Opinion
Index No. 656111/2020
06-13-2022
American Express National Bank, Plaintiff, v. Pino Napoli Tile & Granite, LLC, and PHIL COLBERT, Defendants.
Zwicker & Associates, P.C., Piscataway Township, N.J. (Brandon G. Stanislaus of counsel), for plaintiff. No appearance for defendants.
Unpublished Opinion
Zwicker & Associates, P.C., Piscataway Township, N.J. (Brandon G. Stanislaus of counsel), for plaintiff.
No appearance for defendants.
GERALD LEBOVITS, J.
This is an action on a loan that has been brought by a bank headquartered in Utah, plaintiff American Express National Bank, against a company operating in Florida, defendant Pino Napoli Tile & Granite LLC, and the company's registered agent in Arizona, defendant Phil Colbert. Plaintiff moves without opposition for default judgment. The motion is denied.
DISCUSSION
I. Whether Plaintiff Has Established Valid Service on Defendants
A plaintiff seeking a default judgment must establish that it validly served defendant. (See CPLR 3215 [f].) Plaintiff has not demonstrated valid service in this action.
Plaintiff served defendants in Arizona. (See NYSCEF Nos. 6, 7.) Plaintiff does not attempt to show that either defendant is domiciled in New York. As a result, absent consent by defendant, this method of service was valid only if this court has longarm personal jurisdiction over defendants under CPLR 302. (See CPLR 313. ) Plaintiff has not established either that defendants consented to service or that longarm jurisdiction exists.
Plaintiff does not attempt to establish CPLR 301 provides this court with personal jurisdiction over defendants pursuant to some other basis for asserting jurisdiction that existed at the time the Legislature enacted the CPLR. (See CPLR 313.)
To show consent, plaintiff relies on a document entitled "Working Capital Terms from American Express Program and Loan Agreement." (See NYSCEF No. 19 at 4 [client affidavit]; NYSCEF No. 20 [agreement].) That document does contain a consent to service in the form used by plaintiff. (See NYSCEF No. 20 at 11 § 5.) But the document does not mention either of the defendants here by name, is not signed by them, and indeed has no signature page. (See generally id.) An affidavit submitted by plaintiff states in general terms that "Plaintiff provided to Defendant(s) a copy of the... [Agreement]... and Defendant(s) acknowledged acceptance of the Agreement via electronic signature." (NYSCEF No. 19 at 4.) But plaintiff does not give any details about when or how it provided defendants with the agreement, when defendants acknowledged acceptance of the agreement, or how that signature was recorded. Nor, for that matter, does plaintiff provide an image or other record of the signature.
Plaintiff also has not alleged any facts in its complaint, or submitted any evidence on this motion, that could give rise to longarm jurisdiction under CPLR 302. The complaint alleges that plaintiff is located in Utah, and that defendant Colbert lives in Arizona (where he was served). (See NYSCEF No. 1 at1, 3.) The complaint does not allege any facts about defendant Pino Napoli's location (see id. at 2), but the Pino Napoli loan statement on which plaintiff relies gives a Florida address for the company. (See NYSCEF No. 21.) Plaintiff does not provide copies of any loan agreements or related documents executed by the parties; but there is no suggestion that any of the loans at issue are connected to New York. To the contrary, the Working Capital agreement on which plaintiff relies provides that the agreement itself, credit decisions related to the agreement, ensuing loans, and the disbursement of loan amounts are all made in or from Utah. (See NYSCEF No. 20 at 11 § 5.)
The four charges listed on that statement, at least two of which are expressly for monthly rent, carry Florida addresses as well. (See NYSCEF No. 21.)
Plaintiff thus fails to establish a basis for exercising longarm personal jurisdiction over defendants under CPLR 302, as required to support the validity of plaintiff's service under CPLR 313. Indeed, given the absence of any record evidence of ties between defendants and New York, plaintiff has failed so far to show that it would be constitutional for this court to exercise jurisdiction over defendants. (See LaMarca v Pak-Mor Mfg. Co., 95 N.Y.2d 210, 216-218 [2000] [describing minimum due-process requirements for the exercise of personal jurisdiction].)
The Working Capital agreement submitted by plaintiff also includes a provision consenting to the personal jurisdiction of the New York courts. (See NYSCEF No. 20 at 11 § 5.) But again, plaintiff has failed to show that defendants signed or otherwise assented to the terms of this agreement.
II. Whether Plaintiff Has Established the Facts of its Claims Against Defendants
Even assuming that defendants were properly served and that this court may exercise personal jurisdiction consistent with the U.S. Constitution, the New York Constitution, and the CPLR, plaintiff has not established the facts constituting its claims against defendants.
A. Defendant Pino Napoli
With respect to defendant Pino Napoli, plaintiff has not shown even that it may sue this defendant at all, given the restrictions imposed by Business Corporation Law (BCL) § 1314. BCL § 1314 limits the ability of a foreign corporation to sue another foreign corporation in the New York courts. (See BCL § 1314 [b]. ) Plaintiff represents that it is headquartered in Utah. (See NYSCEF No. 1 at 1; NYSCEF No. 19 at 1.) The record reflects that Pino Napoli is located in Florida (see NYSCEF No. 21), and that its registered agent, defendant Colbert, lives in Arizona (see NYSCEF No. 1 at 3; NYSCEF No. 6). And plaintiff does not claim (or provide evidence) that Pino Napoli is a New York corporation or authorized to do business in New York. The record on this motion thus indicates that plaintiff may sue Pino Napoli only if it satisfies at least one of the conditions of BCL § 1314 (b). Plaintiff has not, however, shown-or attempted to show-that it can satisfy any of those conditions.
