Court Opinion

ID: 9962535
Source: CourtListenerOpinion
Date Created: 2024-04-23 20:10:14.804573+00
Date Added: 2024-06-11T08:19:00.720424
License: Public Domain

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
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 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

                                                                                    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 17th day of April 2024

           HONORABLE FRANCOIS A. RIVERA
           -----------------------------------------------------------------X
           FENIX CAPITAL FUNDING, LLC,

                             Plaintiff~                                             DECISION & ORDER
                                                                                    Index No. 512458/2023
                                 -against-

           MEMORIAL WINE CELLAR, LLC /DBA: MEMORIAL
           WINE CELLAR AND RY AND. WEISE,

                             Defendants.
           ---------------------------------------------------------------------X
                   Recitation in accordance with CPLR 2219 (a) of the papers considered on the
           notice of motion filed on August 4, 2023, by Fenix Capital Funding LLC (hereinafter the
           plaintiff) for an order pursuant to CPLR 3212 granting summary judgment in its favor on
           its causes of action for breach of contract, 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 of Motion
           -Affinnation in Support
           -Affidavit in Support
                  Exhibits A-E
           -Statement of Material Facts

           BACKGROUND

                  On April 6, 2023, plaintiff commenced the 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 a joint verified answer with counterclaims with the

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            KCCO. On July 11, 2023, plaintiff interposed and filed a reply to defendants'

            counterclaims with the KCCO.

                   The verified complaint alleges thirty allegations of fact in support of three

            denominated causes of action: The first is for breach of contract, 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 (hereinafter the agreement) and personal guaranty dated March 24,

           2023, the plaintiff purchased from the LLC defendant its future accounts receivables for

           the sum of$20,000.00.

                  On or about March 24, 2023, in consideration of the sum of $20,000.00, the LLC

           defendant sold, assigned, and transferred to plaintiff twelve ( 12%) percent of its future

           sales proceeds, up to an aggregate amount of $29,200.00. By the agreement, Ryan D

           Weise executed a personal guaranty if the 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 of this 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

           LAW AND APPLICATION

                  There is no opposition to the instant motion. However, "[a] summary judgment

           motion should not be granted merely because the party against whom judgment is sought

           failed to submit papers 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 1-800 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 oflaw"]; see Cugini v System Lumber Co., Inc., 111 AD2d 114, 115

           [1st Dept 1985]).

                  It is well established that summary judgment may be granted only when no triable

           issue of fact exists (Alvarez v Prospect Hosp., 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

           summary judgment as a matter oflaw by presenting evidence in admissible form

           demonstrating the absence of material issue of fact ( Giuffrida v Citibank, I 00 NY2d 72,

           81 [2003]).

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

           motion, regardless of the adequacy of the opposing papers (Ayotte v Gervasio, 81 i'q'Y2d

          · 1062 [1993]). If a prima facie showing has been made, the.burden shifts to the opposing

           party to produce evidentiary proof sufficient to establish the existence of material issues

           of fact (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

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

           upon a determination that the movant's papers justify holding, as a matter of Jaw, that

          . there is no defense to the cause of action or that the cause of action or defe~se has no

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

          opponent of the motion (Marine Midland Bank v Dino & Artie's Automatic Transmission

          Co., 168 AD2d 610 [2d Dept 1990]).

                  In the case at bar, the only sworn testimony submitted by the plaintiff in support

          of the motion was an affirmation of Maksim Leyvi, its counsel (hereinafter Leyvi), and

          an affidavit of Alexander Ryvkin, its chief legal officer (hereinafter Ryvkin ). Leyvi 's

          affinnation demonstrates no personal knowledge of any of the transactional facts alleged

          in the complaint. "An attorney's affirmation that is not based upon personal knowledge

          is of no probative or evidentiary significance" (Nerayoff v Khorshad, 168 AD3d 866, 867

          [2d Dept 2019], citing Warrington v Ryder Truck Rental, Inc., 35 AD3d 455,456 [2d

          Dept 2006]). Leyvi's affirmation states that the facts in support of the 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 of the

          plaintiff and, as such, has personal knowledge of its business practices and procedures.

