Recitation in accordance with CPLR 2219 (a) of the papers considered on the notice of motion filed by plaintiff Fundfi Merchant Funding, LLC., (hereinafter FMF or plaintiff) on August 2, 2024, under motion sequence one for an order pursuant to CPLR 3212 granting summary judgment in its favor on the issue of liability on the claims asserted against defendants JDM Electric LLC, A.K.I. Brothers LLC, JM Services (hereinafter the business defendants) and Jonas D Munoz Carrales (hereinafter the guarantor) (collectively as defendants).

On October 4, 2022, FMF commenced the instant action by filing a summons and verified complaint with the Kings County Clerk's office (KCCO). On November 7, 2022, the defendants joined issue by interposing and filing a joint verified answer with the KCCO. The complaint alleges thirty-four allegations of fact in support of three causes of action, namely, breach of contract, breach of a personal guaranty agreement, and attorneys' fees.

The verified complaint alleges the following salient facts, among others. On May 16, 2022, plaintiff and defendants entered into an agreement (hereinafter the agreement) whereby plaintiff agreed to purchase the business defendants' future receivables in the amount of $100,800.00 for the purchase price of $70,000.00. The business defendants agreed to have one account approved by plaintiff (hereinafter bank account) from which business defendants authorized plaintiff to debit 25% of its weekly revenue until the purchased amount of receivables was paid in full. Plaintiff remitted the purchase price for the future receivables to business defendants as was agreed upon.

On or about October 3, 2022, the business defendants stopped making payments to plaintiff and breached the agreement by intentionally impeding and preventing plaintiff from making the agreed upon ACH withdrawals from the bank account while conducting regular business operations and still in receipt of accounts-receivable. This constituted a default under the agreement.

Business defendants made payments totaling $34,160.01, leaving a balance of $66,639.99. And, pursuant to the agreement, business defendants incurred "Non-Sufficient Fees" in the amount of $200.00 and a "UCC Filing Fee" in the amount of $195.00 to cover the cost of filing UCC-1 Financing Statement in connection with the agreement.

In addition, guarantor agreed to guarantee all amounts owed to plaintiff from business defendants upon a breach in performance by business defendants.

The business defendants and the guarantor have failed to pay the amounts due and owing under the agreement. There remains a balance due and owing to plaintiff on the agreement in the amount of $83,694.98 (including attorneys' fees of $16,659.99), interest from 10/3/2022, plus costs, and disbursements.

There is no opposition to the instant motion. However, "[a] summary judgment motion should not be granted merely because the party against whom judgment is sought failed to submit papers in opposition to the motion, (i.e., 'defaulted')" (Liberty Taxi Mgt., Inc. v Gincherman, 32 AD3d 276, 278 n [1st Dept 2006], citing Vermont Teddy Bear Co., v 1-800 Beargram Co., 373 F3d 241, 244 [2d Cir 2004] ["the failure to oppose a motion for summary judgment alone does not justify the granting of summary judgment. Instead, the ... court must still assess whether the moving party has fulfilled its burden of demonstrating that there is no genuine issue of material fact and its entitlement to judgment as a matter of law"]; see Cugini v System Lumber Co., Inc., 111 AD2d 114, 115 [1st Dept 1985]).

It is well established that summary judgment may be granted only when no triable issue [*2]of fact exists (Alvarez v Prospect Hospital, 32 AD3d 276 [1986]). The burden is upon the moving party to make a prima facie showing that he or she is entitled to summary judgment as a matter of law by presenting evidence in admissible form demonstrating the absence of any material issues of fact (Giuffrida v Citibank, 100 NY2d 72, 81 [2003]).

A failure to make that showing requires the denial of the summary judgment motion, regardless of the adequacy of the opposing papers (Ayotte v Gervasio, 81 NY2d 1062, 1063 [1993]). If a prima facie showing has been made, the burden shifts to the opposing party to produce evidentiary proof sufficient to establish the existence of material issues of fact (Alvarez, 68 NY2d at 324).

Pursuant to CPLR 3212 (b), a court will grant a motion for summary judgment upon a determination that the movant's papers justify holding, as a matter of law, that there is no defense to the cause of action or that the cause of action or defense has no merit. Furthermore, all the evidence must be viewed in the light most favorable to the opponent of the motion (Marine Midland Bank v Dino & Artie's Automatic Transmission Co., 168 AD2d 610 [2d Dept 1990]).

The essential elements of a cause of action to recover damages for breach of contract are "the existence of a contract, the plaintiff's performance pursuant to the contract, the defendant's breach of its contractual obligations, and damages resulting from the breach" (Cruz v Cruz, 213 AD3d 805, 807 [2d Dept 2023]).

In the case at bar, the only sworn testimony submitted by FMF in support of the motion was an affirmation of David Fogel, its counsel (hereinafter Fogel), and an affidavit of Efraim Kandinov (hereinafter Kandinov). Fogel's affirmation contends that the facts in support of the motion are contained in the affidavit of Kandinov.

