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INDEX NO. 506655/2015
NYSCEF DOC. NO. 8 RECEIVED NYSCEF: 11/13/2015
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF KINGS File No.: 1023-774
HSBC BANK USA, NATIONAL ASSOCIATION,
successor by merger to HSBC BANK USA,
Index No. 506655/2015
Plaintiff;
- against -
AFFIRMATION IN SUPPORT OF
SILVER ROSE FASHIONS INC. d/b/a SILVER ROSE MOTION FOR SUMMARY
FASHIONS d/b/a FAMILY OFF PRICE SHOPS III, JUDGMENT
INC. and DAOUD A. ALCHKIFATI a/k/a DAOUD
ALCHKIFATI a/k/a GAOUD ALCHKIFATI a/k/a
DAOUD A. ALPHKISATI a/k/a DAOUD A.
CHKIFATI a/k/a DAOUD AOCHKISATI a/k/a
DAOUD ALCHIFATI a/k/a DAOUD ALPHKISATI
a/k/a DAOUD ALTCHKIFATI a/k/a DAOUD
CHKIFATI a/k/a DAOUD ALTHKISATI a/k/a DAVID
ALCHICIFATI a/k/a DAVID ALCHKIFATI a/k/a
DAVID CHKIFATI,
Defendants.
Teresa Sadutto-Carley, an attorney duly admitted to practice law in the courts of the State
of New York, affirms the following under penalties of perjury:
INTRODUCTION
1 lam an Associate of the law firm of Platzer, Swergold, Levine, Goldberg, Katz &
Jaslow, LLP, the attorneys for the plaintiff, HSBC BANK USA, NATIONAL ASSOCIATION,
successor by merger to HSBC BANK USA (the “Plaintiff” or the “Bank”), and am fully familiar
with the facts and circumstances herein by virtue of the records and documents kept in the legal
file maintained by this office.
2. I certify that to the best of my knowledge, on information and belief, formed after
an inquiry reasonable under the circumstances, the contentions made herein are not frivolous as
defined in subsection (c) of §130-1.1 of the New York Codes, Rules and Regulations.
3 I submit this affirmation in support of the Plaintiffs Motion for an Order:
(i) pursuant to New York Civil Practice Law and Rules (“CPLR”) § 3212, granting the Plaintiff
summary judgment in favor of the Plaintiff and against the defendants, Silver Rose Fashions Inc.
d/b/a Silver Rose Fashions d/b/a Family Off Price Shops III, Inc. (the “Corporate Defendant” or
“Borrower”) and Daoud A. Alchkifati a/k/a Daoud Alchkifati a/k/a Gaoud Alchkifati a/k/a Daoud
A. Alphkisati a/k/a Daoud A. Chkifati a/k/a Daoud Aochkisati a/k/a Daoud Alchifati a/k/a Daoud
Alphkisati a/k/a Daoud Altchkifati a/k/a Daoud Chkifati a/k/a Daoud Althkisati a/k/a David
Alchicifati a/k/a David Alchkifati a/k/a David Chkifati (hereinafter referred to as the “Guarantor”)
(hereinafter collectively referred to with the Corporate Defendant as the “Defendants”), for the
relief demanded in the Complaint and dismissing the Defendants’ Answer dated July 31, 2015, on
the grounds that no triable issues of fact exist; and, (ii) granting such other and further relief as this
Court may deem just and proper.
PROCEDURAL HISTORY
4 On or about May 29, 2015, the Plaintiff commenced this action by purchasing Index
Number “506655/2015” and filing a summons and verified complaint (collectively, the
“Complaint”) with the Clerk of the Court via the NYSCEF for the Kings County Supreme Court.
Thereafter, on or about June 9, 2015, the Complaint was duly served upon the Borrower via the
New York State Secretary of State in accordance with the provisions of CPLR §311(a) and §306
of the B.C.L. Thereafter, on or about June 12, 2015, pursuant to CPLR §3215(g)(4) and BCL
§306(B), a true copy of the Complaint was mailed to the Borrower in a first-class postpaid properly
addressed envelope addressed to the Borrower’s last known business addresses. Additionally, on
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or about June 23, 2015, the Complaint was duly served upon the Guarantor pursuant to CPLR §
308(2), by leaving a copy of the Complaint with his daughter, a person of suitable age and
discretion, at the Guarantor’s last known residence and usual place of abode, 1306 Ocean Parkway,
Apt 2, Brooklyn, New York 11230. Thereafter, pursuant to CPLR § 308(2), on June 24, 2015 and
June 29, 2015, a true copy of the Complaint was mailed to the Guarantor by first class mail marked
personal and confidential and not indicating on the outside thereof, by return address or otherwise
that said notice is from an attorney or concerns an action against that person. Accordingly, the
Complaint was duly served upon each of the Defendants. Annexed hereto are true and complete
copies of the Complaint and the related Affidavits of Service with respect to same as Exhibit “A”.
5 On or about July 31, 2015, the Defendants jointly filed an Answer containing
general denials and twenty-two (22) unsubstantiated affirmative defenses (the “Answer”). A true
and complete copy of the Answer is annexed hereto and made a part hereof as Exhibit “B”.
DISCUSSION
6 This action was initiated by the Plaintiff to recover the outstanding principal sum
of $66,819.74, plus accrued interest in the sum of $3,042.32 and late charges in the amount of
$273.21, plus interest continuing to accrue at the Default Rate (defined herein) from August 1,
2014 to the date of entry of judgment herein, plus reasonable attorneys' fees, costs and expenses.
Neither the Borrower nor the Guarantor has any valid legal argument to avoid their respective
obligations under the Loan Documents or the Guaranty (as provided for herein).
The BLOC
fl On or about September 1, 2004, the Corporate Defendant executed and delivered a
Business Credit Application (the “Application”) to the Plaintiff for a Business Line of Credit (the
“BLOC”) in the sum of Seventy Five Thousand Dollars ($75,000.00). In connection with the
Application, the Plaintiff provided the Corporate Defendant with a Business Lending Agreement
(the “Business Lending Agreement”).
8 On or about September 22, 2004, the Plaintiff issued an Acceptance Letter (the
“Acceptance Letter”) to the Corporate Defendant advising that the Plaintiff had approved the
Corporate Defendant for a Business Line of Credit in the sum of Seventy Five Thousand Dollars
($75,000.00) (The Business Lending Agreement, Acceptance Letter and Application are
collectively referred together herein as the “Loan Documents”). Ture and complete copies of the
Loan Documents are annexed as Exhibit “C” to the Affidavit of Claudia M. Villaman dated
November 5, 2015 in Support of the Plaintiff's Motion for Summary Judgment (the “Villaman
Affidavit”).
Terms of the BLOC
9 The Acceptance Letter sets forth:
This is the Acceptance Letter referred to in your Business
Lending Agreement and is part of such Agreement. Your
acceptance of any advance under your Line will mean you agree
to all of the terms and conditions contained in the Business
Lending Agreement and this Acceptance Letter.
10. The Acceptance Letter also provides in pertinent part that:
Interest Rate: 0.9% for the first six months, the Prime Rate (as
such term is defined in your Agreement) plus 1% for the
remaining term.
11 Part “I” - Section “3” of the Business Lending Agreement also sets forth that:
Interest on our Account will be payable monthly and on the date
that the unpaid principal balance is paid in full.
12 Part “I” - Section “4” of the Business Lending Agreement states in pertinent part:
(a) These are Events of Default:
If we do not pay the amount(s) we owe you when we should or
we do not pay amounts owed to others.
13. The Corporate Defendant proceeded to accept the terms of the Loan Documents by
drawing on the account and accruing a total balance of $72,297.06 as of October 20, 2015.
14. The Corporate Defendant defaulted under the terms of Part “I” - Section “4” of the
Business Lending Agreement by, among other things, failing to make payment when due on
August 1, 2014 (the “Default Date”) and through the date hereof.
15. Part “1” - Section “4” of the Business Lending Agreement provides, inter alia, that
“if we default, you may require us to pay the full amount we owe at once.”
16. Part “I” — Section “3” of the Business Lending Agreement further provides that if
the Corporate Defendant does not pay immediately all that it owes, the Interest Rate (the “Prime
Rate” plus 1.0%) will increase by 3% (hereinafter the “Default Rate”).
