Plaintiff Hudson Valley Bank, N.A. ("Plaintiff") seeks summary judgment in lieu of complaint, pursuant to CPLR 3213, against Defendants BanxCorp and Norbert Mehl ("Defendants"). Plaintiff seeks summary judgment as to the current balance due and an order deferring and/or severing its claim for attorneys' fees to a subsequent application or motion. Defendants have opposed Plaintiff's motion and have purported to have interposed counterclaims against Plaintiff.^[FN1]

The action was commenced by the filing on March 4, 2010 of a Summons dated February 19, 2010 and a Notice of Motion dated February 19, 2010, accompanied by an affidavit from Plaintiff's Asset Recovery Specialist, Christopher Trocino, and annexed exhibits.

The exhibits consist of: (a) a Preferred Credit Line Agreement ^[FN2] dated March 12, 2007 between Plaintiff (lender) and BanxCorp (borrower) (Affidavit of Christopher Trocino, sworn to February 15, 2010 ["Trocino Aff."], Ex. A); (b) a Commercial Guaranty between Plaintiff and Norbert Mehl as Guarantor, executed on March 12, 2007 wherein Mehl personally guaranteed the payment of BanxCorp's indebtedness to Plaintiff (Trocino Aff., Ex. B); ( c) a Letter dated December 4, 2009 from Terrance J. Edwards, Plaintiff's Vice President of Asset Recovery to BanxCorp notifying BanxCorp of defaults in required monthly payments for the months of September-December 2009 and that if the outstanding balance was not paid by close of business on December 21, 2009, Plaintiff would accelerate the due date of the loan and declare the entire balance due (Trocino Aff., Ex. C); (d) a Notice of Default and Acceleration dated January 8, 2010 from Terrance J. Edwards, Plaintiff's Vice President of Asset Recovery to BanxCorp demanding immediate payment of the entire principal balance in the amount of $99,997.11, plus interest in the amount of $2,742.98, plus late fees of $105.88, plus loan fees of $500.00 totaling $99,9970.11, which had to be paid by January 22, 2010 in order to avoid the accrual of interest at the default interest rate (Trocino Aff., Ex. C); and (e) a computation of the current loan balance that Trocino [*2]avers was made "in strict accordance with the terms and provisions of the Note" (Trocino Aff. at ¶ 7 and Ex. D thereto).

In his affidavit, Mr. Trocino avers to the authenticity of the Preferred Credit Agreement (improperly referred to as a Note)^[FN3] and the default notices and states that Defendants last tendered a payment with regard to the Note on August 13, 2009 and no payments have been made thereafter. He avers that none of the Defendants has objected to Notice of Default & Acceleration and none of the named Defendants has denied or objected to the computation of the amount owed as set forth in the Notice of Default & Acceleration. The Computation annexed as Exhibit D shows the total principal amount due as of February 10, 2010 as $99,997.11, plus $8,734.29 in interest and $132.78 in late fees, for a total amount due of $108,864.18.

Finally, Mr. Trocino cites to the provisions in the Preferred Credit Line Agreement and the Guaranty which allow Plaintiff to seek its attorneys' fees in the event Plaintiff is required to enforce its rights as a result of Defendants' default.

On April 22, 2010, Norbert Mehl, pro se, on behalf of himself as an individual defendant and purportedly in his individual capacity as purported assignee for Defendant BanxCorp, filed a purported Summons along with a document labeled "Counterclaims." These documents use the same index number as Plaintiff's action. CPLR 304 states that an action is commenced by filing a Summons and Complaint or a Summons with Notice. It does not authorize the commencement of an action by "Summons with Counterclaims." Further, to the extent that the "Counterclaims" were intended to be a "Complaint", Mehl was required to obtain an index number and set forth the index number and date of filing on the Summons (see CPLR 305). While a party can counterclaim in an answer, and thus not have to purchase a new index number, since there is presently no complaint to answer, there can be no answer and, hence, no counterclaims. Thus, the "Counterclaims" are not legally existent, as they do not exist as "Counterclaims" and do not exist as claims in a separate plenary action.^[FN4] [*3]

In any event, the Court will consider the purported Counterclaims as part of Defendants' opposition; indeed, the Counterclaims are verified, making the document the functional equivalent of an affidavit (see CPLR 105 [u]). In the Counterclaims, Counterclaim-Plaintiffs Norbert Mehl and BanxCorp first point out that the document executed by BanxCorp was a business revolving credit line transaction with a credit limit up to $100,000, and that in connection with this credit line Mehl executed a related personal guaranty (Counterclaims at ¶ 4). Counterclaim-Plaintiffs allege that BanxCorp customarily made its monthly interest-only payments and "its ... account was kept up to date even in the midst of the worse [sic] financial crisis since the Great Depression of 1929 ...." (id. at ¶ 5).

