Opinion
CV-001156-14
05-28-2015
Cach, LLC, Plaintiff(s) v. Neil Kugelman, Goldspeedcom Inc, Defendant(s)
Daniels Norelli Scully & Cecere, P.C. Attorneys for Plaintiff One Old Country Road, Suite LL5 Carle Place, New York 11514 516-338-7520 Lewisohn & Lewisohn Attorneys for Defendants 444 Merrick Road, Suite 112 Lynbrook, New York 11563 516-374-1400
Daniels Norelli Scully & Cecere, P.C.
Attorneys for Plaintiff
One Old Country Road, Suite LL5
Carle Place, New York 11514
516-338-7520
Lewisohn & Lewisohn
Attorneys for Defendants
444 Merrick Road, Suite 112
Lynbrook, New York 11563
516-374-1400
Scott Fairgrieve, J.
Plaintiff moves for summary judgment to recover the sum of $10,768.38 against both Neil Kugelman and Goldspeedcom, Inc. The defendant Neil Kugelman denies liability.
The verified complaint, dated December 23, 2013, states that plaintiff is the assignee and/or purchaser of Bank of America which issued a credit card to defendants. The defendants used the credit card but defaulted in payment. The defendants owe $10,768.38 and due demand has been made for payment.
The first cause of action is based upon breach of contract and the second cause of action is based upon account stated. Paragraph 9 of the verified complaint states:
Bank of America, N.A./FIA CARD SERVICES, N.A./FLEET BANK (RI), N.A./MBNA AMERICA, N.A., assignor to plaintiff herein, did, prior to the transfer of the title, rights and privileges of said account, furnish and deliver to defendant(s) on or about 9/30/2011, a full, just and true statement of the unpaid balance due from defendant(s) a result of defendants use of said account. That the defendant(s) received, accepted and retained the accounting without rejection or objection being made.
Plaintiff submits the affidavit from Tom (last name illegible) indicating that Bank of America assigned the debt incurred by defendants for account No.4339931675702377. Attached to plaintiff's motion papers (Exhibit C) are copies of the credit card statements sent to defendant Goldspeedcom Inc. at Ste. 112, 444 Merrick Road, Lynbrook, New York. None of the statements indicate statements being sent to Neil Kugelman, individually.
Plaintiff also submits the affidavit of Melinda K. Stephenson, dated September 24, 2012, employed by FIA Card Services as Bank Officer, and which is a wholly owned subsidiary of the Bank of America.
Paragraph 4 of Ms. Stephenson's affidavit states:
That the account records of FIA Card Services, N.A. show that:
a.Account number 4339931675702377, was opened on 1/27/2009 by NEIL KUGELMAN and GOLDSPEEDCOM INC.
b.Pursuant to terms of the card member agreement with FIA Card Services, N.A., there was due and payable $9649.65 as of the charge off date of 9/30/2011.
c.Said agreement and account was, on 10/17/2011, sold, transferred and set over unto CACH, LLC, with full authority to do and perform all acts necessary for collection, settlement, adjustment, compromise or satisfaction of the said claim, and as of that date, there was due and payable on this Account the sum of $10768.38, with all just and lawful offsets, payments, and credits having been allowed.
d.There were no uncredited, payments, just counterclaims or offsets against said debt when sold.
There are no records or documents submitted by plaintiff demonstrating that defendant Neil Kugelman agreed to be personally liable either primarily or by guarantee. There is no credit card statement being sent to Neil Kugelman, individually. All statements are addressed to Goldspeedcom Inc.
Defendant Neil Kugelman submits his affidavit dated April 5, 2015. He was the Chief Executive Officer of Goldspeedcom Inc., which ceased operations in about March of 2011. Mr. Kugelman denies personal liability for the debt. No written guarantee was ever provided by him. Mr. Kugelman states that "Goldspeedcom Inc. was the sole user of the account and made all payments from it's Corporate account." No bills were ever in his name.
In reply, plaintiff's attorney Ira R. Sitzer, argues that Neil Kugelman is liable because:
Facts appearing in movant's papers which the opposing papers do not controvert may be deemed to be admitted, see Kuehne & Nagel, Inc. -v- Baiden, 36 NY2d 539; citing Laye v Shepard, 48 Misc 2d 478, affd 25 AD2d 498; see also Arteaga -v- 231/249 W 39 St. Corp., 45 AD3d 320, 847 N.Y.S.2d 5. The Defendants thus concede by the failure to actually deny any of the assertions in question that:
a) The Defendants jointly opened the Bank of America business account in question,
b) the Defendants made charges and payments on said account,
c) that Bank of America sent to the Defendants the Statements of Account annexed to the Notice of Motion,
d) that Defendants received the Statements of Account annexed to the Notice of Motion and retained same without written objection,
e) that no payments were made that were not reflected on the Statements of Account, and,
f) that the account was assigned to the instant Plaintiff. As of the date of this affirmation the account has not been resold to any other entity.