17. During the term of the BLOC, Plaintiff sent the Borrower monthly statements
setting forth, among other things, the outstanding principal balance of the BLOC, along with
interest charges, and other fees and charges incurred by the Borrower and due the Plaintiff.
Defendants have never raised an issue with the Plaintiff concerning the amounts due the Plaintiff
on account of the BLOC.
The Guaranty
18. As additional collateral security for, and as further inducement to the Plaintiff to
grant the BLOC to the Borrower, the Guarantor executed an absolute, unconditional and unlimited
guaranty (the “Guaranty”) of all of the Borrower’s obligations under the Loan Documents. See
Exhibit “C” to the Villaman Affidavit, the Application and Part III - Unconditional Continuing
Guaranty section of the Business Lending Agreement.
The Demand and Defaults
19. By letters dated June 20, 2014 and October 28, 2014, demand was made upon the
Defendants for the debt owed to the Plaintiff (hereinafter collectively, the “Default Letters”). True
and complete copies of the Default Letters are annexed to the Villaman Affidavit as Exhibit “D”.
The Defendants failed to pay the aggregate unpaid balance due under the Loan Documents by the
Default Date.
20. The Borrower and the Guarantor defaulted under the terms of the Loan Documents
by their continuing failure to comply with the Loan Documents, and their failure to pay all amounts
owed under the BLOC as demanded by the Plaintiff.
21. The Borrower and the Guarantor have failed to repay the amounts due under the
Loan Documents and Guaranty. During the term of the BLOC, Plaintiff sent the Borrower monthly
statements setting forth, among other things, the outstanding principal balance of the BLOC, along
with interest charges, and other fees and charges incurred by the Borrower and due the Plaintiff.
The Defendants have never raised an issue with the Plaintiff concerning the amounts due the
Plaintiff on account of the BLOC or how payments were applied. Annexed to the Villaman
Affidavit as Exhibit “E” are true and complete copies of the billing statements sent to the
Borrower reflecting the outstanding principal balance of the BLOC, along with interest charges,
and other fees and charges incurred by the Borrower and due the Plaintiff.
22. The amounts due and outstanding under the Loan Documents as of October 20,
2015, are the principal sum in the amount of $ 66,819.74, plus accrued interest in the sum of
$5,101.20 and late charges in the sum of $376.12 through and including October 20, 2015, plus
late charges and interest continuing to accrue at the Default Rate from October 21, 2015 to the date
of entry of judgment herein, plus reasonable attorneys' fees, costs and expenses.
23. The Plaintiff is the holder and owner of the Loan Documents evidencing the BLOC
and Guaranty, and the obligations thereunder of the respective parties hereto have not been
modified or released subsequent to execution thereof.
24. By reason of the foregoing, the Borrower and the Guarantor are each liable to the
Plaintiff in the principal amount of $ 66,819.74, plus accrued interest in the sum of $5,101.20 and
late charges in the sum of $376.12 through and including October 20, 2015, plus late charges and
interest continuing to accrue at the Default Rate from October 21, 2015 to the date of entry of
judgment herein, plus reasonable attorneys' fees, costs and expenses.
DEFENDANTS’ AFFIRMATIVE DEFENSES ARE WITHOUT MERIT
AND FAIL TO RAISE TRIABLE ISSUES OF FACT
25. In a motion for summary judgment, where a defendant must rebut the plaintiff's
allegations of fact and assertions of law, it is the defendant’s burden to come forward with
sufficient facts, not merely of a conclusory nature, to support their defenses. It is respectfully
submitted that the Defendants’ Answer and unsubstantiated Affirmative Defenses are non-
substantive, unsupported my facts, and do not raise material issues of fact requiring a trial on either
the question of liability or damages, which is necessary to defeat Plaintiff's motion for summary
judgment, despite the assertion of said Affirmative Defenses.
26. The Defendants raise the following twenty-two (22) Affirmative Defenses in their
Answer: (i) Improper Service; (ii) No meaningful opportunity to negotiate the terms of the
Guaranty; (iii) Failure of consideration regarding the Guaranty; (iv) Failure to satisfy conditions
precedent to suit; (v) Right to recover against the Guarantor is limited by the scope of the Guaranty;
(vi) Plaintiff failed to give the individual Defendant proper notice of the underlying debt; (vii)
Plaintiff failed to give Defendants’ proper notice of the Borrower’s default; (viii) Plaintiff failed
to notify Defendants of the adverse facts materially increasing their risk as guarantor beyond what
they reasonably assumed; (ix) Plaintiff failed to provide Defendants in writing disclosures required
by the Federal Trade Commission and the Federal Reserve Bank; (x) Failure to state a claim which
relief may be granted; (xi) Unclean Hands; (xii) Equitable Estoppel; (xiii) Promissory Estoppel;
(xiv) Waiver and/or Modification; (xv) Failure to mitigate damages; (xvi) Plaintiff's recovery of
any deficiency judgment should be reduced, in whole or in part, to the extent that any sale by
Plaintiff is not commercially reasonable; (xvii) No meaningful opportunity to negotiate terms of
the Business Credit Application and the Business Revolving Credit Account Agreement; (xviii)
Failure for Consideration regarding Business Credit Application and Business Revolving Credit
Account Agreement; (xix) Right to recover is limited by the scope of the Business Credit
Application and Business Revolving Credit Account Agreement; (xx) Failure to notify Defendants
of adverse facts materially increasing of being a party to the Business Credit Application and the
Business Revolving Credit Account Agreement beyond was reasonably assumed; (xxi) Failure to
provide Defendants in writing those disclosures required by the Federal Trade Commission and
the Federal Reserve Bank; and, (xxii) Defendants are not bound by the Business Revolving Credit
Account Agreement.
Defendants’ First Affirmative Defense — Improper Servic:
27. The “First Affirmative Defense” raised in the Answer alleges Plaintiff failed to
properly serve the Defendants. As evidenced by the Affidavits of Service annexed hereto as
Exhibit “A”, each of the Defendants in this action were properly served.
28. Pursuant to CPLR §311(a), on or about June 9, 2015, the Borrower was served by
service upon the New York State Secretary of State in accordance with the provisions of §306 of
the BCL. See Exhibit “A”, Affidavits of Service.
29. On or about May 29, 2015, the Plaintiff commenced this action by purchasing Index
Number “506655/2015” and filing a summons and verified complaint (collectively, the
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“Complaint”) with the Clerk of the Court via the NYSCEF for the Kings County Supreme Court.
Thereafter, on or about June 9, 2015, the Complaint was duly served upon the Borrower via the
New York State Secretary of State in accordance with the provisions of CPLR §311(a) and §306
of the B.C.L. Thereafter, on or about June 12, 2015, pursuant to CPLR §3215(g)(4) and BCL
§306(B), a true copy of the Complaint was mailed to the Borrower ina first-class postpaid properly
addressed envelope addressed to the Borrower’s last known business addresses. Additionally, on
or about June 23, 2015, the Complaint was duly served upon the Guarantor pursuant to CPLR §
308(2), by leaving a copy of the Complaint with his daughter, a person of suitable age and
discretion, at the Guarantor’s last known residence and usual place of abode, 1306 Ocean Parkway,
Apt 2, Brooklyn, New York 11230. Thereafter, pursuant to CPLR § 308(2), on June 24, 2015 and
June 29, 2015, a true copy of the Complaint was mailed to the Guarantor by first class mail marked
personal and confidential and not indicating on the outside thereof, by return address or otherwise
that said notice is from an attorney or concerns an action against that person. Accordingly, the
Complaint was duly served upon each of the Defendants.
30. Furthermore, the Defendants have failed to comply with CPLR §3211(e), which
mandates that a party who objects to service of process in its pleading must make a motion to
dismiss on those grounds within sixty (60) days of the date of the pleading.
31. The Defendants’ Answer is dated July 31, 2015, which means they would have had
to move to dismiss Plaintiff's Complaint on or before September 29, 2015. The Defendants have
not made such a motion prior to this deadline and are therefore precluded from maintaining this
affirmative defense.
32. The Defendants have failed to timely raise a personal jurisdiction defense as
required by CPLR §3211(e) and it is therefore waived.
33. Although the failure to comply with CPLR §3211(e) is dispositive, it is also
significant that the Defendants have failed to make any factual allegations in contradiction to the
Process Server’saffidavits of service. The Defendants merely rely on unsubstantiated allegations
and fail to provide any substantive proof of improper service.
