The following papers were read on this motion: Notice of Motion, Affidavit in Support, Exhibits 1 Upon the foregoing papers, the unopposed motion by plaintiff Steven Diverniero for an Order pursuant to CPLR §3213 granting plaintiff summary judgment in lieu of complaint is determined as hereinafter provided. This is an action for nonpayment on three (3) promissory notes. In his affidavit, plaintiff asserts that defendant Michael Makowenskyj executed two (2) promissory notes to plaintiff on October 5, 2019; on the first note, in return for value received of $75,000, defendant promised to pay $85,000 on or before April 5, 2020 (the “First Note”); on the second note, in return for value received of $66,875, defendant promised to pay $73,562 on or before April 5, 2020 (the “Second Note”). Plaintiff asserts that defendant executed a third note on January 17, 2020, which provided that, in return for value received of $100,000, defendant promised to pay $110,000 on or before March 17, 2020 (the “Third Note”). Plaintiff alleges that defendant made only one payment of $20,000 on June 16, 2020. Plaintiff seeks judgment for a cumulative balance of $249,062, plus a late payment penalty of 2 percent which amounts to $4,981.24, and the costs and disbursements of this action. Plaintiff provides copies of the promissory notes and notices of default sent by his attorneys. According to the affidavit of service filed herein the “Summons with Notice of Motion for Summary Judgment in Lieu of Complaint Pursuant to CPLR 3212 and Notice of Electronic Filing and RJI” were served by delivery of the papers to “Jane Doe”, a person of suitable age and discretion, on September 18, 2020, at 1722 Park Avenue, New Hyde Park, New York 11040. The process server attests that the person to whom the papers were delivered refused to give her name. He also states that the premises is defendant’s dwelling house/usual place of abode, and attests to mailing additional copies of the papers to defendant on September 21, 2020, in accordance with the requirements of CPLR §308[2]. The affidavit of service was filed with the Nassau County Clerk on October 1, 2020. Accordingly, service was complete on October 11, 2020, and defendant’s appearance or an answer was due within thirty (30) days thereafter, or November 10, 2020. (See CPLR §308[2], CPLR §320[a] and CPLR §3012[c]). By Order dated March 3, 2020, this Court denied plaintiff’s first application for summary judgment, without prejudice, ruling that plaintiff had provided insufficient notice to defendant because the motion was made returnable on October 13, 2020, when it should have been made returnable no earlier than November 10, 2020. Defendant had failed to answer, appear or submit any opposition to plaintiff’s first motion for summary judgment in lieu of complaint. Defendant has not submitted any opposition to the instant motion, or otherwise answered or appeared herein. Nevertheless, the Court determines that plaintiff is not entitled to the relief requested. General Obligations Law §5-501 provides that the legal rate of interest shall be prescribed by the Banking Law. §14-a of the Banking Law states that “(t)he maximum rate of interest provided for in section 5-501 of the general obligations law shall be sixteen per centum per annum.” Interest in excess of 16 percent constitutes civil usury, while interest in excess of 25 percent constitutes criminal usury (Penal Law §190.42; Aiber v. Malky, Inc., 59AD3d 646 [2d Dept 2009]). The borrower does not have to repay either the principal or interest on a usurious loan. (General Obligations Law §5-511[2]); Venables v. Sagona, 85AD3d 904 [2d Dept 2011]); Pemper v. Reifer, 264AD2d625 [1st Dept 1999]. The maximum interest rate permissible on a loan is 16 percent per annum, and any interest rate in excess of that amount is usurious. (O’Donovan v. Galinski, 62 AD3d 769, 769-70 [2d Dept 2009] (see General Obligations Law § 5-501[1]; Banking Law § 14a [1]; Matias v. Arango, 289 AD2d 459, 460 [2d Dept 2001]). In determining whether a transaction is usurious, the law looks not to its form, but its substance, or “real character” (O’Donovan, supra, 62 AD3d at 769 [citations omitted]). Upon review of the promissory notes at issue, the Court finds that all three (3) Notes are usurious, void, and unenforceable. The First Note bears an interest rate of 26.67 percent per annum, the Second Note bears an interest rate of 19.99 percent per annum and the Third Note bears an interest rate of 60 percent per annum. Accordingly, plaintiff’s motion for summary judgment in lieu of complaint is DENIED, and on the Court’s own motion, the complaint is DISMISSED. This constitutes the Decision and Order of the Court. Dated: August 19, 2021