Plaintiff cites Fink, Weinberger, Fredman, Berman & Lowell, P.C. v. Petrides, 80 AD2d 781, 437 NYS2d 1 (1st Dept 1981) for the proposition that the receipt and retention of the account statements without objection within reasonable period creates a prima facie case of account stated independent of the original obligation.
Counsel also refers to the Federal Fair Credit Billing Act (15 USC § 1666) which requires a consumer to object in writing within 60 days after an account is received. Plaintiff alleges that Neil Kugelman violated the foregoing by not timely objecting. Plaintiff also relies upon case law for the proposition that use of the credit card constitutes an agreement to pay for the services and/or goods received. Citing Citibank (S.D.) N.A. v. Roberts, 304 AD2d 901, 757 NYS2d 365, Great Seneca Fin. Corp. v. Brown, 18 Misc 3d 140A (App Term, 1st Dept 2008), and Citibank (South Dakota), N.A. v. Keskin, 121 AD3d 635 (2nd Dept 2014).
The receipt of credit card bills by a defendant without objection does not necessarily make it an account stated because the failure to object raises a presumption of assent which may be rebutted by circumstances tending to support a contrary inference. See James Talcott Inc. v. U.S. Tel. Co., 52 AD2d 197, 383 NYS2d 39 (1st Dept 1976); Simmons v. Santoro, 36 Misc 3d 409, 232 NYS2d 602 (NYSup 1962).
In 1 NY Jur 2d Accounts and Accounting § 18, the following is stated:
A claim for an account stated may not be utilized simply as another means to attempt to collect under a disputed contract. In order to constitute an account stated, there must be a mutual examination of the claims of the respective parties, a balance struck, and an agreement either express or implied that the balance is correct, and that the party against whom it is found will pay it. A party relying upon an account stated is required to prove the account was presented, and by mutual agreement it was accepted as correct and that the debtor promised to pay the amount so stated.
In Volkening v. DeGraaf, 81 NY 268 (1880), the Court held that plaintiff failed to demonstrate any assent on the part of the defendant to pay the account stated claimed:
Now there is no evidence in this case from which a jury would be allowed to find or infer that the defendants ever assented, expressly or impliedly, that they were indebted to the plaintiffs in the balance or sum claimed, and undertook, by express or implied promise, that they would pay it.
In Waldman v. Englishtown Sportswear, Ltd., 92 AD2d 833, 460 NYS2d 552 (1st Dept 1983), the Court recognized the principle that the mere rendering of an account without an acceptance by the defendant does not constitute an account stated.
In Guernsey v. Rexford, 63 NY 631 (1875), the Court held that the mere rendering of an account does not make it an account stated, and failure to object to the account raises only a presumption of assent, which may be rebutted by circumstances tending to demonstrate a contrary inference. In this case, there was no agreement that the defendant pay compounded interest.
In Farley v. Promovision Video Displays Corp., 198 AD2d 122, 603 NYS2d 476 (1993) the grant of summary judgment to the plaintiff was reversed, in part, because there existed an issue as to for whose benefit the services were rendered, i.e. - whether performed for defendant Weiss or for defendant Promovision.
Also, in DerOhannesian v. Albany, 110 AD3d 1288, 975 NYS2d 188 (3d Dept 2013), the Court upheld the dismissal of the contract claim because there was no mutual assent to "assume that the parties are truly in agreement with respect to all material terms." There was no agreement on the price to be charged, which was a material term of the agreement.
Application of the above principles of law to the case at bar demonstrates that an account stated was never established by the failure of the defendant Neil Kugelman to object to the credit card statements. Plaintiff has submitted no proof that defendant Neil Kugelman agreed to be individually responsible for the charges or guaranteed payment if defendant Goldspeedcom Inc. failed to pay. All statements were billed to defendant Goldspeedcom Inc. and never to defendant Neil Kugelman. Thus, the failure of Neil Kugelman to object upon receipt of the credit card bills cannot impose an obligation to pay when there was no agreement or consent to be responsible for charges during the history of this account, which is clearly a corporate obligation.
Based upon the foregoing, plaintiff's motion for summary judgment is granted as to defendant Goldspeedcom Inc., and denied, as against Neil Kugelman, to whom this court grants summary judgment dismissing all claims asserted against him individually.
So Ordered:
/s/ Hon. Scott Fairgrieve
DISTRICT COURT JUDGE
Dated:May 28, 2015