GUARANTOR OF A CRIMINALLY USURIOUS LOAN WAS ENTITLED TO SUMMARY JUDGMENT IN AN ACTION SEEKING PAYMENT, THE DOCTRINE OF ESTOPPEL IN PAIS DID NOT APPLY (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant Jarvis, who guaranteed payment on a note, was entitled to summary judgment because the loan was criminally usurious. The plaintiff did not raise a question of fact about the applicability of the doctrine of estoppel in pais:

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Jarvis established his prima facie entitlement to summary judgment by demonstrating that the interest rate on the loan was criminally usurious; a loan that is criminally usurious is void … . In opposition to that prima facie showing, the plaintiff failed to raise a triable issue of fact. The doctrine of estoppel in pais provides that “a borrower may be estopped from interposing a usury defense when, through a special relationship with the lender, the borrower induces reliance on the legality of the transaction. . . . Otherwise, a borrower could void the transaction, keep the principal, and achieve a total windfall, at the expense of an innocent person, through his own subterfuge and inequitable deception'” … . Here, the plaintiff did not submit any evidence of a special relationship … . Accordingly, the Supreme Court erred in finding that triable issues of fact exist regarding the doctrine of estoppel in pais. Kingsize Entertainment, LLC v Martino, 2017 NY Slip Op 07986, Second Dept 11-15-17

 

DEBTOR-CREDITOR (USURY, GUARANTOR OF A CRIMINALLY USURIOUS LOAN WAS ENTITLED TO SUMMARY JUDGMENT IN AN ACTION SEEKING PAYMENT, THE DOCTRINE OF ESTOPPEL IN PAIS DID NOT APPLY (SECOND DEPT))/USURY (GUARANTOR OF A CRIMINALLY USURIOUS LOAN WAS ENTITLED TO SUMMARY JUDGMENT IN AN ACTION SEEKING PAYMENT, THE DOCTRINE OF ESTOPPEL IN PAIS DID NOT APPLY (SECOND DEPT))/ESTOPPEL IN PAIS (USURY, GUARANTOR OF A CRIMINALLY USURIOUS LOAN WAS ENTITLED TO SUMMARY JUDGMENT IN AN ACTION SEEKING PAYMENT, THE DOCTRINE OF ESTOPPEL IN PAIS DID NOT APPLY (SECOND DEPT))