Trial/IS FORWAR DOOR OF NEW YORK INC. IRWI FORLADER CRAG FORLADER, FORWAR DOOR COMPAN

Transcription

1 SHORT FORM ORDER SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NASSAU PRESENT: Hon. Burton. S. Joseph, Justice. FORWAR DOOR OF NEW YORK INC. - against - Plaintiff Trial/IS Index No. Par /2002 IRWI FORLADER Defendant & Third-Part Plaintiff - against - CRAG FORLADER, FORWAR DOOR COMPAN INC., RAID DOOR, INC., & FORWAR DOOR OF NEW YORK CORP. Third-Par Defendants. Craig Forlader is the son of Irin Forlader. Craig Forlader is a principal of plaintiff Forward Door of New York, Inc., the individual third-par defendant and principal of the corporate third-part defendants. Irin Forlader is the defendant and third-par plaintiff. Plaintiff commenced this action to recover on a promissory note executed by defendat - third-part plaintiff, Irin Forlader dated October in the principal sum of $ to be paid over a period of 120 months in equal installments of $2, commencing on March 1, It is undisputed that the defendant failed to pay the installment due on April I, 2002 together with accumulated interest. Defendant Irin Forlader interposed a first affrmative defense and counter claim in which he seeks to recover on (1) a Promissory Note made by plaintiff and the corporate thirdpar defendants to defendant, Irin Forlader, in the amount of $ , payable in monthly

2 installments on the same terms and conditions as the note sued on by plaintiff, for the balance of the purchase price of defendant' s fift percent (50%) interest in the business conducted by the corporations, (2) a Mortgage Note and Mortgage made by third-par defendant Craig Forlader to defendant, Irin Forlader, in the amount of$ for the balance of the purchase price of defendant' s fift percent (50%) interest in the building in which the plaintiff and third-par defendants do business and (3) an obligation by the plaintiff and the corporate third-part defendats to maintain in force and effect the then existing health insurance coverage for defendant Irin Forlader, at the expense of the corporations. Defendant fuher alleges and undisputed by the testimony that since the execution of the stipulation of October 12, 2001, third-par defendant Craig Forlader has been the President and sole stockholder of plaintiff and third-par defendant corporations, and in sole and complete control of them. The notes that defendant Irin Folander gave to plaintiff, Forward Door to pay for the obligations that Irin owed the corporation, and the notes Forward Door gave to Irin in order to buyout his shares of stock in the corporation and interest in the commercial building which father and son owned together were all executed simultaneously to settle a pending action in Nassau County Supreme Cour. Although the paries could have provided that Irin obligations be deducted from the corporations $ buyout price, with the assistance of counsel, the paries chose to have separate notes made out to each other payable over a ten year period.. The father s position is that implied in the stipulation is the understanding that only if Craig made timely payments on his obligations would Irin have the funds to be curent on his indebtedness to his son and the corporation. Defendant Irin Forlader s defense to his non-payment is that the source of the fuds with which to make payments on the Note held by Craig was the payments to defendant by the corporations and his son Craig on the Notes held by Irin. The first affirmative defense and counter-claim alleges that plaintiff and corporation third-par defendants failed to maintain in force the existing health insurance coverage for defendant-third-par plaintiff Irin Forlader. The second affirmative defense and counter-claim alleges that from the execution of the stipulation in October until Januar 15, 2002, defendant Irin Forlader, although

3 no longer an officer or owner of the business, continued in the employ of plaintiff and third-par defendants at a compensation of $ per two-week pay period. On December plaintiff and third-part defendants paid defendant the sum of $1 194., and on December , the sum of$i On Januar 15, 2002, third-par defendant Craig Forlader discharged defendant/third-par plaintiff saying that there was no fuher work for defendant to do. Defendant further alleges he received no payment for compensation for the two weeks preceding his being discharged and there is due from plaintiff and third- part defendants as and for compensation for employment the sum of$ that: In Jacobs & Youngs 230 NY 239, (Ct of Appeals 1920) Judge Cardozo opined We must weigh the purose to be served, the desire to be gratified, tne excuse for deviation from the letter, the cruelty of enforced adherence. Then only- can we tell whether literal fulfilment is to be implied by law as a condition. This is not to say that the paries are not free by apt and certain words to effectuate a purose that performance of every term shall impute the p1!ose, in the silence of the paries, where the significance of the default is grevously out of p'roportion to the oppression of the forfeitue. The willful transgressor must accept the nal of,his transgr ssion. (Gitations o itted) For him there IS no occasion to mitigate the ngor implied conditions. The transgressor whose default is unintentional and trivial may hope for mercy if he wil offer atonement for his wrong. (emphasis added) Whether there is a hardship in the enforcement of an obligation may depend on many extreme circumstances. In considering the circumstances, the Cour must determine whether relaxation of the letter of the law wil be in fuherance of justice. Garret Building Corp. 250 NY 230 (N.Y. Ct of Appeals 1929). See, Burston Equity wil excuse a default if due to a dispute arsing out of the circumstances trggering the default, relief can be granted without damage to the lender. In applying general equitable principles, the gravity of the breach must be compared with the gravity of the hardship. See, J.N.A. Realty Corp. v. Corss Box Chelsea, Inc. 42 NY2d 392 (N Ct of App 1977), see also, Pomeroy, Equity Jurisprudence ed) sec 439. In considering the totality of all testimony and evidence submitted, as well as the relationship of the individual litigants in this transaction, the Cour finds there is justification for equitable intervention. The Cour finds that the terms of the stipulation are so integrated that

