Unconditional Means Unconditional: The First Department Enforces a Promissory Note and Rejects a Fraud Defense

By: Jeffrey M. Haber

CPLR 3213 provides an expedited procedure for enforcing an “instrument for the payment of money only.” When a promissory note arises from a broader contractual relationship, however, two distinct questions may determine whether the holder is entitled to relief. First, does the note contain a standalone and unconditional obligation to pay, or must the court look to the underlying agreement to establish the parties’ payment obligations? Second, can an asserted fraud defense defeat enforcement where it rests on the other party’s alleged failure to perform that underlying agreement?

A promissory note does not necessarily fall outside CPLR 3213 merely because it refers to another agreement or was executed as part of a larger transaction. The central inquiry is whether the note contains an unconditional promise to pay a sum certain at a definite time, or whether payment depends on obligations that can be established only by looking beyond the note. Similarly, the possibility that the maker may assert defenses arising from the underlying transaction does not, by itself, alter the note’s character as an instrument for the payment of money only.

Fraud presents a related but analytically distinct issue. A party cannot transform a claim for breach of an underlying agreement into fraud simply by alleging that the other party represented that it was performing, or would perform, its contractual obligations. A viable fraud defense requires more than an alleged failure to perform: the asserted misrepresentation must be sufficiently particularized, and the evidence must support fraudulent intent when the representation was made. A subsequent failure to perform, standing alone, does not establish that the promisor never intended to perform.

Both principles were before the Appellate Division, First Department in Cura Found. v Shaya, 2026 N.Y. Slip Op. 06061 (1st Dept. Oct. 20, 2026). Cura arose from a charitable pledge (the “Pledge”) followed by a $6.5 million promissory note (the “Note”) for the unpaid balance. Defendant resisted enforcement of the Note on two related grounds: that the Note was inseparable from plaintiff’s obligations under the Pledge and that plaintiff had fraudulently represented that it was complying, and would continue to comply, with those obligations.

The motion court denied plaintiff’s CPLR 3213 motion, reasoning that the Note “integrates” the Pledge and that plaintiff had not established the enforceability of the underlying pledge. The First Department reversed, holding that the Note contained “an unconditional promise to pay a sum certain,” did not “incorporate the pledge agreement wholesale,” and qualified as an “instrument for the payment of money only.”

The First Department also addressed the defendant’s fraud defense. The Note made his payment obligations “unconditional and absolute” and provided that they were not subject to “any defense, offset or counterclaim of any kind whatsoever for any reason.” Separately, the Court held that the fraud defense failed because “the only fraud alleged relates to a breach of the pledge agreement,” defendant provided no details concerning the alleged representations, and plaintiff’s alleged failure to establish the agreed upon fund did not show that plaintiff lacked an intention to do so when the promise was made.

The Cura Foundation v. Shaya[1]

Plaintiff is a nonprofit organization to which defendant pledged to make a charitable contribution. In January 2019, defendant initially pledged $10 million to plaintiff. The parties subsequently revised that commitment, and, on May 8, 2020, defendant signed a written pledge agreement reducing his Pledge to $7.5 million.

By May 2021, $6.5 million remained outstanding under the Pledge. On May 4, 2021, the parties executed a promissory note for that amount. The Note stated that defendant was providing it “to pay the balance due of the Irrevocable Pledge Commitment made between the [parties].” It set forth the amount defendant was obligated to pay and specified the dates on which payments were due.

The Note also addressed its relationship to the underlying Pledge. Section 15.2 stated that the Pledge was “integrated” into the Note and that the two documents together “constitute[d] the [parties’] entire understanding” concerning the matters addressed and superseded their prior and contemporaneous discussions, agreements, and representations. At the same time, the Note provided that it was given “for value received” and that defendant “unconditionally promise[d] to pay” plaintiff $6.5 million. It further provided that defendant’s payment obligations were “unconditional and absolute” and were “not subject to any defense, offset or counterclaim of any kind whatsoever for any reason.”

