Ferrari Fin. Servs., Inc. v. Freidman

Full title: FERRARI FINANCIAL SERVICES, INC. Plaintiff, v. EVGENY FREIDMAN, Defendant.

Court: SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PART IAS MOTION 42EFM

Date published: Jan 19, 2019

2019 N.Y. Slip Op. 30402 (N.Y. Sup. Ct. 2019)

Opinion

INDEX NO. 156676/2018

01-19-2019

FERRARI FINANCIAL SERVICES, INC. Plaintiff, v. EVGENY FREIDMAN, Defendant.

HON. NANCY M. BANNON Justice

NYSCEF DOC. NO. 29 PRESENT: HON. NANCY M. BANNON Justice MOTION DATE 11/28/2018 MOTION SEQ. NO. 001

DECISION, ORDER and JUDGMENT

The following e-filed documents, listed by NYSCEF document number (Motion 001) 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 26, 27, 28 were read on this motion to/for DEFAULT/ORDER OF SEIZURE.

In this action seeking damages for breach of contract and for replevin, the plaintiff moves for leave to enter a default judgment against the defendant pursuant to CPLR 3215, and for an order of seizure pursuant to CPLR 7102. No opposition is submitted. The branch of the motion seeking leave to enter a default judgment is granted in part insofar as the plaintiff has submitted proof of proper service of the summons and complaint on the defendant, proof of the facts constituting the claims, and proof of the defendant's failure to answer or appear. See CPLR 3215(f); Atlantic Cas. Ins. Co. v RJNJ Services, Inc., 89 AD3d 649 (2^nd Dept. 2011). The branch of the motion seeking provisional relief is denied as procedurally improper.

While the "quantum of proof necessary to support an application for a default judgment is not exacting ... some firsthand confirmation of the facts forming the basis of the claim must be proffered." Guzetti v City of New York, 32 AD3d 234, 236 (1^st Dept. 2006). The proof submitted must establish a prima facie case. See Guzetti v City of New York, supra; Silberstein v Presbyterian Hosp., 95 AD2d 773 (2^nd Dept. 1983). The plaintiff's submissions include three Motor Vehicle Retail Installment Contracts (the Contracts) signed by the defendant and the seller, Algar Ferrari of Philadelphia, for the purchase of a 2014 Ferrari FF, a 2015 Ferrari 458, and a 2014 Ferrari F12 (the Vehicles), respectively. The plaintiff also submits two affidavits from two of its Litigation Administrators, Notices of Default it mailed to the defendant and Notices of Recorded Liens it filed with the New York State Department of Motor Vehicles.

The plaintiff's proof establishes the necessary elements of a breach of contract claim: (1) the existence of a contract, (2) the plaintiff's performance under the contract, (3) the defendant's breach of that contract, and (4) resulting damages. See Harris v Seward Park Housing Corp., 79 AD3d 425 (1^st Dept. 2010). The Contracts were duly assigned to the plaintiff, a financial service provider in the business of arranging financing for specialty vehicles. They provided that the defendant would make certain payments with interest in exchange for the plaintiff's financing of the purchase of the Vehicles. It is undisputed that the defendant failed to pay the balances in full. The plaintiff has established that, pursuant to the terms of the Contracts, the defendant currently owes the sum of $575,558.56. Having failed to answer, the defendant is "deemed to have admitted all factual allegations in the complaint and all reasonable inferences that flow from them." Woodson v Mendon Leasing Corp., 100 NY2d 62, 70-71 (2003).

As to the plaintiff's causes of action for replevin, the court notes that to the extent that the plaintiff is seeking relief pursuant to CPLR 7102, it seeks a prejudgment quasi-provisional remedy, not a post-judgment remedy. See Americredit Financial Services, Inc. v Decoteau, 103 AD3d 761 (2^nd Dept. 2013); see also McKesson v Automated Healthcare, Inc. v Brooklyn Hospital Center, 779 NYS 2d 765 (Sup. Ct. Kings Co. 2004). Therefore, while the plaintiff has submitted an affidavit compliant with CPLR 7102(c), and has established that it is probable that it will succeed on the merits and that the facts are as stated in the affidavit, replevin pursuant to CPLR 7102 is improper at this stage. The court notes that even if such relief were properly requested prior to seeking a final judgment, the plaintiff offers no basis for its assertion that the requirement of posting an undertaking be waived by the court.

