Opinion
6699/2013
06-29-2015
Amos Financial, LLC, Plaintiff, v. H & B & T Corporation and Boruch Teitelbaum, Defendants.
Plaintiff Attorney: Alan J. Wohlberg, Esq. Defense Attorney: Boruch Teitelbaum
Plaintiff Attorney: Alan J. Wohlberg, Esq.
Defense Attorney: Boruch Teitelbaum
Yvonne Lewis, J.
Plaintiff, Amos Financial, LLC (Plaintiff or Amos Financial) moves, by notice of motion pursuant to CPLR §3212, for summary judgment against Defendant Boruch Teitelbaum (the defendant) on the first cause of action, and for dismissal of all of the defendant's affirmative defenses and counterclaims. The defendant cross-moves, pursuant to CPLR §3212, for summary judgment dismissing the complaint on the ground that he was never properly served.
Facts and Procedural History
This is an action sounding in breach of contract (breach of the defendant's obligations under a guarantee of a promissory note), an account stated, and a claim for attorney's fees. According to the affidavit of Ohannes Korogluyan (Korogluyan), manager of Plaintiff Amos Financial, the plaintiff is an authorized foreign corporation doing business in the State of New York and the City of New York. Amos Financial is also duly licensed to do business by the New York City Department of Consumer Affairs under License No. 1440608. Upon information and belief, H & B & T Corporation (HBT), is an entity owned by the defendant that is or was doing business in, and with a principal place of business in Brooklyn, and non-party Sovereign Bank is a financial institution licensed to do, and doing business in the State and City of New York. On June 4, 2008, Sovereign Bank, in conjunction with the financing of a business loan, entered into a promissory note (the Note) with HBT. Under the terms of the Note (a business loan), HBT agreed to repay Sovereign Bank the principal amount of $100,000, along with interest.
The court cannot determine from the affidavit or papers whether Korogluyan is male or female.
According to Korogluyan, the defendant is or was an officer of HBT, and signed the Note on behalf of HBT and personally guaranteed HBT's obligations thereunder in a "separate" agreement (the Guarantee) signed in conjunction with the Note. On June 19, 2010, Sovereign Bank assigned its rights under the Note to the plaintiff, and the plaintiff is still the lawful holder of the Note. Korogluyan also states in his affidavit that, Sovereign Bank and the plaintiff have both fulfilled all of their obligations under the Note; no part of said sum has been paid, despite due demand; and all conditions precedent to the defendant's liability have been performed or have occurred; and therefore the defendant has breached his obligations under the Guarantee.
As of October 15, 2012, the amount due and unpaid by the defendants pursuant to the Note and Guarantee, exclusive of legal fees and expenses, is $90,043.57, consisting entirely of principal, and per diem interest of $6.14, from October 15, 2012. Korogluyan states that pursuant to the terms of the Note and Guarantee, the plaintiff is entitled to recover all costs, including reasonable attorney's fees, incurred in pursuing payment due pursuant to the Note and Guarantee that were not tendered timely. According to Korogluyan, the plaintiff rendered to the defendants a full and true account of the amounts owed by the defendants, which were delivered and accepted without objection by the defendants, resulting in an account stated in the amount of $90,043.57. Korogluyan further states that there is no issue that HBT borrowed money in connection with its business and failed to repay it; that the defendant personally guaranteed HBT's loan and did not perform under the Guarantee; and that the plaintiff owns this debt.
On or about April 15, 2013, the plaintiff commenced the instant action. On or about July 30, 2013, the defendant interposed his answer, generally denying the allegations of the complaint, asserting eight affirmative defenses (failure to obtain jurisdiction over him; failure to state a cause of action; failure to comply with CPLR pleading requirements; the plaintiff lacks legal capacity to sue; Statute of Frauds; Statute of Limitations; and laches, equitable estoppel, waiver, lack of consideration and/or unclean hands [considered as a "bundled" affirmative defense]; and that the defendant does not know the plaintiff and has had no dealings with it) and five counterclaims (violation of 47 USC 227[b][1][A]; punitive damages based upon interference with quiet enjoyment of property; intentional infliction of emotional distress; violation of General Business Law § 349 and; trespass).
