Deutsche Bank: Chicago, suit, Deutsche Bank Response to Trump

S&S COPY SUPREME COURT OF THE STATE or NEW YORK COUNTY Of- NEW YORK ---------------------------------------------------------x DEUTSCI IE BANK TRUST COM PANY AMERICAS, Index No.: 603483/08 Dale purchased: November 26, 2008 Plaintiff, -against- RECEIVED DONALD J. TRUMP, NOV 2 8 2008 Defendant. lAS MOTION SUPPORT OFFICE ----------------------------------------------------------x MEMORANDUM OF LAW IN sm>PORT OF PLAINTIFF'S MOTION FOR SUMMARY .JUDGMl~NT IN LIEU OF COMPLAINT -\1\::1 AdOC> Hl\N\ .J : 1Vd~~OC> 10N gooz <J GAOt-lI 381:dO S,>la:i- :..'. ;--1.i-.: VJ~ )ltiO" NdN Steven F. Molo George J. Wade Seth M. Kean SHEARMAN & STERLING LLP 599 Lexington Avenue New York, NY 10022-6069 (212) 848-4000 TABLE OF CONTENTS Page PRJJLlMlNARY STATEMENT ..................................................................................................... I FAc·ruAL BACKGROUND ..........................................................................................................2 l. The $640 Million Construction Loan -/\nd Trump's Personal Guaranty ........................ 2 11. Trua1p: ·rhc Guarantor ......................................................................................................... 4 Ill. Trump's Efforts lo Avoid Repayment of the Construction Loan - /\nd The Eventual Default ................................................................................................................................ 5 ARGUMENl·................................................................................................................................... 9 I. The Payment Guaranty Is An Instrument f-or The Payment Of Money Only ..................... 9 H. Trump llus Failed To Pay As Required By The Payment Guaranty ................................. 12 CONCLUSION ............................................................................................................................. 13 PRAYER FOR RELIEf- ................................................................................................................ 13 TABLIL OF AUTHORITIES CASES Bank ofAmerica, N.A. v. Solow, No. 60 1892/07, 2008 WL 182 1877 (Sup. Ct. N.Y. CountyApr.17,2008) ................................................................................................... 9, 10 Boland v. lndah Kiat Fin. (IV) Mauritus ltd., 291 A.D.2d 342 (1st Oep't 2002) ........................ 11 Citicorp Real Hstate, Inc. v. Du Ider, et al., No. 076 12/92 (Sup. Ct. N. Y. County Aug. 5, 1992) ................................................................................................................................................ 9 Dell 'Anno v. Molinari, No. 111 324/06, 2008 WL 961 156 (Sup. Ct. N.Y. Counly Apr. 8, 2008) .................................................................................................................................. I 0 European A111. Bank & Trust Co. ~'chirripa, 108 A.D.2d 684 (Isl Dep'l 1985)....................... I 0 Donald 1iwnp, et al. v. Deutsche Bank Trust Company Americas, el al., No. 26841/08 ..... Passim lstilulo Per Lo Sviluyo Economico Dell 'Italia Meridionale v. Sperfi Prods. Inc., 47 F.R.D. 3 10 (S.D.N. Y. 1969) ............................................................................................................ 9 .Jason Trading Corp v. Lason 1i-ading Corp., 303 A.D.2d J 80 ( Isl Dcp't 2003) .......................... 9 Maglich v. Saxe, Bacon & Bolan, P.C., 97 J\..D.2d 19 ( l sl Dep'l 1983) ........................................ 9 Mfrs. llanover 7i·ust Co. v. Green, 95 A.O.2d 737 (1st Dcp' I I983) ............................................ I 1 Seaman-And111all Co,p. v. Wright Mach. Corp, 31 A.D.2d 136 ( Ist Dep't 1968), qff'd, 29 N. Y.2d 6 17 (1971 ) .................................................................... 9 Smith v. Shields Sales Corp., 22 ." .n.Jd 942 (3d Dep't 2005) ...................................................... I 0 Trump v. O'/Jrien, Superior Court ofNew Jersey. Camden County, No. L-545-06 ....................... 4 II Plaintiff Deutsche Bank Trust Company Americas (individually and in its capacity as agent for the construction lenders described below, "Deutsche Bank'' or "Plaintiff") respectfully submits this Memorandum of Law in Support of its Motion for Summary Judgment in Lieu or a Complaint (the "Motion") pursuan1 to section 3213 or the New York Civil Practice Law and Rules ("CPLR"). PRELCMINARY STATEMENT This is an action for the payment of money only. Plaintiff Deutsche Bank and Defendant Donald J. Trump ("Trump") entered into an unconditional payment guaranty (the "Payment Ciuaranty"). On its face, the Payment Guaranty expressly requires Trump, personally, to pay Deutsche Bank $40 million in the event that 401 North Wabash Venture LLC ("401 NWV") - a Trump-controlled entity that obtained $640 million in financing from Deutsche Bank and the other lenders for whom Deutsche Bank acts as administrative agent (the "Lenders") to rund construction of the Trump lnternational l lotel & Tower in Chicago - fails to meet its repayment obligations. 