Counterclaim-Plaintiffs assert during the first week of September, they "received an unconscionable letter from Hudson Valley Bank dated August 31, 2009 which was tantamount to extortion ... [as it] unilaterally announced fundamental changes of several material terms to the line of credit at issue, including an abrupt acceleration of the repayment terms from interest-only minimum payment to repayment (repossession) in full within a month, immediate cessation of advances (credit freeze), a significant interest rate increase, new administrative fees, a requirement of three years of tax returns, and a financial statement" (Counterclaims at ¶¶ 6-7). They further allege that "the original credit line ... did not require tax returns, and was approved with no income and no asset verification" (id. at ¶ 9).

Counterclaim-Plaintiffs note that Hudson Valley admitted in its letter that the changes were not due to any default by them, but were instituted because of the difficult economic times. They assert that for years they "operated in justifiable reliance on Hudson Valley Bank's words and conduct, and have been misled into proceeding upon the belief that an enforcement as unprecedented and unjustified as that which was sought by Plaintiff under its August 2009 letter, deliberately pushing Defendants into default, would never happen" (Defs' Mem. of Law at 7). Defendants further contend that it is not common industry practice or sound business practice "for a lender to abruptly call or accelerate a performing loan or business line of credit without good cause or sufficiently reasonable notice ...." (id. at ¶ 12).

As their First Counterclaim, Counterclaim-Plaintiffs assert that Hudson Valley Bank engaged in unconscionable economic duress by sending the bad faith August 2009 letter since Hudson Valley knew that they had nowhere else to go and in effect gave them the ultimatum of either acceding to the more onerous terms which included a higher interest rate, more fees and a more stringent underwriting process or [*4]else provoke Counterclaim-Plaintiffs' default. The Second Counterclaim alleges that Hudson Valley Bank breached the implied covenant of good faith and fair dealing based on these same allegations. The Third Counterclaim seeks an award of attorneys' fees.

Also attached to the Counterclaims is an Affidavit from Norbert Mehl wherein he avers that BanxCorp has assigned to him its counterclaims and therefore CPLR 321(a) does not apply (Affidavit of Norbert Mehl, sworn to April 21, 2010 ["Mehl Aff."] at ¶¶ 2-3). Mehl purports to submit his affidavit in support of Defendants' Counterclaims and in opposition to Plaintiff's motion for summary judgment.^[FN5] He explains his 25-years of banking and finance industry experience based on BanxCorp's business of operating an online banking marketplace called BanxQuote.com, which features daily market rates on banking and loan products connecting consumers with banks throughout the United States. Mehl reiterates the facts underlying Defendants' counterclaims. He further avers that "Defendants dispute the outstanding amounts as alleged by Plaintiff. On several occasions between September 2009 and February 2010, [Mehl] spoke with Carolyn Johnson, Plaintiff's White Plains branch manager who had initiated the transaction at issue here, and ... made it clear that [he] did not wish to waive any of [his] rights as a result of Hudson Valley Bank's economic duress ... [and] promptly repudiated and objected to the August 2009 Letter and then again repudiated and objected to Plaintiff's Notice of Default & Acceleration and balance computation or account stated" (Mehl Aff. at ¶ 20). Mehl avers that, as a sign of protest, on September 3, 2009, he closed BanxCorp's checking account at Hudson Valley Bank which was tied to the Preferred Credit Line Agreement.

Attached to Mehl's affidavit is Plaintiff's alleged unconscionable August 31, 2009 letter. In the letter, Plaintiff states that given the current economic times, Plaintiff was required to make changes that would affect BanxCorp's line of credit and Plaintiff explains the changes to BanxCorp's Preferred Credit Line Agreement:

(1) the term of the line was changed from "on demand" to a maturity date of September 30, 2009, which was when the line had to be paid in full;

(2) the amount on the line was frozen at the present outstanding balance;

(3) if Plaintiff agreed to an extension of the maturity date, the interest rate would increase to 8%; and

(4) effective October 1, 2009, Plaintiff would be instituting an annual administrative fee of $500 or 1% of the credit line, whichever was greater.

