iQuanti, Inc. v. RTW Retailwinds Acquistion LLC

2024 NY Slip Op 33169(U)

• Court: New York Supreme Court, New York County
• Decided: September 6, 2024
• Docket: Index No. 154683/2024
• Status: Unpublished

Opinion

iQuanti, Inc. v RTW Retailwinds Acquistion LLC 2024 NY Slip Op 33169(U) September 6, 2024 Supreme Court, New York County Docket Number: Index No. 654381/2022 Judge: Emily Morales-Minerva 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. INDEX NO. 654381/2022 NYSCEF DOC. NO. 61 RECEIVED NYSCEF: 09/06/2024

SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. EMILY MORALES-MINERVA PART 42M Justice X INDEX NO. 654381/2022 IQUANTI, INC. MOTION DATE 03/27/2024 Plaintiff, MOTION SEQ. NO. 001 - V-

RTW RETAILWINDS ACQUISTION LLC, DECISION + ORDER ON MOTION Defendant. X

The following e-filed documents, listed by NYSCEF document number (Motion 001) 29, 30, 31, 32, 33, 34, 35,36,37,38, 39,40,41,42,43,44,45,46,47,48,49, 50,51 were read on this motion to/for SUMMARY JUDGMENT {AFTER JOINDER)

APPEARANCES:

Hubell & Associates, LLC, New York, New York (Richard A. Hubell Esq., of counsel) for plaintiff.

HON. EMILY MORALES-MINERVA:

In this action £or, among other things, breach of contract,

plaintiff, I QUANT I, INC. ("plaintiff") , moves for an order

granting it summary judgment against defendant, RTW RETAILWINDS

ACQUISITION LLC ("defendant") see CPLR § 3212 [governing summary

judgment]). Defendant does not submit opposition to the motion.

For the reasons set forth below, the motion is granted, in part,

and summary judgment is entered in favor of plaintiff on the issue

of liability alone.

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BACKGROUND

Plaintiff is a digital marketing firm that provides

consulting services related to digital commerce, and defendant is

the operator of numerous brand trade names which require data

driven digital marketing services. The parties entered into the

Master Services Agreement ("MSA") on November 9, 2020, and the

Statement of Work ("SOW", collectively the "Agreements"), which

was incorporated into the MSA, on May 16, 2021, for plaintiff to

provide digital marketing services to defendant for a period of

one-year (see NY St Cts Elec Filing [NYSCEF) Doc. Nos. 33 and 34,

Agreements) .

In exchange for plaintiff's marketing services, defendant

agreed to compensate plaintiff in accordance with the detailed fee

structure delineated in the SOW see NYSCEF Doc. No. 34, SOW,

Section 4[c]). According to the MSA, defendant was required to pay

undisputed invoices issued by plaintiff within thirty (30) days of

receipt see NYSCEF Doc. No. 33, MSA, Section 3.2). Defendant

paid plaintiff's invoices, without issue, through March of 2022

(see NYSCEF Doc. No. 30, Affidavit of Viswanatha Sastry

Rachakonda) .

On April 12, 2022, defendant notified plaintiff that it would

not renew the one-year term of the SOW, which was set to terminate

on May 16, 2022. However, in accordance with the parties'

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Agreements, plaintiff continued to provide contracted services

through May 16, 2022, the termination date of the SOW see NYSCEF

Doc. No. 001, Complaint).

Plaintiff alleges that in April and May of 2022, defendant

failed to pay plaintiff's undisputed invoices (see NYSCEF Doc. Nos

35 - 36, Schedule of Pending Invoices). As a result, plaintiff

emailed defendant to inquire about the outstanding invoices, and

followed-up with defendant numerous times (see NYSCEF Doc. No. 37,

E-mails from plaintiff to defendant}. Plaintiff alleges that

despite following up with defendant, the invoices remained

delinquent and its e-mails went unanswered (id.} . Plaintiff

submits that Jack Saadia, Vice President of defendant, placed

plaintiff's payments on an indefinite "hold" (NYSCEF Doc. No. 46,

Jack Saadia's e-mails}. During this time frame, the invoices were

never objected to see NYSCEF Doc. No. 30, Affidavit of Viswanatha

Sastry Rachakonda}.

