Nuance Indus. v. Union Apparel Grp.

• Decision Date: 01 July 2022
• Docket Number: Index No. 655882/2017,Motion Seq. No. 003
• Citation: 2022 NY Slip Op 32132 (U)
• Parties: NUANCE INDUSTRIES, INC., Plaintiff, v. UNION APPAREL GROUP, LTD., BUDMARK TEXTILES INTERNATIONAL, INC., THOMAS LAM A/K/A TOMMY LAM AND/OR THOMAS SHU KWONG LAMUNIO, and CLARENCE GELBER, Defendants.
• Court: New York Supreme Court

2022 NY Slip Op 32132(U)

NUANCE INDUSTRIES, INC., Plaintiff,
v.
UNION APPAREL GROUP, LTD., BUDMARK TEXTILES INTERNATIONAL, INC., THOMAS LAM A/K/A TOMMY LAM AND/OR THOMAS SHU KWONG LAMUNIO, and CLARENCE GELBER, Defendants.

Index No. 655882/2017, Motion Seq. No. 003

Supreme Court, New York County

July 1, 2022

Unpublished Opinion

PRESENT: HON. LOUIS L. NOCK Justice

DECISION + ORDER ON MOTION

LOUIS L. NOCK, J.S.C.

The following e-filed documents, listed by NYSCEF document number (Motion 003) 59, 60, 61, 62, 63, 64, 65, 66, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, and 84

were read on this motion for SUMMARY JUDGMENT .

In this breach of contract action, plaintiff Nuance Industries, Inc., moves, pursuant to CPLR 3212, for summary judgment against defendants Union Apparel Group, Ltd. ("Union"), Budmark Textiles International, Inc. ("Budmark"), and Clarence Gelber ("Gelber") (collectively, the "Union Defendants") and defendant Thomas Lam a/k/a Tommy Lam and/or Thomas Shu Kwong Lamunio ("Lam") (together with the Union Defendants, "defendants"). Lam cross-moves for summary judgment dismissing the complaint against him.

Background

The relevant facts are set forth in the court's prior decision and order dated March 23, 2021, familiarity with which is presumed. Briefly, this action arises out of the purported breach of a settlement agreement (the "Settlement Agreement") reached between plaintiff and Union, Budmark and non-party Ashley Stewart, Inc. ("Ashley"), in a copyright infringement action

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brought in federal district court. The Settlement Agreement defines the "Parties" to the agreement as plaintiff, Ashley, Union and Budmark; and the "Defendants" as Ashley, Union and Budmark (NYSCEF Doc No. 61 at 21 [Exh. C]). Section 3.1 set forth the "Settlement Amount" as follows: (1) $100,000 total in cash payments to plaintiff from Union and Budmark by June 30, 2016, and (2) $1 million in completed textile purchases by Union from plaintiff between April 30, 2016 and April 30, 2017 (the "Settlement Term") (id. at 21-22). If Union completed less than $1 million in textile purchases by April 1, 2017, then "a final payment totaling 15% of the difference between the $1,000,000 in purchases and the actual amount of purchases shall be payable by April 30, 2017" (the "Shortfall Amount") (id. at 22). Section 5, titled "Personal Guarantee and Stipulated Judgment," reads:

5.1 As further consideration for the release set forth below, and as a condition of NUANCE entering into this Agreement, Tommy Lam agrees to personally guarantee payment of any shortfall in the Settlement Amount, as set forth at the end of this Agreement

5.2 Furthermore, the Parties agree that in the event of a default in payment that is not remedied in full within ten (10) days of written notice from NUANCE to DEFENDANTS, NUANCE shall be entitled to immediate judgment against defendants Union Apparel Group, Ltd. and Budmark Textiles International, Inc. and against Tommy Lam and Clarence Gelber jointly and severally, but in no event against defendant Ashley Stewart, Inc., in an amount equal to any shortfall in the remaining balance due of the Settlement Amount at the time of the breach. [Guarantors initial here: ___ ___]

(Id.)

The Settlement Agreement states that any notice in connection with the agreement shall be given by mail and email to counsel for the Parties, Carlos M. Carvajal, Esq. ("Carvajal"), and to Michael Abate ("Abate"), Ashley's Treasurer/Secretary (id. at 25 [§ 19]). Section 8 provides, in part, that "[i]n the event of any subsequent litigation to enforce the terms of this agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees in addition to any other

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relief" (id. at 24). The Settlement Agreement was executed by Samy Nimroody ("Nimroody") as plaintiff's president, Lam as Sales Manager for Union, and Abate for Ashley (id. at 26 and 28).

The personal guarantee (the "Guaranty") signed by Lam and attached to the Settlement Agreement provides:

The undersigned absolutely guarantees the prompt payment of the shortfall portion of Settlement Amount payable by DEFENDANTS under the above-executed Agreement and, in the event of default in payment of any portion thereof, the undersigned promises to pay the full amount of such indebtedness in full. It is further agreed that the liability of the undersigned shall not be affected by the discharge or release of the indebtedness, liability, obligation of DEFENDANTS, other than through satisfaction of the Agreement. In the event of death of the undersigned guarantor, this guarantee shall be discharged.

(Id. at 29.)

Union and Budmark satisfied the cash payment portion of the Settlement Agreement, but Union purchased only $126,507.49 in textile products within the Settlement Term (NYSCEF Doc No. 64, ¶¶ 9-10).

Procedural History

Plaintiff commenced this action by filing a summons and complaint asserting a single cause of action for breach of contract against all defendants. After the Union Defendants and Lam interposed answers, plaintiff moved for summary judgment, and Lam cross-moved for summary judgment on his cross claim for indemnification against Union (NYSCEF Doc Nos. 27 and 34). In a decision and order dated March 23, 2021 (the "March Order"), this court denied plaintiff's motion on the ground that its evidence regarding Union's breach was inadmissible, granted plaintiff leave to renew upon the submission of admissible evidence consistent with CPLR 4518, and denied Lam's cross-motion in its entirety (NYSCEF Doc No. 54).

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Plaintiff now renews its motion for summary judgment, and Lam cross-moves for summary judgment dismissing the complaint against him.

Positions of the Parties

In support of its motion, plaintiff relies on an affidavit from Nimroody, who avers that Union and Budmark have made the cash payment as required under the Settlement Agreement, but Union has purchased only $126,507.49 in textile products within the Settlement Term, as indicated in the five invoices annexed to his affidavit (NYSCEF Doc No. 64, ¶¶ 9-10). Although Union later placed an additional $26,094.10 in textile orders, these purchases were made after April 30, 2017 (id., ¶ 11). He submits that $131,023.88 is due...