Prosperum Capital Partners LLC v. Bottego Enters., Inc.

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Prosperum Capital Partners LLC v Bottego Enters., Inc. 2024 NY Slip Op 31385(U) April 19, 2024 Supreme Court, Kings County Docket Number: Index No. 529406/2022 Judge: Francois A. Rivera 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: KINGS COUNTY CLERK 04/19/2024 12:05 PM INDEX NO. 529406/2022 NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/19/2024

.At an IAS Tenn, Part 52 of the Supreme Court of the State of New York, held in cllld for the County of Kings, at the Courthouse; . .

at Civic Center, Brooklyn; New York; on the 19 th day of April 2024

HONORABLE FRANCOIS A. RIVERA

PROSPERUM CAPITAL PARTNERS LLC DIBIA ARSENAL FUNDING;

Plaintiff, DECISION & ORDER Index No. 529406/2022 -against:':"

BOTTEGO ENTERPRISES, INC . , DBA PRECISION CRAFTSMAN, and ALFRED D BOTTEGO,

Defendants. ----------. -----· ------- .--- . ----. ------. ------· --------------------X Recitation in accordance with CPLR 2219 (a) of the papers considered on the notice of motion filed on Nove1nber 14, 2023, by Prosperum Capital PartnersLLC D/B/A Arsenal Funding (heteinafter the plaintiff) for an order pursuant to CPLR 3212 granting summary Judgment in its favor on its causes of action for breach of contract, breach ofa guarantee agree1nei1t and attomey's fees against Bottego Enterprises, Inc., D/B/A Ptecision Craftsman (heteinaftet the business defendant), and Alfred Bottego (hereinafter the individual defendants) {collectively the defendants) for breachingtheagreements. The motion is unopposed.

-Notice of Motion. -Statement ofMatedal Facts "'.Affirination in .Support -Affidavitin Support Exhibits A~E -Memorandum of law in support

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FILED: KINGS COUNTY CLERK 04/19/2024 12:05 PM INDEX NO. 529406/2022 NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/19/2024

BACKGROUNI>

On October 11, 2022, plaintiff cmnmenced the instant action by filing a summons

and verified complaintwiththeKingsCounty Clerk's office (KCCO). On November 7,

2022, the defendants interposed and filed a joint verified answer with the KCCO.

The verified complaint alleges thirty-two. allegations of fact in support o fthree

denominated causes of action. The first is for breach of contract, the second is for breach

of a guarantee agreement, and the third is for attorney's fees based oil an alleged breach

of the agreement.

The verified complaint alleges the following salient facts. On or about June 16,

2022,the business defendant, in consideration of the sum of$25,000.00, sold, assigned; . . . .

and transferred to plaintiff nine {9%) percent ofits future sales proceeds, up to an

aggregate amount of $37,250.00. Pursuant to the aforesaidagreement,the business

defendant agreed tohave one bank accQllnt approved by plaintiff (hereinafter the "Bank

Account") from which the business defendant authorized plaintiff to debit 93/o of its daily

revenue until the amount of receivables of $37,250.00 was paid in fuU. Also, by the

agreement, Alfred Bottego executed a personal guarantee if the business defendant

defaulted ort the agreement.

On or aboutSepteinber 21, 2022, the business defendantstopped 1naking its

payments to plaintiff and otherwise breached the agreement by intentionally .impeding·

and preventin15 p'laintiff from making the agreed upon ACH withdrawals from the Bank

Account whHe conducting r~gular business operations and stiH in re.c¢ipt ofaccourits:-

i•ecei vab le.

