The court’s Decision and Order is based upon consideration of the following papers:CPLR 2219(a) RecitationOrder to Show Cause & Affidavits Annexed 1Opposition/Cross-Motion 2Reply/Opposition to Cross-Motion 3DECISION AND ORDER This is an action commenced on or about August 29, 2018 alleging default on a promissory note and an account stated cause of action. Defendant filed an Answer on or about September 17, 2018 alleging, inter alia, a general denial and a statute of limitations defense. Defendant moves herein for summary judgment claiming that this action is time barred. Plaintiff opposes the motion.Defendant executed an Application and Promissory Note on February 7, 2007 to obtain a student loan in the amount of $6269.77. Defendant agreed to repay that amount in monthly payments in the amount of $117.03 beginning on January 1, 2010. Although Defendant made several payments, his last payment was made on May 8, 2012, leaving a balance on the loan. By letter dated October 30, 2012, Plaintiff demanded payment in full, exercised their right to accelerate the loan and informed Defendant that the loan would go into default on November 29, 2012.Defendant claims that the cause of action accrued on June 2012, the first month he defaulted on his obligation to pay. He contends that should the court determine that the applicable statute of limitations is six years, the action must have been commenced by June 2018. In the alternative, Defendant argues that this case involves a breach of contracts cause of action and that as Delaware is Plaintiff’s state of incorporation, Delaware’s three-year statute of limitations for breach of contract is applicable. On this basis, Defendant also seeks dismissal of the action as time barred.To dismiss a cause of action on the ground that it is barred by the applicable statute of limitations, a defendant bears the initial burden of demonstrating, prima facie, that the time within which to commence the action has expired (Stewart v. GDC Tower at Greystone, 138 A.D.3d 729 [2d Dept 2016]). “If the defendant satisfies this burden, the burden shifts to the plaintiff to raise a question of fact as to whether the statute of limitations was tolled or otherwise inapplicable, or whether the plaintiff actually commenced the action within the applicable limitations period” (Elia v. Perla, 150 A.D.3d 962 [2d Dept. 2017] quoting Barry v. Cadman Towers, Inc., 136 A.D.3d 951, 952 [2d Dept. 2016]; see Stewart v. GDC Tower at Greystone, 138 A.D.3d at 730).Defendant first argues against the existence of a promissory note. However, this court finds those arguments unavailing. The Second Department holds that,“[a] promissory note is an instrument for the payment of money only, provided that it contains an unconditional promise by the borrower to pay the lender over a stated period of time…The instrument does not qualify if outside proof is needed, other than simple proof of nonpayment or a similar de minimis deviation from the face of the document” (Lugli v. Johnston, 78 AD3d 1133, 1135 [2d Dept. 2010] [internal citations omitted]).In Lugli, the plaintiff established his prima facie entitlement to judgment as a matter of law by submitting the promissory note and loan agreement signed by the defendant coupled with his own affidavit asserting that the defendant failed to repay the loan in accordance with the terms of the note. Similarly, in Ahern v. Miloslau, the Second Department had before it the promissory note, the corresponding agreement between the parties, and plaintiff’s affidavit asserting that the defendants failed to pay the loan in accordance with the terms of the note on an appeal involving a claimed default of an alleged promissory note (Supra, 128 A.D.3d 992 [2d Dept. 2015]).The court is satisfied that Plaintiff established the existence of a promissory note. The following documents are contained as exhibits to the motion and opposition papers: an electronically signed loan application (“Application and Promissory Note”), a Signature Student Promissory Note Document 3XSP0603, a letter from Sallie Mae advising that Defendant’s student loan was approved annexed to a Payment Schedule and Disclosure Statement, dated 2/10/07 and a Demand and Acceleration of Loan letter dated 10/30/12. Additionally, in his affidavits in support of his motion and Reply, Defendant admits that he failed to pay the loan in accordance to the terms of the Note. These documents leave no question that the cause of action herein is based on a breach of a promissory note. As such, Defendant’s argument that there is no promissory note in this action is specious.Defendant next argues that the