FILED: NEW YORK COUNTY CLERK 05/25/ :45 PM INDEX NO /2016 NYSCEF DOC. NO. 31 RECEIVED NYSCEF: 05/25/2016

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1 FILED NEW YORK COUNTY CLERK 05/25/ PM INDEX NO /2016 NYSCEF DOC. NO. 31 RECEIVED NYSCEF 05/25/2016 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK x CAPITAL ONE TAXI MEDALLION FINANCE, Plaintiff, - against - SAVAS TSITIRIDIS, Defendant x Index No /2016 Motion Seq. # 001 J. Oing REPLY MEMORANDUM OF LAW IN FURTHER SUPPORT OF PLAINTIFF S MOTION FOR SUMMARY JUDGMENT IN LIEU OF COMPLAINT PURSUANT TO CPLR 3213 SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP George A. Zimmerman Robert L. Dunn Bradley E. Honigman Four Times Square New York, NY george.zimmerman@skadden.com robert.dunn@skadden.com bradley.honigman@skadden.com Attorneys for Plaintiff Capital One Taxi Medallion Finance 1 of 15

2 TABLE OF CONTENTS TABLE OF AUTHORITIES... ii PRELIMINARY STATEMENT...1 ARGUMENT...3 I. DEFENDANT HAS FAILED TO RAISE A TRIABLE ISSUE OF FACT...3 Page A. No Outside Proof Is Needed for Summary Enforcement...3 B. Capital One Is Not Relying on the Forbearance Agreement to Prove Defendant s Liability...5 II. THE ABSOLUTE AND UNCONDITIONAL GUARANTEES ARE ENFORCEABLE AS A MATTER OF LAW...6 A. Defendant s Bald Allegation of Forgery Is Insufficient to Raise a Fact Issue...6 B. Defendant s Guarantees Preclude Him From Raising Any Defenses to Payment on the Guarantees...10 CONCLUSION...11 i 2 of 15

3 TABLE OF AUTHORITIES CASES Banco Popular North America v. Victory Taxi Management, Inc., 1 N.Y.3d 381 (2004)... 2, 7, 8, 9 Beal Bank, SSB v. Sandpiper Resort Corp., 251 A.D.2d 360 (2d Dep t 1998) Bronsnick v. Brisman, 30 A.D.3d 224 (1st Dep t 2006)... 7 Capital Circulation Corp. v. Gallop Leasing Corp., 248 A.D.2d 578 (2d Dep t 1998) Chase Manhattan Bank, N.A. v. Marcovitz, 56 A.D.2d 763 (1st Dep t 1977)... 4 Cooperatieve Centrale Raiffeisen-Boerenleenbank, B.A., Rabobank Int l, N.Y. Branch v. Navarro, 25 N.Y.3d 485, 492 (2015)... 3, 6, 7, 10 Coopersmith v. Gold, 89 N.Y.2d 957 (1997)... 7 JPMorgan Chase Bank v. Gamut-Mitchell, Inc., 27 A.D.3d 622 (2d Dep t 2006)... 7 Kitovas v. Megaris, 133 A.D.3d 720 (2d Dep t 2015)... 7 Korea First Bank of N.Y. v. Cha, 259 A.D.2d 378 (1st Dep t 1999)... 4 Raven Elevator Corp. v. Finkelstein, 223 A.D.2d 378 (1st Dep t 1996) Storch v. Storch, 282 A.D.2d 845 (3d Dep t 2001)... 4 RULES CPLR , 3, 4 CPLR ii 3 of 15

