Fenix Capital Funding, LLC v Memorial Wine Cellar, LLC 2024 NY Slip Op 31372(U) April 17, 2024 Supreme Court, Kings County Docket Number: Index No. 512458/2023 Judge: Francois A. Rivera 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 04/18/2024 10:43 AM INDEX NO. 512458/2023 NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 04/18/2024

1 of 8 HONORABLE FRANCOIS A. RIVERA 

### -----------------------------------------------------------------X FENIX CAPITAL FUNDING, LLC, Plaintiff~-againstMEMORIAL WINE CELLAR, LLC /DBA: MEMORIAL WINE CELLARAND RYAND. WEISE, Defendants. 

### ---------------------------------------------------------------------X At an IAS Term, Part 52 of the Supreme Court ofthe State ofNewYork, held in and for the County ofKings, at the Courthouse, at Civic Center, Brooklyn, New York, on the 17th day ofApril 2024



### DECISION & 

### ORDER Index No. 512458/2023

Recitation in accordance with CPLR 2219 (a) ofthe papers considered on the notice ofmotion filed on August 4, 2023, by Fenix Capital Funding LLC (hereinafter the plaintiff) for an order pursuant to CPLR 3212 granting summaryjudgment in its favor on its causes ofaction for breach ofcontract, unjust enrichment, and fraud as asserted against Memorial Wine Cellar, LLC /D/B/A: Memorial Wine Cellar (hereinafter the LLC defendant) and Ryan D. Weise (hereinafter the guarantor) (collectively the defendants). The motion is unopposed. -Notice ofMotion -Affinnation in Support -Affidavit in Support Exhibits A-E -Statement ofMaterial Facts 

### BACKGROUND On April 6, 2023, plaintiffcommencedthe instant action by filing a summons and verified complaint with the Kings County Clerk's office (KCCO). On June 29, 2023, the defendants interposed and filed ajointverified answer with counterclaims with the



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### FILED: KINGS COUNTY CLERK 04/18/2024 10:43 AM INDEX NO. 512458/2023 NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 04/18/2024

2 of 8 KCCO. On July 11, 2023, plaintiffinterposed and filed a reply to defendants' counterclaims with the KCCO. The verified complaint alleges thirty allegations offact in support ofthree denominated causes ofaction: The first is for breach ofcontract, the second is for unjust enrichment, and the third alleges fraud. The verified complaint alleges the following salient facts. Pursuant to a receivable purchase agree~nent (hereinafterthe agreement) andpersonal guaranty dated March 24, 2023, the plaintiffpurchased from the LLC defendant its future accounts receivables for the sum of$20,000.00. On or aboutMarch 24, 2023, in consideration ofthe sum of$20,000.00, the LLC defendant sold, assigned, and transferred to plaintifftwelve (12%) percent ofits future sales proceeds, up to an aggregate amount of$29,200.00. By the agreement, Ryan D Weise executed a personal guaranty ifthe LLC defendant defaulted. On April 21, 2023, the LLC defendant defaulted·under the agreement by placing a stop payment request to its bank for the ACH transfers or it closed the bank account in its entirety. In total, the LLC defendant remitted the amount of$4,866.60 in accordance with the agreement, leaving a balance of$24,333.40 remaining due and owing. Accordingly, there is now due and payable to plaintiff, by the defendants, the principal balance sum of$24,333.40, contractual default fees and penalties, and nonsuf:ficient fund fees in the amount of$150.00, together with interest from April 23, 2023, and reasonable attorneys' fees and costs and disbursements ofthis action.

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### FILED: KINGS COUNTY CLERK 04/18/2024 10:43 AM INDEX NO. 512458/2023 NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 04/18/2024

3 of 8 

### LAW AND APPLICATION There is no opposition to the instant motion. However, "[a] summaryjudgment motion should not be granted merely because the party against whomjudgment is sought failed to submitpapers in opposition to the motion, i.e. 'defaulted'" (Liberty Taxi Mgt., Inc: v Gincherman, 32 AD3d 276, 278 n [1st Dept 2006], citing Vermont Teddy Bear Co. Inc., v 1-800Beargram Co., 373 F3d 241,244 [2d Cir 2004] ["the failure to oppose a motion for summaryjudgment alone does notjustify the granting ofsummaryjudgment. Instead, the
... court must still assess whether the moving party has fulfilled its burden of demonstrating that there is no genuine issue ofmaterial fact and its entitlement to judgment as a matter oflaw"]; see Cugini v System Lumber Co., Inc., 111 AD2d 114, 115 [1st Dept 1985]). It is well established that summaryjudgmentmay be granted only when no triable issue offact exists (Alvarez v ProspectHosp., 68 NY2d 320, 324-25 [1986]). The burden is upon the moving party to make a prima facie showing that he or she is entitled to summaryjudgment as a matter oflawby presenting evidence in admissible form demonstrating the absence ofmaterial issue offact (Giuffrida v Citibank, 

