MCA Servicing Co. v. Nic's Painting, LLC

MCA Servicing Co. v Nic's Painting, LLC 2026 NY Slip Op 30643(U) March 2, 2026 Supreme Court, Rockland County Docket Number: Index No. 034901/2023 Judge: Keith J. Cornell 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.

file:///LRB-ALB-FS1/Vol1/ecourts/Process/covers/034901_WW.html[03/06/2026 3:45:33 PM] FILED: ROCKLAND COUNTY CLERK 03/04/2026 09:24 AM INDEX NO. 034901/2023 NYSCEF DOC. NO. 113 RECEIVED NYSCEF: 03/04/2026

SUPREME COURT OF THE STATE OF EW YORK COUNTY OF ROCKLA D -------------------------------------------------------------------- X MCA SERVICING COMPANY, Index # : 034901/2023 Plaintiff (Motion Sequence 5) -against- DECISION AND ORDER IC'S PAI TING, LLC, LORRAINE WILLIAMS, MD., INC, SAfNT MATTHEWS PRIMITIVE CHURCH CEMETERY ASSOCIATION, INC. T.

MATTHEWS PRJMITIVE BAPTIST CHURC [, INC., N ILOR HOLDINGS LLC, ISLA D MIKE HA t DYMA LLC d/b/a !C'S PA TI G, and ICHOLAS CAMPBELL RAHMING, Defi ndants. -------------------------------------------------------------------- X PRESENT: HON . KEITH J. CORNELL, A.J.S.C. Before the Court is the motion submitted by MCA Servicing Company pursuant to CPLR 2221 (e) to renew the decision and order of thi s Court dated April 23, 2024, which denied summary judgment against each of the above captioned Defendants. Defendants oppose the motion. The Court has read and considered NYSC F documents 96-112 in deciding the motion.

Background On June 8, 2023 , Defendant Ticholas Campbe ll Rahming entered into a Revenue Purchase Agreement ("RPA' ) with MCA on behalf of hi s company, ic 's Painting LLC ('·Merchant ).

Mr. Rahming also personally signed the agreement as guarantor. Per the terms of the RPA , Merchant sold $100,750.00 of its future receivables to MCA for $65,000.00. Plaintiff commenced this action by way of a ummons and Complaint filed on October 3 2023 alleging breach of contract. On October 26 2023, defense counsel filed an answer to the complaint on behalf of the corporate Merchant and the personal guarantor.

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On January 11 , 2024, Plaintiff moved for summary judgment. In the Deci sion and Order of April 23 , 2024, the Court denied the moti on fo r summary judgment. The Court fou nd that Plain ti ff had not established its prim a fac ie case because a material fact remained at issue, that is, whether Plaintiff was in breach of its ongoing obi igations under the contract when Defendant failed to make a weekly payment on eptember 1, 2023 . Plaintiff mo ved to re new and reargue on May 30, 2024 . The Court granted the motion on October 15, 202 5, but declined to change its dec ision denying summary judgment. The Court reiterated that Plaintiff had fail ed to establish its prima faci e case because it had not established that it had not breached the RP A. The Court also pointed o ut that failure to pay is not, in a nd of it e lf, a breach by Defendant.

Plaintiff now moves to renew based on the recent decision Apollo Funding Co. v. Dave Reilly Constr., LLC, (24 l AD3d 1508 [2d Dept 2025]), which reversed a denial of summary judgment to a plaintiff on an iden tical m erchant cash advance contract. Plainti ff points out that the Second Department found that plainti ff Apollo Funding had "submitted proof of an executed written agreement, th e plaintiff's performance pursuant to the agreement, the defend ants ' breach, and damages resulting from the breach ' (id. at 1059). The Second Department a lso found that plaintiff Apollo had established that the transaction was not a loan. The Second Department held that review of Reilly 's claim that the reconciliation process was illusory, which is a factor in evaluati ng if the agreement was a loan was precluded because the merchant did not affirm that it strictly engaged in the agreem ent' s reconciliation procedure (id. ).

