Motion to Dismiss in Simply Funding, Llc, v. Moore Solutions Inc., DBA MOORE SOLUTIONS, Terrance Moore| Trellis.Law

On September 28, 2022 a Motion,Ex Parte was filed involving a dispute between Simply Funding, Llc,, and Moore Solutions Inc., Dba Moore Solutions, Terrance Moore, for Commercial - Contract in the District Court of Queens County.

Preview
FILED: QUEENS COUNTY CLERK 01/18/2023 11:42 AM INDEX NO. 720129/2022
NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 01/18/2023

SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF QUEENS
Index No.: 720129/2022
SIMPLY FUNDING, LLC,
Plaintiff,
vs.

MOORE SOLUTIONS INC.,
DBA MOORE SOLUTIONS;
and TERRANCE MOORE,
Defendants.
X

DEFENDANTS’ REPLY IN OPPOSITION TO PLAINTIFF’S CROSS-MOTION FOR
SANCTIONS AND IN FURTHER SUPPORT OF DEFENDANTS’ MOTION TO DISMISS

Mikhail Usher, Esq.
USHER LAW GROUP, P.C.
Attorneys for Defendants
1022 Avenue P, 2nd Fl.
Brooklyn, NY 11223
Phone.: 718-484-7510
Fax.: 718-865-8566
E-mail: musheresq@gmail.com

1 of 25
FILED: QUEENS COUNTY CLERK 01/18/2023 11:42 AM INDEX NO. 720129/2022
NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 01/18/2023

TABLE OF CONTENTS

TABLE OF CONTENTS …………………………………………………………………... .i

TABLE OF AUTHORITIES ............................................................................................. ii, iii

PRELIMINARY STATEMENT AND BACKGROUND ..................................................... 1

LEGAL ARGUMENTS.......................................................................................................... 3

PLAINTIFF HAS FAILED TO STATE A CLAIM OF BREACH
BY DEFENDANTS…………………………………………………………………... 3

PLAINTIFF’S REQUEST FOR LIQUIDATED DAMAGES MUST
BE WHOLLY DENIED ……………………………………………………............... 5

THE COURT LACKS PERSONAL JURISDICTION
OVER THE DEFENDANTS……………………………………………………......... 7

 FORUM NON CONVENIENS ………………………………………………..11

IN THE ALTERNATIVE, THE AGREEMENT IS A USURIOUS LOAN
AND NOT A PURCHASE OF FUTURE RECEIVABLES AGREEMENT………... 14

THE COURT SHOULD ENTIRELY DISMISS PLAINTIFF’S
CROSS-MOTION FOR SANCTIONS…………………………………………….... 19

CONCLUSION…………………………………………………………………………….….21

2 of 25
FILED: QUEENS COUNTY CLERK 01/18/2023 11:42 AM INDEX NO. 720129/2022
NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 01/18/2023

TABLE OF AUTHORITIES

Cases

Andrews v. Modell, 84 A.D.3d 843, 844–45, 921 N.Y.S.2d 908 (Mem)–909 (2011)……..………8

Fleetwood Servs., LLC v. Ram Cap. Funding, LLC, No. 20-CV-5120 (LJL),

2022 WL 1997207 (S.D.N.Y. June 6, 2022)………………………………………………….... 19

Hochman v. LaRea, 789 N.Y.S.2d 300 (2005)…………………………………………………. 14

Industralease Automated & Sci. Equip. Corp. v. R.M.E. Enterprises, Inc.,

58 A.D.2d 482, 488–89, 396 N.Y.S.2d 427 (1977)……………………………………………... 13

Intertec Contracting A/S v. Turner Steiner Int'l, S.A., 774 N.Y.S.2d 14 (2004)..………………. 11

JP Morgan Chase v. J.H. Elec. of New York, Inc.,

69 A.D.3d 802, 893 N.Y.S.2d 237 (2010)…………………………………….…………………. 3

LaMarca v. Pak-Mor Mfg. Co., 95 N.Y.2d 210, 735 N.E.2d 883 (2000). ……………………. 7, 9

Levant v. Nat'l Car Rental, Inc., 824 N.Y.S.2d 218 (2006)………………………..………...…. 17

LG Funding, LLC v. United Senior Properties of Olathe, LLC,

181 A.D.3d 664, 122 N.Y.S.3d 309 (2020)……………………………………………………... 15

Paradigm Mkrg. Consortium, Inc. v Yale New Haven Hosp., Inc.,

124 AD3d 736 [2d Dept 2015]……………………………………………...…………………… 9

Pirs Cap., LLC v. D & M Truck, Tire & Trailer Repair Inc., 69 Misc. 3d 457,

129 N.Y.S.3d 734 (N.Y. Sup. Ct.), judgment entered sub nom.

Pirs Cap., LLC v. D&M Truck, Tire & Trailer Repair Inc. (N.Y. Sup. Ct. 2020)….................. 16

