Opinion
Index No. 611447/2023 Motion Seq. Nos. 001 002
08-29-2024
FORA FINANCIAL ASSET SECURITIZATION 2021, LLC, Plaintiff, v. D-K RECYCLING, LLC d/b/a D-K RECYCLING LLC AND BOB CALVERT, JR. Defendants.
Unpublished Opinion
Motion Submitted: 5/22/2024
DECISION AND ORDER
EILEEN C. DALY-SAPRAICONE, JUSTICE
The following papers were read on this motion
NYSCEF DOCUMENT NUMBERS
Notice of Motion, Statement of Material Facts, Memorandum of Law Affirmation, Exhibits ................................
30 - 41
Affirmation in Opposition ..................................................................................................................................
43 - 47
Reply ................................................................................................................................................................
48
Order to Show Cause, Affidavit, Affidavit of Service .........................................................................................
50 - 54
Plaintiff, FORA FINANCIAL ASSET SECURITIZATION 2021, LLC (hereinafter. Plaintiff) moves pursuant to CPLR Section 3212 for summary judgment against Defendants D-K RECYCLING, LLC d/b/a D-K RECYCLING LLC (hereinafter, Company Defendant) AND BOB CALVERT, JR (hereinafter, Guarantor)(hereinafter collectively, Defendants) seeking a judgment against the Defendants, jointly and severally in the principal amount of $52,963.69, with interest from December 5, 2022 (the date of the breach), costs and disbursements; for an order pursuant to CPLR 3211(a)(1) and (b), dismissing the Defendants' counterclaims for failure to state a claim and based upon documentary evidence and settled law; and pursuant to CPLR 3211(a)(1) and (a)(7) dismissing the Defendants' counterclaims for failure to state a claim and based upon the documentary evidence and settled law; and for an order awarding Plaintiff such other and further relief as this Court deems just and proper (hereinafter, Motion Sequence No. 001).
After Motion Sequence No. 001, Defendants' counsel filed an Order to Show Cause pursuant to Section 321 of the CPLR and Section 475 of the Judiciary Law, allowing the Law Office of Dominick Dale, Esq., to withdraw as attorneys of record for all Defendants. No opposition was submitted by Plaintiff or Defendants themselves (hereinafter, Motion Sequence No. 002). Motion Sequence No. 001 and Motion Sequence No. 002 are consolidated for decision as set forth herein below.
The instant action arises from the Defendants' alleged breach of a merchant cash advance agreement entered into by the parties on July 10, 2022. Pursuant to the terms of the agreement. Plaintiff purchased 12% of future accounts receivables of Defendants, up to the sum of $133,280.00 in exchange for an upfront purchase price of $95,200.00. Guarantor executed a personal guaranty of Company Defendant's performance of its obligation under the agreement. The Defendants allegedly remitted to Plaintiff $80,456.31, leaving an unpaid balance of $52,823.69. As a result of the Defendants' alleged failure to remit payment, Plaintiff commenced the instant action on July 20, 2023, to recover damages for breach of contract, breach of the guaranty, conversion, and account stated. Issue was joined when the Defendants answered the complaint on August 17, 2023.
Plaintiff moves for summary judgment on the complaint, contending, inter alia, that the Defendants' affirmative defense in claiming usury is inapplicable to the instant action since the agreement the parties entered into is not a loan. Plaintiff further contends that because the contract in question contains mandatory reconciliation and adjustment provisions; is for an indefinite term; and provides limited recourse in bankruptcy, the agreement cannot be considered a loan. In addition. Plaintiff claims the Defendants' remaining affirmative defenses are boilerplate and lack any explanation and Defendants' counterclaims are facially defective. In support of its motion. Plaintiff submits, among other things, the affidavit of its Director of Collections &Servicing, Jonathan Headley, which affidavit states that the business records attached to the affidavit were made in the regular course of business. The affidavit further details the Defendants' alleged breach of the agreement by failing to pay back their remaining balance of receivables.
