CIVIL COURT OF THE CITY OF NEW YORK
COUNTY OF NEW YORK
------------------------ -------- - - - ------------------- - - - ----)(
COCA-COLA REFRESHMENTS USA, INC.
f/k/a COCA-COLA ENTERPRISES, INC.,
Plaintiff,
AFFIRMATION
IN OPPOSITION
-againstIndex No. 022542/14
BULL & BUDDHA, LLC d/b/a BULL
and BUDDHA and MONICA FRYDMAN,
Defendants.
----------------------------------------------------------------------------)(
ROBERT N. COHEN, an attorney duly admitted to practice law before the Courts
of the State of New York, hereby affirms under penalties of perjury, as follows:
1.
I am a member of the law firm of WEINSTEIN, KAPLAN & COHEN,
P.C., attorneys for the plaintiff herein, am fully familiar with all of the facts and
circumstances in this matter and submit this Affirmation in Opposition to defendants'
Motion to Dismiss pursuant to CPLR §321 l(a)(l), §321l(a)(7) and §321 l(a)(lO).
STATEMENT OF FACTS
2.
The above entitled action was brought to recover monies due and owing for
goods sold and delivered pursuant to a Credit Application and based upon an account
stated.
3.
The parties entered into a Credit Agreement on May 28, 2010 which
provided that the plaintiff would deliver Coca-Cola products to defendant-BULL &
BUDDHA, LLC d/b/a BULL and BUDDHA (hereafter "BULL") on credit and
defendant-BULL would remit payment for those products on the fifteen day of the
following month (prox 15 terms). This Agreement was personally guaranteed by the
individual defendant, MONICA FRYDMAN (hereinafter "FRYDMAN") who personally
guaranteed the corporation's obligations thereunder. (Annexed hereto and made apart
hereof and marked Exhibit "1" is a copy of said Credit Agreement)
4.
The Credit Agreement provides that should defendants default under the
Agreement, defendants agreed to pay plaintiff s reasonable attorneys' fees incurred in
pursuant of the collection of any money due under the Credit Agreement. ( See Exhibit 1,
paragraph 5)
5.
The Credit Agreement further provides that the personal guaranty is a
continuing guaranty unless the plaintiff receives a certified notification of termination
within a minimum of seven days of said termination. (See Exhibit 1, Guaranty Clause)
6.
Plaintiff and defendants performed under the Agreement until January 15,
2013, when the December 12, 2012 invoice became due and defendants failed to pay the
same. Defendants further failed to pay every invoice thereafter through May 15, 2013.
(Annexed hereto and made a part hereof and marked Exhibit "2" is a copy of the
Accounts Receivable Spreadsheet and outstanding invoices)
7.
Plaintiff attempted to cure defendants' default herein by contacting them via
telephone at the number that they listed on their Credit Application (see Exhibit J) on
April 10, 2013, April 18, 2013, April 23, 2013, April 30, 2013, May 3, 2013, May 7,
2
2013, May 8, 2013, and May 10, 2013 but defendants refused to pay. (Annexed hereto
and made part hereof and marked as Exhibit "3" is a copy of the Customer Activity Log)
8.
In addition to these calls and voice mail messages, plaintiff sent e-mails to
the defendants to the e-mail address they listed on the Credit Application on April 30,
2013, May 3, 2013 and May 15, 2013 but defendants refused to pay. (See Exhibit 3)
9.
At no time did defendant-BULL notify the plaintiff that it wished to
terminate the Credit Application. Similarly, to date plaintiff has not received the required
certified written notice from defendant-f RYDMAN indicating her intention to terminate
the continuing guaranty that she executed herein. (See Exhibit 1)
10.
After said attempts to cure defendants' delinquency without resort to
litigation proved fruitless, this matter was referred to the undersigned and demand letters
were sent to defendants on or about September 24, 2013. (Annexed hereto and made part
hereof and marked Exhibit "4" are a copies of said Demand Letters)
11.
