Court Opinion

ID: 9956350
Source: CourtListenerOpinion
Date Created: 2024-04-01 20:12:17.774871+00
Date Added: 2024-06-11T08:15:53.249848
License: Public Domain

Regal Capital Inc. v Nomad Ventures LLC
               2024 NY Slip Op 31027(U)
                     March 20, 2024
             Supreme Court, Kings County
        Docket Number: Index No. 530946/2022
                  Judge: Ingrid Joseph
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 03/27/2024 02:41 PM                                                                     INDEX NO. 530946/2022
  NYSCEF DOC. NO. 15                                                                                        RECEIVED NYSCEF: 03/27/2024

                                                                                   At an IAS
                                                                                          lAS Part 83
                                                                                                   83 of
                                                                                                      of the Supreme;:
                                                                                                             Supreme Court of the
                                                                                  . State of New York held in and for the County
                                                                                    of Kings at 360 A~s
                                                                                                    A~s Street, Broo Iyn,New
                                                                                                                         yn, New
                                                                                   York, on t   h~e ~ clay
                                                                                              the      Clayof
                                                                                                            of     d         2024.
                                                                                                                          . 2024;
           PRESENT
           PRESENT:: HON. INGRID JOSEPH, J.S.C.
           SUPREM
           SUPREME      E COURT OF THE STATE OF
           NEW YORK COUNTY OF KINGS
           ·---------------------------------------------------------------------X
           ----------------------------------------------------------------------)(                    Index
                                                                                                       Index No: 530946/20
                                                                                                                 530946/2022
                                                                                                                           22
           REGAL CAPITAL INC.,        INC,
                                                            Plaintiff(s))
                                                           Plaintiff(s
                                     -against-
           NOMAD VENTUR VENTURES      ES LLC d/b/a FIRST A         AVEVE AUTO, RONIN                        ORDER
                                                                                                            ORDER
           VENTURES LLC, and GLENN ALLEN WOODAR
           VENTURES                                                WOODARD,       D,
                                                             Defendan
                                                             Defendant(s) t(s)
           ------------ ----------------------------------------------------------X
           ----------------------------------------------------------------------)(
           The
           The following
                following e-filed
                          e-filed papers
                                   papers read
                                           read herein:
                                                herein: ·                                                          NYSCEF
                                                                                                                   NYSCEF Nos.:
                                                                                                                          Nos.:
           Notice of
           Notice  of Motion/Aff  irmation in Support/M
                      Motion/Affirmation       Support/Memo         Support/
                                                          emo in Support/
           Affidavits
           Affidavits Annexed/E    xhibits Annexed
                      Annexed/Exhibits     Annexed .............. .............. ....... .                         3-7;
                                                                                                                   3-7; 14
           Affirmation
           Affirmation in Opposition
                           Opposition/ / Affidavits
                                         Affidavits Annexed/E
                                                     Annexed/Exhibits     Annexed .. .
                                                                xhibits Annexed                                    8-12
                                                                                                                   8-12

                     In
                     In this
                        this action, Nomad Ventures
                             action, Nomad Ventures LLC
                                                    LLC D/B/A
                                                        D/B/A First
                                                              First Ave
                                                                    Ave Auto
                                                                        Auto and
                                                                             and Ronin
                                                                                 Ronin Ventures
                                                                                       Ventures LLC,
                                                                                                LLC,
           ("Defend ants") move
           ("Defendants")  move to dismiss
                                   dismiss Regal
                                           Regal Capital
                                                 Capital Inc.'
                                                         Inc.' s ("Plaintif
                                                                 ("Plaintiff')f') complain
                                                                                  complaint t for lack
                                                                                                  lack of
                                                                                                       of personal
                                                                                                          personal
           jurisdiction, and failure
           jurisdiction,     failure to state
                                        state a cause
                                                cause of
                                                      of action pursuant to CPLR
                                                         action pursuant    CPLR 3211 (a)(7)
                                                                                      (a)(7) and (8), and
                                                                                                      and in
                                                                                                          in the
                                                                                                             the .
           alternativ
           alternativee for an extension
                               extension oftime
                                         of time to serve
                                                    serve an answer.
                                                             answer. Plaintiff
                                                                     Plaintiff has opposed
                                                                                   opposed the motion.
                                                                                               motion.