As their legal argument, Defendants contend that Plaintiff improperly used CPLR 3213 to institute this action since the Preferred Credit Line Agreement is not an instrument for the payment of money only as the test requires a determination of "whether a prima facie case for payment can be made out solely by proof from the instrument at issue, without resort to extrinsic documents" (Defs' Mem. of Law at 2). Defendants argue that the Preferred Credit Line Agreement "is neither a Note, nor an instrument in the original principal sum of $100,000'" and "[a] review of the [Preferred Credit Line Agreement] and the Guaranty disclose that they provided for more than a simple unconditional promise by Defendants to pay a sum of money at a certain time or over a stated period. The amount borrowed is not certain, as there is a draw down period. The [Preferred Credit Line Agreement] obligates Defendants to make periodic payments. Outside proof is needed to determine the amount due to Plaintiff, if any ...." (Defs' Mem. of Law at 4). Defendants further argue that "Plaintiff has not established a prima facie case, since their claim is based on an acceleration clause in a revolving credit agreement, thus requiring resort to an external document to define an event of default under the alleged Note. Here, the credit agreement outlines several default events other than the mere failure to make payments" (id.).

Defendants further contend that because they have asserted counterclaims against Plaintiff, "[w]hen a viable counterclaim arises from the same underlying transaction as is involved in the main action and is inseparable from or inextricably intertwined with that transaction, summary judgment should be denied" (id. at 3 [citations omitted]).

In its reply, Plaintiff argues that it is undisputed that the Preferred Credit Agreement executed by BanxCorp "contains an explicit promise to pay all credit advanced, finance charges and all other charges described in this Agreement ...." and that Defendants have not disputed (1) Mehl's execution of the absolute guaranty, (2) Defendants' default in their payment obligations since August 13, 2009, and (3) the computation of the balance due as provided in Ex. D. With regard to the propriety of using CPLR 3213, Plaintiff points out that the only extrinsic evidence relied on outside of the Guaranty and the Preferred Credit Line Agreement is the computation of the amount due under the Preferred Credit Line Agreement (Trocino Aff., Ex. D). According to Plaintiff, the August 31, 2009 loan modification letter is not inextricably intertwined with the transaction thereby precluding CPLR 3213 treatment. Accordingly, as Defendants' counterclaims are not inextricably intertwined with Plaintiff's right to recovery under the Preferred Credit Line Agreement and Guaranty, under [*6]Seaman-Adwall Corp. v Wright Mach. Corp. (29 NY2d 617 [1971]), Defendants have to separately prosecute their counterclaims and the existence of the counterclaims do not preclude this Court's grant of summary judgment in lieu of complaint.

Plaintiff responds to Defendants' arguments concerning Plaintiff's unconscionable and bad faith conduct in presenting the modification letter by arguing that pursuant to paragraph 9 of the Credit Line Agreement, Plaintiff had the right to require payment on demand and therefore, to provide Defendant with an alternative to the demand and acceleration of the loan cannot be found to be made in bad faith. Furthermore, Plaintiff argues that Defendants fail to offer any evidence that Plaintiff's conduct prior to entering the loan was unconscionable. And, according to Plaintiff, there is no basis for Defendants to rely on an estoppel theory since Defendants have offered no evidence supporting the notion that Plaintiff somehow waived the right to call the loan on demand and Defendants' conclusory assertion that Plaintiff misled them into believing enforcement would not occur is insufficient to raise a triable issue of fact. Accordingly, Plaintiff argues that, as Defendants have only advanced conclusory and unsubstantiated claims, they have failed to create a triable issue of fact and Plaintiff's motion should be granted.

