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February 6, 2004.


The opinion of the court was delivered by: MIRIAM CEDARBAUM, Senior District Judge


The Travelers Insurance Company ("Travelers") filed this diversity action against Mark Ross Services Corporation ("MRSC") and its president, Mark E. Ross, to recover sums owed on a promissory note executed by MRSC and personally guaranteed by Mark Ross. Travelers has moved for summary judgment. For the Page 2 following reasons, the motion is granted in part and denied in part.


  The following facts are undisputed.

  Defendant Mark E. Ross and non-party Mark Ross & Company ("MRC") are agents of Travelers. Defendant MRSC is an administrative corporation whose sole function is to support Ross and MRC. It does not independently generate income or sell insurance products.

  In March 1998, MRSC executed a promissory note in favor of Travelers, pursuant to which Travelers loaned MRSC $500,000. The note obligated MRSC to make quarterly interest payments during the term of the loan. Any installment that was more than thirty days overdue would incur a five percent penalty. MRSC also agreed that Travelers could offset any overdue installments, upon written notice to MRSC, by retaining commissions it owed to Mark Ross and MRC. The principal and any unpaid interest and fees were due and payable to Travelers on February 28, 2003. The note also provided that if those amounts were not paid when due, MRSC was liable for all of Travelers's costs of collection, including reasonable attorneys' fees.

  Also in March 1998, defendant Mark Ross executed a guaranty Page 3 on the promissory note, in which he "absolutely and unconditionally guarantee[d] . . . the full and complete payment" due under the note, including any costs of collection. In May 1999 both the note and the guaranty were amended to reflect an increase in the loan to $1 million.

  MRSC failed to make interest payments from August 31, 2001 through February 28, 2003. MRSC also failed to pay the principal, outstanding interest, and late fees on February 28, 2003. Travelers then commenced this action.


  A motion for summary judgment shall be granted if the court determines "that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). See also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A genuine issue of material fact exists when the evidence is such that a reasonable finder of fact could return a verdict for the nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986); Richardson v. Coughlin, 763 F. Supp. 1228, 1234 (S.D.N.Y. 1991). In deciding whether a genuine issue exists, the court must "examine the evidence in the light most favorable to the party opposing the motion, and resolve ambiguities and draw reasonable Page 4 inferences against the moving party." In re Chateaugay Corp., 10 F.3d 944, 957 (2d Cir. 1993). Rule 56 also provides that
the court at the hearing of the motion, by examining the pleadings and the evidence before it and by interrogating counsel, shall if practicable ascertain what material facts exist without substantial controversy and what material facts are actually and in good faith controverted. It shall thereupon make an order specifying the facts that appear without substantial controversy, including the extent to which the amount of damages or other relief is not in controversy, and directing such further proceedings in the action as are just. Upon the trial of the action the facts so specified shall be deemed established, and the trial shall be conducted accordingly.
Fed.R.Civ.P. 56(d).
  Defendants' principal defense to summary judgment is that the contract is unenforceable because it violates New York Insurance Law § 4228(e)(9)(B). That section states, in pertinent part:
[An insurance company] may make a loan to any of its agents pursuant to a plan of agent compensation. The maximum amount of any loan shall not exceed the expected compensation of the agent over the next twelve months. A company shall charge interest on loans at a rate not less than a rate consistent with current short-term borrowing rates.
  Defendants concede that MRSC is not an agent of Travelers. Mark Ross is a Travelers agent, but defendants do not contend that this section prohibits an insurance company from obtaining a guaranty from one of its agents. Furthermore, defendants do not explain how this loan was "pursuant to a plan of agent compensation." Indeed, defendants explain in their opposition Page 5 papers that the loan was made in consideration of plans for a joint venture between MRC and Travelers that never came to fruition. Accordingly, the provision that defendants invoke does not invalidate this loan.

  Defendants also argue that even if the note is valid, parol evidence must be admitted to show that the promissory note was never intended to be enforced standing alone, but that it was instead entered into as part of a larger set of agreements related to the proposed joint venture. Defendants seek to introduce parol evidence that contradicts the terms of the written instruments. Section 7 of the promissory note indicates that all liabilities become immediately due and payable at the sole option of Travelers if MRSC fails to perform any agreement under the note or fails to pay any obligation when due. That includes payment of the entire principal and interest on February 28, 2003. Any promises by Travelers of renegotiation or forbearance would contradict those provisions. Parol evidence is inadmissible to contradict the terms of a written contract. See Mitchill v. Lath, 247 N.Y. 377, 380 (1928).

  Defendants do not dispute that if this contract and guarantee are enforceable, they failed to make the scheduled interest payments and failed to pay the full amount of the note on the date that it was due. Defendants do dispute the amount due. Travelers exercised its right to offset interest owed by Page 6 retaining commissions belonging to Ross and MRC. According to Travelers, it retained $136,762.20. Defendants contend that Travelers withheld $139,925.75. If defendants are correct, their calculation would reduce the total amount now owed by $3,163.55. Since Travelers has not proffered evidence to support the amount it seeks, ...

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