Fundfi Merchant Funding, LLC v. Atlantic Roofing Solutions LLC

2024 NY Slip Op 30910(U)

Opinion

Fundfi Merchant Funding, LLC v Atlantic Roofing Solutions LLC

2024 NY Slip Op 30910(U)

March 19, 2024

Supreme Court, Kings County Docket Number: Index No. 536050/2023 Judge: Francois A. Rivera Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication.

FILED: KINGS COUNTY CLERK 03/19/2024 01:00 PM INDEX NO. 536050/2023 NYSCEF DOC. NO. 18 RECEIVED NYSCEF: 03/19/2024

At an IAS Term, Part 52 of the.Supreme Court of the

State of New York, held.in.

and for the County of Kings, at the Courthouse, at Civic· Center, Brooklyn; New York, on the 19th day of March

2024

HONORABLE FRANCOIS A. RIVERA

--- ------- . --- --- ----------------------------------X FUNDFI MERCBANT FUNDING, LLC, DECISION & ORDER

Plaintiff, Index No. 536050/2023 "against-

ATLANTIC ROOFING SOLUTIONS LLC and CHRISTOPHER ROY SHEPPERD,

Defendants .

.--. -------. ------------ .-- .. -------- .----- .. -----. -------. --. ·x· Recitation in accordance with CPLR 2219 ( a) of the papers considered on the notice-of motion filed by plaintiffFundfi Merchant Funding, LLC., (hereinafter FMF or plaintiff} on January 16, 2024, under motion sequence one for an order pursuant to CPLR 3212 granting summary judgment in its favor on the issue of liability on the claims asserted again.st defendant Atlantic Roofing Solutions LLC (hereinafter the corporate defendant) and Christopher Roy Sheppard (hereinafter the guarantor) (collectively as defendants).

-Notice of Motion -Affirmation.in Support -Affidavit in Support

Exhibits 1 through 6

-Statement of Material Facts -Memoranclum of law in support

BACKGROUND

Oil Deceinber 11, 2 023, FMF commenced the instant action by filing a summons and verified cotnplaint Wit[i the Kings. County Clerk's office.(KCCO). OnJatma:ry 1,

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2024, the defendants joined issue by interposing and filing a joint verified answer with the KCCO. The complaint alleges thirteen allegations of factin support of two causes of action, namely, breach of contract and breach of a personal guaranty agreement.

The verified complaint alleges the following salient facts, arnong others. On June.

16, 2023, plaintiff and defendants entered into an agreement (hereinafter the agreement)

whereby plaintiff agreed to purchase the company defendant's. future receivables in the amountof$J 19,280.00 for the purchase price of $84,000.00.

The defendants ag;teed that irt the event ofits default under the agreement, such as the one alleged herein, the full uncollected receivables plus all fees due under the agreemc;!nt(because of the default) wouldbecome immediately due and payable in full to the plaintiff.

On or.about October27, 2023,Atlantic Roofing Solutions LLC,: materially breached the terrns of the agreement by causing the receivables to be deposited into a separate account not designated in the agreement, blocked the payment due to plaintiff so that plaintiff could not collect the amount of receivables due, and/or prevented plaintiff from collecting the amount due to non-sufficient funds or otherwise failed to pay and/or prevented plaintiff from collecting the amount due pursuant to the payment schedule in ·the agreement and thereby defaulted under its tenns, or otherwise violated a material term of the agreement which constituted an event of default thereunder. Based upon the.

foregoing and after accounting for payme11tsinade cmd applicable fees,Atlantic Roofing Solutions LLCowes plaintiff a balance in the amount of$60,347.00;

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In addition, guarantor agreed to guarantee all ammmts owed to plaintiff from company defendant upon a breach in performance by company defendant.

The corporate defendant and the guarantor have failed to pay the amounts due and owing under the agreement. There remains a balance due and owingto plaintiff on the agreement in the amount of$60,347.00 plus interest,. costs, disbursements, and attorney's fees.