CPLR 3213 allows an action based upon an instrument for the payment of money only to be commenced with a motion for summary judgment rather than a complaint. This procedure is intended to provide a speedy and effective means for resolving a presumptively meritorious claim (Banco Popular North Am. v Victory Taxi Mgt., Inc.,1 NY3d 381, 383 [2004]). Where an action is commenced under CPLR 3213, the instrument upon which it is based must be for the payment of money only. An instrument for the payment of money only qualifies for CPLR 3213 treatment if it contains an unconditional promise by the debtor to repay lender the moneys advanced to it or on its behalf for payment (Afco Credit Corp. v Boropark Twelfth Ave. Realty Corp., 187 AD2d 634 [2d Dept 1992]). An unconditional guaranty is an instrument for the payment of money only, whether or not it recites a sum certain (European Am. Bank v Cohen, 183 AD2d 453 [1st Dept 1992]; Bank of Am., N.A. v Solow, 2008 NY Slip Op 50830[U], 19 Misc 3d 1123[A] [Sup Ct NY County 2008], lv dismissed 59 AD3d 304 [1st Dept 2009], lv dismissed 12 NY3d 877 [2009]). Thus, the need to consult underlying loan documents or other bank account information in order to establish the amount of liability does not affect the availability of CPLR 3213 (id.). The proponent of a CPLR 3213 motion establishes a prima facie entitlement to judgment by offering proof, in evidentiary form, of the instrument for payment of money in question and of the failure of the defendant to pay in accordance with the terms of the instrument.

Here, Plaintiff met its prima facie burden on its claim against BanxCorp under the Preferred Credit Line Agreement by providing evidence of its existence of the [*7]Agreement and an affidavit of nonpayment (see Warburg, Pincus Equity Partners, L.P. v Keane, 22 AD3d 321 [1st Dept 2005], lv denied 6 NY3d 707 [2006]; Maglich v Saxe, Bacon & Bolan, P.C., 97 AD2d 19 [1st Dept 1983]; AFCO Credit Corp, supra ). The Court does not agree with Defendants' argument that the Preferred Credit Line Agreement is not an instrument for the payment of money. The Agreement contains an unconditional promise by BanxCorp to repay Plaintiff for all credit extended to it, together with all finance and other charges described in the Agreement (Trocino Aff., Ex. A at

¶ 3). The only proof extraneous to the Preferred Credit Line Agreement is the perfunctory proof of the amount of credit extended (i.e., BanxCorp's bank account information) and the amount of the claimed default (Seaman-Andwall Corp. v Wright Mach. Corp., 31 AD2d 136 [1st Dept 1968], affd 29 NY2d 617 [1971]; European Am. Bank v Cohen, 183 AD2d 453 [1st Dept 1992]; Siegel, New York Prac § 289, at 472 [4th ed]).

In the case of a guaranty, to establish a prima facie case, the lendor must present the note, an unconditional guaranty to pay and the guarantor's non-paymment (Bank Leumi Trust Co. of New York v Rattet & Liebman, 182 AD2d 541 [1st Dept 1992]). If this showing is made, the burden shifts to defendant to come forward with evidentiary facts demonstrating the existence of a material issue of fact which would defeat summary judgment (see, e.g., Fleet Bank v M & Z Headwear, Inc., 308 AD2d 507 [2d Dept 2003]; Moezinia v Baroukhian, 247 AD2d 452 [2d Dept 1998]; Alicanto, S.A. v Woolverton, 142 AD2d 703 [2d Dept 1988], lv denied 73 NY2d 702 [1988]; accord Banco Popular North Am. v Victory Taxi Mgt., Inc., supra ; Mastro v Carroll, 296 AD2d 802 [3d Dept 2002]; DeVito v Benjamin, 243 AD2d 600 [2d Dept 1997]). To defeat the motion, the guarantor must come forward with proof showing the existence of a triable issue of fact with respect to a bona fide defense (id.).

Here, Plaintiff met its prima facie burden with regard to Mehl's Guaranty by providing evidence of: (1) a guaranty in which Mehl absolutely and unconditionally guaranteed the full and punctual payment of BanxCorp's indebtedness; and (2) BanxCorp's default in its payment obligations under the Preferred Credit Line Agreement (Hess Corp. v Magnone, 2010 NY Slip Op 50811[U], 27 Misc 3d 1220[A] [Sup Ct NY County 2010]).

The law is well settled that the need to refer to some de minimis outside proof from the face of the document in order to establish the amount of the indebtedness is not determinative of whether the document qualifies as an instrument for the payment of money only (see Weissman v Sinorm Deli, Inc., 88 NY2d 437, 444 [1996]; Bank Leumi Trust Co. v Rattet & Liebman, 182 AD2d 541 [readily accessible interest rate]; Siegel, New York Prac § 289, at 472 [4th ed]). In European Am. Bank v Cohen (183 AD2d 453 [1st Dept 1992]), the Appellate Division, First Department rejected defendants' contention that a note which contained an unconditional promise to pay on a certain day the current balance in defendant's line of credit was not an [*8]instrument for the payment of money only because there was the need to resort to outside records (i.e., plaintiff's bank account) in order to determine the amount that had been taken out on the line of credit. Similarly, in Afco Credit Corp, supra , the Appellate Division, Second Department found that a premium finance agreement qualified as an instrument for the payment of money only because it contained "an unconditional promise by the insured to repay to the lender the moneys advanced on its behalf for the payment of the insured's insurance premium. Although the agreement also contain[ed] other provisions and terms, none of these require[d] additional performance by the lender as a condition precedent to repayment, or otherwise alter[ed] the insured's promise of repayment" (Afco Credit Corp., supra , 187 AD2d at 634).

