Cohan v. Movtady, 751 F. Supp. 2d 436

Plaintiffs Perry Cohan and Rezvan Lahiji sue Mordechay Movtady for unpaid principal, interest, and attorneys' fees on three loans.
First Loan: promissory note dated Jan 1, 2007 for $3,335,000, with monthly interest and a due date of Dec 30, 2008; default alleged after May 2009.
Second Loan: March 2007 four checks totaling $1,350,000; expected repayment by Dec 31, 2007 with 11% interest; some checks not deposited.
Third Loan: Oct 24, 2008 loan of $200,000 interest-free, repayment due Dec 1, 2008; a returned undeposited check occurred.
Movtady challenges standing, the statute of limitations for the First Loan, the validity of the Promissory Note, and alleged oral modifications; court also addresses standing for Lahiji on the loans and Cohan’s standing on the Note.
Ultimately, court grants partial and denies partial relief: Lahiji’s Promissory Note claim is granted to extent of principal and interest; Cohan’s Second Loan claim limited to principal with leave to seek interest; Lahiji’s and Cohan’s standing issues resolved sua sponte; oral modifications deemed unenforceable for lack of consideration; prejudgment interest awarded on the Third Loan.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Standing under the Trading With the Enemy Act	Lahiji lacks standing as an Iranian citizen.	Trading With the Enemy Act deprives enemy aliens of standing.	Trading With the Enemy Act does not preclude Lahiji's suit; she is not an 'enemy' for purposes of the Act.
Standing to enforce the Promissory Note	Cohan can enforce the Note as lender; Lahiji supports enforcement as lender.	Note names Lahiji as payee for the obligation; Cohan lacks standing to collect.	Cohan lacks standing on the Promissory Note; Lahiji’s promissory claim is the viable one.
Standing to enforce the Second and Third Loans	Lahiji has rights to collect on the loans invoked by the complaint.	Loans originated with Cohan; Lahiji has no independent standing.	Lahiji's claims on the Second and Third Loans are sua sponte dismissed for lack of standing; only Cohan may pursue them.
Statute of Limitations for the First Loan	Six-year NY CPLR for breach of contract applies to the Promissory Note.	Limitations would bar the action.	Six-year period applies to the Promissory Note; Lahiji’s claim on the Note falls within limitations.
Oral Modification - consideration and Statute of Frauds	Oral extensions valid despite Statute of Frauds; supported by consideration.	Oral modifications require valid consideration; may be unenforceable.	Statute of Frauds not a bar, but oral modifications lack valid consideration and are unenforceable.

ABB Indus. Sys. Inc. v. Prime Tech., Inc., 120 F.3d 351 (2d Cir. 1997) (breach of contract accrues at time of breach; summary judgment standards)
Premium Mortg. Corp. v. Equifax, Inc., 583 F.3d 103 (2d Cir. 2009) (standing constraints for third-party enforcement of contracts under NY law)
D & N Boening v. Kirsch Beverages, 63 N.Y.2d 449 (N.Y. 1984) (Statute of Frauds application to modifications; one-year performance language)
Kellogg v. Olmsted, 25 N.Y. 189 (N.Y. 1862) (creditor postponement of payment lacks consideration)
Spodek v. Park Property Development Associates, 279 A.D.2d 467 (N.Y. App. Div. 2d Dep't 2001) (prejudgment interest accrues when due and unpaid absent waiver)
Wein v. Columbia Univ., 224 F.3d 33 (2d Cir. 2000) (summary judgment standard for disputes on material facts)
McLee v. Chrysler Corp., 109 F.3d 130 (2d Cir. 1997) (burden on movant and non-movant to show genuine issues of material fact)
N.Y. Gen. Oblig. Law § 5-1103, (statutory reference) (statutory) (modification defenses; consideration requirements)
N.Y. U.C.C. Law § 3-301, (McKinney 2001) (statutory) (holder of negotiable instrument rights)
N.Y. U.C.C. Law § 3-408, (McKinney 2001) (statutory) (no additional consideration required for pre-existing debt)