is afforded to him, so as to justify postponing a determination of this summary judgment motion. Deutsch also asserts, as an affirmative defense in his amended answer, that plaintiff must first attempt to collect from Plasticware before he can attempt to collect from him as a guarantor on the note.7 This affirmative defense, however, is without merit. A guarantor of payment on a note is bound jointly and severally with the principal debtor, and has a primary obligation as distinguished from a secondary liability. "A plaintiff need not prove that it unsuccessfully attempted to obtain payment from the principal" in order to recover against a guarantor (European Am. Bank, 131 AD2d at 630). As a general rule, a guaranty of payment of a note is an absolute undertaking that the borrower will pay the note when due, and that, if the borrower fails to do so, the guarantor will pay, becoming immediately liable on the default of the principal (see General Phoenix Corp., 300 NY at 92; Federal Deposit Ins. Corp. v Schwartz, 78 A.D.2d 867, 868 [2d Dept 1980], affd 55 N.Y.2d 702 [1981]). Here, the guaranty is one of payment, as opposed to a guarantee of collection, and, as such, plaintiff is not required to first attempt to collect on its judgment against Plasticware before attempting to collect from Deutsch on his guaranty (see European Am. Bank, 131 AD2d at 630). Of course, a guarantor is liable only to the extent that the holder has not already recovered on the note. However, pursuant to CPLR 3002, since Plasticware and Deutsch's liability to plaintiff is joint and several, the mere rendition of a judgment against Plasticware following the confirmation of the arbitration award, does not bar plaintiff's claim in this action against Deutsch (see generally Gillespie v Flight Line Pub, 2 A.D.3d 1014, 1015 [3d Dept 2003]). Only if plaintiff's judgment against Plasticware and the co-guarantors of the note has already been satisfied would this act as a barrier to a judgment against Deutsch under the simple rule that the law does not allow duplicative recoveries. Deutsch's affirmative defense that plaintiff failed to join Meth and Neustein as necessary parties to this action8 is likewise devoid of merit. Judgment has already been entered against them in the action brought under index number 507442/2014, wherein the arbitration award was confirmed, and plaintiff claims that the debt to him has remained unsatisfied. Thus, neither Meth nor Neustein will be inequitably affected by a judgment entered in favor of plaintiff and against Deutsch (see CPLR 1001 [a]; European Am. Bank, 131 AD2d at 630). Deutsch's other affirmative defenses set forth in his amended answer (which have not been discussed in his opposition papers) are wholly unsupported, conclusory, and devoid of merit. Therefore, inasmuch as Deutsch has failed to raise any triable issue of fact with respect to any bona fide defense, plaintiff's motion for summary judgment must be granted (see CPLR 3212 [b]). Consequently, plaintiff is entitled to recover the principal amount of $800,000, plus interest from March 27, 2008 through June 9, 2008 (the maturity date of the note) at the rate of 12% per annum, and interest from June 10, 2008 to the entry of judgment on this Order at the default rate of 24% per annum, as provided by the terms of the note. Plaintiff shall set forth the computation of the amount of interest to be awarded in a proposed judgment to be served with plaintiff's documentation regarding attorneys' fees. Accompanying such proposed judgment shall be an affidavit from plaintiff regarding any payment of the judgment awarded against Plasticware and the other guarantors, which must be deducted from the judgment to be entered against Deutsch. In addition, since paragraph 3 of the note provided for the recovery of attorney's fees by plaintiff, plaintiff is entitled to recover his reasonable attorney's fees. Plaintiff shall submit an affidavit by his counsel, together with appropriate documentation, as to the basis of the legal fees charged to him, on notice to Deutsch, within 30 days of the date of this decision. Deutsch may respond to such demand for fees within 20 days thereafter. If the amount to be awarded as reasonable attorney's fees cannot be agreed upon by plaintiff and Deutsch, a hearing will be ordered. Plaintiff, in his motion, also requests that this action be discontinued as against Plasticware due to its submission to binding arbitration, which has resulted in an arbitration award that the court has confirmed. "In the absence of special circumstances, such as prejudice to a substantial right of the defendant, or other improper consequences, a motion for a voluntary discontinuance should be granted" (Wells Fargo Bank, N.A. v Chaplin, 107 A.D.3d 881, 883 [2d Dept 2013] [internal quotation marks omitted]). There is no opposition by Deutsch to plaintiff's application for this relief, and the court finds that there would be no prejudice to any party by the granting of such request. Thus, the granting of plaintiff's motion, insofar as he seeks to voluntarily discontinue this action as against Plasticware, is warranted (see CPLR 3217 [b]). CONCLUSION Accordingly, plaintiff's motion, insofar as he seeks summary judgment in his favor as against Deutsch, is granted for the principal amount of $800,000, plus accrued interest and reasonable attorney's fees incurred in this litigation, less any sums already recovered. Plaintiff shall promptly comply with the procedure set forth above to determine the amount of interest and attorneys' fees. Plaintiff's motion is also granted insofar as he seeks an order discontinuing this action as against Plasticware. This constitutes the decision, order, and judgment of the court. FootNotes 1. Although Deutsch's amended answer contains 19 affirmative defenses, Deutsch's opposition papers only contain assertions and arguments related to certain of these defenses, which the court addresses below.2. In his twelfth affirmative defense in his amended answer, Deutsch alleges that plaintiff's claims are barred by the statute of frauds and he reserves the defense that the note and the personal guaranty under which plaintiff seeks recovery were not signed by him.3. The defense of usury is alleged in the tenth affirmative defense of Deutch's amended answer.4. I.e., where the limited liability company has, as its principal asset, a one or two family dwelling and the limited liability company was organized, or the controlling interest acquired, within six months prior to execution by the limited liability company of the note evidencing the indebtedness (see Limited Liability Company Law § 1104).5. In addition, General Obligations Law § 5-501 (6) (a) provides that "[n]o law regulating the maximum rate of interest which may be charged, taken or received, except section 190.40 and section 190.42 of the penal law, shall apply to any loan or forbearance in the amount of two hundred fifty thousand dollars or more, other than a loan or a forbearance secured primarily by an interest in real property improved by a one or two family residence." Here, it is not alleged that the loan was secured by an interest in real property improved by a one or two family residence, and the loan was in the principal amount of $800,000, and, thus, constituted a loan which was more than $250,000.6. The fifteenth affirmative defense in Deutch's amended answer alleges that the note was modified and/or a new note was executed which modified the terms of the note, rendering the guaranty executed by him void.7. This is raised in Deutsch's second affirmative defense in his amended answer.8. This is alleged as Deutsch's sixteenth affirmative defense in his amended answer.


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