Pursuant to CPLR 3213, a plaintiff may commence an action “based upon an instrument for the payment of money only or upon any judgment” by filing a summons and motion for summary judgment in lieu of complaint.[1] The statute “provide[s] a speedy and effective means” for resolving “presumptively meritorious” claims.[2]
The standard to prevail on a CPLR 3213 motion is the same as that on a CPLR 3212 motion: accelerated judgment will be awarded “if, upon all the papers and proof submitted, the cause of action … shall be established sufficiently to warrant the court as a matter of law in directing judgment” for the plaintiff.[3] However, “where the instrument requires something in addition to defendant’s explicit promise to pay a sum of money, CPLR 3213 is unavailable”.[4]
In addition, a CPLR 3213 motion may be defeated where the defendant offers “evidentiary proof sufficient to raise a triable issue of fact”.[5]
CPLR 3213 can be used to enforce the terms of a settlement, even when the settlement is set forth in a term sheet, memorandum of understanding, or the like.
“Term sheets”, “letters of intent”, “memoranda of understanding” and “agreements in principle” may constitute an enforceable agreement if the writing includes all the essential terms of an agreement.[6] This is so even if “the parties intended to negotiate a ‘fuller agreement’”.[7] Thus, if the informal writing contains the necessary elements of an enforceable contract, e.g., an offer, acceptance, consideration, mutual assent and intent to be bound, courts will enforce the writing as if it was a formal, written agreement.[8]
However, a term sheet, letter of intent or a memorandum of understanding will be rendered ineffective where material terms are left for future negotiation, or the writing expressly reserves the right not to be bound until a more formal agreement is signed.[9]
In Tangtiwatanapaibul v. Tom & Toon Inc., 2025 N.Y. Slip Op. 33139(U) (Sup. Ct., New York County Aug. 20, 2025) (here), the court held that a settlement term sheet qualified as an “instrument for the payment of money only” under CPLR 3213, thereby enabling plaintiffs to seek accelerated judgment for the amount due by defendants. In so holding, the motion court found the payment terms in the term sheet explicit and unconditional, rejecting defendants’ claims that extrinsic evidence was needed to determine whether payment was due under the term sheet.
Background
Tangtiwatanapaibul was an action to enforce and recover upon a term sheet memorializing the terms of the settlement of plaintiffs’ federal and state fair wage claims brought against the Corporate Defendants and the Individual Defendants in the United States District Court for the Southern District of New York.
On June 26, 2019, during a settlement conference with Magistrate Judge Parker, the parties entered into a written “Settlement Agreement Term Sheet” (“the Term Sheet”), pursuant to which the Corporate and Individual Defendants agreed to pay Plaintiffs the sum of $72,000, inclusive of attorney’s fees and costs, in “equal mo. installments of $3,000 over 24 mo. commencing within 10 days of court approval of settlement,” with a 10-day notice and cure period in the event of a default in any payment, after which continued default would entitle plaintiffs to “2x remaining amount due.” The Term Sheet also provided that: the Corporate and Individual Defendants would give a confession of judgment; the Corporate and Individual Defendants did not admit liability; plaintiffs would give defendants a general release of all claims raised in the lawsuit; and plaintiffs’ attorney would prepare a detailed settlement agreement.
The Term Sheet expressly stated that it was a “binding agreement” as of the “effective date”. The parties also agreed that Magistrate Judge Parker would retain jurisdiction to approve the settlement and dismiss the case.
Although more formal written settlement agreements were prepared and exchanged between June 2019 and October 2020, one was not fully executed by the parties. Notwithstanding, the Corporate and Individual Defendants paid plaintiffs $2,000. They stopped making payments as of September 29, 2020.
By order dated October 13, 2020, Magistrate Judge Parker approved the settlement reflected in the Term Sheet and dismissed the action without retaining jurisdiction to enforce the settlement.
