Libertas Funding, LLC v Patmos Prop. Group LLC

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Libertas Funding, LLC v Patmos Prop. Group LLC 2023 NY Slip Op 31825(U) May 24, 2023 Supreme Court, Kings County Docket Number: Index No. 521299/2022 Judge: Leon Ruchelsman 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. INDEX NO. 521299/2022 FILED: KINGS COUNTY CLERK 05/30/2023 02:18 PM NYSCEF DOC. NO. 81 RECEIVED NYSCEF: 05/30/2023 SUJ?REijE COlJRT OF ·THE STATE_O-F"NEW YORK_ <;OUNTY OF KINGS: CIVIL TERM: COMMERCIAL PART 8 ------------ -- ----x - ~-- -. - -----~-----_LLC, LIBERT.AS FUNDING, Decision and order Plaintiff, Tndex No. 521B99/Z0.22 - aga-inst E>ATMOS PATMOS -PROPERTY GROUP LLC; PROPERTY GROUP HOLDINGS LLC; SAVIN.GS MORTGA.GE INC and MICHAEL JOYCE, MARK SULEK, May 24, .bef end-ants,·. 2-023 ---·- ·--------·---·- -· - ·------------· . ----·---. -x Motion Seq. #2 PRESENT: HON. LEON RUCHELSMAN T.he plaintiff has moved seeking summary j:udgement p_ursuant to CPLR §3212 arguing there are no questions of fact the ·ci.eJend.;3:nts owe the money- sought. motion. Pa,pers were Tl:l.e def.endan.t:s oppci-se the submitted by the- parties and after reviewing all the arguments this .court-now ma-kes the following .dete;r:mir1at ion. On September 14, 2020, the plaintiff a merchant cash advanc·e· funding p-rovide·r entered -who rea;i.de in Penn_oyl van.ia .. into a ·contract with def.endc1.nt.s Pursuant to the agreern.ent the plaintiff purchased $2'6".8, O(lO of def:E;!ndant; s future receivable for $200, 0-0-0. 06. The defendants guaranteed t-he agreement. The p.lainti.ff asserts the defendants stopped remittance.s in May 2022This actiori was .corritnenc_ed and :now ·-the and no:w -owe $141, 5.96·. 38. th.ere c:.an h~ no a:i;:g.uing plaintiff seeks. summary judgeme-nt .. . : . questions of fact the defendants owe .the amount outstaridin:g and juci.g:e:ment shoul_d be granted irt their favor. [* 1] 1 of 5 The defendants· INDEX NO. 521299/2022 FILED: KINGS COUNTY CLERK 05/30/2023 02:18 PM NYSCEF DOC. NO. 81 RECEIVED NYSCEF: 05/30/2023 oppos.e the mo_tion -arguing the.r.e are :questions .o.f fact which pre,cluqe a summary determinatio n at, this time. Conclusions of L-aw Where the material facts at issue in a case ate in dispute summary judgment cannot be granted. {Zuckerman v. City of New York, 4-9 NYS.2d 557, 427 NYS2d 595 [1980]). Generally, it is fq:r: the jury, the trier of fact to determine the legal cause of any i"njury_ , however, where ·only -ot'l"e coriclusi:cin ma_y be drawn -from th-e facts then the q1,.1es.tio.n. of l~.gal ca.use may tie .decid~d by the trial court as a matter of law (Marino v; Jamison, 18.·9 ADJ-d 1021, 1~6 NYS3d 324- [2d Dept,, 2021}. \'A prop.er foundation for the admis~ion of a business reCord must be provic:ied by some·one with personal knowledge o.f the ;mal5.-er '. s business pr acti.ces and procedur.es" (Citibank N. A. .v. Cabrera, 130 AD3d .$61, 14 NYS~d 420 [2d Qept., 2015]). In this case, -the plaint:i;ff submitted. ··the af.fidav"it o--f Ricky Pa.iacio a a, customer s.$rvtce .1;:epres.entati ve of :the pl'3-int;.iff who stated that .he reviewed the plaintiff's records in connectiort with the loan extended in this ca:se. He :Eu.rt.he+ -E!tated. that all ·the doc:uments: _he reviewed were ~i3.intained in the regular co\1:tse of business and all such ·records. were made. near their occu_rr.ence ..with s.Q:ni.eone who· had know-1~.c;ige at that ;t:i,me and that the plaintiff; s .standard practice is to keep .such records in the ordinary courf>e of 2 [* 2] 2 of 5 INDEX NO. 521299/2022 FILED: KINGS COUNTY CLERK 05/30/2023 02:18 PM NYSCEF DOC. NO. 81 business. RECEIVED NYSCEF: 05/30/2023 Thus, the plaintiff has :establish ed the admissibi lity of the records relied upoh since Mt. Palacio ha:d knowledge and familiarit y of the plaintiff 's practices and procedure s (see, Cadletock Joint Venture L.P. v. Trombley. 