FILED: KINGS COUNTY CLERK 04/19/2024 12:05 PM INDEX NO. 529406/2022 NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/19/2024

Footnotes

[2] of 8 [* 2] In total, the busin:ess defendant remitted the amount of $22,350.24 leaving a balance.of $14,899.76 remaining due and owing. Additionally, pursuant to the agreement, the business defendant incurred a "Default Fee" in the amount of $7,500.00, a "Non.,.Sufficient Fees'' in the amount of $400.00artd a :'UCC Filing Fee'' in the amount of$195.00 to cover the cost of filing UCC-1 financing statement fora total balance of $22,994.76 due and owing to the plaintiff. PursuanttO the terms ofthe agreement, defendants further owe plaintiff a total of $3,724,94 representing reasonable attorney;s fees, or twenty five percent (25%), incurred in the collection of the underlying balance. By reason of the foregoing:, the plaintiff has been damagedin the sum of$22,994.76, together with attorney's fees of$3,724.94, resulting in a sum total of$26,719.70. Despite due de1nand, the business defendant has failed to pay the amounts due and owing'. LAW AND APPLICATION The defendants did not submit opposition to the instant motion. However; "[a] summary judgment motion shoulcl not be granted merely because the party against whom judgment is sought failed to submit papers in opposition to the motion, {i.e. 'defaulted')" (Liberty TaxiMgt., Inc. v Gincherman, 32 AD3d 276,278 n [1st Dept2006], citing Vermont Teddy Bear Co., v l-800Beargram Co., 373 F3d241, 244 [2d Cir2004J ["the failure. to oppose a motion for summary judgment alone does not justify the granting of swnmary judgnie11t. Insteac:l,the ... court rimst still assess whetl1.er th.e moving party ha~ fulfilled. its burden ofdeinonstrating that there is rto gei1uine issue of material fact and Its entitlement tojudgment as a matter of law'']; see .Cugini v System Lumber Co., Inc., 1 il

[3] of 8 [* 3] AD2dl 14, 115 [1st Dept 1985]). It is well established that summary judgment may be granted only when no triable issue of fact exists (Alvarez v ProspectHospital, 68 NY2d 320, 324-25 [1986]). The burden is upon the moving party to make a prima facie showing thathe .or she is entitled to summary judgment as a matterof law by presenting evidence in admissible form demonstrating the absence of material facts (Giuffrida v Citibank, l 00 NY2d 72; 81 [2003]). A failure.to make that showing requires the denial of the summaryjudgrnent motion, regardless of the adequacy ofthe opposing papers (Ayottev Gervasio, 81 NY2d 1062, 1063 [1993]). Ifa prima facie showing has been made, the burden shifts to the opposing party to ptoduce evidentiary proof sufficientto establish the existence of material issues of fact (Alvarez, 68 NY2d at 324). Pursuant to CPLR 3212 (b), a court will grant a motion for summary judgment upon a determination that the movant's papersjustify holding, as a rnatter of law, that there is no defense to the cause ofaction or that the-cause of action or defense has no merit. Furthermore, all of the evidence must be viewed in the light most favorable to the opponent of the•motion (Marine Midland Bank v Dino & Artie's Automatic Transmission Co., 168 AD2d 610,610 [2d Dept 1990]). In the case at bar, the orily sworn testimony submitted by the plaintiff in support ofthe mbtfrm was an affirmation of Jeffrey Pare11a, its counsel (hereinafter Parella:), and an affidavit.ofMarlen Kruzhkov, its managing member (hereinafter Kruzhkov). Pa,rella' s affirmatio11. d¢monstrated no personal knowledge· of anY oftile

[4] of 8 [* 4] transactional facts alleged in the complaint. "An attorney's affirmation that is not based upon personal knowledge is of no probative or evidehtiary significance" (Nerayojfv Khorshad, 168 AD3d 866, 867 [2d Dept 2019], citing Warrington v Ryder Truck Rental, Inc~, 35 AD3d 455, 45 6 [2d Dept 2006]). Parella's affirmation states that additional facts in support of the motion are contained in the affidavit ofl(ruzhkov. Kruzhkov's affidavit is used to authenticate the agreement which was allegedly breached by the ·defendants. He averred that he is the managing mein ber of the p Ia intiff and, as such, has personal knowledge o fp laintit'f s business practices and procedures. He further averred that the factual allegations· proffered.in.support.ofthe·.motion for summary judgment were derived from his review of the plaintiffs business records. He then refetred to the three documents attached to the motion, namely, the agreement, a document denominatedasproofofpaymentand a document denominated as a payment history. Kruzhkov's affidavit averred that tlie defendants defaulted on the agreement by either blocking _plaintiffs access to a designated bank account froin which the business defendant agreed topermitplaintifftowithdraw receivables, orby failing to deposit receivables into the bank account, or by depositing receivables into an account other than the·agreed uponbank account. Ktuzhkov's allegedthat the pay1nent hi~tory~ annexed as exhibit Oto his affidavit, was proofofthe defendants.' default. "A proper foundation for the admission of a business record must be provided by someone wi_th personalknowledge ofthe maker's businesspra¢tices and procedures" (Citi.bi:mk) N.A. v Cabrera, 130 AD3d 861, 861 [24