In opposition, the Defendants argue that the affidavit relied on by Plaintiff fails to lay a proper foundation for the admission of any business records, that the agreement is a usurious loan and is void as a matter of law, that the Plaintiffs requested default fee and attorney's fees are unenforceable penalties, and summary judgment is improper and premature at this time.
In reply, Plaintiff maintains the affidavit of its Director of Collections &Servicing establishes that the records in question were made in the regular course of business. Further, Plaintiff argues the Defendants failed to present any facts in their opposition which demonstrate the existence of triable issues of fact.
CPLR § 3212 provides, "any party may move for summary judgment in any action, after issue has been joined..." Summary judgment should only be granted where it is clear that no material and triable issue of fact is present. If there exists a factual issue that can be argued, then summary judgment should not be granted {see Matter of New York City Asbestos Litig., 33 N.Y.3d 20 [2019]; see also Forrest v Jewish Guild for the Blind, 3 N.Y.3d 295, 315 [2004], citing Glick &Dolleck v Tri-Pac Export Corp., 22 N.Y.2d 439, 441 [1968]). "Once the movant makes the proper showing, 'the burden shifts to the party opposing the motions for summary judgment to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action'" (see Stonehill Capital Mgt. LLC v Bank of the W., 28 N.Y.3d 439, 448 [2016], quoting Alvarez r Prospect Hosp., 68 N.Y.2d 320, 324 [1986]). "The 'facts must be viewed in the light most favorable to the non-moving party'" (see Stonehill Capital Mgt. LLC, 28 N.Y.3d at 448, quoting Vega v Restrani Constr. Corp., 18 N.Y.3d 499, 503 [2012]). "However, bald, conclusory assertions or speculation and 'a shadowy semblance of an issue' are insufficient to defeat summary judgment, as are merely conclusory claims" (see Stonehill Capital Mgt. LLC, 28 N.Y.3d at 448, quoting S.J. Capelin Associates, Inc. v Globe Mfg. Corp., 34 N.Y.2d 338, 341 [ 1974]; see also Putrino v Buffalo Ath. Club, 82 N.Y.2d 779,781 [1993]).
CPLR § 4518(a) provides in part, "any writing or record, whether in the form of an entry in a book or otherwise, made as a memorandum or record of any act, transaction, occurrence or event, shall be admissible in evidence in proof of that act, transaction, occurrence or event, if the judge finds that it was made in the regular course of any business and that it was the regular course of such business to make it, at the time of the act, transaction, occurrence or event, or within a reasonable time thereafter..." "A proper foundation for the admission of a business record must be provided by someone with personal knowledge of the maker's business practices and procedures" (see Aurora Loan Servs., LLCv Mercius, 138 A.D.3d650, 652 [2d Dept 2016], quoting Citibank. N.A. v Cabrera. 130 A.D.3d 861 [2d Dept 2015], citing Palisades Collection, LLC v Kedik, 67 A.D.3d 1329, 1331 [4th Dept 2009]). "The essential elements of a cause of action to recover damages for breach of contract are: (1) the existence of a contract[;] (2) the plaintiffs performance pursuant to the contract[;] (3) the defendant's breach of its contractual obligations[] and (4) damages resulting from the breach" (see Kollatz v KOS Bldg. Group, LLC, 118 A.D.3d 1175, 1177 [2d Dept 2020] [internal 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" (Encore Nursing Ctr. Partners Ltd. Partnership-85 v Schwartzberg, 172 A.D.3d 1166, 1168 [2d Dept 2019] [internal quotation marks omitted]).
