Northern Leasing Sys. Inc. v Young

[*1] Northern Leasing Sys. Inc. v Young 2017 NY Slip Op 50975(U) Decided on July 27, 2017 Civil Court Of The City Of New York, New York County Kelley, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on July 27, 2017
Civil Court of the City of New York, New York County

Northern Leasing Systems Inc., Plaintiff,

against

Guy C. Young aka Guy Young, Defendant.



03553/14
John J. Kelley, J.

The plaintiff, Northern Leasing Systems Inc. ("Northern Leasing"), brings this action against defendant to recover $4,105.67 pursuant to a personal guaranty of an equipment finance lease agreement for a credit card processing machine. The plaintiff claims that the defendant personally guaranteed payment of a finance lease that it had entered with Treasure Coast Scooters and Things ("Lessee"), a Florida business.

The plaintiff seeks to recover the balance of the lease, plus attorney's fees, from the defendant, as a guarantor, because the lessee defaulted. Although the lease and guaranty were executed in Florida, the case is before this Court because the lease agreement contains a forum selection clause that requires all disputes between the parties to be heard in New York County. The plaintiff now moves for summary judgment and for dismissal of the defendant's affirmative defenses. The defendant has not submitted opposition to the motion.

Although the motion is unopposed, the Court still must scrutinize the motion papers to determine whether the plaintiff has meet its burden (see Liberty Taxi Management, Inc. v. Gincherman, 32 AD3d 276, 277 [1st Dept 2006]; Cugini v. System Lumber, 111 AD2d 114, 115 [1st Dept 1985]). To lay a prima facie case for default of a finance lease, the plaintiff must demonstrate the existence of a valid lease agreement and proof of nonpayment (see AGFA Photo USA Corp. v, Chromozone, Inc., 82 AD3d 402 [1st Dept 2011]; Canon Fin. Servs., Inc. v. Medico Stationary Serv., Inc., 300 AD3d 66, 66-67 [1st Dept 2002]). Similarly, when seeking judgment against a guarantor of an equipment lease agreement, the plaintiff must prove the existence of an absolute and unconditional guaranty, the underlying debt, and the guarantor's failure to perform under the guaranty (see Reliance Canst. Ltd. v. Kennelly, 70 AD3d 418, 419 [1st Dept 2010]; Kensington House Co. v. Gram, 293 AD2d 394, 305 [1st Dept 2002]).

Pursuant to CPLR § 3212, the proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidentiary proof in admissible form to demonstrate the absence of a material issue of fact (see [*2]Jacobson v. New York City Health and Hospitals Corp., 22 NY3d 824, 833 [2014], Zuckerman v. City of New York, 49 NY2d 557, 562 [1980]). The proponent must met a heavy burden. In deciding a summary judgment motion, courts must view all facts in the light most favorable to the non-moving party (see William J. Jenack Estate Appraisers and Auctioneers, Inc. v. Rabizadeh, 22 NY3d 470, 475 [2013]). If the moving party fails to make a prima facie showing, then the court is required to deny the motion, regardless of the sufficiency of the non-moving party's papers (see Winegard v. New York Univ. Med. Center, 4 NY2d 851, 853 [1985]). Only after the moving party has met its burden does the onus then shift to the party opposing the motion to establish the existence of a factual issue requiring a trial of the action (Jacobson, 22 NY3d at 833).

A conclusory affidavit by someone who lacks personal knowledge of the facts has no probative value and is insufficient to support a motion for summary judgment (see Zuckerman, 49 NY2d at 563; Rodriguez v. Bronx Zoo Restaurant, Inc., 110 AD3d 412, 412-413 [1st Dept 2013]). The plaintiff's motion relies on the affidavit of Lina Kravic, its lease originations director and custodian of records. Ms. Kravic's affidavit is conclusory, and she does not demonstrate personal knowledge of how the lease or guaranty were generated or executed by the parties. For example, she states in her affidavit that "prior to accepting and funding a lease transaction, the plaintiff generally verifies the lease through direct telephonic communication with the signatories on the lease or by obtaining a signed delivery receipt of the equipment." (emphasis added). She then claims that, in this case, the plaintiff obtained confirmation that the equipment was delivered to the lessee; however, she does not provide any basis for this knowledge, and the documents attached to the motion papers do not reference any confirmation of delivery to the lessee. Her use of the passive voice in her affidavit also may imply that someone else performed the tasks associated with verifying the lease, and thus would be outside of her personal knowledge.