On or about September 30, 2013, Daniel C. Edelman, Esq., contacted the
plaintiff s attorneys' via e-mail to allege that it was defendants' subtenant that owed the
outstanding invoices and requested supporting documentation with regards to plaintiff s.,. _ _
claims. (Annexed hereto and made part hereof and marked as Exhibit "5" is a copy of said
e-mail request)
12.
Immediately in response thereto, plaintiff forwarded defendants' attorney
the requested documentation and a breakdown of the damages sought and further advised
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that his clients had never terminated the Credit Agreement, and specifically his client,
defendant-FRYDMAN had never sent the required certified written notice terminating the
personal guaranty. (Annexed hereto and made apart hereof and marked Exhibit "6" is a
copy of said correspondence)
13.
Having received no response thereto, plaintiff sent a second and final
demand letter to defendants ' attorney on or about October 31, 2013 which likewise went
ignored. (Annexed hereto and made part hereof and marked as Exhibit "7" is a copy of
the second demand letter)
PROCEDURAL HISTORY
14.
Having received no response whatsoever to it's second and final demand,
plaintiff commenced this action on August 28, 2014 by the filing of a Summons and
Complaint that was subsequently served upon defendant-FRYDMAN at defendantFRYDMAN's current residence located at 46 Ledgerock Lane, Hyde Park, New York
12538. (Annexed hereto and made part hereof and marked as Exhibit "811 is a copy of the
Summons and Complaint with proof of service)
15.
In lieu of filing an answer herein, defendants served the instant Motion to
Dismiss upon plaintiff s attorneys on December 10, 2014.
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ARGUMENTS
I.
DEFENDANTS' MOTION TO DISMISS SHOULD BE
DENIED IN ITS ENTIRETY BECAUSE PLAINTIFF HAS
CLEARLY DEMONSTRATED A CAUSE OF ACTION
UPON WHICH RELIEF MAY BE GRANTED
.
16.
A motion to dismiss a Complaint pursuant to CPLR §321l(a)(7) should not
be granted where, assuming all the facts in the Complaint are true, the plaintiff's
Complaint states a cause of action -upon which relief may be granted. See CPLR
321 l (a)(7); Leon v. Martinez, 84 N.Y.2d 83, 614 N.Y.S.2d 972 (1994) ("the criterion is
whether the proponent of the pleadings has a cause of action, not whether he has
stated one.");Rovello v. Orofino Realty Co., 40 N.Y.2d 633; 389 N.Y.S.2d 314 (1976)
( A "complaint should not he dismissed on a pleading motion so long as, when the
plaintiff is given the benefit of every possible inference, a cause of action exists");
Stukuls v.
State, 42 N.Y.2d 272, 275, 397 N.Y.S.2d 740 (1977); Henbest & Morrisey, Inc. v. W.H.
Ins. Agency, Inc., et. al., 259 App.Div.2d 829, 686 N.Y. S.2d 207 (3d Dept. 1999) (Held:
Court must accept the allegations in complaint as true and ignore the affidavits
submitted by defendants); see
' Matter of FYM Clinical Lab. v. Perales, 147
App.Div.2d 840, 537 N.Y.S.2d 998, aff'd_.74 N.Y.2d 539, 549 N.Y.S.2d 933 (1989).
17.
Indeed, the Second Department has held that the test to be applied is
whether the complaint gives sufficient notice of the transaction, occurrence or series of
transaction or occurrences intended to be proved and whether the requisite elements of
any cause of action known to our law can be discerned from its averments. JP Morgan
5
Chase v . J.H . Elec. of New York, Inc., 893 N.Y.S.2d 237, 239, 69 A.D.3d. 802, 803
·(2010)
18.
Thus, a motion to dismiss must be denied if, from the pleading's four
comers, "factual allegations are discerned which taken together manifest any cause of
action cognizable at law." 511 West 232nd Owners Corp v. Jennifer Realty Co., 98
N.Y.2d .144, 151·
15, 746 N.Y.S.2d 131 (2002), citing Polonetsky v. Better Homes
Depot, 97 N.Y.2d 46, 54, 735 N .Y.S.2d 479 (2001) (internal citation omitted).