### I00 NY2d 72, 81 [2003]). A failure to make that showing requires the denial ofthe summaryjudgment motion, regardless ofthe adequacy ofthe opposingpapers (Ayotte v Gervasio, 81 i'q'Y2d

· 1062 [1993]). Ifa prima facie showing has been made, the.burden shiftsto the opposing

party to produce evidentiary proofsufficient to establish the existence ofmaterial issues offact (Alvarez, 68 NY2d at 324).



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### FILED: KINGS COUNTY CLERK 04/18/2024 10:43 AM INDEX NO. 512458/2023 NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 04/18/2024

4 of 8 Pursuant to CPLR 3212 (b), a court will grant a motion for summaryjudgment upon a determination that the movant's papersjustify holding, as a matter ofJaw, that

.there is no defense to the cause ofaction or thatthe cause ofaction or defe~se has no merit. Furthermore, all ofthe evidence must be viewed in the light most favorable to the opponent ofthe motion (Marine MidlandBankv Dino &Artie'sAutomatic Transmission Co., 168 AD2d 610 [2d Dept 1990]). In the case at bar, the only sworn testimony submitted by the plaintiffin support ofthe motion was an affirmation ofMaksim Leyvi, its counsel (hereinafter Leyvi), and
an affidavit ofAlexander Ryvkin, its chieflegal officer (hereinafter Ryvkin). Leyvi's affinnation demonstrates no personal knowledge ofany ofthe transactional facts alleged in the complaint. "An attorney's affirmation that is not based upon personal knowledge is ofno probative or evidentiary significance" (Nerayoff v Khorshad, 168 AD3d 866, 867 [2d Dept 2019], citing Warrington vRyder TruckRental, Inc., 35 AD3d 455,456 [2d Dept 2006]). Leyvi's affirmation states that the facts in support ofthe motion are contained in the affidavit ofRyvkin
.

.Ryvkin's affidavit is used to authenticate the agreement which was allegedly breached by the defendants. Ryvkin averred that he is the chieflegal officer ofthe plaintiffand, as such, has personal knowledge ofits business practices and procedures. He further averred that the factual allegations proffered in support ofthe motion for summaryjudgment are derived from his review oftheplaintiffs business records. He then referred to business records attached to the motion, namely, the agreement, andthe documents denominated as a wire transfer confirmation and a paymentledger.



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### FILED: KINGS COUNTY CLERK 04/18/2024 10:43 AM INDEX NO. 512458/2023 NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 04/18/2024

5 of 8 It is noted that Ryvkin did not aver that he was a signatory to the agreement or that he participated in the execu_tion ofsame. Ryvkin refers to the payment ledger, as proofof the defendants' default. He_ contends that the payment ledger shows that the LLC defendantplaced a stop payment order on plaintiff's ACH withdrawal for the specified daily amount. "Aproper foundation for the admission ofa business record must be provided by someone with personal knowledge ofthe maker's business practices and procedures'' (Citibank, NA. v Cabrera, 130 AD3d 861, 861 [2d Dept 2015]). Generally, "the mere filing ofpapers received from other entities, even ifthey are retained in the regular course ofbusiness, is insufficient to qualify the documents as business records" (Bank of N. Y Mellon v Gordon, 171 AD3d 197, 209 [2d Dept 2019], quoting Standard Textile Co. v NationalEquip. Rental, 80 Ad2d 911,911 [1981]). "However, such records may be admitted into evidence ifthe recipient can establish personal knowledge ofthe maker's business practices and procedures or establish that the records provided by the maker were incorporated into the recipient's mvn records and routinely relied upon by the recipient in its own business" (Bank of NY Mellon, 171 Ad3d at 209). Here, the payment ledger was not self-explanatory and was submitted without explaining its meaning. The ledger did explain the codes contained therein and did not state that there was a stop payment by the LLC defendant. The payment ledger did not demonstrate that the LLC defendant closed its bank account in its entirety, as alleged in the verified complaint. 