34. As set forth in the accompanying Memorandum of Law, the Courts in New York
have held that an affidavit of service is prima facie proof of proper service. Accordingly, since an
affidavit of service exists to demonstrate proper service upon all of the Defendants, the “First
Affirmative Defense” is without merit and should be dismissed.
Defendants’ Second Affirmative Defense — (No Meaningful O ortuni to Negotiate the
Terms of the Guaran ; and, Seventeenth Affirmative Defense (No Meaningful O ortunii
to Negotiate Terms of Business Credit Application and the Business Revolving Credit
Account Agreement )
35. The Defendants “Second Affirmative Defense” alleges that the Defendants did not
have a meaningful opportunity to negotiate the terms of the Guaranty and similarly, their
“Seventeenth Affirmative Defense” alleges that the Defendants did not have a meaningful
opportunity to negotiate the terms of the Business Credit Application and Business Revolving
Credit Account Agreement. Both defenses are simply without merit and should be dismissed.
36. According to PNC Capital Recovery v. Mechanical Parking Systems, Inc., 283
Ad2d 268 (1* Dept. 2001) app. Dism., 98 NYS2d 763 (2002) where Plaintiff was granted summary
judgment based on a signed personal guaranty, the defendant “was under the obligation to exercise
ordinary diligence to ascertain the terms of the document he signed...a personal guaranty of his
company’s debt.” Similarly, “[a] party to a writing is presumed to have read and understood the
document which he signed.” Marine Midland Bank, N.A. v. Idar Gem Distributors, Inc., 133
A.D.2d 525, 519 N.Y.S.2d 898 (4 Dept., 1987), citing from Maross Construction v. Central New
York Regional Transportation Authority, 107 A.D.2d 1010, 1012, 486 N.Y.S.2d 535 (4 Dept.,
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1985); Ginsberg v. Fairfield-Noble Corp., 81 A.D.2d 318, 321-322, 440 N.Y.S.2s 222 (1% Dept.,
1981); Sterling National Bank & Trust Co. of New York v. I.S.A. Merchandising Corp., 91 A.D.2d
571, 572, 457 N.Y.S.2d 58 (1 Dept., 1982). In Chemical Bank v. Masters, 176 A.D.2d 591, 574
N.Y.S.2d 754 (1 Dept., 1991), the Court stated that:
The allegations made by the defendant-appellant with respect to the actions
and statements of a Citibank employee at the time he signed the guaranty
provide no basis for finding a triable issue with respect to defendant’s
justifiable reliance. In addition, defendant’s failure...to read the guaranty,
in the absence of any evidence of coercion, provides no basis for relief,
inasmuch as defendant was under an obligation to exercise ordinary
diligence to ascertain the terms of the document he signed [emphasis
added].
37. The Defendants were under no obligation to obtain a loan from the Plaintiff or
enter into the Loan Documents with the Plaintiff. By executing the Loan Documents, the
Defendants were fully aware of their rights and obligations thereunder and it was their obligation
to exercise ordinary diligence in understanding the terms. Therefore, the “Second” and
“Seventeenth” Affirmative Defenses are baseless and without merit.
Defendants’ Fourth Affirmative Defense — (Failure to Satisfy Conditions Precedent to Suit);
Fifth Affirmative Defense — (Right to Recover Against Guarantor is Limited by the Scope of
the Guaran ; Ninth Affirmative Defense— Failure to Receive Disclosures Required by the
Federal Trade Commission and the Federal Reserve Bank); Nineteenth Affirmative Defens
—(Right to Recover is Limited by the Scope of the Business Credit lication and Business
Revolving Credit Account Agreement); Twen -First Affirmative Defense (Failure to
Provide Defendants in Writing those Disclosure Required by the Federal Trade Commission
ind the Federal Reserve Bank); and Twenty-Second Affirmative Defense (Defendants ar
not bound by the Business Revolving Credit Account Agreement)
38. As set forth in the Memorandum of Law, New York Courts have been clear that
defenses which merely plead conclusions of law without supporting facts are insufficient. In
addition, CPLR § 3013 supports this position, setting forth, inter alia, that “statements in a
pleading shall be sufficiently particular to give the court and the parties notice of the transactions,
occurrences, or series of transactions or occurrences, intended to be proved and the material
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elements of each cause of action or defense.” As such, the Defendants, “Fourth”, “Fifth”, “Ninth”,
“Nineteenth”, “Twenty-First” and “Twenty-Second Affirmative Defenses” pleaded in their
Answer are blatantly insufficient, containing only mere conclusions of law and no facts or elements
of the defense to support the Defendants’ allegations.
Defendants’ Third Affirmative Defense — (Failure of Consideration Regarding Guaranty);
nd, Eighteenth Affirmative Defense— (Failure of Consideration Regarding Business Credit
A lication and the Business Revolving Credit Account Agreement
39. The Defendants’ “Third Affirmative Defense” alleging the “guaranty is
unenforceable for failure of consideration” and “Eighteenth Affirmative Defense” alleging the
“Business Credit Application and the Business Revolving Credit Account Agreement are
unenforceable for failure of consideration” are without merit. In order to induce the Plaintiff to
extend credit and other financial accommodations to the Borrower, the Borrower executed the
Loan Documents and the Guarantor executed the Guaranty which personally guaranteed the
Borrower’s obligations under the Loan Documents to the Plaintiff. In this case, the Plaintiff clearly
conferred a benefit upon the Borrower, which in turn benefitted the Guarantor, by extending the
BLOC to the Borrower. There can be no doubt that there was consideration in this transaction and
both the Borrower and Guarantor derived a benefit from the BLOC. Furthermore, the Defendants
have not alleged facts to support this affirmation defense. Accordingly, based on the foregoing,
the “Third” and “Eighteenth Affirmative Defenses” should be dismissed as a matter of law.
Defendants’ Sixth Affirmative Defense — Failure to Give the Individual Defendants Proper
Notice of the Underlying Debt); Seventh Affirmative Defense — (Failure to give Defendants
Proper Notice of the Alleged Default of the Alleged Borrower); Eighth Affirmative Defens
(Failure_to Notify Defendants of Adverse Facts Materially Increasing their Risk_a:
Guarantor Beyond what was reasonably assumed); and Twentieth Affirmative Defens:
(Failure to Notify Defendants of Adverse Facts Materially Increasing His Risks of Being
Party to the Business Credit Application and the Business Revolving Credit Account
Agreement beyond what he reasonably assumed
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40. The Defendants’ “Sixth”, “Seventh”, “Eighth” and “Twentieth Affirmative
Defenses” are also without merit. Pursuant to the Defendants’ “Sixth Affirmative Defense”, the
Defendants assert that the “Plaintiff failed to give the individual defendants proper notice of the
underlying debt.” Additionally, the Defendants’ “Seventh Affirmative Defense” alleges that “the
Plaintiff failed to give Defendants proper notice of the alleged default of the alleged Borrower.”
41. However, as set forth in the Villaman Affidavit, the Plaintiff, during the term of the
BLOC, sent the Borrower monthly statements setting forth, among other things, the outstanding
principal balance of the BLOC, along with interest charges, and other fees and charges incurred
by the Borrower and due the Plaintiff. Defendants have never raised an issue with the Plaintiff
concerning the amounts due the Plaintiff on account of the BLOC. Moreover, the Defendants were
provided notice of their default and demand for payment by the Default Letters. See Exhibit “D”
to the Villaman Affidavit. More importantly, such notice or any notice regarding the Borrower’s
outstanding debt obligation was not even required to be provided to the Guarantor. Part III -
Section 2(c) of the Business Lending Agreement clearly provides:
You do not have to tell me that any Debt has been incurred. You do not
have to send me or anyone else any notice that any Debt has not been paid.
I will pay you whether or not you have demanded payment of any Debt
from the Borrower. (emphasis supplied).
See Exhibit “C” to the Villaman Affidavit.
42. Given the undisputed facts that the Defendants never raised an issue with the
Plaintiff concerning the amounts due the Plaintiff on account of the BLOC, the clear language of
the Guaranty, and the fact that notwithstanding this language, the Default Letters were sent to the
Defendants, it is clear that the “Sixth” and “Seventh Affirmative Defenses” should be dismissed.