401 NWV has failed to meet its repayment obligations. On November 7, 2008, it was required to pay the Lenders $334,150,336.40 of principal and interest and certain other amounts. lt did not do so. Deutsche Bank demanded payment from 40 I NWY and Trump on November I0, 2008. Neither party has made payment. Accordingly, because the Payment Guaranty is an instrument for the payment of money only, and Trump's payment obligation is past due, Deutsche Bank asks this Court to enter summary judgment in its favor and order Trump to pay Deutsche Bank $40 million, the sum due and owing under the Payment Guaranty, as well as interest, attorneys' fees, and costs. FACTUAL BACKGROUND I. T he $640 Million Construction Loa n - And Trump's Pe rsonal G uaranty On February 7, 2005, Deutsche Bank and 401 NWV, a single purpose entity owned and controlled by Trump, executed a Construction Loan Agreement ("CL/\"). Under the CLA, Deutsche Bank agreed to lend 40 I NWY a maximum of $640 million in principal (the "Construction Loan") to construct the Trump International I lotel & Tower Chicago (the "Project"). (CLA §§ 1.1, 2.1.1, Affidavit of William C. Mott, Jr., dated November 24, 2008 ("Mott Aff."), Ex. B.) The initial maturity date for the Construction Loan was May 7, 2008. (CL/\§§ 1.1, 2.3.2, Molt Aff., Ex. 1-3.) As partial consideration to Deutsche Bank for providing the Construction Loan, Trump, an experienced real estate developer who was represented by counsel, executed an unconditional Payment Guaranty. The Payment Guaranty provides that Trump personally guarantees the timely payment of the Construction Loan when due under the CLA with Trump's maximum liability under the Payment Guaranty limited to $40 million. 1 (Payment Guaranty §§ 1, 5, Mott /\IT., Ex./\.) Trump's obligations under the Payment Guaranty arc absolute and unqualified. By way of example only: 2. Continuing Guaranty. ... th\! obligations and liabilities of Guarantor hereunder arc absolute and w1conditional under any and all circumstances ... (and] shall not be discharged or released in whole or in part, by any act or occurrence which might, but for the 1 The amount oftJ1e payment due under the Payment Guaranty is detem1ined by whether "Substantial Completion" has occurred. Trump is obligated to pay $40 million of the Construction Loan until "Substantial Completion" and $25 million thereafter, plus interest and costs. (Payment Guaranty§ 5, Mou Aff., Ex. A.) The CLA provides that Substantial Completion has occurred when, among other benchmarks, lhe construction has been "completed substantially in accordance with the Plans and Specilications and the Construction Documents" and the City of Chicago has issued a temporary certificate of occupancy for the project. (CLA § 1.1, Mott A ff., Ex. B.) The conditions precedent for Substantial Completion to occur have not been met ,t11d arc months away from being met. 2 prov1s1ons of this Guarnnty, be deemed a legal or equitable discharge or release of Guarantor. +** ** 4. No Limitation of Liability. ... ll is the unambiguous and unequivocal intention of Guarantor that Guarantor shall be obligated to pay and perform the Guaranteed Obligations when due, notwithstanding any occurrence, circumstance, event, action or om1sst011 whatsoever, whether contemplated or uncontemplatcd, and whether or not otherwise or particularly described herein, except for the full and final payment and satisfaction of all Guarantied Obligations." (Payment Guaranty§§ 2, 4, Mott Aff., Ex. A.) Trump's payment under the Payment Guaranty is due ten business days after written demand has been made upon him following any fai lure of the Construction Loan to be timely paid (which includes any failure by 40 I NWV to pay the Construction Loan in full on the maturity date). (Payment Guaranty § 5, Mott Aff. , Ex. /\.) The obligation is straightforward. Trump must, "within ten ( I0) Business Days after written demand and without protest or notice of protest, pay the amount due. " 2 (Payment Guaranty § 5, Mott /\ff., Ex. /\.) (emphasis added.) To fulfill his "unambiguous and unequivocal intention" and meet his Payment Guaranty obligations and liabilities, Trump must pay the amount owcd.3 (Payment Guaranty § 4, Mott /\ff., Ex. /\.) 