Super PC Sys. v. Kaitryanna Pizza Inc.
| Docket Number | Index 653246/2019 |
| Decision Date | 10 January 2022 |
| Citation | 2022 NY Slip Op 30218 (U) |
| Parties | SUPER PC SYSTEMS, INC., Plaintiff, v. KAITRYANNA PIZZA INC. d/b/a NONNA'S BRICKOVEN PIZZERIA and MUHAMET KABASHI Defendants. |
| Court | New York Supreme Court |
Unpublished Opinion
DECISION + ORDER ON MOTION
The following e-filed documents, listed by NYSCEF document number (Motion 001) 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33 34, 35, 36, 37, 38 were read on this motion to/for SUMMARY JUDGMENT .
In this action seeking damages for breach of contract for the sale of a checkout or "point of sale" system for a restaurant, the defendants move pursuant to CPLR 3212 for summary judgment (i) dismissing the complaint and (ii) granting judgment in their favor on their counterclaims. The plaintiff opposes the motion. The motion is denied.
The following facts are undisputed unless indicated otherwise.
The plaintiff is a purveyor of a combination of custom hardware and/or software comprising a point of sale (POS) system. Non-party Andrey Belyayev (Belyayev) is the president and owner of the plaintiff. Defendant Kaitryanna Pizza, Inc. (the restaurant), is a small, family-owned pizza restaurant in Peekskill, New York. Defendant Muhamet Kabashi (the individual defendant) manages the restaurant. Although on certain documents defendant Kabashi states he owns the restaurant, he claims in this action that he is only the husband of the owner, who is not named as a party.
In 2019, the parties executed a contract (the POS contract) pursuant to which the plaintiff would, inter alia, install and provide the restaurant with a POS system to consist of six POS terminals. The plaintiff represented to the defendants that this POS system was an upgrade from a POS system that the plaintiff had provided to the restaurant several years earlier. The defendants aver that they contracted with the plaintiff for the new POS system only after verbal assurances from the plaintiff's sales representative that it would not have certain defects allegedly present in the previous POS system. Conversely, the plaintiff alleges that the previous system did not have any operating defects and that it does not provide any guaranties beyond what is stated in the POS contract.
Belyayev, as the plaintiff's principal, was personally involved in crafting the POS contract with his attorney and there were several "iterations before [they] came up with [the final version]." Ultimately, the POS contract provided for payments from the restaurant to the plaintiff of a monthly fee of $600.00 for use of the system. The contract also provided that the restaurant was to be bound by a separate merchant application and agreement between it and Unified Payments, LLC (Unified), as the "exclusive provider" for credit card processing. Unified is referred to in the POS contract as the plaintiff's "authorized merchant." The POS contract includes a handwritten provision that the restaurant would receive a check in the sum of $5, 000.00 upon the installation of the POS system and the commencement of processing with the authorized merchant.
At his deposition, Belyayev stated this means that "anything that has to do with freezing of the software, with error on the software cannot be warranted."
Additionally, the POS contract states that the Upon the restaurant's default, the plaintiff had the right to remove the POS system. At his deposition, Belyayev conceded that the hardware and software remained the property of the plaintiff at the time of the alleged breach and that the restaurant offered to return the hardware but the plaintiff refused.
Belyayev further testified that the plaintiff paid a "set fee" of $450.00 to Aldelo, the entity through which the plaintiff purchased the software licenses, for each license required to use the software and that the plaintiff is effectively a "re-seller" of the license. Belyayev stated that the plaintiff provided either six or seven Aldelo licenses to the restaurant, per the POS contract, as well as additional software, Aldelo EDC, at a one-time cost of $799.00. Thus, per Belyayev, the plaintiff paid between $3, 499.00 - $4, 159.00 for the licensing of its software to the restaurant. The plaintiff further avers that it also incurred "peripheral costs" for such items as printers, customer displays, network cables, and labor.
The POS contract provides for an "early termination fee," calculated as the total of the monthly fees remaining on the agreement. It further provides for "liquidated damages" in the form of 10 percent of the total amount of the POS contract from the beginning until the end of the term as well as the costs of shipping the POS and its components. The POS contract contains another provision that requires the restaurant to pay the plaintiff for each year of the remainder of the four-year term of the contract either $250.00 per year or the "processing volume of the highest of [the] last six (6) months processing volume (for which processing exists) multiplied by 100 basis points or 1% multiplied by the remaining number of payments under [the contract], whichever is greater." Belyayev testified at his deposition that this meant the restaurant "would owe the highest of either $1, 000 or 1 percent of the 28 months of their credit card processing."
Defendant Kabashi signed the POS contract on behalf of the restaurant, a personal guaranty in his individual capacity, and the merchant application and agreement with Unified and Esquire Bank on behalf of the restaurant. The defendants state that Kabashi signed these documents without reading them or consulting an attorney. The merchant application and agreement is not signed by Unified or Esquire Bank.
Over a four-month period between January 2019 and April 2019, there were 82 calls between the restaurant's employees and the plaintiff's technicians. At least three of those calls document issues relating to the POS system freezing. Others document that the system was, inter alia, functioning at a slow pace, was offline, or was suffering from other technical issues that precluded the restaurant from processing credit card transactions. On April 4, 2019, the individual defendant sent an email to the plaintiff's sales representative, in which he stated:
The defendants contend that the plaintiff's POS system was plagued with systematic software and hardware failures from January 2019 through April 2019. The plaintiff does not dispute that there were software issues but contends that there were no hardware failures reported. The plaintiff's technicians made four on-site visits on January 18, 2019, February 6, 2019, March 14, 2019, and April 11, 2019. Belyayev never personally made an on-site visit, and that the source of his information concerning the POS system failures was the plaintiff's Director of Operations, Vladimir Avakyants (Avakyants). Although the plaintiff does not dispute that Belyayev never himself made a visit to the restaurant, the plaintiff explains that it resolves "99% of all issues with POS remotely."
The plaintiff attributes any failures in the POS system to the unauthorized installation of a second router, which it claims it only discovered upon its third on-site visit and removed during the same visit on March 14, 2019. The plaintiff claims that on its fourth visit, it discovered that the router was reinstalled. According to the plaintiff, this "shows the defendants did not cooperate or follow instructions and instead caused themselves malfunctions by their own actions." Belyayev's account is in tension with other evidence in the record, as more fully described below. In any event, as a result of the problems experienced with the POS system, the defendants stopped making payments.
The plaintiff commenced the instant action, wherein it asserts three causes of action for breach of contract and seeks damages in excess of $147, 337.74. The defendants answered the complaint and assert counterclaims for breach of contract, breach of express/implied warranty, fraud and/or fraud in the inducement, fraudulent concealment, and unjust enrichment. Upon the completion of discovery, the...
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