Prospect Funding Holdings, L.L.C. v. Maslowski, 2017,

146 A.D.3d 535, 43 N.Y.S.3d 904 (1st Dep't)………………………………………………….. 12

Puleo v. Shore View Ctr. for Rehab. & Health Care, 132 A.D.3d 651, 17 N.Y.S.3d 501 (2015)..12

3 of 25
FILED: QUEENS COUNTY CLERK 01/18/2023 11:42 AM INDEX NO. 720129/2022
NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 01/18/2023

Resorb Networks, Inc. v. YouNow.com, 30 N.Y.S.3d 506, 510 (N.Y. Sup. Ct. 2016)……………10

Rubin v. Napoli Bern Ripka Shkolnik, LLP……………………………………………………… 6

Scarcella v. Am. Online, Inc., 811 N.Y.S.2d 858 (App. Term 2005)…………………….……... 10

V. Groppa Pools, Inc. v. Massello, 106 A.D.3d 722, 964 N.Y.S.2d 563 (2013)………………... 3

Zanfini v. Chandler, 197 A.D.3d 594, 153 N.Y.S.3d 77 (2021)……………………………….... 15

Statutes

CPLR 3211(a)(7) ………………………………………………………………………………... 3

CPLR 3211(a)(8) …………………………………………………………………………...… 1, 8

GEN. OBLIG. LAW 5-1402………………………………………………………………1, 12, 14

GEN. OBLIG. LAW 5-501(1) ………………………………………………………………..... 15

CPLR 302(a) …………………………………………………………………….……………… 7

22 NYCRR 130…………………………………………………………………….………. 19, 20

iii

4 of 25
FILED: QUEENS COUNTY CLERK 01/18/2023 11:42 AM INDEX NO. 720129/2022
NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 01/18/2023

PRELIMINARY STATEMENT AND
BACKGROUND

The Defendants herein move to dismiss with prejudice the “Plaintiff’s Memorandum of Law

in Opposition to Defendants’ Motion to Dismiss and in Support of Plaintiff’s Cross-Motion for

Sanctions”, on the ground of failure to state a claim pursuant to CPLR 3211(a)(7), and for lack of

jurisdiction pursuant to CPLR 3211(a)(8) and General Obligations Law 5-1402. Defendants fervently

deny all the allegations raised by Plaintiff in its cross-motion except as specifically admitted herein.

On September 28, 2022, Plaintiff commenced the instant action by filing a Summons and

Verified Complaint. This matter is being filed in New York only because the contract between

Plaintiff and Defendants indicates that this would be the proper forum; while such clauses are

permissible in general this situation calls for a deviation from that principle since the Corporate

Defendant is a FLORIDA Company and the Non-Corporate Defendant is domiciled in FLORIDA.

Plaintiff’s contentions that similar grounds have been raised in previous Motions to Dismiss

ought to be wholly rejected. It is not surprising that while the Plaintiff points a finger at the

Defendants for raising similar grounds in prior Motions to Dismiss, they craftily fail to cite any of the

cases that the counsel for the Defendants has won by raising similar legal grounds. (See, EXHIBIT

A: Composite Exhibit of New York Supreme Court Decisions granting portions of Similar Arguments

made by Defense Counsel). Similarly placed arguments cannot be claimed to be meritless as Plaintiff

is attempting to imply. The Plaintiff through its cross-motion for sanctions is merely trying to employ

pressure tactics against genuine merit-based arguments raised by the Defendants.

In regard to the Meritorious Defense, the Defendants herein have several defenses. Firstly, the

instant matter pertains to an Agreement dated June 6, 2022, (See, NYSCEF Doc. # 2: Agreement),

entered between the Plaintiff and the Defendants for financing purposes. The contract was never

breached by the Defendants as alleged by Plaintiff. The Defendants have been making due payments

Page 1 of 21

5 of 25
FILED: QUEENS COUNTY CLERK 01/18/2023 11:42 AM INDEX NO. 720129/2022
NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 01/18/2023

under the disputed Agreement, as acknowledged by the Plaintiff, (See, NYSCEF Doc. # 1: Complaint

at pg.4, ¶12), before realizing it was a usurious loan agreement instead of an asset purchase

agreement as they Defendants had initially intended upon entering into at the time of contracting.

