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.
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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, 

- against -

CAPITAL ADVANCE SERVICES, LLC; 

Defendant, 

- . -----.----·----------- .. -- .--------.--------.x 

PRESENT: HON. LEON RUCHELSMAN 

Decision and order 

Index . No. .. 512735/2021 . .. 

May 14, 2024 

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 .. 

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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 

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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. 

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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, 

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{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 

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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 

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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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