Court Opinion

ID: 9954312
Source: CourtListenerOpinion
Date Created: 2024-03-25 21:11:09.3193+00
Date Added: 2024-06-11T08:12:03.413677
License: Public Domain

Fundfi Merchant Funding, LLC v Atlantic Roofing
                     Solutions LLC
               2024 NY Slip Op 30910(U)
                     March 19, 2024
             Supreme Court, Kings County
        Docket Number: Index No. 536050/2023
                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 03/19/2024 01:00 PM                                                           INDEX NO. 536050/2023
  NYSCEF DOC. NO. 18                                                                               RECEIVED NYSCEF: 03/19/2024

                                                                                           At an IAS Term, Part 52 of
                                                                                           the.Supreme Court of the
                                                                                           State of New York, held.in.
                                                                                           and for the County of Kings,
                                                                                           at the Courthouse, at Civic·
                                                                                           Center, Brooklyn; New York,
                                                                                           on the 19th day of March
                                                                                           2024
            HONORABLE FRANCOIS A. RIVERA

            --- -------           . --- --- ----------------------------------X
            FUNDFI MERCBANT FUNDING, LLC,                                                  DECISION & ORDER

                                                   Plaintiff,                              Index No. 536050/2023

            "against-

            ATLANTIC ROOFING SOLUTIONS LLC and
            CHRISTOPHER ROY SHEPPERD,

                                                   Defendants .
            .--. -------. ------------ .-- .. -------- .----- .. -----. -------. --. ·x·
                    Recitation in accordance with CPLR 2219 ( a) of the papers considered on the
            notice-of motion filed by plaintiffFundfi Merchant Funding, LLC., (hereinafter FMF or
            plaintiff} on January 16, 2024, under motion sequence one for an order pursuant to CPLR
            3212 granting summary judgment in its favor on the issue of liability on the claims
            asserted again.st defendant Atlantic Roofing Solutions LLC (hereinafter the corporate
            defendant) and Christopher Roy Sheppard (hereinafter the guarantor) (collectively as
            defendants).

            -Notice of Motion
            -Affirmation.in Support
            -Affidavit in Support
                   Exhibits 1 through 6
            -Statement of Material Facts
            -Memoranclum of law in support

            BACKGROUND

                     Oil Deceinber 11, 2 023, FMF commenced the instant action by filing a summons

            and verified cotnplaint Wit[i the Kings. County Clerk's office.(KCCO). OnJatma:ry 1,

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    FILED: KINGS COUNTY CLERK 03/19/2024 01:00 PM                                                               INDEX NO. 536050/2023
    NYSCEF DOC. NO. 18                                                                                   RECEIVED NYSCEF: 03/19/2024

                            2024, the defendants joined issue by interposing and filing a joint verified answer with

                            the KCCO. The complaint alleges thirteen allegations of factin support of two causes of

                            action, namely, breach of contract and breach of a personal guaranty agreement.

                                          The verified complaint alleges the following salient facts, arnong others. On June.

                            16, 2023, plaintiff and defendants entered into an agreement (hereinafter the agreement)

                            whereby plaintiff agreed to purchase the company defendant's. future receivables in the

                            amountof$J 19,280.00 for the purchase price of $84,000.00.

                                         The defendants ag;teed that irt the event ofits default under the agreement, such as

                            the one alleged herein, the full uncollected receivables plus all fees due under the

                            agreemc;!nt(because of the default) wouldbecome immediately due and payable in full to

                            the plaintiff.

                                         On or.about October27, 2023,Atlantic Roofing Solutions LLC,: materially

                            breached the terrns of the agreement by causing the receivables to be deposited into a

                            separate account not designated in the agreement, blocked the payment due to plaintiff so

                            that plaintiff could not collect the amount of receivables due, and/or prevented plaintiff

                            from collecting the amount due to non-sufficient funds or otherwise failed to pay and/or

                            prevented plaintiff from collecting the amount due pursuant to the payment schedule in

                           ·the agreement and thereby defaulted under its tenns, or otherwise violated a material term

                            of the agreement which constituted an event of default thereunder. Based upon the.

                            foregoing and after accounting for payme11tsinade cmd applicable fees,Atlantic Roofing

                            Solutions LLCowes plaintiff a balance in the amount of$60,347.00;

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  FILED: KINGS COUNTY CLERK 03/19/2024 01:00 PM                                             INDEX NO. 536050/2023
  NYSCEF DOC. NO. 18                                                                 RECEIVED NYSCEF: 03/19/2024

                    In addition, guarantor agreed to guarantee all ammmts owed to plaintiff from

            company defendant upon a breach in performance by company defendant.

                    The corporate defendant and the guarantor have failed to pay the amounts due and

            owing under the agreement. There remains a balance due and owingto plaintiff on the

            agreement in the amount of$60,347.00 plus interest,. costs, disbursements, and attorney's

            fees.