Plaintiffs moved for clarification of the October 13, 2020 Order and separately appealed therefrom. By opinion and order dated August 24, 2021, Magistrate Judge Parker clarified her prior findings that, inter alia, the Term Sheet “contained all of the material terms of the agreement and explicitly set forth that those terms were binding as of that date [June 26, 2019]” and that “to the extent Plaintiffs seek to enforce the settlement they reached, they may do so in state court.” By Summary Order dated December 12, 2022, the United States Court of Appeals for the Second Circuit affirmed the Magistrate Judge’s approval of the Term Sheet as an “enforceable contract,” binding as to its material terms, and to be enforced in state court.
On December 1, 2024, and pursuant to CPLR 3213, Plaintiffs commenced the action for an accelerated judgment of $140,000, plus interest, in their favor and against the Corporate and Individual Defendants, based upon the terms of the Term Sheet. The Corporate and Individual Defendants opposed the motion on the ground that the Term Sheet was neither a judgment nor an instrument for the payment of money only, as contemplated by the statute. They also argued that there were issues of fact “as to how much [was] owed” under the agreement and whether the amount of the settlement should be reduced in proportion to the number of plaintiffs that did not sign the “agreements.” Defendants contended that, at best, plaintiffs had a breach of contract action requiring extrinsic evidence on its material terms.
The Motion Court’s Decision
The motion court held that plaintiffs established prima facie that the Term Sheet constituted an instrument for the payment of money only in that it clearly and unequivocally contained the Corporate and Individual Defendants’ “explicit promise” to pay plaintiffs the sum of $72,000 in equal monthly installments of $3,000 per month, for 24 months, commencing within 10 days of the Court’s approval of the settlement.[10] The motion court found that there was no
ambiguity in the payment term or in the 10-day notice and cure provision, which sets forth a penalty on default in the sum of two times the remaining amount due.[11] These terms, said the motion court, were unconditional and not contingent upon any other act or fact.[12] The motion court concluded that the payment and default provisions were material terms of the “binding agreement” that the parties entered into on June 26, 2019.[13] Thus, said the motion court, the Term Sheet was “‘an instrument for the payment of money only’ upon which issuance of accelerated judgment [was] appropriate.”[14]
The motion court also held that plaintiffs “established that the Corporate and Individual Defendants defaulted in making [the] payments” under the Term Sheet “by submitting the affirmation of their attorney, to whom the settlement payments were to be tendered, attesting to non-payment apart from the initial $2,000 paid prior to September 2020 and that the remaining amount due [was] $70,000.”[15]
The motion court noted that the Term Sheet did “not provide specifics as to the 10-day default notice requirement; how it [was] to be made, or what it [was] to contain.”[16] However, explained the motion court, “Plaintiffs’ federal motion practice in October 2020 and their service of the instant CPLR § 3213 motion in December 2024, which set forth the details of Defendants’ default under the Term Sheet and gave them more than a 10-day opportunity to cure, constitute[d] sufficient notice of default under the Term Sheet.”[17]
The motion court held that the Corporate and Individual Defendants failed to offer evidentiary proof sufficient to raise a question of fact.[18] The motion court rejected defendants’ argument that “extrinsic evidence” was needed to assess their payment obligations.[19] The motion court concluded the “Term Sheet [was] crystal clear that Defendants [were] to pay Plaintiffs the sum of $72,000, on a 24-month payment plan of $3,000 per month.”[20]
Finally, the motion court rejected defendants’ attempt to add terms to the Term Sheet in an effort to avoid summary judgment:
The division or disbursement of such payment across the Plaintiffs is not a material term of the agreement– indeed, it is not even mentioned in the Term Sheet. Nor is there need for any extrinsic evidence on whether the absence of a more formal and detailed settlement agreement violated a material term of the Term Sheet: it does not[,] and so the federal appellate and trial courts have definitely found. The Second Circuit, which has the last word on the issue, explicitly found that the Term Sheet contains the parties’ agreement as to material terms, that such agreement is binding, that the [parties] partially performed their agreement, and the Term Sheet constitutes an enforceable contract to be enforced in this court. Nothing more is needed for this Court to determine that the Term Sheet contains Defendants’ explicit and unconditional promise to pay a sum certain over a stated period and that they failed to do so, entitling Plaintiffs to entry of judgment.[21]
Accordingly, the motion court granted plaintiffs’ motion.
