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LAKHANEY v. ANZELONE

January 30, 1992

NARI LAKHANEY, Plaintiff, against JAMES F. ANZELONE and BART J. TARULLI, Defendants.

CARTER


The opinion of the court was delivered by: ROBERT L. CARTER

ROBERT L. CARTER, District Judge

Plaintiff Nari Lakhaney brings this diversity action to en force two guarantees of payment ("the guarantees") allegedly executed by defendants James Anzelone and Bart Tarulli. The guarantees were for payment of a promissory note ("the note") executed in favor of plaintiff by 5550 Corp. Plaintiff has moved for summary judgment under Rule 56, F.R.Civ.P. Defendants have not opposed the motion.

 FACTS

 On March 8, 1990, 5550 Corp., a New York corporation, executed the promissory note in favor of the plaintiff, a New Jersey resident, as evidence of a loan plaintiff made to 5550. Affidavit of Nari Lakhaney at para. 10 [hereinafter Lakhaney Aff.]; Ex. C, Lakhaney Aff. The note provided for payment to "Nari Lakhaney or order," $ 500,000 plus 12% interest "as follows: $ 510,000 (five hundred ten thousand dollars plus interest accrued to the date hereof of sixty thousand dollars, $ 60,000) plus interest from the date hereof until August 1, 1990 [unreadable] at the rate of $ 5,000 per month until payment in full." The note provided that 5550 Corp. waived any rights to "presentment for payment, demand, notice of non-payment and dishonor, protest and notice of protest." The note also provided that upon maturity or default, it would bear interest at the rate of "two (2%) per cent per month on the unpaid balance until the date of payment in full." The note also provided that its "maker, endorsers and guarantors" were to be jointly and severally liable to pay costs of its collection, including attorney"s fees. It was signed by Bart Tarulli, president of 5550 Corp. and secured by a mortgage on certain New York property owned by 5550. Ex. C, D, Lakhaney Aff.

 On the same day, *fn1" defendants James F. Anzelone and Bart Tarulli, both New York residents, executed guarantees of payment for the note in order to induce plaintiff to make the loan to 5550 Corp. Defendants "unconditionally and irrecovably" guaranteed payment of the note as well as all "reasonable expenses, including reasonable attorneys' fees" incurred by plaintiff in enforcing the guarantees. In addition, 5550 Corp. and plaintiff were given the power to "alter, cancel, release, renew, extend, decrease or increase the amount of the principal or interest." The guarantees also extended to "renewals or extensions of any claims or demands guaranteed under this instrument." The guarantees required any action brought to enforce them to be brought within the County of New York and were notarized by New York notaries. Ex. E, F, Lakhaney Aff.

 5550 Corp. and each of the defendants failed to pay plaintiff the principal or the interest on the note. On November 9 and December 10, 1990, plaintiff made written demands for payment on the plaintiffs and on 5550 Corp. On January 18, 1991, plaintiff notified defendants of his intention to pursue all available remedies. Plaintiff subsequently began this action.

 DISCUSSION

 I.

 In order to prevail on his summary judgment motion, plaintiff must show that "there is no genuine issue as to any material fact and that [he] is entitled to a judgment as a matter of law." Rule 56, F.R.Civ.P. The court is not to "weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue" which must be reserved for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). If plaintiff can demonstrate the absence of a factual issue, then to oppose the motion successfully, defendant "must come forward with 'specific facts shoving that there is a genuine issue for trial.'" Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986) (quoting Rule 56) (emphasis removed). *fn2"

 Plaintiff has submitted with his notice of motion a statement of material facts as to which he contends there is no genuine issue for trial, as required by Rule 3(g), S.D.N.Y. Civ. R. [hereinafter Local Rule 3(g)] Also, as permitted by Rule 56, F.R.Civ.P., plaintiff has supplemented his statement with an affidavit and copies of the guarantees, the note and other material. Local Rule 3(g) requires that defendants submit a statement responding to plaintiff's 3(g) statement, and provides that any material fact in plaintiff's statement that is not controverted by the responding statement is deemed to be admitted. Rule 56 requires defendants to submit opposition materials to plaintiff's materials. As this motion is unopposed, defendants have not fulfilled the requirements of either rule. In this situation, plaintiff is only entitled to summary judgment "if appropriate." See Rule 56(e), F.R.Civ.P. Hence he must have alleged and supported facts that entitle him to judgment as a matter of law. See Anderson, supra, 477 U.S. at 247-48. In addition, the court must independently search the record to determine if any issue of fact remains. See Higgins v. Baker, 309 F. Supp. 635, 639 (S.D.N.Y. 1970) (Tenney, J.). As the following discussion indicates, plaintiff has alleged and supported sufficient its to justify summary judgment in his favor.

 II.

 Plaintiff, in his brief, assumes that New York law governs the guarantees and the note but has not explicitly addressed the choice of law issue. Since this is a diversity case, the court must apply the choice of law rules of the forum state, New York. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 85 L. Ed. 1477, 61 S. Ct. 1020 (1941). New York state courts apply a "'paramount interest' test, which applies the law of the jurisdiction having the greatest interest in the litigation." Frishberg v. Esprit de Corp., Inc., 778 F. Supp. 793, No. 90 Civ. 5150 (S.D.N.Y. Dec. 10, 1991) (Carter, J.) (citation omitted); see also New York Annotations, N.Y. U.C.C. Law ยง 1-105(1) (McKinney 1992) (suggesting that the U.C.C. incorporates New York's significant contacts test.). *fn3"

 The two jurisdictions with a significant interest in the guarantees and the note are New York and New Jersey. New York appears to be the place the guarantees were executed, the location of 5550 Corp. and of the defendants, the location of the property mortgaged to plaintiff to secure the note and the place that the contracts constituting the note and guarantees were breached. In addition, the provisions in the guarantees requiring any suit enforcing the guarantees to be brought within the County of New York implies that the parties intended New York law to govern. *fn4" New Jersey, the other jurisdiction with a significant interest in this litigation, is the place of performance of the contract because the note requires payment ...


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