43. Pursuant to the “Eighth Affirmative Defense”, the Defendants have asserted that
the Plaintiff failed to notify Defendants of adverse facts materially increasing their risk as
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guarantor beyond what was reasonably assumed. Additionally, the Defendants’ in their
“Twentieth Affirmative Defense” assert that the Plaintiff failed to notify Defendants of adverse
facts materially increasing his risks of being a party to the Business Credit Application and the
Business Revolving Credit Account Agreement beyond what he reasonably assumed. Simply put,
the Defendants’ “Eighth” and “Twentieth Affirmative Defenses” are baseless and an attempt to
blur the record before this Court. There is no obligation under the Loan Documents and Guaranty
that the Plaintiff must provide the Defendants of any adverse facts materially increasing their risk
under the Guaranty or the Loan Documents nor has the Defendants set forth any evidence or
specify any facts which support their “Eighth” and “Twentieth Affirmative Defenses”.
Accordingly, the Defendants “Eighth” and “Twentieth Affirmative Defenses” are without merit
and should be dismissed.
Defendants’ Tenth Affirmative Defense — (F: re to state a claim
44 The Defendants’ “Tenth Affirmative Defense”, “Complaint fails to state a claim
upon which relief may be granted” is without merit. The allegations in the Complaint clearly assert
viable causes of action as substantiated by the documentary evidence annexed to this Motion.
45. In support of its Breach of Contract causes of action, the Plaintiff has presented a
prima facie case for the existence of the debt, the obligations thereunder of each of the Defendants,
their respective breaches, and the damages suffered by the Plaintiff thus stating causes of action
for Breach of Contract (the BLOC and the Guaranty).
46. A viable cause of action for Account Stated has also been made as the Plaintiff has
alleged in the Complaint that statements of account were remitted to the Borrower and the
Borrower has not recited any facts specific to its objection to the amounts alleged to be due in said
statements of account. Moreover, the Borrower’s past conduct of making prior payments on
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outstanding statements of account refutes any assertion that an Account Stated cause of action has
not been made.
47. The Plaintiff has also stated a cause of action for Unjust Enrichment because it has
alleged the receipt of money by the Borrower that was loaned by the Plaintiff, repayment of which
has not been made by the Borrower.
48. Therefore, the Defendants’ “Tenth Affirmative Defense” must be dismissed.
Defendants’ Eleventh Affirmative Defense —(Unclean Hands)
49. The Defendants in their “Eleventh Affirmative Defense” have asserted the doctrine
of “Unclean Hands”. As set forth in the accompanying Memorandum of Law, “Unclean Hands”
is an equitable defense and does not apply to an action at law. This action is for money damages
arriving from the Defendants’ breach of their respective obligations under the Loan Documents
and Guaranty. Defendants have alleged no set of facts which even outline what purported conduct
has been committed by Plaintiff sufficient to support a consideration of an unclean hands defense.
Accordingly, the Defendants’ “Eleventh Affirmative Defense” must also be dismissed.
Defendants’ Twelfth Affirmative Defense —- (Equitable Estoppel); Thirteenth Affirmative
Defense — (Promissory Estoppel); and Fourteenth Affirmative Defense (Waiver and/or
Modification)
50. Defendants’ “Twelfth”, “Thirteenth”, and “Fourteenth Affirmative Defenses”
allege equitable estoppel, promissory estoppel and waiver/modification, respectively. Said
defenses are merely a collection of theories all of which are also without merit.
51. “In order for estoppel to exist, three elements are necessary: (1) conduct which
amounts to a false representation or concealment of material facts, or at least which is calculated
to convey the impression that the facts are otherwise than and inconsistent with, those which the
party subsequently seek to assert; (2) intention, or at least expectation, that such conduct will be
15
acted upon by the other party; and, (3) in some situations, knowledge, actual or constructive, of
real facts .... The party asserting estoppel must show with respect to himself; (1) lack of knowledge
of the true facts; (2) reliance upon the conduct of the party estopped; and (3) a prejudicial change
in his position.” In re City of New York, Powell’s Cove Environmental Waterfront Park, Queens,
14 Misc.3d 1232(a), 2007 WL 509797 (NY Slip Op. 50267(u) (Sup. Kings Cty. Feb. 15, 2007));
BWA Corp. v. Alltrans Express U.S.A., Inc., 112 A.D.2d 850, 493 N.Y.S.2d 1 (1% Dept. 1985).
52. In this case, the Defendants have pled no facts to support the legal conclusions that
the Plaintiffs claims should be barred. Moreover, the Defendants cannot (and have not) denied
that they had knowledge of the terms of the respective and applicable Loan Documents and
Guaranty because the Defendants acknowledged these documents, executed them, received the
benefit of the use of the proceeds from the BLOC and failed to repay the Plaintiff for the same
since the Default Date. The Defendants have shown no change in their position to their detriment
and no reliance upon any specified alleged misconduct of the Plaintiff. In addition, the Defendants
have not pled any basis for estoppel in any cognizable manner whether by promissory estoppel or
collateral estoppel.
53. Additionally, waiver is the voluntary and intentional abandonment of a known right
that, but for the waiver, would have been enforceable and may be established by affirmative
conduct or by failure to act that it makes it appear that enforcing the right will be sought. General
Motors Acceptance Corp. v. Clifton-Fin Cent. Sch. Dist., 85 N.Y.2d 232, 236, 623 N.Y.S.2d 821,
823 (1995); Callen v. Callen, 2002 WL 32179000 at *9. In this case, Defendants have not provided
any facts to support a waiver by Plaintiff in any cognizable manner.
54, Based upon the foregoing, the Defendants’ “Twelfth”, “Thirteenth” and
“Fourteenth Affirmative Defenses” must be dismissed.
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Defendants’ Fifteenth Affirmative Defense — (Mitigation of Damages)
55. The Defendants in their “Fifteenth Affirmative Defense” have asserted that the
“{p]laintiff’s claims are barred in whole or part by plaintiff's failure to mitigate its damages, if
any.” The Defendants obligations to the Plaintiff are controlled by the Loan Documents and the
Guaranty. The Defendants have failed to plead any facts that would substantiate that Plaintiff has
a requirement to mitigate damages and is therefore without merit.
56. Part II — Section 4(b) and (c) of the Business Lending Agreement provides in
pertinent part:
(b) If an Event of Default happens, you can enforce any interest in Collateral
and apply what you receive from the enforcement to payment of Debt whether Debt
is payable then or in the future.
(c) We know if any Debt is payable on demand, you have the right to payment
of that Debt at any time, whether or not an event of default has happened and the
you can enforce any interest in the Collateral at any time.
See Exhibit “C” to the Villaman Affidavit.
57. Part III - Section 2(c) of the Business Lending Agreement clearly provides:
I will pay you whether or not you have demanded payment of any Debt
from the Borrower. I will pay you even if you do not first try to collect from
the Borrower or any other Guarantor or Endorser of any Debt or try to
enforce any interest in Collateral.
See Exhibit “C” to the Villaman Affidavit.
58. Given the clear language of the Business Lending Agreement, mitigation of
damages is not required and therefor this defense should be dismissed with prejudice.
Defendants’ Sixteenth Affirmative Defense - (Plaintiff's Recovery of any Deficiency
Judgment should be reduced, in whole or in part, to the extent that any sale by Plaintiff is
not commercially reasonable)
59. The Defendants allege in their “Sixteenth Affirmative Defense” that “the Plaintiff's
recovery of any deficiency judgment should be reduced, in whole or in part, to the extent that any
17
sale by Plaintiff is not commercially reasonable.” The Plaintiff respectfully submits that the
Defendants’ “Sixteenth Affirmative Defense” is without merit, as it is inapplicable to the causes
of action maintained by the Plaintiff and as such, should be dismissed.
60. In conclusion, it is respectfully submitted that each and every one of the
Defendants’ twenty-two (22) affirmative defenses contained in their Answer is fatally deficient
and should be stricken with prejudice as a matter of law.
CONCLUSION
61. It is respectfully submitted that the Plaintiffs causes of action have been
established by the Complaint, this Affirmation with Exhibits, the Villaman Affidavit with Exhibits
and the Memorandum of Law, and the granting of summary judgment in favor of the Plaintiff is
warranted and proper.
62. There are no issues of fact presented on the question of liability or damages.
63. No prior application for the relief sought herein has been made to this Court or any
other court.