To the extent that the plaintiff's causes of action for replevin seek to assert a substantive right at law to recover the Vehicles, however, the sole issue in determining its claim is which party has the superior possessory right to the Vehicles. See CPLR 7101; Christie's Inc. v Davis, 247 F Supp 2d 414 (SDNY 2002) (applying New York law). Since the defendant came into possession of the Vehicles lawfully, the plaintiff must also establish that it made a demand for possession and was refused. See Solomon R. Guggenheim Foundation v Lubell, 77 NY3d 311 (1991). The Contracts clearly state that the plaintiff retains a security interest in each Vehicle, and that in the event of the defendant's default, the plaintiff has the right to take each Vehicle with or without demand, court order, or other judicial process. They further provide that the plaintiff has all of the rights of a secured party under the Uniform Commercial Code.

In the case of a secured transaction, Uniform Commercial Code § 9-609 provides that in the event of default, a secured party "may take possession of the collateral" and "may render equipment unusable and dispose of collateral on debtor's premises." NY UCC Law § 9-609(a). The secured party may proceed "pursuant to judicial process" or "without judicial process, if it proceeds without breach of the peace." Id. § 9-609(b). Where, as here, a defendant refuses to surrender possession of the collateral subject to a securitized agreement voluntarily, a plaintiff may proceed pursuant to article 71 of the CPLR. See Gen. Elec. Credit Corp. v Marcella's Appliances Sales & Servs., Inc., 66 AD2d 927 (3^rd Dept. 1978).

Having shown that the defendant is in default on its payments under the Contracts, and that the plaintiff duly demanded the return of the Vehicles in accordance with the terms of the Contracts, the plaintiff has established its superior right to the Vehicles pursuant to the terms of the Contracts and the Uniform Commercial Code. The requirement of fixing the value of chattels in the judgment for the purpose of an alternative money award pursuant to CPLR 7108(c) is inapplicable where, as here, the plaintiff seeks to recover property not for the sake of possession of the chattel, but for the retention of a security for a debt. See Christies Inc. v Davis, supra (citing Allen v Judson, 71 NY 77 [1877] [finding that judgment in favor of mortgagee should include alternative award of the amount of plaintiff's interest in the chattel]). Accordingly, the court finds that the appropriate alternative relief should be $575,558.56, the amount of the plaintiff's interest in the Vehicles.

At this juncture, the plaintiff has not established that it is entitled to an order pursuant to CPLR 7109(b), which provides that where the subject chattel is unique the court may, in addition to granting judgment under CPLR 7108, direct that a party in possession deliver the chattel to the party entitled to possession. Chattels sufficiently unique to qualify for relief under CPLR 7109(b) include items that are not mass-produced or readily available on the market, such that a money judgment enabling purchase of a replacement would be an adequate remedy. See id. The plaintiff has not made any argument that the Vehicles meet this standard.

While the plaintiff has proven its entitlement to judgment on both categories of its claims, recovery of the chattel itself is inconsistent with a money award for its value. A litigant ordinarily is required to elect among inconsistent positions upon seeking expedited disposition such as default judgment. See Jones Lang Wootton USA v LeBoeuf, Lamb, Greene & MacRae, 243 AD2d 168 (1^st Dept. 1998). Here, while the cause of action for breach of contract has not been waived, it appears from the plaintiff's submissions that the plaintiff seeks to assert its rights to possession of the Vehicles pursuant to CPLR article 71, which provides for an alternative award of the money value of chattels so that the sheriff can enforce a replevin judgment where the chattels cannot be recovered, rather than its right to a money judgment.

Accordingly, it is,

ORDERED that the branch of the plaintiff's motion pursuant to CPLR 3215 seeking leave to enter a default judgment against the defendant is granted with respect to the plaintiff's causes of action sounding in replevin pursuant to CPLR 7101, and the motion is otherwise denied; and it is further,

ORDERED and ADJUDGED that the plaintiff, Ferrari Financial Services, Inc., recover from the defendant, Evgeny Freidman, the possession of certain described chattels, to wit, (1) one 2014 Ferrari, Model FF (V.I.N. ZFF73SKA6E0196929), (2) one 2015 Ferrari 458 Speciale (V.I.N. ZFF75VFA1F0204538), and (3) one 2014 Ferrari F12 (V.I.N. ZFF74UFA1E0199286), and alternatively, if the possession of the chattels is not returned to the plaintiff, that the plaintiff recover from the defendant the amount of $575,558.56, with statutory interest from November 28, 2018, and that the plaintiff have execution for enforcement of this judgment.

This constitutes the Decision, Order, and Judgment of the Court. 1/19/2019

DATE

/s/ _________

NANCY M. BANNON, J.S.C.