SG Equip. Fin. USA Corp. v Vaan Gaskets, Inc.

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SG Equip. Fin. USA Corp. v Vaan Gaskets, Inc. 2019 NY Slip Op 31362(U) May 13, 2019 Supreme Court, New York County Docket Number: 654492/2018 Judge: Andrew Borrok 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] NEW YORK COUNTY CLERK 05/13/2019 02:05 P~ NYSCEF DOC. NO. 28 INDEX NO. 654492/2018 RECEIVED NYSCEF: 05/13/2019 SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: PART HON. ANDREW BORROK IAS MOTION 53EFM Justice --------------------------------------------------------------------------------x SG EQUIPMENT FINANCE USA CORP., INDEX NO. MOTION DATE 654492/2018 05/13/2019 Plaintiff, MOTION SEQ. NO. 001 -vVAAN GASKETS, INC.,ANTONIO RIVERO, ANTONIO RIVERO DECISION AND ORDER Defendant. ---------------------------------------------------------------------------------x The following e-filed documents, listed by NYSCEF document number (Motion 001) 15, 16, 17, 18, 19, 20,21,22,23,24,25,26 were read on this motion to/for JUDGMENT-SUMMARY For the reasons set forth below, SG Equipment Finance Corp.'s motion pursuant to CPLR § 3212 for summary judgment is granted. Reference is made to (x) a Master Lease Agreement (the Lease Agreement), dated October 5, 2016, between TRUMPP Finance 1 and Vaan Gaskets, Inc. (Vaan Gaskets; Vaan Gaskets, together with Antonio Rafael Rivero and Antonio Jose Rivero, collectively, the Defendants) pursuant to which TRUMPP Finance agreed to lease certain equipment to Vaan Gaskets (Tsang aff, exhibit A iJ 1), (y) a Personal Guaranty, dated October 5, 2016, by Antonio Rafael Rivero and in favor of TRUMPP Finance (the ARR Guaranty), and (z) a second Personal Guaranty, of even date therewith, by Antonio Jose Rivero and in favor of TRUMPP Finance (the AJR Guaranty), pursuant to which Antonio Rafael Rivero and Antonio Jose Rivero guaranteed to 1 SG Equipment Finance USA Corp. dba TRUMP Finance. 654492/2018 SG EQUIPMENT FINANCE USA CORP. vs. VAAN GASKETS, INC. Motion No. 001 1 of 6 Page 1of6 [*[FILED: 2] NEW YORK COUNTY CLERK 05/13/2019 02:05 NYSCEF DOC. NO. 28 P~ INDEX NO. 654492/2018 RECEIVED NYSCEF: 05/13/2019 TRUMPP Finance the payment and performance of all indebtedness, obligations, and liabilities of Vaan Gaskets arising out of any financial accommodations extended by TRUMPP Finance (Tsang aff, exhibits C, D). The terms of the Lease Agreement are set forth in a Master Lease Schedule (Lease Schedule), dated of even date therewith, between TRUMPP Finance and Vaan Gaskets, which describes the leased equipment as one TRUMPP TruLaser1030 Fiber S/N (the Equipment), for a base lease term of 60 months commencing on the date of delivery and acceptance, with monthly lease payments of $5,260, plus a one-time documentation fee of $750 (Tsang aff, exhibit B). Section 19 of the Lease Agreement provides that the Lease Agreement is a Finance Lease as that term is defined in Article 2A of the UCC (id. iJ19). Article 2A of the UCC provides that "a lease contract is effective and enforceable according to its terms between the parties" (NY UCC § 2A-301). Section 13 of the Lease Agreement sets forth the circumstances constituting an Event of Default, including the failure to make any lease payment when it becomes due where such failure is not cured within 10 days (Tsang aff, exhibit A iJ 13). Section 14 of Lease Agreement provides: Upon the occurrence of any Event of Default, Lessor may declare this Agreement and/or any Lease hereunder to be in default and exercise any one or more of the following remedies: (a) declare the entire unpaid balance of Lease Payments for the unexpired term of the Lease immediately due and payable and similarly accelerate the balances due under any other Leases without notice or demand, (b) sue for and recover the Stipulated Loss Value, as defined in Section 10 hereof, for each accelerated Lease, but only to the extent permitted by law, (c) charge Lessee interest on all monies more than thirty days past due at the lesser of one and one half percent (1.5%) per month or the maximum rate permitted by law from the date of default until paid, (d) require Lessee to assemble all Equipment at 654492/2018 SG EQUIPMENT FINANCE USA CORP. vs. VAAN GASKETS, INC. Motion No. 001 2 of 6 Page 2 of 6 [*[FILED: 3] NEW YORK COUNTY CLERK 05/13/2019 02:05 NYSCEF DOC. NO. 28 P~ INDEX NO. 654492/2018 RECEIVED NYSCEF: 05/13/2019 Lessee's expense, at a place reasonably designated by Lessor and/or (e) remove any physical obstructions for removal of the Equipment from the place where the Equipment is located and take possession of any or all items of Equipment, without demand or notice, wherever same may be located, disconnecting and separating all such items of the Equipment from any other property and/or (f) exercise any remedies available to Lessor under the UCC and/or applicable law (id. ii 14). Pursuant to Section 14 of the Lease Agreement, Section 1 of the ARR Guaranty, and Section 1 the AJR Guarantee, the Defendants agreed to pay all legal fees incurred by TRUMPP Finance in connection with enforcement of the Lease Agreement (Tsang aff, exhibit A iJ 14; Tsang aff, exhibits C, D ii 1). The Amended Complaint alleges that Vaan Gaskets defaulted under the Lease Agreement by failing to make the required lease payments due to TRUMPP Finance beginning in July 2018 and for each month thereafter (Amended Complaint iJ 17), that TRUMPP Finance served default demand notices on August 17, 2018, and that such defaults were not cured within the 10-day cure period provided in the Lease Agreement. The Amended Complaint further alleges that, (i) as a result of Vaan Gaskets' default, TRUMPP Finance has incurred damages of not less than $229,078.98, plus accrued interest from the date of default, costs, expenses, and attorneys' fees (id. iJ 18) and (ii) Mssrs. Rivero have breached the ARR Guaranty and the AJR Guaranty by failing to pay the obligations due and owing to TRUMPP Finance (id. iii! 19-34). Accordingly, TRUMPP Finance sued and now moves for summary judgment. 