19.
Furthermore, the Court of Appeals has ruled that a complaint must be
liberally construed and that a consideration of the mere adequacy of the contract cause of
action, not its merits, is the applicable standard when determining whether a cause of
action for breach of contract is sufficient to survive a motion to dismiss. 511 West 232nd
Owners Corp, supra at 151-152.
20.
As such, where none of the causes of action alleged in a complaint are
facially deficient, a defendant's motion to dismiss must be denied. Henbest & Morrisey.
Inc., supra.
21.
Plaintiff s complaint clearly states a cause of action for both breach of
contract and for account stated. As defense counsel notes, to state a claim for breach of
contract the plaintiff must allege the existence of a contract, the plaintiff s performance
under the contract, the defendant's breach of that contract and resulting damages. JP
Morgan Chase, supra.
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22.
Plaintiff s complaint states, and defense counsel even quotes in his moving
papers:
"As and for a first cause of action, for goods sold and delivered and
services rendered by plaintiff to defendant, at defendant's special instance
and request ·at an agreed upon price, no part of which has been paid,
although duly demanded, thereby cause damages to plaintiff in the sum of
$2,484.42, with interest accruing from January 15, 2013." (See Exhibit 8)
23.
Therefore plaintiff adequately pied (i) the existence of a contract,
specifically plaintiff and defendants Agreement to sell and deliver goods; (ii) plaintiff
performance under said contract, specifically the delivery of said goods; (iii) defendats
breach of the contract; specifically failure to pay for the delivered goods and (iv)
-plaintiff s damages as a result thereof, specifically the amount due for unpaid invoices.
(See Exhibit 8)
24.
Thus it is clear that within the four comers of the complaint the plaintiff
clearly states a cause of action for breach of contract.
25.
Similarly plaintiff adequately pleaded a claim for account stated when it
alleged in its complaint that it duly demanded payment for the goods sold and delivered
by the plaintiff to the defendant. Citibank (South Dakota), N.A. v. Brown-Serulovic, 948
N.Y.S.2d 331, 97 A.D.3d 522 (2012) (See Exhibit 8)
26.
Thus, looking only at the four corners of the complaint, plaintiff has clearly
and adequately plead the elements for each of its causes of action.
A.
Defendants' Motion to Dismiss should be denied because
defendants failed to resolve all factual issues as a matter of
law
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sufficient to conclusive y dispose of plaintiff's claim
27.
Where a party files a motion to dismiss based upon documentary evidence,
said evidence "...must be such that it resolves all factual issues as a matter of law, and
conclusively disposes of the plaintiff s claim." ( emphasis added) Berger v. Temple
Beth- El of Great Neck, 303 App.Div.2d 346 (2d Dept. 2003), quoting Trade Source v.
Westchester Wood Works, 290 App.Div.2d 437 (2d Dept. 2002). See also New York
Schools Ins. Reciprocal v. Gugliotti Associates, Inc., 305 App.Div.2d 563 (2d Dept.
2003).
28.
The plaintiff herein has undoubtedly stated a cause of action for breach of
contract upon which relief can be granted. In its Complaint, plaintiff clearly sets forth
that defendants breached the Agreement herein by defaulting on invoices due and owing
for products that were sold and delivered. Plaintiff has produced a duly executed Credit
Agreement that executed by both defendants. It is undisputed that plaintiff performed
pursuant to the Credit Agreement by delivering product to the address requested by
defendants on the Credit Application. It is undisputed that the defendants failed to pay for
the products that were delivered to the address they listed on the Credit Agreement. It is
further undisputed that neither defendant has ever terminated the Agreement with the
plaintiff and the defendant has put forth no evidence of such.
29.