By contrast, the cases relied upon by Defendants are wholly inapposite. For example, in Bonds Fin., Inc. v Kestrel Tech., LLC (48 AD3d 230 [1st Dept 2008]), the note was found not to be an instrument for the payment of money only because it required resort to an extrinsic document to define the event of a default under the Note, i.e., an acceleration clause in a separate revolving credit agreement and the provision "outlined several default events other than the mere failure to make payments ... in particular, the closing of a real estate transaction in Maryland" (Bonds Fin., Inc., 48 AD3d at 430). Here, the Agreement plainly gives Plaintiff the right to amend the Agreement, including the provisions relating to Finance Charges and Annual Percentage Rate (Trocino Aff., Ex. A, §16), the right to demand payment in full at any time (id at §9), and the Agreement defines what constitutes an event of default, including the failure to make monthly payments, in which event Plaintiff is given the right to declare the entire unpaid balance of principal and interest immediately due and payable (Trocino Aff., Ex. A, §16 [subds A, I]).

Similarly, the note in Manufacturers Hanover Trust Co. v Hixon (124 AD2d 488 [1st Dept 1986]) did not qualify because proof of the note and the failure to make payments were insufficient to establish Plaintiff's prima facie case since the note stated that reference had to be made to the mortgage to define default and the need to resort to the mortgage to establish default precluded CPLR 3213 treatment. In Technical Tape, Inc. v Spray Tuck, Inc. (131 AD2d 404 [1st Dept 1987]), the note was specifically made subject to the terms and conditions of an asset purchase agreement concerning defendant's purchase of plaintiff's subsidiary's assets. Because the agreement of sale contained no definite statement of the amount due since it was subject to adjustments and offset computations, the note, which was subject to the asset purchase agreement's terms and conditions, did more than merely require the payment of money only.

Defendants' position in this case is not supported by Webster Bank, N.A. v BanxCorp. (Sup Ct, Westchester County, November 4, 2009, Giacomo, J., Index. No. 14094/09), wherein another bank suing these same defendants failed to persuade a Justice of this Court that the alleged Note qualified as an instrument for the payment of money only. In that case, the plaintiff argued that a line of credit application signed by [*9]Mehl, read in conjunction with plaintiff bank's approval letter (which was not signed by Mehl or by BanxCorp) (and which Mehl disputed that he ever received), constituted a "note." Here there is a signed Agreement by BanxCorp and a signed guaranty by Mehl. In any event, because Webster Bank was decided by a Justice of coordinate jurisdiction, this Court, while respectful of the decision, is not obligated to treat it as a binding precedent (see State v Rosado, 25 Misc 3d 380, 416 [Sup Ct Bronx County 2009]).

In Ippolito v Family Medicine of Tarrytown and Ossining, LLP (46 AD3d 752 [2d Dept 2007], the purchase money note was signed in connection with defendants' purchase of plaintiff's medical practice and was made subject to other agreements including a modification agreement and an accounts receivable agreement calling for an adjustment of the note after six months had passed. Indeed, the note provided that "the indebtedness evidenced by this note as provided herein [is] subject to an adjustment in the loan amount pursuant to a written modification agreement; or would remain the same pursuant to a written confirmation to be signed by maker and payee on July 4, 2006 that the loan amount has not changed." In that case, defendants delivered a new note, which adjusted the loan amount based on the modification agreement and the accounts receivable agreement. The Appellate Division, Second Department reversed the trial court's grant of summary judgment in lieu of complaint because more than simple proof of nonpayment or a similar de minimis deviation from the face of the document was involved (Ippolito, 46 AD3d at 753). Here, the Agreement and the Guaranty speak entirely for themselves and all that is required to establish liability, prima facie, is simple proof of nonpayment.

