Zomongo.TV USA Inc. v Capital Advance Servs., LLC 2024 NY Slip Op 31701(U) May 14, 2024 Supreme Court, Kings County Docket Number: Index No. 512735/2021 Judge: Leon Ruchelsman 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 05/14/2024 02:49 PM INDEX NO. 512735/2021 NYSCEF DOC. NO. 286 RECEIVED NYSCEF: 05/14/2024
SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KINGS : CIVIL TERM: COMMERCIAL 8 - - - - - . - - .. - ·--· ..- - - - . - - - - - - - - - - - - - - - - - - - · - · ·-X ZOMONGO. TV USA INC. D/B/A ZOMONGO. TV USA, JOCELYNE LISA HUGHES-OSTROWSKI and JEREMY GENE OSTROWSKI, .Plaintiffs, Decision and order
- against - Index No. 512735/2021 . .. . ..
CAPITAL ADVANCE SERVICES, LLC; Defendant, May 14, 2024 - . -----.----·----------- . -- .--------.--------.x PRESENT: HON. LEON RUCHELSMAN Motion Seq. #9
The plaintiff has moved pursuant to CPLR §3025 seeking to
amend the complaint to add causes of action for trespass,
conversion, a claim for RICO pursuant to 18 USC §1962 Cc) and
cairn for RICO pursuant to 18 USC §1962 (d) . The defendant has
opposed the rn.otion.
As recorded in prior orders, the plaintiff, Zomongo, a
corporation involved in the advertising industry, entered into
two merchant cash agreements with the defendant. The first
agreement was dated February 12, 2018 whereby the defendant
purt:ha5ed $449,700 of plaintiff's future .t:eceivabl.e:s for
$300,000. The second agreement was dated April 11, 2018 whereby
the defendant purchased $861,925 of plaintiff's future
receivables for $575,000. The complaint alle:ges the defendant
failed to deliver the .:purchased .amounts pursuant.to the agreements and improperly withdre.w daily amounts in excess of the
amounts to which the partie.s agreed. The plaintiff now seek$ to
amend the complaint as noted ..
1 of 7 [* 1] FILED: KINGS COUNTY CLERK 05/14/2024 02:49 PM INDEX NO. 512735/2021 NYSCEF DOC. NO. 286 RECEIVED NYSCEF: 05/14/2024
Conclusions of Law
On May 4, 2022 in another action between the same parties
the court held that levies served upon a bank in Illinois and
Arizona was void (gg, Decision and Order fNYSCEF Doc. 219]).
Further, in another action with the same plaintiff and a
different defendant, with a similarly improper levy, the
plaintiff withdrew tort claims for trespass and conversion. The
court in that case explained that "the plaintiffs contend that in
Plymouth Venture Partners, the court of Appeals conclusively
decided that the proper avenue for litigating claims like the
plaintiffs' claims concerning the issuance of an unlawful levy is
by filing a CPLR §524 O ni.otion under the Index Number f ram which
the levy stemmed. Accordingly, the plaintiffs cross-.,.move to
withdraw thqse of their c1aims which they feel ate improper under
Plymouth Venture Partners" (.§.§.§., ZomongoTV.USA Inc., v. GTR
Source LLC, 78 Misc3d 461, 185 NYS3d 559 [Supreme Court Nassau
County 2023]); That withdrawal was based upon Plymouth Venture
Partners, II, LP v. GTR Source, LLC, 37 NY3d 59:1, i63 NYS3d 467
[2021] which held that the exclusive: remedy available following
an improper levy is to file a motion pursuant to CPLR §5420 and
that "CPLR 5240 provides courts with the ability to craft
£1.exible and equitable responses to claims that arise with
respect to enforcement of valid money judgntents" (id). The court
categorically rejected the argument th.at tort causes of action
2 of 7 [* 2] FILED: KINGS COUNTY CLERK 05/14/2024 02:49 PM INDEX NO. 512735/2021 NYSCEF DOC. NO. 286 RECEIVED NYSCEF: 05/14/2024
could be filed a:s well.
The plaintiff argues that they have satisfied the
requirements of GPLR §5240, have obtained a determination the
levy was improper, and now, after that determination, may pursue
tort claims. However, that would essentially permit any party
aggrieved by an improper levy to eventually pursue tort claims.
