Preview
FILED: NEW YORK COUNTY CLERK 11/12/2020 10:25 PM INDEX NO. 651260/2020
NYSCEF DOC. NO. 28 RECEIVED NYSCEF: 11/12/2020
Exhibit N
FILED:
FILED: NEW
NEW YORK
YORK COUNTY
COUNTY CLERK
CLERK 03/20/2020
11/12/2020 01:37
10:25 PM
PM INDEX
INDEX NO.
NO. 651793/2020
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NYSCEF
NYSCEF DOC.
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NO. 2
28 RECEIVED
RECEIVED NYSCEF:
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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
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:
CAPSTONE CREDIT, LLC, : Index No.
:
Plaintiffs, :
: COMPLAINT
-- against -- :
:
UE YONKERS II LLC :
And :
URBAN EDGE PROPERTIES, :
:
Defendants. :
:
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Plaintiff Capstone Credit, LLC, by and through its attorneys, Crowell & Moring LLP, as
and for its Complaint, states and alleges as follows:
THE PARTIES, JURISDICTION AND VENUE
1. Plaintiff Capstone Credit, LLC (“Capstone”) is a Delaware limited liability
company with offices at 810 7th Ave., 27th Floor, New York, New York 10019 (“Plaintiff”).
2. Defendant UE Yonkers II, LLC is (“UE”) is a Delaware limited liability company
with offices at 888 7th Avenue, New York, NY 10019.
3. Defendant Urban Edge Properties is (“UEP” and together with UE, “Defendants”)
is a Maryland entity with offices at 888 7th Avenue, New York, NY 10019.
4. This Court has jurisdiction over this action on the grounds that the parties have
availed themselves of New York law in the contractual agreements at issue in this action, the
parties conducted business in New York, and the parties’ places of business is New York.
5. Venue is proper because the parties’ offices are located in New York County.
FACTS APPLICABLE TO ALL CAUSES OF ACTION
A. Background
NYACTIVE-18639459.2
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6. Capstone is a factoring company, headquartered in New York City, New York,
that is engaged in the business of facilitating cash flow for its customers. Capstone specializes in
invoice factoring, in which Capstone, as a third party, funds its clients through the purchase of
accounts receivable. This allows a business to ensure consistent cash flow when needed and
allows the business to maintain its operations with less cash on hand.
7. On information and belief, on or about June 29, 2018, UE entered into a written
contract (the “Paving Contract”) with ECC under which ECC agreed, in return for payment, to
provide certain paving services and parking lot repairs for UE.
8. East Coast Companies, Inc. (“ECC”) is a New Jersey Corporation with offices at
2850 Woodbridge Ave., Edison, New Jersey 08837 that specializes in in paving and site work.
9. ECC performed work as a contractor for UE Yonkers II LLC to provide striping
and paving services for the property located at 2500 Central Park Avenue in Yonkers, NY (the
“Project”).
B. Capstone and ECC Enter into The Agreement to Factor ECC’s Accounts
Receivable
10. Starting in March 2018, ECC from time to time factored accounts receivable
receivables with Capstone. On July 11, 2018, July 19, 2018, and July 26, 2018, ECC sold certain
receivables to Capstone pursuant to Purchase and Sale Agreements, and on or about September
21, 2018, ECC entered into a Master Purchase and Sale Agreement (together with the July
Purchase and Sale Agreements, the “Agreements") with Capstone under which Capstone
acquired all of ECC’s accounts receivable accrued from September 21, 2018 to September 20,
2019. The Agreements covered receivables due to ECC from Defendants.
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11. Under the Agreement, ECC expressly represented to Capstone that any accounts
receivable purchased by Capstone were and would remain “bona fide existing obligations”
created in the ordinary course of ECC’s business. ECC further represented that such accounts
receivable were and would remain unconditionally owed, and would be paid, to Capstone
“without defenses, disputes, offsets, counterclaims, or rights of return cancellation.” ECC
assigned to Capstone all rights of action with respect to its accounts receivable and “full power to
collect, sue for, compromise, assign, or in any other manner enforce collection thereof in
Purchaser’s [Capstone’s] name or otherwise.” In addition, ECC expressly agreed to hold
Capstone harmless from any breach of its representations, warranties and other covenants set
forth in the Agreement.
