HI Bar Capital, LLC v. Excell Auto Grp.

1

2023 NY Slip Op 31593(U)

HI BAR CAPITAL, LLC, Plaintiff, v. EXCELL AUTO GROUP, INC. KARMA OF PALM BEACH, INC., et. al., Defendants.

EXCELL AUTO GROUP, INC. Third-Party Plaintiff, v. Third-Party Plaintiff, SPIN CAPITAL LLC d/b/a SPIN CAPITAL, Third-Party Defendant.

Index No. 502846/2022, Cal. No. 9-10 MS 5-6

Supreme Court, Kings County

May 11, 2023

Unpublished Opinion

DECISION AND ORDER

Honorable Reginald A. Boddie Justice

The following e-filed papers read herein:

NYSCEF Doc Nos.

MS 5

153-155; 164; 175

MS 6

165-166; 174

Plaintiffs motion and defendants' cross-motion seeking reargument of plaintiffs' underlying motion for summary judgment are decided as follows:

This action seeks to recover monies due pursuant to a Settlement Agreement entered into by the parties on or around December 19,2021, under which defendants agreed to pay plaintiff Hi Bar Capital, LLC (plaintiff or Hi Bar) $4,016,820 ("Settlement Amount"). The Settlement Agreement resolved defendants' default under a Revenue Purchase Agreement (the "Purchase Agreement"). Under the Purchase Agreement, plaintiff agreed to purchase $3,177,880 of defendants' future receivables for an upfront purchase price of $2,120,000. It is undisputed that defendants defaulted under the terms of the Settlement Agreement.

After commencement of this action, the parties entered into a Stipulation of Settlement pursuant to CPLR 3215(i) ("Stipulation") resolving defendants' default under the Settlement Agreement. Defendants thereafter defaulted under the Stipulation.

Upon plaintiffs separate motions seeking a default judgment and summary judgment against defendants, this court issued a decision dated January 12, 2023 ("January Decision"), granting plaintiffs motion for summary judgment to the extent of dismissing defendants' counterclaims for breach of contract, fraudulent inducement criminal usury and unjust enrichment but otherwise denying plaintiffs motions. In finding that plaintiff failed to meet its burden for summary judgment, the January Decision stated that:

"[I]n light of the defense that the subject agreements are.. .criminally usurious loans, plaintiff has not established its entitlement to judgment as a matter of law. While the parties Initial Purchase Agreement indicates that the transaction was not a loan for the reasons expounded by plaintiff, plaintiff fails to demonstrate that the parties' subsequent agreements [i.e., the Settlement Agreement and Stipulation] should be treated the same way given the absence of a mandatory reconciliation provision and the existence of finite terms for repayment contained in the Settlement Agreement and Stipulation [citing Principis Cap., LLC v I Do, Inc.,201 A.D.3d 752,754 (2d Dept 2022)]."

In the instant motion to reargue, plaintiff contends, inter alia that (a) the court sua sponte raised the issue of whether the Settlement Agreement and Stipulation constituted criminally usurious loans, which deprived plaintiff of the opportunity to address the point; (b) the Settlement Agreement and Stipulation are not loans or forbearances subject to New York's usury laws; (c) even if the Settlement Agreement and/or Stipulation were loans or forbearances, New York's usury laws do not apply to transactions in excess of $2,500,000 and both agreements involve sums in excess of that amount; and (d) the Principis test does not apply to the subject agreements because they are not receivables purchase agreements.

Defendants oppose plaintiffs motion and cross-move to reargue the January Decision to the extent that such decision dismissed their counterclaims for fraudulent inducement, breach of contract (lack of consideration), and unjust enrichment. Upon reargument, defendants seek reinstatement of their counterclaims.

Upon consideration of the parties' submissions, the court grants plaintiffs motion to reargue on the grounds that the...