Plymouth Venture Partners, IL LP v. GTR Source, LLC (supra)
never endorsed a delayed pursuit ocf tort claims at all. Indeed,
the decision states that ''CPLR article 52 •.. is the exclusive
avenue .for a judgment debtor seeking relief from the use of an
enforcement mechanism that does not comply witha.rticle 52's
requirements" (id). The decision does not support the
plaintiff's argument that it is just the exclusive first step for
a judr;_i-e:tnent debtor, in what amounts to a two..,step process, but
rather it is the exclusive avenue in all ways. Further, the
decision noted that CPLR Article 52 is sufficient by "providing a
flexible array of procedures for relief from violations of the
statute" (..id.), To the extent the remedies available pursuant to
CPLR Article 52 are not as broad or as advantageous as tort
claims, the legislature's decision to curtail them is a
determination which cannot addressed in this forum. Lastly, the
plain:tiff~s reliar:ice upon the dissent iri Plymouth Venture
Partners. II. LP v. GTR source, LLC cannot possibly c~rry any
weight considerJ,.ng the majority's conclusions.
3 of 7 [* 3] FILED: KINGS COUNTY CLERK 05/14/2024 02:49 PM INDEX NO. 512735/2021 NYSCEF DOC. NO. 286 RECEIVED NYSCEF: 05/14/2024
Therefore, the plaintiff is ba.rred from asserting ahy tort
claims and the motion seeking to amend the complaint to add
claims for trespass and conversion is denied.
Turning to the RICO claims, to succeed on a RICO claim, the
moving party must demonstrate three elements: (1) a violation of
the RICO statute, 18 USG §1962; (2) an injury to business or
property; and (3) the injury was caused by the violation of
section 1962 (Spool v. World Child Int'l Adoption Agency, 520
F.3d 178 [2d. Cir. 2008]). Under 18 USC §1962(c) it is unlawful
for any person employed by or associated with any enterprise
engaged in, or the activiti.es of whic:h affect, interstate or
foreign commerce, to conduct or participate, directly or
indirectly, in the conduct of such enterprise's affairs through a
pattern of racketeering activity. Racketeering activity is
defined a.s any activity included within 18 use §1961 (1). That
statute includes within racketeering activity the collection of
an unlawful debt {id). For pur~oses of this lawsuit unlawful debt. is .defined as .any debt "which was incurred . . . .:Ln connection
with the business of .•.. lending money or a thing of value at a
rate usuriou.'.3 under State or Federal law, where the usurious rate
is at least twice the enforceable rate" ( 18 use §1961 ( (6) ( B) ) .
Tb maintain an action for unlawf.ui clebt it must bie estaplished that Cl) the debt was unenforceable irt whole or ih part because of state or. fecteral law.s relating to illegal usury,
4 of 7 [* 4] FILED: KINGS COUNTY CLERK 05/14/2024 02:49 PM INDEX NO. 512735/2021 NYSCEF DOC. NO. 286 RECEIVED NYSCEF: 05/14/2024
{2) the debt was incurred in t:onne~tion with "the business of
lending money.; .at a [usurious] rate," (3) the usurious rate was
at least twice the enforceable rate, and (4) as a result of all
the above factors the plaintiff was injured in his or her
business or property (Durante Bros .
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Zomongo.TV USA Inc. v Capital Advance Servs., LLC 2024 NY Slip Op 31701(U) May 14, 2024 Supreme Court, Kings County Docket Number: Index No. 512735/2021 Judge: Leon Ruchelsman 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 05/14/2024 02:49 PM INDEX NO. 512735/2021 NYSCEF DOC. NO. 286 RECEIVED NYSCEF: 05/14/2024
SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KINGS : CIVIL TERM: COMMERCIAL 8 - - - - - . - - .. - ·--· ..- - - - . - - - - - - - - - - - - - - - - - - - · - · ·-X ZOMONGO. TV USA INC. D/B/A ZOMONGO. TV USA, JOCELYNE LISA HUGHES-OSTROWSKI and JEREMY GENE OSTROWSKI, .Plaintiffs, Decision and order
- against - Index No. 512735/2021 . .. . ..
CAPITAL ADVANCE SERVICES, LLC; Defendant, May 14, 2024 - . -----.----·----------- . -- .--------.--------.x PRESENT: HON. LEON RUCHELSMAN Motion Seq. #9
The plaintiff has moved pursuant to CPLR §3025 seeking to
amend the complaint to add causes of action for trespass,
conversion, a claim for RICO pursuant to 18 USC §1962 Cc) and
cairn for RICO pursuant to 18 USC §1962 (d) . The defendant has
opposed the rn.otion.
As recorded in prior orders, the plaintiff, Zomongo, a
corporation involved in the advertising industry, entered into
two merchant cash agreements with the defendant. The first
agreement was dated February 12, 2018 whereby the defendant
purt:ha5ed $449,700 of plaintiff's future .t:eceivabl.e:s for
$300,000. The second agreement was dated April 11, 2018 whereby
the defendant purchased $861,925 of plaintiff's future
receivables for $575,000. The complaint alle:ges the defendant
failed to deliver the .:purchased .amounts pursuant.to the agreements and improperly withdre.w daily amounts in excess of the
amounts to which the partie.s agreed. The plaintiff now seek$ to
amend the complaint as noted ..
