Preview
(FILED:
WNASSAU_COUNTY
CLERK 06/22/2023 02:21 PM INDEX NO. 600378/2023
NYSCEF DOC. NO. 44 RECEIVED NYSCEF: 06/21/2023
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NASSAU
PRESENT: HON. CONRAD D. SINGER,
Justice TRIAL PART: 21
went nnn nnn nee ene nee eneenenenemen ne!
PEARL DELTA FUNDING, LLC,
Index No.: 600378/2023
Plaintiff, Motion Seq. Nos.: 001
Motions Submitted: 03/23/2023
-against- DECISION AND ORDER ON
MOTION
PEAK TITLE AGENCY CO. AKA PEAK TITLE CO and
TOBBY JABLONSKI and JUAN RUIZ JR,
Defendants.
pater enn enn neem nn nn en een nnenemenenennneen nnn
The following papers were read on this motion:
Notice of Motion to Dismiss and Supporting Papers [Seq. 001]
Affirmation in Opposition to Motion and Supporting Documents [Seq. 001]
Memo of Law in Reply [Seq. 001]
Upon the foregoing e-filed papers, the motion filed by the Plaintiff, PEARL DELTA FUNDING,
LLC [“Plaintiff’], for an Order pursuant to CPLR 3211(b) dismissing the Defendants’ affirmative
defenses is determined as hereinafter follows:
The Plaintiff commenced this action by filing a Summons and Verified Complaint on January 6,
2023. The Defendants thereafter served a Verified Answer with Affirmative Defenses.
This case arises from the alleged breach by the Defendants, PEAK TITLE AGENCY CO. AKA
PEAK TITLE CO [“Merchant Defendant”] and TOBBY JABLONSKI [“JABLONSKI”] and JUAN
RUIZ JR [“RUIZ JR., and when referred to collectively with JABLONSKI, “GUARANTOR
DEFENDANTS”] [Merchant Defendant and Guarantor Defendants collectively referred to as
“Defendants”], of an agreement entered into with the Plaintiff on or about August 10, 2022 [the
“Agreement”]. Pursuant to the Agreement, the Plaintiff agreed to purchase rights to the Merchant
1 of 10
(FILED:
WNASSAU_COUNTY
CLERK 06/22/2023 02:21 PM INDEX NO. 600378/2023
NYSCEF DOC. NO. 44 RECEIVED NYSCEF: 06/21/2023
Defendant’s receivables having an agreed upon value of $178,100.00. The Plaintiff alleges that the
Merchant Defendant agreed to exclusively use one bank account approved by the Plaintiff [the
“Account”] into which the Merchant Defendant agreed to deposit all its receipts and from which the
Plaintiff was authorized to make periodic ACH withdrawals until the $178,100.00 was fully paid to the
Plaintiff.
The Plaintiff alleges that, under the Agreement, the following would constitute a default by the
Merchant Defendant: (a) if the Merchant Defendant, without the Plaintiff's prior authorization, used a
bank account other than the Account or closed the Account; (b) if the Merchant Defendant failed to give
Plaintiff the required advance notice to prevent an ACH withdrawal from being dishonored for
insufficient funds; and/or, (c) if the Plaintiff was otherwise prevented from making any agreed upon
ACH withdrawal. Each Guarantor Defendant agreed to guarantee any and all amounts owed to the
Plaintiff from the Merchant Defendant upon the Merchant’s breach in performance of its Agreement
obligations.
The Plaintiff alleges that it fulfilled all its Agreement obligations by remitting to the Merchant
Defendant the purchase price for the future receivables. The Plaintiff further alleges that on or about
January 3, 2023, the Plaintiff was prevented from making the agreed upon ACH withdrawals and, as
such, the Merchant Defendant defaulted under the terms of the Agreement. The Merchant Defendant is
alleged to have made payments totaling $98,940.00, leaving a balance of $79,160.00, and is also alleged
to have incurred a default account fee in the amount of $2,500.00.