Ms. Kravic also states that the lessee breached the lease by failing to make the required payments. Again, she offers no basis for her knowledge of the non-payments, and the documents attached do not include a payment history or log. Ms. Kravic further claims that demand was made upon the defendant for payment, but the plaintiff failed to provide any proof of said demand.

Additionally, Ms. Kravic's affidavit is insufficient to establish that the lease and guaranty (attached to its motion) are admissible business records. Documents proffered in support of a summary judgment must be in admissible form (CPLR §3212). Business records are admissible as an exception to the hearsay rule if the entries were made in the regular course of business, it was in the regular course of business to make the entries, and the entries were made at the time of the transaction, act or event or within a reasonable time thereafter (CPLR § 4518[a]). To lay the proper foundation for admissibility of a business record, the proponent must demonstrate that the records were generated as part of the regular practice of the business, that the people who generated the records had a business duty to do so accurately, and that they did so within the scope of their employment (see People v. Kennedy, 68 NY2d 569, 579-580 [1986]). Notably, Ms. Kravic's affidavit does not attempt to authenticate either the lease or the guaranty as records [*3]generated or maintained in the plaintiff's regular course of business.[FN1]

As Ms. Kravic clearly lacks personal knowledge of all the facts and circumstances surrounding the subject lease and guaranty, and the documents attached in support of the motion are not in admissible form, the plaintiff's motion for summary judgment fails to meet its prima facie burden and must be denied.

The plaintiff also moves for a dismissal of all the defendant's affirmative defenses, pursuant to CPLR §§ 3211(b), 3212 and 3016(b). The defendant's answer contains eight affirmative defense: (1) lack of personal jurisdiction due to improper service of process; (2) failure to state a claim upon which relief may be granted; (3) estoppel; (4) laches; (5) unclean hands; (6) lack of standing; (7) lack of privity and failure of consideration; and (8) statute of limitations. In the absence of any opposition from the defendant, and having searched the record, the Court cannot find any basis for these defenses. Many of the asserted defenses are pled deficiently and/or have procedural defects. Specifically, the defendant's claim that the complaint does not state a claim upon which relief may be granted is incorrect—the complaint states a valid cause of action for breach of a guaranty. The defendant's bald and conclusory allegations that the action is barred by unclean hands, laches,[FN2] estoppel and/or lack of standing are insufficiently pled (see Commissioners of State Insurance Fund v. Ramos, 63 AD3d 453 [1st Dept 2009]; Robbins v. Growney, 229 AD2d 356, 357 [1st Dept 1996]; Bentivegna v. Meenan Oil Co., Inc., 126 AD2d 506, 508 [2d Dept 1987]). The statute of limitations defense is deficient because the pleading does not set forth the applicable period of limitation (see Scholastic Inc. v. Pace Plumbing Corp., 129 AD3d 75, 82-83 [1st Dept 2015]). Additionally, the defendant waived any personal jurisdiction defense because he failed to move to dismiss within 60 days of serving his answer (CPLR §3211(e)). Accordingly, the plaintiff's motion to dismiss the affirmative defenses is granted.

Based upon the forgoing, the plaintiff's motion for summary judgment and dismissal of all the defendant's affirmative defenses is granted to the extent that the affirmative defenses are hereby dismissed. The motion is otherwise denied.

Dated: July 27, 2017

ENTER

Hon. John J. Kelley, J.C.C. Footnotes

Footnote 1:There may have been other methods of authenticating the documents besides proffering them as business records, but the plaintiff has not suggested or laid the proper foundation for such methods.

Footnote 2:The allegation that the action is barred by laches lacks merit because laches cannot be asserted as a defense to an action at law (County of Rockland v. Homicki, 227 AD2d 477 [2d Dept 1996].