12. Pursuant to the Agreement, ECC assigned to Capstone the full payment from five
invoices (the “Invoices”) under its Paving Contract with UE:
• Invoice No. Yon 1, for $367,879.14, dated July 9, 2018 and due on August 8,
2018;
• Invoice No. Yon 2, for $285,053.52, dated July 17, 2018 and due on August
16, 2018;
• Invoice No. Yon 3, for $142,969.95, dated July 25, 2018 and due on August
24, 2018.
• Payment Application No. 4, for $527,084.89, dated November 16, 2018 and
due on December 16, 2018.
• Invoice No. 695, for $75,650.00, dated April 26, 2019 and due on May 25,
2019.
C. UE Acknowledges the Assignment of the Invoices and Agrees to Make its Payments
to Capstone
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13. By letters dated July 10, 2018 (“Assignment Letter 1”), July 11, 2018
(“Assignment Letter 2”), July 18, 2018 (“Assignment Letter 3”), November 16, 2018
(“Assignment Letter 4”), and April 26, 2019 (“Assignment Letter 5”), (collectively, the
“Assignment Letters”), ECC provided UE with written notice that ECC and Capstone had
entered into the Agreement. ECC further advised UE in each Assignment Letter that the
Assignment Letter “serves as your irrevocable authority to send all current and future invoice
payments directly and solely to [Capstone].” Assignment Letters 1, 2, 3, 4, and 5 explicitly
referenced Invoices No. Yon 1, Yon 2, Yon 3, Payment Application #4, and 695, respectively, as
the Invoices that UE would pay to Capstone.
14. After receiving invoices from ECC, Capstone obtained an agreement from UE
and UEP that the work represented in the invoice has been completed and accepted, and that
payment was due.
15. By letters dated July 9, 2018 (“Estoppel Letter 1”), July 17, 2018 (“Estoppel
Letter 2”), July 26, 2018 (“Estoppel Letter 3”), and November 16, 2018 (“Estoppel Letter 4”),
(collectively, the “Estoppel Letters”), UE acknowledged ECC’s assignment of the Invoice Nos.
Yon 1, Yon 2, Yon 3, and Payment Application #4, respectively, to Capstone. In each Estoppel
Letter, Joseph DeGiorgio, V.P. of Operations for UE, expressly represented to Capstone that the
referenced invoice was “correct, due and owing by us; that the work and/or merchandise has
been ordered from, and completed by the captioned client [ECC] and accepted by us.”
16. UEP, through its designee Joseph DeGiorgio, also executed an irrevocable
guarantee on each of the Estoppel Letters.
17. UE issued change order work in the amount of $75,650.00 to ECC, and ECC
completed the work in that order. Capstone funded the materials for that change work order, and
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confirmed by visiting the site, that the materials were installed. DeGiorgio also verbally
confirmed that the work had been completed and accepted.
D. Defendants Fail to Pay Capstone and Breach the Agreement
18. At all relevant times, Capstone has performed its obligations under the
Agreement.
19. ECC issued the Invoices to UE for services rendered in the amount of
$1,398,637.50.
20. To date, Capstone has received payments totaling $1,144,622.15 leaving an open
balance owed of $178,365.35.
21. In addition, Capstone has received no payment for the $75,650.00 change order
work.
22. To date Defendants have failed make payments due under the Estoppel Letters
and under the Guaranty despite due demand from Capstone. Defendants have breached their
obligations with respect to the payment of all amounts due and owing to Capstone.
23. Plaintiff also continues to incur collection costs. Such costs of collection may
increase as Plaintiff continues to exercise its judicial remedies against Defendants.
CAUSES OF ACTION
As and For a First Cause of Action
(Breach of Contract)
24. Plaintiff incorporates, repeats, and re-alleges the allegations of paragraphs 1
through 23 of this Complaint with full force and effect, as if fully set forth herein.
27. ECC issued the Invoices to UE for services rendered in the amount of
$1,398,637.50, $254,015.35 of which UE has failed to pay.
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28. UE executed the Estoppel Letters in favor of Capstone, in which UE expressly
acknowledged ECC’s assignment of payment for the Invoices, with a combined total balance of
$1,322,987.50, to Capstone.