2 The CL/\ provides that "Business Day shall mean day of the year {other than a Saturday or Sunday) on which banks arc not required or authorized by Law or Regulation 10 close in New York City and, if the applicable Business Day relates to any LIBOR Loan Tranche, on which dealings arc can·icd on in the London interbank market." (CL/\ § 1.1, Moll /\ff., Ex. B.) 3 The Payment Guarwny defines Guarantied Obligations as "(i) the tlutstanding balance of' the Debt in full; provided, however, that the obligations of Guarantor in respect of such Debt shall be limited 10 a maximum aggregate payment amount of:(/\) Forty Million Dollars ($40,000,000.00) uni ii Substantial Completion and (8) Twenty-Five Million Dollars ($25,000,000.00) thereafter, (such maximum aggregate payment amount, with interest as aforesaid, collectively, the "Performa nce Stuns"); ~ (ii) interest at the Default Rate which accrues on the Performance Sums from the dale of written demand for payment under this Guaranty from /\gent to Guarantor until the Pcrfonnance Sums arc paid in full; glus (iii) all costs and expenses of any collection or other realizalion under, this Guaranty, including reasonable anorneys' fees." (Payment Guaranty§ I, Molt AO~, Ex./\.) 3 The Payment Guaranty provides that if Trump docs not cure by paying withjn ten days, Deutsche Bank is allowed to seek appropriate relief. Trump agreed that "a separate action may be brought to enforce the provisions of this Guaranty" and "ftjime is of the essence." (Payment Guaranty §§ 18, 24, Molt Aff., Ex. A.) Should Trump fail to "timely pcrfonn" his obligations under the Payment Guaranty, he must pay Deutsche Bank "all costs and expenses (including court costs and reasonable attorneys' fees) incurred by [Deutsche Bank] . . ." (Payment Guaranty§ 16, Mott Aff., Ex. A..) II. Trump: The Guarantor ·1;rump proclaims himself "the archetypical businessman, a deal-maker without 4 pccr." Trump has stated in court that he is wo1th billions of dollars. 5 In addition to substantial cash, personal in vestments and various other tangible assets, he maintains substantial interests in numerous extraordinary properties in New York and around th1.: eoun try. 6 Trump has hotel projects in seven U.S. cities as well as Mexico, the Dominican Republic, Dubai, Canada, and Panama. 7 lle is involved in golr course developments in New York, Califo rnia, Florida, the Caribbean, and most recently, Scotland.8 He has an interest in casinos in the United States and the Caribbean, and offers commercial and residential real estate brokerage services. 9 Trump provides extens ive advice on how to do business through al least a dozen books he has authored. In IJow lo Get Rich, Trnmp advised readers to use the courts to "be 4 lnfonnation on Trump University Management Team: Donald J. Trump, available at h11p ://www.1rumpunivcrsi1y.co111/company/rnanagcmcnl.cfm 5 Trump v. 0 '/Jr11m, Superior Court of'Ncw Jersey, Camden County, No. L-545-06, Complaint V23. 6 Id. 7 www.trump.com 9 www.trump.com 4 strategically dramatic." 10 In 1'l1ink Big and Kick Ass in Business and L(/e, he boas ts of how he " lovc[sJ to crush the other side and take the benefits" and revealed his strategy for dealing with lenders in the l 990s: " I turned it back on the banks and let them accept some of the blame. I figured it was the bank's problem, not mine. What the hell did I care? l actually told one bank, ' l told you you shouldn't have loaned me that money. I told you that goddamn deal was no good.' . .. Banks arc afraid of getting sucd." 11 H J. T rump 's Efforts lo Avoid Repayment of the Construction Loan - And The Eventual Default In March 2008 , Trump satisfied the contractual pre-conditions lo ,.eceiving an extension of the CLA's maturity date, and the maturity date was extended lo November 7, 2008. (See Letter of April 3, 2008, Moll Aff., Ex. C.) Trumr sought a second extension beyond November 7, 2008, without satisfyi ng the contractual pre-conditions, and none was given. On November 6, 2008, Trump, personally, 401 NWV, 401 Mczz Venture LLC, and Trump international I lotels Management LLC liled suit against Deutsche Bank, the other Lemler::;, and the mez.z.anine lenders to the Project, in a ten-count complaint in the Supreme Court of New York, County of Queens. 12 On approximately three hours' notice, Trump asked the court in Queens to issue a temporary restraining order extending the November 7, 200R maturity date of the CLA. Trump claimed that the current world economic crisis constitutes a Force Majeure Event which should excuse the repayment of over $330 million borrowed and sti ll owing under the CLA to build the Trump International llotcl & Tower in Chicago. Trump's pleadings and his 10 11 12 Donald J. Trump, !low to Get !?,ch, 139 (Random llousc 2004). Donald J. Trump, Think Big and Kick Ass i11 Business and Life, 48, 58 (Collins 2007). Donald Trump, et al. v. Deutsche Bank Trust Company Americas, et al., No. 26841/08, Supreme Court of New York, County of Queens. 