          He further averred that the factual allegations proffered in support of the motion for

          summary judgment are derived from his review of the plaintiffs business records. He

          then referred to business records attached to the motion, namely, the agreement, and the

          documents denominated as a wire transfer confirmation and a payment ledger.

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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

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

           he participated in the execu_tion of same. Ryvkin refers to the payment ledger, as proof of

           the defendants' default. He_ contends that the payment ledger shows that the LLC

           defendant placed a stop payment order on plaintiff's ACH withdrawal for the specified

          daily amount. "A proper foundation for the admission of a 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 filing of papers received from other entities, even if they are retained in the

          regular course of business, 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 National Equip. Rental, 80 Ad2d 911,911 [1981]). "However, such records

          may be admitted into evidence if the recipient can establish personal knowledge of the

          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 ofNY 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 payment ledger did not provide proof of the LLC

           defendant's alleged breach. It is noted that the plaintiff did not annex a copy of its own

           or the LLC defendant's bank records. "[I]t is the business record itself, not the

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            foundational affidavit, that serves as proof of the matter asserted" (Citibank, NA. v

            Potente, 210 AD3d 861, 862 [2d Dept 2022], quoting Bank ofN.Y Mellon v Gordon, 171

           AD3d 197,209 [2d Dept 2019]). Accordingly, evidence of the contents of business

           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 Bank ofN. Y Mellon, 171 AD3d at 206). In sum, plaintiff has failed to rriake

           a prima facie showing that the LLC defendant breached the agreement.

           Breach of Contract

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

           contract are the existence of a contract, the plaintiffs performance pursuant to the

           contract, the defendant's breach of its 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 plaintiff to prove

           each of these elements as a matter oflaw. The plaintiff provided no evidence

           demonstrating that the LLC defendant breached the agreement by placing a stop

           payment. Consequently, the plaintiff did not meet its burden of demonstrating as a matter

           of law that the defendants breached the agreement. Inasmuch as the plaintiff did not

           make a prima facie showing that the LLC defendant breached the agreement, the

           obligation of the guarantor, was not triggered. As a resul.t, the plaintiff also failed.to

           show that the guarantor breached the agreement.

            Unjust Enrichment

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  NYSCEF DOC. NO. 49                                                               RECEIVED NYSCEF: 04/18/2024

                   "The elements of a cause of action 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

           v Das, 203 AD3d 973 [2d Dept 2022], quoting Financial Assistance, Inc. v Graham, 191

           AD3d 952,956 [2d Dept 2021]).

           Fraud

                                    a
                   "The elements of cause of action to recover damages for fraud are a

           misrepresentation or a material omission of fact which was false and known to be false

           by defendant, made for the purpose of inducing the other party to rely upon it, justifiable

           reliance of the 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 of action for unjust enrichment and for fraud were both

           based on the defendants' breach of the agreement. "The existence of a valid contract

           governing the subject matter of a dispute generally precludes recovery in quasi contract

           for events arising out of the same subject matter" (Murtha Cons tr., Inc. v Town of

           Southampton Hous. Auth., 210 AD3d 896,897 [2d Dept 2022], quoting Jaybar Realty

           Corp. v Armato; 175 AD3d 1391, 1393 [2d Dept 2019]). "Merely alleging scienter in a

           cause of action to recover damages for breach of contract, unless the representations

           alleged to be false are collateral or extraneous to the terms of the agreement, does not

           convert a breach of contract cause of action into one sounding in fraud" (Crowley Mar.

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           Assoc. v Nyconn Assoc., 292 AD2d 334, 334 [2d Dept 2002]). Here, the plaintiff is

           claiming fraud based solely on the defendants' breach of the 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 or demonstrate that the defendants defrauded the plaintiff. The motion is therefore

           denied without regard to the sufficiency or lack of opposing 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 summary judgment in its favor on its causes of action for breach of contract, .

           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 of the Court.

           ENTER:

                                                                     J.S.C.

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