Opinion
Index No. 704474/2023 Motion Seq. Nos. 001 002 + cross-motion
09-04-2024
SIMPLY FUNDING, LLC, Plaintiff, v. JIM DAN DEE SEAFOOD LLC, DBA JIM DAN DEE SEAFOOD, aka JIM DAN DEE CRAB KING, aka CRAB KING; and JAMES LESLIE DAMERON, Defendants.
Unpublished Opinion
Motion Date 03/21/2024
PRESENT: HON. PHILLIP HOM, Justice
DECISION + ORDER ON MOTION
HON. PHILLIP HOM, JUSTICE
The following e-filed documents, listed by NYSCEF document number (Motion 001) 12, 13, 14, 27, 28, 29, 30, 31, 32, 45, 46, 47 were read on this motion to/for DISMISS.
And were read on this cross-motion to/for DISMISS AFFIRMATIVE DEFENSES.
The following e-filed documents, listed by NYSCEF document number (Motion 002) 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43 were read on this motion to/for SUMMARY JUDGMENT.
Upon the foregoing papers, it is ordered that defendants' motion to dismiss (Seq. No. 1), plaintiff's cross-motion to dismiss defendants' affirmative defenses, and plaintiff's motion for summary judgment (Seq. No. 2), are determined as follows:
Plaintiff SIMPLY FUNDING, LLC (“Plaintiff”) commenced this action against defendants JIM DAN DEE SEAFOOD LLC, DBA JIM DAN DEE SEAFOOD, aka JIM DAN DEE CRAB KING, aka CRAB KING (“Jim Dan”); and JAMES LESLIE DAMERON (“Dameron”) (collectively “Defendants”), alleging breach of contract, breach of performance guaranty, unjust enrichment, and for attorneys' fees.
Motion to Dismiss (Seq. No. 1)
Under CPLR 3211 (a) (2), a party may move for judgment dismissing a cause of action on the ground that the court does not have jurisdiction over the subject matter. Subject matter jurisdiction is the “‘power to adjudge concerning the general question involved, and is not dependent upon the state of facts which may appear in a particular case, arising, or which is claimed to have arisen, under the general question'” (Thrasher v U.S. Liab. Ins. Co., 19 N.Y.2d 159, 166 [1967], quoting Hunt v Hunt, 72 NY 217, 229 [1878]). A judgment entered without subject matter jurisdiction is void (see Manhattan Telecom. Corp. v H & A Locksmith, Inc., 21 N.Y.3d 200, 203 [2013]; Lacks v Lacks, 41 N.Y.2d 71, 75 [1976]). A lack of subject matter jurisdiction means "the matter before the court was not the kind of matter on which the court had power to rule" (Garcia v Government Empls Ins. Co., 130 A.D.3d 870, 871 [2d Dept 2015], quoting Manhattan Telecom. Corp., 21 N.Y.3d at 203). The Supreme Court has general original jurisdiction in law and equity and is competent to hear all causes of action unless jurisdiction has been specifically proscribed (see N.Y. Const., art. VI, § 7; Lacks, 41 N.Y.2d at 75; Thrasher, 19 N.Y.S.2d at 166). Thus, it is a "court of original, unlimited and unqualified jurisdiction" (21st Century Pharmacy v. Am. Int'l Grp., 195 A.D.3d 776, 778 (2d Dept 2021). "Giving additional jurisdiction to other tribunals does not take general jurisdiction away from the Supreme Court" (Barone v Aetna Life Ins. Co., 260 NY 410, 414 [1933]). Therefore, Defendants' motion to dismiss is denied.
Cross-Motion to Dismiss Affirmative Defenses
Under CPLR 3211 (b), "[a] party may move for judgment dismissing one or more defenses, on the ground that a defense is not stated or has no merit." Therefore, a plaintiff moving to dismiss a defense, pursuant to CPLR 3211 (b), has the prima facie burden of establishing that affirmative defense(s) is(are) without merit as a matter of law (see Lewis v U.S. Bank N.A., 186 A.D.3d 694, 697 [2d Dept 2020]; Edwards v Walsh, 169 A.D.3d 865, 870 [2d Dept 2019]; Mazzei v Kyriacou, 98 A.D.3d 1088, 1089 [2d Dept 2012]). '"In reviewing a motion to dismiss an affirmative defense, the court must liberally construe the pleadings in favor of the party asserting the defense and give that party the benefit of every reasonable inference'" (Mazzei, 98 A.D.3d at 1089, quoting Fireman's Fundins. Co. v Farrell, 57 A.D.3d 721, 723 [2d Dept 2008]).