Takeaway
The implications of Tangtiwatanapaibul are significant for both litigants and practitioners.
The case affirms that informal documents like term sheets or memorandums of understanding can be enforceable instruments for the payment of money under CPLR 3213, provided they contain all the salient terms of the parties’ agreement and contain clear, unconditional promises to pay a sum certain. In Tangtiwatanapaibul, the motion court emphasized that the absence of a formal, signed agreement did not invalidate the settlement because the essential terms of the settlement were present and the parties intended to be bound by their term sheet.
For litigants, Tangtiwatanapaibul shows that: (a) plaintiffs have an important tool in CPLR 3213 for the enforcement of a settlement without the need for a full breach of contract action, if all the material terms of their agreement are present; and (b) defendants will be responsible for complying with the terms of their settlement—even if the terms are in a term sheet—and that the failure to pay could result in accelerated judgment under CPLR 3213.
For practitioners, Tangtiwatanapaibul underscores the importance of drafting term sheets with precision and clarity. Including explicit payment terms and language that indicates the agreement is binding can make the difference between lengthy litigation and a quick resolution.
[1] CPLR 3213.
[2] Banco Popular N. Am. v. Victory Taxi Mgmt. Inc., 1 N.Y.3d 381, 383 (2004) (citing Interman Indus. Prods. v. R.S.M. Electron Power, 37 N.Y.2d 151, 154 (1975)).
[3] Banco Popular, 1 N.Y.3d at 383.
[4] Weissman v. Sinorm Deli, Inc., 88 N.Y.2d 437, 444 (1996) (“The instrument does not qualify if outside proof is needed, other than simple proof of nonpayment or a similar de minimis deviation from the face of the document”).
[5] Banco Popular, 1 N.Y.3d at 383.
[6] Sullivan v. Ruvoldt, 16 Civ. 583, 2017 WL 1157150 at *6 (S.D.N.Y. Mar. 27, 2017).
[7] Conopco, Inc. v. Wathne Ltd., 190 A.D.2d 587, 588 (1st Dept. 1993)
[8] Stonehill Capital Mgt. LLC v. Bank of the W., 28 N.Y.3d 439, 451-454 (2016).
[9] Bed Bath & Beyond Inc. v. IBEX Constr., LLC, 52 A.D.3d 413, 414 (1st Dept. 2008); Emigrant Bank v. UBS Real Estate Sec., Inc., 49 A.D.3d 382, 383-384 (1st Dept. 2008).
[10] Slip Op. at *2-*3.
[11] Id. at *3.
[12] Id.
[13] Id.
[14] Id. (citing LFR Collections LLC v. Tammy Tran Att’ys at L., 238 A.D.3d 490 (1st Dept. 2025) (settlement agreement constituted an instrument for the payment of money only; agreement provided “that defendants owed $7,900,000 as of October 12, 2012; that the maturity date was October 12th, 2017, the fifth anniversary date of the settlement agreement; that the interest rate was 0% a year for the first 18 months and then 5% a year thereafter, without compounding interest; and that upon default, interest was to accrue at the rate of 12% per annum.”); J.D. Structures, Inc. v. Waldbaum, 282 A.D.2d 434, 436 (2d Dept. 2001) (“The appellant established that the respondents failed to make the payments required by the settlement agreement, which is an instrument for the payment of money only. Accordingly, it is appropriate in this case to grant summary judgment pursuant to CPLR 3213”)).
[15] Id. (citing LFR Collections, 238 A.D.3d at 490 (“On its motion, plaintiff submitted the settlement agreement, the amount due, and an affirmation of LFR’s general counsel, who swore to the loan history under penalty of perjury and stated that he was familiar with the facts”)).
[16] Id.
[17] Id. (citations omitted).
[18] Id.
[19] Id.
[20] Id.
[21] Id. at *3-*4 (citations omitted).