On August 17, 2022, plaintiff sent defendant a demand letter,

wherein plaintiff demanded "prompt payment in full of the

outstanding balance" of $390,918.80 (see NYSCEF Doc. No. 38, Demand

Letter). On September 9, 2022, defendant replied and noted that

"[defendant] disputes amounts allegedly due to plaintiff . . . as

[defendant] has had issues with [plaintiff]" (NYSCEF Doc. No. 39,

Response Letter}.· Following this exchange, defendant continued to

refuse to pay plaintiff see NYSCEF Doc. No. 001, Complaint).

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As a result of defendant's failure to pay plaintiff, plaintiff

commenced this action on November 16, 2023, asserting four causes

of action against defendant for breach of contract, unjust

enrichment, quantum meruit, and account stated see NYSCEF Doc.

No. 001, Complaint). At the time of filing, the invoices were

twenty months overdue (id.) . Plaintiff alleges, among other

things, that defendant breached the Agreements by failing to pay

plaintiff for the services rendered, and plaintiffs were damaged

as a result in an amount totaling "no less than $3 90,918.80" (id.) .

Defendant filed an untimely answer on January 6, 2023, and asserted

twenty-four affirmative defenses (NYSCEF Doc. No. 004, Answer).

On June 15, 2023, the court (N. Bannon, J. S. C.) issued a

preliminary conference order, setting forth specific discovery

deadlines (NYSCEF Doc. No. 10, Preliminary Conference Order) .

Immediately thereafter, plaintiff served a deposition notice on

defendant, and demanded it produce documents relevant to

plaintiff's causes of action (see NYSCEF Doc. No. 007, Notice of

Deposition) .

Months later, at the compliance conference, the same justice

determined that defendant failed to respond to plaintiff's

discovery demands in accordance with the June 15, 2023 order

{NYSCEF Doc. No. 12, Compliance Conference Order, August 17, 2023).

Accordingly, the court (N. Bannon, J.S.C.) ordered defendant to

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serve document responses and respond to discovery demands by August

31, 2023 (id.).

Defendant served discovery demands on plaintiff on October 3,

2023, but did not respond to plaintiff's discovery requests (see

NYSCEF Doc. No. 17, Request for Production). Consequently,

following a status conference, the court (N. Bannon, J.S.C.)

ordered that defendant had waived discovery because defendant

served demands on October 3, 2023, thirty-three days after the

court-ordered deadline (see NYSCEF Doc. No. 22, Status Conference

Order, October 5, 2023). The court again ordered defendant to serve

document responses within fourteen days of the order (id.).

On October 18, 2023, defertdant responded to plaintiff's

discovery demands, and produced only two documents demanded by

plaintiff the MSA and the SOW (NYSCEF Doc. No. 19). Defendant

alleged that it was unable to comply with plaintiff's discovery

demands due to a cyber-attack, which resulted in a loss of

documents and data (see NYSCEF Doc. Nos. 23, 27). Plaintiff's

deposition of defendant also did not proceed as scheduled ( see

NYSCEF Doc. Nos. 23, 24).

Accordingly, following a status conference, the court (N.

Bannon, J~S.C) found that its prior court order had not been

complied with in that defendant again failed to produce the

documents plaintiff demanded, and defendant's deposition had not

been conducted, without reasonable excuse see NYSCEF Doc. No. 25,

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Status Conference Order, November 30, 2023 (emphasis added]). The

court ordered defendant to serve a Jackson Affidavit see Jackson

v City of New York, 185 AD2d 768 [1st Dept 1992]) and evidence of

the alleged cyber-attack by December 29, 2023, and to complete the

deposition of defendant by December 29, 2023 (id.).

On December 13, 2023, defendant submitted a Jackson Affidavit

and a letter from an insurance adjuster regarding the alleged

cyber-attack (see NYSCEF Doc. Nos. 26, 27). However, neither the

affidavit nor the letter provided any specific information

regarding the alleged cyber-attack, or the specific, detailed

efforts defendant made to recover and provide the necessary

documents to plaintiff Further, Jack Saadia,

defendant's Vice President, remotely appeared for his scheduled

deposition, but the deposition could not proceed because Mr. Saadia

alleged that the device he was using was "not operational" (NYSCEF

Doc . No . 51 ) .

Shortly thereafter, having made no progress on discovery,

plaintiff filed Note of Issue (see NYSCEF Doc. No. 28, Note of

Issue, January 31, 2024), followed by the subject motion (seq. no.

001}, on March 27, 2024.