Further, Plaintiff has provided zero evidence of any transactions, no evidence of a breach, and no

evidence that they demanded statements in order to calculate what amount of funds would be

withdrawn by ACH each day in order to equal 18% of their receivables.

Secondly, the agreement does not conform to the covenant of Good Faith and Fair Dealing.

The agreement in a boilerplate clause categorically states that all issues or claims arising out of,

relating to, in connection with, or incident to this Agreement and any transactions it contemplates,

shall be brought and conducted exclusively in the Supreme Court of the State of New York, or in the

United States District Court for the Eastern District of New York, or, solely in the Plaintiff’s

discretion, in any state or federal court where the Defendants are located. Further, the ability to

initiate enforcement in any jurisdiction other than in the Supreme Court of the State of New York, or

in the United States District Court for the Eastern District of New York, would be in the Plaintiff's

discretion only. (See, NYSCEF Doc. # 2: Agreement at pg.4-5 ¶15: Governing Law, Jurisdiction, and

Venue). This affords no opportunity for the Defendants to have a say in selecting a choice of forum.

In the alternative, the agreement which was used as a basis for the Plaintiff commencing the

instant action was completely mischaracterized. The agreement was a usurious loan, not a risk-laden

purchase of future receivables as Plaintiff claims. Under the disputed agreement, Plaintiff placed an

ACH daily debit on the corporate Defendant’s bank account, automatically withdrawing the same

daily amount without regard for the Defendant’s actual sales. The daily payment pursuant to the

agreement was supposedly an estimate of how much the business could afford daily, but the de facto

agreement was a usurious loan that existed solely to get around usury laws and constitute deceptive

business practices, inter alia.

Page 2 of 21

6 of 25
FILED: QUEENS COUNTY CLERK 01/18/2023 11:42 AM INDEX NO. 720129/2022
NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 01/18/2023

If this Honorable Court does find that the disputed agreement is indeed a valid agreement,

then a claim for unjust enrichment must be wholly denied for being duplicative and excessive.

LEGAL ARGUMENTS
I. PLAINTIFF HAS FAILED TO STATE A CLAIM OF BREACH BY DEFENDANTS

When assessing a motion to dismiss a complaint or counterclaim pursuant to CPLR 3211(a)(7)

for failure to state a cause of action, the court must afford the pleading a liberal construction, accept

as true all facts as alleged in the pleading, accord the pleader the benefit of every possible inference,

and determine only whether the facts as alleged fit within any cognizable legal theory (see Rabos v. R

& R Bagels & Bakery, Inc., 100 A.D.3d 849, 851, 955 N.Y.S.2d 109; Mazzei v. Kyriacou, 98 A.D.3d

1088, 1089, 951 N.Y.S.2d 557; Yellow Book Sales & Distrib. Co., Inc. v. Hillside Van Lines, Inc., 98

A.D.3d 663, 664, 950 N.Y.S.2d 151). The allegations of the pleading cannot be vague and conclusory

(see Phillips v. Trommel Constr., 101 A.D.3d 1097, 957 N.Y.S.2d 359), but must contain sufficiently

particularized allegations from which a cognizable cause of action reasonably could be found

(see Mazzei v. Kyriacou, 98 A.D.3d at 1090, 951 N.Y.S.2d 557). The test of the sufficiency of a

pleading is “‘whether it gives sufficient notice of the transaction, occurrences, or series of

transactions 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' ” (Moore v. Johnson, 147 A.D.2d 621,

621, 538 N.Y.S.2d 28, quoting Pace v. Perk, 81 A.D.2d 444, 449, 440 N.Y.S.2d 710). V. Groppa

Pools, Inc. v. Massello, 106 A.D.3d 722, 722–23, 964 N.Y.S.2d 563, 564–65 (2013)

“[T]he essential elements of a cause of action to recover damages for breach of contract, to

wit: the existence of a contract, the plaintiff's performance under the contract, the defendant's breach

of that contract, and resulting damages” (see Agway, Inc. v. Curtin, 161 A.D.2d 1040, 1041, 557

N.Y.S.2d 605; Furia v. Furia, 116 A.D.2d 694, 695, 498 N.Y.S.2d 12). JP Morgan Chase v. J.H.

Elec. of New York, Inc., 69 A.D.3d 802, 803, 893 N.Y.S.2d 237, 239 (2010).

Page 3 of 21

7 of 25
FILED: QUEENS COUNTY CLERK 01/18/2023 11:42 AM INDEX NO. 720129/2022
NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 01/18/2023

Plaintiff allegedly paid to Defendants $55,000.00 less applicable fees of $2,200.00 in order to

purchase an alleged 18% of the Corporate Defendant's future receivables valued at $78,650.00 with

an alleged specified remittance amount of $1,966.25 in what Plaintiff contends is an asset purchase

agreement, but which Defendants contend was an unlawful loan in violation of New York States'

usury statute.