The Defendants have asserted twenty-nine (29) [which the Defendants have mis-numbered as
thirty [30] total] affirmative defenses, which are as follows:
2 of 10
(FILED:
WNASSAU_COUNTY
CLERK 06/22/2023 02:21 PM INDEX NO. 600378/2023
NYSCEF DOC. NO. 44 RECEIVED NYSCEF: 06/21/2023
First Affirmative Defense: “Excessive fees charged by Plaintiff including, but not limited
to various liquidated damages clauses in the contract are attempted to be charged as
penalties which are contrary to law”; and
Second Affirmative Defense: The contract is unconscionable; and
Third Affirmative Defense: “Plaintiff being granted the relief requested would result in
Unjust Enrichment on the part of the Plaintiff’; and
Fourth Affirmative Defense: “Plaintiff violated the duty of good faith and fair dealing”;
and
Fifth Affirmative Defense: “Plaintiff is suing for the wrong amount”; and
Sixth Affirmative Defense: “Plaintiff's filing of this matter against Defendants violates
the doctrine of laches”; and
Seventh Affirmative Defense: “The Plaintiff Fraudulently Induced the Defendants into
executing the agreement”; and
Eighth Affirmative Defense: “Plaintiff's filing of this matter against Defendants violates
the doctrine of in pari delicto”; and
Ninth Affirmative Defense: “Plaintiff failed to mitigate damages”; and
Tenth Affirmative Defense: “There is a lack of damages in this matter, or that the damages
are inconsequential and de minimis”; and
Eleventh Affirmative Defense: “Plaintiff failed timely and properly to exhaust all
necessary administrative, statutory, and/or jurisdictional prerequisites to commence this
action”; and
Twelfth Affirmative Defense: “Plaintiff failed to comply with its obligations under the
agreement”; and
3 of 10
INDEX NO. 600378/2023
NYSCEF DOC. NO. 44 RECEIVED NYSCEF: 06/21/2023
Thirteenth Affirmative Defense: “Plaintiff induced Defendant into entering into an
unlawful usurious loan and not an asset purchase agreement”; and
Fourteenth Affirmative Defense: “The agreement which is the subject matter of this
litigation is invalid because it lacks a legal purpose”; and
Fifteenth Affirmative Defense: “The agreement constitutes a contract of adhesion”; and
Sixteenth Affirmative Defense: “Plaintiff fails to state a claim upon which relief can be
granted”; and
Seventeenth Affirmative Defense: “Defendant was not served or was improperly served
with the Summons and Complaint. As such, personal jurisdiction is lacking. Defendant
was not served either personally or otherwise served”; and
Eighteenth Affirmative Defense: “Defendant has paid, in whole or in part, the amounts
claimed by the plaintiff’; and
Nineteenth Affirmative Defense: “The complaint fails to state a cause of action upon
which relief may be granted. The plaintiff failed in its Summons and Complaint to
adequately plead the nature of the alleged cause of action”; and
Twentieth Affirmative Defense: The circumstances surrounding it, it is so unfair that they
“shock the conscience”; and
Twenty First Affirmative Defense: “Plaintiff has not established subject jurisdiction over
the defendant. The court lacks jurisdiction over the defendant. Subject matter jurisdiction
is lacking. Complaint to be dismissed based upon subject matter jurisdiction”; and
Twenty Second Affirmative Defense: “The complaint should be dismissed based upon
lack of standing”; and
4 of 10
(FILED:
WNASSAU_COUNTY
CLERK 06/22/2023 02:21 PM INDEX NO. 600378/2023
NYSCEF DOC. NO. 44 RECEIVED NYSCEF: 06/21/2023
Twenty Third Affirmative Defense: “Based upon plaintiff's bad faith, the Complaint
should be dismissed”; and
Twenty Fourth Affirmative Defense: “Based upon the forgoing, the plaintiff's claims are
barred by the doctrine of unclean hands”; and
Twenty Sixth [sic] Affirmative Defense: “Based upon foregoing, the plaintiff's claims
are barred by the doctrine of estoppel”; and
Twenty Seventh Affirmative Defense: “Plaintiff's action should fail because of lack and
failure of consideration. Plaintiff has not and cannot show that it provided consideration
to the defendant”; and
Twenty Eighth Affirmative Defense: “Plaintiff's claims are barred by Statute of Frauds”;
and
Twenty Ninth Affirmative Defense: “Plaintiff engaged in deceptive acts and practices
unlawful [sic]”; and
Thirtieth Affirmative Defense: “The claims asserted in the Complaint are not set forth
with sufficient particularity to enable Defendant to determine all of his defenses to these
claims. Defendant therefore reserves the right to assert any additional defenses that may
be applicable and to withdraw any defenses that are inapplicable once the precise nature
of the claims are ascertained through discovery and investigation.”
The Plaintiff argues that all the Defendants’ Affirmative Defenses should be dismissed pursuant
to CPLR § 3211(b). “Pursuant to CPLR 3211 (b), ‘a party may move for judgment dismissing one or
more defenses, on the ground that a defense is not stated or has no merit.’” (Wells Fargo Bank, N.A. v
Rios, 160 AD3d 912, 913 [2d Dept 2018]). “When moving to dismiss, the plaintiff bears the burden of
demonstrating that the affirmative defenses ‘are without merit as a matter of law because they either do
5
5 of 10
(FILED:
WNASSAU_COUNTY
CLERK 06/22/2023 02:21 PM INDEX NO. 600378/2023
NYSCEF DOC. NO. 44 RECEIVED NYSCEF: 06/21/2023
not apply under the factual circumstances of [the] case, or fail to state a defense’”. (Wells Fargo Bank,
N.A., 160 AD3d at 913, citations omitted.
