Opinion
009590/14
05-10-2018
SURPLUS CITY LIQUIDATORS CORPORATION, Plaintiff, v. AC PENGUIN PRESTIGE CORP., Defendant.
Attorney for Plaintiff: The Schutzer Group PLLC by Rickin Desai, Esq. Attorney for Defendant: Wilson & Chan, LLP by Henry C. Chan Esq.
Attorney for Plaintiff: The Schutzer Group PLLC by Rickin Desai, Esq.
Attorney for Defendant: Wilson & Chan, LLP by Henry C. Chan Esq.
Mary V. Rosado, J.
Plaintiff Surplus City Liquidators Corporation (hereinafter "Plaintiff") moves and Defendant AC Penguin Prestige Corp. (hereinafter "Defendant") cross-moves for summary judgment pursuant to New York Civil Practice Law and Rule 3212 (hereinafter "CPLR"). This matter came before the court on March 5, 2018. In addition to oral arguments of counsel, the court considered the following submissions of the parties, pursuant to CPLR 2219(a) :
Title Number
Plaintiff's Notice of Motion dated December 6, 2017; Affidavit of William Daniels in Support of Motion for Summary Judgment sworn to October 3, 2017; Plaintiff's Affirmation in Support dated December 6, 2017 and Supporting Exhibits A–X; Plaintiff's Memorandum of Law in Support of its Motion for Summary Judgment against Defendant dated December 6, 2017, 1–4
Defendant's Notice of Cross Motion dated January 5, 2018; Affidavit of Arik Aflafo in Opposition to the Plaintiff's Motion for Summary Judgment and Support of Defendant's Motion for Summary Judgment sworn to January 5, 2018; Affirmation in Opposition to Plaintiff's motion and in Support of Defendant's Cross Motion dated January 5, 2018 and Supporting Exhibit A, 5–7
Plaintiff's Reply Memorandum of Law in Further Support of Plaintiff's Motion and in Opposition to Defendant's Cross Motion dated February 12, 2018, 8
Defendant's Reply Affirmation in Further Support of Summary Judgment dated February 23, 2018, 9
Upon the foregoing papers, the Decision and Order of the Court is as follows:
In this action involving the sale of goods, Plaintiff sued Defendant based on Defendant's alleged failure to pay fully for the air conditioner units, parts, and/or supplies received from Plaintiff. On or about October 28, 2012, Plaintiff and Defendant entered into an agreement wherein Plaintiff agreed to sell and to deliver air conditioner units and related parts to Defendant.
The order contained fifty natural gas furnaces, Model No.WFAR060BO42A. On or about October 31, 2012, Defendant received an invoice for these goods for $42,525.00. Defendant received the goods about a month later. Defendant paid for the goods, but in a letter dated September 12, 2013, Defendant rejected the goods stating that they were not acceptable because they were oversized for the size of the apartments for which they were intended. Despite that, on or about October 28, 3013, Plaintiff and Defendant entered into another agreement wherein Plaintiff agreed to supply Defendant with another shipment of goods for $7,300.00 and those goods were delivered that same day.
Plaintiff alleges that Defendant received the shipments of goods and failed to timely and properly reject the goods. Plaintiff further alleges that the evidence is clear that Defendant received Plaintiff's invoices and account statements and did not object to the invoices and statements, but instead made partial payments and wrote checks that failed to clear. Therefore, Plaintiff requests that judgment to be entered in their favor in the sum of $7,300.00 together with interest from November 29, 2013 and costs of the action. Defendant seeks dismissal of the complaint and counterclaims for the return of $30,000.00 on its 2012 order.
Defendant's Assertion that Plaintiff Lacks Capacity Under New York Business Corporation Law § 1312
In opposition to Plaintiff's motion, Defendant argues that Plaintiff's motion for summary judgment must be denied because Plaintiff lacks capacity to maintain a lawsuit in the State of New York pursuant to Business Corporation Law § 1312 (hereinafter "BCL"). Plaintiff argues that Defendant waived this defense as it did not assert the defense in their answer or in a motion to dismiss pursuant to CPLR 3211. Defendant states that it did not discover the defense until after they filed their answer, but Defendant did not state what information was relied upon and what information was unavailable to them prior to filing their answer.
The defense that Plaintiff lacked capacity to sue because it failed to comply with requirements of BCL § 1312 has been waived, since such defense must be raised by motion to dismiss pursuant to CPLR 3211 or in a responsive pleading (see RCA Records, Div. of RCA Corp. v. Wiener , 166 AD2d 221 [App Div 1st Dept 1990] ). Since this defense was not raised in the answer or by pre-answer motion, it has been waived.