                     This
                     This action
                          action .arises
                                 arises from
                                         from an agreemen
                                                 agreement t dated
                                                             dated Septembe
                                                                   Septemberr 9,
                                                                              9,2022,  entered info
                                                                                 2022, entered into between
                                                                                                    between the
                                                                                                            the
           parties wherein
           parties wherein Plaintiff paid Defendan
                           Plaintiff paid Defendantsts a sum of
                                                             of$50,000.qo
                                                                $50,000 . 0.0 to purchase all of
                                                                                 purchase aH     Defendants'ts'
                                                                                              of Defendan
           future receivables valued
           future receivables valued at $75,000.0
                                        $75,000.000 ("Agreem ent"). Plaintiff
                                                    ("Agreement").  Plaintiff commenc
                                                                              commenced  this action
                                                                                      ed this action by the
                                                                                                     by the
           filing
           filing of
                  ofaa Verified
                       Verified Summon
                                Summonss and Complain
                                             Complaint t on October
                                                            October 25,
                                                                    25,2022,  and asserts
                                                                        2022, and asserts causes
                                                                                          causes of
                                                                                                 of action
                                                                                                    action
           for breach
               breach of
                      of contract
                         contract and breach
                                      breach of
                                             of a personal guarantee..
                                                  personal guarantee                             .
                    In
                    In support
                       support of
                               of their motion, Defendan
                                  their motion, Defendantsts argue
                                                             argue that
                                                                   that Plaintiff'
                                                                        Plaintiff s complain
                                                                                    complaint t should
                                                                                                should be
                                                                                                       be
           dismissed
           dismissed for
                     for lack
                         lack of personal jurisdiction
                              of personal jurisdiction because
                                                       because Defendan
                                                               Defendant t Ronin
                                                                           Ronin is an LLC
                                                                                       LLC organized
                                                                                           organized in
                                                                                                     in
                            .
                                                                                             .
           Nebraska
           Nebraska and was never
                    and was never a party
                                    party to any agreemen
                                                 agreement t with
                                                             with Plaintiff.
                                                                  Plaintiff. Additiona
                                                                             Additionally,  Defendantsts argue
                                                                                       lly, Defendan     argue
           that
           that they were never
                they were never personally
                                personally served with the Summon
                                           served with     Summonss and Complain
                                                                        Complaint t or by any
                                                                                          any other
                                                                                              other
           acceptabl
           acceptablee means
                       means of
                             of service.
                                service. Moreove
                                         Moreover,r, Defendan
                                                     Defendantsts allege
                                                                  allege that
                                                                         that Plaintiff
                                                                              Plaintiff seeks
                                                                                        seeks repayment of
                                                                                              repayment of
          ·. $85,937.5
             $85,937.500 in less than
                                 than a year,
                                        year, which
                                              which far exceeds
                                                        exceeds an annualize
                                                                   annualizedd rate
                                                                               rate of
                                                                                    of sixteen
                                                                                       sixteen percent (16%) and
                                                                                               percent (16%) and
          thus is considere
                  consideredd a usurious
                                usurious loan under New
                                         loan under New York
                                                        York Law.
                    In
                    In oppositio
                       opposition,n, Plaintiff
                                     Plaintiff states that Pursuant
                                               states that Pursuant to Section
                                                                       Section 4.5 of
                                                                                   of the Purchase
                                                                                          Purchase Agreement, the. ·
                                                                                                   Agreement, the
          parties
          parties explicitly
                   explicitly agreed
                              agreed that
                                     that the Agreeme
                                              Agreementnt would
                                                          would be governed
                                                                           ".
                                                                    governed    by the laws
                                                                                       laws of
                                                                                            of New
                                                                                               New York   and
                                                                                                     York and
                                                    ..       .
          that
          that the
               the parties
                    parties consente
                            consentedd to New
                                          New York
                                               York or Texas  jurisdiction, venue,
                                                       Texas jurisdiction,    venue, and choice
                                                                                         choice of
                                                                                                oflaw,  and that
                                                                                                   law, and that
                                                                            11
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           Defendants
           Defendants waived
                      waived personal
                             personal service
                                      service in favor
                                                 favor of
                                                       of service
                                                          service via
                                                                  via certified
                                                                      certified mail
                                                                                mail with
                                                                                     with return
                                                                                          return receipt
                                                                                                 receipt
           requested.
           requested. Further,
                      Further, Plaintiff
                               Plaintiff argues
                                         argues that
                                                that it has sufficiently
                                                            sufficiently plead
                                                                         plead viable
                                                                               viable causes
                                                                                      causes of
                                                                                             of action
                                                                                                action for breach
                                                                                                           breach
           of
           of contract
              contract and breach
                           breach of
                                  of a personal
                                       personal guarantee.
                                                guarantee. Plaintiff
                                                           Plaintiff states
                                                                     states that
                                                                            that the
                                                                                 the language
                                                                                     language of
                                                                                              of the
                                                                                                 the
           Agreement
           Agreement does
                     does not
                          not indicate
                              indicate that
                                       that it is a loan,
                                                    loan, thus
                                                          thus its terms
                                                                   terms cannot
                                                                         cannot be considered
                                                                                   considered a usurious
                                                                                                usurious loan
                                                                                                         loan
           under New
           under New York
                     York law.
