Calltrol Corp. v. DialConnection, LLC

CourtNew York Supreme Court
DecidedMay 10, 2016
Docket2016 NYSlipOp 50765(U)
StatusPublished

This text of Calltrol Corp. v. DialConnection, LLC (Calltrol Corp. v. DialConnection, LLC) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Calltrol Corp. v. DialConnection, LLC, (N.Y. Super. Ct. 2016).

Opinion



Calltrol Corporation, Plaintiff,

against

DialConnection, LLC also known as VESPER TECHNOLOGIES, L.L.C., Defendant.




65994/2015

APPEARANCES:

LAW OFFICE OF AMOS WEINBERG
By: Amos Weinberg, Esq.
Attorneys for Plaintiff
49 Somerset Drive South
Great Neck, New York 11020

FLASTER/GREENBERG P.C.
By: John W. Fried, Esq.
Attorneys for Defendant
427 Bedford Road, Suite 390
Pleasantville, New York 10570
Alan D. Scheinkman, J.

Defendant DialConnection, LLC, also known as Vesper Technologies, L.L.C. ("Defendant" or "DialConnection"), moves pursuant to CPLR 3211(a)(5) for an order dismissing the Verified Complaint of Plaintiff Calltrol Corporation ("Plaintiff" or "Calltrol") on the basis of [*2]the statute of limitations. Plaintiff opposes the motion.

THE ALLEGATIONS OF THE COMPLAINT

This action for breach of contract was initiated by Plaintiff's filing of its Summons and Complaint [FN1] on September 28, 2015. Defendant moved to dismiss the Complaint on December 11, 2015.

The following are the pertinent allegations of the Complaint, which the Court must accept as true for the purposes of this motion. All allegations in the Complaint are set forth under the heading "First Cause of Action." Although Plaintiff does not explicitly identify the claim asserted by its sole cause of action, the allegations collectively reflect that Plaintiff is raising a claim for breach of contract.

Plaintiff alleges that it is an authorized distributor of software products and other third party products for C.T. Ventures, Inc. (Complaint at ¶ 9). It further alleges that Plaintiff entered into a "Reseller Agreement" with Defendant in January 2001, by which Defendant became a licensee of Plaintiff to market and resell certain products for which Plaintiff was a licensed distributor (the "January 2001 Contract") (id. at ¶¶ 10-12). A copy of the January 2001 Contract is attached to the Complaint (id. at Ex. B).

Pursuant to the January 2001 Contract, Plaintiff granted Defendant a non-exclusive license to market and resell certain products, which the January 2001 Contract states are identified in Schedule A thereto (id. at Art. 1.1). However, Schedule A is not included with the copy of the January 2001 Contract that is attached to the Complaint and annexed to Defendant's moving papers. The submitted version of the January 2001 Contract only includes Schedules B and C. Further, the pagination shows that page 6 of 11, which presumably included Schedule A, has been omitted from the copies filed with the Court.

Plaintiff further alleges in the Complaint that both parties performed their obligations under the January 2001 Contract, "except that defendant failed to make certain payments due" (Complaint at ¶ 14). It claims that the parties subsequently entered into another contract "renewing their relationship" (id. at ¶¶ 15-16). Certain portions of a "Reseller Agreement" executed in May 2010 (the "May 2010 Contract") are attached to the Complaint (id. at Ex. C). Pursuant to the May 2010 Contract, Defendant was again granted a non-exclusive license to market and resell certain products for which Plaintiff was a licensed distributor, which products are identified in Schedule A thereto (id.). Schedule A to the May 2010 Contract sets forth the products as follows:

OTS (Object Telephony Server) — Schedule C license
Various other programs and documentation for Computer Telephone Integration — Schedule C license
PS240 Developer's Kit for CAPDE/OTS — Schedule D license
Reseller Support — Schedule E
Third Party Products

Plaintiff in the Complaint cites to Article 7.1(a) of the May 2010 Contract, which reads, in its entirety, as follows:

7.1a Balance Due Reseller [i.e., Defendant] acknowledges current indebtedness to [Plaintiff] in the sum of Four Hundred Nineteen thousand and 00/100 ($419,000.00), the Balance Due.' Annexed hereto is a breakdown of the Balance Due." (Complaint at ¶¶ 18-19 and Ex. C) (emphasis in original).

Exhibit C to the May 2010 Contract consists of a spreadsheet captioned "Account Statement" dated April 28, 2010 and appears to have been issued by Plaintiff and addressed to Defendant. It includes a series of transactions and reflects a "Balance Due" of $419,000.00 (id. at ¶ 20 and Ex. C). Plaintiff alleges that Defendant is liable to Plaintiff for $419,000 less subsequent payments made by Defendant of $42,794.41, for a total of $376,206.59 (id. at ¶¶ 21-23).

As relief, Plaintiff seeks a judgment against Defendant in the amount of $376,206.59, with interest from May 10, 2010 and costs.



DEFENDANT'S CONTENTIONS IN SUPPORT OF ITS MOTION

In support of its motion, Defendant submits an affirmation from its counsel, John W. Fried, Esq. (Flaster/Greenberg P.C.), and a memorandum of law.

The purpose of counsel's affirmation is to attach a copy of the Summons and Complaint (Affirmation of John W. Fried, Esq. dated December 10, 2015 ["Fried Aff."] at ¶¶ 1-3 and Ex. A).

As its legal argument set forth in its memorandum of law, Defendant argues that the Complaint should be dismissed pursuant to CPLR 3211(a)(5) because the sole cause of action for breach of contract is governed by the applicable four year statute of limitations set forth in Article 2-725(1) of New York's Uniform Commercial Code ("UCC").

Defendant contends that the UCC applies to the January 2001 Contract because that agreement is for the market and resale of software products and other third party products. Defendant asserts that the UCC's broad application to all transactions in goods covers this contract, as computer software is considered to be a "good" for UCC purposes. Defendant further argues that the UCC also applies to the January 2001 Contract regardless of whether there was a direct sale of goods or licensure for the sale of goods, because the UCC governs all "transactions" and not only the sale of goods. Defendant also cites to case law that it asserts stands for the proposition that the UCC applies to software licensing contracts of the type at issue in this action.

Defendant contends that even if Plaintiff's cause of action is deemed to be a claim for account stated as opposed to breach of contract, the UCC's statute of limitations nonetheless applies. It argues that the "Balance Due" of $419,000.00 set forth in the May 2010 Contract did not reinstate Defendant's debt to Plaintiff, as the May 2010 Contract did not require Defendant to make payments to Plaintiff for the past due balance. Even if the "Balance Due" reinstated the debt, Defendant asserts that this account stated claim arises out of the same allegation as a breach of contract claim, and is accordingly governed by the UCC's four year limitations period. It further asserts that a party may not circumvent the UCC by entering into a new contract for an account stated. Defendant contends that because both the [*3]January 2001 Contract and the May 2010 Contract and the balance due thereunder arise out of the same allegations, i.e., Defendant's alleged failure to make payments due under the January 2001 Contract, the UCC governs both agreements and the four year statute of limitations warrants the dismissal of Plaintiff's Complaint.

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Calltrol Corp. v. DialConnection, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/calltrol-corp-v-dialconnection-llc-nysupct-2016.