A. Usury Defense
"The rudimentary element of usury is the existence of a loan or forbearance of money, and where there is no loan, there can be no usury, however unconscionable the contract may be" (Principis Capital, LLC v I Do, Inc., 201 A.D.3d 752, 754 [2d Dept 2022], quoting (LG Funding, LLC v United Senior Props, of Olathe, LLC, 181 A.D.3d 664, 665 [2d Dept 2020]). An advanced principal sum needs to be repayable absolutely for the transaction to be considered a loan (see Crystal Springs Capital, Inc. v Big Thicket Coin, LLC, 220 A.D.3d 745 [2d Dept 2023]). "Usually, courts weigh three factors when determining whether repayment is absolute or contingent: (1) whether there is a reconciliation provision in the agreement; (2) whether the agreement has a finite term; and (3) whether there is any recourse should the merchant declare bankruptcy" (id. at 746-47, quoting LG Funding, LLC, 181 A.D.3d at 665-66).
Here, Plaintiff establishes that the transaction set forth in the agreement was not a loan, and thus, there can be there can be no usury defense. Defendants' answer alleges thirty affirmative defenses, but only one specifically mentions usury. However, the Court notes that usury is mentioned in several other places in the answer. Therefore, Defendants' usury affirmative defense, as stated in affirmative defense number thirteen, and as mentioned throughout Defendants' answer, are dismissed.
B. Jurisdictional Defenses
Parties may enter into a contract to waive, among other things, methods of service and personal jurisdiction defenses (see 159 MP Corp, v Redbridge Bedford, LLC, 160 A.D.3d 176, 188 [2d Dept 2018], citing Alfred E. Mann Living Trust v ETIRC Aviation S.A.R.L., 78 A.D.3d 137, 140 [1st Dept 2010] ["parties to a contract are free to contractually waive service of process"]). "A contractual forum selection clause is prima facie valid and enforceable unless it is shown by the challenging party to be unreasonable, unjust, in contravention of public policy, invalid due to fraud or overreaching, or it is shown that a trial in the selected forum would be so gravely difficult that the challenging party would, for all practical purposes, be deprived of its day in court" (Bernstein v Wysoki, 77 A.D.3d 241, 248-49 [2d Dept 2010]). Although General Obligations Law ("Gen. Oblig. Law") § 5-1402 subsection 1 references actions of one million dollars or more, subsection 2 expressly states that "[n]othing contained in this section shall be construed to affect the enforcement of any provision respecting choice of forum in any other contract, agreement or undertaking." Thus, "in actions involving less than $ 1 million, forum selection clauses are enforceable according to their terms" (National Union Fire Ins. Co. v Worley, 257 A.D.2d 228, 231 [1st Dept 1999]).
In accordance with the foregoing, Defendants' affirmative defenses regarding venue, personal jurisdiction, subject matter jurisdiction, and Gen. Oblig. Law § 5-1402, as stated throughout Defendants' answer and in affirmative defenses numbered eleven, seventeen, and twenty-one are dismissed.
C. Remaining Affirmative Defenses
"[W]here affirmative defenses 'merely plead conclusions of law without any supporting facts,' the affirmative defenses should be dismissed pursuant to CPLR 3211 (b)" (Diaz v 297 Schaefer St. Realty Corp., 195 A.D.3d 794, 795 [2d Dept 2021], quoting Bank of Am., N.A. v 414 Midland Ave. Assoc., LLC, 78 A.D.3d 746, 750 [2d Dept 2010]).
Here, Defendants' affirmative defenses plead conclusions of law without any supporting facts. Defendants' contention that there are documents and discovery in Plaintiff's possession necessary for its defense, is unavailing (see Bank of Am., N.A., 78 A.D.3d at 750). Thus, Defendants' remaining affirmative defenses are dismissed.
Summary Judgment (Seq. No. 2)
In a summary judgment motion, the movant has the initial burden of demonstrating his or her prima facie entitlement to judgment as a matter of law through submission of sufficient evidence eliminating any material issues of fact (see Giuffiida v Citibank Corp., 100 N.Y.2d 72, 81 [2003]; Alvarez v Prospect Hosp., 68 N.Y.2d 320, 324 [1986]; Zuckerman v City of New York, 49 N.Y.2d 557, 560 [1980]). Only when the movant satisfies this prima facie burden does the burden shift to the opponent to show that material issues of fact exist (see Giuffrida, 100N.Y.2dat 81). Thus, where the movant does not satisfy this initial burden, summary judgment is denied regardless of the sufficiency of the opposing papers (see Voss v Netherlands Ins. Co., 22 N.Y.3d 728, 734 [2014]).