Defendant failed to make the payments required by the Note. Thereafter, plaintiff moved for summary judgment in lieu of complaint under CPLR 3213, relying on the executed Note and defendant’s failure to make the required payments when due.

Defendant opposed the motion principally by relying on plaintiff’s alleged obligations under the Pledge. Defendant contended that plaintiff failed to fulfill obligations it had undertaken in connection with the parties’ agreement. Among other things, defendant asserted that plaintiff promised to establish an “ADEL fund” but failed to do so.

Defendant also asserted fraud. According to defendant, plaintiff represented that it was complying with the Pledge and would continue to perform its obligations under that agreement. He attested that he executed the Note “[i]n reliance on [plaintiff]’s representations that it would continue adhering to its performance obligations under the Pledge Agreement.” Defendant therefore maintained that plaintiff’s alleged breach of the Pledge and its representations concerning performance provided grounds for opposing enforcement of the Note.

The motion court denied plaintiff’s motion. Although the Note stated that it was executed “for value received” and contained defendant’s unconditional promise to pay $6.5 million, the motion court focused on the Note’s integration of the Pledge (i.e., the merger clause).

The Pledge stated that plaintiff “intend[ed] to act in reliance on the pledge.” Plaintiff’s moving papers, however, did not establish that plaintiff had, in fact, relied on defendant’s pledge. Therefore, the motion court concluded that plaintiff did not establish, as a matter of law, that the Pledge constituted an enforceable unilateral contract.

On appeal, the First Department unanimously reversed.

The Court began with the requirements of CPLR 3213 and held that the Note was “an instrument for the payment of money only.”[2] The Court noted that the Note was signed by defendant, contained “an unconditional promise to pay a sum certain,” and specified definite times when the required payments were due.[3]

The Note’s connection to the Pledge did not require a different result.[4] In particular, the Court rejected the contention that the Note fell outside CPLR 3213 merely because it stated that defendant was providing it “to pay the balance due of the Irrevocable Pledge Commitment made between the [parties].”[5]

The Court also rejected defendant’s reliance on the merger clause, which provided that the Note and Pledge “constitute[d] the entire understanding of [the parties] with respect to the matters discussed [therein] . . . , and supersede[d] all prior and contemporaneous discussions, agreements, and representations” concerning the matters addressed.[6] That language, said the Court, did “not prevent the [N]ote from being an instrument for the payment of money only.”[7] Contrary to defendant’s argument, said the Court, “the [N]ote [did] not incorporate the pledge agreement wholesale.”[8] Rather, concluded the Court, the provision “merely says that the pledge agreement and the [N]ote represent the parties’ entire understanding.”[9]

Thus, the Note’s relationship with the Pledge did not prevent it from constituting an instrument for the payment of money only. The Court further emphasized that “[t]he possibility that defendant might advance defenses that would raise issues outside the [N]ote [did] not change the [N]ote’s character as one for the payment of money only.”[10]

Having determined that the Note fell within CPLR 3213, the Court concluded that plaintiff had made its prima facie showing by producing the Note executed by defendant and proof that defendant had failed to make the payments required by its terms.[11]

Next, the Court addressed defendant’s fraud defense and concluded that it did not raise a triable issue of fact.[12]

As an initial matter, the Court relied on the sweeping waiver contained in the Note. Defendant agreed that his “payment obligations . . . [were] unconditional and absolute and [were] not subject to any defense, offset or counterclaim of any kind whatsoever for any reason.”[13] The Court held that such a provision was enforceable and therefore barred defendant’s attempt to resist payment based on fraud.[14]

Importantly, the Court held that defendant’s fraud defense would fail even if he had not waived the right to assert it.[15]

Defendant claimed that plaintiff had “engaged in fraud . . . by representing that [it] was complying with the Pledge’s promises when it was not.”[16] The Court found that theory legally insufficient because “the only fraud alleged relates to a breach of the pledge agreement.”[17] In other words, the allegation that plaintiff represented that it was performing its contractual obligations when it allegedly was not did not supply an independent basis for fraud.