                  Generally,
                  Generally, a nondomiciliary
                               nondomiciliary is subject
                                                 subject to the jurisdiction
                                                                jurisdiction of
                                                                             of a New
                                                                                  New York
                                                                                      York court
                                                                                           court if
                                                                                                 if it has
           purposefully
           purposefully transacted
                        transacted business
                                   business within
                                            within the
                                                   the State
                                                       State and there
                                                                 there is a "substantial
                                                                            "substantial relationship"
                                                                                         relationship"
           between
           between this activity
                        activity and
                                 and the
                                     the plaintiff's
                                         plaintiffs cause
                                                     cause of
                                                           of action
                                                              action (Keutter   McFadden Oil Corp., 71
                                                                     (Keutter v McFadden
           A.D.2d
           AD.2d 460 [1988];           Latman, 202 A.D.3d
                             Fanelli v Latman,
                     [1988]; Fanelli               AD.3d 758 [2d Dept.
                                                                 Dept. 2022]).
                                                                       2022]). While
                                                                               While the
                                                                                     the ultimate
                                                                                         ultimate
           burden of
           burden of proof
                     proof regarding
                           regarding personal jurisdiction rests
                                     personal jurisdiction rests with
                                                                 with the
                                                                      the party
                                                                          party asserting jurisdiction, the
                                                                                asserting jurisdiction, the
           plaintiff
           plaintiff in opposition
                        opposition to a motion
                                        motion to dismiss
                                                  dismiss pursuant    CPLR 321
                                                          pursuant to CPLR 3211l(a)(8)
                                                                                (a)(8) need
                                                                                       need only
                                                                                            only make
                                                                                                 make a
           prima
           prima facie showing
                       showing ·that
                                that the
                                     the defendant
                                         defendant was subject
                                                       subject to the personal jurisdiction of
                                                                      personal jurisdiction of the Supreme
                                                                                                   Supreme
           Court
           Court (Daniel    Katz & Associates
                 (Daniel B. Katz   Associates Corp. v Midland Rushmore, LLC, 90 A.D.3d
                                                      Midland Rushmore,         AD.3d 977 [2d
                                                                                          [2d Dept.
                                                                                              Dept.
           2011]; Jacobs       Stepheson Corp., 138 A.D.3d
                  Jacobs v 201 Stepheson            AD.3d 693 [2d Dept.
                                                                  Dept. 2016];
                                                                        2016]; Cornely
                                                                               Cornely v Dynamic
                                                                                         Dynamic
           HVAC Supply,
           HVAC         LLC, 44 A.D.3d
                Supply, LLC,    AD. 3d 986 [2d Dept.
                                               Dept. 2007]).
                                                     2007]).
                  A contractual
                    contractual forum
                                forum selection
                                      selection clause
                                                clause is prima
                                                          prima facie valid
                                                                      valid and
                                                                            and enforceable
                                                                                enforceable unless
                                                                                            unless it is
           shown
           shown by the challenging party to be unreasonable,
                        challenging party       unreasonable, unjust,    contravention of
                                                              unjust, in contravention    public policy,
                                                                                       of public policy,
           invalid
           invalid due to fraud
                          fraud or overreaching,
                                   overreaching, or it is shown
                                                          shown that
                                                                that a trial
                                                                       trial in the
                                                                                the selected
                                                                                    selected forum
                                                                                             forum would
                                                                                                   would be so
                                                                                                            so
           gravely
           gravely difficult
                   difficult that
                             that the
                                  the challenging party would,
                                      challenging party would, for all practical
                                                                       practical purposes,
                                                                                 purposes, be deprived
                                                                                              deprived of
                                                                                                       of its
           day in court
                  court (Somerset Fine Home
                        (Somerset Fine      Building, Inc., 185 A.D.3d
                                       Home Building,           AD.3d 752 [2d Dept
                                                                              Dept 2020]; Lifetime
                                                                                   2020]; Lifetime
           Brands, Inc., v Garden
           Brands,                Ridge, L.P., 105 A.D.3d
                           Garden Ridge,           AD.3d 1011 [2d Dept.
                                                                  Dept. 2013];
                                                                        2013]; Creative Mobile
                                                                               Creative Mobile
           Technologies, LLC v Smart
           Technologies, LLC                 Technologies, Inc., 97 A,.D.3d
                                     Modular Technologies,
                               Smart Modular                        AD.3d 626 [2d Dept.
                                                                                  Dept. 2012]).