Subsequently, on or about August 25, 2014, the plaintiff moved for summary judgment on its cause of action for breach of contract, and for dismissal of the defendant's affirmative defenses and counterclaims, and the defendant, pro se, cross-moved to dismiss the complaint based upon lack of personal jurisdiction. Discussion
"The elements of a cause of action for breach of contract are (1) formation of a contract between the plaintiff and the defendant; (2) performance by the plaintiff; (3) the defendant's failure to perform; and (4) resulting damage" (Clearmont Prop., LLC v Eisner, 58 AD3d 1052, 1055 [2009] [internal citations and quotation marks omitted]). On a motion for summary judgment to enforce a written guaranty, all that the creditor need prove is an absolute and unconditional guaranty, the underlying debt, and the guarantor's failure to perform under the guaranty" (4 USS LLC v DSW MS LLC, 120 AD3d 1049, 1051 [2014]).
Counsel for the plaintiff argues that he has set forth all of the elements to support the plaintiff's breach of contract cause of action, entitling it to summary judgment on this claim. The plaintiff has submitted the promissory note, which was signed by the defendant and which contained an unequivocal and unconditional obligation to repay, the affidavit of the plaintiff's manager, affirming that Sovereign Bank entered into the Note with HBT to lend it $100,000 as a business loan, that the defendant signed and personally guaranteed the Note on behalf of HBT; that Sovereign Bank assigned its rights under the Note to the plaintiff; that both Sovereign Bank and HBT fulfilled their obligations under the Note; and that the defendant failed to pay in accordance with the Note's terms. The plaintiff has also submitted the affidavit Ms. Karen Tennant, custodian of records of Santander Bank, N.A., formerly Sovereign Bank, wherein she annexes the Note, the Guarantee, the defendant's payment history, the bill of sale and the assignment from Sovereign Bank to the plaintiff, and the asset schedule, and affirms that among her duties at Santander Bank, N.A./formerly Sovereign Bank, one was to oversee the keeping of business records, including the records made by the personnel or staff of the bank, or persons acting under the bank's control, in the regular course of business, at the time of the act, transaction, occurrence or event recorded therein, or within a reasonable time thereafter, and that it was in the bank's regular course of business to make such records. As such, the plaintiff established its prima facie entitlement to judgment as a matter of law (Sound Shore Med. Ctr. of Westchester v Maloney, 96 AD3d 823, 823-824 [2012]).
In opposition, the defendant argues that the plaintiff's manager, Korogluyan: (1) was not employed by the alleged original lender, Sovereign Bank, (2) makes no reference to the manner in which the original records were made or kept, (3) does not state that he reviewed the files or the relevant documents or state who made the records or when they were made or that he or she had any knowledge of same; and (4) failed to establish that the entrant was under a business duty to record the event and that the informant was under a business duty to report the information. But, as noted above, in opposition to the defendant's cross motion, the plaintiff annexed the affidavit of Ms. Tennant, who authenticated the records of Sovereign Bank with respect to the subject loan.
The defendant also argues that he never signed any Guarantee and that the signature on the Guarantee is not his own, noting: "See my signature as it appears on my licences annexed hereto as Exhibit B'". Exhibit B contains photocopies of two of the Defendant's New York State driver's licenses, one which was issued on June 4, 2001 and which expired on June 30, 2009, and his current license, which was issued on June 3, 2009 and which expires June 30, 2017. In opposition, the plaintiff states that Defendant does not deny that he signed the Corporate ("Authorizing") Resolution and the Note, and that one of the licenses appears to have been issued on June 3, 2008, the day before the loan documents are dated, and not on June 3, 2009. The plaintiff also asserts that the defendant's signature on the Corporate ("Authorizing") Resolution, the Note, and the Guarantee all match each other and do not match the signature on the driver's license issued on June 3, 2008. Therefore, the plaintiff states that the defendant's evidence proves that he signed the Guarantee.