            LAW AND APPLICATION

                    There is no dpposition to the instant motion. However, ''[a] summary judgmei1t

            motion shouldnot be granted merely because the party against whom judgment         is sought
            failed to submit papers in opposition to the motion, {Le., 'defaulted')" (Liberty Taxi Mgt.,

            Inc. v Gincherman, 32AD3d276,278 n [lstDept2006],citing VermontTeddyBear Co.,

            v 1-800 Beargram Co., 373 F3d 241,244 [2d Cir 2004] [''the failure to oppose a motion

            for summary judgment alone does not justify the granting of summary judgment. Instead,

            the ... court must still assess whether the moving party has fulfilled its burden of

            demonstrating that there is no genuine issue of material fact and its entitlement to

            judgment as a matter of law'']; see Cuginiv System Lumber Co., Inc., 111 AD2d 114, 115

            [1st Dept 1985]).

                    It is well established that summary judgment. may· he granted only when no.triable

            issue of fact exists (Alvarez v ProspectHospital, 32 AD3d 276 [1986]). The burden is

            upon the 1p:oving party to make a prima fade showing that he or she is entitled to

            suinmafy Judgmentas a matter ofla:w by presenting evidence in admissible form

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  FILED: KINGS COUNTY CLERK 03/19/2024 01:00 PM                                            INDEX NO. 536050/2023
  NYSCEF DOC. NO. 18                                                                RECEIVED NYSCEF: 03/19/2024

            demonstrating the absence of any material issues of fact (Giuffrida v Citibank, 100 NY2d

            72, 81 [2003]).

                   A failure to make that showing requires the denial of the stunmary judgment

            motion; regardless of the adequacy of the opposing papers (Ayotte v Gervasio, 81 NY2d

            1062, 1063 [1993]). Ifa primafacie showing has been made, the burden shifts to the

            opposing party to produceevidentiary·proof sufficient to establish the·existence of

            material issues of fact (Alvarez, 68 NY2d at 324).

                   Pursuant to CPLR 3212 (b), a court will granta motion for summary judgment

            upon a determination that the movant1s papers justify holding, as a matter oflaw,. that

            there is no defense to the cause of action or that the cause of action or defense has no

            merit. Furthermore, all the evidence must be viewed in the light most favorable to the

            opponent of the motion (Marine Midland BankvDino & Artie 1s Automatic Transmission

            Co., t68AD2d 610 [2d Dept 1990]).

                   The essential elements of a cause of action to recover damages for breach of

            contract are "the existence of a contract, the plaintiffs perfonnance pursuant to the

            contract, the defendants breach ofits contractual obligations, and damages resulting from

            the breach" (Cruz v Cruz, 213 AD3d 805, 807 [2d Dept2023]).

                  In the case at bar, the only sworn testimony submitted. by FMF in support ofthe

            mod on was an affirmation of David Fogel, its counsel (hereinafter Fogel), and an

            affidavit of Eryn Black (hereinafter Black). Fogel's affinnation contends that the facts in

            support of the motion at¢ contained in the affidavit of Black.

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  FILED: KINGS COUNTY CLERK 03/19/2024 01:00 PM                                             INDEX NO. 536050/2023
  NYSCEF DOC. NO. 18                                                                 RECEIVED NYSCEF: 03/19/2024

                   Fogel's affirmation demonstrates no personal knowledge of any of the

            transactional fac:ts alleged in the complaint. "An attorney's affirmation that is not based

            upon personal knowledge is ofno probative or evidentiary significance" (Nerayojf v

            Khorshad, 168 AD3d 866, 867 [2d Dept 2019], citing Warrington v Ryder Truck Rental,

            Inc., 35AD3d455, 456 [2d Dept 2006]).

                   Black's affidavit is used to authenticate the agreement which was allegedly

            breached by the defendants. Black averred that he is the operation manager for FMF and,

            as such, has personal knowledge ofits business practices and procedures, He further

            averred that the factual allegations proffered in support of the 1t1otion for summary

            judgment are derived from his review ofthe plaintiffs business records.

                  It is noted that Black did not aver that he was a signatory to the agreement or that

            he participated in the execution of same; Furthermore, the document submitted insupport

            of the amount FMF purportedly provided to the defendaht is less than the agreed upon

            purchase price of$84,000;00. The lesser amount of$79;750;00 was unsupported. This

            fact alone raises material issues of fact regarding the plaintiffs perfonnance under the

            ·agreement.

