Kalamata Capital Group, LLC v. A.C.S.A. Transp. L.L.C.

Kalamata Capital Group, LLC v A.C.S.A. Transp. L.L.C. 2024 NY Slip Op 34461(U) December 20, 2024 Supreme Court, New York County Docket Number: Index No. 452907/2023 Judge: Lyle E. Frank Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service.

This opinion is uncorrected and not selected for official publication.

INDEX NO. 452907/2023 NYSCEF DOC. NO. 152 RECEIVED NYSCEF: 12/20/2024

SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. LYLE E. FRANK PART 11M Justice ---------------------------------------------------------------------------------X INDEX NO. 452907/2023 KALAMATA CAPITAL GROUP, LLC, MOTION DATE 09/06/2024 Plaintiff, MOTION SEQ. NO. 003 -v- A.C.S.A. TRANSPORTATION L.L.C., ACSA DECISION + ORDER ON TRANSPORTATION LLC,AARON ANTHONY DRAWL MOTION Defendant. ---------------------------------------------------------------------------------X The following e-filed documents, listed by NYSCEF document number (Motion 003) 125, 126, 127, 128, 129, 130, 131, 132, 133, 134, 135, 137, 139, 140, 141, 142, 143, 144, 145, 146, 147, 148, 149, 1501 were read on this motion to/for JUDGMENT - SUMMARY .

Upon the foregoing documents, plaintiff’s motion for summary judgment is granted and defendants’ cross-motion for summary judgment is denied.

Background This case arises out of an alleged breach of a receivables purchase agreement (the “RPA”). In April of 2022, Kalamata Capital Group, LLC (“Plaintiff”) entered into an agreement with A.C.S.A. Transportation LLC d/b/a ACSA Transportation and ACSA Transportation LLC (collectively, “Company Defendants”) wherein Kalamata purchased $74,000.00 of Company Defendants’ future receivables. Anthony Drawl (“Individual Defendant”, collectively with Company Defendants “Defendants”) signed as a personal guarantor. Plaintiff alleges that $47,586.00 of the receivables was transmitted to them before payments ceased, and that combined with various fees Plaintiff is owed $29,159.00 plus interest, costs and disbursements under the RPA. Plaintiff filed the underlying suit in October of 2022.

INDEX NO. 452907/2023 NYSCEF DOC. NO. 152 RECEIVED NYSCEF: 12/20/2024

Standard of Review Under CPLR § 3212, a party may move for summary judgment and the motion “shall be granted if, upon all the papers and proof submitted, the cause of action or defense shall be established sufficiently to warrant the court as a matter of law in directing judgment in favor of any party.” CPLR § 3212(b). Once the movant makes a showing of a prima facie entitlement to judgment as a matter of law, the burden then shifts to the opponent to “produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action.” Stonehill Capital Mgt. LLC v. Bank of the W., 28 N.Y.3d 439, 448 (2016).

The facts must be viewed in the light most favorable to the non-moving party, but conclusory statements are insufficient to defeat summary judgment. Id. Discussion Plaintiff has filed the present motion for summary judgment. Defendants oppose and have cross-moved for summary judgment. For the reasons that follow, plaintiff’s motion is granted, and defendants’ cross-motion is denied.

Company Defendants Breached the RPA Plaintiffs allege, and have attached supporting documentation, that the Company Defendants have breached the RPA in two ways: 1) by failing to remit Plaintiff’s share of receivables while still collecting receivables and conducting regular business operations; and 2) failing to provide reasonable notice to Plaintiff that more than five ACH transactions were rejected by Company Defendants’ bank. In response, Defendants question the foundation for Plaintiff’s documents, argue that the RPA is a usurious loan, and argue that an NSF response to Plaintiff’s attempt to collect receivables is not a breach under the RPA.

452907/2023 KALAMATA CAPITAL GROUP, LLC vs. A.C.S.A. TRANSPORTATION L.L.C. ET AL Page 2 of 4 Motion No. 003

The terms of the RPA state, in the relevant provision, that “[t]he occurrence of any of the following events shall constitute an ‘Event of Default’ hereunder: (a) Seller or any Guarantor shall violate any term or covenant in this Agreement [. . . ] (d) Seller fails to provide reasonable notice to Purchaser that in any 30-day period there are five or more ACH transactions attempted by Purchaser that are rejected by Seller’s bank.” Here, Company Defendants have committed two events of default. By conducting business and collecting revenue without sending Plaintiff their share of receivables, Company Defendants have breached their obligation to send Plaintiff their remittances. They also failed to send notice to Plaintiff that there were more than five rejected ACH transactions from September 28, 2022, to October 11, 2022.

While Defendants are correct that under the terms of the RPA a NSF rejection is not in and of itself an event of default, here there is no dispute of material fact that Defendants breached the RPA in other ways. Sections 3.4 and 3.5 of the RPA states that if there is an Event of Default, Plaintiff is entitled to pursue action to collect unpaid amounts; that the full uncollected purchase amount becomes due immediately; and that Defendants must pay Plaintiff all reasonable costs and attorneys’ fees. Therefore, if the RPA is legally binding then there is no dispute of material fact that Defendants breached the agreement, and that Plaintiff is entitled to the unpaid amount plus costs and fees.

The RPA is Not a Usurious Loan There are three factors that courts are to weigh when determining whether a receivables purchase agreement is a usurious loan: “(1) whether there is a reconciliation provision in the agreement; (2) whether the agreement has a finite term; and (3) whether there is any recourse should the merchant declare bankruptcy.” Principis Capital, LLC v. I Do, Inc., 201 A.D.3d 752, 754 (2nd Dept. 2022). Here, there is no finite term in the RPA, there is a clear reconciliation

452907/2023 KALAMATA CAPITAL GROUP, LLC vs. A.C.S.A. TRANSPORTATION L.L.C. ET AL Page 3 of 4 Motion No. 003

12/20/2024 DATE LYLE E. FRANK, J.S.C. CHECK ONE: X CASE DISPOSED NON-FINAL DISPOSITION

□ □ GRANTED DENIED X GRANTED IN PART OTHER APPLICATION: SETTLE ORDER SUBMIT ORDER

□ CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT REFERENCE

452907/2023 KALAMATA CAPITAL GROUP, LLC vs. A.C.S.A. TRANSPORTATION L.L.C. ET AL Page 4 of 4 Motion No. 003