LAW AND APPLICATION

There is no dpposition to the instant motion. However, ''[a] summary judgmei1t

motion shouldnot be granted merely because the party against whom judgment is sought failed to submit papers in opposition to the motion, {Le., 'defaulted')" (Liberty Taxi Mgt.,

Inc. v Gincherman, 32AD3d276,278 n [lstDept2006],citing VermontTeddyBear Co., v 1-800 Beargram Co., 373 F3d 241,244 [2d Cir 2004] [''the failure to oppose a motion for summary judgment alone does not justify the granting of summary judgment. Instead, the ... court must still assess whether the moving party has fulfilled its burden of demonstrating that there is no genuine issue of material fact and its entitlement to judgment as a matter of law'']; see Cuginiv System Lumber Co., Inc., 111 AD2d 114, 115 [1st Dept 1985]).

It is well established that summary judgment. may· he granted only when no.triable issue of fact exists (Alvarez v ProspectHospital, 32 AD3d 276 [1986]). The burden is upon the 1p:oving party to make a prima fade showing that he or she is entitled to suinmafy Judgmentas a matter ofla:w by presenting evidence in admissible form

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demonstrating the absence of any material issues of fact (Giuffrida v Citibank, 100 NY2d 72, 81 [2003]).

A failure to make that showing requires the denial of the stunmary judgment motion; regardless of the adequacy of the opposing papers (Ayotte v Gervasio, 81 NY2d 1062, 1063 [1993]). Ifa primafacie showing has been made, the burden shifts to the opposing party to produceevidentiary·proof sufficient to establish the·existence of material issues of fact (Alvarez, 68 NY2d at 324).

Pursuant to CPLR 3212 (b), a court will granta motion for summary judgment upon a determination that the movant1s papers justify holding, as a matter oflaw,. that there is no defense to the cause of action or that the cause of action or defense has no merit. Furthermore, all the evidence must be viewed in the light most favorable to the opponent of the motion (Marine Midland BankvDino & Artie 1s Automatic Transmission Co., t68AD2d 610 [2d Dept 1990]).

The essential elements of a cause of action to recover damages for breach of contract are "the existence of a contract, the plaintiffs perfonnance pursuant to the contract, the defendants breach ofits contractual obligations, and damages resulting from the breach" (Cruz v Cruz, 213 AD3d 805, 807 [2d Dept2023]).

In the case at bar, the only sworn testimony submitted. by FMF in support ofthe mod on was an affirmation of David Fogel, its counsel (hereinafter Fogel), and an affidavit of Eryn Black (hereinafter Black). Fogel's affinnation contends that the facts in support of the motion at¢ contained in the affidavit of Black.

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Fogel's affirmation demonstrates no personal knowledge of any of the transactional fac:ts alleged in the complaint. "An attorney's affirmation that is not based upon personal knowledge is ofno probative or evidentiary significance" (Nerayojf v Khorshad, 168 AD3d 866, 867 [2d Dept 2019], citing Warrington v Ryder Truck Rental, Inc., 35AD3d455, 456 [2d Dept 2006]).

Black's affidavit is used to authenticate the agreement which was allegedly breached by the defendants. Black averred that he is the operation manager for FMF and, as such, has personal knowledge ofits business practices and procedures, He further averred that the factual allegations proffered in support of the 1t1otion for summary judgment are derived from his review ofthe plaintiffs business records.

It is noted that Black did not aver that he was a signatory to the agreement or that he participated in the execution of same; Furthermore, the document submitted insupport of the amount FMF purportedly provided to the defendaht is less than the agreed upon purchase price of$84,000;00. The lesser amount of$79;750;00 was unsupported. This fact alone raises material issues of fact regarding the plaintiffs perfonnance under the ·agreement.