4 PRELIMINARY STATEMENT Capital One 1 brought this summary CPLR 3213 proceeding to collect on 31 materially identical Guarantees signed by Defendant on loans to 26 entities used to purchase taxi vehicles for use in Defendant s businesses. The loans and Guarantees have been in default for approximately one and a half years. In connection with its motion for summary judgment in lieu of compliant, Capital One submitted admissible evidence that Defendant owes money pursuant to written instruments that he has failed to pay all that is needed to set forth a prima facie case for summary judgment under CPLR As a result, the burden has shifted to Defendant to establish a triable issue of fact. In his Opposition, Defendant tries mightily to avoid his obligations through misdirection and unsupported ipse dixit. First, Defendant feigns ignorance of his obligations he has known about for years, claiming there are triable issues because Capital One only submitted a representative example of the 31 Guarantees at issue. To moot any possible issue, Capital One is submitting all 31 Guarantees with this Reply. (See Reply Affidavit of John O Gorman ( O Gorman Reply Aff. ) Exs ) These Guarantees and the calculations also attached to the O Gorman Reply Affidavit, confirm that the amount due, exclusive of interest and fees, is indeed $515, Second, Defendant speculates that the Guarantees which contain signatures that Defendant admits look identical to Defendant s signature were in fact not hand signed by Defendant but signed without Defendant s approval using a stamp kept in the offices of the business he co-owns and manages with Mr. Freidman. Rather than submit any evidence, Defendant resorts to his argument that his signatures on the Forbearance Agreement on the same 1 Unless otherwise stated, all capitalized terms have the same definitions as in Capital One s Memorandum Of Law In Support Of Plaintiff s Motion For Summary Judgment In Lieu Of Complaint Pursuant to CPLR 3213 (Dkt. Entry 6.) 4 of 15

5 obligations that formed the basis of the now-vacated Judgment by Confession against Defendant had been forged. But that is old news. Capital One did not oppose vacatur of the Judgment by Confession precisely because the signature on the Forbearance Agreement, on its face, did not match that of Defendant. However, that manifestly is not the case with the Guarantees, where the signature is a hands-on match to Defendant s signature. As Capital One made clear in open court, and this Court recognized in its Order vacating the Judgment by Confession, that vacatur did not affect the validity of the Guarantees and Capital One reserved all rights under those documents. With respect to the Guarantees themselves, Defendant does not provide any evidence other than his say-so that he did not authorize his signature on the Guarantees. Under the Court of Appeals decision in Banco Popular North America v. Victory Taxi Management, Inc., 1 N.Y.3d 381, 384 (2004), such bald assertions by a guarantor fall short of raising a triable issue of fact. Indeed, the admissible evidence establishes the opposite. Defendant s allegations that Freidman previously forged Defendant s signature on the Forbearance Agreement (which is inadmissible propensity evidence) is based on a comparison between the alleged forgery and Defendant s true signature. In this case, Defendant concedes that no such comparison evidence exists because it is actually the Defendant s signature on the document. Yet, Defendant asks this Court to rely on his word alone, without a scintilla of admissible evidence to corroborate him, to find that his signature stamp was used without his consent. Under Banco Popular, Defendant s assertion is not enough to create an issue of fact. Finally, despite elsewhere going to great lengths to show that Mr. Freidman is unscrupulous and untrustworthy, Defendant switches course and now trumpets Mr. Freidman s credibility, claiming that the underlying debts are in doubt because Mr. Freidman has alleged in a separate action that he was fraudulently induced into borrowing from Capital One. But, as set 2 5 of 15

