RMP Capital Corp. v. Victory Jet, LLC

Decision Date11 May 2016
Docket Number2014-03564, Index No. 6197/12.
Citation32 N.Y.S.3d 231,2016 N.Y. Slip Op. 03729,139 A.D.3d 836
PartiesRMP CAPITAL CORP., appellant, v. VICTORY JET, LLC, et al., respondents.
CourtNew York Supreme Court — Appellate Division

Reisman Peirez Reisman & Capobianco, LLP, Garden City, N.Y. (Jerome Reisman, Kevin Scully, and Lisa A. Giunta of counsel), for appellant.

Keith D. Black, P.C., Garden City, N.Y., for respondents Christopher Barnes and Roger Maldonado, and Schwartz Kaufman & Livoti, LLP, Garden City, N.Y. (Frank J. Livoti of counsel), for respondent Jeff Erickson (one brief filed).

RANDALL T. ENG, P.J., L. PRISCILLA HALL, SANDRA L. SGROI, and COLLEEN D. DUFFY, JJ.

In an action, inter alia, to recover damages for breach of a factoring and security agreement and to recover on several guaranties, the plaintiff appeals, as limited by its brief, from so much of a judgment of the Supreme Court, Suffolk County (Whelan, J.), entered February 14, 2014, as, upon an order of the same court dated April 12, 2013, awarding it summary judgment on the issue of liability on the third and sixth causes of action, and upon a decision of the same court dated September 11, 2013, made after a nonjury trial on the issue of damages, is in favor of the plaintiff and against the defendants Jeff Erickson, Christopher Barnes, and Roger Maldonado in the principal sum of only $75,199.92, which amount includes an award of only $67,399.92 for “factoring fees,” and awarded it the sum of only $40,657 for attorneys' fees.

ORDERED that the judgment is modified, on the facts, (1) by increasing the award for attorneys' fees from the sum of $40,657 to the sum of $44,112.94, and (2) by deleting the provision thereof awarding factoring fees in the principal sum of $67,399.92; as so modified, the judgment is affirmed insofar as appealed from, with one bill of costs payable to the plaintiff by the defendants Jeff Erickson, Christopher Barnes, and Roger Maldonado, and the matter is remitted to the Supreme Court, Suffolk County, for a new determination of the amount of the award of factoring fees in accordance herewith and the entry of an amended judgment.

The plaintiff and the defendant Victory Jet, LLC (hereafter Victory Jet), entered into a Factoring and Security Agreement dated October 13, 2010, and an Addendum thereto dated October 13, 2010, as amended by an Amendment of the Factoring and Security Agreement dated April 27, 2011 (hereinafter the Factoring Agreement). Pursuant to the Factoring Agreement, the plaintiff agreed to purchase Victory Jet's account receivables, through the purchase of invoices from Victory Jet at a purchase price of 45% of the face amount of each invoice, and then collect the entire amount of the invoices from Victory Jet's account debtors. As the plaintiff advanced to Victory Jet the purchase price of the accounts it purchased, Victory Jet was obligated to pay the plaintiff certain fees, such as factoring fees and out-of-pocket expenses as set forth in the Factoring Agreement. Victory Jet was required to pay to the plaintiff the factoring fees every month until the invoices the plaintiff purchased from Victory Jet were repaid in full and the purchased accounts were closed. The individual defendants, Jeff Erickson, Christopher Barnes, and Roger Maldonado (hereinafter together the defendants) were guarantors of the obligations of Victory Jet pursuant to the Factoring Agreement. Victory Jet subsequently defaulted under the Factoring Agreement by, inter alia, failing to pay its monthly factoring fees and declaring bankruptcy. By letter dated October 11, 2011, the plaintiff accelerated all amounts due under the Factoring Agreement, and demanded immediate full payment thereof from the defendants. The defendants failed to comply with the October 11, 2011, demand.