action must be dismissed as untimely under the applicable statute of limitations. As an initial matter, the court looks to CPLR §202 which provides, that “[a]n action based upon a cause of action accruing without the state cannot be commenced after the expiration of the time limited by the laws of either the state or the place without the state where the cause of action accrued.” The Court of Appeals holds that “(w)hen a nonresident sues on a cause of action accruing outside New York, CPLR §202 requires the cause of action to be timely under the limitation periods of both New York and the jurisdiction where the cause of action accrued (Global Fin. Corp. v. Triarc Corp, 93 N.Y.2d 525 [1999]; 2138747 Ontario, Inc. v. Samsung C & T Corporation, 31 N.Y.3d 372 [2018]).In this case, the introductory paragraph of the Promissory Note states that Utah law is applicable to all issues arising from the loan. A forum-selection clause, or inability to obtain personal jurisdiction over a defendant in a foreign jurisdiction, will not override CPLR §202 (Global Fin. Corp. v. Triarc Corp 93 N.Y.2d 525, 530 citing Insurance Co. v. ABB Power Generation, 91 NY2d 180 [1997]; see generally 2138747 Ontario, Inc. v. Samsung C & T Corporation 31 N.Y.3d 372 at 377). Further, the Court of Appeal holds that choice of law provisions typically apply to only substantive issues, and statutes of limitations are considered “procedural” because they are deemed “as pertaining to the remedy rather than the right” (Portfolio Recovery Assoc., LLC v. King, 14 N.Y.3d 410, 416 [2010] [internal citations omitted]).The relevant part of Utah Code Annotated Section 70A-3-118 states ” (1) Except as provided in Subsection (5), an action to enforce the obligation of a party to pay a note payable at a definite time must be commenced within six years after the due date or dates stated in the note or, if a due date is accelerated, within six years after the accelerated due date” (Dale K. Barker Co., P.C., C.P.A. v. Turner, 2018 WL 4492533 [Utah Dist. Ct. May 25, 2018]).Likewise, in New York, the statute of limitations for an action to recover on a promissory note is six years (see CPLR §213[2]). With respect to a note payable in installments, such as the one at bar, there are separate causes of action for each installment accrued, and the statute of limitations begins to run on the date each installment becomes due and is defaulted upon (Sce v. Ach, 56 A.D.3d 457 [2d Dept. 2008]; Morrison v. Zaglool, 88 A.D.3d 856 [2d Dept. 2011]). However, as in Utah, once a debt is accelerated, the entire amount is due and the statute of limitations begins to run on the entire debt (Wells Fargo Bank, N.A. v. Burke, 94 A.D.3d 980 [2d Dept. 2012] citing EMC Mtge. Corp. v. Patella, 279 A.D.2d 604, 605 [2d Dept 2001]; see Zinker v. Makler, 298 A.D.2d 516, 517 [2d Dept. 2002]).Since both Utah and New York laws provide that actions on a promissory note commence within six years of the date the debt was accelerated, this action was timely commenced under both states’ statute of limitations and in accordance with the provisions of CPLR §202. By letter dated October 30, 2012 Defendant was given notice that the entire loan would be due and owing on November 29, 2012. Based upon the acceleration date, the action had to be commenced on or before November 29, 2018. This action was timely commenced on August 28, 2018.Defendant repeatedly argues that Delaware law applies to this transaction because Plaintiff, Navient Bank, is incorporated in Delaware. However, this argument fails. Plaintiff is bound by the terms and provisions of the Promissory Note, including the choice of law provision, which designates Utah as the law which governs in the event of a default. Furthermore, Delaware courts generally uphold choice of law provisions and find that incorporation within the state is not consent to its jurisdiction (see generally, Change Capital Partners Fund I, LLC v. Volt Electrical Systems, LLC, et al., C.A. No. N17C-05-290-RRC [Del. Super. April 3, 2018]; Genuine Parts Company v. Cepec, 2016 WL 1569077 [Del. 2016]).This court rejects the remainder of Defendant’s arguments as they are unavailing. In particular, considering that a promissory note is overwhelmingly established by the facts and documents herein, there is no merit to Defendant’s claim that the cause of action sounds in breach of contract. Accordingly, Defendant has failed to meet his prima facie burden to establish that the time within which to commence the action has expired and his Motion for Summary Judgment is denied.This constitutes the decision and order of the court.June 4, 2019Brooklyn, NY