6 forth below, that is irrelevant as a matter of law. The Guarantees at issue are absolute and unconditional, and waive any defenses relating to the validity of the underlying debts. As set forth below, the Court of Appeals, and the uniform case law, confirm that this language means exactly what it says and is strictly enforced. At bottom, this case presents a paradigmatic attempt by a guarantor to renege on his absolute and unconditional obligations through unsupported and far-fetched theories. Under controlling authority, that is not enough to raise a triable issue. ARGUMENT A. No Outside Proof Is Needed for Summary Enforcement Defendant first asserts that Capital One s Motion for Summary Judgment in Lieu of Complaint falls outside the limited confines of CPLR 3213 because Capital One only attached one of the 31 Guarantees executed by Defendant, but otherwise relies upon the testimony of Mr. O Gorman from Capital One. (Opp n 13.) To put this manufactured issue to rest, Capital One is submitting all 31 Guarantees (which include the underlying notes) with this Reply. (See O Gorman Reply Aff. 5 & Exs ) As Mr. O Gorman previous stated, and as Defendant knows, all the Guarantees contain the same operative language unconditionally guaranteeing the payment of money only. (Id. Exs ) Moreover, Defendant has not paid the amount owed (which he does not dispute in his Opposition). (O Gorman Affidavit 15.) Accordingly, Capital One has established a prima facie entitlement to summary judgment under CPLR See Cooperatieve Centrale Raiffeisen-Boerenleenbank, B.A., Rabobank Int l, 3 6 of 15

7 N.Y. Branch v. Navarro, 25 N.Y.3d 485, 492 (2015). The Court need not look outside the instrument, as Defendant suggests (see Opp n 13), to establish Defendant s obligations. 2 Defendant also asserts that Capital One has not provided this Court with any calculation as to how it arrived at the $515, sum it seeks to recover in this action. (Opp n 11.) Defendant has not cited to a single case requiring a precise accounting as to amounts due in order to qualify for summary judgment in lieu of complaint under CPLR In fact, an instrument need not even be for a sum certain to qualify under CPLR See, e.g., Chase Manhattan Bank, N.A. v. Marcovitz, 56 A.D.2d 763, 763 (1st Dep t 1977) (holding that an agreement to pay any and all legal and other costs and expenses qualifies under CPLR 3213). At most, a final calculation might require a separate submission by the parties particularly because interest and penalties continue to accrue not the denial of summary judgment on liability. See, e.g., Korea First Bank of N.Y. v. Cha, 259 A.D.2d 378 (1st Dep t 1999) (affirming summary judgment on issue of liability under CPLR 3213 but remanding for further proceedings on the amount due and owing) In support of his contention that Capital One failed to establish it is entitled to summary judgment, Defendant cites three inapposite cases involving instruments that called for something other than the payment of money only. See Kerin v. Kaufman, 296 A.D.2d 336 (1st Dep t 2002); Tech. Tape, Inc. v. Spray Tuck, Inc., 131 A.D.2d 404 (1st Dep t 1987); Paine Webber Jackson & Curtis, Inc. v. Aronson, 115 A.D.2d 355 (1st Dep t 1985). Unlike those actions, there is no dispute here that the Guarantees call for the payment of money only. Defendant also absurdly contends that the amount sought by Capital One is too low because Capital One previously sought in a different action nearly twice as much as Capital One now claims. (Opp n 8.) As Defendant knows, the Guarantees that Capital One is currently seeking to enforce are a subset of those it sought to enforce when obtaining the Confession of Judgment, a decision that stems in part from settlement discussions between the parties. Although Capital One would not normally reference settlement negotiations in papers submitted to the Court, having opened the door, Defendant cannot object to Capital One relying on those negotiations to explain the basis for the discrepancy. See, e.g., Storch v. Storch, 282 A.D.2d 845, 848 (3d Dep t 2001) ( Family Court did not err by permitting (cont d) 4 7 of 15