                   Black referred to the doc:uments attached to the motion, namely, the agreement and

            two other documents denominated as proof of funding and a payment history. Black

            averred thatthe payment history, annexed as exhibit 6 to his affidavit, provided proof of

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  FILED: KINGS COUNTY CLERK 03/19/2024 01:00 PM                                                                         INDEX NO. 536050/2023
  NYSCEF DOC. NO. 18                                                                                          RECEIVED NYSCEF: 03/19/2024

            the defendants; default.I Black averred thaton or about October 27, 2023, FMF received

            from its banka return code indicating that defendant's payment, which was made by

            ACH debit that is initiated by plaintiff, failed because plaintiff's access and ability to

            make the ACI-ldebit was restricted due to unrelated legal action (R.16); 2 Black contended

            thatthis constituted a default under the agreement. The bankrecord ofFMF which

            purportedly reflected a code (Rl 6) and a restriction by the defendants was not annexed to

            the motion.

                     "A pr~per foundation for the adinission ofa business record must be provided by

            someone with personal knowledge of the maker's business practices and procedures''

            (Citibank, NA. v Cabrera, 130 AD3d 861, 861 [2d Dept 2015]). Generally, "the mere

            filingofpapers received from other entities, even if they are retainedin the regular course

            of business, is insufficient to qualify the documents as business records" (Bank ofNY.

            Mellon v Gordon; 171 AD3d 197,209 [2d Dept2019] quoting Standard Textile Co. v

            National Equip,. Rental, 80 Ad2d 911, 911 [1981 ]}. ''However, such records may be

            admitted into evidence if the rei:ipient can establish personal knowledge of the maker's

            businesB practices and procedures or establish that the records provided by the maker

            were incorporated into the recipient's own records and. routinely relied Upon by the

            recipient in its own business" (Bank of NY. Mellon, 171 Ad3d at 209).

           •1 'Blackdescribed exhibit 6 .as plaintiff's report of defendant's account, which is. received directly from the plaintiff's
            automated cleari11ghouseA¢H proces~or and was rc,corded electron:ically i!l plaintiff~s computer.software ;i.nd
            maintained in the Qrdinary course 9f p Jaintiff'll business, but it is notclear ifth is was. or was not actually part of the
            plaintiff's business r~cord. . .          .         .                            .                       .            .
            2 Black does not explain what RI 6 means; despite relying on.thkas evidence ofdefii.uJt;

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  FILED: KINGS COUNTY CLERK 03/19/2024 01:00 PM                                                                   INDEX NO. 536050/2023
  NYSCEF DOC. NO. 18                                                                                     RECEIVED NYSCEF: 03/19/2024

                     Here, the payment history under exhibit 6 is one page and is in a font so small that

            it is not discemable with the naked eye, The Court was able to enlarge the exhibit After

            doing so, the court found that the document was not self-explanatory and that there was

            an insufficient foundation for its admission as a business record. 3 Furthermore, the bank

            record ofF:rvJF reflecting the Rl6 code was not annexed, "[I]t is the business record itself,

            not the foundational affidavit, that serves as proof of the matter asserted" (Citibank, NA,

            v Potente, 210 AD3 d 861, 862 [2d Dept 2022], quoting Bank ofN. Y. Mellon, .1 71 Ad3d at.

            205}, Accordingly, evidence of the contents ofbusiness records is admissible only Where

            the records themselves are introduced. Without their introduction, a witness's testimony

            as to the contents of the records is inadmissible hearsay (see Barik pfNY. Mellon, 171

            AD3d at 198), In sum, FMF has failed to make a prima facie showing of entitlementto

            summaryjudgment on its claim thanhe corporate defendant breached the agreement.

            Consequently; FMF has failed to show that the obHgation of the guarantor was ever

            triggered. In sum, plaintiff c:annot make a prima facie showing of entitlement to

            judgment on its claim$ for breach of the agreements or of the guaranty.

            CONCLUSION

                     The motion by plaintiffFundfi Merchant Funding, LLC., for an order pursuant to

            CPLR 3212 granting swnmary judgment in its favor on the issue df liability on. the claims

            3 RJ6 can be found in the enlarged. do~ument under a column labeled "Return Code;" but it is.not explained in the.

            document Addjtiona]ly, to tlte left of the ''Return Code" colum.n is a. column labeled "Return Reason" an.d there .are
            no entries alongside thi;i R.16 entries.                                                                     ··

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   FILED: KINGS COUNTY CLERK 03/19/2024 01:00 PM                                                                       INDEX NO. 536050/2023
   NYSCEF DOC. NO. 18                                                                                     RECEIVED NYSCEF: 03/19/2024

                     asserted against defendant Atlantic Roofing Solutions LLC and Christopher Roy is

                     denied.

                               A copy ofthis decision and order, along with notice ofentry, shall be served upon

                     defendants and filed with the Court within 20 days of entry.

                     The foregoing constitutes the decision and order ofth··.e·-···Court

                     ENTER:
                                                                                      .. ·,.

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                                                                                                           .     -':

                                                                                                        J.S.C.
                                                                                        HON. FRANCOlSA. RIVEAA

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