As an initial matter, the Court concludes that the driver's license issued on June 3rd was issued in 2009, not in 2008 as the plaintiff avers. Moreover, where the signature is witnessed or notarized, there is a presumption of authenticity which arises from the signature (id.; HSBC Bank USA, N.A. v Community Parking Inc., 104 AD3d 595, 596 [2013]). On the other hand, where handwriting samples submitted by the individual challenging the signature differ enough from the signature on the note and guarantee, it may be sufficient to raise a question of fact as to the authenticity of the signature (TD Bank, N.A., 98 AD3d at 500; HSBC Bank USA, N.A.,104 AD3d at 596 [emphasis added]).
Here, the defendant has failed to raise an issue of fact as to the authenticity of his signature on the Guaranty. First, the Note and the Guarantee were witnessed, creating a presumption of authenticity. Second, the signatures on the Corporate ("Authorizing") Resolution, Note, and the Guarantee, even to an untrained eye, appear to be essentially the same. While they differ from the signatures on the defendant's driver's licenses, this is explained by the fact that the signatures on the Corporate ("Authorizing Resolution,") Note, and Guarantee are Defendant's initials, as opposed to Defendant's full signature, which appears on Defendant's driver's licenses exemplars. In addition, Defendant does not deny that he signed the Corporate ("Authorizing) Resolution and the Note. Finally, although Defendant states that he was "never an officer, director or employee of the Defendant corporation [HBT], and never worked for the Defendant corporation," Defendant signed the Corporate ("Authorizing") Resolution as "Secretary or Assistant Secretary, General Partner or Member" and signed the Note as "President" of the "Borrower: H & B & T Corporation." In view of the foregoing, Defendant has failed to raise an issue of fact that he did not sign the Guarantee.
In support of his cross motion, Defendant argues that he was not properly served. "Pursuant to CPLR §3211 (e) . . . Defendant was required to move to dismiss the complaint for lack of proper service within 60 days following the service of the answer, unless an extension of time was warranted on the ground of undue hardship" (Reyes v Albertson, 65 AD3d 855, 855 [2009]). Here, the answer was served on July 30, 2013, and the cross motion to dismiss the complaint was made on or about January 7, 2015, over one and one-half years after service of the answer in which the defendant raised the defense of lack of personal jurisdiction. Therefore, the defense is untimely and is not supported by any showing of undue hardship which prevented the making of the cross motion within the requisite statutory period (id.). As such, the jurisdictional objection has been waived, and the defendant's cross motion to dismiss the complaint is denied.
The plaintiff also moves to dismiss Defendant's affirmative defenses and counterclaims. As indicated immediately above, the court has already denied the defendant's cross motion to dismiss based upon the defense of lack of personal jurisdiction. As such, this affirmative defense must be dismissed.
The second affirmative defense, namely that the complaint fails to state a cause of action, must also be dismissed as to the cause of action for breach of contract/guaranty, based upon the court's determination granting the plaintiff summary judgment on this cause of action. However, the plaintiff has failed to make a prima facie showing warranting dismissal of this affirmative defense as it relates to the cause of action for an account stated and related attorney's fees. "A claim for an account stated is independent of the original obligation" (Pat Pellegrini Flooring Corp. v Serota, 20 Misc 3d 138[A] [App Term 2008]). Further, "[t]he receipt and retention of an account without objection within a reasonable period of time entitles a Plaintiff to summary judgment on the account independent of the original obligation" (id.). However, "[t]here can be no account stated where no account was presented or where any dispute about the account is shown to have existed" (id.).Here, the plaintiff has only submitted the affidavit of its manager, Korogluyan, stating that the plaintiff "rendered to the [d]efendants a full and true account of the amounts owed by the [d]efendants . . . [p]laintiff's statements were delivered and accepted without objection by the [d]efendants, resulting in an account stated in the amount of $90,043.57." But, other than Korogluyan's statements, the plaintiff has failed to submit any proof that the account was actually presented to Defendant. Moreover, the plaintiff does not address the third cause of action for attorney's fees related to the cause of action for an account stated. As such, this branch of the plaintiff's motion to dismiss the second affirmative defense as it relates to an account stated and related attorney's fees is denied.
As to the third affirmative defense, namely that the complaint fails to comply with CPLR pleading requirements, CPLR §3013 provides that: "Statements in a pleading shall be sufficiently particular to give the court and parties notice of the transactions, occurrences, or series of transactions or occurrences, intended to be proved and the material elements of each cause of action or defense." Here, the plaintiff has established, by virtue of the complaint, that it properly alleged all three causes of action. Defendant does not address this claim, and thus this affirmative defense must be dismissed.
