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:
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))