8 In all events, the Guarantees submitted with this Reply are part of the same documents as the Notes evidencing the underlying debts, which provide all the information necessary to calculate the amounts owed. (See O Gorman Reply Aff. Exs ) And to extinguish any conceivable doubt as to the amount Defendant owes, Capital One is submitting a spreadsheet evidencing the calculation of the amount Defendant owes under the Guarantees, exclusive of interest, cost and fees. (See id. Ex. 32.) B. Capital One Is Not Relying on the Forbearance Agreement to Prove Defendant s Liability Seeking to conflate the Forbearance Agreement (which formed the basis of the Judgment by Confession against Defendant) with the Guarantees, Defendant claims that (1) Capital One attempts to work around its failure to provide this Court with copies of 25 of the 26 instruments for the payment of money only that it is suing on, by relying on the terms of the Forbearance Agreement ; (2) the O Gorman Affidavit relies on schedules contained within the fraudulently forged Forbearance Agreement to show the amount Defendant owes; and (3) lobs a threat of litigation against Capital One for good measure. (Opp n ) These arguments are flat-out wrong. The only cite in the O Gorman Affidavit to the Forbearance Agreement is to show that Capital One gave Defendant all the benefits of the agreement forbearing for several months from collecting on the Guarantees even though Defendant has since claimed he did not sign the agreement. (See O Gorman Aff. 13.) Capital One has not relied upon the Forbearance Agreement for any other purpose, and Defendant s attempt at misdirection should not be countenanced. (cont d from previous page) petitioner to cross-examine respondent regarding... an offer to compromise [under CPLR 4547] as respondent opened the door on this issue by testifying about the agreement on her direct testimony. ). 5 8 of 15

9 Notably, when Capital One did not oppose the vacatur of the Confession of Judgment in December 2015, based on the evidentiary showing of a forgery submitted by Defendant (in the form of evidence showing a marked difference between Defendant s signature and the signature on the Judgment by Confession), it explicitly informed Defendant that it preserved its right to sue on the underlying Guarantees, and intended to enforce the Guarantees. (See Dunn Reply Aff. Ex. 1 at 4-5.) The Court then entered an Order (in language agreed to by Defendant) that Capital One retained all of its rights to bring claims under the Guarantees, notwithstanding Defendant s allegations the Confession of Judgment papers were forged by Mr. Freidman. (See id. Ex. 2 at 2.) Thus, Defendant has no basis to contend that the earlier vacatur of the Confession of Judgment has any bearing on Capital One s right to relief on the absolute and unconditional Guarantees, which Defendant now purports to disavow, raising an unauthorized signature claim for the first time. A. Defendant s Bald Allegation of Forgery Is Insufficient to Raise a Fact Issue As Capital One has put forth a prima facie case that Defendant owes Capital One under an instrument for the payment of money, the burden is on Defendant to establish, by admissible evidence, the existence of a triable issue with respect to a bona fide defense. Cooperatieve Centrale, 25 N.Y.3d at 492 (citation omitted). Defendant s effort to sustain his burden is his unsubstantiated assertion that he never guaranteed the loans at issue, and the signature purporting to be mine on the Promissory Note was affixed using a hand stamp of my name, purportedly without his authorization. (Tsitiridis Aff. 39.) Under controlling Court of Appeals authority, [s]omething more than a bald assertion of forgery is required to create an issue of fact contesting the authenticity of a 6 9 of 15

10 signature. Banco Popular, 1 N.Y.3d at As in Banco Popular, there is a glaring absence of factual assertions supporting a claim of forgery. Id.; see also Bronsnick v. Brisman, 30 A.D.3d 224, 224 (1st Dep t 2006) (defendant s bare denial that she signed a note was insufficient to defeat summary judgment in claim by creditor); JPMorgan Chase Bank v. Gamut-Mitchell, Inc., 27 A.D.3d 622, 623 (2d Dep t 2006) (same). Rather than introducing actual evidence that his signature is a forgery as he must Defendant surmises that Freidman (whom Defendant apparently trusts to make truthful claims in a separate complaint against Capital One) is behind the forgeries, based on allegations that he forged Defendant s signature on a separate Forbearance Agreement (a document that is not at issue in this action) and a publicly reported allegation that he forged his wife s signature. (Opp n 6, ) As a threshold matter, it is hornbook law that Defendant s propensity evidence is inadmissible to show that Freidman misused the signature stamp on the Guarantees at issue, see Coopersmith v. Gold, 89 N.Y.2d 957, 959 (1997), and Defendant may introduce only admissible evidence to create an issue of material fact, see Cooperatieve Centrale, 25 N.Y.3d at 492. For this reason alone, Defendant cannot defeat Plaintiff s Motion for Summary Judgment by relying on Freidman s alleged misconduct elsewhere. 4 The single case cited by Defendant, Kitovas v. Megaris, 133 A.D.3d 720 (2d Dep t 2015), does not support Defendant here. The court in Kitovas expressly held that [s]omething more than a mere assertion of forgery is required to create an issue of fact contesting the authenticity of a signature, and found that the defendant had provided such evidence, including (1) an example of his own signature, which confirmed the forgery even to the untrained eye, and (2) an affidavit of a witness who was present when the promissory note was signed, where the witness confirmed that he had no recollection of witnessing the defendant signing the note. Id. at Unlike in Kitovas, Defendant admits that the signature on the Guarantees at issue here looks the same as Defendant s original signature. (Tsitiridis Aff. 39.) And, again unlike Kitovas, Defendant here fails to provide any testimony from anyone who purportedly witnessed the execution of the Guarantees or otherwise can support his forgery theory of 15