'"The rudimentary element of usury is the existence of a loan or forbearance of money, and where there is no loan, there can be no usury.' To determine whether a transaction constitutes a usurious loan: 'The court must examine whether the plaintiff is absolutely entitled to repayment under all circumstances. Unless a principal sum advanced is repayable absolutely, the transaction is not a loan. Usually, courts weigh three factors when determining whether repayment is absolute or contingent: (1) whether there is a reconciliation provision in the agreement; (2) whether the agreement has a finite term; and (3) whether there is any recourse should the merchant declare bankruptcy'" (see Principis Capital, LLC v I Do, Inc., 201 A.D.3d 752, 754 [2d Dept 2022], quoting LG Funding, LLC v United Senior Props, of Olathe, LLC, 181 A.D.3d 664, 665, 666 [2d Dept 2020]; see also Donatelli v Siskin, 170 A.D.3d 433, 434 [2d Dept 1991]). Further, "there is a strong presumption against a finding of usury, and at trial..the party claiming usury will be required to establish usury by clear and convincing evidence (see Ujeta v Euro-Quest Corp., 29 A.D.3d 895, 896 [2d Dept 2006], citing Mahler v Bernsley 265 A.D.2d 531 [2d Dept 1999]).
Plaintiff has met its prima facie burden in establishing entitlement to a grant of summary judgment. The affidavit provided by Plaintiff in support of its motion was made by its Director of Collections &Servicing, and it establishes that the records attached as exhibits were made in accordance with the company's business and record keeping practices. Thus, contrary to the Defendants' contention, the affidavit has in fact properly laid the foundation to introduce as evidence the parties' agreement and payment history which were attached as exhibits. Plaintiffs evidence establishes, prima facie, that Company Defendant breached the agreement and that Guarantor breached the guaranty. Moreover, Plaintiff is also correct in its assertion that the remaining affirmative defenses in the Defendants' answer are boilerplate, lack any explanation, and go unaddressed in their opposition (see Starkman v City of Long Beach, 106 A.D.3d 1076, 1078 [2nd Dept 2013]). Consequently, the Defendants' opposition to fails to raise any triable issues of fact to Plaintiffs prima facie showing. Thus, granting Plaintiffs prima motion for summary judgment is proper.
With respect to Motion Sequence No. 002, this Court's Order to Show Cause (hereinafter, OSC) dated April 30, 2024 provided, in pertinent part,
ORDERED that moving counsel shall file an Affidavit of Service evidencing proof of service upon Defendants, D-K Recycling LLC d/b/a D-K Recycling LLC and Bob Calvert Jr. via regular mail, certified mail return receipt (including tracking number and proof of delivery) and via overnight delivery with delivery confirmation (including tracking number and proof of delivery) on or before May 21,2024.
Accordingly, this Court requested that Defendants' counsel serve his client in three (3) ways, via regular mail, certified mail, return receipt requested and via overnight delivery with delivery confirmation. Defendants' counsel only served his clients via certified mail (NYSCEF Docket Entry No. 53). The method of service provided for in an order to show cause is jurisdictional in nature and must be strictly complied with. Rotanelli v Board of Elections of Westchester County, 109 A.D.3d 562 [2d Dept 2013]; Codrington v Citimortgage, Inc., 118 A.D.3d 843 [2d Dept 2014], The Court finds that Defendants' counsel failed to provide this Court with proof that the service provisions of the OSC were complied with and failed to contact this Court to request an alternative method of service. As Defendants' counsel failed to comply with the service provisions of the OSC, his application must be denied.
Accordingly, it is hereby
ORDERED that Plaintiff, FORA FINANCIAL ASSET SECURITIZATION 2021, LLC's motion for summary judgment (Motion Sequence No. 001) is hereby GRANTED; and it is further
ORDERED that upon service of a copy of this order with notice of entry, the Nassau County Clerk is directed to enter judgment against Defendants, D-K RECYCLING, LLC d/b/a D-K RECYCLING LLC and BOB CALVERT, JR., jointly and severally, in the amount of S52,963.69 plus interest from December 5, 2022, costs and disbursements; and it is further
ORDERED that the Order Show Cause by the LAW OFFICE OF DOMINICK DALE ESQ., to be relieved as counsel for the Defendants (Motion Sequence No. 002) is hereby DENIED; and it is further
ORDERED that any relief not specifically addressed herein is DENIED.
This constitutes the Decision and Order of the Court.