Defendants' other argument — that Plaintiff has not established a prima facie case since their claim is based on an acceleration clause in a revolving credit agreement, thus requiring resort to an external document to define an event of default under the alleged Note — is also without merit. The Preferred Credit Line Agreement is the only agreement needed to determine what constituted an event of default, and the Plaintiff's right to accelerate the loan in the event of a default (see European Am. Bank v Lofrese, supra ).

While Defendants argue that their assertion of counterclaims precludes this Court's grant of Plaintiff's motion, the Court disagrees. A motion for summary judgment in lieu of complaint should only be denied based on the assertion of counterclaims if the proposed counterclaims are inextricably tied to the underlying transaction so as to provide a defense to the enforceability of the instrument at issue (Harris v Miller, 136 AD2d 603 [2d Dept 1988]; Acute Corp. v Stewart, 2008 NY Slip Op 52346 [U], 21 Misc 3d 1134[A] [Sup Ct Kings County 2008]).

The Court finds that, to the extent that Defendants have articulated what their proposed Counterclaims are, those proposed Counterclaims, and the rest of Defendants' opposition, fail to show that there is a defense to the enforceability of the [*10]instruments at issue.

The Preferred Credit Line Agreement allowed Plaintiff to demand payment in full at any time.^[FN6] Thus, given Plaintiff's right to call the loan at any time, Plaintiff's offer to extend the loan under new terms as set forth in the August 31, 2009 letter appears entirely reasonable and not undertaken in bad faith.

While most courts do not permit a discrete cause of action for breach of the covenant of good faith and fair dealing (as distinguished from a cause of action for breach of contract), some courts have allowed a breach of covenant claim to stand where there are allegations that a defendant has exercised its rights under its contract in bad faith in order to realize gains that the contract implicitly denied or to deprive the other party of the fruit of its bargain, even if the plaintiff has not alleged a breach of that contract (see Gross v Empire Healthchoice Assur., Inc., 2007 NY Slip Op 51390[U], 16 Misc 3d 1112[A] [Sup Ct NY County 2007]). However, the concept that every contract carries with it a promise to use good faith and fair dealing in executing the contract does not extend so far as to permit the courts to re-write the agreements of the parties by deleting provisions they made or adding provisions they did not make (Vanlex Stores, [*11]Inc. v BFP 300 Madison II, LLC, 66 AD3d 580 [1st Dept 2009]; National Union Fire Ins. Co. of Pittsburgh, PA v Xerox Corp., 25 AD3d 309 [1st Dept 2006], lv dismissed 7 NY3d 886 [2006]; see Willsey v Gjuraj, 65 AD3d 1228 [2d Dept 2009]).

Here, Defendants have provided no evidence to substantiate their counterclaim of breach of the implied covenant of good faith and fair dealing. All Defendants offer is the allegation that the August 2009 letter was sent in bad faith because Defendants had no other place to go to borrow funds and that Plaintiff was using leverage to force Defendants to agree to more onerous terms, including a higher interest rate, more fees, and a more stringent underwriting process (Counterclaims at ¶ 15). But the Agreement itself permitted Plaintiff to demand full payment at any time for any reason, or for no reason whatsoever (Trocino Aff., Ex. A at §9). The implied covenant of good faith and fair dealing may not invoked to imply an obligation inconsistent with other terms of the contract between the parties. Since the Agreement gave Plaintiff the right to terminate its financing at any time in its sole discretion, the Court cannot re-write the Agreement in order to create an obligation on the part of Plaintiff to continue providing financing at all, or under the original terms of the Agreement, indefinitely (Chrysler Credit Corp. v Dioguardi Jeep Eagle, Inc., 192 AD2d 1066 [4th Dept 1993] ["Jeep Eagle's agreements with plaintiff gave plaintiff the sole discretion to continue to extend financing. Plaintiff had no obligation to do so.... A financing institution does not act in bad faith when it exercises its contractual right to terminate financing"]). Stated differently, Defendants have no enforceable expectation that Plaintiff would use good faith in deciding whether to terminate financing (124 In-To-Go Corp. v Roundabout Theatre Co., Inc., 266 AD2d 166 [1st Dept 1999], lv dismissed 94 NY2d 944 [2000]).

