Merchant Store Inc. v Schloesser

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Merchant Store Inc. v Schloesser 2012 NY Slip Op 31928(U) July 17, 2012 Supreme Court, Suffolk County Docket Number: 30202-2011 Judge: Emily Pines Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. [* 1] SHORT FORM ORDER I.r.."l)F.X No.: 30202-2011 SUPREME COURT - STATE OF NEW YORK COMM.:RCIAL DIVISION, PART 46, SUFFOLK COUNTY Motion Dale: Submit Date: Motion No.: Jj1rEsEnt !inn. 1EmilyJin£5 .1Iusticc snprculc <!lour! 05-10-2012 05-15-2012 001 MD r ] Final [x x THE MERCHANT STORE INC., Plaintiff, INon Final Attorney for Plaintiff David Lazcr. Esq. Lazcr. Apthcker, Rosella & Ycdid. PC 225 Old Country Road Melville. New York 11747 Attorney for Defendanl Aaron & Cohen Esq. Cohen & Pappera, Esq. 955 NW 17'" Avenue Building D Delray Beach, Florida, 33445 ·againstKENT A. SCHLOESSER, Defendant. ________________ x ORDERED that the motion by plaintiff for summary judgment in its favor is denied; and it is further ORDERED that the parties are directed to appear at a preliminary conference on Monday, September 10, at 11:00 a.m. in Supreme Court, Part 46, located at the Alan Oshrin Building, One Court Street, Courtroom Two, Second Floor, Riverhead, New York; and it is further [* 2] ORDERED that the plaintiff's counsel shall serve a copy of this Order with Notice of Entry upon counsel for the defendant pursuant to CPLR 21 03(b)(2) or (3) within twenty (20) days of the date hereof and thereafter file the affidavit of service with the Clerk of the Court. In this breach of contract action, the plaintiff, The Merchant Store, Inc., seeks to recover chargebacks in connection with a credit card processing contract with United Advantage, in the amount of$467, who allegedly personally September 28,2011. guaranteed 387.40, from Kent Schloesser, the contract. The action was commenced Issue was joined on December I, 2011, wherein the defendant asserted a general denial with counterclaims. for summary judgment The plaintiff now moves in its favor. A party moving for summary judgment entitlement must make a prima facie showing of as a matter of law, offering sufficient evidence to demonstrate absence of any material issues of fact. Winegrad 64 NY2d 851,487 on NYS2d 316 (1985); Zuckerman 427 NYS2d 595 (1980]). the v New York Vniv. Med. Ctr., v New York, 49 NY2d 557, Of course, summary judgment is a drastic remedy and should not be granted where there is any doubt as to the existence of a triable issue. Stewart Title Ins. Co. v Equitable Land Servs., 207 AD2d 880, 616 NYS2d 650 (2d Dept 1994). Once a prima facie showing has been made, fhe burden shifts to the party opposing the motion to produce evidentiary admissible ofthc form sufficient action. Alvarez '-'A guarantee proof in to establish material issues of fact which require a trial v Prospect Hasp., 68 NY2d 320, 508 NYS2d 923 (1986). is an agreement to pay a debt owed by another which creates a secondary liability and thus is collateral to the contractual Page 2 of 5 obligation." Brewster [* 3] Transit Mix Corp. v McLean, 169 AD2d 1036, 1037,565 NYS2d 316 (3d Dept 1991), quoting Shire Realty Corp. v Schorr, 55 AD2d 356, 359-360, 390 NYS2d 622 (2d Dept 1977). In support of the motion, the plaintiff submits, inter alia, the pleadings, the personal affidavit of Peler Estep, a copy the Merchant Account Application by Untied Advantage, and copies of an invoice and Merchant Search Results. Peter Estep avers that he is the president of the piaintiffThe Merchant Store, Inc. He states that the defendant personally guaranteed the obligations of United Advantage in connection with a credit card processing contract between United and Merchant Services, Inc. He further states that United incurred liability to the plaintiff and defendant Schloesser has failed to pay pursuant to the personal guarantee. Pursuant to a contract, dated October 12, 2010, between the plaintiff and United, United is fully liable to the plaintiff for all chargebacks. Estep avers that the defendant, in his capacity as owner and officer of United, executed a contract on behalf of United, doing business as both United and SGS Consulting Group, LLC, whereby the plaintiff agreed to provide credit card processing services for United. On October 12, 20 I0, the defendant executcd a personal guarantee "fthe United contract whereby the defendant guaranteed the full performance of United's obligations. Estep states that beginning in March 2011 through January 2012 many of United's customers have charged back the cost of United's products and/or services to their credit card issuers, which were passed on to the plaintiff. However, pursuant to the contract, the merchant ultimately bears the responsibility for the loss incurred by the plaintifffor a customer's chargebaek. The defendant had the opportunity to dispute 250 of the ehargebaeks resulting in I 10 successful challenges. The remainder of chargebacks which the plaintiff claims that the defendant owes amounts to $467,387.40. Page 3 of 5 Despite due [* 4] demand, the defendant has failed to reimburse the plaintiff for the enst of United's customers' chargebacks. The defendant failed to demonstrate its entitlement to judgment as a matter of law. Upon review of the Merchant Account Application, the defendant's obligation is not that of a guarantor as the writings did not make United the primary obligor, with the defendant's liability secondary to that of United, accruing only after default on the part of United, regardless of the self-serving allegations contained in the affidavit submitted by the plaintiff. Brewster Transit Mix Corp v McClean, supra. This is not to say that Scholesser is not a coobligor under the contract who may be personally liable thereunder. Yellow Book of NY, LP v DePante, 309 A02d 859, 766 NYS2d 44, (2d Oept 2003); Star Video Entertainment, LP v J & I Video Distrib., Inc., 268 A02d 423, 702 NYS2d 91 (2d Dept 2000); Florence Corp. V Penguin Constr. Corp., 227 A02d 442,642 NYS2d 697 (2d Oept 1996). In any event, there are issues of fact regarding the amount of chargebacks and fees which arc al1egedly owed to the plaintiff. Since the plaintiff failed to satisfy its burden as the party moving for summary judgment, it is unnecessary to analyze the sufficiency of the defendant's opposition. McArthur v Muhammad, 27 A03d 532, 810 NYS2d 352 (2d Oept 2006); Valdez v Aramark Servs., Inc., 23 A03d 639,804 NYS2d 811 (2d Dcpt 2005); Nationwide Property Casualty v Nestor, 6 A03d 409, 774 NYS2d 357 (2d Dept 2004). Accordingly, summary judgment is inappropriate and the plaintiffs motion is denied. See generally, Zuckerman v City of New York, supra. Page40f 5 [* 5] The parties are directed to appear at a preliminary conference in Supreme Court, Part 46, One Court Street, Riverhead, New York on Monday, September ] 0, 2012 at II :00 a.m. This constitutes lIlntell: j/llIU11, the DECISION and ORDER of the Court. 2012 i!tturrl~rili),Nrm 11!l1rlt [ ] Final [ x ] Non Final Page 5 of 5

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