5 own affidavit speak of a "once-in-a-century cred it tsunami," 13 an "unforeseen situation," 14 and an "economic crisis, unprecedented since the Great Depression." 15 He claims this so-called "Force Majcurc" somehow entitles him lo a ''perm anent inju11ctio11 e11joi11ing defe11da11ts from declaring tlte Deutsche Bank Loan due d11ri11g tlte p e11de11cy of llte Force Majeure Even t and for a reasonable time thereafter. " 16 Trump also seeks $3 bi llion in damages. 17 Trump first infom1ed Deutsche Bank that he considered the world economic crisis a Force Majeurc Event rendering repayment of the CLA impossible through a letter dated November 4, 2008. Significantly, that very same day, Trump expressed a different view in The Scotsman, the national newspaper of Scotland. The Scotsman story details Trump's intent to sta11 building what he says wi ll be "the world's greatest golf course" and time share condos on land considered virtually sacred to Scottish environmental ists. 18 Trump boasted, "The world has changed fi nancially and the banks arc all in such trouble, but the good news is that we arc doing very well as a company and we arc in a very, very strong cash position." 19 Trump explained, "f-ortunatcly, I haven't been a stock market person, so l wasn't affected by the stock market. I 13 Donald Trump, er al v. Deutsche Bank Trust Company Americas, et al., No. 2684 1/08, Supreme Court of New Yor k, County of Queens, Complaint~ 86. • Donald Trump, et al v. Deutsche Bank Trust Company Americas, et al., No. 2684 1/08, Supreme Court of New I York, County of Queens, Affidavit of Donald J. Trump 129. ,s Id. ii 27 (emphasis added). 16 Donald Trump. <:I al. v. Deutsche Bank Tru.~I Company Americas, et al., No. 26841/08, Supreme Coult of New York, County of Queens, Complaint, Prayer for Relief, p. 3 l(emphasis added). 11 Id 18 Frank Urquhart, Donald Tr11111p· 'The time is right. I want to get started', The Scotsman, November 4, 2008, available at hll-p://news.scotsman.com/donaldtrump/Donald-Trump-39The-time-is.4656277 .jp. 19 Id 6 don't even have a mortgage on the land. 1 bought it for [reportedly more than £1 billionl cash, and that makes life much easier if you can do business that way ."20 Despite receiving only about three hours' notice and being served with two volumes of pleadings on the courthouse steps in Queens, Deutsche Bank appeared at the temporary restraining order hearing on the afternoon of Thursday, November 6Lh_ Deutsche Bank vigorously opposed Trump's motion, pointing out the fallacy of his argument that the world economic crisis is a Force Maj cure entitling 40 I NWV to escape repaying the money it owes until the crisis is over. The court rejected Trump's arguments, ruled in Deutsche Bank's favor, and denied Tnunp·s request for a temporary restraining order. Jlaving lost, Trump asked the court to set an expedited hearing on a motion for preliminary injunction, which he later withdrew after receiving discovery requests that called for his deposition. 21 Without the temporary restraining order, the CLA's maturity date of November 7, 2008 remained in effect. 40 I NWV failed to make payment of the outstanding loan amount of more than $330 million on Priday, November 7, 2008. Accordingly, on Monday, November 10, 2008, Deutsche I3ank made written demand on 40 I NWV for payment of the outstanding loan amount and made written demand on Trump for payment on the Payment Guaranty. (Letter of November I0, 2008, Mott Aff., Ex. 0.) io id 71 Deutsche Bank served document requests and interrogatories on the plaintiffs in the Queens Supreme Court case which sought infom1ation regarding Trump's Force Majcurc claim as well as his allegation that his reputation would be irreparably harmed if the CLA maturity date were not extended. Deutsche Bank also sought the deposition of Trump, who had submitted a detailed affidavit in support or the motion for temporary restraining order, on an expedited basis. Upon receiving the discovery requests, Trump's counsel asked Deutsche Bank's counsel for a continuance of the preliminary injw1ction hearing date and said they wanted some limited reciprocal discovery. Deutsche Uank's counsel agreed and by s1ipulation, the parties were to appear before lhe court on November 19th to resolve any disputes over lhe scope of discovery. But Trump's counsel never served discovery requests and Deutsche Dank moved for entry ofan order requiring expedited discovery including Trump's deposition. Trump's counsel did not respond and on November 19th they made an extraordinary concession in open court in light of the relief they had been seeking and the tactics they had employed - they dropped their request for preliminary injunction. 