The plaintiff commenced this action to recover the cost of the unpaid face amounts of the invoices it purchased from Victory Jet, the factoring fees which continued to accrue based upon the amounts that remained outstanding, and attorneys' fees. In an order dated April 12, 2013, the Supreme Court awarded summary judgment to the plaintiff on the issue of liability on the third and sixth causes of action. After a nonjury trial on the issue of damages, the court determined that the plaintiff failed to establish the unpaid face amount of the invoices it purchased from Victory Jet, and awarded the plaintiff the sum of $75,199.92 in damages, representing the commitment fee of $7,500, wire fees in the sum of $300, and factoring fees in the sum of $67,399.92. With respect to the award of factoring fees, the court determined that the Factoring Agreement was terminated as of October 11, 2011, and as a result, so was the accrual of factoring fees. The court also awarded attorneys' fees to the plaintiff, after reducing the hourly rates and after reducing the hours expended by 25%, in the amount of $40,657. The plaintiff appeals, contending that the damages and attorneys' fees awards were incorrectly limited as indicated.

In reviewing a determination made after a nonjury trial, the power of the Appellate Division is as broad as that of the trial court and it may render the judgment it finds warranted by the facts, taking into account that in a close case the trial judge had the advantage of seeing and hearing the witnesses (see Northern Westchester Professional Park Assoc. v. Town of Bedford, 60 N.Y.2d 492, 499, 470 N.Y.S.2d 350, 458 N.E.2d 809 ; Novair Mech. Corp. v. Universal Mgt. & Contr. Corp., 81 A.D.3d 909, 909–910, 917 N.Y.S.2d 876 ; Baygold Assoc., Inc. v. Congregation Yetev Lev of Monsey, Inc., 81 A.D.3d 763, 764, 916 N.Y.S.2d 639, affd. 19 N.Y.3d 223, 947 N.Y.S.2d 794, 970 N.E.2d 829 ).

It is fundamental to the law of damages that one complaining of injury has the burden of proving the extent of the harm suffered (see Berley Indus. v. City of New York, 45 N.Y.2d 683, 686, 412 N.Y.S.2d 589, 385 N.E.2d 281 ; Haughey v. Belmont Quadrangle Drilling Corp., 284 N.Y. 136, 29 N.E.2d 649, amended 286 N.Y. 584, 35 N.E.2d 931 ; Palsgraf v. Long Is. R.R. Co., 248 N.Y. 339, 162 N.E. 99 ; see also J.R. Loftus, Inc. v. White, 85 N.Y.2d 874, 877, 626 N.Y.S.2d 52, 649 N.E.2d 1196 ; G & A Moving & Stor. Co. v. Computer Assoc. Intl., 233 A.D.2d 479, 479, 650 N.Y.S.2d 982 ). Thus, a plaintiff is required to sustain his or her burden to demonstrate actual damages (see J.R. Loftus, Inc. v. White, 85 N.Y.2d at 874, 626 N.Y.S.2d 52, 649 N.E.2d 1196 ; Ashton v. McLenithan, 224 A.D.2d 749, 636 N.Y.S.2d 936 ; Davis v. Mutual of Omaha Ins. Co., 167 A.D.2d 714, 562 N.Y.S.2d 883 ). In order to be entitled to a verdict, or a judgment for damages for breach of contract, the plaintiff must lay a basis for a reasonable estimate of the extent of its harm (see G & A Moving & Stor. Co. v. Computer Assoc. Intl., 233 A.D.2d at 479, 650 N.Y.S.2d 982 ; 5 Corbin, Contracts § 1020, at 124). Contrary to the plaintiff's contention, the Supreme Court's determination that the plaintiff failed to meet its burden of proof with respect to the cost of the unpaid face amount of the invoices it purchased from Victory Jet is supported by the record, and we discern no reason to disturb it.

However, we agree with the plaintiff's contention that the Supreme Court incorrectly determined that factoring fees stopped accruing as of October 11, 2011. [W]hen the terms of a written contract are clear and unambiguous, the intent of the parties must be found within the four corners of the contract, giving practical interpretation to the language employed and the parties' reasonable expectations. Thus, a written agreement that is complete,...

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