Court reduces judgment amount in Peach, Inc. case

A New York court has modified a judgment involving Peach, Inc. and RJR Services, Inc., significantly reducing the amount owed in a promissory note dispute. The Appellate Division of the Supreme Court ruled on September 16, 2026, that RJR Services must pay only $12,152 instead of the original $65,197. This decision affects both companies and highlights the importance of clear contractual agreements.

The case stems from a promissory note executed by RJR Services, which operates as Hamlet Window Cleaning and Power Washing. The note, dated October 9, 2020, was for a principal sum of $100,000, with a 5% annual interest rate. After RJR and its guarantor, Jason Reusch, defaulted on the note, Peach, Inc. sought to recover the outstanding amount through a legal process known as summary judgment.

Peach, Inc. filed the motion for summary judgment in lieu of a complaint under New York's Civil Practice Law and Rules (CPLR) 3213. The dispute arose over the total amount due on the note. RJR Services acknowledged liability but contested the amount owed. The case was initially heard in Suffolk County Supreme Court, where a judge ruled in favor of Peach, Inc. on the issue of liability.

Following the ruling on liability, a hearing was conducted to determine the damages. During this hearing, Peach's president testified that he and Reusch had orally agreed on a purchase price of $150,000 for the sale of Peach, Inc. The note was part of this agreement, and RJR had paid $50,000 at the closing. However, Reusch claimed that the $50,000 was merely a partial payment of the $100,000 purchase price, as indicated in a business purchase agreement (BPA) signed at the same time as the note.

The Supreme Court initially sided with Peach, Inc., determining that the outstanding amount was $65,197 based on the testimony presented. However, upon appeal, the Appellate Division found that the BPA clearly stated the purchase price as $100,000, and therefore, the court should not have considered the oral agreement testimony.

The court ruled, "the evidence at the hearing established an outstanding balance in the principal sum of $12,152 on the note." This ruling was made by Justices Francesca E. Connolly, Cheryl E. Chambers, William G. Ford, and James P. McCormack. They emphasized that the terms of the BPA and the promissory note could not be altered by extrinsic evidence due to the presence of a merger clause.

The impact of this ruling is significant for both parties. Peach, Inc. will receive a reduced amount, which may affect its financial standing. For RJR Services, the reduction in the judgment means a lower financial burden, allowing them to manage their obligations more effectively. This case underscores the importance of having clear and unambiguous contracts, as well as the legal principle that oral agreements cannot override written contracts.

This decision also sets a precedent for similar cases involving disputes over the interpretation of contracts. It reinforces the idea that courts will uphold the written terms of agreements, especially when they include merger clauses that prevent the introduction of prior oral agreements. Businesses should take note of this ruling to ensure that their contracts are clear and comprehensive.

Looking ahead, it is unclear whether Peach, Inc. will seek to appeal this decision. The court has remitted the case back to the Supreme Court for a calculation of interest due under the terms of the note and the entry of an amended judgment. This means that while the principal amount has been settled, the final financial implications for both parties are not yet fully resolved.