Plaintiff contends, and Defendants fervently deny that inter alia, there was any material

breach of the agreement, where the Defendants “intentionally blocked the payments that Simply was

authorized under the Agreement, by instructing its bank to reject Simply's ACH transactions from the

Designated Account”, which allegedly breached the agreement. (See, NYSCEF Doc. # 1: Complaint

at pg.4, ¶15). The Defendants have been making due payments under the disputed Agreement, as

acknowledged by the Plaintiff, (See, NYSCEF Doc. # 1: Complaint at pg.4, ¶12). The payments were

made till the point when the Defendants recognized the true nature of the agreement and the structure

of the payment schedule. No evidence of breach has been provided by Plaintiff to the court or to the

Defendants of any alleged breach.

While Plaintiff claims that a “demand” was made to the Defendants to cure any default, no

evidence of this “demand” has been provided to this Court. (See, NYSCEF Doc. # 1 at pg.5, ¶17)

Indeed, no e-mails, no letters, and no records whatsoever of any “demand” have been furnished by

Plaintiff. Further, no proof of Defendants’ having “refused to continue performing under the

Agreement while still conducting business operations” has been provided by Plaintiff. (See, NYSCEF

Doc. # 1 at pg.4, ¶13)

Plaintiff has failed to establish any breach on the part of the Defendants. Plaintiff alleges that

on August 24, 2022, Defendants intentionally blocked the payments payable to Plaintiff and began

interfering with and stopping Plaintiff’s collection of its share of the corporate Defendant’s

receivables. (See, NYSCEF Doc. # 1 at pg.4, ¶14). Clause 13 of the disputed Agreement provides

Page 4 of 21

8 of 25
FILED: QUEENS COUNTY CLERK 01/18/2023 11:42 AM INDEX NO. 720129/2022
NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 01/18/2023

that, “Seller agrees that Buyer is not required to send notice of default or Termination Event to

Seller.” (See, NYSCEF Doc. # 2: Agreement at pg.4, ¶13). However, Plaintiff contends that on that

very same date, Plaintiff allegedly demanded that Defendants cure default while constituting this to

be a breach. Clause 28 of the same Agreement also provides that, “Failure to allow Buyer to monitor

Accounts, or failure to deliver requested documents within five business days, shall result in an Event

of Default.” (Emphasis supplied). (See, NYSCEF Doc. # 2: Agreement at pg.6, ¶28). Plaintiff claims

that Defendants defaulted on August 24, 2022, but it did not even provide them with a single day or

opportunity to cure any alleged default, contrary to their allegations and also to the provisions of the

agreement, yet claiming that Defendants breached the contract. Accordingly, Plaintiff cannot succeed

on the test of sufficiency for failure to give sufficient notice of any transaction, occurrences, or series

of transactions or occurrences.

II. PLAINTIFF’S REQUEST FOR LIQUIDATED DAMAGES

MUST BE WHOLLY DENIED

In the absence of a breach, Plaintiff cannot claim resulting damages. Further, even if

Plaintiff’s figures are taken to be true, Plaintiff is seeking to recover liquidated damages for default

when it itself did not provide Defendants with any notice of default, nor afforded the 5-day cure

period to Defendants towards any alleged breach.

Liquidated damages constitute the compensation that should be paid in order to satisfy any

loss or injury flowing from a breach of their contract (Truck Rent–A–Ctr. v. Puritan Farms 2nd, 41

N.Y.2d 420, 423–424, 393 N.Y.S.2d 365, 361 N.E.2d 1015 [1977]). Although the party challenging

the liquidated damages provision has the burden to prove that the liquidated damages are, in fact, an

unenforceable penalty (see JMD Holding Corp. v. Congress Fin. Corp., 4 N.Y.3d 373, 380, 795

N.Y.S.2d 502, 828 N.E.2d 604 [2005]; Parker v. Parker, 163 A.D.3d 405, 406, 81 N.Y.S.3d 22 [1st

Page 5 of 21

9 of 25
FILED: QUEENS COUNTY CLERK 01/18/2023 11:42 AM INDEX NO. 720129/2022
NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 01/18/2023

Dept. 2018]), the party seeking to enforce the provision must necessarily have been damaged in order

for the provision to apply (see e.g. J. Weinstein & Sons, Inc. v. City of New York, 264 App.Div. 398,

400, 35 N.Y.S.2d 530 [1st Dept. 1942] [“The proof establishes that no claims were made against

defendant and that defendant suffered no financial damage whatsoever.”], affd 289 N.Y. 741, 46

N.E.2d 351 [1942]). Rubin v. Napoli Bern Ripka Shkolnik, LLP, 179 A.D.3d 495, 496, 118 N.Y.S.3d

4, 6–7 (2020). Here, the Plaintiff has not identified before this Honorable Court any damages that

they have sustained as a result of any breach of the agreement by the Defendants.