654492/2018 SG EQUIPMENT FINANCE USA CORP. vs. VAAN GASKETS, INC. Motion No. 001 3 of 6 Page 3 of 6 [*[FILED: 4] NEW YORK COUNTY CLERK 05/13/2019 02:05 NYSCEF DOC. NO. 28 P~ INDEX NO. 654492/2018 RECEIVED NYSCEF: 05/13/2019 DISCUSSION Summary judgment will be granted only when the movant presents evidentiary proof in admissible form that there are no triable issues of material fact and that there is either no defense to the cause of action or that the cause of action or defense has no merit (CPLR § 3212 [b]; (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]). The proponent of a summary judgment motion carries the initial burden to make a prima facie showing of entitlement to judgment as a matter of law (Alvarez v Prospect Hosp., 68 NY2d at 324). Failure to make such a primafacie showing requires denial of the motion (id., citing Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]). Once this showing is made, the burden shifts to the opposing party to produce evidence in admissible form sufficient to establish the existence of a triable issue of fact (Alvarez, 68 NY2d at 324). To establish entitlement to summary judgment in a cause of action alleging breach of an equipment lease, a plaintiff must demonstrate the existence of an equipment lease agreement and proof of non-payment (AGFA Photo USA Corp. v Chromazone, Inc., 82 AD3d 402, 403 [1st Dept 2011 ]). A demand notice may serve as proof of non-payment (id.). In a cause of action for breach of a guaranty, a plaintiff must establish the existence of a guarantee executed by the defendant(s), the underlying debt, and the guarantor's failure to perform under the guarantee (Sarfati v Palazzolo, 142 AD3d 877, 877 [1st Dept 2016]). It is undisputed that SG Equipment Finance USA Corp. dba TRUMPP Finance had a Lease Agreement with Vaan Gaskets which Lease Agreement was guaranteed pursuant to the ARR Guaranty and the AJR Guaranty by Mssrs. Rivero, that Vaan Gaskets defaulted under the Lease 654492/2018 SG EQUIPMENT FINANCE USA CORP. vs. VAAN GASKETS, INC. Motion No. 001 4 of 6 Page 4 of 6 [*[FILED: 5] NEW YORK COUNTY CLERK 05/13/2019 02:05 NYSCEF DOC. NO. 28 P~ INDEX NO. 654492/2018 RECEIVED NYSCEF: 05/13/2019 Agreement beyond the applicable cure period and that no payments have been made to the TRUMPP Finance since July, 2018. In their opposition papers, the Defendants argue that TRUMPP Finance failed to mitigate damages by "exercising its alternate remedy of repossession-as expressly provided in the [Lease Agreement]" (NYSCEF Doc. No. 23 at 4). The argument is unavailing. Simply put, Section 14 of the Lease Agreement provided TRUMPP Finance with the option not the obligation to repossess to mitigate damages. While TRUMPP Finance was under no statutory or contractual obligation to mitigate damages, Section 14 of the Lease Agreement provides that "[i]n the event Lessor disposes of the Equipment, Lessor shall give Lessee credit for any sums received by Lessor from the sale or lease of the Equipment after deduction of the expenses of sale or lease" (Tsang aff, exhibit A iJ 14). At oral argument, both TRUMPP Finance and the Defendants acknowledged that the Equipment has been surrendered and sold at auction. Accordingly, it is ORDERED that the plaintiff's motion for summary judgment is granted and the Clerk of the Court is directed to enter judgment in favor of SG Equipment Finance USA Corp. and against Vaan Gaskets, Inc., Antonio Rafael Rivero, and Antonio Jose Rivero in the amount of $229,078.98, less the amount of the proceeds from the sale of the Equipment after deduction of expenses incurred in effectuating the sale, proof of which shall be submitted to the Clerk, together with interest at the rate of 9% per annum from the date of July 1, 2018 until the date of the decision and order on this motion, and thereafter at the statutory rate, as calculated by the 654492/2018 SG EQUIPMENT FINANCE USA CORP. vs. VAAN GASKETS, INC. Motion No. 001 5 of 6 Page 5 of 6 [*!FILED: 6] NEW YORK COUNTY CLERK 05/13/2019 02: 05 PMI NYSCEF DOC. NO. 28 INDEX NO. 654492/2018 RECEIVED NYSCEF: 05/13/2019 Clerk, together with costs and disbursements to be taxed by the Clerk upon submission of an appropriate bill of costs, and the plaintiff shall have execution thereof. 5/13/2019 DATE CHECK ONE: ANDREW BORROK, J.S.C. CASE DISPOSED GRANTED D DENIED APPLICATION: SETTLE ORDER CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN ~ NON-FINAL DISPOSITION GRANTED IN PART SUBMIT ORDER FIDUCIARY APPOINTMENT 654492/2018 SG EQUIPMENT FINANCE USA CORP. vs. VAAN GASKETS, INC. Motion No. 001 6 of 6 D D OTHER REFERENCE Page 6 of 6

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