Black referred to the doc:uments attached to the motion, namely, the agreement and two other documents denominated as proof of funding and a payment history. Black averred thatthe payment history, annexed as exhibit 6 to his affidavit, provided proof of

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the defendants; default.I Black averred thaton or about October 27, 2023, FMF received from its banka return code indicating that defendant's payment, which was made by ACH debit that is initiated by plaintiff, failed because plaintiff's access and ability to make the ACI-ldebit was restricted due to unrelated legal action (R.16); 2 Black contended thatthis constituted a default under the agreement. The bankrecord ofFMF which purportedly reflected a code (Rl 6) and a restriction by the defendants was not annexed to the motion.

"A pr~per foundation for the adinission ofa business record must be provided by someone with personal knowledge of the maker's business practices and procedures'' (Citibank, NA. v Cabrera, 130 AD3d 861, 861 [2d Dept 2015]). Generally, "the mere filingofpapers received from other entities, even if they are retainedin the regular course of business, is insufficient to qualify the documents as business records" (Bank ofNY. Mellon v Gordon; 171 AD3d 197,209 [2d Dept2019] quoting Standard Textile Co. v National Equip,. Rental, 80 Ad2d 911, 911 [1981 ]}. ''However, such records may be admitted into evidence if the rei:ipient can establish personal knowledge of the maker's businesB practices and procedures or establish that the records provided by the maker were incorporated into the recipient's own records and. routinely relied Upon by the recipient in its own business" (Bank of NY. Mellon, 171 Ad3d at 209).

•1 'Blackdescribed exhibit 6 .as plaintiff's report of defendant's account, which is. received directly from the plaintiff's automated cleari11ghouseA¢H proces~or and was rc,corded electron:ically i!l plaintiff~s computer.software ;i.nd maintained in the Qrdinary course 9f p Jaintiff'll business, but it is notclear ifth is was. or was not actually part of the plaintiff's business r~cord. . . . . . . . 2 Black does not explain what RI 6 means; despite relying on.thkas evidence ofdefii.uJt;

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Here, the payment history under exhibit 6 is one page and is in a font so small that it is not discemable with the naked eye, The Court was able to enlarge the exhibit After doing so, the court found that the document was not self-explanatory and that there was an insufficient foundation for its admission as a business record. 3 Furthermore, the bank record ofF:rvJF reflecting the Rl6 code was not annexed, "[I]t is the business record itself, not the foundational affidavit, that serves as proof of the matter asserted" (Citibank, NA, v Potente, 210 AD3 d 861, 862 [2d Dept 2022], quoting Bank ofN. Y. Mellon, .1 71 Ad3d at. 205}, Accordingly, evidence of the contents ofbusiness records is admissible only Where the records themselves are introduced. Without their introduction, a witness's testimony as to the contents of the records is inadmissible hearsay (see Barik pfNY. Mellon, 171 AD3d at 198), In sum, FMF has failed to make a prima facie showing of entitlementto summaryjudgment on its claim thanhe corporate defendant breached the agreement. Consequently; FMF has failed to show that the obHgation of the guarantor was ever triggered. In sum, plaintiff c:annot make a prima facie showing of entitlement to judgment on its claim$ for breach of the agreements or of the guaranty.

CONCLUSION

The motion by plaintiffFundfi Merchant Funding, LLC., for an order pursuant to CPLR 3212 granting swnmary judgment in its favor on the issue df liability on. the claims

3 RJ6 can be found in the enlarged. do~ument under a column labeled "Return Code;" but it is.not explained in the.

document Addjtiona]ly, to tlte left of the ''Return Code" colum.n is a. column labeled "Return Reason" an.d there .are no entries alongside thi;i R.16 entries. ··

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asserted against defendant Atlantic Roofing Solutions LLC and Christopher Roy is denied.

A copy ofthis decision and order, along with notice ofentry, shall be served upon defendants and filed with the Court within 20 days of entry.

The foregoing constitutes the decision and order ofth··.e·-···Court

ENTER:

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J.S.C.

HON. FRANCOlSA. RIVEAA

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