The case law is clear that a liquidated damages clause will be upheld when the “amount

liquidated bears a reasonable proportion to the probable loss and the amount of actual loss is

incapable or difficult of precise estimation. (emphasis added)” (See Truck Rent–A–Center v. Puritan

Farms 2nd, 41 N.Y.2d 420, 425, 41 N.Y.2d 420, 361 N.E.2d 1015 [1977]; cf. Vernitron Corp. v. CF

48 Associates, 104 A.D.2d 409, 478 N.Y.S.2d 933 [2nd Dept.1984]; National Telecanvass

Associates, Ltd. v. Stephen Smith, et.al., 98 A.D.2d 796, 470 N.Y.S.2d 22 [2nd

Dept.1983].) Harrington v. Hasan, 191 Misc. 2d 617, 620, 743 N.Y.S.2d 684, 687-88 (Civ. Ct. 2002)

Further, when the actual loss is easily ascertainable, then the liquidated damages clause will

be treated as a penalty and thereby unenforceable. (cf. Seidlitz v. Auerbach, 230 N.Y. 167, 129 N.E.

461 [1920]; Mosler Safe Co. v. Maiden Lane Safe Deposit Co., 199 N.Y. 479, 485, 93 N.E. 81

[1910]; Vernitron Corp., 104 A.D.2d at 410, 478 N.Y.S.2d 933.) Harrington v. Hasan, 191 Misc. 2d

617, 620, 743 N.Y.S.2d 684, 688 (Civ. Ct. 2002). In the present circumstances, even if this Honorable

court finds there has been any breach, the actual amount of loss can be easily discernable as the

purchased amount is clearly identified in the disputed Agreement. Thus, liquidated damages in the

form of Default Fee of $2,500.00 ought to be regarded as a penalty and unenforceable. (See,

NYSCEF Doc. # 1 at pg.4, ¶11).

Page 6 of 21

10 of 25
FILED: QUEENS COUNTY CLERK 01/18/2023 11:42 AM INDEX NO. 720129/2022
NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 01/18/2023

III. THE COURT LACKS PERSONAL JURISDICTION OVER THE DEFENDANTS

Pursuant to CPLR 302(a), this Honorable Court lacks personal jurisdiction over the defendants

as they are residents of the State of Florida and non-domiciliaries of the State of New York. Further,

the court cannot extend its long-arm jurisdiction over the defendants in this case.

To determine whether a nonresident defendant may be sued in State, the court first needs to

determine whether long-arm statute confers jurisdiction over the defendant, in light of its contacts

with State, and if so, then determines whether the exercise of jurisdiction comports with due process.

U.S.C.A. Const.Amend. 14; McKinney's CPLR 302(a).

A State may exercise jurisdiction over nonresident defendants without violating due process

clause, provided they had certain minimum contacts with forum state such that the maintenance of the

suit does not offend traditional notions of fair play and substantial justice. U.S.C.A. Const. Amend.

14. LaMarca v. Pak-Mor Mfg. Co., 95 N.Y.2d 210, 735 N.E.2d 883, 887 (2000). Test in determining

whether nonresident has sufficient minimum contacts with forum state that exercise of jurisdiction

over defendant will not violate due process clause rests on whether defendant's conduct and

connection with the forum state are such that it should reasonably anticipate being hauled into court

there. U.S.C.A. Const. Amend. 14. Id. Minimum contacts with forum state on part of nonresident

defendant alone do not satisfy due process, and for exercise of jurisdiction to be permissible, prospect

of defending a suit in the forum state must also comport with traditional notions of fair play and

substantial justice; latter test is in essence another way of asking what is reasonable. U.S.C.A. Const.

Amend. 14. See LaMarca v. Pak-Mor Mfg. Co., at *888.