WHEREFORE, the Plaintiff respectfully requests that this Court grant an Order: pursuant
to CPLR § 3212 granting the Plaintiff summary judgment against the Defendants in the principal
sum of $66,819.74, plus accrued interest in the sum of $5,101.20 and late charges in the sum of
$376.12 through and including October 20, 2015, plus late charges and interest continuing to
accrue at the Default Rate from October 21, 2015 to the date of entry of judgment herein, plus
reasonable attorneys' fees, costs and expenses.
Dated: New York, New York
November 11, 2015
JL 6
Teresa id Caney
18
Preview
INDEX NO. 506655/2015 NYSCEF DOC. NO. 8 RECEIVED NYSCEF: 11/13/2015 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KINGS File No.: 1023-774 HSBC BANK USA, NATIONAL ASSOCIATION, successor by merger to HSBC BANK USA, Index No. 506655/2015 Plaintiff; - against - AFFIRMATION IN SUPPORT OF SILVER ROSE FASHIONS INC. d/b/a SILVER ROSE MOTION FOR SUMMARY FASHIONS d/b/a FAMILY OFF PRICE SHOPS III, JUDGMENT INC. and DAOUD A. ALCHKIFATI a/k/a DAOUD ALCHKIFATI a/k/a GAOUD ALCHKIFATI a/k/a DAOUD A. ALPHKISATI a/k/a DAOUD A. CHKIFATI a/k/a DAOUD AOCHKISATI a/k/a DAOUD ALCHIFATI a/k/a DAOUD ALPHKISATI a/k/a DAOUD ALTCHKIFATI a/k/a DAOUD CHKIFATI a/k/a DAOUD ALTHKISATI a/k/a DAVID ALCHICIFATI a/k/a DAVID ALCHKIFATI a/k/a DAVID CHKIFATI, Defendants. Teresa Sadutto-Carley, an attorney duly admitted to practice law in the courts of the State of New York, affirms the following under penalties of perjury: INTRODUCTION 1 lam an Associate of the law firm of Platzer, Swergold, Levine, Goldberg, Katz & Jaslow, LLP, the attorneys for the plaintiff, HSBC BANK USA, NATIONAL ASSOCIATION, successor by merger to HSBC BANK USA (the “Plaintiff” or the “Bank”), and am fully familiar with the facts and circumstances herein by virtue of the records and documents kept in the legal file maintained by this office. 2. I certify that to the best of my knowledge, on information and belief, formed after an inquiry reasonable under the circumstances, the contentions made herein are not frivolous as defined in subsection (c) of §130-1.1 of the New York Codes, Rules and Regulations. 3 I submit this affirmation in support of the Plaintiffs Motion for an Order: (i) pursuant to New York Civil Practice Law and Rules (“CPLR”) § 3212, granting the Plaintiff summary judgment in favor of the Plaintiff and against the defendants, Silver Rose Fashions Inc. d/b/a Silver Rose Fashions d/b/a Family Off Price Shops III, Inc. (the “Corporate Defendant” or “Borrower”) and Daoud A. Alchkifati a/k/a Daoud Alchkifati a/k/a Gaoud Alchkifati a/k/a Daoud A. Alphkisati a/k/a Daoud A. Chkifati a/k/a Daoud Aochkisati a/k/a Daoud Alchifati a/k/a Daoud Alphkisati a/k/a Daoud Altchkifati a/k/a Daoud Chkifati a/k/a Daoud Althkisati a/k/a David Alchicifati a/k/a David Alchkifati a/k/a David Chkifati (hereinafter referred to as the “Guarantor”) (hereinafter collectively referred to with the Corporate Defendant as the “Defendants”), for the relief demanded in the Complaint and dismissing the Defendants’ Answer dated July 31, 2015, on the grounds that no triable issues of fact exist; and, (ii) granting such other and further relief as this Court may deem just and proper. PROCEDURAL HISTORY 4 On or about May 29, 2015, the Plaintiff commenced this action by purchasing Index Number “506655/2015” and filing a summons and verified complaint (collectively, the “Complaint”) with the Clerk of the Court via the NYSCEF for the Kings County Supreme Court. Thereafter, on or about June 9, 2015, the Complaint was duly served upon the Borrower via the New York State Secretary of State in accordance with the provisions of CPLR §311(a) and §306 of the B.C.L. Thereafter, on or about June 12, 2015, pursuant to CPLR §3215(g)(4) and BCL §306(B), a true copy of the Complaint was mailed to the Borrower in a first-class postpaid properly addressed envelope addressed to the Borrower’s last known business addresses. Additionally, on 2 or about June 23, 2015, the Complaint was duly served upon the Guarantor pursuant to CPLR § 308(2), by leaving a copy of the Complaint with his daughter, a person of suitable age and discretion, at the Guarantor’s last known residence and usual place of abode, 1306 Ocean Parkway, Apt 2, Brooklyn, New York 11230. Thereafter, pursuant to CPLR § 308(2), on June 24, 2015 and June 29, 2015, a true copy of the Complaint was mailed to the Guarantor by first class mail marked personal and confidential and not indicating on the outside thereof, by return address or otherwise that said notice is from an attorney or concerns an action against that person. Accordingly, the Complaint was duly served upon each of the Defendants. Annexed hereto are true and complete copies of the Complaint and the related Affidavits of Service with respect to same as Exhibit “A”. 5 On or about July 31, 2015, the Defendants jointly filed an Answer containing general denials and twenty-two (22) unsubstantiated affirmative defenses (the “Answer”). A true and complete copy of the Answer is annexed hereto and made a part hereof as Exhibit “B”. DISCUSSION 6 This action was initiated by the Plaintiff to recover the outstanding principal sum of $66,819.74, plus accrued interest in the sum of $3,042.32 and late charges in the amount of $273.21, plus interest continuing to accrue at the Default Rate (defined herein) from August 1, 2014 to the date of entry of judgment herein, plus reasonable attorneys' fees, costs and expenses. Neither the Borrower nor the Guarantor has any valid legal argument to avoid their respective obligations under the Loan Documents or the Guaranty (as provided for herein). The BLOC fl On or about September 1, 2004, the Corporate Defendant executed and delivered a Business Credit Application (the “Application”) to the Plaintiff for a Business Line of Credit (the “BLOC”) in the sum of Seventy Five Thousand Dollars ($75,000.00). In connection with the Application, the Plaintiff provided the Corporate Defendant with a Business Lending Agreement (the “Business Lending Agreement”). 8 On or about September 22, 2004, the Plaintiff issued an Acceptance Letter (the “Acceptance Letter”) to the Corporate Defendant advising that the Plaintiff had approved the Corporate Defendant for a Business Line of Credit in the sum of Seventy Five Thousand Dollars ($75,000.00) (The Business Lending Agreement, Acceptance Letter and Application are collectively referred together herein as the “Loan Documents”). Ture and complete copies of the Loan Documents are annexed as Exhibit “C” to the Affidavit of Claudia M. Villaman dated November 5, 2015 in Support of the Plaintiff's Motion for Summary Judgment (the “Villaman Affidavit”). Terms of the BLOC 9 The Acceptance Letter sets forth: This is the Acceptance Letter referred to in your Business Lending Agreement and is part of such Agreement. Your acceptance of any advance under your Line will mean you agree to all of the terms and conditions contained in the Business Lending Agreement and this Acceptance Letter. 10. The Acceptance Letter also provides in pertinent part that: Interest Rate: 0.9% for the first six months, the Prime Rate (as such term is defined in your Agreement) plus 1% for the remaining term. 11 Part “I” - Section “3” of the Business Lending Agreement also sets forth that: Interest on our Account will be payable monthly and on the date that the unpaid principal balance is paid in full. 12 Part “I” - Section “4” of the Business Lending Agreement states in pertinent part: (a) These are Events of Default: If we do not pay the amount(s) we owe you when we should or we do not pay amounts owed to others. 13. The Corporate Defendant proceeded to accept the terms of the Loan Documents by drawing on the account and accruing a total balance of $72,297.06 as of October 20, 2015. 14. The Corporate Defendant defaulted under the terms of Part “I” - Section “4” of the Business Lending Agreement by, among other things, failing to make payment when due on August 1, 2014 (the “Default Date”) and through the date hereof. 15. Part “1” - Section “4” of the Business Lending Agreement provides, inter alia, that “if we default, you may require us to pay the full amount we owe at once.” 16. Part “I” — Section “3” of the Business Lending Agreement further provides that if the Corporate Defendant does not pay immediately all that it owes, the Interest Rate (the “Prime Rate” plus 1.0%) will increase by 3% (hereinafter the “Default Rate”). 