7 Deutsche Bank is entitled to summary judgment regardless of Trump's abi lity lo pay the amount due under the Payment Guaranty. Nonetheless, it is noteworthy that Trump's representatives are telling the world that he is flush with cash held in a secret bank account. On November 17, 2008, The Scotsman reported that "Donald Trump has £1 billion in cash 'silting in the bank and ready to go"' accord ing to a claim made by "the US tycoon's organisation."22 The Scotsman quotes George Soria!, a Trump Organization executive, as stating '·the money is there, ready lo be wired at any lime. T am nol discussing where il is, whether it is in a Scollish bank or what, but it is earmarked for this fScottish golf course] project. Ir we needed to put the development up tomorrow, we have lhe cash lo do that. Tt is there in lhe bank and is ready to go."23 The Trump Organization executive conceded that Trump bas benefited than been hurt, as so many others have - rather by the world financial crisis. "There is an economi c downturn globally, but we have managed to use that to our advantagc."24 As the executive explained, " I laving cash in a downturn like this is a good position to be in .... We arc talking about an organisation that has its own TV show, numerous lines of products including clothing, vodka, and so on. lt is not about one little projcct."25 22 Jane Dradlcy, 'I've got£/ bn in the bank ready lo fund golf resort' says Trump, The Scotsman, November 17, 2008. 2$ Id. 8 ARGUMENT DEUTSCHE BANK IS ENTITLED TO SUMMARY JUDGMENT IN LIEU OF A COMPLAINT BECAUSE TIIE PAYMENT GUARANTY IS AN INSTRUMENT FOR THE PAYMENT OF MONEY ONLY AND TRUMJ1 IIAS FAll..l~D TO PAY CPLR 3213 provides for summary judgment in lieu of a complainl to collect on an instrumcnl for payment of money only. This summary procedure "affords a speedy and efficient rcmc<ly to secure judgment in certain cases where service of formal pleadings would be unnecessary for the expedi tious resolution of the dispute between U1c parties.'' Maglich v. Saxe, Baco11 & Bolan, P.C., 97 A.D.2d 19, 21 ( Isl Dcp't 1983). formal plcadi:-igs arc superfluous because th<.: instruments and corresponding claim for payment arc presumptively meritorious. Istiluto Per Lo Sviluyo Economico Dell 'Italia Meridiona/e v. Sperti Prods. Inc., 47 F.R.D. 310, 314 (S.D.N.Y. 1969). Plaintiff makes oul its prima foci<.: case by submitting proof (1) of the iustrumenl and (2) of the failure by the defendant lo make the payment called for by its terms. Bank ofAmerica, N.A. v. Solow, No. 601892/07, 2008 WL I821877, at *2 (Sup. Ct. N.Y. County Apr. 17, 2008) (Fried, JSC); Seaman-Andwa/1 Corp. v. Wright Mach. Corp, 31 J\..D.2d 136, 137 (isl Dep't 1968), aff"d, 29 N.Y.2d 617 (1971). Deutsche Bank has submitted incontrovertible evidence on both elements and, thus, is entitled to summary judgment. I. The Payment Guaranty Is An Instrument For The Payment Of Money Only An unconditional payment guaranty is an "instrument for the payment of money only" within the meaning of CPLR 3213. See, e.g., .Jason Trading Corp. v. Lason Trading Corp., 303 A.D.2d 180, 180 ( lst Dep't 2003) (unconditional guaranty of a promissory note found to be an instrument for the payment of money only); Citicorp Real Estate, Inc. v. Dulder, el al., No. 07612/92, at 2 (Sup. CL. N.Y. County Aug. 5, 1992) (stating that "li lt is hcyoncl cavil that a guaranty is an instrument for the payment of money only, within the purview of CPLR 9 3213") (Ex. A); European Am. Bank & Trust Co. v. Schirripa, 108 A.D.2d 684,684 (1st Dcp'l 1985) (an unconditional guarantee is an instrument for the payment of money only); Smith v. Shields Sales Corp., 22 A.D.Jd 942, 944 (3d Dep't 2005) (deeming guaranty an instrument for the payment of money only); Dell 'Anno v. Molinari, No. 111324/06, 2008 WL 961156, at *3 (Sup. Ct. N. Y. County Apr. 8, 2008) (stating, "il is well-established that an unconditional guaranty is an instrument for the payment or money only within the meaning of CPLR 3213") (citations omitted). Unconditional guarantee agreements arc fully enforceable as a matter of New York law and prevent guarantors from avoiding liability based on any defenses that may be asserted by the borrower. Citibank, N.A. v. I'lapinger, 66 N.Y.2d 90, 92-93 ( 1985). The fact that a payment guaranty may require reference to other documents to determine the precise