### In sum, the paymentledger did notprovideproofofthe LLC defendant's alleged breach. 

### It is noted that the plaintiffdid not annex a copy ofits own
orthe LLC defendant's bank records. "[I]t is the business record itself, not the



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### FILED: KINGS COUNTY CLERK 04/18/2024 10:43 AM INDEX NO. 512458/2023 NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 04/18/2024

6 of 8 foundational affidavit, that serves as proofofthe matter asserted" (Citibank, NA. v Potente, 210 AD3d 861, 862 [2d Dept 2022], quoting BankofN.Y Mellon v Gordon, 171 AD3d 197,209 [2d Dept 2019]). Accordingly, evidence ofthe contents ofbusiness records is admissible only where the records themselves are introduced. Without their introduction, a witness's testimony as to the contents ofthe records is inadmissible hearsay (see Bank of N. Y Mellon, 171 AD3d at 206). In sum, plaintiffhas failed to rriake
a prima facie showing that the LLC defendant breached the agreement. Breach of Contract "The essential elements ofa cause ofaction to recover damages for breach of contract are the existence ofa contract, the plaintiffsperformance pursuant to the contract, the defendant's breach ofits contractual obligations, and damages resulting from the breach" (see Cruz v Cruz, 213 AD3d 805, 807 [2d Dept 2023], quoting Klein v Signature Bank, Inc., 204 AD3d 892, 895 (2022] [internal quotation marks omitted]). To prevail on the instant motion, it was incumbent upon the plaintiffto prove each ofthese elements as a matter oflaw. The plaintiffprovided no evidence demonstrating that the LLC defendant breached the agreement by placing a stop payment. Consequently, the plaintiffdid not meet its burden ofdemonstrating as a matter oflaw that the defendants breached the agreement. Inasmuch as the plaintiffdid not make a prima facie showing that the LLC defendant breached the agreement, the obligation ofthe guarantor, was not triggered. As a resul.t, the plaintiffalso failed.to show thatthe guarantor breached the agreement. UnjustEnrichment



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### FILED: KINGS COUNTY CLERK 04/18/2024 10:43 AM INDEX NO. 512458/2023 NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 04/18/2024

7 of 8 "The elements ofa cause ofaction to recover for unjust enrichment are (I) the defendant was enriched, (2) at the plaintiffs expense, and (3) that it is against equity and good con.science to permit the defendant to retain what is sought to be recovered" (Sarker
vDas, 203 AD3d 973 [2d Dept 2022], quoting FinancialAssistance, Inc. v Graham, 191 AD3d 952,956 [2d Dept 2021]). Fraud "The elements of

# acause ofaction to recover damages for fraud are a misrepresentation or a material omission offact which was false and known to be false by defendant, made for the purpose ofinducing the other party to rely upon it,justifiable reliance ofthe other party on the misrepresentation or material omission, and injury" (Hong Qin Jiang v: Li Wan Wu, 179 AD3d 1041, 1042 [2d Dept 2020], quoting Tsinias Enters. Ltd. v Taza Grocery, Inc., 172 AD3d 1271, 1271 [2d Dept 2019] [internal quotations omitted]). The plaintiffs causes ofaction for unjust enrichment and for fraud were both based on the defendants' breach ofthe agreement. "The existence ofa valid contract governing the subject matter ofa dispute generally precludes recovery in quasi contract for events arising out ofthe same subject matter" (Murtha Constr., Inc. v Town of Southampton Hous. Auth., 210 AD3d 896,897 [2d Dept 2022], quotingJaybar Realty Corp. vArmato; 175 AD3d 1391, 1393 [2d Dept 2019]). "Merely alleging scienter in a
cause ofaction to recover damages for breach ofcontract, unless the representations alleged to be false are collateral or extraneous to the terms ofthe agreement, does not convert a breach ofcontractcause ofaction into one sounding in fraud" (Crowley Mar.



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### FILED: KINGS COUNTY CLERK 04/18/2024 10:43 AM INDEX NO. 512458/2023 NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 04/18/2024

8 of 8 Assoc. vNyconn Assoc., 292 AD2d 334, 334 [2d Dept 2002]). Here, the plaintiffis claiming fraud based solely on the defendants' breach ofthe agreement. Consequently, the plaintiff's evidentiary submission 

### did not make a prima facie showing that the defendants' were unjustly enriched at the plaintiffs expense. Nor did it plead ordemonstrate that the defendants defrauded the plaintiff. The motion is therefore denied without regard to the sufficiency or lack ofopposing papers (Cugini v System Lbr. 

### Co., 111 AD2d I 14, 115 [1st Dept 1985]). CONCLUSION The motion by Fenix Capital Funding LLC for an order pursuant to CPLR 3212 granting summaryjudgment in its favor on its causes ofaction for breach ofcontract, . unjust enrichment and fraud as asserted against defendants Memorial Wine Cellar, LLC ID/BIA: Memorial Wine Cellar and Ryan D. Weise is denied. The foregoing constitutes the decision and order ofthe Court.

ENTER: J.S.C.



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