17. During the term of the BLOC, Plaintiff sent the Borrower monthly statements setting forth, among other things, the outstanding principal balance of the BLOC, along with interest charges, and other fees and charges incurred by the Borrower and due the Plaintiff. Defendants have never raised an issue with the Plaintiff concerning the amounts due the Plaintiff on account of the BLOC. The Guaranty 18. As additional collateral security for, and as further inducement to the Plaintiff to grant the BLOC to the Borrower, the Guarantor executed an absolute, unconditional and unlimited guaranty (the “Guaranty”) of all of the Borrower’s obligations under the Loan Documents. See Exhibit “C” to the Villaman Affidavit, the Application and Part III - Unconditional Continuing Guaranty section of the Business Lending Agreement. The Demand and Defaults 19. By letters dated June 20, 2014 and October 28, 2014, demand was made upon the Defendants for the debt owed to the Plaintiff (hereinafter collectively, the “Default Letters”). True and complete copies of the Default Letters are annexed to the Villaman Affidavit as Exhibit “D”. The Defendants failed to pay the aggregate unpaid balance due under the Loan Documents by the Default Date. 20. The Borrower and the Guarantor defaulted under the terms of the Loan Documents by their continuing failure to comply with the Loan Documents, and their failure to pay all amounts owed under the BLOC as demanded by the Plaintiff. 21. The Borrower and the Guarantor have failed to repay the amounts due under the Loan Documents and Guaranty. During the term of the BLOC, Plaintiff sent the Borrower monthly statements setting forth, among other things, the outstanding principal balance of the BLOC, along with interest charges, and other fees and charges incurred by the Borrower and due the Plaintiff. The Defendants have never raised an issue with the Plaintiff concerning the amounts due the Plaintiff on account of the BLOC or how payments were applied. Annexed to the Villaman Affidavit as Exhibit “E” are true and complete copies of the billing statements sent to the Borrower reflecting the outstanding principal balance of the BLOC, along with interest charges, and other fees and charges incurred by the Borrower and due the Plaintiff. 22. The amounts due and outstanding under the Loan Documents as of October 20, 2015, are the principal sum in the amount of $ 66,819.74, plus accrued interest in the sum of $5,101.20 and late charges in the sum of $376.12 through and including October 20, 2015, plus late charges and interest continuing to accrue at the Default Rate from October 21, 2015 to the date of entry of judgment herein, plus reasonable attorneys' fees, costs and expenses. 23. The Plaintiff is the holder and owner of the Loan Documents evidencing the BLOC and Guaranty, and the obligations thereunder of the respective parties hereto have not been modified or released subsequent to execution thereof. 24. By reason of the foregoing, the Borrower and the Guarantor are each liable to the Plaintiff in the principal amount of $ 66,819.74, plus accrued interest in the sum of $5,101.20 and late charges in the sum of $376.12 through and including October 20, 2015, plus late charges and interest continuing to accrue at the Default Rate from October 21, 2015 to the date of entry of judgment herein, plus reasonable attorneys' fees, costs and expenses. DEFENDANTS’ AFFIRMATIVE DEFENSES ARE WITHOUT MERIT AND FAIL TO RAISE TRIABLE ISSUES OF FACT 25. In a motion for summary judgment, where a defendant must rebut the plaintiff's allegations of fact and assertions of law, it is the defendant’s burden to come forward with sufficient facts, not merely of a conclusory nature, to support their defenses. It is respectfully submitted that the Defendants’ Answer and unsubstantiated Affirmative Defenses are non- substantive, unsupported my facts, and do not raise material issues of fact requiring a trial on either the question of liability or damages, which is necessary to defeat Plaintiff's motion for summary judgment, despite the assertion of said Affirmative Defenses. 26. The Defendants raise the following twenty-two (22) Affirmative Defenses in their Answer: (i) Improper Service; (ii) No meaningful opportunity to negotiate the terms of the Guaranty; (iii) Failure of consideration regarding the Guaranty; (iv) Failure to satisfy conditions precedent to suit; (v) Right to recover against the Guarantor is limited by the scope of the Guaranty; (vi) Plaintiff failed to give the individual Defendant proper notice of the underlying debt; (vii) Plaintiff failed to give Defendants’ proper notice of the Borrower’s default; (viii) Plaintiff failed to notify Defendants of the adverse facts materially increasing their risk as guarantor beyond what they reasonably assumed; (ix) Plaintiff failed to provide Defendants in writing disclosures required by the Federal Trade Commission and the Federal Reserve Bank; (x) Failure to state a claim which relief may be granted; (xi) Unclean Hands; (xii) Equitable Estoppel; (xiii) Promissory Estoppel; (xiv) Waiver and/or Modification; (xv) Failure to mitigate damages; (xvi) Plaintiff's recovery of any deficiency judgment should be reduced, in whole or in part, to the extent that any sale by Plaintiff is not commercially reasonable; (xvii) No meaningful opportunity to negotiate terms of the Business Credit Application and the Business Revolving Credit Account Agreement; (xviii) Failure for Consideration regarding Business Credit Application and Business Revolving Credit Account Agreement; (xix) Right to recover is limited by the scope of the Business Credit Application and Business Revolving Credit Account Agreement; (xx) Failure to notify Defendants of adverse facts materially increasing of being a party to the Business Credit Application and the Business Revolving Credit Account Agreement beyond was reasonably assumed; (xxi) Failure to provide Defendants in writing those disclosures required by the Federal Trade Commission and the Federal Reserve Bank; and, (xxii) Defendants are not bound by the Business Revolving Credit Account Agreement. Defendants’ First Affirmative Defense — Improper Servic: 27. The “First Affirmative Defense” raised in the Answer alleges Plaintiff failed to properly serve the Defendants. As evidenced by the Affidavits of Service annexed hereto as Exhibit “A”, each of the Defendants in this action were properly served. 28. Pursuant to CPLR §311(a), on or about June 9, 2015, the Borrower was served by service upon the New York State Secretary of State in accordance with the provisions of §306 of the BCL. See Exhibit “A”, Affidavits of Service. 29. On or about May 29, 2015, the Plaintiff commenced this action by purchasing Index Number “506655/2015” and filing a summons and verified complaint (collectively, the 8 “Complaint”) with the Clerk of the Court via the NYSCEF for the Kings County Supreme Court. Thereafter, on or about June 9, 2015, the Complaint was duly served upon the Borrower via the New York State Secretary of State in accordance with the provisions of CPLR §311(a) and §306 of the B.C.L. Thereafter, on or about June 12, 2015, pursuant to CPLR §3215(g)(4) and BCL §306(B), a true copy of the Complaint was mailed to the Borrower ina first-class postpaid properly addressed envelope addressed to the Borrower’s last known business addresses. Additionally, on or about June 23, 2015, the Complaint was duly served upon the Guarantor pursuant to CPLR § 308(2), by leaving a copy of the Complaint with his daughter, a person of suitable age and discretion, at the Guarantor’s last known residence and usual place of abode, 1306 Ocean Parkway, Apt 2, Brooklyn, New York 11230. Thereafter, pursuant to CPLR § 308(2), on June 24, 2015 and June 29, 2015, a true copy of the Complaint was mailed to the Guarantor by first class mail marked personal and confidential and not indicating on the outside thereof, by return address or otherwise that said notice is from an attorney or concerns an action against that person. Accordingly, the Complaint was duly served upon each of the Defendants. 30. Furthermore, the Defendants have failed to comply with CPLR §3211(e), which mandates that a party who objects to service of process in its pleading must make a motion to dismiss on those grounds within sixty (60) days of the date of the pleading. 31. The Defendants’ Answer is dated July 31, 2015, which means they would have had to move to dismiss Plaintiff's Complaint on or before September 29, 2015. The Defendants have not made such a motion prior to this deadline and are therefore precluded from maintaining this affirmative defense. 32. The Defendants have failed to timely raise a personal jurisdiction defense as required by CPLR §3211(e) and it is therefore waived. 33. Although the failure to comply with CPLR §3211(e) is dispositive, it is also significant that the Defendants have failed to make any factual allegations in contradiction to the Process Server’saffidavits of service. The Defendants merely rely on unsubstantiated allegations and fail to provide any substantive proof of improper service. 