Plaintiff argues that the underlying facts in this matter are nearly identica l to the facts in Reilly . Specifically Pl aintiff points o ut that Defend ant here fa iled to claim strict compliance w ith the reconc il iati on procedure. Plaintiff points out that the reconciliation provision in the RPA in this case, lik e Reilly, r quires a written su bmi ssion of a request to reconcile, sent by email , with

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[* 2] 2 of 6 FILED: ROCKLAND COUNTY CLERK 03/04/2026 09:24 AM INDEX NO. 034901/2023 NYSCEF DOC. NO. 113 RECEIVED NYSCEF: 03/04/2026 copies of bank statements cred it card processing statements, and an accounts re ceivable report, from the date of the signing of the RP A through the date of the requested reconciliation. Plaintiff argues that Defendant here only claimed to have called his contact at CA and Plaintiffs attorney to ask to reconcile. Plaintiff points out that making these phone calls was not a valid way to request a reconciliation per the RPA. Plaintiff argues that in light of the decision in Reilly, a claim of a non-compliant attempt to reconcile is insufficient to raise an issue of fact such that summary judgment should be denied.

In opposition , Defendants argue that leave for renew should be denied because Plaintiff has not demonstrated a change in the law, but merely a clarification. Defendants argue that a clarification of existing law is not sufficient in this circumstance to warrant a motion to renew.

Defendants further argue that renewal should be denied because Plaintiff failed to establish that Reilly would change this Court·s prior determination denying summary judgment. Defendants point out that the affidavit subm itted by Plaintiffs manager, Kole ar, does not state that Plaintiff complied with its own reconciliation pro ision nor do it deny that Rahmin g tried to initiate a reconciliation. Defendants argue that as the movant for summary judgment, Plaintiff bore the burden of establishing that it had complied with the contract such that it was entitled to bring a claim for breach against Defendants.

Defendants argue that this matter is distinct from Reilly in substantive ways. In particular, Defendants point out that, unlike in Reilly, Rahming's affidavi t contains detail s about his attempt to initiate a reconciliation. Defendants argue that Rahming actually followed the instructions he received from his contact, Oran, who did not direct Rahming to the relevant portion of the contract, but alleged! told him to call Plai ntiffs attorney . Defendants argue that Plaintiffs attorney did not direct Rahming to submit documentation by emai l, but instead flatly refr1sed to commence the

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[* 3] 3 of 6 FILED: ROCKLAND COUNTY CLERK 03/04/2026 09:24 AM INDEX NO. 034901/2023 NYSCEF DOC. NO. 113 RECEIVED NYSCEF: 03/04/2026 reconciliation process. Defendants argue that Rahming's affidavit was sufficiently detailed to overcome the threshold to raise a material issue of fact such that judgment as a matter of law to Plain ti ff was not app ropriate.

In rep ly, P laintiff argues that Defendants have materially mischaracterized the Second Department 's decision in Reilly . Fir t, Plaintiff argues that this deci ion is not merely the application of existing princip les to new facts, but a clarification of the standard for evaluating whether an agreement is loan. Plai ntiff argues that pursuant to Reilly, as a matter of law, Plaintiffs forn1 RP i a purchase of receivables, not a loan, if the merchant/guarantor' s allegations do not demonstrate strict comp Iiance with the reconci liation procedure. Finally, Plainti ff argues that the factual differences between the affidavit of Defendant Reilly and that of Defe ndant Rahming are immat rial because neither could prove that he emailed a properly supported written reque t for a reconc i Iiation .

Discussion A motion to renew is appropriate when "there has been a change in the law that would change the prior determi nation" (CPLR § 2221[e]; see Wilmington Sav. Fund Socy, FSB v Souffrant , 237 AD3d 1006, 1007 [2d Dept 2025] ["A motion for leave to renew is the appropriate vehicle for seeking relicf from a prior ord r based on a change in the law, including, a clarification of deci io nal law''] ; see HSBC Bank USA , Nat'! Ass'n v. Jshmail, 239 AD3d 955 , 956 [2d Dept 2025 ] [" clarification of existing la may in some circumstances suffice to constitu te a change in law for purposes of a motion for leave to renew"] [citations and alterations omitted]).

