New York law offers creditors an expedited procedure to enforce an "instrument for the payment of money only" — such as many promissory notes and guaranties — via Section 3213 of the Civil Practice Law and Rules. This procedure allows creditors to commence an action in New York state court through a motion for summary judgment in lieu of a complaint, eliminating the need to wait for an obligor to answer a complaint before moving for summary judgment.

Section 3213 does not authorize discovery, enabling creditors to obtain judgments more rapidly and at a lower cost. This expedited procedure has been invoked in numerous cases in New York state courts.

A recent decision by the First Judicial Department in Marjan International Corp. v. Lillian August Designs Inc. has made it easier for creditors to use this expedited procedure. The court's decision allows a creditor to minimize the risk of potentially challenging litigation on threshold issues by including a provision in the relevant documentation that specifies it qualifies as an instrument for the payment of money only, within the meaning of Section 3213.

In cases involving promissory notes, guaranties, and other instruments, courts examine whether payment under the instrument is conditioned on additional performance by the creditor, the occurrence of complex events, or other factors that necessitate evidence beyond the instrument itself. Instruments that require extensive references to other contracts or documents, or those with conditional payment obligations, often preclude the use of Section 3213.

Before the Marjan decision, provisions stating that an instrument qualifies as one for the payment of money only were considered one factor among several in supporting the use of Section 3213. However, the Marjan decision indicates that such a provision should now be determinative in many cases, particularly for promissory notes and unconditional guaranties issued in connection with complex transactions.

Creditors cannot bring any contract within the scope of Section 3213 simply by agreeing that it constitutes an instrument for the payment of money only. For example, indemnification agreements, which depend on unknown contingencies, are unlikely to qualify.

In summary, Section 3213 can be a valuable tool for creditors to enforce promissory notes, guaranties, and other instruments in New York state courts. Creditors wishing to use this procedure should include a provision in their documentation stating that the instrument qualifies as one for the payment of money only and that the obligor waives the right to challenge the instrument's status. The Marjan decision reinforces the effectiveness of these provisions, minimizing the risk of successful threshold challenges to the instrument's enforceability under Section 3213.