34. As set forth in the accompanying Memorandum of Law, the Courts in New York have held that an affidavit of service is prima facie proof of proper service. Accordingly, since an affidavit of service exists to demonstrate proper service upon all of the Defendants, the “First Affirmative Defense” is without merit and should be dismissed. Defendants’ Second Affirmative Defense — (No Meaningful O ortuni to Negotiate the Terms of the Guaran ; and, Seventeenth Affirmative Defense (No Meaningful O ortunii to Negotiate Terms of Business Credit Application and the Business Revolving Credit Account Agreement ) 35. The Defendants “Second Affirmative Defense” alleges that the Defendants did not have a meaningful opportunity to negotiate the terms of the Guaranty and similarly, their “Seventeenth Affirmative Defense” alleges that the Defendants did not have a meaningful opportunity to negotiate the terms of the Business Credit Application and Business Revolving Credit Account Agreement. Both defenses are simply without merit and should be dismissed. 36. According to PNC Capital Recovery v. Mechanical Parking Systems, Inc., 283 Ad2d 268 (1* Dept. 2001) app. Dism., 98 NYS2d 763 (2002) where Plaintiff was granted summary judgment based on a signed personal guaranty, the defendant “was under the obligation to exercise ordinary diligence to ascertain the terms of the document he signed...a personal guaranty of his company’s debt.” Similarly, “[a] party to a writing is presumed to have read and understood the document which he signed.” Marine Midland Bank, N.A. v. Idar Gem Distributors, Inc., 133 A.D.2d 525, 519 N.Y.S.2d 898 (4 Dept., 1987), citing from Maross Construction v. Central New York Regional Transportation Authority, 107 A.D.2d 1010, 1012, 486 N.Y.S.2d 535 (4 Dept., 10 1985); Ginsberg v. Fairfield-Noble Corp., 81 A.D.2d 318, 321-322, 440 N.Y.S.2s 222 (1% Dept., 1981); Sterling National Bank & Trust Co. of New York v. I.S.A. Merchandising Corp., 91 A.D.2d 571, 572, 457 N.Y.S.2d 58 (1 Dept., 1982). In Chemical Bank v. Masters, 176 A.D.2d 591, 574 N.Y.S.2d 754 (1 Dept., 1991), the Court stated that: The allegations made by the defendant-appellant with respect to the actions and statements of a Citibank employee at the time he signed the guaranty provide no basis for finding a triable issue with respect to defendant’s justifiable reliance. In addition, defendant’s failure...to read the guaranty, in the absence of any evidence of coercion, provides no basis for relief, inasmuch as defendant was under an obligation to exercise ordinary diligence to ascertain the terms of the document he signed [emphasis added]. 37. The Defendants were under no obligation to obtain a loan from the Plaintiff or enter into the Loan Documents with the Plaintiff. By executing the Loan Documents, the Defendants were fully aware of their rights and obligations thereunder and it was their obligation to exercise ordinary diligence in understanding the terms. Therefore, the “Second” and “Seventeenth” Affirmative Defenses are baseless and without merit. Defendants’ Fourth Affirmative Defense — (Failure to Satisfy Conditions Precedent to Suit); Fifth Affirmative Defense — (Right to Recover Against Guarantor is Limited by the Scope of the Guaran ; Ninth Affirmative Defense— Failure to Receive Disclosures Required by the Federal Trade Commission and the Federal Reserve Bank); Nineteenth Affirmative Defens —(Right to Recover is Limited by the Scope of the Business Credit lication and Business Revolving Credit Account Agreement); Twen -First Affirmative Defense (Failure to Provide Defendants in Writing those Disclosure Required by the Federal Trade Commission ind the Federal Reserve Bank); and Twenty-Second Affirmative Defense (Defendants ar not bound by the Business Revolving Credit Account Agreement) 38. As set forth in the Memorandum of Law, New York Courts have been clear that defenses which merely plead conclusions of law without supporting facts are insufficient. In addition, CPLR § 3013 supports this position, setting forth, inter alia, that “statements in a pleading shall be sufficiently particular to give the court and the parties notice of the transactions, occurrences, or series of transactions or occurrences, intended to be proved and the material 11 elements of each cause of action or defense.” As such, the Defendants, “Fourth”, “Fifth”, “Ninth”, “Nineteenth”, “Twenty-First” and “Twenty-Second Affirmative Defenses” pleaded in their Answer are blatantly insufficient, containing only mere conclusions of law and no facts or elements of the defense to support the Defendants’ allegations. Defendants’ Third Affirmative Defense — (Failure of Consideration Regarding Guaranty); nd, Eighteenth Affirmative Defense— (Failure of Consideration Regarding Business Credit A lication and the Business Revolving Credit Account Agreement 39. The Defendants’ “Third Affirmative Defense” alleging the “guaranty is unenforceable for failure of consideration” and “Eighteenth Affirmative Defense” alleging the “Business Credit Application and the Business Revolving Credit Account Agreement are unenforceable for failure of consideration” are without merit. In order to induce the Plaintiff to extend credit and other financial accommodations to the Borrower, the Borrower executed the Loan Documents and the Guarantor executed the Guaranty which personally guaranteed the Borrower’s obligations under the Loan Documents to the Plaintiff. In this case, the Plaintiff clearly conferred a benefit upon the Borrower, which in turn benefitted the Guarantor, by extending the BLOC to the Borrower. There can be no doubt that there was consideration in this transaction and both the Borrower and Guarantor derived a benefit from the BLOC. Furthermore, the Defendants have not alleged facts to support this affirmation defense. Accordingly, based on the foregoing, the “Third” and “Eighteenth Affirmative Defenses” should be dismissed as a matter of law. Defendants’ Sixth Affirmative Defense — Failure to Give the Individual Defendants Proper Notice of the Underlying Debt); Seventh Affirmative Defense — (Failure to give Defendants Proper Notice of the Alleged Default of the Alleged Borrower); Eighth Affirmative Defens (Failure_to Notify Defendants of Adverse Facts Materially Increasing their Risk_a: Guarantor Beyond what was reasonably assumed); and Twentieth Affirmative Defens: (Failure to Notify Defendants of Adverse Facts Materially Increasing His Risks of Being Party to the Business Credit Application and the Business Revolving Credit Account Agreement beyond what he reasonably assumed 12 40. The Defendants’ “Sixth”, “Seventh”, “Eighth” and “Twentieth Affirmative Defenses” are also without merit. Pursuant to the Defendants’ “Sixth Affirmative Defense”, the Defendants assert that the “Plaintiff failed to give the individual defendants proper notice of the underlying debt.” Additionally, the Defendants’ “Seventh Affirmative Defense” alleges that “the Plaintiff failed to give Defendants proper notice of the alleged default of the alleged Borrower.” 41. However, as set forth in the Villaman Affidavit, the Plaintiff, during the term of the BLOC, sent the Borrower monthly statements setting forth, among other things, the outstanding principal balance of the BLOC, along with interest charges, and other fees and charges incurred by the Borrower and due the Plaintiff. Defendants have never raised an issue with the Plaintiff concerning the amounts due the Plaintiff on account of the BLOC. Moreover, the Defendants were provided notice of their default and demand for payment by the Default Letters. See Exhibit “D” to the Villaman Affidavit. More importantly, such notice or any notice regarding the Borrower’s outstanding debt obligation was not even required to be provided to the Guarantor. Part III - Section 2(c) of the Business Lending Agreement clearly provides: You do not have to tell me that any Debt has been incurred. You do not have to send me or anyone else any notice that any Debt has not been paid. I will pay you whether or not you have demanded payment of any Debt from the Borrower. (emphasis supplied). See Exhibit “C” to the Villaman Affidavit. 42. Given the undisputed facts that the Defendants never raised an issue with the Plaintiff concerning the amounts due the Plaintiff on account of the BLOC, the clear language of the Guaranty, and the fact that notwithstanding this language, the Default Letters were sent to the Defendants, it is clear that the “Sixth” and “Seventh Affirmative Defenses” should be dismissed. 