Defendant’s evidence also failed to substantiate the asserted misrepresentation. Although Defendant attested that he executed the Note “[i]n reliance on [plaintiff]’s representations that it would continue adhering to its performance obligations under the Pledge Agreement,” his affirmation provided “no details about the alleged representations.”[18] Thus, concluded the Court, defendant’s “conclusory affirmation [was] insufficient to defeat plaintiff’s motion for summary judgment in lieu of complaint.”[19] 

Finally, defendant failed to establish fraudulent intent (i.e., scienter).[20] Even assuming, as defendant contended, that plaintiff promised to establish the ADEL fund and ultimately failed to do so, the subsequent failure to perform did not establish that plaintiff had no intention of establishing the fund when the parties entered into the Pledge, said the Court.[21] The Court therefore found no basis to permit the fraud defense to prevent enforcement of the Note.[22]

Takeaway

Cura is significant not simply because the Court permitted enforcement of the Note under CPLR 3213, but because of how the Court treated both the Note’s relationship to the underlying pledge agreement and the defenses arising from that agreement.

A promissory note does not cease to be an instrument for the payment of money only merely because it identifies the underlying transaction, refers to another agreement, or states that the two documents constitute the parties’ entire understanding. As Cura shows, the question to be resolved concerns whether the note itself contains an unconditional obligation to pay a sum certain at specified times or instead requires proof of outside obligations to establish the right to payment.

At the same time, Cura underscores that asserting fraud does not necessarily create a factual issue sufficient to defeat enforcement of an otherwise unconditional note. That is particularly so where the alleged fraud is simply the claimed failure to perform the underlying agreement. In Cura, the Court found the fraud defense deficient at several levels: defendant had contractually agreed that his payment obligations were unconditional and not subject to defenses; the alleged fraud concerned the same nonperformance underlying the claimed contractual breach; his assertions concerning the purported representations lacked detail; and the subsequent failure to establish the ADEL fund did not demonstrate fraudulent intent when the alleged promise was made.

The decision therefore reinforces two related principles under New York law: the existence of an underlying agreement does not necessarily defeat CPLR 3213 treatment, and characterizing the other party’s alleged contractual nonperformance as fraud does not, without more, create a defense to an unconditional obligation to pay.

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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.

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[1] The factual background comes from the parties’ briefs on appeal and the First Department’s decision.

[2] Slip Op. at *1.

[3] Id., citing Weissman v. Sinorm Deli, 88 N.Y.2d 437, 444 (1996); DDS Partners v. Celenza, 6 A.D.3d 347, 348 (1st Dept. 2004).

[4] Id.

[5] Id., citing Seaman-Andwall Corp. v. Wright Mach. Corp., 31 A.D.2d 136, 137 (1st Dept. 1968) (rejecting argument “that, as the note was given as one factor in a transaction embracing other features, proof dehors the instrument must be given”), aff’d, 29 N.Y.2d 617 (1971).

[6] Id.

[7] Id.

[8] Id.

[9] Id.

[10] Id.

[11] Id. at *2 (citations omitted).

[12] Id.

[13] Id.

[14] Id., citing SCP (Bermuda) v. Bermudatel Ltd., 242 A.D.2d 429, 430 (1st Dept 1997); see also SCP (Bermuda) v. Bermudatel Ltd., 224 A.D.2d 214, 215 (1st Dept. 1996).

[15] Id.

[16] Id.

[17] Id., citing Sanyo Elec. v. Pinros & Gar Corp., 174 A.D.2d 452, 453 (1st Dept. 1991).

[18] Id.

[19] Id., citing Kenney v. Jacobs, 200 A.D.3d 419, 420 (1st Dept. 2021).

[20] Id., citing Sanyo, 174 A.D.2d at 453.

[21] Id.

[22] Id.