Given the fact that defendants do not deny the allegations contained in the
Complaint that they executed the Credit Agreement and agreed to be responsible for the
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product that was delivered pursuant to that credit application, it is surprising that they
choose to ignore the termination provision contained in the same Credit Agreement when
making their claims in the instant motion. Despite the fact that defendant-BULL never
formally terminated the contract with the plaintiff an despite the fact that to this day
defendant-FRYDMAN has never sent plaintiff a certified writing terminating the ongoing
personal guaranty, it is defendants contention that the sublease attached to their motion
wherein they supposedly ceased operating the restaurant and leased the premises to
another absolves them completely qf liability. It is respectfully submitted that it is of no
little consequence that defendants not only fail to cite to any precedent in support of their
claim that the foregoing supposedly constitutes a meritorious defense to the plaintiff s
claims herein, but that defendants similarly fail to attach an affidavit of someone with
firsthand knowledge of the facts and circumstances in this matter.
30.
Defendants cite to no legal authority as the same does not constitute a
meritorious defense recognized by the Laws of the State of New York. Indeed, there is
simply no statute or case law that states that a party to a contract may be excused from its
obligations thereunder because that party decided to sublease its premises to another
entity without regard to an ongoing credit agreement with a vendor to deliver goods.
31.
Further defendants fail to attach an affidavit of someone with personal
knowledge of the facts but submits only the affirmation of their attorney, Daniel C.
Edelman, Esq., who does not have personal knowledge of the underlying facts and
circumstances herein. Such an affirmation by counsel is without evidentiary value.
9
Zuckerman v. City of New York, 49 N.Y.2d 557, 404 N.E.2d 718 (1980) (holding: a
bare affirmation of the defendant's attorney who demonstrated no personal
knowledge of the manner in which the accident occurred is without evidentiary value
and is unavailing)
32. Defendants sole defense becomes more troublesome when viewed in light of
the fact that the Credit Agreement has a specific manner in which the personal guarantor
may terminate the Agreement, specifically, that defendant-FRYDMAN must have sent
certified writing to the plaintiff formally terminating the agreement.
Enforcingand upholding this termination provision is extremely important in cases where,
as here, the subsequent lessee used the same trade name as the defendants.
33.
As their sole "proof ' in support of the instant motion, defendants have
attached a sublease indicating they were no longer operating on the premises at the time
and date of delivery of the products sued upon herein. However defendants' sub-lease is
of no consequence to this action as (i) plaintiff is not a party to the sub-lease agreement
and (ii) plaintiff was not put on notice that defendant wished to terminate the Credit
Agreement to permit the new owners to make their own arrangements for product. Indeed
the only documentary evidence that could support a meritorious defense in this case is a
writing that terminated the underlying Credit Agreement and defendants have failed to
attached such a termination request. Absent such documentary evidence that would
conclusively dispose of plaintiff s claim, defendants' motion must fail in its entirety.
34.
Thus, it is respectfully submitted that defendants have certainly failed to
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proffer any evidence that plaintiff s Complaint warrants dismissal-as it clearly states a
cause of action upon which relief may be granted.
B.
35.
Defendants' Motion to Dismiss should be denied because plaintiff
is not required to prove it's case with documentary evidence in its
Complaint
On a motion to dismiss pursuant to CPLR 321 l(a)(7) for failure to state a
cause of action, the Court must accept the facts alleged in the complaint as true, accord
the plaintiff every possible inference, and determine only whether the facts as alleged fit
within any cognizable legal theory. Porcelli v. Key Food Stores Co-operative, Inc., 44
A.D.3d 1020, 844 N.Y.S.2d 387 (2d Dept. 2007)
36.
Whether a complaint will survive a motion for summary judgment, or
whether the plaintiff will ultimately be able to prove its claim, is irrelevant to a
determination of pre-disclosure CPLR §3211 motion to dismiss. Porcelli v. Key Food
Stores Co-operative, Inc. , supra, 884 N.Y.S.2d. at 388.
37.
The courts have also held that pursuant to a CPLR §321 l (a)(7) motion, if in
any aspect upon the facts stated the plaintiff is entitled to recovery, a motion to dismiss
for insufficiency must be denied. Upon such a motion, the function of the court is to look
to the substance rather than to the form. Kaufman v. Sweigard, 27A.D.2d 717, 277
N.Y.S.2d 498 (1st Dept. 1967)
38.
