Commercial loan documents are notoriously complex, packed with financial reporting requirements, compliance covenants, and collateral maintenance obligations. For practitioners seeking the expedited relief of CPLR 3213's summary judgment in lieu of complaint procedure, a critical question emerges: do these additional obligations disqualify the instruments from streamlined treatment? In a recent decision, the New York County Commercial Division provided much-needed clarity on when ancillary provisions actually matter.
Legal Framework
Section 3213 of the CPLR allows plaintiffs to move for summary judgment in lieu of complaint when an action is based on "an instrument for the payment of money only." This expedited procedure bypasses the traditional pleading phase, but courts have long struggled with defining exactly what constitutes such an instrument.
The Court of Appeals established the foundational principle in Weissman v. Sinorm Deli, Inc., holding that "[w]here the instrument requires something in addition to defendant's explicit promise to pay a sum of money, CPLR 3213 is unavailable." However, this broad language can leave practitioners uncertain about the countless ancillary provisions that populate modern commercial lending documents.
The Case: PFNGT LLC v. Liquid Capital LLC
In PFNGT LLC v. Liquid Capital LLC, Index No. 654595/2024, decided April 28, 2025, plaintiff PFNGT sought nearly $4 million under a secured promissory note, loan agreement, and related guaranty. The defendants—borrower Liquid Capital LLC, guarantor Riccardo Spagni, and pledgor Wyoming Trust—mounted a sophisticated defense, arguing that the loan documents contained extensive non-payment obligations that disqualified them from CPLR 3213 treatment.
Defendants' Strategy
Defendants focused on numerous obligations within the loan documents that purported to extend beyond strict payment. For example, the loan documents required (1) Wyoming Trust to make financial statements to the lender; (2) Liquid Capital to comply with all laws, orders, writs, injunctions, and decrees; (3) the borrower and guarantor were prohibited from creating liens or transferring pledged collateral; and (4) the borrower could not amend organizational documents or incur additional debts. As Defendants argued, "[t]he liability of Guarantor shall be primary and shall include guarantee of the prompt payment of amounts due and the prompt performance of all obligations required under the Note." This language seemed to echo the problematic "payment and performance" formulation that courts had previously found disqualifying for the purposes of CPLR 3213 relief.
The Court's Analysis
The Court cut through the complexity with a precise legal distinction that clarifies this area of law, explaining that "[t]hese ancillary clauses do not affect or limit Guarantor's or Borrower's unconditional obligation to make payment. As such, they are not grounds to deny Plaintiff's motion." The Court also set forth the crucial test that practitioners need, citing Park Union Condominium v. 910 Union St., LLC, 140 A.D.3d 673 (1st Dep't 2016): "An instrument qualifies for CPLR 3213 treatment when it 'required no additional performance by plaintiff as a condition precedent to payment or other than unconditional."
This standard fundamentally reframes the analysis. The test has two distinct prongs: first, whether the instrument requires additional performance by the Plaintiff as a condition precedent to payment, and second, whether anything in the instrument makes the Defendants' promise to pay something other than unconditional.
Critical Distinction
In PFNGT, the Court analyzed both prongs. On the first prong, the obligations Defendants identified were things the Defendants had to do: provide financial reports, comply with laws, maintain collateral. None of these required the Plaintiff to perform any additional acts to trigger the payment obligation.
The more challenging question was the second prong: did these obligations make the Defendants' promise to pay something other than unconditional? The Court found that the Defendants' various covenant obligations—while substantial—didn't condition their fundamental payment promise. The Defendants owed the money regardless of whether they fulfilled their reporting, compliance, or collateral maintenance duties.
Practical Takeaways
The PFNGT decision provides important guidance for Commercial Division practitioners moving under CPLR 3213 in the commercial-lending context:
For Plaintiffs: The analysis requires examining whether you must perform additional acts and whether the defendant's payment promise remains unconditional. Standard lending covenants typically do not condition the borrower's payment obligation—they create separate duties that do not affect the core promise to repay.
For Defendants: The strongest CPLR 3213 challenges will identify (1) a condition precedent requiring affirmative plaintiff performance, or (2) provisions that actually make the payment promise conditional rather than absolute. Look for language that ties payment obligations to performance of other duties.
For Drafters: The PFNGT decision suggests that standard commercial lending covenants—reporting requirements, compliance obligations, collateral maintenance—will not automatically disqualify instruments from CPLR 3213 treatment, provided they do not impose conditions on the lender's right to payment.
Broader Implications
The Court's analysis in PFNGTdoes not eliminate all line-drawing problems in this area, but it provides a much clearer framework for analysis. Rather than get lost in debates about whether various clauses are "ancillary" practitioners can now focus on the two-part test: (1) does the instrument require additional performance by the plaintiff as a condition precedent to payment, and (2) do any provisions make the defendant's promise to pay something other than unconditional?
This approach should provide greater predictability for lenders seeking expedited relief and help defendants identify the most promising grounds for challenging CPLR 3213 motions. It also reinforces the Commercial Division's commitment to efficient resolution of straightforward collection matters while preserving traditional litigation procedures for more complex disputes.
The PFNGT decision represents sound commercial law policy: routine lending covenants should not force parties into protracted litigation when the fundamental question is simply whether money is owed and payment has been made.
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