Southwestern Invs. Group, LLC v JH Portfolio Debt Equities, LLC

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Southwestern Invs. Group, LLC v JH Portfolio Debt Equities, LLC 2018 NY Slip Op 33660(U) June 5, 2018 Supreme Court, Erie County Docket Number: 805990/2017 Judge: Deborah Chimes 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: 1] ERIE COUNTY CLERK 06/05/2018 09:54 AM NYSCEF DOC. NO. 244 INDEX NO. 805990/2017 RECEIVED NYSCEF: 06/05/2018 At a Civil Special Term of the Supreme Court, held in and for the County of Erie, State of New York, on the 23rd day of April, 2018. PRESIDING: HON. DEBORAH A. CHIMES SUPREME COURT: STATE OF NEW YORK COUNTY OF ERIE SOUTHWESTERN INVESTORS GROUP, LLC, DECISION INDEX NO.: 805990/2017 Plaintiff, -vsJH PORTFOLIO DEBT EQUITIES, LLC, DAREN TURCO, and JACOB ADAMO, Defendants. DECISION Defendant, JH Portfolio Debt Equities, LLC (JHPDE), moved for partial summary judgment, dismissing plaintiffs fifth cause of action for declaratory judgment and sixth cause of action for injunctive relief, and for declaratory judgment on JHPDE's twelfth counter-claim. judgement. Plaintiff, Southwestern Investors Group, LLC (SWI), cross-moved for declaratory judgement, requesting that the Court rule that the Assignment and Assumption Agreements between the plaintiff and JHPDE are ambiguous and that extrinsic evidence be allowed to assist in the interpretation of the contracts. [*FILED: 2] ERIE COUNTY CLERK 06/05/2018 09:54 AM NYSCEF DOC. NO. 244 INDEX NO. 805990/2017 RECEIVED NYSCEF: 06/05/2018 Briefly, the relevant facts are as follows: Beginning in June of2015, SW! entered into a series of agreements with Comenity Bank to purchase credit card debt. Between December 2015 and July 2016, SW!, Comenity and .IHPDE entered into a series of three-way Assignment and Assumption Agreements. Each Assignment was accompanied by a Bill of Sale. At issue is whether the Assignment and Assumption Agreements transferred ownership of the disputed accounts to JHPDE as defendant contends, or whether, as plaintiff argues, the transaction between JHPDE and SW! was a loan and that the Assignment and Assumption Agreements were not a transfer of the disputed accounts to JHPDE. The proper inquiry in determining whether a contract is ambiguous is whether the agreement on its face is reasonably susceptible of more than one interpretation. A party seeking summary judgment has the burden of establishing that the construction it favors is the only construction which can fairly be placed thereon. Arrow Communication Lab. v. Pico Prods., 206 A.D.2d 922, 922-923 (4th Dep't 1994) (internal citations omitted). Pursuant to paragraph I of the Assignment and Assumption Agreements, S WI conveyed its "rights, title and interest" in the disputed accounts to JHPDE. SW! argues that paragraph 6 of those same Agreements, which refer to release of JHPDE's "security interest," creates an ambiguity in support ofSWI's argument that the transaction between SW! and JHPDE was not an assignment, but a loan. In reply, JHPDE argues that the language of the Assignment and Assumption Agreements is not ambiguous and that reference to a security interest does not transfo1m the Assignments into a loan agreement, but rather, under the UCC, a security interest includes any interest of a buyer of accounts in the accounts which it purchases. UCC § 1-201.35. 2 [*FILED: 3] ERIE COUNTY CLERK 06/05/2018 09:54 AM NYSCEF DOC. NO. 244 INDEX NO. 805990/2017 RECEIVED NYSCEF: 06/05/2018 When interpreting a contract, the court "should construe the agreements so as to give full meaning and effect to the material provisions. A reading of the contract should not render any portion meaningless. Further, a contract should be read as a whole, and every part will be interpreted with reference to the whole; and if possible, it will be so interpreted as to give effect to its general purpose." Beal Savings Bank v Sommer, 8 N. Y. 3d 318, 324-325 (2007) (internal citations omitted). Here, the Assignment and Assumption Agreements unambiguously reflect the intention of the parties. The third whereas clause states that ''S WI wishes to assign to JHP2 all of Assignor's respective rights, title and interest in to and under the Original Purchase Agreement for purchase of the Charged-off accounts ... and JHP2 is willing to accepts such assignments". Further. under paragraph 1 of the Assignments, SW! agreed to assign its "rights, title and interest in, to and under the Original Purchase Agreement including without limitation, (i) all the Accounts under the terms and conditions set forth in each of the Original Purchase Agreements, and (ii) any and all respective rights of the Assignor to compel performance of the respective tenns of the Original Purchase Agreement regarding the Accounts." Paragraph 6 of the Assignment merely permits JHPDE to request that Comenity consider assignment back to SW! at the time of the release of the JHPDE's security interest in the accounts. Nowhere in the body of the Assignment is there reference to a "loan" or the "repayment of money''. Hence, to give full meaning and effect to the material provisions of the assignments, the Court concludes that the only rational interpretation is that the reference in paragraph 6 to security interest is to JHPE's security interest in the accounts themselves. 3 [*FILED: 4] ERIE COUNTY CLERK 06/05/2018 09:54 AM NYSCEF DOC. NO. 244 INDEX NO. 805990/2017 RECEIVED NYSCEF: 06/05/2018 Accord ingly. JHPDE's motion is granted in its entirety and WI' eras -motion denied. Counsel lor JI IPDE i to prepare and submit an Order on both motions in 30 days. attach ing the Court' Decision. {1.£ / DATED: Buffalo, New York -:Su..ne S ~ DEBORAH A. CHIME , J .S.C. .}01B 4

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