Accordingly, the standard on a motion to dismiss a pleading for failure to
state the cause of action is not whether the party has artfully drafted a pleading, but
whether, deeming the pleading to allege whatever can be reasonably implied from its
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statements, a cause of action can be sustained. When deciding whether a cause of action
can be sustained, the pleadings must be liberally construed and the Court must accept the
facts as alleged in the complaint as true, accord the plaintiff the benefit of every possible
inference, and determine only whether the facts as alleged fit into any cognizable legal
theory. Barry & Sons, Inc. v. Instinct Productions LLC, 5 Misc.3d 172, 783 N.Y.S.2d
225 (Sup. Ct. N.Y. Co. 2004) (reversed on other grounds)
39.
In their motion, defendants complain that the plaintiff did not attach a copy
of the underlying agreement to the Complaint, without citing to any legal authority that
would suggest this is a viable basis to dismiss a Complaint under CPLR §3211(a)(7),
which plaintiff submits it is not as there is simply no legal requirement that a copy of the
underlying agreement be attached to the Complaint.
40.
Plaintiff submits that the claims made by defendants therein, which plaintiff
vehemently disputes, should not be considered by this Court when rendering its decision
as such claims are outside the scope of review for a Motion to Dismiss pursuant to CPLR
§321l(a)(7) as they go to the underlying merits of the case and not to what is set forth
within the four corners of the Complaint. Henbest & Morrisey, Inc. v. W.H. Ins. Agency,
Inc., et. al., 259 App.Div.2d 829, 686 N.Y.S.2d 207 (3d Dept. 1999) (A CPLR
§3211 (a)(7) Motion to Dismiss may not be converted into a Motion for Summary
Judgment if issue has not yet been joined).
41.
Plaintiff further submits that, not only are the contents of defendants'
Motion to Dismiss devoid of any viable legal basis to grant dismissal pursuant to CPLR
12
§321l(a)(7), but that, even applying the requisite standard, the face of the pleadings
clearly state a cause of action for breach of contract, account-stated and attorneys'
42.
fees.
As discussed at length above, plaintiff herein has undoubtedly stated a
cause of action for breach of contract upon which relief can be granted. In its Complaint,
plaintiff clearly sets forth that defendants breached the Agreement herein by defaulting on
invoices due and owing for products that were sold and delivered. (Exhibit 2) Plaintiff has
produced a duly executed Credit Agreement that executed by both defendants. (Exhibit 1)
It is undisputed that plaintiff performed pursuant to the Credit Agreement by delivering
product to the address requested by defendants on the Credit Application. (Exhibit 2) It is
undisputed that the defendants failed to pay for the products that were delivered to the
address they listed on the Credit Agreement. (Exhibit 2) It is further undisputed thatneither
defendant has ever terminated the Agreement with the plaintiff and the defendant has put
forth no evidence of such. (Exhibit 1) As such, it is respectfully submitted that
it
is clear upon a review of the four comers of the pleadings that plaintiff has stated a cause
of action upon which relief may be granted. Thus, applying the requisite standard for a
Motion to Dismiss pursuant to CPLR §3211(a)(7), it is respectfully submitted that
defendants Motion to Dismiss must be denied in its entirety.
43.
A review of the complaint herein reflects that the first cause of action is for
a breach of contract and the plaintiff has submitted a copy of the contract entered into
among the parties hereto. (Exhibit 1)
44.
The second cause of action is for an account stated and the defendants
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I
-i
admit that plaintiff performed under the agreement. (Exhibit 2)
45.
The third cause of action is for reasonable attorneys' fees which are
provided for in paragraph "5 11 in the Credit Agreement among the parties. (Exhibit 1)
46.
Accordingly, each of the above causes of action express legally cognizable
claims against the defendants and cannot be determined, at this point in the litigation,
based on any evidence, since the plaintiff has not had the opportunity to present same to
the Court in evidentiary form.
II.
47.