The fourth affirmative defense, that the plaintiff lacks legal capacity to sue, must also be dismissed. The plaintiff has made a prima facie showing, by admissible evidence (the assignment of the Note to it from Sovereign Bank, that it is the assignee of the Note), and that it therefore has legal capacity to sue. Defendant does not address this evidence, and thus this affirmative defense must be dismissed. The fifth affirmative defense, the Statute of Frauds, is prima facie inapplicable to the Note, which is a contract reduced to writing (General Obligations Law § 7-501). Thus, this affirmative defense must be dismissed.
The sixth affirmative defense, the Statute of Limitations, must also be dismissed.
"An action to recover damages for breach of contract is governed by a six-year statute of limitations period" (Livingston v En-Consultants, Inc., 115 AD3d 650, 651 [2014]). Here, the plaintiff has established that the action was commenced on April 15, 2013 and the Note and Guarantee are dated June 6, 2008. Since the Statute of Limitations for breach of contract is six years, the action is timely. Thus, this affirmative defense must be dismissed.
The plaintiff correctly argues that the seventh affirmative defense (grouped together), which asserts laches, equitable estoppel, waiver, lack of consideration and/or unclean hands is, in effect, a so-called "grab bag/catch all of objections" (Foley Inc. v Helix Group, Inc., 29 Misc 3d 1210 [A], 2010 NY Slip Op 51786 [U], *9 [Sup Ct, NY County 2010]), and that such doctrines are equitable in nature and not applicable, as here, to actions in law" (id.; see also Republic Ins. Co. v. Real Dev. Co., 161 AD2d 189, 190 [1990] [equitable defense of laches is unavailable at action in law]; Manshion Joho Ctr. Co., Ltd. v Manshion Joho Ctr., Inc., 24 AD3d 189, 190 [2005] ["The doctrine of unclean hands is an equitable defense that is unavailable in an action exclusively for damages."]). In addition, "the doctrine of laches is not available as a defense where, [as here], the action at law has been commenced within the period set forth by the statute of limitations" (id.). Finally, the affirmative defense of lack of consideration must be dismissed on the additional ground that a loan was made pursuant to the Note. Thus, the plaintiff has made a prima facie showing, which the defendant has failed to rebut. Accordingly, this affirmative defense is dismissed.
The eighth affirmative defense, mislabeled as the tenth affirmative defense, alleges that "[defendant never had any dealing with Plaintiff and does not know who Plaintiff is." The plaintiff has already made a prima facie showing that it is the assignee of Sovereign Bank. The defendant has failed to rebut this showing. Thus, this affirmative defense must be dismissed.
The plaintiff also moves to dismiss the defendant's five counterclaims. The first counterclaim alleges a violation of the Telephone Consumer Protection Act (47 USC § 227) (TCPA). Specifically, it alleges that the plaintiff and/or its assignors have telephoned the defendant for more than a year, between 8 and more than 200 times a day, in which the defendant was informed that the caller was attempting to collect a past due amount allegedly owed on account; that the defendant never gave the plaintiff and/or its assignors permission to call his cell phone; that the plaintiff and/or its assignors knowingly violated the TCPA; that the plaintiff and/or its assignors used an "automatic telephone dialing system" as defined by the TCPA; that the plaintiff and/or its assignors "contacted Defendant, with a prerecorded voice' and/or an automatic telephone dialing system,' to Defendant's cellular telephone service as specified in . . . [the TCPA] without [his] prior express consent;" and that the calls continued, and threats were made that the defendant's wages would be garnished, his credit report negatively affected and his neighbors contacted.
The plaintiff has submitted the affidavit of its manager, Korogluyan, in which he states that the plaintiff denies that it or Sovereign Bank harassed HBT or the defendant. In addition, Korogluyan avers that the plaintiff denies the defendant's claims that the plaintiff called the defendant hundreds of times. He further states that the plaintiff does not use or possess an automatic dialer and never did, and that upon information and belief, Sovereign Bank did not use an automatic dialer. The plaintiff's counsel states that the defendant failed to allege a necessary element of this cause of action, namely that this counterclaim merely alleges that the plaintiff "used a dialing system" instead of alleging that the alleged calls were based on "randomly or sequentially generated telephone numbers," the statute's definition of "an automatic telephone dialing system" (see 47 USC § 227 [b] [1] [A][iii]).