Here, plaintiff seeks an order, pursuant to CPLR § 3212,

granting it summary judgment against defendant on its first cause

of action (breach of contract) and fourth cause of action (account

stated) . Therein, among other things, plaintiff contends

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entitlement to summary judgment, arguing no triable issues of fact

exist that plaintiff provided services pursuant to a written

contract, and that defendant failed to pay for those services in

breach of that contract.

In support of its motion, plaintiff submits the pleadings

herein (NYSCEF Doc. No. 001); the MSA (NYSCEF Doc. No. 33); the

SOW (NYSCEF Doc. No. 34); the schedule of unpaid invoices {NYSCEF

Doc. No. 35); copies of the unpaid invoices (NYSCEF Doc. No. 36);

e-mails from plaintiff to defendant (NYSCEF Doc. No. 37); letters

exchanged between the parties {NYSCEF Doc. Nos. 38 - 40); internal

e-mails exchanged between employees of defendant (NYSEF Doc. Nos.

41 - 50); and an affidavit by Viswanatha Sastry Rachakonda, CEO of

plaintiff {NYSCEF Doc. No. 30) . Plaintiff requests an award of

damages in an amount "no less than $390,918.80" {NYSCEF Doc. No.

001, Complaint).

Pending plaintiff's motion (seq. no. 001), counsel for

defendant filed a motion to withdraw {seq. no. 002). The

undersigned granted the motion, stayed the matter for thirty days,

ordering defendant to notify the court as to their new counsel

within thirty days, and ordering defendant to submit opposition

papers to plaintiff's motion for summary judgment within thirty

days of entry of counsel's notice of appearance see NYSCEF Doc.

No. 58, Decision and Order, July 2, 2024).

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On July 29, 2024, this court held a status conference wherein

defendant failed to appear, to seek an adjournment, or to present

a reason for failing to appear and/ or obtain counsel. Further,

defendant's counsel, if any, has failed to file a notice of

appearance on behalf of defendant, and defendant has not contacted

the court to extend the stay or for more time to obtain counsel.

Defendant has not submitted opposition papers to plaintiff's

motion for summary judgment, and defendant has not made itself

available for deposition. Therefore, the court marked the subject

motion (seq no. 001) submitted without opposition.

ANALYSIS

On a motion for summary judgment, the moving party must 'make

a prima facie showing of entitlement to judgment as a matter of

law, tendering [evidentiary proof in admissible form] to

demonstrate the absence of any material issues of fact'" {Nomura

Asset Capital Corp. v Cadwalader, Wickersham & Taft LLP, 26 NY3d

40, 49 [2015], citing Alvarez v Prospect Hosp., 68 NY2d 320, 324

[1986]; CPLR §. 3212 [b]; Friends of Animals v Associated Fur Mfrs.,

46 NY2d 1065, 1066 [1979] [providing movant must support the

subject application with "'evidentiary proof in admissible

form'n]). Further, it is black letter law that such proof shall

include the "affidavitn of a person having personal knowledge of

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the facts, "a copy of the pleadings" and "other available proof,

such as depositions and written admissions" (CPLR § 3212 [b]}.

The court must view the facts in the light most favorable to

the non-movant, giving it the benefit of all reasonable inferences

see De Lourdes Torres v Jones, 26 NY3d 742 [2016]). If the moving

party makes the requisite showing, the non-moving party then has

the burden "'to establish the existence of [factual issues] which

require a trial of the action'" (id. at 763, citing Vega v Restani

Constr. Corp., 18 NY3d 499, 503 (2012], quoting Alvarez, 68 NY2d

at 324) .

Liability

A breach of contract claim requires the plaintiff to show

that a contract exists, the plaintiff performed in accordance with

the contract, the defendant breached its contractual obligations,

and the breach resulted in damages (34-06 73, LLC v Seneca Ins.

Co., 39 NY3d 44, 52 [2022]; Second Source Funding, LLC v

Yellowstone Capital, LLC, 144 AD3d 445 [1st Dept 2016]).