11 Even if admissible, the evidence is simply not relevant whether Freidman actually forged other signatures is not at issue here. Defendant must establish that the signatures on the actual Guarantees at issue were forged, which he has not done. Instead, Defendant relies without any evidence to corroborate him solely on his own dubious claim that someone affixed his signature stamp to the Guarantees without his permission. (Opp n 6, 9, ) At least one New York appellate court has already rejected this precise argument. In Marjam Supply Co., a Section 3213 case, the defendant alleged that his purported signature was caused not by someone signing his name, but by use of a stamp and suggested that Banco Popular s requirement of [s]omething more than a bald assertion of forgery did not apply. Appellant s Brief at 20-21, Marjam Supply Co. v. Orlando, 78 A.D.3d 908 (2d Dep t 2010) (No ). The Second Department declined to introduce a more lax standard for stamped signatures, and concluded that the appellant-defendant had failed to raise a triable issue of fact. Marjam Supply Co. v. Drywall Surgeon Specialists, Inc., 78 A.D.3d 908, 908 (2d Dep t 2010). Thus, Defendant cannot rely on his bald assertion that his signature stamp was misused to generate an issue of fact. At bottom, Defendant does not dispute that (1) the signature is in fact his; (2) the stamp does exist and is kept in the office that I share with Freidman and his employees ; (3) he runs a business with Freidman; and (4) [t]he stamp is authorized for use in connection with the day to day operation of the businesses. (Tsitiridis Aff. 39.) Defendant also admits that he owns and operates a taxi business with Freidman Dispatch Taxi Management LLC and the loans at issue were taken to finance the purchase of vehicles that operate in the Dispatch fleet. (Id. 11, 14.) As Defendant represented to Capital One during the underwriting process through the submission of tax returns and financial statements, Defendant personally owns seven of the 8 11 of 15

12 Borrowers. (See O Gorman Reply Aff. Exs ) Together, Defendant and Mr. Freidman own all 26 Borrowers and thus have ample reason to serve as co-guarantors. (See id ) Furthermore, Defendant has known that Capital One was seeking to collect on the Guarantees since at least October 2015, when he allegedly first learned about the Judgment by Confession (Tsitiridis 16), has engaged in extensive discussions with Capital One both personally and through counsel, and has never once contended that Mr. Freidman had misused his signature stamp to sign the Guarantees. (O Gorman Reply Aff. 6.) Defendant s prelitigation conduct, in the form of his earlier silence when confronted with the Guarantees is fatal to his litigation contrived forgery defense. This makes it all the more obvious that he has failed to raise a genuine issue of fact as to the Guarantees authenticity. See Banco Popular, 1 N.Y.3d at 384 (where defendant failed to demonstrate[] that her prelitigation conduct was consistent with a denial of genuineness [of her signature on loan documents], she could not rely on her bare affidavit claiming that her signature was forged). Even more incredibly, after suggesting that Mr. Freidman is a serial forger who has been abusing Defendant s signature stamp, Defendant indicates that Freidman still has access to the stamp today. (See Opp n 9 ( This stamp does exist and is kept in the office that Tsitiridis shares with Freidman and his employees. ).) It would be patently absurd for Defendant to cloak Freidman with the continued authority to use his signature stamp (see id. ( The stamp is authorized for use in connection with the day to day operations of the business.... )) for any purpose if Defendant had in fact been a serial victim of widespread abuse of the stamp as he now claims. Accordingly, Defendant s unauthorized stamp theory does not create a triable issue of 15