Consequently, Defendants have failed to show that there are any triable issues of fact going to the enforceability of the instruments at issue (see Rhodia, Inc. v Steel, 32 AD2d 753 [1st Dept 1969]; Executive Fliteways, Inc. v Caballero, 2007 WL 6714354 [Sup Ct Suffolk County 2007]). Further, as to the Guaranty, given that it is absolute and unconditional (Trocino Aff., Ex. B), Mehl waived his right to assert any defenses to Plaintiff's demand for payment (European Am. Bank v Lofrese, supra ; Kornfeld v NRX Tech., Inc., 93 AD2d 772 [1st Dept 1983], affd 62 NY2d 686 [1984]; Anglo Irish Bank Corp., Ltd. v Ashkenazy, 2010 NY Slip Op 51428[U], 28 Misc 3d 1222[A] [Sup Ct NY County 2010]). Defendants' "conclusory allegations of wrongdoing are insufficient to establish the existence of genuine triable issues of fact" (Mlcoch v Smith, 173 AD2d 443 [2d Dept 1991]).

In regard to the proposed counterclaim asserting economic duress in connection with Plaintiff's proposed modification of the terms of the Preferred Credit Line as set forth in Plaintiff's August 31, 2009 letter, the Court finds that this counterclaim is not inextricably intertwined with the enforceability of the Preferred Credit Line Agreement and Guaranty. This counterclaim does not assail the legitimacy of the instruments upon which Plaintiff sued. [*12]

Further, a claim for economic duress exists when a party is forced to agree to the terms of a contract by means of a wrongful threat which precludes the exercise of free will (see Geller v Esikoff, 165 AD2d 863 [2d Dept 1990]). Given that it is undisputed that Defendants did not agree to any of the modifications requested by Plaintiff, Defendants do not have a basis for seeking to rescind an agreement that was not made. Moreover, where the alleged menace was, as here, to stop performance under a contract or to exercise a legal right, there is no actionable duress and, in any event, financial pressures, even when coupled with inequality in bargaining position, do not, without more, constitute duress (Gubitz v Security Mut. Life Ins. Co. of NY, 262 AD2d 451 [2d Dept 1999]).

Even if the Court were to read the proposed counterclaim as asserting that economic duress was occasioned in the underlying Preferred Credit Line Agreement or Guaranty, Defendants have provided no evidentiary facts to substantiate this claim sufficient to raise a triable issue of fact.^[FN7] In this regard, it is undisputed that the last payment BanxCorp made was on August 13, 2009 for $537.68. Based on the computation of money due under the Preferred Credit Line, as Defendants have not objected to the calculations contained therein, it appears that BanxCorp's monthly payments varied from as high as $960.40 to as low as $485.63 (Trocino Aff., Ex. D). Further, while Defendants contend that Plaintiff was seeking to materially change the terms of the Preferred Credit Line by increasing the interest rate to 8%, based on Exhibit D to Mr. Trocino's affidavit, the monthly interest rate varied over the course of the Preferred Credit Line from as high as 11.25% to as low as 6.25% and the interest rate for the time period from August 13, 2010 to the date of Plaintiff's filing of this motion was a Note Interest Rate of 6.25% (although there was an additional default interest being charged separately). Indeed, based on the default notices, it appears that nothing changed in terms of BanxCorp's required monthly payments for the months of September 2009 to December 2009 in that the monthly payments for which [*13]BanxCorp defaulted were in the following amounts: $538.18 plus late fees in the amount of $26.90 for the payment due on 9/10/09, $520.82 plus late fees in the amount of $26.90 for the payment due on 10/10/09, $538.18 plus late fees in the amount of $26.90 for the payment due on 11/10/09, and $520.82 plus late fees in the amount of $26.90 for the payment due on 12/10/09.

Thus, it is clear that Plaintiff did not act as provided in its August 31, 2009 letter by demanding that the outstanding line of credit be paid in full unless BanxCorp acceded to its demands concerning modifications to the loan's terms and, instead, the loan was accelerated when BanxCorp failed to pay the past due above-referenced payments as required by the December 4, 2009 Demand Letter. Accordingly, Defendants' reliance on cases such as Canterbury Realty and Equip. Corp. v Poughkeepsie Sav. Bank (135 AD2d 102 [3d Dept 1988]) is misplaced as the facts of that case are entirely distinguishable.

Finally, disregarding the technical deficiency in Defendants' assertion of a separate counterclaim for attorneys' fees rather than tying the request for attorneys' fees to one or both of their counterclaims, as well as the substantive deficiency insofar as Defendants do not invoke a statute or contractual provision which would allow for an award of attorneys' fees, the request for attorneys' fees again does nothing to undermine the legal validity of the Preferred Credit Line Agreement or the Guaranty, and, therefore, does not create a triable issue of fact so as to warrant the denial of Plaintiff's motion.

