Snow v. SRE Wellness, Inc.

2024 NY Slip Op 33790(U)

• Court: New York Supreme Court, New York County
• Decided: October 23, 2024
• Docket: Index No. 654391/2020
• Status: Unpublished

Opinion

Snow v SRE Wellness, Inc. 2024 NY Slip Op 33790(U) October 23, 2024 Supreme Court, New York County Docket Number: Index No. 654391/2020 Judge: Debra A. James 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. 654391/2020 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 10/23/2024

SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. DEBRA A. JAMES PART 59 Justice ----------------------------------------------------------------- ----------------X INDEX NO. 654391/2020 MATHEW SNOW, MOTION DATE 12/13/2020 Plaintiff, MOTION SEQ. NO. 001 - V -

SRE WELLNESS, INC., DECISION + ORDER ON MOTION Defendant. ------------------------------------------------------------------- --------------X

The following e-filed documents, listed by NYSCEF document number (Motion 001) 2, 12, 13, 14, 15, 16, 17, 18, 19,20,21,22,23,24 were read on this motion to/for JUDGMENT - SUMMARY IN LIEU OF COMPLAINT.

ORDER

Upon the foregoing documents, it is

ORDERED that the cross motion of defendant SRE Wellness,

Inc., to dismiss the complaint for lack of personal jurisdiction

over it is denied; and it is further

ORDERED that the motion, pursuant to CPLR § 3213, for summary

judgment in lieu of complaint of plaintiff Mathew Snow is granted,

and the Clerk of the Court is directed to enter judgment in favor

of plaintiff and against defendant in the amount of$ 214,641.10,

together with interest at the statutory rate per annum from the

date of June 30, 2020, until the date of the decision and order on

this motion, and thereafter at the statutory rate, as calculated

by the Clerk, together with costs and disbursements to be taxed by

the Clerk upon submission of an appropriate bill of costs.

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DECISION

Plaintiff Mathew Snow ("Snow") commenced this action pursuant

to CPLR § 3213 to enforce an amended convertible Promissory Note

and Note Purchase Agreement (collectively, the "Note") issued by

the defendant SRE Wellness, Inc. ("SRE"). See NYSCEF Doc. Nos. 004

and 005.

SRE opposes the motion and cross-moves for dismissal

asserting that: ( 1) this court lacks personal jurisdiction over

SRE; (2) the Note is not a proper instrument for CPLR 3213; and

(3) that SRE amended the terms of the Note to remove the election

to receive cash instead of shares of SRE.

This court disagrees with SRE's contentions.

In general, the Note, and Snow's affidavit stating that

payment was duly demanded on July 17, 2020, and July 27, 2020, and

the lack of payment as evidenced by SRE's notice of conversion and

amendment to the Note, establish his prima facie entitlement to

summary judgment in lieu of complaint. Marj an Intl. Corp. v

Lillian August Designs, Inc., 225 AD3d 408, 409 (1st Dept 2024)

SRE's personal jurisdiction defense fails, even though it is

undisputed that Snow never posted proof of service upon the

Secretary of State on the docket of this action. Such failure is

not fatal to plaintiff's motion, as SRE acknowledges that it was

served via the Secretary of State, by admission of its own counsel

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in his memorandum of law in opposition to plaintiff's motion and

support of its cross motion, to wit:

The Plaintiff had the summons, notice of motion and supporting papers delivered to the New York State Secretary of State. This Deli very was made on September 21, 2020. The Secretary of State thereafter delivered the papers to SRE's registered agent." NYSCEF Doc. No. 22, p. 4).

SRE, which is a corporate entity, erroneously argues that

Snow's failure to comply with the service requirements set forth

in CPLR § 308 is fatal to his motion for summary judgment in

lieu of complaint. CPLR § 308 is inapplicable to a corporate

entity, such as SRE, but applies to service upon a natural

person only. SRE's judicial admission that service was made (on

September 21, 2020) within one hundred twenty days of the filing

of the summon and motion for summary judgment in lieu of

complaint (on September 11, 2020) constitutes a failure on SRE's

part to object to Snow's failure to file his proof of service

pursuant to CPLR § 306-b. Given that admission, SRE has have

waived any objection to Snow's alleged failure to comply with

the filing requirement of CPLR 306-b. Clarke v Davis, 277 AD2d

902 (4th Dept 2000) ("By appearing in the action before the time

period provided in CPLR former 306-b[a] expired and failing to

raise an objection in his answer, defendant has waived his

objection to the filing requirement").

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As for SRE's argument that Snow is not entitled to summary

judgment pursuant to CPLR § 3213 as the Note is not an instrument

for the payment of money only, it is well established that "[t]he

conversion option contained in the note does not alter the fact

that the note is 'an instrument for the payment of money only' and

a proper subject of a motion pursuant to CPLR 3213", (Simon v

Indus. City Distillery, Inc., 159 AD3d 505, 505 [1st Dept 2018]).

Assuming, arguendo, that Amendment #1 to the Note Purchase

Agreement properly amends the Purchase Note Agreement, since there

is no Noteholder Election of Conversion, signed and delivered by

Snow, as required under Section paragraph 1. of such Amendment

(NYSCEF Doc. No. 007, p. 2), SRE has provided no proof that the

subject Note was converted into Series A Preferred Stock. See

Simon v Industry City Distillery, Inc., 159 AD3d 505, 506 (2019).

Snow seeks attorneys' fees that he incurred in enforcing the

Note. However, he has not demonstrated that he is entitled to

recover attorneys' fees, as no such remedy is set forth in either

the Note, Amended Note, Note Purchase Agreement or Amended Note

Purchase Agreement.

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For the foregoing reasons, the cross motion of SRE to dismiss

the action for lack of personal jurisdiction shall be denied and

the motion of Snow for summary judgment in lieu of complaint shall

be granted.

P- ~ .A - } ~ 20241023133731DJAME503539AE2F9344309BB043510E32ABCCB

10/23/2024 DATE DEBRA A. JAMES, J.S.C. CHECK ONE: NON-FINAL DISPOSITION

□ GRANTED IN PART OTHER

APPLICATION: SUBMIT ORDER

□ CHECK IF APPROPRIATE: FIDUCIARY APPOINTMENT REFERENCE

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