Plaintiff's submissions establish entitlement to summary

judgment on its breach of contract cause of action. Specifically,

the duly executed MSA and SOW establish that the parties entered

into a written contract for plaintiff to provide digital marketing

services to defendant for a period of one-year, and under the

contract, defendant was required to pay plaintiff's invoices

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within thirty days of receipt see NYSCEF Doc. Nos. 33, 34). The

various invoices (NYSCEF Doc. No. 36) reflect that defendant failed

to pay for the digital marketing services that plaintiff provided,

and defendant's internal e-mails demonstrate that the payments

were kept on hold well beyond the thirty-day timeframe without any

explanation. This is sufficient to establish a prima facie case

for breach of contract (see George S. May Intern. Co. v Thirsty

Moose, Inc., 19 AD3d 721 [3d Dept 2005]; Calm Ave, LLC v Baker,

224 AD3d 426 [1st Dept 2024]; Hussey v Joseph N. Leggio Agency,

Inc., 299 AD2d 690 [3d Dept 2002]).

An account stated claim is an independent cause of action and

not duplicative of a breach of contract claim (Aronson Mayefsky &

· Sloan, LLP v Praeger, 228 AD3d 182 [1st Dept 2024]). Summary

judgment is appropriate where a defendant receives and retains

invoices for professional services rendered, and fails to object

within a reasonable time (see e.g. Mintz & Gold LLP v Daibes, 125

AD3d 488 [1st Dept 2015]; Berkman Bottger & Rodd, LLP v Moriarty,

58 AD3d 539 [1st Dept 2009]; Glazer v Falberg, 85 AD2d 938 [1st

Dept 1981]).

Here, the admissible evidence submitted by plaintiff

namely, the timely submitted invoices; the numerous follow-up e-

mails from plaintiff to defendant as to the status of the

outstanding invoices, and defendant's acknowledgment of such;

defendant's failure to object to the invoices or plaintiff's

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performance within a reasonable time; defendant's internal e-mails

confirming that the payments due were placed on an inexplicable,

indefinite hold; and the affidavit of plaintiff's CEO, who has

personal knowledge of the facts in the instant matter

establishes that an account has been stated see NYSCEF Doc Nos.

30, 35, 36, 37, and 41 - 50). Therefore, plaintiff is entitled to

summary judgment on the account stated cause of action see Cohen

Tauber Spievak & Wagner, LLP · v Alnwick, 33 AD3d 562 [ 1st Dept

2006]; I.S. Design, Inc v Planned Mgmt. Const. Corp., 243 AD2d 425

[1st Dept 1997]).

Further, by failing to oppose the motion, defendant has

failed to raise any material, triable issue of fact (Sears Holding

Mgmt. Corp. v Rockaway Realty Assocs., LP, 176 AD3d 433, 433 [1st

Dept 2019] [holding: "as defendants submitted no relevant

admissible evidence in opposition to the motion, we affirm the

grant of summary judgment for breach of contract in plaintiff's

favor"); Zuckerman v City of New York, 49 NY2d 557, 560 [1980)).

Therefore, this court grants summary judgment for breach of

contract and account stated in plaintiff's favor.

The remaining causes of action for unjust enrichment and

quantum merit are dismissed as duplicative of the breach of

contract and account stated claims (see Br.own v Brown, 12 AD3d 176

[1st Dept 2004) ; Dipizio Const. Co. v Niagara Frontier Transp.

Auth., 107 AD3d 1565 [1st Dept 2013]).

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Damages

As plaintiff requests "no less than $390,918.80", which

cannot be ascertained in total, plaintiff is directed to an

Inquest to determine the amount of damages (see CPLR 3212 [c];

Murray v Farrell, 97 AD3d 953 [3d Dept 2012]).

Accordingly, it is hereby:

ORDERED that plaintiff's unopposed motion for summary

judgment (seq. no. 001) is granted, in part, as to defendant's

liability on the first (breach of contract) and fourth (account

stated) causes of action, and the motion is otherwise denied; and

it is further

ORDERED that this matter is scheduled for an Inquest for the

assessment of damages before Justice Emily-Morales Minerva in Part

42 at 111 Centre Street New York, NY 10013, in Courtroom 574 on

October 24, 2024, at 10:00 A.M.; and it is further

ORDERED that, within ten (10) days of this order, plaintiff

IQUANTI, INC., shall serve a copy of this Order, with notice of

entry, by overnight mail, return receipt requested, on defendant

RTW RETAILWINDS ACQUISITION LLC, as well as by electronic mail on

defendant at sugeidy@tfxny.com, and shall file such notice via

NYSCEF.

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THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT .

. · D~TE

~ CHECK ONE: CASE DISPOSED NON-FINAL DISPOSITION

GRANTED. □ DENIED GRANTED IN PART □ OTHER APPLICATION: SETTLE ORDER SUBMIT ORDER

CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT □ REFERENCE

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