                                                                                        2012]). Parties
                                                                                                Parties
           to a contract
                contract may
                         may freely
                             freely select
                                    select a forum
                                             forum which
                                                   which will
                                                         will resolve
                                                              resolve any disputes
                                                                          disputes over
                                                                                   over the
                                                                                        the interpretation
                                                                                            interpretation or
           performance
           performance of the contract
                       ofthe  contract (Somerset Fine Homes
                                       (Somerset Fine       Buildings, Inc. at 753).
                                                      Homes Buildings,         753). Thus,
                                                                                     Thus, a forum
                                                                                             forum
           selection
           selection clause
                     clause will
                            will be given
                                    given effect
                                          effect in the absence
                                                        absence of a
                                                                oLI 'strong
                                                                    'strong showing'
                                                                            showing' that
                                                                                     that it should
                                                                                             should be set
           aside
           aside (US.                           Distributors, Inc., 122A.D.3d
                      Merchandise, Inc. v L & R Distributors,
                 (US. Merchandise,                                  122AD.3d 613 [2d Dept.
                                                                                     Dept. 2014];
                                                                                           2014];
           Horton v Concerns
           Horton   Concerns of Police Survivors,
                             of Police                     A.D ....D
                                       Survivors, Inc., 62 AD      D 836 [2d Dept.
                                                                             Dept. 2009]).
                                                                                   2009]).
                  General
                  General Obligations
                          Obligations Law
                                      Law § 5-1402 provides
                                          S5-1402  provides that a party
                                                                   party may
                                                                         may maintain
                                                                             maintain an action    New
                                                                                         action in New
           York against a foreign
           York against   foreign defendant if the parties
                                  defendant if     parties have
                                                           have entered into an agreement
                                                                entered into    agreement that
                                                                                          that (i) contains
                                                                                                   contains a
           New York
           New York forum
                    forum selection
                          selection clause,
                                    clause, (ii) contains
                                                 contains a New
                                                            New York c:hoice of
                                                                York choice  of law provision, and (iii)
                                                                                law provision,
           involves
           involves a transaction
                      transaction that
                                  that in the aggregate    over $1 million.
                                              aggregate is over    million. This
                                                                            This section,
                                                                                 section, however,
                                                                                          however, is not a

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           limitation
           limitation on the use and
                                 and effectiveness
                                     effectiveness of
                                                   of forum
                                                      forum selection
                                                            selection clauses.
                                                                      clauses. Rather,
                                                                               Rather, it contains
                                                                                          contains a statutory
                                                                                                     statutory
           mandate
           mandate that
                   that a clause
                          clause designating New York
                                 designating New York as the forum
                                                             forum "shall"
                                                                   "shall" be enforceable,
                                                                              enforceable, in cases
                                                                                              cases
           involving
           involving $1
                     $1 million
                        million or more,
                                   more, regardless
                                         regardless of
                                                    of any inconvenience
                                                           inconvenience to the parties.
                                                                                parties. Therefore,
                                                                                         Therefore, in
           actions
           actions involving      than $1 million,
                   involving less than    million, forum
                                                   forum selection
                                                         selection clauses, are enforceable
                                                                                enforceable according
                                                                                            according to their
                                                                                                         their
           terms
           terms (see Natl. Union Fire
                                  Fire Ins. Co. of Pittsburgh, Pa. v Worley, 257 AD2d
                                                of Pittsburgh,                   AD2d 228,
                                                                                      228, 231 [1st Dept
                                                                                                    Dept
           1999]; Bizfund
                  Bizfund LLC
                          LLC v Holland   Sliger Steel, LLC, 71 Misc.3d
                                Holland & Sliger                Misc.3d 12226[A] [Sup. Ct. Kings
                                                                        12226[A] [Sup.     Kings
           County
           County 2021 ]).
                  2021]).
                  Here,
                  Here, RoninVentures
                        RoninVentures LLC
                                      LLC is listed
                                             listed as an additional
                                                          additional entity
                                                                     entity subject        terms of
                                                                            subject to the terms of the
           contract.
           contract. Further,
                     Further, Plaintiff
                              Plaintiff has established
                                            established that
                                                        that the Agreement between the
                                                                 Agreement between     parties included
                                                                                   the parties included a
           Choice of
           Choice of Law
                     Law clause
                         clause designating New York
                                designating New York as the forum pertaining to any disputes
                                                            forum pertaining        disputes regarding
                                                                                             regarding
           the contract,
               contract, which
                         which Defendants
                               Defendants signed,
                                          signed, subjecting
                                                  subjecting them
                                                             them to the personal jurisdiction of
                                                                         personal jurisdiction of the Court.
                                                                                                      Court.
