No Triable Issue: The Limits of Fraudulent Inducement Against Clear Payment Terms Under CPLR 3213

By: Jeffrey M. Haber

Summary judgment in lieu of a complaint under CPLR 3213 was central to the decision in Newmark Partners, L.P. v. Singer, 2026 N.Y. Slip Op. 03923 (1st Dept. June 23, 2026), the subject of today’s article, where the Appellate Division, First Department, affirmed the enforcement of a settlement agreement arising from a failed $13 million transaction. Following defendants’ default on an $11 million repayment obligation structured under the agreement, plaintiff obtained expedited judgment based on the agreement’s clear payment terms. The Court held that the agreement qualified as an instrument for the payment of money only, the terms of the agreement warranted entry of summary judgment, and rejected defendants’ fraudulent inducement defense as unsupported, finding no triable issue of fact sufficient to defeat summary judgment.

Newmark arose out of a default in a Recission and Settlement Agreement (the “Agreement”), executed by plaintiff, defendants, and certain non-parties. Prior to execution of the Agreement, defendants and the non-parties entered into a Securities Purchase Agreement, dated August 13, 2021, to sell Nightingale Realty, LLC, to plaintiff for $13,000,000 in cash. Plaintiff then filed an action in New York State Court, seeking recission of the transaction. On March 3, 2023, plaintiff, defendants, and the non-parties executed the Agreement, requiring that defendants and the non-parties repay plaintiff $11,000,000 over the course of six installments, concluding on April 30, 2024.

Under Section 2.1 of the Agreement, “the Parties agree[d] to rescind the Transaction as follows: at the Rescission Closing (as defined below): (a) the [non-parties] shall pay the initial $5,000,000 installment of the Settlement Amount (as set forth in Section 5.3 below) to Buyer; and (b) the [defendants] shall, subject to the limitations set forth in Section 5.3, pay the remaining Settlement Amounts due after the Rescission Closing Date in accordance with the schedule set forth therein.” Section 5.3(a) of the Agreement required the non-parties to pay the initial $5,000,000 installment, while the remaining $6,000,000 was to be shared between defendants and the non-parties over six installments. Defendants’ obligation was capped at no more than 50% of each installment and, in any event, limited to a maximum aggregate contribution of $3 million.

Notably, in Section 5.3(f) of the Agreement, the parties contemplated and agreed that “Section 5.3 constitute[d] an Agreement for the payment of money only. The Sellers and the Principals expressly agree that failure to make payment under this Agreement, as and when due, shall entitle Buyers to enforce the payment obligations under this Agreement pursuant to NY CPLR 3213.” Under Section 5(g) of the Agreement, “Default” was defined as “a breach under the Recission Agreement.” 

Under Section 8 of the Agreement, remedies for default included the right of the Secured Party “to institute any claim, action, suit, or proceeding seeking specific performance in connection with any of the agreements.”

The first two installment payments were remitted under the Agreement, but no further payments were made. Accordingly, on August 1, 2023, plaintiff issued defendants and the non-parties a Notice of Breach, for failure to pay the required $1,250,000 by the mandated date of July 31, 2023. This notice invoked plaintiff’s right to demand payment of the outstanding principal amount owed by defendants. Additional demands for payment were sent on August 1, 2023; November 13, 2023; March 5, 2024; and October 25, 2024. As of the filing of the action, no other payments under the Agreement were made.

Plaintiff moved for summary judgment in lieu of complaint. Defendants cross-moved, arguing, among other things, that the Agreement’s merger clause was mere boilerplate and insufficient to bar their claim for fraudulent inducement. 

Defendants also contended that plaintiff’s knowledge of, involvement in, or willful blindness to defendant’s alleged fraudulent conduct during the negotiation of the Agreement barred their fraudulent inducement claim.

Defendants further maintained that the structure of the Agreement supported their position. They asserted that the Agreement primarily imposed obligations on defendant, while plaintiff received no immediate benefit and faced only contingent exposure. In their view, this allocation made defendant’s financial condition and performance material to plaintiff’s decision to enter into the Agreement. As a result, any misrepresentations or omissions concerning those matters induced their consent.

The motion court granted plaintiff’s motion for summary judgment in lieu of a complaint and denied defendants’ cross-motion to dismiss.

CPLR 3213 provides an expedited procedure for claims based upon “documentary claims so presumptively meritorious that a formal complaint is superfluous, and even the delay incident upon waiting for an answer and then moving for summary judgment is needless.”[1] “When an action is based upon an instrument for the payment of money only . . . the plaintiff may serve with the summons a motion for summary judgment and the supporting papers in lieu of a complaint.”[2] A settlement agreement may qualify as instrument for the payment of money, when the agreement contains an unconditional promise to pay a sum certain, signed by one the parties and due on demand or at a definite time.[3] 

To establish entitlement to relief under CPLR 3213, a plaintiff must show the existence of an instrument for the payment of money only, along with proof of nonpayment in accordance with its terms.[4]  

The motion court held that plaintiff satisfied its prima facie burden by submitting: (i) the executed Agreement; (ii) the August 1, 2023 Notice of Breach and subsequent demand letters; (iii) the December 23, 2024 Affidavit of Service to defendant, along with the December 23, 2024 Affidavit of Service to the defendants, affirming that defendants received sufficient notice of the actions brought against them; and (iv) affirmation of defendants’ default and the total amount due on the Agreement. Plaintiff also provided support and calculations for the interest and fees owed. 

On appeal, the Appellate Division, First Department, unanimously affirmed.