29. Pursuant to the Estoppel Letters, UE expressly represented that Invoices No. Yon
1, Yon 2, Yon 3, and Payment Application #4 were correct, due and owing, and were to be paid
by October 8, October 16, October 24 and November 16, 2018, respectively.
30. Pursuant to the Estoppel Letters, Capstone was to receive payment of
$1,322,987.50 UE by November 16, 2018. Capstone has duly demanded payment from UE of
all amounts that Capstone is entitled to receive. Nevertheless, ECC failed to comply with its
express obligations to Capstone and breached the Estoppel Letters by failing to pay the amounts
due and owing to Capstone.
31. As a direct consequence of UE’s material breach of the Assignment Letters and
the Estoppel Letters, Capstone is entitled to judgment against UE for compensatory damages
based upon breach of contract in an amount to be determined at trial, but in no event less than
$254,015.35, together with applicable pre-judgment and post-judgment interest and attorneys
and costs.
As and For a Second Cause of Action
(Breach of Contract)
25. Plaintiff incorporates, repeats, and re-alleges the allegations of paragraphs 1
through 23 of this Complaint with full force and effect, as if fully set forth herein.
26. UEP is in breach of the agreements it executed, guaranteeing the payments from
UE to Capstone for the invoices attached as Exhibits 1-4 to this Complaint.
27. As to its failure to pay amounts owed, Plaintiffs have made demand on UEP to
make payment, but UEP has failed and refused to make payment.
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28. As of the date of the filing of this Complaint, UEP owes Plaintiffs $253,365.35.
REQUEST FOR RELIEF
29. Plaintiff Capstone Credit, LLC respectfully requests that the Court enter judgment
in Plaintiffs’ favor, granting the following relief:
a. on the first cause of action for breach of contract, awarding damages to
Plaintiff and against UE, jointly and severally with UEP, for breach of
contract in an amount to be determined at trial, but in no event less than
$253,365.35;
b. on the second cause of action for breach of contract, awarding damages to
Plaintiffs and against UEP, jointly and severally with UE, for breach of
contract in an amount to be determined at trial, but in no event less than
$253,365.35;
c. ordering Defendants to pay all pre-judgment interest pursuant to
applicable law, together with interest on all damages from the date
judgment is entered until complete payment of the judgment is made;
d. awarding Plaintiff its reasonable attorney’s fees, court costs and costs of
collection; and
e. granting Plaintiff such other and further relief as the Court may deem just
and proper.
Date: March 18, 2020
Respectfully submitted,
CROWELL & MORING LLP
By: s/Mark S. Lichtenstein
Mark S. Lichtenstein
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590 Madison Avenue
New York, New York 10022
mlichtenstein@crowell.com
(212) 223-4000
Attorneys for Plaintiff Capstone
Credit, LLC
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Preview
FILED: NEW YORK COUNTY CLERK 11/12/2020 10:25 PM INDEX NO. 651260/2020 NYSCEF DOC. NO. 28 RECEIVED NYSCEF: 11/12/2020 Exhibit N FILED: FILED: NEW NEW YORK YORK COUNTY COUNTY CLERK CLERK 03/20/2020 11/12/2020 01:37 10:25 PM PM INDEX INDEX NO. NO. 651793/2020 651260/2020 NYSCEF NYSCEF DOC. DOC. NO. NO. 2 28 RECEIVED RECEIVED NYSCEF: NYSCEF: 03/20/2020 11/12/2020 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK -------------------------------------------------------------------- x : CAPSTONE CREDIT, LLC, : Index No. : Plaintiffs, : : COMPLAINT -- against -- : : UE YONKERS II LLC : And : URBAN EDGE PROPERTIES, : : Defendants. : : -------------------------------------------------------------------- x Plaintiff Capstone Credit, LLC, by and through its attorneys, Crowell & Moring LLP, as and for its Complaint, states and alleges as follows: THE PARTIES, JURISDICTION AND VENUE 1. Plaintiff Capstone Credit, LLC (“Capstone”) is a Delaware limited liability company with offices at 810 7th Ave., 27th Floor, New York, New York 10019 (“Plaintiff”). 