Mehl's bald conclusory assertions that he "disputed the outstanding amounts as alleged by Plaintiff" and that "[o]n several occasions between September 2009 and February 2010, ... spoke with Carolyn Johnson, Plaintiff's White Plains branch manager" and repudiated the Plaintiff's demand and acceleration notices, are insufficient to raise a triable issue of fact that the amount demanded as outstanding was incorrect (Quest Commercial, LLC v Rovner, 35 AD3d 576 [2d Dept 2006]; North Fork Bank v Hamptons Mist Mgt. Corp., 225 AD2d 596 [2d Dept 1996]; Cymalo v Geichman, 175 AD2d 150 [2d Dept 1991]; Acute Corp., supra , 2008 NY Slip Op 4980352 at *6 [conclusory assertions that defendant was fraudulently induced to sign guaranty are insufficient to overcome summary judgment]).

Because Defendants have failed to come forward with evidence in opposition sufficient to raise triable issues of fact, the Court shall grant Plaintiff's motion.^[FN8]

a)Summons dated February 19, 2010;

b)Notice of Motion dated February 19, 2010, with the accompanying affidavit of Christopher Trocino, sworn to February 18, 2010, together with the exhibits annexed thereto; Memorandum of Law dated February 15, 2010;

c)Affidavits of Service;

d)Summons dated April 21, 2010; Counterclaims; Affidavit of Norbert Mehl, sworn to April 21, 2010; Defendants' Memorandum of Law in Opposition to Plaintiff's Motion for Summary Judgment dated April 21, 2010;

e)Reply Affirmation of Kevin A. Stevens, Esq. dated May 27, 2010 and attached Reply to Counterclaims dated May 17, 2010; and

f)Letter dated June 1, 2010 from Mordechai I. Lipkis, Esq. to Hon. Alan D. Scheinkman and attached Supplemental Affirmation of Mordechai I. Lipkis, Esq. dated June 1, 2010, together with attachments;

g)Letter dated June 4, 2010 from Kevin A. Stevens, P.C. to Hon. Alan D. Scheinkman; and

h)Stipulation dated June 7, 2010.

Accordingly, for the reasons stated and based upon the papers aforesaid, it is hereby

ORDERED that the motion by Plaintiff Hudson Valley Bank N.A. for summary judgment in lieu of complaint against Defendants BanxCorp and Norbert Mehl is granted; and it is further

ORDERED that Plaintiff is entitled to a judgment against Defendants BanxCorp and Norbert Mehl in the sum of $108,864.18, together with statutory interest [*14]from February 20, 2010; and it is further

ORDERED that to the extent Plaintiff seeks recovery of attorneys' fees and costs and disbursements, Plaintiff shall serve and file, on or before September 24, 2010 at 4:00 p.m. an affirmation of services, together with copies of all bills and other documentation in support thereof, with service to be made both by certified mail, return receipt requested, and by overnight delivery (next day delivery); and it is further

ORDERED that Defendants shall serve and file any opposition to the amount sought by Plaintiff for attorneys' fees, costs and disbursements on or before October 8, 2010, at 4:00 p.m.; and it is further

ORDERED that the matter is set down for a hearing on October 22, 2010 at 11:30 a.m. to hear all issues relating to attorneys' fees and expenses; and it is further

ORDERED that Plaintiff shall, pursuant to the provisions of 22 N.Y.C.R.R §202.48, submit a proposed judgment to the Court for settlement on October 22, 2010 at 11:30 a.m., with the amount to be awarded for statutory interest, attorneys' fees and costs being left blank so that the Court may insert the amounts awarded, if any, at the conclusion of the hearing ordered herein; and it is further

ORDERED that Plaintiff's counsel shall serve upon the Defendants by certified mail, return receipt requested and by overnight delivery (next day delivery) and file with the Clerk of the Court, a copy of this Decision and Order with Notice of Entry, a Notice of Inquest and shall pay the appropriate filing fees on or before September 24, 2010; and it is further

ORDERED that the hearing date and dates for submissions hereinabove provided may not be adjourned without the prior written permission of this Court.

The foregoing constitutes the Decision and Order of this Court.

Dated: White Plains, New York

September 7, 2010

E N T E R :



ALAN D. SCHEINKMAN

Justice of the Supreme Court