Plaintiff, UPS Capital Corporation, alleges that defendant Lavender Associates Inc. borrowed more than $300,000 from it under the terms of a financing agreement between them, guaranteed by defendant Jacob Schwartz. According to UPS Capital, Lavender Associates defaulted on this loan. UPS Capital now brings this motion for summary judgment in lieu of complaint under CPLR 3213 against Lavender Associates and Schwartz to recover the outstanding balance on the loan. The motion is denied, and the proceeding converted into a plenary action, because the monetary obligation that UPS Capital seeks to enforce is not apparent on the face of the loan instrument on which UPS Capital relies.

UPS Capital is a corporation based in Georgia. In 2018, UPS Capital and Lavender Associates entered into a "cargo financing agreement." Under this agreement, Lavender Associates could obtain cash advances from UPS Capital on request, in order to finance the purchase of goods for later sale by Lavender. (See NYSCEF No. 3 at 3, § 2.) The agreement specified various conditions and parameters for the issuance of cash advances by UPS Capital and their repayment by Lavender Associates. (See id. at 3, §§ 3-4; id. at 6, § 21.) The agreement was not itself a self-executing loan.

At the same time that UPS Capital and Lavender Associates executed the cargo financing agreement, defendant Jacob Schwartz (president of Lavender) executed a guarantee of Lavender's obligations arising under or in connection with that agreement. (See NYSCEF No. 4.)

According to UPS Capital, it issued several cash advances to Lavender Associates under the terms of the cargo financing agreement, which Lavender failed to repay. UPS Capital then brought this motion for summary judgment under CPLR 3213 to recover the principal and interest allegedly owed to it under the agreement.

As an initial matter, the parties briefly dispute whether this court should look to New York or Georgia law on this motion. The financing agreement provides that "all acts, transactions, rights, and liabilities under this Agreement shall be governed in all respects by, and construed in accordance with, the internal laws of the State of Georgia." (NYSCEF No. 3 at 5, § 15.) The agreement also authorizes UPS Capital to "commence any action, suit or other proceeding in any other forum" outside of Georgia to "sue upon or recovery any of the Obligations" incurred by Lavender Associates. (Id.)

Under these provisions, substantive legal questions regarding the interpretation of the agreement are governed by Georgia law. Procedural issues, on the other hand, are to be governed by the law of the forum state—here, New York. (See Tanges v Heidelberg N. Am., Inc., 93 NY2d 48, 53 [1999].) Here, CPLR 3213 is a procedural statute: it does not relate to the "rights[] and liabilities" of the parties under the agreement (NYSCEF No. 3 at 5), but rather to their enforcement—i.e., it "pertain[s] to the remedy rather than the right." (Tanges, 93 NY2d at 54-55 [internal quotation marks omitted.) UPS Capital therefore must satisfy the requirements of CPLR 3213 in order to obtain summary judgment here.

CPLR 3213 provides an accelerated procedure for prosecuting an action "based upon an instrument for the payment of money only," combining pleading and dispositive motion practice. (See Weissman v Sinorm Deli, Inc., 88 NY2d 437, 443 [1996].) The threshold requirement that the instrument be one "for the payment of money only," although "seemingly straightforward," is also "stringent." (Id. at 443-444.) To satisfy this requirement, the plaintiff must be relying on "a written unconditional instrument, evidencing an obligation to pay a sum at a certain time or over a stated period." (Maglich v. Saxe, Bacon & Bolan, P.C., 97 AD2d 19, 22 [1st Dept 1983].) Additionally, "[w]here the instrument requires something in addition to defendant's explicit promise to pay a sum of money, CPLR 3213 is unavailable." (Weissman, 88 NY2d at 444.) That is, the "instrument does [*2]not qualify if outside proof is needed, other than simple proof of nonpayment or a similar de minimis deviation from the face of the document," such as a readily ascertainable interest rate. (Id.)

UPS Capital's motion here does not qualify as an action "based upon an instrument for the payment of money only," because outside proof is required to establish UPS Capital's entitlement to relief beyond the instrument on which it relies—namely the cargo financing agreement and accompanying guarantee. (See Affidavit of Steve Eisenberg, NYSCEF No. 2 at 1 [stating that "[t]hese commercial loan instruments form the basis of this lawsuit and are the subject matter of this application to the Court"].) But the financing agreement does not evidence an obligation to pay a sum of money at a defined time. Indeed, the agreement does not itself reflect or impose any obligation to pay money at all. Rather, it creates a framework by which Lavender Associate can incur definite monetary obligations to UPS Capital (in the form of cash advances).

UPS Capital thus cannot demonstrate that Lavender Associates incurred—and then defaulted on—obligations under the financing agreement without recourse to outside proof beyond the four corners of the agreement. As a result, the agreement and guarantee do not qualify as instruments for the payment of money only within the meaning of CPLR 3213. (See Oak Rock Financial, LLC v Rodriguez, 148 AD3d 1036, 1039 [2d Dept 2017] [holding that CPLR 3213 was unavailable to enforce a guarantee where "neither the guaranty nor the underlying agreement relied upon by the plaintiff in support of its motion contain[ed] an unconditional promise to pay a sum certain, signed by the maker and due on demand or at a definite future time"]; cf. New York City Economic Dev. Corp. v New York Sur. Co., 242 AD2d 211, 211 [1st Dept 1997] [holding that a surety bond that "required an additional act in order to trigger payment" imposed a "conditional obligation" that could not be "considered, in the classic sense, an instrument for the payment of money only"].)

Accordingly, it is hereby

ORDERED that UPS Capital's motion for summary judgment under CPLR 3213 is denied; and it is further

ORDERED that this proceeding is converted into a plenary action, and that UPS Capital's motion papers shall be deemed a complaint (with supporting affidavits) and Lavender Associates' opposition papers shall be deemed an answer, respectively; and it is further

ORDERED that the parties shall confer and prepare a joint request for a preliminary conference with this court, as set forth in the Remote Conference Protocol available on this court's website, http://ww2.nycourts.gov/courts/1jd/supctmanh/index.shtml.