2. Defendant UE Yonkers II, LLC is (“UE”) is a Delaware limited liability company with offices at 888 7th Avenue, New York, NY 10019. 3. Defendant Urban Edge Properties is (“UEP” and together with UE, “Defendants”) is a Maryland entity with offices at 888 7th Avenue, New York, NY 10019. 4. This Court has jurisdiction over this action on the grounds that the parties have availed themselves of New York law in the contractual agreements at issue in this action, the parties conducted business in New York, and the parties’ places of business is New York. 5. Venue is proper because the parties’ offices are located in New York County. FACTS APPLICABLE TO ALL CAUSES OF ACTION A. Background NYACTIVE-18639459.2 1 of 8 FILED: FILED: NEW NEW YORK YORK COUNTY COUNTY CLERK CLERK 03/20/2020 11/12/2020 01:37 10:25 PM PM INDEX INDEX NO. NO. 651793/2020 651260/2020 NYSCEF NYSCEF DOC. DOC. NO. NO. 2 28 RECEIVED RECEIVED NYSCEF: NYSCEF: 03/20/2020 11/12/2020 6. Capstone is a factoring company, headquartered in New York City, New York, that is engaged in the business of facilitating cash flow for its customers. Capstone specializes in invoice factoring, in which Capstone, as a third party, funds its clients through the purchase of accounts receivable. This allows a business to ensure consistent cash flow when needed and allows the business to maintain its operations with less cash on hand. 7. On information and belief, on or about June 29, 2018, UE entered into a written contract (the “Paving Contract”) with ECC under which ECC agreed, in return for payment, to provide certain paving services and parking lot repairs for UE. 8. East Coast Companies, Inc. (“ECC”) is a New Jersey Corporation with offices at 2850 Woodbridge Ave., Edison, New Jersey 08837 that specializes in in paving and site work. 9. ECC performed work as a contractor for UE Yonkers II LLC to provide striping and paving services for the property located at 2500 Central Park Avenue in Yonkers, NY (the “Project”). B. Capstone and ECC Enter into The Agreement to Factor ECC’s Accounts Receivable 10. Starting in March 2018, ECC from time to time factored accounts receivable receivables with Capstone. On July 11, 2018, July 19, 2018, and July 26, 2018, ECC sold certain receivables to Capstone pursuant to Purchase and Sale Agreements, and on or about September 21, 2018, ECC entered into a Master Purchase and Sale Agreement (together with the July Purchase and Sale Agreements, the “Agreements") with Capstone under which Capstone acquired all of ECC’s accounts receivable accrued from September 21, 2018 to September 20, 2019. The Agreements covered receivables due to ECC from Defendants. 2 2 of 8 FILED: FILED: NEW NEW YORK YORK COUNTY COUNTY CLERK CLERK 03/20/2020 11/12/2020 01:37 10:25 PM PM INDEX INDEX NO. NO. 651793/2020 651260/2020 NYSCEF NYSCEF DOC. DOC. NO. NO. 2 28 RECEIVED RECEIVED NYSCEF: NYSCEF: 03/20/2020 11/12/2020 11. Under the Agreement, ECC expressly represented to Capstone that any accounts receivable purchased by Capstone were and would remain “bona fide existing obligations” created in the ordinary course of ECC’s business. ECC further represented that such accounts receivable were and would remain unconditionally owed, and would be paid, to Capstone “without defenses, disputes, offsets, counterclaims, or rights of return cancellation.” ECC assigned to Capstone all rights of action with respect to its accounts receivable and “full power to collect, sue for, compromise, assign, or in any other manner enforce collection thereof in Purchaser’s [Capstone’s] name or otherwise.” In addition, ECC expressly agreed to hold Capstone harmless from any breach of its representations, warranties and other covenants set forth in the Agreement. 