13 B. Defendant s Guarantees Preclude Him From Raising Any Defenses to Payment on the Guarantees Defendant also contends Capital One s motion should be denied because Freidman has challenged the validity of the underlying debts. The Court of Appeals has made clear that absolute and unconditional guarantees obligat[e] the guarantor to payment without recourse to any defenses or counterclaims. Cooperatieve Centrale, 25 N.Y.3d at 493 (emphasis added). Even if Defendant s purported defenses had merit which they do not Defendant s absolute and unconditional promises foreclose him from interposing them. See id. at 494 (finding that an absolute and unconditional guaranty forecloses any challenge to the enforceability and validity of the documents which establish defendant s liability for payments arising under the [underlying agreement], as well as to any other possible defense to his liability for the obligations[.] ). By executing the Guarantees, Defendant expressly waived all defenses to payment. This waiver bars Defendant from asserting, among other things, that the underlying obligation is not valid, see id., or that it was fraudulently induced, see Raven Elevator Corp. v. Finkelstein, 223 A.D.2d 378, 378 (1st Dep t 1996). Moreover, Defendant is liable even if Mr. Freidman somehow eschews liability. See Beal Bank, SSB v. Sandpiper Resort Corp., 251 A.D.2d 360, 361 (2d Dep t 1998) ( [B]y the unqualified language contained in the guarantees, the guarantees are enforceable even if the principal escapes liability. ). Even assuming he could raise them, which he cannot, the defenses Defendant asserts are entirely without merit. First, Defendant attempts to attack the validity of the underlying Loans by relying on, and fully crediting, pleadings submitted by Mr. Freidman in a separate litigation. (Opp n 7-8, 15.) Defendant s reliance on Mr. Freidman s pleadings is striking, because Defendant prefaces this categorical acceptance of Mr. Freidman s allegations with a lengthy of 15

14 discourse impugning Mr. Freidman s credibility. (Id. at 5-6.) Moreover, Defendant acknowledges that Capital One has obtained a confession of judgment against Mr. Freidman premised on... all of the vehicle loans at issue in this case. (Id. at 7.) In any event, Defendant s bare recitation of unproven allegations that Freidman made in a different litigation that the underlying Loans may have been induced by fraud (see id. at 7) is wholly conclusory and thus insufficient to warrant denial of Capital One s motion. See, e.g., Capital Circulation Corp. v. Gallop Leasing Corp., 248 A.D.2d 578, (2d Dep t 1998) ( [T]he respondents assertions, including a claimed lack of consideration, were merely unsupported conclusory allegations which were insufficient to defeat the plaintiff s motion. ). CONCLUSION For all of the reasons set forth above, judgment should be entered for Capital One for the balance due on the Notes in the amount of $515, against Savas Tsitiridis, with interest and fees, plus the costs and expenses, including legal fees of this action, and for such other and further relief as the Court deems just and proper of 15

15 Dated New York, New York May 25, 2016 Respectfully submitted, SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP By /s/ George A. Zimmerman George A. Zimmerman Robert L. Dunn Bradley E. Honigman Four Times Square New York, NY T F george.zimmerman@skadden.com robert.dunn@skadden.com bradley.honigman@skadden.com Attorneys for Plaintiff Capital One Taxi Medallion Finance of 15