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NCUA BD. v. RAPHAEL

December 27, 1994

NATIONAL CREDIT UNION ADMINISTRATION BOARD as liquidating agent for AMALGAMATED TAXI FEDERAL CREDIT UNION, Plaintiff, against JEAN A. RAPHAEL, Defendant.


The opinion of the court was delivered by: EUGENE H. NICKERSON

 NICKERSON, District Judge:

 Amalgamated Taxi Federal Credit Union ("Amalgamated") brought this action in New York State Supreme Court alleging that defendant defaulted on a promissory note (the "Note"). Subsequently, the National Credit Union Administration Board (the "Board") placed Amalgamated into liquidation, appointed itself as liquidating agent, and removed the action to this court.

 The Board as Liquidating Agent for Amalgamated ("plaintiff") now moves for summary judgment and reasonable attorney's fees and costs.

 I

 The parties do not contest the following pertinent facts.

 On December 10, 1987, defendant, by executing and delivering the Note, borrowed $ 35,425.50 from Amalgamated and agreed to repay the loan in monthly installments beginning January 9, 1988. He has not made any payments.

 The Note provides for interest at an annual percentage rate of 15% and states:

 
If I'm in default under this note and you demand full payment, I agree to pay you interest on the unpaid balance at the rate stated above. If you have to sue me, I also agree to pay reasonable attorney's fees and court costs. I also agree to pay actual collection costs not to exceed % of the unpaid balance. [Percentage left blank in original.]

 On or about June 28, 1990, Amalgamated brought a state court action against defendant to recover on the Note. On August 17, 1990, the Board declared Amalgamated insolvent and appointed itself as liquidating agent. Thereafter, plaintiff removed the action to this court, seeking $ 35,425.50, interest at 15% from January 9, 1988, and reasonable attorney's fees and costs.

 Defendant claims that pursuant to an arrangement among himself, Amalgamated, and Fleetway, a company with which defendant worked, Amalgamated paid the loan proceeds to Fleetway, which represented that it would use income generated by defendant to make the monthly payments on the Note. He alleges that Amalgamated failed to notify him that Fleetway was not making the payments until November 1988, that this failure is evidence of an agreement between Amalgamated and Fleetway to defraud him, and that because of that agreement, he is not liable on the Note.

 Defendant also maintains that plaintiff's recovery is barred by waiver, laches, failure to mitigate, accord and satisfaction, and failure of consideration.

 The Note does not make reference to any agreement among defendant, Amalgamated and Fleetway, and there were no written side agreements ...


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