Preview
FILED: KINGS COUNTY CLERK 12/14/2022 06:19 PM INDEX NO. 515251/2021
NYSCEF DOC. NO. 30 RECEIVED NYSCEF: 12/14/2022
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF KINGS
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PRESTIGE HOME FITNESS, LLC A/K/A
GYMGUYZ BAY RIDGE, Index No.: 515251/2021
Plaintiff,
AFFIRMATION IN SUPPORT
-against- OF MOTION TO VACATE
DEFAULT JUDGMENT
GYMGUYZ FRANCHISING, LLC,
Defendant.
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NANCY L. KOURLAND, ESQ., an attorney duly admitted to practice before the courts
of the state of New York, affirms as follows, upon penalty of perjury:
1. I am a Senior Counsel at Lasser Law Group, PLLC, attorneys for Defendant
GYMGUYZ FRANCHISING, LLC (“GymGuyz” of “Defendant”). As such, I have personal
knowledge of the facts, circumstances and pleadings set forth herein.
2. I make this Affirmation in support of Defendant’s motion, pursuant to CPLR §
317, seeking an order vacating the default judgment dated November 16, 2022 and entered on
December 5, 2022 and compelling Plaintiff Prestige Home Fitness, LLC a/k/a GymGuyz Bay
Ridge (“Prestige”) to accept its September 8, 2021 answer with counterclaims (the “Answer”)
[NYSECF Doc. No. 13], and for such other and further relief as this Court deems just and proper.
3. As discussed more fully below, GymGuyz did not receive actual notice of the
Complaint until after its time to answer or otherwise respond to the Complaint expired.
4. In addition, GymGuyz has a meritorious defense to this commercial breach of
contract action because Prestige unequivocally and positively repudiated the contract by
expressing its intent in writing to GymGuyz that it would cease, and indeed did cease, performing
under it.
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5. Thus, because GymGuyz did not receive notice in time to defend and has a
meritorious defense, this Court should vacate the Default Judgment under CPLR § 317.
PROCEDURAL HISTORY
Commencement of the Action
1. Prestige commenced this commercial breach of contract action against GymGuyz
on June 22, 2021 by filing a Summons and the Complaint in which it sets forth five (5) causes of
action alleging that Gymguyz breached a certain Self-Direction Agreement, dated December 17,
2019, by and between GymGuyz and Prestige and engaged in fraudulent concealment with respect
to its books and records as to amounts allegedly owed to Prestige. Prestige seeks (a) unspecified
damages, (b) an accounting, and (c) a declaratory judgment that the Self-Direction Agreement
continues in perpetuity. A copy of the Self-Direction Agreement is attached hereto as Exhibit
“A.”
Service on GymGuyz via the Secretary of State
2. The Affidavits of Service [NYSCEF Document No. 2 and NYSCEF Document
No. 3] reflect that Prestige served the Summons and the Complaint on GymGuyz by personally
delivering them to the New York Secretary of State on July 6, 2021 in accordance with Section
303 (“Service of Process on Limited Liability Companies”) of the New York Limited Liability
Law.
3. Service of process on Gymguyz was complete on July 6, 2021 and, pursuant to
CPLR §320[a], Gymguyz had until August 5, 2021, i.e., 30 days, to appear or answer. See CPLR
§320[a], §3012[c]; Paez v. 1610 St. Nicholas Ave., L.P., 103 AD3d 553 [1st Dept 2013].
4. The Secretary of State, however, did not mail the Summons and Complaint to
GymGuyz at its corporate address on file until August 16, 2021. The Summons and Complaint
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were sent by USPS certified mail, return receipt requested. See New York Secretary of State’s
cover letter to GymGuyz dated August 16, 2022 attached hereto as Exhibit “B.”
5. USPS delivered the Summons and Complaint to GymGuyz on August 19, 2021.
See USPS proof of delivery attached hereto as Exhibit “C.”
6. On August 30, 2021, Prestige filed its motion for a default judgment. See
NYSCEF Doc. No. 4; Motion Seq. No. 1.
7. On September 9, 2021, GymGuyz filed its Answer [NYSCEF Doc. No. 13].
8. On September 9, 2021, Prestige rejected the Answer as untimely under CPLR §
320, pursuant to a Notice of Rejection [NYSCEF Doc. No. 15].
9. On July 19, 2022, Prestige’s motion for a default judgment was denied based on
its failure to submit a CPLR §3215(g) affidavit of additional mailing. [NYSCEF Doc. No. 16].
10. On July 25, 2022, Prestige filed a motion to reargue [NYSCEF Doc. No. 18;
Motion Seq. No. 2].
11. On November 16, 2022, Prestige’s motion to reargue was granted and, upon
reargument, this Court entered a default judgment. [NYSCEF Doc. No. 27].
CPLR §317
12. CPLR §317 provides that “a person served with a summons other than by personal
delivery . . . who does not appear may be allowed to defend the action within one year after he
obtains knowledge of entry of the judgment . . . upon a finding of the court that he did not
personally receive notice of the summons in time to defend and has a meritorious defense.”
13. Under this section, the Court of Appeals has held that a defendant moving to vacate
a default judgment need not show a “reasonable excuse” for its delay. Eugene Di Lorenzo, Inc.
v. A.C. Dutton Lumber Co., 67 NY2d 138, 141 [1986]. See also Matter of Rockland Bakery, Inc.
v. B.M. Baking Co., Inc., 83 AD3d 1080, 1081 [2011].
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GymGuyz Did Not Receive Notice in Time to Defend
14. Here, GymGuyz satisfies the first prong of the CPLR §317 test because it can
establish that did not receive notice of the action in time to defend.