The defendant sufficiently alleged the above-noted element of the statute by asserting that the plaintiff used an "automatic telephone dialing system" as defined by 47 USC § 227 [b] [1] [A][iii]). However, the plaintiff, through its manager, has made a prima facie showing that it did not use this dialing system to call the defendant's cell phone. The defendant has failed to address the sworn affidavit of the plaintiff's manager. Moreover, the answer in which these claims are asserted is unverified. Thus, the defendant has failed to rebut the plaintiff's prima facie showing. And so, this counterclaim is dismissed.
The second counterclaim alleges that the plaintiff and/or its assignors intentionally made the above-noted telephone calls, day and night, which created a nuisance to the defendant, interfered with his quiet enjoyment of property, and that he is entitled to punitive damages because the conduct was unreasonable and will serve to deter other creditors from engaging in the same conduct. The court has already determined that the plaintiff has made a prima facie showing that the plaintiff has not made these calls, which the defendant has failed to rebut. Further, "New York law does not recognize a separate cause of action for punitive damages" (Ehrlich v Incorporated Vil. of Sea Cliff,
95 AD3d 1068, 1070 [2012]). Therefore, this counterclaim is dismissed.
The third counterclaim alleges intentional infliction of emotional distress, namely that by making harassing telephone calls as noted above, the plaintiff and/or its assignors caused the defendant anxiety, sleeplessness, and difficulty in performing normal activities. The claim further alleges that the acts were consumer-oriented because they arose from an alleged use of a credit card and an alleged debt, and that the plaintiff's acts were misleading because they assured the defendant he was liable for certain monies when he was not. The plaintiff has made a prima facie showing that it did not make these calls, which the defendant has failed to rebut. In any event, the debt at issue is not a consumer debt, as the defendant alleges, and as the plaintiff has demonstrated. Moreover, the plaintiff correctly argues that "a breach of contract is not to be considered a tort unless a legal duty independent of the contract itself has been violated'" (Probst v Cacoulidis, 295 AD2d 331, 332 [2002], quoting Clark-Fitzpatrick, Inc. v Long Is. R.R., 70 NY2d 382, 389 [1987]). Here, the counterclaim does not allege that the plaintiff owes the defendant a legal duty independent of the contract. The defendant has failed to address this counterclaim, and thus has failed to rebut the plaintiff's prima facie showing. Accordingly, this counterclaim is dismissed.
The fourth counterclaim alleges a violation of General Business Law § 349 based upon the harassing telephone calls, which were allegedly deceptive acts committed in the conduct of business. The counterclaim further alleges that each of the acts were consumer-oriented, involved misleading conduct having a broad impact on the public, or were practices that could easily recur to potentially similarly situated consumers. The plaintiff has made a prima facie showing that these calls were not made, which the defendant has failed to rebut. In any event, the plaintiff has demonstrated - through documentary evidence and the affidavit of its manager - that the loan at issue was a business loan, making the statute inapplicable because the challenged act or practice is not consumer-oriented (see Beneficial Homeowner Serv. Corp. v Williams, 113 AD3d 713, 714 [2014] [the first element of General Business Law § 349 is that "the challenged act or practice was consumer-oriented"]). The plaintiff has also demonstrated that this action is based upon a single loan, and therefore the Guarantee does not have a "broad impact on consumers at large" (QPBC, Inc. v Total Auto. Warehouse, Inc., 117 AD3d 703, 704-705 [2014] ["the alleged misconduct did not have a broad impact on consumers at large and . . . this case involved precisely the type of private contract dispute, unique to the parties, that does not fall within the ambit of the statute"]; see also JP Morgan Chase Bank, N.A. v Hall, 122 AD3d 576, 581 [2014]). Finally, the plaintiff has made a prima facie showing that the defendant is not a "consumer" under the statute (Cruz v NYNEX Info. Resources, 263 AD2d 285, 289 [2000], quoting, inter alia, General Business Law §§ 399-c, 399-p [1] [c], General Obligations Law § 5-327 [1] [a]; CPLR 105 [f] ["In New York law, the term consumer' is consistently associated with an individual or natural person who purchases goods, services or property primarily for personal, family or household purposes.'"]). The defendant has failed to address these arguments, and has therefore failed to rebut the plaintiff's prima facie showing. Thus, this counterclaim must be dismissed.