As a preliminary matter, Pl aintiff is correct that the Second Department's decision in Reilly is suffici nt to j ustify a motion to renew. Therefore, leave to move to renew is granted.

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However, the language re li ed upon by Plaintiff does not lead to the conclusion that Plaintiff seeks. l n Reilly, the Appellate Court found that consideration of the claim that the reconciliation process was illusory was precluded because the Merchant had not even pleaded that it complied with the reconciliation procedure (241 AD3d at 1509). This finding went to the standard for judging whether the RP A was a usurious loan (id.). Having concluded that the available evidence established that the RPA was not a loan, the Court found that the RPA was not vo id or unenforceable and reversed this Comt's decision denying summary judgment (id.) In deciding a motion for summary judgment, the reviewing cou11 shou ld accept the opposing party ' s evidence a· true (see Hotopp Assocs. v Victoria's Secret Stores, 256 AD2d 285 , -287 [1st Dept 1998]) and give the opposing palt the benefit of all reasonable inD rence ( ee Negri v Stop & Shop, 65 Y2d 625 , 626 [ 1985]). If there i any doubt as to the existence of a triabl e fact , the motion for summary judgment must be denied (see Rotuba Extruders v Ceppos, Y2d 223 , 23 1 [1978]).

This Court's decision pril 23, 2024 did not deny summary judgment to Plaintiff based on a find ing that an issue of fact as to usury had been rais ed. Ins tead, this Court deni ed summary judgment based on Defendants claim that Plaintiff breached the RP A first by fail in g to give them a chance to reconcile. This Court found that Defendants effectively raised issues of fact based on Rah ming's description in his sworn statement of his attempt to have the amount of the we kly payment adjusted to match his actual receivab les (Doc . 46) . If Plaintiff did not allow Defendant to even apply to reconcil after a reque t to do so was made, even if that request was initiated orally, then Plaintiff may have been in breach of it obligations und r the RP A when Defendants missed a payment. othing in Apollo v Reilly requires thi s Court to find as a matter of law that Plaintiff

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[* 5] 5 of 6 FILED: ROCKLAND COUNTY CLERK 03/04/2026 09:24 AM INDEX NO. 034901/2023 NYSCEF DOC. NO. 113 RECEIVED NYSCEF: 03/04/2026 was not in breach of its obligations under the RPA when its employees allegedly declined Merchant's efforts to even apply for reconciliation.

Further, this Co urt pointed out in the decision on the prior motion for rearguement and renewal that Plaintiff had also fa il ed to prove Defend ants' breach of the agreement. P r the RP A, failure to pay is not, in and of itself, a breach by Defendant (see Doc. 2, RPA at 1, 2 nd paragraph ["Merchant is selling a po1tion of a future revenue stream to MCA at a discount, and is not borrowing money from MCA, therefore there is no interest rate or payment schedule and no time period during which the Purchased Amoun t must be collected by MCA. . . . Merchant and Guarantor(s)(s) [sic] are o nly guaranteeing their performance of the te rms of th is Revenue Purchase Agreement, and are not guaranteeing the payment of the Purchased Amount"]) [emph asis added]. Other than not making its week ly payment, Plaintiff did not claim any other material breach of the RPA by Defendants .

T herefore, even in light of Reilly, this Court finds that Plaintiff did not establish its prima .facie entitlement to summary judgment because it neither proved its own compliance with the RP A, nor proved Defendants ' breach. Therefore, it is ORDERED, that Pl aintiffs motion for renewal is GR.A TED; and it is further .

ORDERED, that upon reconsideration, the Court finds that denial of summ ary judgment was appropriate, and therefore the motion to vacate the prior dec ision is D E IED; and it is further ORDERED, that all counsel shall appear for a pretrial conference on the date to be provided in a separate court notice.

Dated: M a r c h ~ ew City , ew York

To: All counsel via YSCEF

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