150 AD3d 957, 54 NYS3d 127 [2d Dept., 2017]). Further, there is.no m:erit to the atgum:ent that Libertas has no standing to even commence this aC:tiori. Moreover, there is no merit to the argument the actual copy of the agreement entered into between the parties has not been presented to the court for review. Therefore , the plaintiff establishe d its entitleme nt to summary judgement . The defendant s argue the agreement in this case was a usurious loan and thus is unenforce able. In this c:ase, there are no questions of fact the agreement was a cash advance agreement and not a usurious and unenforce able loan. The agreement contained a reconcili ation provision which conclusiv ely establish the agreement was not usurious (see, K9 bytes, Inc., v. Arch Capital Funding LLC;. 56 Misc3d 807, 57 NYS2d 625 Westchest er County 2017]}. [Supreme Court The defendant s argue the reconcilia tion provision in the contract was merely illusory and thus riot a true reconcilia tion provision , hence the contract wa.s a loan arid was usurious. The courts have developed three criteria evaluating whether a particula r arrangeme nt is a loan or a merchant case advance. First, whether there is a :re-concili ation provision , whether the 3 [* 3] 3 of 5 INDEX NO. 521299/2022 FILED: KINGS COUNTY CLERK 05/30/2023 02:18 PM NYSCEF DOC. NO. 81 RECEIVED NYSCEF: 05/30/2023 agreement has an indefinite term and lastly, whether the fuhde:i:: has recourse if the merchant declares bankruptc y (IBIS Capital Group LLC v. Four Paws Orlando LLC, 2017 WL 10.65071 [Supreme Court New York County 2017]). Thus, a reconcili~ tion provision demonstra tes, without any evidence to the contrary, that the plaintiff is not eriti tled to repayment in all circµms,ta nces. this case the reconcili ation provision is mandatory , In supporting the simple conclusio n the agreement is not a loan (see, Tender Loving Care Homes Irie., 172 NYS3d 335 v. Reliable Fast Cash LLC, 76 Misc3d 314, [Supreme court Richmond County 2022]). This is particula rly true wll.ere the "merchant never made such a written request or provided its bank statement s or other informatio n, such that neithe<r a reconcilia tion nor an adjustmen t wa-s ever performed " 44]). (.§.&.§, affidavit of Ricky Palacio, 'TilD [NYSCEF Doc. No. Thus; there can be no violation of the reconci1i8 tiori proVi-sion where the defendant s ''have not alleged that reconc::ili ation di<:i not in actuality function as agreed {or, indeed, that" the de.£endaht s "ever even requested reconcilia tion}" EBF Holdings LLC, (™, Streamline d Consultan ts Inc. , et. , at. , v. 2022 WL 4368114 [S.D.N.Y. 2022]). The <:iefendant s counter that ,indeed reconcili ation requests However, email requests seeking were forwarded to the plaintiff . a minimum weekly payment were really requests for ari adjt}stmen t of the weekly delivery contained within Article 12 of the, 4 [* 4] 4 of 5 INDEX NO. 521299/2022 FILED: KINGS COUNTY CLERK 05/30/2023 02:18 PM NYSCEF DOC. NO. 81 RECEIVED NYSCEF: 05/30/2023 Merchant Ag·reernent_. Paragraph 12 (b) of the ag-reeme:'nt states that ":ho Aµjustmerit sh.all take place until and unless Reooncili.atio n for at least one (i) Reconciiii3-tio n Month take-s place restiltin·g .:Ln reo.u.ct{on of the tot.a-L amount debited f r6m Merchant's ·Approved Bank Account during the Reconciliatio n Month by at ieast 20% in t:ompar:i.son to the.· .amount that would have been debited dur-ing tha.t -month without Reconcil.iatio n;' (see, Agr~ement 9J Sale of Futur.e· Receipts, '![12- (b) 45]). {NYSCEF Doc. No. p-ossible without a .prior recbncilia.tio n. Thus; no adjustment is The mere t.act the plaintiff accornmo.dated the tjefendant_s and actually reduced the weekly amount owed does ·not mean the reconciliatio n provision was ever tit.ilized and surel·y doe·-s not e·stablish o-r even. :i;.:aise. a_ny questions o:f fact ttie reconciliatio n provision was illusory thereby rendering the agreement a usurious loan. The:refore, no issues of fact ha=ve b.~en raised which would demand a denial of the motion for summary judgement. -:Conse.quently , the motio"n see.king summary judgement is. granted. So ord.erec:l. ENTER: DATED; May ~4, 2023 Brooklyn N.Y. ~ Ho.n. Leo._n Ru:.C1J.eJ_sman JSC 5 [* 5] .. 5 of 5 ---------- ---------- ------·····-·····- ·····-···-- ----------

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