4 unless the father receives payments on the Notes in the first instance, he is not obligated to make payments on the Notes to the son. Craig testified that he mailed payments to his father s former New York address. At the time of said mailing, Irin had relocated to Florida and was living in Florida. Irin testified he never received any envelopes containing payments. Although the payments were not received by Irin, Craig never attempted to forward them to his father in Florida. Craig fuher claims that he is entitled to late interest. The son testified that his father missed paying only one Note and owed only $91.00 in interest for late payments before declaring the notes in default. Equity wil not intervene at the insistence of a litigant who after fostering the default would make the Court his ally in an endeavor to tu it to his benefit. The envelope sent by certified mail from Craig to Irin (plaintiff s Exh 11) and not received by Irin, contains the following checks, drawn on the account of Forward Door of NY Corp. payable to Irin Forlander Dme Amount Dec., 526. Dec Feb Feb Marchll Marchll March (late fees 1/03 2/03 3/03) The plaintiff corporation by Craig shall reimburse Irin the aforesaid sum of $ , representing the total amount of checks in the envelope marked as plaintiffs exhibit 11 by forw ding a check to Irin Forlader in the sum of $ and the payments due for March 2004 within 10 days of today' s date. The payments due May, 2003, June, 2003, July 2003 and August 2003 shall be paid by plaintiffs no later than 30 days from today s date. The payments due September, 2003 October, 2003, November, 2003 and December, 2003, shall be paid by Irin to Craig 60 days from today s date. The payments due Januar, 2004, and Februar, 2004 shall be paid by Craig to Irin no later than 90 days from today s date. Notwithstanding anything to the contrar, on April 1, 2004 Craig shall make the April, 2004 payment due pursuant to the stipulation; and monthly thereafter, he shall resume making payments to Irin pursuant to the terms of the stipulation. Within 35 days of to day s date Irin shall make the payments due plaintiffs in

5 Januar, 2003, February, 2003 and March, The payments due plaintiff May, 2003, June 2003, July, 2003 and August, 2003 shall be paid by defendants no later than 55 days from today date. The payments due September, 2003, October, 2003, November, 2003 and December, 2003 shall be paid by defendant no later than 75 days from today s date. The payments due Januar, 2004 and Februar, 2004 shall be paid by defendant no later than 115 days from today s date. Notwithstanding anything to the contrar, upon receipt of the April, 2004 payments Irin shall make his April, 2004 payment pursuant to the terms of the stipulation and monthly thereafter; and also remit a check in the sum of $91.00 representing interest on late fees. All relief for additional interest, late fees and penalties not awarded herein is denied. The Cour hereby invokes its equity power to prevent a forfeitue (see, JNA Realty Corp. v. Cross May Chelsea, Inc. 42 NY2d 392.) and the litigants from destroying their respective interest in a profitable business and commercial real estate as well as faciltating the restoration of a haronious relationship between father and son. Paragraph 8 of the stipulation provides that "Until the payment in full of all obligations due Irin Forlader hereunder, from Craig Forlader and/or the corporations or any of them, the corporations shall continue to pay the premiums with respect to any and all health or health related insurance covering Irin Forlader or until Medicare coverage is available to him. Within 10 days of presentment of paid bils for past medical insurance premiums incured by Irin for health related insurance, Craig shall send his father a check representing the actual reimbursement for said insurance premiums, and continue reimbursement to him up to the sum of$ per month for futue medical premiums actually incurred until Irin reaches the age of 65. Reimbursement by Forward Door for past and futue medical premium payments made by Irin shall be paid within 10 days of presentment of the paid bil to Forward Door. The defendant eared a salary of $ and received payments of$i 085. and $ Within 10 days of today' s date, plaintiff shall pay to the defendant the sum of for salar due and owing pursuant to the terms of the stipulation less any deduction for payroll taxes. (See, parag. 18 of the Affirmative Defense and Counter-claim). It is suggested that the litigants each establish separate ban accounts with money wiring capability to faciltate payments. For example, on the day that Craig s Notes are to be paid, the fuds can automatically be wired to Irin s account; on the day that Irin s Notes are to be paid, the fuds can be automatically wired to Craig s account.

6 In the spirit of reconciliation, father and son might in the futue pursue other nonjudicial alternatives before their respective positions and feelings are fuher polarzed. This decision is the Order and Judgment of the Court. ENTER Mineola, New York March 9, 2004 (L S.. rrereo MA 1 zot41 eo Cl