Likewise, in LG Funding, LLC v. United Senior Properties of Olathe, LLC, 181 AD3d 664 [2d
Dept 2020], the Second Department held as follows:
“In reviewing a motion to dismiss an affirmative defense, the court
must liberally construe the pleadings in favor of the party asserting
the defense and give that party the benefit of every reasonable
inference’ ...‘[I]f there is any doubt as to the availability of a
defense, it should not be dismissed’ ...Dismissal may be warranted
under CPLR 3211(a)(1) ‘if the documentary evidence submitted
conclusively establishes a defense to the asserted claims as a matter
of law”. (LG Funding, LLC, 181 AD3d at 664, internal citations
omitted).
The Plaintiff, in moving to dismiss the affirmative defenses, bears “the burden of demonstrating
that those defenses are without merit as a matter of law”. (Butler v Catinella, 58 AD3d 145, 148 [2d
Dept 2008], citations omitted).
The Plaintiff first argues that the Defendants’ usury defense and all of their “usury-based”
defenses are meritless and must be dismissed as a matter of law. The issue upon which the availability
of the usury defense hinges is whether the parties’ agreement constituted a loan. “[W]here there is no
loan, there can be no usury, however unconscionable the contract may be”. (LG Funding, LLC v United
Senior Properties of Olathe, LLC, 181 AD3d 664, [2d Dept 2020]. In determining whether the subject
transaction constituted a loan, “[t]he court must examine whether the plaintiff ‘is absolutely entitled to
repayment under all circumstances’”, because “[uJnless a principal sum advanced is repayable
absolutely, the transaction is not a loan”. (/d., citations omitted).
The Second Department has articulated three factors to be weighed when determining whether
payment is absolute or contingent: “(1) whether there is a reconciliation provision in the agreement; (2)
6 of 10
(FILED:
WNASSAU_COUNTY
CLERK 06/22/2023 02:21 PM INDEX NO. 600378/2023
NYSCEF DOC. NO. 44 RECEIVED NYSCEF: 06/21/2023
whether the agreement has a finite term; and (3) whether there is any recourse should the merchant
declare bankruptcy”. (Jd., citations omitted).
The Plaintiff argues that the parties’ transaction is not a loan based on the following: first,
that
the Agreement contained express reconciliation and adjustment provisions providing for reconcili
ation
and adjustment every two weeks. The Court has reviewed the “Reconciliation” provisions cited to by
the Plaintiff's attorney [labeled § 1.4 Adjustments to the Remittance in the parties’ Agreemen
t], and
notes that the contractual language indicates that reconciliation and remittance adjustme
nt are only
available to the Merchant “[i]f an Event of Default has not occurred”, and only after
the Merchant
“give[s] notice to Purchaser to request a decrease in the Remittance”. (Emphasis supplied).
The Court has also reviewed the Agreement’s sections defining the “Events of Default” [Section
3.1 of the Agreement] and governing Notices [Section 4.3]. Construing in the Defendants’ favor the
provisions included in the “Events of Default”, and affording them every favorable inference therefrom,
the Court has considerable concerns that it would be impossible for the Defendants to request a
reconciliation from the Plaintiff without there first having been one or more default events. Additional
ly,
construing the Notice provisions in the Defendants’ favor, and affording them every favorable inference
therefrom, the Court further finds that the Reconciliation/Adjustment provisions are potentially
discretionary and that the Plaintiff could potentially withhold reconciliation from the Defendants even
after requested. The Court finds that the Plaintiff has failed to establish that the usury defense is without
merit, and therefore the Thirteenth Affirmative Defense alleging that the subject Agreement is a usurious
loan shall not be dismissed. (LG Funding, LLC v. United Senior Properties of Olathe, LLC, 181 AD3d
664 [2d Dept 2020]). The portion of the Plaintiff's motion which seeks dismissal of the Thirteenth
Affirmative Defense alleging usury is DENIED.
7 of 10
(FILED:
WNASSAU_COUNTY
CLERK 06/22/2023 02:21 PM INDEX NO. 600378/2023
NYSCEF DOC. NO. 44 RECEIVED NYSCEF: 06/21/2023
Likewise, the Plaintiff has also failed to establish that the following affirmative defenses should
be dismissed as meritless or unavailable based on the facts of this case: First Affirmative Defense
alleging excessive fees constituting improper penalties; Second Affirmative Defense alleging
unconscionable contract; Fourth Affirmative Defense alleging violation of duty of good faith and fair
dealing; Eighth Affirmative Defense asserting in pari delicto doctrine; Ninth Affirmative Defense
alleging the failure to mitigate damages; Fourteenth Affirmative Defense alleging the Agreement lacks
a legal purpose; Fifteenth Affirmative Defense alleging a contract of adhesion; Twenty-Third
Affirmative Defense alleging the Plaintiff's bad faith; Twenty-Fourth Affirmative Defense alleging the
Plaintiffs unclean hands; Twenty-Ninth Affirmative Defense alleging the Plaintiff engage in deceptive
acts and practices.
