In a December 24, 2008 decision, Justice Austin denied plaintiff’s motion for summary judgment in lieu of a complaint based upon a promissory note.
The action was based upon a promissory note provided at the time of the sale of a business and accompanying restrictive covenants.
In opposition to plaintiffs’ claims that amounts were due under a promissory note defendants, through their attorney’s affidavit, submitted to the Court checks showing payments to the plaintiffs in excess of the amounts then due for the purchase of the business, which the defendants alleged were pre-payment of their obligation under the note. The plaintiffs alleged that such payments were in consideration of certain non-compete agreements (which on their face did not indicate that separate payments were due) and not prepayment on the note.
The Court found in light of the additional payments to plaintiffs there were issues of fact as to whether defendants had a bona fide defense, precluding summary judgment.
Defendants in their opposition papers also claimed that plaintiffs’ motion was frivolous and sanctions should be awarded. The Court found that such application could not be granted for two reasons (1) no cross motion was served, and (2) defendants failed to demonstrate that plaintiffs’ conduct was completely without merit.