DYCKMAN v. BARRETT, N.Y. App. Div., Judgment, Law, casemine.com

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Robert J. Miller

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Smart Summary

Factual and Procedural Background

The plaintiffs commenced this action against the defendant, Maria E. Barrett, to recover principal and interest due on a promissory note related to the defendant's purchase of a haircutting salon from the plaintiffs. The defendant opposed the plaintiffs' motion for summary judgment by submitting an affidavit claiming the parties agreed to a reduced payment of $7,500 as full satisfaction of the note due to the plaintiffs' financial difficulties. The defendant also submitted a UCC-3 termination statement allegedly signed by plaintiff Lawrence Dyckman. Upon renewal of the summary judgment motion, the defendant introduced additional evidence, including an affidavit from an eyewitness who observed a cash payment exchanged between the parties. The Supreme Court granted summary judgment to the plaintiffs on the first cause of action, but this order was later reversed on appeal, vacating the summary judgment and denying that branch of the plaintiffs' motion. The appeal from the original judgment was dismissed as superseded by the renewed order.

Legal Issues Presented

Whether the plaintiffs were entitled to summary judgment on the first cause of action to recover on the promissory note.
Whether the alleged modification of the note by payment of a reduced amount constituted a valid modification supported by consideration.
Whether the signature of Lawrence Dyckman on the UCC-3 termination statement was forged, and if that issue could be resolved on summary judgment.
The applicability of General Obligations Law § 5-1103 regarding contract modifications without consideration and the necessity of a signed writing.

Arguments of the Parties

Defendant's Arguments

The parties agreed to accept $7,500 as full payment on the note due to the plaintiffs' financial problems.
Submitted a UCC-3 termination statement allegedly signed by plaintiff Lawrence Dyckman.
Presented new evidence on renewal, including an eyewitness affidavit detailing a cash payment to Dyckman.
Argued that these facts raise material issues of fact precluding summary judgment.

Plaintiffs' Arguments

Asserted there was no consideration supporting modification of the note.
Argued that Lawrence Dyckman could have accelerated the loan balance upon default but did not do so until filing the complaint.
Contended that the note's terms were not modified and that the UCC-3 termination statement signature was a forgery.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Zuckerman v City of New York, 49 N.Y.2d 557, 562	Standard for summary judgment: court determines if material issues of fact exist, not to resolve them.	Applied to conclude defendant produced sufficient admissible evidence requiring trial of material facts.
Barr v County of Albany, 50 N.Y.2d 247, 254	Summary judgment burden: court does not weigh credibility or resolve factual disputes.	Supported the court’s refusal to grant summary judgment given disputed facts.
Merrill Lynch Realty/Carll Burr, Inc. v Skinner, 63 N.Y.2d 590, 596	Accord and satisfaction cannot apply when claim is undisputed and liquidated.	Used to reject characterization of note modification as accord and satisfaction.
Ross v Mail Order Merchandising, 128 A.D.2d 514	Supports principles regarding accord and satisfaction and contract modifications.	Referenced in analysis of note modification validity.
Ber v Johnson, 163 A.D.2d 817	Related to accord and satisfaction in contract disputes.	Applied to distinguish accord and satisfaction from modification supported by consideration.
Matter of King Metal Prods. v Workmen's Compensation Bd., 20 A.D.2d 565	Consideration supports modification of contract terms.	Supported the court’s conclusion that payment prior to default constituted consideration.
Felt v Olson, 51 N.Y.2d 977, 979	Handwriting comparisons under CPLR 4536 raise issues of fact, not suitable for summary judgment.	Applied to hold that alleged forgery of signature is a factual dispute requiring trial.
People v Hoffman, 111 A.D.2d 411	Supports that handwriting analysis creates factual issues unsuitable for summary judgment.	Used to reinforce the court’s ruling on forgery issue.
Matter of Thomas v Coughlin, 145 A.D.2d 695, 696	Handwriting comparison issues are factual questions for trial.	Further supported denial of summary judgment on forgery claim.

Court's Reasoning and Analysis

The court analyzed the defendant’s submission of affidavits and documentary evidence, determining that such evidence sufficiently raised material factual issues that precluded summary judgment. The court emphasized that the burden on a summary judgment motion is to determine whether factual disputes exist, not to resolve them or assess credibility. The defendant’s affidavit alleging a modification agreement supported by a partial payment before default, along with an eyewitness affidavit describing a cash payment, introduced a genuine issue of fact regarding whether the note’s terms were modified with new consideration.

The court distinguished the modification from an accord and satisfaction, noting the claim was undisputed and liquidated, thus accord and satisfaction did not apply. Instead, the court found the payment prior to default could constitute valid consideration supporting modification, rendering General Obligations Law § 5-1103 inapplicable because that statute requires a signed writing only in the absence of consideration.