The elements of a claim for breach of contract are: (1) the existence of a contract; (2) the plaintiff s performance pursuant to the contract; (3) the defendant's breach of its contractual obligations; and (4) damages resulting from the breach (see Dean Builders Grp., P.C. v M.B. Din Constr., Inc., 186 A.D.3d 1612, 1614 [2d Dept 2020]; Junger v John V. Dinan Assocs., Inc., 164 A.D.3d 1428, 1430 [2d Dept 2018]; Carione v Hickey, 133 A.D.3d 811, 811 [2d Dept 2015]). "Liability for breach of contract does not lie absent proof of a contractual relationship or privity between the parties" (KTG Hospitality, LLC v. Cobra Kitchen Ventilation, Inc., 201 A.D.3d 710, 711 [2d Dept 2022]).
To establish prima facie entitlement to judgment as a matter of law with respect to a guaranty, a plaintiff must show the existence of a guaranty, the underlying debt, and the guarantor's failure to perform under the guaranty (see Cooperatieve Centrale Raiffeisen-Boerenleenbank, B.A., Rabobank Intl., N.Y. Branch v Navarro, 25 N.Y.3d 485, 492 [2015]; Encore Nursing Ctr. Partners Ltd. Partnership-85 v. Schwartzberg, 172 A.D.3d 1166, 1168 [2d Dept 2019]; Hyman v Golio, 134 A.D.3d 992, 992 [2d Dept 2015]).
To be enforceable, certain types of agreements, including a guaranty, must be in writing and subscribed by the party to be charged therewith or by his or her lawful agent, pursuant to the statute of frauds (see General Obligations Law § 5-701 [a] [2]; Massias v Goldberg, 163 A.D.3d 648, 649 [2d Dept 2018]).
"A guaranty is a promise to fulfill the obligations of another party, and is subject 'to the ordinary principles of contract construction'" (Cooperative Centrale Raiffeisen-Boerenleenbank, B.A., "Rabobank Intl.," N.Y. Branch, 25 N.Y.3d at 492, quoting Compagnie Financiere de CIC et de L'Union Europeenne v Merrill Lynch, Pierce, Fenner & Smith Inc., 188 F.3d 31, 34 [2d Cir 1999]).
In contrast, "[u]njust enrichment lies as a quasi-contract claim and contemplates an obligation imposed by equity to prevent injustice, in the absence of an actual agreement between the parties" (Bedford-Carp Constr., Inc. v. Brooklyn Union Gas Co., 219 A.D.3d 1293, 1295 [2d Dept 2023]). "[T]he existence of a valid contract governing the subject matter generally precludes recovery in quasi contract for events arising out of the same subject matter" (Pierce Coach Line, Inc. v Port Wash. Union Free Sch. Dist., 213 A.D.3d 959, 961 [2d Dept 2023]).
The record contains, among other things, the affidavit of Jacob Kleinberger ("Kleinberger"), the manager and head of operations for Plaintiff. Kleinberger incorporates by reference the agreement between the parties, the guaranty, and the payment history.
The Court finds that Plaintiff establishes its entitlement to summary judgment for breach of contract and breach of performance guaranty. Plaintiff does not establish a claim for unjust enrichment since there was a valid contract governing the parties. Furthermore, Plaintiff does not submit, among other things, documentation to support its assertion for attorneys' fees and costs incurred in this action. Notably, Defendants does not oppose the motion for summary judgment.
In accordance with the foregoing, it is hereby
ORDERED that Defendants' motion to dismiss (Seq No. 1) is denied in its entirety; and it is further
ORDERED that Plaintiff s cross-motion to dismiss Defendants' affirmative defenses (Seq No. 1) is granted in its entirety; and it is further
ORDERED that the branches of Plaintiffs summary judgment motion (Seq No. 2) for the claims of breach of contract and breach of performance guaranty are granted; and it is further
ORDERED that the branch of Plaintiffs summary judgment motion (Seq No. 2) for the claim of unjust enrichment is denied; and it is further
ORDERED that the branch of Plaintiff s summary judgment motion (Seq No. 2) for attorneys' fees is denied, without prejudice, to be renewed with proper evidentiary support; and it is further
ORDERED that any requested relief and/or remaining contentions not expressly addressed herein have nonetheless been considered and are hereby expressly rejected; and it is further
ORDERED that Plaintiff shall serve a copy of this Order with Notice of Entry, upon Defendants and the Queens County Clerk, within thirty (30) days of the date of entry; and it is further
ORDERED that, upon service of a copy of this Order with Notice of Entry, the Queens County Clerk is directed to enter judgment in the amount of $30,004.93, plus statutory interest at 9% from February 13, 2023, with costs and disbursements as taxed by the Queens County Clerk, in favor of Plaintiff, and against Defendants.
The amount of $30,004.93 includes the agreement balance of $27,504.93. plus additional fees in the amount of $2,500.00. for costs associated with collections activity before this litigation coimnenced (EF 37).
This amount does not include attorneys' fees.
This constitutes the Decision and Order of this Court.