43. Pursuant to the “Eighth Affirmative Defense”, the Defendants have asserted that the Plaintiff failed to notify Defendants of adverse facts materially increasing their risk as 13 guarantor beyond what was reasonably assumed. Additionally, the Defendants’ in their “Twentieth Affirmative Defense” assert that the Plaintiff failed to notify Defendants of adverse facts materially increasing his risks of being a party to the Business Credit Application and the Business Revolving Credit Account Agreement beyond what he reasonably assumed. Simply put, the Defendants’ “Eighth” and “Twentieth Affirmative Defenses” are baseless and an attempt to blur the record before this Court. There is no obligation under the Loan Documents and Guaranty that the Plaintiff must provide the Defendants of any adverse facts materially increasing their risk under the Guaranty or the Loan Documents nor has the Defendants set forth any evidence or specify any facts which support their “Eighth” and “Twentieth Affirmative Defenses”. Accordingly, the Defendants “Eighth” and “Twentieth Affirmative Defenses” are without merit and should be dismissed. Defendants’ Tenth Affirmative Defense — (F: re to state a claim 44 The Defendants’ “Tenth Affirmative Defense”, “Complaint fails to state a claim upon which relief may be granted” is without merit. The allegations in the Complaint clearly assert viable causes of action as substantiated by the documentary evidence annexed to this Motion. 45. In support of its Breach of Contract causes of action, the Plaintiff has presented a prima facie case for the existence of the debt, the obligations thereunder of each of the Defendants, their respective breaches, and the damages suffered by the Plaintiff thus stating causes of action for Breach of Contract (the BLOC and the Guaranty). 46. A viable cause of action for Account Stated has also been made as the Plaintiff has alleged in the Complaint that statements of account were remitted to the Borrower and the Borrower has not recited any facts specific to its objection to the amounts alleged to be due in said statements of account. Moreover, the Borrower’s past conduct of making prior payments on 14 outstanding statements of account refutes any assertion that an Account Stated cause of action has not been made. 47. The Plaintiff has also stated a cause of action for Unjust Enrichment because it has alleged the receipt of money by the Borrower that was loaned by the Plaintiff, repayment of which has not been made by the Borrower. 48. Therefore, the Defendants’ “Tenth Affirmative Defense” must be dismissed. Defendants’ Eleventh Affirmative Defense —(Unclean Hands) 49. The Defendants in their “Eleventh Affirmative Defense” have asserted the doctrine of “Unclean Hands”. As set forth in the accompanying Memorandum of Law, “Unclean Hands” is an equitable defense and does not apply to an action at law. This action is for money damages arriving from the Defendants’ breach of their respective obligations under the Loan Documents and Guaranty. Defendants have alleged no set of facts which even outline what purported conduct has been committed by Plaintiff sufficient to support a consideration of an unclean hands defense. Accordingly, the Defendants’ “Eleventh Affirmative Defense” must also be dismissed. Defendants’ Twelfth Affirmative Defense —- (Equitable Estoppel); Thirteenth Affirmative Defense — (Promissory Estoppel); and Fourteenth Affirmative Defense (Waiver and/or Modification) 50. Defendants’ “Twelfth”, “Thirteenth”, and “Fourteenth Affirmative Defenses” allege equitable estoppel, promissory estoppel and waiver/modification, respectively. Said defenses are merely a collection of theories all of which are also without merit. 51. “In order for estoppel to exist, three elements are necessary: (1) conduct which amounts to a false representation or concealment of material facts, or at least which is calculated to convey the impression that the facts are otherwise than and inconsistent with, those which the party subsequently seek to assert; (2) intention, or at least expectation, that such conduct will be 15 acted upon by the other party; and, (3) in some situations, knowledge, actual or constructive, of real facts .... The party asserting estoppel must show with respect to himself; (1) lack of knowledge of the true facts; (2) reliance upon the conduct of the party estopped; and (3) a prejudicial change in his position.” In re City of New York, Powell’s Cove Environmental Waterfront Park, Queens, 14 Misc.3d 1232(a), 2007 WL 509797 (NY Slip Op. 50267(u) (Sup. Kings Cty. Feb. 15, 2007)); BWA Corp. v. Alltrans Express U.S.A., Inc., 112 A.D.2d 850, 493 N.Y.S.2d 1 (1% Dept. 1985). 52. In this case, the Defendants have pled no facts to support the legal conclusions that the Plaintiffs claims should be barred. Moreover, the Defendants cannot (and have not) denied that they had knowledge of the terms of the respective and applicable Loan Documents and Guaranty because the Defendants acknowledged these documents, executed them, received the benefit of the use of the proceeds from the BLOC and failed to repay the Plaintiff for the same since the Default Date. The Defendants have shown no change in their position to their detriment and no reliance upon any specified alleged misconduct of the Plaintiff. In addition, the Defendants have not pled any basis for estoppel in any cognizable manner whether by promissory estoppel or collateral estoppel. 53. Additionally, waiver is the voluntary and intentional abandonment of a known right that, but for the waiver, would have been enforceable and may be established by affirmative conduct or by failure to act that it makes it appear that enforcing the right will be sought. General Motors Acceptance Corp. v. Clifton-Fin Cent. Sch. Dist., 85 N.Y.2d 232, 236, 623 N.Y.S.2d 821, 823 (1995); Callen v. Callen, 2002 WL 32179000 at *9. In this case, Defendants have not provided any facts to support a waiver by Plaintiff in any cognizable manner. 54, Based upon the foregoing, the Defendants’ “Twelfth”, “Thirteenth” and “Fourteenth Affirmative Defenses” must be dismissed. 16 Defendants’ Fifteenth Affirmative Defense — (Mitigation of Damages) 55. The Defendants in their “Fifteenth Affirmative Defense” have asserted that the “{p]laintiff’s claims are barred in whole or part by plaintiff's failure to mitigate its damages, if any.” The Defendants obligations to the Plaintiff are controlled by the Loan Documents and the Guaranty. The Defendants have failed to plead any facts that would substantiate that Plaintiff has a requirement to mitigate damages and is therefore without merit. 56. Part II — Section 4(b) and (c) of the Business Lending Agreement provides in pertinent part: (b) If an Event of Default happens, you can enforce any interest in Collateral and apply what you receive from the enforcement to payment of Debt whether Debt is payable then or in the future. (c) We know if any Debt is payable on demand, you have the right to payment of that Debt at any time, whether or not an event of default has happened and the you can enforce any interest in the Collateral at any time. See Exhibit “C” to the Villaman Affidavit. 57. Part III - Section 2(c) of the Business Lending Agreement clearly provides: I will pay you whether or not you have demanded payment of any Debt from the Borrower. I will pay you even if you do not first try to collect from the Borrower or any other Guarantor or Endorser of any Debt or try to enforce any interest in Collateral. See Exhibit “C” to the Villaman Affidavit. 58. Given the clear language of the Business Lending Agreement, mitigation of damages is not required and therefor this defense should be dismissed with prejudice. Defendants’ Sixteenth Affirmative Defense - (Plaintiff's Recovery of any Deficiency Judgment should be reduced, in whole or in part, to the extent that any sale by Plaintiff is not commercially reasonable) 59. The Defendants allege in their “Sixteenth Affirmative Defense” that “the Plaintiff's recovery of any deficiency judgment should be reduced, in whole or in part, to the extent that any 17 sale by Plaintiff is not commercially reasonable.” The Plaintiff respectfully submits that the Defendants’ “Sixteenth Affirmative Defense” is without merit, as it is inapplicable to the causes of action maintained by the Plaintiff and as such, should be dismissed. 60. In conclusion, it is respectfully submitted that each and every one of the Defendants’ twenty-two (22) affirmative defenses contained in their Answer is fatally deficient and should be stricken with prejudice as a matter of law. CONCLUSION 61. It is respectfully submitted that the Plaintiffs causes of action have been established by the Complaint, this Affirmation with Exhibits, the Villaman Affidavit with Exhibits and the Memorandum of Law, and the granting of summary judgment in favor of the Plaintiff is warranted and proper. 62. There are no issues of fact presented on the question of liability or damages. 63. No prior application for the relief sought herein has been made to this Court or any other court. WHEREFORE, the Plaintiff respectfully requests that this Court grant an Order: pursuant to CPLR § 3212 granting the Plaintiff summary judgment against the Defendants in the principal sum of $66,819.74, plus accrued interest in the sum of $5,101.20 and late charges in the sum of $376.12 through and including October 20, 2015, plus late charges and interest continuing to accrue at the Default Rate from October 21, 2015 to the date of entry of judgment herein, plus reasonable attorneys' fees, costs and expenses. Dated: New York, New York November 11, 2015 JL 6 Teresa id Caney 18