1 of 7 [* 1] FILED: KINGS COUNTY CLERK 05/14/2024 02:49 PM INDEX NO. 512735/2021 NYSCEF DOC. NO. 286 RECEIVED NYSCEF: 05/14/2024
Conclusions of Law
On May 4, 2022 in another action between the same parties
the court held that levies served upon a bank in Illinois and
Arizona was void (gg, Decision and Order fNYSCEF Doc. 219]).
Further, in another action with the same plaintiff and a
different defendant, with a similarly improper levy, the
plaintiff withdrew tort claims for trespass and conversion. The
court in that case explained that "the plaintiffs contend that in
Plymouth Venture Partners, the court of Appeals conclusively
decided that the proper avenue for litigating claims like the
plaintiffs' claims concerning the issuance of an unlawful levy is
by filing a CPLR §524 O ni.otion under the Index Number f ram which
the levy stemmed. Accordingly, the plaintiffs cross-.,.move to
withdraw thqse of their c1aims which they feel ate improper under
Plymouth Venture Partners" (.§.§.§., ZomongoTV.USA Inc., v. GTR
Source LLC, 78 Misc3d 461, 185 NYS3d 559 [Supreme Court Nassau
County 2023]); That withdrawal was based upon Plymouth Venture
Partners, II, LP v. GTR Source, LLC, 37 NY3d 59:1, i63 NYS3d 467
[2021] which held that the exclusive: remedy available following
an improper levy is to file a motion pursuant to CPLR §5420 and
that "CPLR 5240 provides courts with the ability to craft
£1.exible and equitable responses to claims that arise with
respect to enforcement of valid money judgntents" (id). The court
categorically rejected the argument th.at tort causes of action
2 of 7 [* 2] FILED: KINGS COUNTY CLERK 05/14/2024 02:49 PM INDEX NO. 512735/2021 NYSCEF DOC. NO. 286 RECEIVED NYSCEF: 05/14/2024
could be filed a:s well.
The plaintiff argues that they have satisfied the
requirements of GPLR §5240, have obtained a determination the
levy was improper, and now, after that determination, may pursue
tort claims. However, that would essentially permit any party
aggrieved by an improper levy to eventually pursue tort claims.
Plymouth Venture Partners, IL LP v. GTR Source, LLC (supra)
never endorsed a delayed pursuit ocf tort claims at all. Indeed,
the decision states that ''CPLR article 52 •.. is the exclusive
avenue .for a judgment debtor seeking relief from the use of an
enforcement mechanism that does not comply witha.rticle 52's
requirements" (id). The decision does not support the
plaintiff's argument that it is just the exclusive first step for
a judr;_i-e:tnent debtor, in what amounts to a two..,step process, but
rather it is the exclusive avenue in all ways. Further, the
decision noted that CPLR Article 52 is sufficient by "providing a
flexible array of procedures for relief from violations of the
statute" (..id.), To the extent the remedies available pursuant to
CPLR Article 52 are not as broad or as advantageous as tort
claims, the legislature's decision to curtail them is a
determination which cannot addressed in this forum. Lastly, the
plain:tiff~s reliar:ice upon the dissent iri Plymouth Venture
Partners. II. LP v. GTR source, LLC cannot possibly c~rry any
weight considerJ,.ng the majority's conclusions.
3 of 7 [* 3] FILED: KINGS COUNTY CLERK 05/14/2024 02:49 PM INDEX NO. 512735/2021 NYSCEF DOC. NO. 286 RECEIVED NYSCEF: 05/14/2024
Therefore, the plaintiff is ba.rred from asserting ahy tort
claims and the motion seeking to amend the complaint to add
claims for trespass and conversion is denied.
Turning to the RICO claims, to succeed on a RICO claim, the
moving party must demonstrate three elements: (1) a violation of
the RICO statute, 18 USG §1962; (2) an injury to business or
property; and (3) the injury was caused by the violation of
section 1962 (Spool v. World Child Int'l Adoption Agency, 520
F.3d 178 [2d. Cir. 2008]). Under 18 USC §1962(c) it is unlawful
for any person employed by or associated with any enterprise
engaged in, or the activiti.es of whic:h affect, interstate or
foreign commerce, to conduct or participate, directly or
indirectly, in the conduct of such enterprise's affairs through a
pattern of racketeering activity. Racketeering activity is
defined a.s any activity included within 18 use §1961 (1). That
statute includes within racketeering activity the collection of
an unlawful debt {id). For pur~oses of this lawsuit unlawful debt. is .defined as .any debt "which was incurred . . . .:Ln connection
with the business of .•.. lending money or a thing of value at a
rate usuriou.'.3 under State or Federal law, where the usurious rate
is at least twice the enforceable rate" ( 18 use §1961 ( (6) ( B) ) .