The Plaintiff's motion papers do not address the following affirmative defenses and therefore the
Court will not dismiss these affirmative defenses: Fifth Affirmative Defense: Plaintiff is suing for the
wrong amount; Seventeenth Affirmative Defense alleging lack of personal jurisdiction; Eighteenth
Affirmative Defense alleging that the Defendant has paid, in whole or in part, the amounts claimed by
the Plaintiff; Twenty-First Affirmative Defense alleging lack of subject matter jurisdiction; Twenty-
Sixth Affirmative Defense alleging estoppel doctrine; Twenty-Eighth Affirmative Defense alleging
Statute of Frauds.
However, the Plaintiff sufficiently established that many of the twenty-nine affirmative defenses
should be dismissed pursuant to CPLR 3211 (b). (See Cohen Fashion Opt., Inc. v. V & M Opt. Inc., 51
AD3d 619, 619-20, 858 NYS2d 260, 261 [2d Dept 2008]). The Court finds that the Plaintiff has
sufficiently established that the following affirmative defenses are meritless or do not apply based on the
facts of this case: Third Affirmative Defense alleging unjust enrichment; Sixth Affirmative Defense
alleging laches doctrine; Seventh Affirmative Defense alleging fraudulent inducement: Tenth
8
8 of 10
(FILED:
WNASSAU_COUNTY
CLERK 06/22/2023 02:21 PM INDEX NO. 600378/2023
NYSCEF DOC. NO. 44 RECEIVED NYSCEF: 06/21/2023
Affirmative Defense alleging a lack of damages or that damages are inconsequential and de minimis;
Eleventh Affirmative Defense alleging the failure to timely and properly exhaust all necessary
administrative, statutory, and/or jurisdictional prerequisites; Twelfth Affirmative Defense
alleging that
the Plaintiff failed to comply with its obligations under the Agreement; Sixteenth Affirmative Defense
alleging that the Plaintiff failed to state a claim upon which relief can be granted; Nineteenth Affirmative
Defense alleging that the Complaint fails to state a cause of action upon which relief may be granted
[duplicative of Sixteenth Affirmative Defense]; Twentieth Affirmative Defense alleging “[t]he
circumstances surrounding it, [sic] it is so unfair that they ‘shock the conscience’”; Twenty-S
econd
Affirmative Defense alleging lack of standing; Twenty-Seventh Affirmative Defense alleging lack and
failure of consideration; Thirtieth Affirmative Defense asserting a catchall affirmative defense to assert
any additional defenses that might be applicable.
Based on the foregoing, the Plaintiff's motion to dismiss the Defendants’ affirmative defenses is
GRANTED in part and DENIED in part.
Accordingly, it is hereby
ORDERED, that the Plaintiffs motion for an Order pursuant to CPLR 3211 (b) dismissing the
Defendants’ affirmative defenses is GRANTED to the extent that the following affirmative defenses
shall be severed and stricken: Third Affirmative Defense alleging unjust enrichment; Sixth Affirmative
Defense alleging laches doctrine; Seventh Affirmative Defense alleging fraudulent inducement; Tenth
Affirmative Defense alleging a lack of damages or that damages are inconsequential and de minimis;
Eleventh Affirmative Defense alleging the failure to timely and properly exhaust all necessary
administrative, statutory, and/or jurisdictional prerequisites; Twelfth Affirmative Defense alleging that
the Plaintiff failed to comply with its obligations under the Agreement; Sixteenth Affirmative Defense
alleging that the Plaintiff failed to state a claim upon which relief can be granted; Nineteenth Affirmative
9
9 of 10
(FILED:
WNASSAU_COUNTY
CLERK 06/22/2023 02:21 PM INDEX NO. 600378/2023
NYSCEF DOC. NO. 44 RECEIVED NYSCEF: 06/21/2023
Defense alleging that the Complaint fails to state a cause of action upon which relief may be granted
[duplicative of Sixteenth Affirmative Defense]; Twentieth Affirmative Defense alleging “[t]he
circumstances surrounding it, [sic] it is so unfair that they ‘shock the conscience”; Twenty-Second
Affirmative Defense alleging lack of standing; Twenty-Seventh Affirmative Defense alleging lack and
failure of consideration; Thirtieth Affirmative Defense asserting a catchall affirmative defense to assert
any additional defenses that might be applicable; and it is further,
ORDERED, that the Plaintiff's motion to dismiss is otherwise DENIED; and it is further,
ORDERED, that all other requests for relief not specifically addressed herein shall be deemed
DENIED.