Regarding the UCC-3 termination statement, the court held that the alleged forgery of the plaintiff’s signature could not be resolved on summary judgment because handwriting comparison under CPLR 4536 raises factual issues for trial. Therefore, the Supreme Court’s prior determination that the signature was forged was improper at the summary judgment stage.

Holding and Implications

The court dismissed the appeal from the original judgment as superseded by the renewed order, reversed the order dated December 6, 1990 insofar as it granted summary judgment to the plaintiffs on the first cause of action, and denied that branch of the plaintiffs’ motion for summary judgment. The defendant was awarded one bill of costs.

The decision results in denial of summary judgment, requiring a trial to resolve the factual disputes concerning the alleged modification of the note and the authenticity of the UCC-3 termination statement signature. No new legal precedent was established; rather, the court reaffirmed established standards governing summary judgment and contract modification requirements.

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LAWRENCE DYCKMAN et al., Respondents, v. MARIA E. BARRETT, Appellant.

Ordered that the appeal from the judgment entered October 5, 1990, is dismissed, as that judgment was superseded by the order dated December 6, 1990, made upon renewal; and it is further,

Ordered that the order dated December 6, 1990, is reversed insofar as appealed from, on the law, the first and third decretal paragraphs of the judgment entered October 5, 1990, and so much of the order entered August 3, 1990, as granted that branch of the plaintiffs' motion which was for summary judgment on the first cause of action is vacated, and that branch of the plaintiffs' motion which was for summary judgment on the first cause of action is denied; and it is further,

Ordered that the defendant is awarded one bill of costs.

The plaintiffs commenced this action against the defendant in part, inter alia, to recover principal and interest due on a promissory note entered into by the parties in connection with the defendant's purchase from the plaintiffs of a haircutting salon. In opposition to the plaintiffs' motion for summary judgment, the defendant submitted an affidavit stating that because the plaintiffs were having financial problems, the parties agreed that the plaintiffs would accept $7,500 as full payment on the remaining amount of the note. The defendant also submitted a UCC-3 termination statement, allegedly signed by the plaintiff Lawrence Dyckman. On renewal of the motion for summary judgment, the defendant additionally submitted newly available evidence, to wit, the affidavit of an eyewitness who stated that on the day in question he accompanied the defendant to a parking lot where he observed a large envelope filled with cash exchanged between the plaintiff Lawrence Dyckman and the defendant.

The defendant, on renewal of the motion for summary judgment, produced evidentiary proof in admissible form sufficient to require a trial of material issues of fact (see, Zuckerman v City of New York, 49 N.Y.2d 557, 562). The burden of a court in deciding a motion for summary judgment is not to resolve issues of fact or to determine matters of credibility, but merely to determine whether such issues exist (see, Barr v County of Albany, 50 N.Y.2d 247, 254).

Although the modification of the underlying obligation on the note could not be characterized as an "accord and satisfaction" since the claim was undisputed and liquidated (see, Merrill Lynch Realty/Carll Burr, Inc. v Skinner, 63 N.Y.2d 590, 596; Ross v Mail Order Merchandising, 128 A.D.2d 514; Ber v Johnson, 163 A.D.2d 817), there still remains an issue of fact as to whether the terms of the note were modified with new consideration, i.e., by the payment of the debt or part of it before it was due (see, 3 Williston, Contracts § 7:27, at 495-499 [4th ed 1991]; Restatement [Second] of Contracts § 73, comment c, illustration 7). The plaintiffs assert that there was no consideration to support a modification of the terms of the note, as Lawrence Dyckman could have elected to accelerate the loan balance and declare the entire principal balance of the note due and payable in the event of a default. However, Lawrence Dyckman, by his own admission, did not do so until he filed his verified complaint. The alleged $7,500 payment was made prior to the filing of the complaint, and at a time when the defendant was not in default on the note payments. Therefore, any alleged modification of the note was supported by consideration (cf., Matter of King Metal Prods. v Workmen's Compensation Bd., 20 A.D.2d 565). Hence, as a matter of law, General Obligations Law § 5-1103, which requires, in "the absence of consideration", a writing "signed by the party against whom it is sought to enforce the change" for a valid modification of a contract, does not apply to this case.

The only legal significance of a filed UCC-3 statement is that it "reflects the termination of the security interest itself and, ipso facto, the effectiveness of the financing statement filed to perfect such security interest" (Bowmar, Secured Transactions in New York § 6.11, at 174). In any event, the Supreme Court improperly determined that the signature of the plaintiff Lawrence Dyckman on the UCC-3 termination statement was a forgery, as a handwriting comparison under CPLR 4536 is not appropriate on a motion for summary judgment, but, rather, gives rise to an issue of fact (see, Felt v Olson, 51 N.Y.2d 977, 979; People v Hoffman, 111 A.D.2d 411; Matter of Thomas v Coughlin, 145 A.D.2d 695, 696). Sullivan, J.P., Rosenblatt, Miller and Ritter, JJ., concur.

DYCKMAN v. BARRETT