The fifth counterclaim, trespass to chattels, alleges that the defendant's telephone, answering machine, and cell phone are protected property interests; that the defendant never gave the plaintiff and/or its assignors permission to attempt to contact him by calling his cell phone; that the plaintiff and/or its assignors intentionally interfered with his possessory interests in his possessions; and that the plaintiff and/or its assignors intentionally and/or negligently continuously called his home and cell phones and answering machines, interfered with the unencumbered access to his phone devices, occupied the memory of his answering machines, "disposed and interfered with the unencumbered access of [him] to [his] phone devices and actually impaired [his] home and cellular telephone and answering machine devices," which caused him damages.
"To establish a trespass to chattels, the Plaintiff must plead an intentional and physical interference with the use and enjoyment of personal property in the Plaintiff's possession, without justification or consent" (AGT Crunch Acquisition LLC v Bally Total Fitness Corporation, 2008 NY Slip Op 30247 [U], *9-10 [Sup Ct, NY County 2008], citing Sch. of Visual Arts v Kuprewicz, 3 Misc 3d 278, 281 [Sup Ct, NY County 2003]; see also Verizon New York v Consolidated Edison, Inc., 2010 NY Slip Op 31464 [U], *5 [Sup Ct, NY County 2010] ["The elements of trespass to chattel are (1) intent, (2) physical interference with (3) possession, resulting in (4) harm"]). In this regard, "[a]n essential element in pleading trespass to chattel is harm to the condition, quality or material value of the chattels at issue'" (AGT Crunch Acquisition LLC v Bally Total Fitness Corporation, 2008 NY Slip Op 30247 [U], *10 [Sup Ct, NY County 2008], quoting "J. Doe No. 1," v CBS Broadcasting Inc., 24 AD3d 215, 215 [2005]).
The defendant has sufficiently alleged damage to his cell phone and answering machine in this counterclaim, namely that the alleged calls occupied the memory of his answering machine and interfered with the unencumbered access to his phone devices (cf. Sch. of Visual Arts, 3 Misc 3d at 281-282] [where the plaintiff alleged that the defendant "caused large volumes' of unsolicited job applications and pornographic e-mails to be sent to [ the plaintiffs] by way of [ the plaintiff's] computer system, without their consent, which depleted hard disk space, drained processing power, and adversely affected other system resources on [ the plaintiff's] computer system'"], citing Hotmail Corp. v Van$ Money Pie Inc., 1998 WL 388389, 1998 US Dist LEXIS 10729, *19-20 [ND Cal, Apr. 16, 1998] [ the plaintiff likely to prevail on trespass to chattels claim upon showing that the defendant's unsolicited e-mails filled up the plaintiff's computer storage space]; compare J. Doe No. 1, 24 AD3d at 215-216 ["Although Plaintiffs seek relief for trespass to chattels, based on either random digit dialing and/or sequential dialing to unlisted and unpublished telephone numbers, they have not alleged harm to the condition, quality or material value of the chattels at issue, i.e., their telephones, and have thus failed to plead an essential element of their purported cause of action"]).
However, the plaintiff has already made a prima facie showing, through its manager, that it did not make these calls. The defendant has failed to address this issue, and therefore has failed to raise an issue of fact warranting denial of summary judgment of this counterclaim. This counterclaim is dismissed.
In sum, the motion of the plaintiff for summary judgment is granted to the extent of dismissing the defendant's first cause of action for breach of contract/guarantee, the first through fifth affirmative defenses (with the exception of the second affirmative defense as it relates to the causes of action for an account stated and related attorney's fees), and all five counterclaims. The defendant's cross motion to dismiss the action is denied.
This constitutes the decision and order of the court.
E N T E R,
_______________________________
yvonne lewis, JSC