12. Pursuant to the Agreement, ECC assigned to Capstone the full payment from five invoices (the “Invoices”) under its Paving Contract with UE: • Invoice No. Yon 1, for $367,879.14, dated July 9, 2018 and due on August 8, 2018; • Invoice No. Yon 2, for $285,053.52, dated July 17, 2018 and due on August 16, 2018; • Invoice No. Yon 3, for $142,969.95, dated July 25, 2018 and due on August 24, 2018. • Payment Application No. 4, for $527,084.89, dated November 16, 2018 and due on December 16, 2018. • Invoice No. 695, for $75,650.00, dated April 26, 2019 and due on May 25, 2019. C. UE Acknowledges the Assignment of the Invoices and Agrees to Make its Payments to Capstone 3 3 of 8 FILED: FILED: NEW NEW YORK YORK COUNTY COUNTY CLERK CLERK 03/20/2020 11/12/2020 01:37 10:25 PM PM INDEX INDEX NO. NO. 651793/2020 651260/2020 NYSCEF NYSCEF DOC. DOC. NO. NO. 2 28 RECEIVED RECEIVED NYSCEF: NYSCEF: 03/20/2020 11/12/2020 13. By letters dated July 10, 2018 (“Assignment Letter 1”), July 11, 2018 (“Assignment Letter 2”), July 18, 2018 (“Assignment Letter 3”), November 16, 2018 (“Assignment Letter 4”), and April 26, 2019 (“Assignment Letter 5”), (collectively, the “Assignment Letters”), ECC provided UE with written notice that ECC and Capstone had entered into the Agreement. ECC further advised UE in each Assignment Letter that the Assignment Letter “serves as your irrevocable authority to send all current and future invoice payments directly and solely to [Capstone].” Assignment Letters 1, 2, 3, 4, and 5 explicitly referenced Invoices No. Yon 1, Yon 2, Yon 3, Payment Application #4, and 695, respectively, as the Invoices that UE would pay to Capstone. 14. After receiving invoices from ECC, Capstone obtained an agreement from UE and UEP that the work represented in the invoice has been completed and accepted, and that payment was due. 15. By letters dated July 9, 2018 (“Estoppel Letter 1”), July 17, 2018 (“Estoppel Letter 2”), July 26, 2018 (“Estoppel Letter 3”), and November 16, 2018 (“Estoppel Letter 4”), (collectively, the “Estoppel Letters”), UE acknowledged ECC’s assignment of the Invoice Nos. Yon 1, Yon 2, Yon 3, and Payment Application #4, respectively, to Capstone. In each Estoppel Letter, Joseph DeGiorgio, V.P. of Operations for UE, expressly represented to Capstone that the referenced invoice was “correct, due and owing by us; that the work and/or merchandise has been ordered from, and completed by the captioned client [ECC] and accepted by us.” 16. UEP, through its designee Joseph DeGiorgio, also executed an irrevocable guarantee on each of the Estoppel Letters. 17. UE issued change order work in the amount of $75,650.00 to ECC, and ECC completed the work in that order. Capstone funded the materials for that change work order, and 4 4 of 8 FILED: FILED: NEW NEW YORK YORK COUNTY COUNTY CLERK CLERK 03/20/2020 11/12/2020 01:37 10:25 PM PM INDEX INDEX NO. NO. 651793/2020 651260/2020 NYSCEF NYSCEF DOC. DOC. NO. NO. 2 28 RECEIVED RECEIVED NYSCEF: NYSCEF: 03/20/2020 11/12/2020 confirmed by visiting the site, that the materials were installed. DeGiorgio also verbally confirmed that the work had been completed and accepted. D. Defendants Fail to Pay Capstone and Breach the Agreement 18. At all relevant times, Capstone has performed its obligations under the Agreement. 19. ECC issued the Invoices to UE for services rendered in the amount of $1,398,637.50. 20. To date, Capstone has received payments totaling $1,144,622.15 leaving an open balance owed of $178,365.35. 21. In addition, Capstone has received no payment for the $75,650.00 change order work. 22. To date Defendants have failed make payments due under the Estoppel Letters and under the Guaranty despite due demand from Capstone. Defendants have breached their obligations with respect to the payment of all amounts due and owing to Capstone. 23. Plaintiff also continues to incur collection costs. Such costs of collection may increase as Plaintiff continues to exercise its judicial remedies against Defendants. CAUSES OF ACTION As and For a First Cause of Action (Breach of Contract) 24. Plaintiff incorporates, repeats, and re-alleges the allegations of paragraphs 1 through 23 of this Complaint with full force and effect, as if fully set forth herein. 