Defendant's Assertion that They Timely Rejected the First Shipment of Goods on December 21, 2012
Defendant also cross moves for summary judgment in the amount of $30,000.00 with interest from October 31, 2012 arguing that Plaintiff should have refunded Defendant for the cost of the goods they rejected. Defendant presented the affidavit of Arik Aflafo who avers that Defendant called Plaintiff and rejected the first shipment of goods on December 21, 2012, a month after receiving the goods. Specifically, he avers that he advised Petitioner that "the furnaces delivered were oversize and not adequate for residential use in the building in which defendant was required to install them" (see aff of Arik Aflafo at 10). Defendant argues that this response is clearly a rejection made within a reasonable time, as required under Uniform Commercial Code § 2–607(3)(a) (hereinafter "UCC").
This alleged December 2012 rejection by phone is not mentioned in Defendant's November 30, 2016 Response to Plaintiff's Notice to Admit. Instead, in paragraph 5 of the Response, Defendant states "[s]ubject to the general objections and specific objection, AC Penguin admits that the August 29, 2013 notice, attached as Exhibit B, was defendant's first notice to plaintiff regarding any defects or problems with the 2012 Goods."
It is well settled that, in order to succeed on a motion for summary judgment, a movant must establish his claim or defense sufficiently to warrant the court, as a matter of law, to direct judgment in his favor ( CPLR 3212[b] ), and he must do so by tender of evidentiary proof in admissible form (see Zuckerman v. City of New York , 49 NY2d 557, 562 [1980] ). The burden then shifts to the non-moving party to produce evidence in admissible form to demonstrate, based on affirmative proof, the existence of a disputed material issue of fact sufficient to require a trial (see SRM Card Shop, Inc. v. 1740 Broadway Assocs., L.P., 2 AD3d 136, 139–140 [App Div 1st Dept 2003] ; CPLR 3212[b] ).
A buyer who accepts goods must notify the seller within a reasonable time after he discovers, or should have discovered a breach, or he is barred from any remedy ( UCC § 2–607[3][a] ).
Generally, a self-serving affidavit offered to contradict a previous admission does not raise a bona fide issue of fact and will be disregarded in considering a motion for summary judgement ( Lupinsky v. Windham Construction Corporation , 293 AD2d 317, 318 [App Div 1st Dept 2002] ). Mr. Aflafo's statement in his affidavit that Defendant rejected the first shipment of goods after an inspection on December 21, 2012, contradicts a prior admission of Defendant is not supported by any documentary evidence. As such, Mr. Alfafo's statement cannot serve as grounds to rule that Defendant's rejection was reasonable and to grant Defendant's motion for summary judgment.
Reasonable Revocation of Acceptance by Defendant
Given this court cannot credit Defendant with a reasonable and timely rejection of the goods on December 21, 2012, the court must consider whether Defendant's written rejection of September 12, 2013, was reasonable and acceptable pursuant to UCC § 2–607(3)(a), considering the surrounding circumstances in this action.
Whether revocation of acceptance was made within a reasonable amount of time often presents an issue of fact depending on the nature, purpose and circumstances of the transaction in question (see Law of Modern Commercial Practices § 3:143, P. 673–674 [2d revised ed 2017] ).
However, where the only inference that can be drawn from surrounding circumstances is that the buyer was unreasonable, Defendant's delay in revocation of acceptance becomes a question of law (see Tabor v. Logan , 114 AD2d 894 [App Div 2nd Dept 1985] [revocation of acceptance five months after delivery found unreasonable as a matter of law]; see also S & H Building Material Corp., v. Riven, 176 AD3d 715 [App Div 2nd Dept 1991] [revocation of acceptance eight months after delivery of building material found unreasonable as a matter of law in light of notice provisions in contract] ). Here, all the invoices issued to Defendant have a warning "[y]ou the buyer are responsible for inspecting all items before signing the delivery receipt." Although these air conditioner units may have been promised for a particular apartment project there is no indication that the parties agreed to allow Defendant to wait to revoke his acceptance of the units until the installation of the units in the apartment complex. Further, Defendant has provided no explanation of how written notification of revocation of acceptance over six months after delivery of the goods could be considered reasonable in accordance with the statute. In consideration of all these factors, this court finds that Defendant failed to make a timely rejection of the goods and is therefore liable to the Plaintiff for the sale price.
Based upon the foregoing, Plaintiff's motion for summary judgment is granted and Defendant's cross motion for summary judgment and its counterclaim for $30,000.00 is denied. The Clerk is directed to enter judgment in favor of Plaintiff in the amount of $7,300.00 together with interest from November 29, 2013 and costs.
This constitutes the Decision and Order of the Court.