amount due and owing docs not prevent the use or CPLR 3213 to enforce it. /\. recent decision or this Court, Bank of America v. Solow, No. 601892/07, 2008 WL I 821877 (Sup. Ct. N.Y. County Apr. 17, 2008) (Fried, JSC), is instructive. ln Solow, a lender brought an action under CPLR 3213 to enforce a real estate developer' s general guara11ty or all or the obligations of a single member limited liability company. The limited liability company had defaulted on a mo1tgage loan on real property subject lo a ground lease and the lender sought lo enforce the guaranty as to this loan. The lender submitted a notice of motion under CPLR 3213 with eight exhibits tracing the mortgage loan's history which were necessary lo determine the precise amount due. The defendant challenged the use of CPLR 3213 because the guaranty did not state a sum certain and the obligation itself could be established only through reference to numerous documents other than the guaranty. This Court rejected both arguments, noting that a guaranty, "by definition, relates to an underlying obligation. It requires the guarantor to perform 10 the obligation of another, the primary obligor, so there must be some reference to another document. '' Solow, 2008 WL 1821877, at *4. The Court went on to hold "laJ guaJanty may be the proper subject of a motion for summary judgment in lieu of a complaint whether or not it recites a sum certain, and the need to consult the underlying documents to establish the amount of liability does not affect the availability of CPLR 3213." Id. As the f-irst Department has noted, the real question is whether the action is over a purely monetary obligation. See Boland v. lndah Kial Fin. (IV) Maurilus Ltd., 291 A.D.2d 342, 342-43 (1st Dep't 2002) (holding that the need to refer to an indenture to calculate liability had no effect on applicability of CPLR 3213 because the note obligation was purely monetary); Mfrs. llanover Trnst Co. v. Green, 95 A. D.2d 737, 737 (1st Dep't I 983) (holding that the need to refer to the underlying promissory note to establish the amount owing had no cffect on the applicability or C'PLR 3213 because the guarantee obligation was purely monetary). The Payment Guaranty at issue here similarly qualifies as an instnunenl for the payment of money only. All or the guarantied obligations relate solely 10 monetary remunernlion. The first provision states that Trump "unconditionally ... guarantees lo Lenders the punctual and complete payment when due." (Payment Guaranty§ I, Molt Aff., Ex. A.) The second provision adds "I tjhis is an irrevocable, abso lute, continuing guaranty of payment and not a guaranty or collection." (Payment Guaranty § 2, Mott Aff., Ex. A.) The Payment Guaranty is replete with such unmistakable language. There are no provisions in the Payment Guaranty requiring Trump to do anything other than pay the outstanding balance of the underlying debt. Therefore, the Payment Guaranty constitutes an instnunent for the payment of money only. The amount of money owed, $40 million plus interest and costs, is derived in part from the CLA. 11 (CLA at§ l. I, Mott NT., Ex. B.) Thus, Deutsche Oank has cstablisbed the first element of its claim. lJ. Trump Has Failed To Pay As Required By The Payment Guaranty Deutsche Bank also established the second element - proof of non-payment. Trump guaranteed the payment of the Construction Loan on its maturity dale. (Payment Guaranty§§ 1, 5,Mott Aff., Ex. A.) Trump's entity, 401 NWV, did n()t pay the balance of the loan - approximately $333,898,879.65 in principal and accrued and unpaid interest in the amount of $251,456.75 - on or before the November 7, 2008 maturity date. (Mott AfI. ii 12.) Accordingly, Deutsche Bank delivered written demand for $40 million plus interest and costs to Trump on November I0, 2006. (Mott Aff., Ex. D.) Deutsche Bank demanded $40 million because Substantial Completion - which has multiple requirements, including that "the Improvements have been completed substantially in accordance with the Plans ... [and] a temporary ce11 i licate of occupancy for the Project shall have been issued" has not yet occurred.26 To date, Trump has not paid the $40 million he owes to Deutsche Dank on the Paymeot Guaranty. Therefore, Deutsche Bank is entitled to summary judgment. ***** By the tcnns of the operative document, Trump docs not have any defenses to payment. Under the Payment Guaranty, Trump is obligated lo pay even if "Borrower has valid defenses, claims or offsets (whether at law, in equity or otherwise) which render the Construction Loan or guaranteed Obligations wholly or partially uncollectible from Borrower." (Payment Guaranty § 4, Mott NT., Ex. A.) Trump explicitly "waives any rights which lhel might have otherwise as a result of or in connection with ... ja]ny circumstru1ce which might in any manner 26 See supra note I al 2. 