Under CPLR 3213, a plaintiff can move for summary judgment in lieu of complaint which, under the right circumstances, serves as a useful tool to avoid extensive litigation and obtain speedy relief. Recently, in JADR Consulting Group Pty Ltd. v Ault Alliance, Inc., some loan sharks attempted to take advantage of the device’s efficiency. Manhattan Commercial Division Justice Margaret A. Chan heard the legendary jaws theme music but was not deterred, instead denying summary judgment and granting the defendant’s cross-motion to dismiss.

Background:

In JADR, the plaintiff and the defendant entered into a promissory note in which the defendant promised to repay a principal of $2,756,245.10. However, plaintiff conceded that the defendant only received $2,249,996. The interest rate on the note was set at 16% per annum, and the default rate was set at 24% per annum or the maximum permitted by law.

That note was amended twice. First, a new section was added to include that in the event of a default, the principal would increase by $1,000,000. Second, the maturity date of the note was extended and included that any default would, at the plaintiff’s discretion, extend the maturity date by 30 days, but also add $250,000 to the principal to be repaid. Further, both amendments increased the principal amount despite the fact that the defendant never received additional consideration.Continue Reading You’re Gonna Need a Bigger Boat: Criminal Usury Statutes Prevent Loan Sharks