Tb maintain an action for unlawf.ui clebt it must bie estaplished that Cl) the debt was unenforceable irt whole or ih part because of state or. fecteral law.s relating to illegal usury,
4 of 7 [* 4] FILED: KINGS COUNTY CLERK 05/14/2024 02:49 PM INDEX NO. 512735/2021 NYSCEF DOC. NO. 286 RECEIVED NYSCEF: 05/14/2024
{2) the debt was incurred in t:onne~tion with "the business of
lending money.; .at a [usurious] rate," (3) the usurious rate was
at least twice the enforceable rate, and (4) as a result of all
the above factors the plaintiff was injured in his or her
business or property (Durante Bros . .& Sons Inc. , v. Flushing
National Bank, 755 F2d 239 [2d Cir. 1985]).
The court has already det:errnined that the plaintiff ffi<:lY not
assert claims based upbri. usury. Thus, notwithstanding, there are
independent reasons the RICO statute may not be pleadecf. In
addition to establishing ra¢keteering, the plaintiff must
demonstrate the defendan:ts engaged in an enterprise.. A RICO
enterprise is "any individual, partnership, corporation,
association, or oth:er legal entity, arid arty union or group bf
individuals associated in fact although not a legal entity" (see,
18 USC §1961(4)). Thus, the 'enterprise' must be an entity
''separate and apart from the pattern of activity in which it
engagesii (United States v. Turkette, 452 us 576, 101 S.Ct 2524 [1981]). Tn Goldfine v. Sichenzia, 118 F.Supp2d 392 [:S • .D •. N.Y.
2002] the court held that ''in a fr<:iud:-based RICO claim, if the . .
sole purpose of the alleged enterprise is to perpetuate the
alleged fraud, ther·e cart be no enterprise for RICO purposes''
(id) . This does not conflict with Second Circuit precedent
coricerriirig the definition of an enterprise which does not really
address the narrow issue raised here, namely that the sole
5 of 7 [* 5] FILED: KINGS COUNTY CLERK 05/14/2024 02:49 PM INDEX NO. 512735/2021 NYSCEF DOC. NO. 286 RECEIVED NYSCEF: 05/14/2024
purpose of the enterprise is to perpetrate the fraud (see, Pavlov
v. Bank of New York Co., Inc., 25 Fed. Appx. 7 O [2d Cir. 2:002],
cf., Sands Harbor Marina Corp., v. Wells Fargo Insurance Services
of Oregon Inc.,. 2013 WL 12368689 [E.D.N.Y. 2013]), In this case
the entire purpose of the enterprise was to defraud the
plaintiffs and engage in unlawful debt collection methods. There
has been no evidence presented the enterprise served a purpose
other than to engc1ge in the alleged fraud (Goldfine, supra).
Indeed, the Fropo·sed Amended Complaint asserts that "The RICO
Persons have organized tri:emselves and the E:nterprise into a
.cohesive group with specific and assigned responsibilities and a
command structure to operate as a unit in order to accomplish the
common goals and purposes of collecting upon unlawful debts"
{see, J?roposed Amended Complaint {Redline version}, '!l320 [NYSCEF
Doc, No .. 192] ) . The Amended Complaint further asserts '~ since at
least 2012 antj continuing through the present, the members of the
Enterprise have had ongoing relations with each other through
common control/owrtership, shared personnel and/or one or more
contracts or agreements relating to and for the purpose of
collecting upon fraudulent fees through electronic wires (see,
Proposed Amended Complaint {Redline Version}, !J[318 [NYSCEF Doc.
No. 192]). Thus, according to the Proposed Amended Complaint the
entire enterprise was created merely to defraud the plaintiffs.
Upon those representations the plaintiff has failed to
6 of 7 [* 6] FILED: KINGS COUNTY CLERK 05/14/2024 02:49 PM INDEX NO. 512735/2021 NYSCEF DOC. NO. 286 RECEIVED NYSCEF: 05/14/2024
demonstrate the existence of an _enterprise. Consequently, the
motion seeking to amend the complaint to assert RICO causes of
action is denied. Likewise, the motion to ame_nd the complaint to
assert conspiracy pursuant to lS USC §1962(d) is denied. Thus,
the motion seeking to amend the compl_aint to assert any of the
proposed claims is denied.
So ordered. ENTER:
DATED: May 14, 2024 Brooklyn N.Y. Hon. Leon Ruchelsman JSC
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