12 or lo any extent constitute a defense available to Borrower, or vary the risk of Guarantor, or might otherwise constitute a h:gal or equitable discharge or defense uvuilable to a surety or guarantor." (Payment Guaranty§ 4, Mott Aff., Ex. A.) CONCLUSION Because 40 I NWV failed to pay the outstanding debt on the maturity date of November 7, 2008, Trump is obliged by the Payment Guaranty to pay Deutsche Bank the outstanding balance owed. To date, he has failed to pay. Therefore, Trump has breached his obligations under the Payment Guaranty, and !his Court should grant this Motion and order Trump to make all payments due and owing to Deutsche Bank under the Payment Guaranty. PRAYRR FOR RELi l~F For the foregoing reasons, Deutsche 13ank's motion for summary judgment in lieu of complain! should be granted, and it should be awarded $40,000,000; unpaid interest from November I 0, 2008; attorneys' fees; costs; and any and such other additional relief as this Court deems just and proper. Dated: New York, New York November 26, 2008 even F. Mola George J. Wade Seth M. Kean 599 Lexington Avenue New York, NY l 0022-6069 Telephone: (212) 848-4000 Facsimile: (212) 848-7179 Attorneys for Plaintiff Deutsche Bank Trust Company Americas 13 11/lll /LUUll l·Rl l l:~9 ~009/013 PI\X '! S'.'PREME COURT OF THE STATE OF. NEW YORK IAS PART 10 {' COUNTY OF NEW YORK f - - - .- - - - - - - - - - - - - - - - - - - j CI fICORP REAL ESTATE, ' -X _.,.,, Plaintiff. / Index tt076l2/92 ( ' P. DULONER, STANLEY S. ITSKOWITCB KURT and CHARLES W. RUSSELL, Defendants. - - - - - - -x Beatrice Shainswit, J.: Citicorp Real Estate, Inc . (•Citicorp"), moves for an order, pursuant to CPLR 321 3, granting summary judgment in iieu of complaint. This is an action by pl.ain tiff-lender aga_inst the individual ~efendant-guarantors--Kurt P. Duldner ("Duldner•) , Itskowitch c•rtskowitch•) , an~ Charles w. Stanley S. Russell ("Russell")--of the obligations of Brightwater Towers Associates ("Brightwater" ), a New York Limited Partnership . high-rise agreed the two to Brightwater is the owner of two residential multiple dwellings located at 501 and Surf Avenue, Brooklyn, New York . On May 26, 1989, buildings from rental units to condominium Citicorp. The three individual defendants 601 plaintiff lend Brightwater SJ4,000,000 to enable i t to The loans were evidenced by promisoory notes made by to ' I' \ convert ownership. Brightwater executed and deli vered to Citicorp a written guarant ee wh ereby they agreed to: •.. jointly and several ly unconditionally and irrevocably guarantee to the Lender the punctual, prompt and complete paymen t of the principal of a n d interest on the Note, together with all other sums secured by the ~ I \ ,I I ' .............., _.,..,../ - agdinst - Plaintiff, , , .~' ./.. sk66 INC. , // ll/14/2008 ~RI ll:59 ~1~-- 14'.1010/013 PAX .. - -- - ~ortgdge, it being expressly understood and agreed that this is a con tin uing Guaranty and an instrument for the payment of money only, and that the obligations of tbe Guarantors are and shall be absolute, unconditional and irrevocable under any and all circumstances without regard to t he legality, binding effect, validity, r egularity or enforceability of the Note, the Mortgage, the Loan Agreement or any other instruments executed in connection therewith ..•. { t I ~ ' •I' \ Pursuant to the terms of the Notes, ~rightwater agreed to repay $13,500,000 on account of the principal indebtedness on May 26, 1991, but did not do so, despit e due demand. action also seeks interest from November 1, The resulting 1991 t o February 29, 1992, plus costs and disbursements . Accel~ra~ed relief is available, pursuant to CPLR 3213, when a pri.ma facie case is made out by an ins trument for the of money only and failure to pay, unless defendant payme nt raises an issue as to defenses by sufficient evidentiary proof (Interman v. R.S -~.Electron cavil Power, Inc., 37 NY2d 151, 155). It is beyond that a guaranty is .an instrument for the payment of money only, within the purview of CPLR 3213 (Chase Manhattan~.~-~· v. Marcovitz, 56 AD2d 763; Chase Manhattan Bank,~-~- v. Kahn, 66 AD2d judgment certain. the A guarantee may be the proper subject 704). in for lieu of complaint whether or not it recites summary a sum The need to refer to the underlying notes to establish amount of liability does not affect the availability of CPLR 3213 (Manufacturers Hanover Trust Co. v. Green, 95 AD2d 737). Defendants oppose the motion by arguing that (a) own wrongful conduct caused Brightwater to Citicorp's default, relieving the guarantors of their obligations (Canterbury & Equipment Corp v . Poughkeepsie Sav. -2- th~reby Realty Bank, 135 AD2d 10 2 , 107), l l/ l4 /2008 FRI 12: 00 l,1J0 ll /013 l'AX ........ and(e}there are concerning the r epaym~n t judgment allege in amb igu i ties ---- ·- - - no t e the sc hedule- -so that, is not a ppr opr i a te a t . t~~e . thi s its meaning there f ore , s umma ry as to Specif ical ly, that Ci t icorp agreed tha t so long as reaso nable was b e ing ma de in the condo minium conversion proc e s s, not --- prog ress they required t o od here to the exact a mounts of t he "line in the budget, that and but, rather, Citibank t h ey we re i t e ms " could allocate funds as n e cessary, wQuld subordinate its mortgages to a declarati o n o f condomi nium. Defenda nts claude nature are wrong. The exi~ t ence of docs no t in any respect affect either the of appropriate accordance obligation , proceeding with Techn o i ogies, the .!E.£_., or upon default terms of the t he right the by unconditional to the notes subordination institute in mortgagor, (Kornfeld -N. -R.X- . v. 93 AD2d ·7 72, aff ' d. 62 NY2d 686) . an On their face , the guarantees state~ unconditional promises to pay. (Ibid . ) · · Fu rthermo re, corporate the or allegation of wrongful conduct by off i cers of Citicorp is not a defense to an action guaranty absolut e defendants' whe n, as here, the guaranty r e cites that a n d unconditional irrespective of a ny . l~ck of unenforceability of the u n derlying note, N. A. loan instruments (Citibank , Th e mortgage it on is validity or other v . Piapinger, 66 NY2d 90 , 92). plaintiff bank has establ is h ed a prima facie case b y settin g forth the notes, the uncondi t ional guaranties , and the nonpayment thereof(~ Leumi Trust Co . AD2d ( 1st Dept. 199 2]. Discount Ba nk of N. Y. of N.Y. -- v. NYLJ 4/23/92, Rattet p. & Liebman , 22, col. 6; Israel v. 5000 Fifth Ave . Assocs . , 167 AD2d 203). -3- ll/14/2008 PRI 1 2:01 PAX aereat summary j udgrnent by alleging __ ...,u1:. • - -·· fJjOl 2/013 fraudulent - - inducement in connection with a separate, though related, transaction (Berlind v. Heinfling. 176 AD2d 452). The oral agreement or ~assurances,· allegedly made by loan officer at Citicorp , that repayment could be made depending on' how well the conversion to condominium ownership would also Bank v. violate the parol evidence rule E . S.I. GrOUE_, state mandates accommod •.on obl.igation, not 177 AD2d 301; Streisand, to .!E_S,. , of a which, (European American N.U.C. v. The public policy of this a person signing bank pro~essed, National Bank of 167 · AD2d 4_53). that the an instrument in its form, is for a the bind.ing is estopped from enforcing an alleged oral agreement enforce the instrument according to its terms (First National City Bank v. Cooper, 50 AD2d 518). Nor bank. may defendants be heard to complain that the by refusing to advance ~urther loan installments after the borrower iatter (Brightwater) had fallen behind (Dimazopoulos v. to default. 166 AD2d 631). did plaintiff not dealing Brightwater caused the Consort Development~-, Under the circumstances here presented, plaintiff breach ~1 schedule, its implied covenant of good faith refusing to make additional financing (Marine Midland~. N.A. v. and fair available Cafferty, to 174 AD2d 932). Defendants' other arguments There is no ambiguity in the note, terms, validity, request absolute and are without merit. and the guaranty was, by its unconditional, equally without regard regularity or enforceability of the note. for denial, to Defendants' or a continuance of the motion in order -4- the to . ------------- ll/14/2008 PRl 12: Ot (dJ013/013 PAX .• ..~· .... . . ···. permit them to engage in pre-trial disclosure ( C['t.f\ )2 D 1 t I l, denied. h They · a .l ready .Possess all of the requlsite'I t1 oc1..1nH.1nt..q, 111n1.\ they have not shown that any new, relev~nt, matorioJ. intor:m,;.HLr>n, . ·•. within the sole and exclusive knowledge of plaintif!, . . woula them to successfully defend against the motion. Ro th<,r, i t appears that they seek to engage in an impermissible •fis hing in the hope that somehow ~hey will uncover evidence enable ' expedition• to create some arguable triable issue of fact (Kennerly v. Campbell. Chain Oivision, _McGraw-Edison Co ., 133 AD2d 669). Accordingly, plaintiff's motion for summery judgment in lieu ~ . . . _.·of complaint is granted. The _county . Clerk is d.irec1:•7.~ :-.~? enter a . . judgment in favor of plaintiff against defendants jointly and several1y, as requested in the moving papers. Settl.e order. Dated: August S. 1992 J. - 5- s _. c. .,