           In challenging
              challenging the legitimacy
                              legitimacy of
                                         of the Choice
                                                Choice of
                                                       of Law
                                                          Law clause,
                                                              clause, the Defendants
                                                                          Defendants do not
                                                                                        not argue
                                                                                            argue that
                                                                                                  that the
           forum
           forum selection
                 selection clause
                           clause is unreasonable,
                                     unreasonable, unjust,
                                                   unjust, in contravention
                                                              contravention of public policy,
                                                                            of public policy, invalid
                                                                                              invalid due to
           fraud or overreaching,
                    overreaching, or argue
                                     argue that
                                           that a trial
                                                  trial in the selected
                                                               selected forum would be so gravely
                                                                        forum would       gravely difficult
                                                                                                  difficult that
           the challenging party would,
               challenging party would, for all practical
                                                practical purposes,    deprived of
                                                          purposes, be deprived of its day in court.
                                                                                              court.
           Additionally,
           Additionally, Section
                         Section 4.5 the Agreement
                                         Agreement states
                                                   states in part
                                                             part that:
                  "Merchant
                  "Merchant andand Guarantor
                                   Guarantor hereby      agree to waive
                                                hereby agree        waive any formal       personal service
                                                                                  formal personal     service of
                                                                                                              of
                  process and agree
                  process        agree that
                                         that any summons
                                                     summons and/or
                                                                  and/or complaint
                                                                           complaint or other        process to
                                                                                             other process
                  commence
                  commence any litigation
                                   litigation by RCI will be properly
                                                                 properly served
                                                                            served ifif sent
                                                                                        sent by certified
                                                                                                 certified mail,
                                                                                                           mail,
                  return
                  return receipt
                         receipt requested,
                                 requested, to the mailing
                                                     mailing address
                                                              address listed       page 1 of
                                                                       listed on page       of this Agreement,
                                                                                                    Agreement,
                  or any other
                          other address     provided in writing
                                 address provided         writing to RCI from the Merchant/Guarantor
                                                                                          Merchant/Guarantor
                  which
                  which includes
                         includes any address    listed o~ the
                                        address listed     the' 'Exhibit
                                                                 Exhibit A,'   if any."
                                                                          A,' if  any."

           Plaintiff
           Plaintiff submits
                     submits an affidavit
                                affidavit of
                                          of service
                                             service and return
                                                         return receipt
                                                                receipt indicating
                                                                        indicating that
                                                                                   that Defendants
                                                                                        Defendants were
                                                                                                   were served
                                                                                                        served
           in accordance
              accordance with
                         with the terms
                                  terms of
                                        of the contract.
                                               contract. Accordingly,
                                                         Accordingly, the Court
                                                                          Court has jurisdiction
                                                                                    jurisdiction over
                                                                                                 over this
                                                                                                      this
           matter
           matter and that branch of
                      that branch of Defendant's
                                     Defendant's motion
                                                 motion to dismiss
                                                           dismiss is denied.
                                                                      denied.
                  When
                  When a party
                         party moves
                               moves to dismiss
                                        dismiss a complaint
                                                  complaint pursuant    CPLR 321 l(a)(7),
                                                            pursuant to CPLR     1(a)(7), the standard
                                                                                              standard is
           whether
           whether the pleading
                       pleading states   cause of
                                states a cause of action,
                                                  action, not whether
                                                              whether the proponent
                                                                          proponent of
                                                                                    of the pleading
                                                                                           pleading has a
           cause
           cause of
                 of action
                    action (Leon
                           (Leon v. Martinez, 84 NY2d
                                 v. Martinez,    NY2d 83, 87 [1994];
                                                             [1994]; Skefalidis
                                                                     Skefalidis v China Pagoda NY, Inc.,
                                                                                  China Pagoda
           210 A.D.
               AD. 3d 925 [2d Dept.
                              Dept. 2022]);
                                    2022]); Oluwo   Sutton, 206 A.D.3d
                                            Oluwo v Sutton,     AD.3d 750 [2d Dept.
                                                                              Dept. 2022];
                                                                                    2022]; Sokol
                                                                                           Sokol v
           Leader, 74 A.D.3d
           Leader,    AD.3d 1180 [2d Dept.
                                     Dept. 201 0]). Whether
                                           2010]).            plaintiff can ultimately
                                                    Whether a plaintiff     ultimately establish
                                                                                       establish its
           allegations        part of
           allegations is not part of the calculus
                                          calculus in determining
                                                      determining a motion
                                                                    motion to dismiss
                                                                              dismiss (Eskridge
                                                                                      (Eskridge v Diocese
                                                                                                  Diocese of
                                                                                                          of
           Brooklyn, 210 A.D.3d
           Brooklyn,     AD.3d 1056 [2d Dept.
                                        Dept. 2022]; Zurich American
                                              2022]; Zurich American Insurance
                                                                     Insurance Company   City of
                                                                               Company v City of

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           New York, 176 A.D3d
           New           A.D3d 1145 [2d Dept.