Pursuant to CPLR 302(a)(1), “long-arm jurisdiction over a nondomiciliary exists where (i) a

defendant transacted business within the state and (ii) the cause of action arose from that transaction

of business” (Johnson v. Ward, 4 N.Y.3d 516, 519, 797 N.Y.S.2d 33, 829 N.E.2d 1201; see CPLR

302[a][1] ). Here, the defendants did not conduct “sufficient purposeful activities in New York, which

Page 7 of 21

11 of 25
FILED: QUEENS COUNTY CLERK 01/18/2023 11:42 AM INDEX NO. 720129/2022
NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 01/18/2023

bears a substantial relationship to the subject matter of this action, so as to avail the benefits and

protections of New York's laws” (Transportation Ins. Co. v. Simplicity, Inc., 61 A.D.3d 963, 964, 879

N.Y.S.2d 479; see e.g. Spanierman Gallery, PSP v. Love, 320 F.Supp.2d 108, 111; PaineWebber Inc.

v. Westgate Group, Inc., 748 F.Supp. 115, 117, 119; Standard Wine & Liq. Co. v. Bombay Spirits

Co., 20 N.Y.2d 13, 17, 281 N.Y.S.2d 299, 228 N.E.2d 367; CK's Supermarket Ltd. v. Peak

Entertainment Holdings, Inc., 37 A.D.3d 348, 348, 831 N.Y.S.2d 138; American Recreation Group v.

Woznicki, 87 A.D.2d 600, 601, 448 N.Y.S.2d 51; J.E.T. Adv. Assoc. v. Lawn King, 84 A.D.2d 744, 745,

443 N.Y.S.2d 745; Pacific Concessions v. Savard, 75 Misc.2d 219, 221, 347 N.Y.S.2d 484; cf. Ulster

Scientific v. Guest Elchrom Scientific AG, 181 F.Supp.2d 95, 102; Barclays Am./Bus. Credit v.

Boulware, 151 A.D.2d 330, 331, 542 N.Y.S.2d 587). In Andrews v. Modell, it was found that the

Supreme Court lacked personal jurisdiction over the defendant and, was erroneous in denying

defendant's CPLR 3211(a)(8) claim in a motion to dismiss complaint for lack of personal jurisdiction

(see Sanchez v. Major, 289 A.D.2d 320, 321, 734 N.Y.S.2d 211; Foley v. Roche, 68 A.D.2d 558, 565,

418 N.Y.S.2d 588). Andrews v. Modell, 84 A.D.3d 843, 844–45, 921 N.Y.S.2d 908, (Mem)–909

(2011)

Conferral of jurisdiction over nonresident defendant under long-arm statute rests on five

elements: (1) that defendant committed a tortious act outside State, (2) that the cause of action arises

from that act, (3) that the act caused injury to a person or property within the State, (4) that defendant

expected or should reasonably have expected the act to have consequences in the State, and (5) that

defendant derived substantial revenue from interstate or international commerce. McKinney's CPLR

302(a).

The requirement for exercise of personal jurisdiction over nonresident defendant under long-

arm statute that, defendant expected or should reasonably have expected the act to have consequences

in the State, is intended to ensure some link between a defendant and State to make it reasonable to

Page 8 of 21

12 of 25
FILED: QUEENS COUNTY CLERK 01/18/2023 11:42 AM INDEX NO. 720129/2022
NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 01/18/2023

require a defendant to come to State to answer for tortious conduct committed elsewhere. McKinney's

CPLR 302(a). Further, the requisite element that defendant must have derived substantial revenue

from interstate or international commerce, is designed to narrow the long-arm reach to preclude the

exercise of jurisdiction over non-domiciliaries who might cause direct, foreseeable injury within

State, but whose business operations are of a local character. McKinney's CPLR 302(a), par. 3(ii).

LaMarca v. Pak-Mor Mfg. Co., 95 N.Y.2d 210, 735 N.E.2d 883 (2000)

In the instant case, the Corporate Defendant Moore Solutions Inc. is a registered Florida profit

corporation that offers industry-leading curriculum solutions for education and businesses aligning

with State of Florida DOE Course frameworks. Moore Solutions Inc. obtained its license from the

Florida Department of Education to become a post-secondary school. After operating as a post-

secondary school for nearly two decades Moore Solutions Inc. began working with the K-12 sector to

help prepare high school and middle school students for industry certification exams in Microsoft and

Adobe. The Individual defendant is the principal owner of the corporate defendant and is primarily

responsible for the corporate defendant’s business activities within the state of Florida. Neither of the

defendants ever had any business connections or any other contacts with the State of New York

except that the usurious loan agreement was entered with the Plaintiff which was done via an online

application, signed using a digital signature without ever stepping out of the residence. The

Defendants were not even aware that the Plaintiff was a New York entity until the instant lawsuit was

initiated. Factually, circumstances in the instant case vary extensively from the facts of Paradigm

Mkrg. Consortium, Inc. v Yale New Haven Hosp., Inc., 124 AD3d 736, 737 [2d Dept 2015] quoting

CPLR 302[a]) given that both the individual defendant as well as the corporate defendant’s contacts

with the State of New York does not rise to the level of Minimum Contacts as required for the court to

extend its long arm jurisdiction over non-domiciliary defendants.