Fogel's affirmation demonstrates no personal knowledge of any of the transactional facts alleged in the complaint. "An attorney's affirmation that is not based upon personal knowledge is of no probative or evidentiary significance" (Nerayoff v Khorshad, 168 AD3d 866, 867 [2d Dept 2019], citing Warrington v Ryder Truck Rental, Inc., 35 AD3d 455, 456 [2d Dept 2006]).

Kandinov's affidavit is used to authenticate the agreement which was allegedly breached by the defendants. Kandinov averred that he is the CEO of FMF and, as such, has personal knowledge of its business practices and procedures. He further averred that the factual allegations proffered in support of the motion for summary judgment are derived from his review of the plaintiff's business records.

It is noted that Kandinov did not aver that he was a signatory to the agreement or that he participated in the execution of same. Furthermore, the document submitted in support of the amount FMF purportedly provided to the defendants is less than the agreed upon purchase price of $70,000.00. The lesser amount of $67,500.00 was unexplained. This fact alone raises material issues of fact regarding the plaintiff's performance under the agreement.

Kandinov referred to the documents attached to the motion, namely, the agreement and two other documents denominated as proof of funding and a report of defendants' account or payment report. Kandinov averred that the payment report, annexed as exhibit 5 to his affidavit, provided proof of the defendants' default. The Court notes that exhibit 5 is a document labeled "Wire Details" reflecting a one-time payment of $67,500 and containing no information regarding any other transactions. The Court understands that Kandinov's reference to exhibit 5 likely refers to exhibit 6, which was previously referenced by Kandinov as "[p]laintiff's report of [d]efendants' account, attached as [e]xhibit 6". Kandinov described exhibit 6 as plaintiff's report of defendant's account, showing each payment made by defendants including those that were [*3]returned. Kandinov stated that the data contained in the report was recorded electronically in plaintiff's computer software and maintained in the ordinary course of plaintiff's business. However, Kandinov's affidavit does not explain the source of this information, whether this was or was not actually part of the plaintiff's business record, or the methodology in acquiring or maintaining this information.

Kandinov averred that on or about October 3, 2022, FMF received from its bank a return code indicating that defendant's payment, which was made by ACH debit that is initiated by plaintiff, failed because there were non-sufficient funds in the defendant's account (R01) for the fourth time in a month without giving plaintiff prior notice that there were non-sufficient funds. Kandinov contended that this constituted a default under the agreement. Kandinov does not explain what R01 means, despite relying on this as evidence of default. Kandinov also does not explain how the records reflect notice or lack thereof of non-sufficient funds. The bank record of FMF which purportedly reflected a code (R01) was not annexed to the motion.

"A proper foundation for the admission of a business record must be provided by someone with personal knowledge of the maker's business practices and procedures" (Citibank, N.A. v Cabrera, 130 AD3d 861, 861 [2d Dept 2015]). Generally, "the mere filing of papers received from other entities, even if they are retained in the regular course of business, is insufficient to qualify the documents as business records" (Bank of NY Mellon v Gordon, 171 AD3d 197, 209 [2d Dept 2019] quoting Standard Textile Co. v National Equip. Rental, 80 Ad2d 911, 911 [1981]). "However, such records may be admitted into evidence if the recipient can establish personal knowledge of the maker's business practices and procedures or establish that the records provided by the maker were incorporated into the recipient's own records and routinely relied upon by the recipient in its own business" (Bank of NY Mellon, 171 AD3d at 209).

Here, the report of defendant's account under exhibit 6 is one page and in a tiny font. The Court was able to enlarge the exhibit. After doing so, the court found that the document was not self-explanatory and that there was an insufficient foundation for its admission as a business record.^[FN1] Furthermore, the bank record of FMF reflecting the R01 code was not annexed. "[I]t is the business record itself, not the foundational affidavit, that serves as proof of the matter asserted" (Citibank, N.A. v Potente, 210 AD3d 861, 862 [2d Dept 2022], quoting Bank of NY Mellon, 171 AD3d at 205). Accordingly, evidence of the contents of business records is admissible only where the records themselves are introduced. Without their introduction, a witness's testimony as to the contents of the records is inadmissible hearsay (see Bank of NY Mellon,171 AD3d at 198). In sum, FMF has failed to make a prima facie showing of entitlement to summary judgment on its claim that the business defendants breached the agreement. Consequently, FMF has failed to show that the obligation of the guarantor was ever triggered. As a result, the plaintiff also failed to show that the guarantor breached the agreement.

Inasmuch as the plaintiff failed to make a prima facie showing of entitlement to summary judgment, FMF's third cause of action for attorneys' fees based on breach of the agreement is [*4]also unsupported. In sum, plaintiff cannot make a prima facie showing of entitlement to judgment on its claims for breach of the agreements or of the guaranty, and attorneys' fees.

The motion by plaintiff Fundfi Merchant Funding, LLC., for an order pursuant to CPLR 3212 granting summary judgment in its favor on its causes of action for breach of contract, breach of guaranty agreement and attorneys' fees as against defendants JDM Electric LLC, A.K.I. Brothers LLC, JM Services, and Jonas D Munoz Carrales is denied.

A copy of this decision and order, along with notice of entry, shall be served upon defendants and filed with the Court within 20 days of entry.

The foregoing constitutes the decision and order of the Court.