                                        Dept. 2019]; EEC lIne.
                                              2019]; EBC I Inc. vGoldman,
                                                                v Goldman, Sachs
                                                                           Sachs & Co., 5 NY3d
                                                                                          NY3d
           [2005]).
                    On a motion
                         mati an made pursuant to
                                 made pursuant    CPLR 321
                                               taCPLR      l(a)(7) to
                                                       3211(a)(7)  to. dismiss
                                                                       dismiss a complaint,
                                                                                 camplaint, the burden
                                                                                                burden never
                                                                                                       never
           shifts to the non-moving
                  to.the            party to
                         nan-maving party    rebut a defense
                                          to.rebut   defense asserted
                                                             asserted by the moving party (Sokol
                                                                             maving party (Sokol at 1181;
                .                      .                                                                        .

           Rovella v Orofino
           Rovello           Realty Co. Inc., 40 NY2d
                     Orofino Realty              NY2d 970 [1976]).
                                                          [1976]). CPLR
                                                                   CPLR 3211 allows a plaintiff to. submit
                                                                             allaws a:plaintiffto   submit
           affidavits, but it does
           affidavits, but    daes not
                                   nat oblige
                                       ablige him or
                                                  ar her to
                                                         to. do
                                                             do. so
                                                                 so. on penalty of
                                                                     an penalty    dismissal (Id.; Sokol
                                                                                af dismissal                n 81).).
                                                                                                   Sokol at 1181
           Affidavits
           Affidavits may
                      may be received
                             received for
                                      far a limited purpose only,
                                            limited purpase anly, serving
                                                                  serving normally
                                                                          normally to
                                                                                   to. remedy
                                                                                       remedy defects
                                                                                              defects in the
           complaint
           camplaint and such
                         such affidavits
                              affidavits are not
                                             nat to
                                                 to. be examined
                                                        examined for     purpose of
                                                                 far the purpase af determining
                                                                                    determining whether
                                                                                                whether
           there
           there is evidentiary
                    evidentiary support
                                suppart for
                                        far the pleading       Rovella at 635; Nonon
                                                pleading (Id.; Rovello         Nanon at 827).
                                                                                        827). Thus,
                                                                                              Thus, a plaintiff
                                                                                                      plaintiff
           will not    penalized because
                nat be penalized because he has not
                                                nat made
                                                    made an evidentiary
                                                            evidentiary showing
                                                                        shawing irt
                                                                                iIi support
                                                                                    suppart of
                                                                                            af its ·.
           complaint.
           camplaint.
                    Unlike
                    Unlike on
                           an a motion
                                mati an for
                                        far summary judgment, where
                                            summary judgment, where the court
                                                                        caurt searches
                                                                              searches the record
                                                                                           record and
           assesses     sufficiency of
           assesses the sufficiency af evidence,
                                       evidence, on
                                                 an a motion
                                                      motian to
                                                             to. dismiss,
                                                                 dismiss, the court
                                                                              caurt merely
                                                                                    merely examines
                                                                                           examines the
           adequacy of
           adequacy afthe  pleadings (Davis
                       the pleadings (Davis v. Boeheim, 24 NY3d
                                            v. Boeheim,    NY3d 262,268
                                                                262, 268 [2014]).
                                                                         [2014]). The
                                                                                  The appropriate
                                                                                      apprapriate test
           of the sufficiency
           afthe  sufficiency of
                              af a pleading
                                   pleading is whether
                                               whether such pleading gives
                                                       such pleading gives sufficient
                                                                           sufficient notice
                                                                                      natice of
                                                                                             af the
                                                                                                the .
           transactions,
           transactians, occurrences,
                         accurrences, or series of
                                      ar series af transactions
                                                   transactians or
                                                                ar occurrences
                                                                   accurrences intended
                                                                               intended to     proved and
                                                                                        to. be praved
           whether
           whether the requisite elements of
                       requisite elements af any cause
                                                 cause of
                                                       af action
                                                          actian known
                                                                 knawn to
                                                                       to. our
                                                                           aur law
                                                                               law can
                                                                                   can be discerned
                                                                                          discerned from its
           averments (V
           averments (V Groppa Pools, Inc. v.
                        Groppa Pools,         Massella, 106'AD3d
                                           v. Massello, 106'AD3d 722, 723 [2d Dept
                                                                 722,723      Dept 2013]; Moore v
                                                                                   2013]; Moore
           Johnson, 147 AD2d
           Johnson,     AD2d 621 [2d Dept
                                     Dept 1989]).