This constitutes the Decision and Order of this Court.
Dated: June 20, 2023
Mineola, New York
GA.
HON. CONRAD, SINC Ax.
ENTERED:
Jun 22 2023
NASSAU COUNTY
COUNTY CLERK'S OFFICE
10
10 of 10
Preview
(FILED: WNASSAU_COUNTY CLERK 06/22/2023 02:21 PM INDEX NO. 600378/2023 NYSCEF DOC. NO. 44 RECEIVED NYSCEF: 06/21/2023 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NASSAU PRESENT: HON. CONRAD D. SINGER, Justice TRIAL PART: 21 went nnn nnn nee ene nee eneenenenemen ne! PEARL DELTA FUNDING, LLC, Index No.: 600378/2023 Plaintiff, Motion Seq. Nos.: 001 Motions Submitted: 03/23/2023 -against- DECISION AND ORDER ON MOTION PEAK TITLE AGENCY CO. AKA PEAK TITLE CO and TOBBY JABLONSKI and JUAN RUIZ JR, Defendants. pater enn enn neem nn nn en een nnenemenenennneen nnn The following papers were read on this motion: Notice of Motion to Dismiss and Supporting Papers [Seq. 001] Affirmation in Opposition to Motion and Supporting Documents [Seq. 001] Memo of Law in Reply [Seq. 001] Upon the foregoing e-filed papers, the motion filed by the Plaintiff, PEARL DELTA FUNDING, LLC [“Plaintiff’], for an Order pursuant to CPLR 3211(b) dismissing the Defendants’ affirmative defenses is determined as hereinafter follows: The Plaintiff commenced this action by filing a Summons and Verified Complaint on January 6, 2023. The Defendants thereafter served a Verified Answer with Affirmative Defenses. This case arises from the alleged breach by the Defendants, PEAK TITLE AGENCY CO. AKA PEAK TITLE CO [“Merchant Defendant”] and TOBBY JABLONSKI [“JABLONSKI”] and JUAN RUIZ JR [“RUIZ JR., and when referred to collectively with JABLONSKI, “GUARANTOR DEFENDANTS”] [Merchant Defendant and Guarantor Defendants collectively referred to as “Defendants”], of an agreement entered into with the Plaintiff on or about August 10, 2022 [the “Agreement”]. Pursuant to the Agreement, the Plaintiff agreed to purchase rights to the Merchant 1 of 10 (FILED: WNASSAU_COUNTY CLERK 06/22/2023 02:21 PM INDEX NO. 600378/2023 NYSCEF DOC. NO. 44 RECEIVED NYSCEF: 06/21/2023 Defendant’s receivables having an agreed upon value of $178,100.00. The Plaintiff alleges that the Merchant Defendant agreed to exclusively use one bank account approved by the Plaintiff [the “Account”] into which the Merchant Defendant agreed to deposit all its receipts and from which the Plaintiff was authorized to make periodic ACH withdrawals until the $178,100.00 was fully paid to the Plaintiff. The Plaintiff alleges that, under the Agreement, the following would constitute a default by the Merchant Defendant: (a) if the Merchant Defendant, without the Plaintiff's prior authorization, used a bank account other than the Account or closed the Account; (b) if the Merchant Defendant failed to give Plaintiff the required advance notice to prevent an ACH withdrawal from being dishonored for insufficient funds; and/or, (c) if the Plaintiff was otherwise prevented from making any agreed upon ACH withdrawal. Each Guarantor Defendant agreed to guarantee any and all amounts owed to the Plaintiff from the Merchant Defendant upon the Merchant’s breach in performance of its Agreement obligations. The Plaintiff alleges that it fulfilled all its Agreement obligations by remitting to the Merchant Defendant the purchase price for the future receivables. The Plaintiff further alleges that on or about January 3, 2023, the Plaintiff was prevented from making the agreed upon ACH withdrawals and, as such, the Merchant Defendant defaulted under the terms of the Agreement. The Merchant Defendant is alleged to have made payments totaling $98,940.00, leaving a balance of $79,160.00, and is also alleged to have incurred a default account fee in the amount of $2,500.00. The Defendants have asserted twenty-nine (29) [which the Defendants have mis-numbered as thirty [30] total] affirmative defenses, which are as follows: 2 of 10 (FILED: WNASSAU_COUNTY CLERK 06/22/2023 02:21 PM INDEX NO. 600378/2023 NYSCEF DOC. NO. 44 RECEIVED NYSCEF: 06/21/2023 First Affirmative Defense: “Excessive fees charged by Plaintiff including, but not limited to various liquidated damages clauses in the contract are attempted to be charged as penalties which are contrary to law”; and Second Affirmative Defense: The contract is unconscionable; and Third Affirmative Defense: “Plaintiff being granted the relief requested would result in Unjust Enrichment on the part of the Plaintiff’; and Fourth Affirmative Defense: “Plaintiff violated the duty of good faith and fair dealing”; and Fifth Affirmative Defense: “Plaintiff is suing for the wrong amount”; and Sixth Affirmative Defense: “Plaintiff's filing of this matter against Defendants violates the doctrine of laches”; and