Page 9 of 21

13 of 25
FILED: QUEENS COUNTY CLERK 01/18/2023 11:42 AM INDEX NO. 720129/2022
NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 01/18/2023

To create a binding contract, there must be a manifestation of mutual assent sufficiently

definite to assure that the parties are truly in agreement with respect to all material terms. Resorb

Networks, Inc. v. YouNow.com, 30 N.Y.S.3d 506, 510 (N.Y. Sup. Ct. 2016).

In regard to online contracts, trial courts look for evidence that a website user had actual or

constructive notice of the terms of using the website. Id. Resorb Networks at *511. Where the

supposed assent to terms of an alleged online agreement is mostly passive, as it usually is online, trial

courts seek to know whether a reasonably prudent offeree would be on notice of the term at issue and

whether the terms of the agreement were reasonably communicated to the user. (Fteja v. Facebook,

Inc., 841 F.Supp.2d 829, 833, 835 [S.D.N.Y.2012]; *981 Starke v. Gilt Groupe, Inc., 2014 WL

1652225, *2, *3, 2014 U.S. Dist. LEXIS 58006, *6–7 [S.D.N.Y.2014]; Jerez v.JD Closeouts, LLC,

36 Misc.3d 161, 168, 943 N.Y.S.2d 392 [Nassau Dist.Ct.2012]). See Resorb Networks, at *511 (held

that Mandatory arbitration provision in alleged online agreement, consisting of terms of use on

provider's website, was not enforceable, on grounds that user lacked notice of agreement to arbitrate,

did not assent to agreement, and did not have effective opportunity to access terms of use, since

provider did not make clear that terms of use was hyperlink that took user to terms of use, so

reasonably prudent user would not have noticed terms of use on website. ); See generally, Scarcella v.

Am. Online, Inc., 811 N.Y.S.2d 858 (App. Term 2005) (held that ‘forum selection clause’ set forth in

electronic Internet service provider (ISP) membership agreement, which required that any dispute

against the ISP be litigated in Virginia, was unenforceable in customer's small claims action against

the ISP, where enforcement of the clause would deprive the customer of his preferred choice to

litigate his $5,000 controversy in the Small Claims Part, and, for all practical purposes, of his day in

court due to, inter alia, costs and inconvenience attendant to litigating the claim in Virginia, and the

$2,000 monetary limit of the Virginia Small Claims Court.)

Page 10 of 21

14 of 25
FILED: QUEENS COUNTY CLERK 01/18/2023 11:42 AM INDEX NO. 720129/2022
NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 01/18/2023

Under present circumstances, Plaintiff seeking this Honorable court to exercise jurisdiction

over the defendants is not in the interest of fair play and substantial justice, and Plaintiff’s combined

memorandum in opposition and cross-motion for sanctions, as well as the complaint, ought to be

dismissed by the court.

 FORUM NON CONVENIENS

Founded upon the equitable principles of justice, fairness and convenience, the common-law

doctrine of forum non conveniens, as codified in CPLR 327, is a highly flexible concept whereby a

court, after considering and balancing certain competing factors, may entertain or decline to entertain

jurisdiction over an action (see **17 Islamic Republic of Iran v. Pahlavi, 62 N.Y.2d 474, 479, 478

N.Y.S.2d 597, 467 N.E.2d 245, cert. denied 469 U.S. 1108, 105 S.Ct. 783, 83 L.Ed.2d 778; Martin v.

Mieth, 35 N.Y.2d 414, 418, 362 N.Y.S.2d 853, 321 N.E.2d 777).

Although no one factor is controlling, some of the factors that a Court should consider in

determining whether jurisdiction should be retained in New York, include “the difficulties for

defendant in litigating the claim in this State, the burden on the New York courts in entertaining the

suit and the availability of another more convenient forum in which plaintiff may obtain

redress (emphasis supplied) (Varkonyi v. Varig, 22 N.Y.2d 333 [292 N.Y.S.2d 670, 239 N.E.2d

542], Irrigation & Ind. Dev. Corp. v. Indag S.A., 37 N.Y.2d 522 [375 N.Y.S.2d 296, 337 N.E.2d 749] )

...” (Banco Ambrosiano v. Artoc Bank, 62 N.Y.2d 65, 73, 476 N.Y.S.2d 64, 464 N.E.2d 432 (1984)).