                    To
                    To. plead   cause of
                        plead a cause af action
                                         actian for breach of
                                                far breach af contract,
                                                              cantract, a plaintiff
                                                                          plaintiff must
                                                                                    must allege (l) the existence
                                                                                         allege (1)     existence
           of
           af a contract,
                cantract, (2) plaintiff's
                              plaintiff's perfarmance
                                          performance pursuant
                                                      pursuant to the contract,
                                                               to.the cantract, (3) defendant's breach of
                                                                                    defendant's breach    the·
                                                                                                       afthe.
           contractual
           cantractual obligations;
                       abligatians; and (4) damages
                                            damages resulting
                                                    resulting from that breach (34-06
                                                                   that breach        73, LLC
                                                                               (34-0673,  LLC v Seneca
                                                                                                Seneca
           Insurance Company,
           Insurance Company, 39 NY3d
                                 NY3d 44 [2022]).
                                         [2022]). Plaintiff's
                                                  Plaintiff's allegations
                                                              allegatians must
                                                                          must identify
                                                                               identify the provisians
                                                                                            provisions of
                                                                                                       af
           the contract
               cantract that
                        that were breached (Id.).
                             were breached (ld.).
                    Here,
                    Here, the Complaint
                              Camplaint sets forth
                                             farth the particular
                                                       particular terms
                                                                  terms of
                                                                        af the contract upon which
                                                                               cantract upan which Plaintiff's
                                                                                                   Plaintiff's
           claim
           claim is based.
                    based. Additionally,
                           Additianally,
                              .
                                         the allegations
                                             allegatians made
                                                         made in the
                                                                 the Complaint
                                                                     Camplaint as. well
                                                                                   well as the
                                                                                           the incorporated
                                                                                               incarporated
           contract
           cantract gives
                    gives sufficient
                          sufficient notice
                                     natice of
                                            af the transactions,
                                                   transactians, occurrences,
                                                                 accurrences, or
                                                                              ar series
                                                                                 series of
                                                                                        af transactions
                                                                                           transactiansoror
           occurrences
           accurrences intended
                       intended to     proved and state
                                to. be praved     state a valid cause of
                                                          valid cause    action for
                                                                      afactian      breach of
                                                                                far breach af contract.
                                                                                              cantract.
                    Accordingly,
                    Accardingly, the Plaintiff
                                     Plaintiff has sufficiently
                                                   sufficiently stated
                                                                stated a cause
                                                                         cause of
                                                                               af action
                                                                                  actian to  breach of
                                                                                         to. breach af contract
                                                                                                       cantract
           and that branch of
               that branch af Defendant's
                              Defendant's motion
                                          mati an to
                                                  to. dismiss
                                                      dismiss is denied.
                                                                 denied.

                                                               4

                                                            4 of 5
[* 4]
  FILED: KINGS COUNTY CLERK 03/27/2024 02:41 PM                                                  INDEX NO. 530946/2022
  NYSCEF DOC. NO. 15                                                                     RECEIVED NYSCEF: 03/27/2024

                  The rudimentary
                      rudimentary element
                                  element of usury is the existence
                                          of usury        existence of
                                                                    of a loan
                                                                         loan or forbearance
                                                                                 forbearance of
                                                                                             of money,
                                                                                                money, and
           where
           where there
                 there is no loan,
                             loan, there
                                   there can
                                         can be no usury,
                                                   usury, however unconscionable the contract
                                                          however unconscionable     contract may
                                                                                              may be"
                                                                                                  be" (LG
           Funding, LLC
           Funding, LLC v.
                        v. United
                           United Senior Props. of
                                  Senior Props.    Olathe, LLC, 181
                                                o/Olathe,       181 A.D.3d
                                                                    A.D.3d 664,665,
                                                                           664,665, 122 N.Y.S.3d
                                                                                        N.Y.S.3d
           309). To determine
                    determine whether
                              whether a transaction
                                        transaction constitutes   usurious loan: "The
                                                    constitutes a usurious            court must
                                                                                 "The court must examine
                                                                                                 examine
           whether
           whether the plaintiff
                       plaintiff is absolutely
                                    absolutely entitled
                                               entitled to repayment under all circumstances.
                                                           repayment under     circumstances. Unless
                                                                                              Unless a
           principal sum advanced
           principal     advanced is repayable
                                     repayable absolutely,
                                               absolutely, the transaction
                                                               transaction is not
                                                                              not a loan. Usually,
                                                                                          Usually, courts
                                                                                                   courts
           weigh three
           weigh three factors when determining
                       factors when             whether repayment
                                    determining whether repayment is absolute
                                                                     absolute or contingent:
                                                                                 contingent: (1) whether
                                                                                                 whether
          there
          there is a reconciliation provision in the agreement;
                     reconciliation provision        agreement; (2) whether
                                                                    whether the agreement
                                                                                agreement has a finite
                                                                                                finite term;
          and (3) whether
                  whether there
                          there is any recourse
                                       recourse should
                                                should the merchant
                                                           merchant declare bankruptcy (Id. at 665-666;
                                                                    declare bankruptcy         665-666;
          Principis Capital,
          Principis          LLC v I Do, Inc., 201 A.D.3d
                    Capital, LLC                   A.D.3d 752 [2d Dept.