[5] of 8 [* 5] Dept 2015]). Generaily, "the mere filing of papers received from other entities, even if they are retained in the regular course of business, is insufficient to qualify the documents as business tecords'''{Bank ofN.Y Mellon v Gordon, 171 AD3d 197,209 [2d Dept 2019], quoting Standard Textile Co. v National Equip. Rental, 80 AD2d 91 t 911 [2d Dept 1981]). "However, such records may be admitted into evidence if the recipient can establish personal knowledge ofthe maker's business practices and procedures or establish that the records provided by the nrnker were incorporated into the recipient's own records and routinely relied upon by the recipient in its own business" (Bank ofN.Y. Mellon, 171 AD3d at 209). In paragraph 16 ofKruzhkov's. affidavit, Kruzhkov alleged thatthe defendants breached the agreement "by defaulting on its representations and warnmties to Plaintiff under the Agreement and by failing to direct its receivables/payments to Plaintiff, by blocking Plaintiffs access to a designated bank account from which Business Defendant agreed to permit Plaintiff to withdraw receivables, by failing to deposit receivables into the Bank Account, and/or by depositing receivables into an account other than the agreed upon Bank Accouht.'' Although the plaintiff contends that defendants performed certain acts, the alleged acts were stated in the alternative and the payment history did not _provide proof of any one of the alleged acts. Here, the payment history is submitted without explaining how to read it Itis not self-explanatoty. Nor does it establish any of the alleged acts by the defendants con•stituting a default under the agreement.

[6] of 8 [* 6] The plaintiff did not annex its own bank records or the bank records of the defendants in support of the motion. It is unclear whether the payment history data is derived from other records. "[I]tis the business record itself, not the foundational affidavit, that serves as proof of the matter asserted" (Citibank, NA. vPotente,210 AD3d 861, 862 [2d Dept 2022], quoting Banko/NY Mellon, l 71 AD3d at 205). Accordingly, evidence of the contents of business records is admissible only where the records themselves are introduced. "Witho11t their introduction, a witness 1s testimony as to the contents of the recorcls is inadmissible hearsay" (Bank of New York Mellon v Gordon,

[171] AD3d 197 [2d Dept 2019]). In smn, plaintiff has failed to make a prima facie showing of entitlement to summary judgment on it claim that the business defendants breach of the agreement. Inasmtlch as the plaintiff did not make a prima facie showing that th~ business defendant breached the agreement, the plaintiff did not establish that the obligation ofthe individualguarantor was triggered; As a result, the plaintiff also failed to show that the guarantor breached the agreement. Inasmuch, as the plaintifffailed to demonstrate that any defendant breached the agreement, the third cause ofaction for attorney's fees basecl on a breach of the agreement is also unsupported. The motion is therefore denied withoutre·gardto the sufficiency orlack o(opposing papers (See Cugini v System Lbr. Co:, I 11 AD:id 114, 115 [1st Dept 1985]). CONCLUSION The. inotio11 by Ptospenun Capital Partners LLC D/B/A Arsenal Funding for an 7 of 8 -7]- ..........-...··-···-·- .............................. ·········- ........... . [* orderpursuant to CPLR 3212 granting summa1y judgment in its favor on its causes of action for breach of contract, breach of a guarantee agreement, and attorney's fees based on the breach asserted as against Bottego Enterprises,Inc., D/B/A Precision Craftsman and Alfred Bottego is denied. The foregoing Gonstitutes the decision and order of the Court. ENTER: __ ..J>_.,~ l.8.C. HON. FRANCOISA; RlVERA -8]- .............. ·-······-··............................... .. 8 of 8 [*