Seventh Affirmative Defense: “The Plaintiff Fraudulently Induced the Defendants into executing the agreement”; and Eighth Affirmative Defense: “Plaintiff's filing of this matter against Defendants violates the doctrine of in pari delicto”; and Ninth Affirmative Defense: “Plaintiff failed to mitigate damages”; and Tenth Affirmative Defense: “There is a lack of damages in this matter, or that the damages are inconsequential and de minimis”; and Eleventh Affirmative Defense: “Plaintiff failed timely and properly to exhaust all necessary administrative, statutory, and/or jurisdictional prerequisites to commence this action”; and Twelfth Affirmative Defense: “Plaintiff failed to comply with its obligations under the agreement”; and 3 of 10 INDEX NO. 600378/2023 NYSCEF DOC. NO. 44 RECEIVED NYSCEF: 06/21/2023 Thirteenth Affirmative Defense: “Plaintiff induced Defendant into entering into an unlawful usurious loan and not an asset purchase agreement”; and Fourteenth Affirmative Defense: “The agreement which is the subject matter of this litigation is invalid because it lacks a legal purpose”; and Fifteenth Affirmative Defense: “The agreement constitutes a contract of adhesion”; and Sixteenth Affirmative Defense: “Plaintiff fails to state a claim upon which relief can be granted”; and Seventeenth Affirmative Defense: “Defendant was not served or was improperly served with the Summons and Complaint. As such, personal jurisdiction is lacking. Defendant was not served either personally or otherwise served”; and Eighteenth Affirmative Defense: “Defendant has paid, in whole or in part, the amounts claimed by the plaintiff’; and Nineteenth Affirmative Defense: “The complaint fails to state a cause of action upon which relief may be granted. The plaintiff failed in its Summons and Complaint to adequately plead the nature of the alleged cause of action”; and Twentieth Affirmative Defense: The circumstances surrounding it, it is so unfair that they “shock the conscience”; and Twenty First Affirmative Defense: “Plaintiff has not established subject jurisdiction over the defendant. The court lacks jurisdiction over the defendant. Subject matter jurisdiction is lacking. Complaint to be dismissed based upon subject matter jurisdiction”; and Twenty Second Affirmative Defense: “The complaint should be dismissed based upon lack of standing”; and 4 of 10 (FILED: WNASSAU_COUNTY CLERK 06/22/2023 02:21 PM INDEX NO. 600378/2023 NYSCEF DOC. NO. 44 RECEIVED NYSCEF: 06/21/2023 Twenty Third Affirmative Defense: “Based upon plaintiff's bad faith, the Complaint should be dismissed”; and Twenty Fourth Affirmative Defense: “Based upon the forgoing, the plaintiff's claims are barred by the doctrine of unclean hands”; and Twenty Sixth [sic] Affirmative Defense: “Based upon foregoing, the plaintiff's claims are barred by the doctrine of estoppel”; and Twenty Seventh Affirmative Defense: “Plaintiff's action should fail because of lack and failure of consideration. Plaintiff has not and cannot show that it provided consideration to the defendant”; and Twenty Eighth Affirmative Defense: “Plaintiff's claims are barred by Statute of Frauds”; and Twenty Ninth Affirmative Defense: “Plaintiff engaged in deceptive acts and practices unlawful [sic]”; and Thirtieth Affirmative Defense: “The claims asserted in the Complaint are not set forth with sufficient particularity to enable Defendant to determine all of his defenses to these claims. Defendant therefore reserves the right to assert any additional defenses that may be applicable and to withdraw any defenses that are inapplicable once the precise nature of the claims are ascertained through discovery and investigation.” The Plaintiff argues that all the Defendants’ Affirmative Defenses should be dismissed pursuant to CPLR § 3211(b). “Pursuant to CPLR 3211 (b), ‘a party may move for judgment dismissing one or more defenses, on the ground that a defense is not stated or has no merit.’” (Wells Fargo Bank, N.A. v Rios, 160 AD3d 912, 913 [2d Dept 2018]). “When moving to dismiss, the plaintiff bears the burden of demonstrating that the affirmative defenses ‘are without merit as a matter of law because they either do 5 5 of 10 (FILED: WNASSAU_COUNTY CLERK 06/22/2023 02:21 PM INDEX NO. 600378/2023 NYSCEF DOC. NO. 44 RECEIVED NYSCEF: 06/21/2023 not apply under the factual circumstances of [the] case, or fail to state a defense’”. (Wells Fargo Bank, N.A., 160 AD3d at 913, citations omitted. Likewise, in LG Funding, LLC v. United Senior Properties of Olathe, LLC, 181 AD3d 664 [2d Dept 2020], the Second Department held as follows: “In reviewing a motion to dismiss an affirmative defense, the court must liberally construe the pleadings in favor of the party asserting the defense and give that party the benefit of every reasonable inference’ ...