                                                                  Dept. 2022]).
                                                                        2022]).
                  Here
                  Here defendants only state
                       defendants only state in a conclusory fashion that
                                                  conclusory fashion that the Agreement
                                                                              Agreement is usurious
                                                                                           usurious
          because the amount
          because     amount of
                             of repayment Plaintiff seeks
                                repayment Plaintiff seeks is greater
                                                             greater than 16% permitted
                                                                              permitted under
                                                                                        under New York
                                                                                              New York
          State law, and that
                         that Plaintiff     harassed defendants
                              Plaintiff has harassed defendants in seeking repayments. Conclusory
                                                                   seeking repayments. Conclusory
          statements
          statements alone
                     alone are insufficient
                               insufficient to allege
                                               allege that
                                                      that a contract
                                                             contract is usurious.
                                                                         usurious. The Court
                                                                                       Court finds
                                                                                             finds that
                                                                                                   that
          Defendants
          Defendants have
                     have failed
                          failed to proffer
                                    proffer the contract
                                                contract or any case law in their
                                                                            their moving
                                                                                  moving papers.
                                                                                         papers. The
          function of
          function ofreply
                      reply papers
                            papers is to address
                                         address arguments
                                                 arguments made    opposition to the position
                                                           made in opposition                 taken by the
                                                                                     position taken
          movant and not
          movant     not to permit the movant
                            permit the movant to introduce new arguments
                                                 introduce new arguments in support
                                                                            support of, or new
                                                                                           new grounds
                                                                                               grounds
          for the motion
                  motion (Ditech
                         (Ditech Financial, LLC v Connors,
                                 Financial, LLC                AD3d 694 -[2d
                                                  Connors, 206 AD3d     [2d Dept.  2022]; Wells Fargo
                                                                             Dept. 2022];       Fargo
          Bank, NA.
                NA. v Marchione,
                      Marchione, 69 AD3d
                                    AD3d 204 [2d Dept. 2009];
                                                       2009]; quoting Harleysville Ins. Co. v Rosario,
                                                              quoting Harleysville            Rosario,
           17 AD3d
              AD3d 677 [2d Dept.
                           Dept. 2005]).
                                 2005]). Thus,
                                         Thus, documents
                                               documents and arguments
                                                             arguments submitted
                                                                       submitted for the first time
                                                                                               time in
          reply papers
                papers generally
                       generally should
                                 should be disregarded
                                           disregarded by the court,
                                                              court, especially
                                                                     especially when
                                                                                when the
                                                                                     the other
                                                                                         other party
                                                                                               party is not
          given
          given the opportunity
                    opportunity to respond
                                   respond to the reply
                                                  reply papers
                                                        papers (Citimortgage,
                                                               (Citimortgage, Inc v Espinal,
                                                                                    Espinal, 134AD3d
                                                                                             134AD3d 876
          [2d Dept. 2015];
                    2015],' Central Mortg. Co. v Jahnsen,
                            Central Mortg.       Jahnsen, 150 AD3d
                                                              AD3d 661 [2d Dept.
                                                                           Dept. 2017]).
                                                                                 2017]).
                  Accordingly, it is hereby,
                  Accordingly,       hereby,
                  ORDERED, that Defendants'
                  ORDERED, that Defendants' motion
                                            motion to dismiss
                                                      dismiss is denied,
                                                                 denied, and it is further,
                                                                                   further,
                  ORDERED,
                  ORDERED, that
                           that Defendants
                                Defendants are granted
                                               granted an extension
                                                          extension of
                                                                    of 30 days
                                                                          days from the notice of entry
                                                                                        notice of entry
          of
          of this Order
                  Order to file and serve
                                    serve an Answer.
                                             Answer.
                  This
                  This constitutes the decision
                       constitutes the decision and order
                                                    order of
                                                          of the
                                                             the court.
                                                                 court.

                                                        -~-
                                                                Hon.
                                                                Hon. l ~ e p h J.S.C.
                                                                     Ingri~eph l.S.C.

                                                           5                                                             II
                                                         5 of 5    Hoh.
                                                                   HOh. Ingrid Joseph
                                                                               Joseph
[* 5]                                                            Supreme
                                                                 Supreme Court
                                                                         Court Justice
                                                                               Justice                                   II