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DEFENDANT RAISED A QUESTION OF FACT WHETHER THE TERMS OF THE NOTE REFLECTED THE ACTUAL AGREEMENT BETWEEN THE PARTIES (MUTUAL MISTAKE) (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, over a dissent, determined defendant had raised a question of fact whether the note set forth the actual agreement between the parties:

“Because the thrust of a reformation claim is that a writing does not set forth the actual agreement of the parties, generally . . . the parol evidence rule . . . [does not] appl[y] to bar proof, in the form of parol or extrinsic evidence, of the claimed agreement” … . Nevertheless, “there is a heavy presumption that a deliberately prepared and executed written instrument manifest[s] the true intention of the parties’ . . . and a correspondingly high order of evidence is required to overcome that presumption” … . “The proponent of reformation must show in no uncertain terms, not only that mistake . . . exists, but exactly what was really agreed upon between the parties’ ” … . …

… [D]efendant here set forth, in detail, the basis for his contention that both parties reached an agreement different from that set forth in the note. The affidavits of the CIO [plaintiff’s chief investment officer] and defendant contain the identical assertion that both parties—plaintiff via the CIO and defendant—agreed that plaintiff’s right to secure repayment of the loan would be limited to defendant’s stock interest … . The affidavits of the CIO and defendant are based upon personal knowledge and state in detail their understanding of the negotiations and the resulting agreement. Moreover, the CIO averred that he negotiated the loan on behalf of plaintiff at the time he was its chief investment officer, and he concluded that the terms of the note did not reflect what the parties had intended. Thus, in opposition to plaintiff’s motion, we conclude that defendant submitted the requisite “high level” of proof required to raise a triable issue of fact regarding mutual mistake. Stache Invs. Corp. v Ciolek, 2019 NY Slip Op 05856, Fourth Dept 7-31-19

 

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