‘[I]f there is any doubt as to the availability of a defense, it should not be dismissed’ ...Dismissal may be warranted under CPLR 3211(a)(1) ‘if the documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter of law”. (LG Funding, LLC, 181 AD3d at 664, internal citations omitted). The Plaintiff, in moving to dismiss the affirmative defenses, bears “the burden of demonstrating that those defenses are without merit as a matter of law”. (Butler v Catinella, 58 AD3d 145, 148 [2d Dept 2008], citations omitted). The Plaintiff first argues that the Defendants’ usury defense and all of their “usury-based” defenses are meritless and must be dismissed as a matter of law. The issue upon which the availability of the usury defense hinges is whether the parties’ agreement constituted a loan. “[W]here there is no loan, there can be no usury, however unconscionable the contract may be”. (LG Funding, LLC v United Senior Properties of Olathe, LLC, 181 AD3d 664, [2d Dept 2020]. In determining whether the subject transaction constituted a loan, “[t]he court must examine whether the plaintiff ‘is absolutely entitled to repayment under all circumstances’”, because “[uJnless a principal sum advanced is repayable absolutely, the transaction is not a loan”. (/d., citations omitted). The Second Department has articulated three factors to be weighed when determining whether payment is absolute or contingent: “(1) whether there is a reconciliation provision in the agreement; (2) 6 of 10 (FILED: WNASSAU_COUNTY CLERK 06/22/2023 02:21 PM INDEX NO. 600378/2023 NYSCEF DOC. NO. 44 RECEIVED NYSCEF: 06/21/2023 whether the agreement has a finite term; and (3) whether there is any recourse should the merchant declare bankruptcy”. (Jd., citations omitted). The Plaintiff argues that the parties’ transaction is not a loan based on the following: first, that the Agreement contained express reconciliation and adjustment provisions providing for reconcili ation and adjustment every two weeks. The Court has reviewed the “Reconciliation” provisions cited to by the Plaintiff's attorney [labeled § 1.4 Adjustments to the Remittance in the parties’ Agreemen t], and notes that the contractual language indicates that reconciliation and remittance adjustme nt are only available to the Merchant “[i]f an Event of Default has not occurred”, and only after the Merchant “give[s] notice to Purchaser to request a decrease in the Remittance”. (Emphasis supplied). The Court has also reviewed the Agreement’s sections defining the “Events of Default” [Section 3.1 of the Agreement] and governing Notices [Section 4.3]. Construing in the Defendants’ favor the provisions included in the “Events of Default”, and affording them every favorable inference therefrom, the Court has considerable concerns that it would be impossible for the Defendants to request a reconciliation from the Plaintiff without there first having been one or more default events. Additional ly, construing the Notice provisions in the Defendants’ favor, and affording them every favorable inference therefrom, the Court further finds that the Reconciliation/Adjustment provisions are potentially discretionary and that the Plaintiff could potentially withhold reconciliation from the Defendants even after requested. The Court finds that the Plaintiff has failed to establish that the usury defense is without merit, and therefore the Thirteenth Affirmative Defense alleging that the subject Agreement is a usurious loan shall not be dismissed. (LG Funding, LLC v. United Senior Properties of Olathe, LLC, 181 AD3d 664 [2d Dept 2020]). The portion of the Plaintiff's motion which seeks dismissal of the Thirteenth Affirmative Defense alleging usury is DENIED. 7 of 10 (FILED: WNASSAU_COUNTY CLERK 06/22/2023 02:21 PM INDEX NO. 600378/2023 NYSCEF DOC. NO. 44 RECEIVED NYSCEF: 06/21/2023 Likewise, the Plaintiff has also failed to establish that the following affirmative defenses should be dismissed as meritless or unavailable based on the facts of this case: First Affirmative Defense alleging excessive fees constituting improper penalties; Second Affirmative Defense alleging unconscionable contract; Fourth Affirmative Defense alleging violation of duty of good faith and fair dealing; Eighth Affirmative Defense asserting in pari delicto doctrine; Ninth Affirmative Defense alleging the failure to mitigate damages; Fourteenth Affirmative Defense alleging the Agreement lacks a legal purpose; Fifteenth Affirmative Defense alleging a contract of adhesion; Twenty-Third Affirmative Defense alleging the Plaintiff's bad faith; Twenty-Fourth