DEFENDANTS' MOTION TO DISMISS SHOULD BE
DENIED IN ITS ENTIRETY BECAUSE PLAINTIFF HAS
JOINED ALL NECESSARY PARTIES TO ITS ACTION
Necessary parties are persons who ought to be parties if complete relief is
to be accorded between the persons who are parties to the action or who might be
inequitably affected by a judgment in the action shall be made plaintiffs or defendants.
CPLR §J OOJ (a).
48.
Further, when a person should be joined under subdivision (a) has not been
made a party and is subject to the jurisdiction of the court, the court shall order him
summoned. CPLR §J OOJ (b). .
49.
Plaintiff joined only the defendants in this action because they are the only
parties to the Agreement. (See Exhibit 1). The defendants requested credit be extended to
them and plaintiff delivered product pursuant to the Credit Agreement. As discussed at
length above, at no time did defendants terminate their agreement, thus at all times
14
relevant herein, defendants were and are the liable party for permitting a subsequent
tenant or order product on their credit account with the plaintiff. Specifically, at no time
even through their current motion have defendants shown that it was their intention to
terminate the Credit Agreement.
50.
Indeed, as it is not uncommon in plaintiff s experience for the management
or names of restaurants at a given location to change completely, it was the defendants
responsibility to guard their credit account to ensure that no one they permitted on their
premises continued to order product on their account, if that was something they did not
intend. However regarding the plaintiff's action, the goods were sold and delivered to an
address that the defendants requested on their Credit Application and absent a formal
termination, and a certified writing terminating the personal guaranty, the Credit
Agreement between the plaintiff and the defendants remains, and any litigations enforcing
the provisions contained therein are appropriately brought against the defendants.
51.
To be clear, the plaintiff is not a party to any sub-lease agreement that the
defendants allegedly had with a third party, as such they cannot be necessary parties to
plaintiff's lawsuit for breach of an unterminated Agreement that plaintiff had with
defendants.
52.
In any event, even if the third party that defendant believes is liable for the
outstanding invoices were a necessary party, which plaintiff maintains are not, plaintiff's
failure to join this party is not fatal to its claim in that CPLR §I 00 I (b) expressly permits
15
the court to order the party joined if it finds it to be a necessary party.
53.
Specifically, the third party "Guestsy's", that defendants maintain is a
necessary party, though a foreign corporation, transacted business in New York and as
such the Court would have jurisdiction to order it summoned into the action pursuant to
CPLR §I 00I(b). Given this option is available to the Court, dismissal is not appropriate
where a defect, if any, can be cured by bringing his party into the lawsuit.
54.
It is respectfully submitted that defendant's motion should be
denied in this regard as plaintiff has joined all necessary parties who are
liable under the Credit Agreement herein. If the Court determines that the
alleged sub-tenant of the defendants is a necessary party, then the plaintiff
requests that the Court use its authority under CPLR §100I(b) and summon
this party into the lawsuit.
CONCLUSION
It is respectfully submitted that defendants' Motion to Dismiss should be denied in its
entirety as plaintiff has clearly set forth that it had adequately stated claims for breach
of contract and account stated. Plaintiff has demonstrated (i) that defendants supposed
documentary evidence is of no consequence to this action as the plaintiff is not a party
to the agreement defendant attaches in support of its claim and the same is not a
defense to plaintiff s cause of action and (ii) plaintiff was not required to attach
supporting documentation to its complaint but rather was required and actually did
adequately plead sufficient facts to put the defendants on notice of the transaction or
occurrence of events that were the basis of plaintiff s lawsuit.
55.
Further, plaintiff has shown that since it was not a party to defendants'
supposed sub-lease with a third party, that third party is not a necessary party
to plaintiff s lawsuit brought under an unterminated Credit Agreement
between. the plaintiff and the defendants. However, if the Court determines
that the third party is a necessary party herein, this is not a fatal defect as the
Court may summon the necessary party into this matter.
WHEREFORE, affirmant respectfully requests that defendants' motion to
dismiss pursuant to CPLR §3211 be denied in all respects and for such other,
further and different relief as to this Court may seem just, proper and
equitable.
Dated: Garden City, New York January 14, 2015
ROBERT N. COHEN
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