Waterways Ltd. v. Barclays Bank PLC, 174 A.D.2d 324, 327, 571 N.Y.S.2d 208, 210 (1991). A court

may also consider that the plaintiffs are nonresidents, that the underlying transaction occurred in a

foreign jurisdiction, and that another suitable forum is unavailable to the parties (Islamic Republic, 62

N.Y.2d at 479–480, 478 N.Y.S.2d 597, 467 N.E.2d 245). Intertec Contracting A/S v. Turner Steiner

Int'l, S.A., 774 N.Y.S.2d 14, 16–17 (2004).

Page 11 of 21

15 of 25
FILED: QUEENS COUNTY CLERK 01/18/2023 11:42 AM INDEX NO. 720129/2022
NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 01/18/2023

The application of forum non-conveniens can be made with a Court sitting in equity pursuant

to CPLR § 327 (a), “When the court finds that in the interest of substantial justice, the action should

be heard in another forum, the court, on the motion of any party, may stay or dismiss the action in

whole or in part on any conditions that may be just”. (emphasis supplied).

Although New York forum selection clauses are prima facie enforceable, courts occasionally

refuse enforcement on the ground of unreasonableness. N.Y. C.P.L.R. 327 (McKinney). A recent

example is Prospect Funding Holdings, L.L.C. v. Maslowski, 2017, 146 A.D.3d 535, 43 N.Y.S.3d 904

(1st Dep't), leave to appeal denied, 29 N.Y.3d 914 (held that the contractual choice of a New York

forum was not binding because that clause was unreasonable on the facts of the case: “Every aspect

of the transaction at issue occurred in Minnesota, the parties, documents, and witnesses are located in

Minnesota, and defending this action in New York would be a substantial hardship to Mrs.

Maslowski.” (It should be noted that because the amount of the transaction at issue was less than one

million dollars, CPLR 327(b) and Gen.Oblig.Law § 5-1402 did not insulate the forum selection

clause against forum non conveniens analysis or unreasonableness considerations.)

“A contractual forum selection clause is prima facie valid and enforceable unless it is shown

by the challenging party to be unreasonable, unjust, in contravention of public policy, invalid due to

fraud or overreaching, or it is shown that a trial in the selected forum would be so gravely difficult

that the challenging party would, for all practical purposes, be deprived of its day in court’ ”

(emphasis supplied) (KMK Safety Consulting, LLC v. Jeffrey M. Brown Assoc., Inc., 72 A.D.3d 650,

651, 897 N.Y.S.2d 649, quoting LSPA Enter., Inc. v. Jani–King of N.Y., Inc., 31 A.D.3d 394, 395, 817

N.Y.S.2d 657; see Casale v. Sheepshead Nursing & Rehabilitation Ctr., 131 A.D.3d 436, 13 N.Y.S.3d

904; Molino v. Sagamore, 105 A.D.3d 922, 923, 963 N.Y.S.2d 355). Puleo v. Shore View Ctr. for

Rehab. & Health Care, 132 A.D.3d 651, 652–53, 17 N.Y.S.3d 501, 502–03 (2015)

Page 12 of 21

16 of 25
FILED: QUEENS COUNTY CLERK 01/18/2023 11:42 AM INDEX NO. 720129/2022
NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 01/18/2023

Further, though unconscionability, as an element in the enforcement of contracts, is equitable

in origin, there is evidence to sustain the conclusion that the common-law courts as well were moved

by the doctrine to invalidate contracts under certain circumstances (1 Corbin on Contracts, s 128, p.

551). The original concept was broad: An unconscionable contract was one “such as no man in his

senses and not under delusion would make on the one hand, and as no honest and fair man would

accept on the other” (Earl of Chesterfield v. Janssen, 28 Eng.Reprint 82, 100; cf. Hume v. United

States, 132 U.S. 406, 411, 10 S.Ct. 134, 33 L.Ed. 393). The test has been more sharply defined “to

include an absence of meaningful choice on the part of one of the parties together with contract terms

which are unreasonably favorable to the other party”, and characterized “by a gross inequality of

bargaining power” (emphasis supplied) (Williams v. Walker-Thomas Furniture Co., 121

U.S.App.D.C. 315, 350 F.2d 445, 449). In dealing with the doctrine, commentators have

differentiated between procedural and substantive unconscionability (see, e.

Case Info

Judge

Robert Ian Caloras Track Judge’s New Case

Case No.

(Subscribe to View)

Document Filed Date

January 18, 2023

Case Filing Date

September 28, 2022

County

Parties

For full print and download access, please subscribe at https://www.trellis.law/.

Motion,Ex Parte: Simply Funding, Llc, v. Moore Solutions Inc., DBA MOORE SOLUTIONS, Terrance Moore

Preview

Related Topics

Case Info

Parties