Affirmative Defense alleging the Plaintiffs unclean hands; Twenty-Ninth Affirmative Defense alleging the Plaintiff engage in deceptive acts and practices. The Plaintiff's motion papers do not address the following affirmative defenses and therefore the Court will not dismiss these affirmative defenses: Fifth Affirmative Defense: Plaintiff is suing for the wrong amount; Seventeenth Affirmative Defense alleging lack of personal jurisdiction; Eighteenth Affirmative Defense alleging that the Defendant has paid, in whole or in part, the amounts claimed by the Plaintiff; Twenty-First Affirmative Defense alleging lack of subject matter jurisdiction; Twenty- Sixth Affirmative Defense alleging estoppel doctrine; Twenty-Eighth Affirmative Defense alleging Statute of Frauds. However, the Plaintiff sufficiently established that many of the twenty-nine affirmative defenses should be dismissed pursuant to CPLR 3211 (b). (See Cohen Fashion Opt., Inc. v. V & M Opt. Inc., 51 AD3d 619, 619-20, 858 NYS2d 260, 261 [2d Dept 2008]). The Court finds that the Plaintiff has sufficiently established that the following affirmative defenses are meritless or do not apply based on the facts of this case: Third Affirmative Defense alleging unjust enrichment; Sixth Affirmative Defense alleging laches doctrine; Seventh Affirmative Defense alleging fraudulent inducement: Tenth 8 8 of 10 (FILED: WNASSAU_COUNTY CLERK 06/22/2023 02:21 PM INDEX NO. 600378/2023 NYSCEF DOC. NO. 44 RECEIVED NYSCEF: 06/21/2023 Affirmative Defense alleging a lack of damages or that damages are inconsequential and de minimis; Eleventh Affirmative Defense alleging the failure to timely and properly exhaust all necessary administrative, statutory, and/or jurisdictional prerequisites; Twelfth Affirmative Defense alleging that the Plaintiff failed to comply with its obligations under the Agreement; Sixteenth Affirmative Defense alleging that the Plaintiff failed to state a claim upon which relief can be granted; Nineteenth Affirmative Defense alleging that the Complaint fails to state a cause of action upon which relief may be granted [duplicative of Sixteenth Affirmative Defense]; Twentieth Affirmative Defense alleging “[t]he circumstances surrounding it, [sic] it is so unfair that they ‘shock the conscience’”; Twenty-S econd Affirmative Defense alleging lack of standing; Twenty-Seventh Affirmative Defense alleging lack and failure of consideration; Thirtieth Affirmative Defense asserting a catchall affirmative defense to assert any additional defenses that might be applicable. Based on the foregoing, the Plaintiff's motion to dismiss the Defendants’ affirmative defenses is GRANTED in part and DENIED in part. Accordingly, it is hereby ORDERED, that the Plaintiffs motion for an Order pursuant to CPLR 3211 (b) dismissing the Defendants’ affirmative defenses is GRANTED to the extent that the following affirmative defenses shall be severed and stricken: Third Affirmative Defense alleging unjust enrichment; Sixth Affirmative Defense alleging laches doctrine; Seventh Affirmative Defense alleging fraudulent inducement; Tenth Affirmative Defense alleging a lack of damages or that damages are inconsequential and de minimis; Eleventh Affirmative Defense alleging the failure to timely and properly exhaust all necessary administrative, statutory, and/or jurisdictional prerequisites; Twelfth Affirmative Defense alleging that the Plaintiff failed to comply with its obligations under the Agreement; Sixteenth Affirmative Defense alleging that the Plaintiff failed to state a claim upon which relief can be granted; Nineteenth Affirmative 9 9 of 10 (FILED: WNASSAU_COUNTY CLERK 06/22/2023 02:21 PM INDEX NO. 600378/2023 NYSCEF DOC. NO. 44 RECEIVED NYSCEF: 06/21/2023 Defense alleging that the Complaint fails to state a cause of action upon which relief may be granted [duplicative of Sixteenth Affirmative Defense]; Twentieth Affirmative Defense alleging “[t]he circumstances surrounding it, [sic] it is so unfair that they ‘shock the conscience”; Twenty-Second Affirmative Defense alleging lack of standing; Twenty-Seventh Affirmative Defense alleging lack and failure of consideration; Thirtieth Affirmative Defense asserting a catchall affirmative defense to assert any additional defenses that might be applicable; and it is further, ORDERED, that the Plaintiff's motion to dismiss is otherwise DENIED; and it is further, ORDERED, that all other requests for relief not specifically addressed herein shall be deemed DENIED. This constitutes the Decision and Order of this Court. Dated: June 20, 2023 Mineola, New York GA. HON. CONRAD, SINC Ax. ENTERED: Jun 22 2023 NASSAU COUNTY COUNTY CLERK'S OFFICE 10 10 of 10