27. ECC issued the Invoices to UE for services rendered in the amount of $1,398,637.50, $254,015.35 of which UE has failed to pay. 5 5 of 8 FILED: FILED: NEW NEW YORK YORK COUNTY COUNTY CLERK CLERK 03/20/2020 11/12/2020 01:37 10:25 PM PM INDEX INDEX NO. NO. 651793/2020 651260/2020 NYSCEF NYSCEF DOC. DOC. NO. NO. 2 28 RECEIVED RECEIVED NYSCEF: NYSCEF: 03/20/2020 11/12/2020 28. UE executed the Estoppel Letters in favor of Capstone, in which UE expressly acknowledged ECC’s assignment of payment for the Invoices, with a combined total balance of $1,322,987.50, to Capstone. 29. Pursuant to the Estoppel Letters, UE expressly represented that Invoices No. Yon 1, Yon 2, Yon 3, and Payment Application #4 were correct, due and owing, and were to be paid by October 8, October 16, October 24 and November 16, 2018, respectively. 30. Pursuant to the Estoppel Letters, Capstone was to receive payment of $1,322,987.50 UE by November 16, 2018. Capstone has duly demanded payment from UE of all amounts that Capstone is entitled to receive. Nevertheless, ECC failed to comply with its express obligations to Capstone and breached the Estoppel Letters by failing to pay the amounts due and owing to Capstone. 31. As a direct consequence of UE’s material breach of the Assignment Letters and the Estoppel Letters, Capstone is entitled to judgment against UE for compensatory damages based upon breach of contract in an amount to be determined at trial, but in no event less than $254,015.35, together with applicable pre-judgment and post-judgment interest and attorneys and costs. As and For a Second Cause of Action (Breach of Contract) 25. Plaintiff incorporates, repeats, and re-alleges the allegations of paragraphs 1 through 23 of this Complaint with full force and effect, as if fully set forth herein. 26. UEP is in breach of the agreements it executed, guaranteeing the payments from UE to Capstone for the invoices attached as Exhibits 1-4 to this Complaint. 27. As to its failure to pay amounts owed, Plaintiffs have made demand on UEP to make payment, but UEP has failed and refused to make payment. 6 6 of 8 FILED: FILED: NEW NEW YORK YORK COUNTY COUNTY CLERK CLERK 03/20/2020 11/12/2020 01:37 10:25 PM PM INDEX INDEX NO. NO. 651793/2020 651260/2020 NYSCEF NYSCEF DOC. DOC. NO. NO. 2 28 RECEIVED RECEIVED NYSCEF: NYSCEF: 03/20/2020 11/12/2020 28. As of the date of the filing of this Complaint, UEP owes Plaintiffs $253,365.35. REQUEST FOR RELIEF 29. Plaintiff Capstone Credit, LLC respectfully requests that the Court enter judgment in Plaintiffs’ favor, granting the following relief: a. on the first cause of action for breach of contract, awarding damages to Plaintiff and against UE, jointly and severally with UEP, for breach of contract in an amount to be determined at trial, but in no event less than $253,365.35; b. on the second cause of action for breach of contract, awarding damages to Plaintiffs and against UEP, jointly and severally with UE, for breach of contract in an amount to be determined at trial, but in no event less than $253,365.35; c. ordering Defendants to pay all pre-judgment interest pursuant to applicable law, together with interest on all damages from the date judgment is entered until complete payment of the judgment is made; d. awarding Plaintiff its reasonable attorney’s fees, court costs and costs of collection; and e. granting Plaintiff such other and further relief as the Court may deem just and proper. Date: March 18, 2020 Respectfully submitted, CROWELL & MORING LLP By: s/Mark S. Lichtenstein Mark S. Lichtenstein 7 7 of 8 FILED: FILED: NEW NEW YORK YORK COUNTY COUNTY CLERK CLERK 03/20/2020 11/12/2020 01:37 10:25 PM PM INDEX INDEX NO. NO. 651793/2020 651260/2020 NYSCEF NYSCEF DOC. DOC. NO. NO. 2 28 RECEIVED RECEIVED NYSCEF: NYSCEF: 03/20/2020 11/12/2020 590 Madison Avenue New York, New York 10022 mlichtenstein@crowell.com (212) 223-4000 Attorneys for Plaintiff Capstone Credit, LLC 8 8 of 8