These limits do not apply "to a corporation which was formed under the laws of the United States and which maintains an office in this state." (BCL § 1314 [c].) Plaintiff's supporting affidavit represents that plaintiff is "a national bank organized under the laws of the United States." (NYSCEF No. 19 at 1.) But plaintiff does not attempt to establish that it maintains a New York office.
A prior decision of the undersigned read a decision of the Appellate Division, First Department, as treating the requirements imposed by BCL § 1314 (b) as jurisdictional. (See Mobile Programming LLC v Tallapureddy, 2021 NY Slip Op 50411[U], at *2-*3 [Sup Ct, NY County May 11, 2021], citing Techno-TM, LLC v Fireaway, Inc., 123 A.D.3d 610, 610 [1st Dept 2014].) On further reflection, though, it is unclear whether Fireaway 's holding should be understood as relating to subject-matter jurisdiction, given the Legislature's lack of authority to limit the scope of Supreme Court's constitutionally conferred general subject-matter jurisdiction. (See Pollicina v Misericordia Hosp. Med. Ctr., 82 N.Y.2d 332, 338-339 [1993].) Regardless, whether this court treats BCL § 1314 as a limit on the court's subject-matter jurisdiction or merely as a bar to plaintiff's cause of action, the result is the same: Plaintiff has not established that it may bring a claim against Pino Napoli.
Even if plaintiff could maintain this action against Pino Napoli, plaintiff has not established the facts constituting its claims. As mentioned above, plaintiff relies on the affidavit of one of its records custodians. (See NYSCEF No. 14 at 9, citing NYSCEF No. 19.) That affidavit states that plaintiff's records reflect that (i) "Defendant(s) applied for enrollment in Plaintiff's Working Capital Terms program" and were accepted into that program with "the right to apply for Loan(s)" through the program; (ii) "Defendant(s) subsequently applied for Loan(s) pursuant to the Working Capital Terms program" and plaintiff "approved Defendant(s)' application(s) for Loan(s)" and disbursed funds accordingly; (iii) plaintiff's "records reflect that it made available to Defendant(s), pursuant to the terms" of the Working Capital agreement "an online accounting which continuously showed the debits and credits that had been applied to Defendant(s)' balance since the Loan(s) were disbursed"; and (iv) plaintiff's records reflect that "as of 03/21/22," defendants owe $87,442.95. (NYSCEF No. 19 at4, 5, 8, 9.)
These statements, though, are largely generic and could apply with minimal alteration to any borrower. Nor does the affidavit of plaintiff's records custodian go on to attach corresponding borrower-specific documentation, as one would expect in these circumstances.
In particular, plaintiff has not provided defendants' application to the Working Capital program; defendants' signature or other manifestations of assent to the terms of that program; defendants' loan application or applications; the agreement or agreements governing defendants' loans; any signatures or other manifestations of assent to that agreement; any record of plaintiff disbursing funds to defendants pursuant to their loans; nor any record (in the form of a screenshot or otherwise) of the running online statements assertedly made available to defendants. The only documents that plaintiff has submitted to this court on this motion are (a) the unsigned Working Capital agreement; and (b) what appears to be an excerpt from a loan statement showing defendant's outstanding balance as of April 2019-not March 2022. (See NYSCEF Nos. 20 [Working Capital agreement], 21 [loan statement].) This paltry showing is not sufficient to establish that plaintiff is entitled to collect from Pino Napoli nearly $90,000 in unpaid loans.
B. Defendant Colbert
With respect to defendant Colbert, the difficulty is even more basic: Plaintiff does not attempt to demonstrate that he may properly be held liable for anything. There is no evidence in the record that Colbert has undertaken any financial obligations to plaintiff on his own. And the only documentary evidence in the record connecting Colbert to the (asserted) obligations of Pino Napoli is that Colbert's name appears above Pino Napoli's in the upper-right-hand corner of the 2019 loan-statement excerpt. (See NYSCEF No. 21.) But one cannot tell merely from this document why Colbert is listed on the statement-whether the statement is being addressed to him as an officer or agent of Pino Napoli, as a co-signer of the loan, or in some other capacity. This document, standing alone, falls far short of the "clear and explicit evidence" required, absent an express agreement, to establish that Colbert undertook to make himself personally responsible for Pino Napoli's obligations. (JDF Realty, Inc. v Sartiano, 93 A.D.3d 410, 419 [1st Dept 2012], citing Savoy Record Co. v Cardinal Export Corp., 15 N.Y.2d 1, 4 [1964].)
The multiple independent shortcomings of plaintiff's papers raise grave doubts about whether plaintiff may ultimately recover in this action as against either defendant. Standing alone, however, those doubts are not sufficient to warrant this court's dismissing the action sua sponte. Instead, this court denies plaintiff's default-judgment motion without prejudice to its renewal upon a proper showing that (1) plaintiff validly served defendants, (2) plaintiff may maintain this action against Pino Napoli, and (3) plaintiff is entitled to recover against both Pino Napoli and against Colbert.
Accordingly, for the foregoing reasons, it is
ORDERED that plaintiff's motion for default judgment under CPLR 3215 is denied without prejudice; and it is further
ORDERED that if plaintiff does not file a renewed motion within 60 days of entry of this order the action will be administratively dismissed; and it is further
ORDERED that plaintiff serve a copy of this order with notice of its entry on defendants at their last-known addresses by certified mail, return receipt requested.