The Court held that “[t[he [motion] court … properly held that the … Agreement … [was] an instrument for the payment of money only (CPLR 3213).”[5] The Court found that plaintiff met its “prima facie case for recovery under CPLR 3213 by submitting, among other things, the affirmation of an attorney who had personal knowledge of the sums due, … its October 25, 2024 letter to defendants, setting forth the amounts paid” by the non-parties under the Agreement, “as well as the bankruptcy trustee’s clawback of $1.15 million of that sum.”[6]

Notwithstanding, the Court found that the language of the Agreement itself sufficed to warrant the grant of summary judgment in lieu of complaint, independent of whether the Agreement itself was an instrument for the payment of money only under applicable case law:[7]

Defendants unambiguously agreed that section 5.3 of the Agreement, the operative section that obligated them to make a settlement payment in certain defined installments, was “an Agreement for the payment of money only" and that "failure to make payment . . . shall entitle [plaintiff] to enforce the payment obligations . . . pursuant to . . . CPLR 3213. Accordingly, we need not determine whether section 5.3 would be considered an instrument for the payment of money only under applicable case law.”[8]

The Court also held that defendants “failed to identify any issue that would preclude summary recovery on the instrument.”[9] The Court considered defendants’ “contention that section 4.2 of the Agreement [was] a standard merger clause that [did] not preclude their fraud defense” and determined the argument to be “meritless.”[10] Under section 4.2 of the Agreement, noted the Court, “defendants plainly covenanted that they had ‘not been influenced to any extent whatsoever in [entering into the Agreement] by any other Party or by any other person or entity, except for those representations, statements and promises expressly set forth’ in the Agreement.”[11] “Under Delaware law, which govern[ed] the Agreement,” said the Court, “‘a party cannot promise . . . that it will not rely on promises and representations outside of the agreement and then shirk its own bargain.’”[12] 

The Court further held that “[a] non-reliance clause such as section 4.2 also bar[red] a claim of fraudulent omission or concealment.”[13]

Finally, the Court held that “defendants failed to raise a triable issue of fact as to their fraudulent inducement defense because they did not support the defense with competent evidence.”[14]

Takeaway

Newmark underscores several core principles of contract enforcement through the Court’s emphasis on Section 5.3 of the Agreement. Though not explicitly stated, the Court reaffirmed the principle that clear and unambiguous contractual terms will be enforced as written. Section 5.3 expressly set forth the parties’ payment obligations, including the total Settlement Payment, the installment structure, and the allocation of responsibility among the obligors. Because these terms were definite and explicit, the Court applied them according to their plain meaning.

This clarity supported the grant of summary judgment in lieu of a complaint. Section 5.3 functioned as an instrument for the payment of money only, imposing a concrete obligation to pay a sum certain under a defined schedule. The decision also reflects that settlement agreements, when they contain such unconditional payment obligations, may qualify as instruments for the payment of money only and may therefore be enforced through this expedited procedural mechanism. Once the plaintiff established nonpayment, the agreement itself conclusively demonstrated entitlement to recovery.

This conclusiveness could not be overcome by defendants’ fraudulent inducement defense. Although fraud can defeat summary judgment, the Court found that defendants’ allegations were devoid of evidentiary support (i.e., they were either conclusory, unsupported by the record, or insufficiently tied to the specific payment obligation at issue).

As a result, the asserted fraud defense was inadequate to transform what was otherwise a straightforward instrument for the payment of money into a fact-bound dispute requiring trial. In these circumstances, where the contract is clear, the obligation to pay is unconditional, and the fraud allegations fail to create a genuine issue of material fact, courts, like the Newmark court, will enforce the agreement as written and grant judgment as a matter of law.

__________________________________

Jeffrey M. Haber is a partner and co-founder of Freiberger Haber LLP.

This article is for informational purposes only and is not intended to be, and should not be, taken as legal advice.

Unless otherwise stated, Freiberger Haber LLP’s articles are based on recently decided published opinions or litigation releases and not on matters handled by the firm. ___________________________________

[1] Weissman v. Sinorm Deli, 88 N.Y.2d 437, 443 (1996) (internal quotations omitted).

[2] CPLR 3213.

[3] Insitro, Inc. v. Cellaria, Inc., 2022 N.Y. Slip Op. 30902(U) (Sup. Ct., N.Y. County Mar. 14, 2022).

[4] 27 W. 72nd St. Note Buyer LLC v. Terzi, 194 A.D.3d 630, 631 (1st Dept. 2021); Valencia Sportswear, Inc. v. D.S.G. Enterprises, Inc., 237 A.D.2d 171, 171 (1st Dept. 1997).

[5] Slip Op. at *1.

[6] Id.

[7] Id., citing Marjan Intl. Corp. v. Lillian August Designs, Inc., 225 A.D.3d 408, 408 (1st Dept. 2024).

[8] Id. (citation omitted).

[9] Id. at *2.

[10] Id.

[11] Id.

[12] Id., quoting RAA Mgt., LLC v. Savage Sports Holdings, Inc., 45 A.3d 107, 117 (Del. 2012).

[13] Id., citing Prairie Capital III, L.P. v. Double E Holding Corp., 132 A3.d 35, 51-53 (Del. Ch. 2015).

[14] Id., citing Woodbridge Vil. Assoc. v. Goren, 188 A.D.2d 293, 293 (1st Dept. 1992); Chemical Bank v. Alco Gems Corp.,151 AD2d 366, 368 (1st Dept. 1989).