15. As provided by Section 303 of the LLC Law, Prestige served process on Gymguyz
through the Secretary of State on July 6, 2021 and service was complete on that date. Pursuant
to CPLR §320[a], Gymguyz had until August 5, 2021, i.e., 30 days, to appear or answer. See
CPLR §320[a], §3012[c]; Paez v. 1610 St. Nicholas Ave., L.P., 103 AD3d 553 [1st Dept 2013].
16. Here, however, the New York Secretary of State’s cover letter to GymGuyz is
dated August 16, 2022 and the USPS tracking information reflects that the Summons and
Complaint were delivered to GymGuyz at its address on file on August 19, 2021, a date that is
after GymGuyz’s time to answer or appear lapsed. See Exhibit “B” and Exhibit “C.”
17. Accordingly, GymGuyz did not receive the Summons and Complaint in time to
defend the action.
18. Notwithstanding the above, GymGuyz promptly retained counsel and filed its
Answer [NYSCEF Doc. No. 13] on September 9, 2021, thus establishing that GymGuyz did not
deliberately attempt to avoid notice of the action. Eugene Di Lorenzo, Inc. v. A.C. Dutton Lumber
Co., 67 NY2d 138, 143 [1986].
19. Prestige rejected the Answer the same day. [NYSCEF Doc. No. 15].
GymGuyz Has a Meritorious Defense
20. As set forth in the accompanying Affidavit of Josh York, GymGuyz has a
meritorious defense to this breach of contract action and, thus, satisfies the second prong of CPLR
§ 317.
21. As admitted by Prestige in its Complaint, Prestige anticipatorily repudiated the
Self-Direction Agreement when, “[o]n or about February 5, 2021, Plaintiff’s member Robin
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Hjalte indicated to [GymGuyz] that she did not intend to continue recruiting new franchisees to
the Self-Direction [p]rogram.” Complaint at ¶ 18 [NYCEF Doc. No. 1] . The enrollment of new
franchisees was an essential and material provision of the Self-Direction Agreement.
22. Prestige’s communication to GymGuyz was a positive and unequivocal statement
by Prestige that it would no longer perform under the Self-Direction Agreement. Prestige’s
repudiation of the Self-Direction Agreement was subsequently memorialized on March 10, 2021
in email correspondence between the parties, which emails are attached hereto as Exhibit “D.”
23. The emails recite that (a) Prestige would no longer perform under the Self-
Direction Agreement, (b) Prestige had received its “last and final check” from GymGuyz in
connection with its performance under the Self-Direction program, (c) GymGuyz intended to run
the Self-Direction program itself henceforth, and (d) Prestige would cooperate and participate in
the transition.
24. Thus, it is clear that Prestige anticipatorily breached the Self-Direction Agreement,
which entitled GymGuyz to terminate it, which it did.
25. Anticipatory repudiation occurs “when, before the time for performance has
arisen, a party to a contract declares [its] intention not to fulfill a contractual duty’” Condor
Funding, LLC v. 176 Broadway Owners Corp., 147 AD3d 99, 101-102 [1st Dept 2017] (citing
Kaplan v. Madison Park Group Owners, LLC, 94 AD3d 616, 618–619 [1st Dept 2012], lv.
dismissed 19 NY3d 1012 [2012], lv. denied 20 NY3d 858 [2013]).
26. The Court of Appeals, in Rosenthal Paper Co. v. National Folding Box & Paper
Co., 226 NY 313, 324 [1919], held that “the inexcusable breach of a contract . . . confer[s] [on
the non-breaching party] the right to terminate it . . . .”
27. It “relieves the nonrepudiating party of its obligation of future performance and
entitles that party to recover the present value of its damages from the repudiating party’s breach
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of the total contract.” Am. List Corp. v. U.S. News & World Rpt., Inc., 75 NY2d 38, 44 [1989].
“A repudiation can be either a statement by the obligor to the obligee indicating that the obligor
will commit a breach that would of itself give the obligee a claim for damages for total breach or
a voluntary affirmative act which renders the obligor unable or apparently unable to perform
without such a breach.” Norcon Power Partners, L.P. v. Niagara Mohawk Power Corp., 92 NY2d
458, 463 [1998] (citations omitted). “The announcement of intention not to perform by the
repudiating party must be ‘positive and unequivocal.’” Tenavision, Inv. v. Neuman, 45 NY2d
145, 150 [1978].
28. Here, Prestige’s indicated its intent to cease enrolling GymGuyz franchisees in
the Self-Direction program and providing support to them repudiated the Self-Direction
Agreement in February 2021. Thereafter, this repudiation excused any further performance by
GymGuyz and provides it with an absolute defense to this action.
WHEREFORE, GymGuyz respectfully requests that this Court grant its motion to vacate
the default judgment pursuant to CPLR § 317and deem its Answer timely filed.
Dated: New York, New York
December 14, 2022
________________________________
Nancy L. Kourland, Esq.
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VERIFICATION
STATE OF NEW YORK )
): ss.
COUNTY OF NEW YORK )
Nancy L. Kourland, Esq., being duly sworn, deposes and says:
I am a Senior Counsel with the law firm of Lasser Law Group, PLLC, attorneys for the
Defendant herein, and am admitted to practice law in New York State. I have read the foregoing
Affirmation and know the contents thereof to be true to my own knowledge, except as to those
matters which are alleged upon information and belief and, as to those, I believe them to be true.
The grounds for my information and belief are oral statements, books and records maintained by
the Defendant, conversations with managing agents and/or employees and material contained in
the office files. This verification is made pursuant to RPAPL 741.
Dated: New York, New York
December 14, 2022
___________________________
Nancy L. Kourland, Esq.
Lasser Law Group, PLLC
Attorneys for Defendant
633 Third Avenue, Suite 1301
New York, NY 10017
(212) 376-3205; nkourland@lasserlg.com
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