The opinion
iQuanti, Inc. v RTW Retailwinds Acquistion LLC
2024 NY Slip Op 33169(U)
September 6, 2024
Supreme Court, New York County
Docket Number: Index No. 654381/2022
Judge: Emily Morales-Minerva
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.
INDEX NO. 654381/2022
NYSCEF DOC. NO. 61 RECEIVED NYSCEF: 09/06/2024
SUPREME COURT OF THE STATE OF NEW YORK
NEW YORK COUNTY
PRESENT: HON. EMILY MORALES-MINERVA PART 42M
Justice
X INDEX NO. 654381/2022
IQUANTI, INC.
MOTION DATE 03/27/2024
Plaintiff,
MOTION SEQ. NO. 001
- V-
RTW RETAILWINDS ACQUISTION LLC, DECISION + ORDER ON
MOTION
Defendant.
X
The following e-filed documents, listed by NYSCEF document number (Motion 001) 29, 30, 31, 32, 33,
34, 35,36,37,38, 39,40,41,42,43,44,45,46,47,48,49, 50,51
were read on this motion to/for SUMMARY JUDGMENT {AFTER JOINDER)
APPEARANCES:
Hubell & Associates, LLC, New York, New York (Richard A.
Hubell Esq., of counsel) for plaintiff.
HON. EMILY MORALES-MINERVA:
In this action £or, among other things, breach of contract,
plaintiff, I QUANT I, INC. ("plaintiff") , moves for an order
granting it summary judgment against defendant, RTW RETAILWINDS
ACQUISITION LLC ("defendant") see CPLR § 3212 [governing summary
judgment]). Defendant does not submit opposition to the motion.
For the reasons set forth below, the motion is granted, in part,
and summary judgment is entered in favor of plaintiff on the issue
of liability alone.
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Motion No. 001
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NYSCEF DOC. NO. 61 RECEIVED NYSCEF: 09/06/2024
BACKGROUND
Plaintiff is a digital marketing firm that provides
consulting services related to digital commerce, and defendant is
the operator of numerous brand trade names which require data
driven digital marketing services. The parties entered into the
Master Services Agreement ("MSA") on November 9, 2020, and the
Statement of Work ("SOW", collectively the "Agreements"), which
was incorporated into the MSA, on May 16, 2021, for plaintiff to
provide digital marketing services to defendant for a period of
one-year (see NY St Cts Elec Filing [NYSCEF) Doc. Nos. 33 and 34,
Agreements) .
In exchange for plaintiff's marketing services, defendant
agreed to compensate plaintiff in accordance with the detailed fee
structure delineated in the SOW see NYSCEF Doc. No. 34, SOW,
Section 4[c]). According to the MSA, defendant was required to pay
undisputed invoices issued by plaintiff within thirty (30) days of
receipt see NYSCEF Doc. No. 33, MSA, Section 3.2). Defendant
paid plaintiff's invoices, without issue, through March of 2022
(see NYSCEF Doc. No. 30, Affidavit of Viswanatha Sastry
Rachakonda) .
On April 12, 2022, defendant notified plaintiff that it would
not renew the one-year term of the SOW, which was set to terminate
on May 16, 2022. However, in accordance with the parties'
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Motion No. 001
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NYSCEF DOC. NO. 61 RECEIVED NYSCEF: 09/06/2024
Agreements, plaintiff continued to provide contracted services
through May 16, 2022, the termination date of the SOW see NYSCEF
Doc. No. 001, Complaint).
Plaintiff alleges that in April and May of 2022, defendant
failed to pay plaintiff's undisputed invoices (see NYSCEF Doc. Nos
35 - 36, Schedule of Pending Invoices). As a result, plaintiff
emailed defendant to inquire about the outstanding invoices, and
followed-up with defendant numerous times (see NYSCEF Doc. No. 37,
E-mails from plaintiff to defendant}. Plaintiff alleges that
despite following up with defendant, the invoices remained
delinquent and its e-mails went unanswered (id.} . Plaintiff
submits that Jack Saadia, Vice President of defendant, placed
plaintiff's payments on an indefinite "hold" (NYSCEF Doc. No. 46,
Jack Saadia's e-mails}. During this time frame, the invoices were
never objected to see NYSCEF Doc. No. 30, Affidavit of Viswanatha
Sastry Rachakonda}.
On August 17, 2022, plaintiff sent defendant a demand letter,
wherein plaintiff demanded "prompt payment in full of the
outstanding balance" of $390,918.80 (see NYSCEF Doc. No. 38, Demand
Letter). On September 9, 2022, defendant replied and noted that
"[defendant] disputes amounts allegedly due to plaintiff . . . as
[defendant] has had issues with [plaintiff]" (NYSCEF Doc. No. 39,
Response Letter}.· Following this exchange, defendant continued to
refuse to pay plaintiff see NYSCEF Doc. No. 001, Complaint).
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As a result of defendant's failure to pay plaintiff, plaintiff
commenced this action on November 16, 2023, asserting four causes
of action against defendant for breach of contract, unjust
enrichment, quantum meruit, and account stated see NYSCEF Doc.
No. 001, Complaint). At the time of filing, the invoices were
twenty months overdue (id.) . Plaintiff alleges, among other
things, that defendant breached the Agreements by failing to pay
plaintiff for the services rendered, and plaintiffs were damaged
as a result in an amount totaling "no less than $3 90,918.80" (id.) .
Defendant filed an untimely answer on January 6, 2023, and asserted
twenty-four affirmative defenses (NYSCEF Doc. No. 004, Answer).
On June 15, 2023, the court (N. Bannon, J. S. C.) issued a
preliminary conference order, setting forth specific discovery
deadlines (NYSCEF Doc. No. 10, Preliminary Conference Order) .
Immediately thereafter, plaintiff served a deposition notice on
defendant, and demanded it produce documents relevant to
plaintiff's causes of action (see NYSCEF Doc. No. 007, Notice of
Deposition) .
Months later, at the compliance conference, the same justice
determined that defendant failed to respond to plaintiff's
discovery demands in accordance with the June 15, 2023 order
{NYSCEF Doc. No. 12, Compliance Conference Order, August 17, 2023).
Accordingly, the court (N. Bannon, J.S.C.) ordered defendant to
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serve document responses and respond to discovery demands by August
31, 2023 (id.).
Defendant served discovery demands on plaintiff on October 3,
2023, but did not respond to plaintiff's discovery requests (see
NYSCEF Doc. No. 17, Request for Production). Consequently,
following a status conference, the court (N. Bannon, J.S.C.)
ordered that defendant had waived discovery because defendant
served demands on October 3, 2023, thirty-three days after the
court-ordered deadline (see NYSCEF Doc. No. 22, Status Conference
Order, October 5, 2023). The court again ordered defendant to serve
document responses within fourteen days of the order (id.).
On October 18, 2023, defertdant responded to plaintiff's
discovery demands, and produced only two documents demanded by
plaintiff the MSA and the SOW (NYSCEF Doc. No. 19). Defendant
alleged that it was unable to comply with plaintiff's discovery
demands due to a cyber-attack, which resulted in a loss of
documents and data (see NYSCEF Doc. Nos. 23, 27). Plaintiff's
deposition of defendant also did not proceed as scheduled ( see
NYSCEF Doc. Nos. 23, 24).
Accordingly, following a status conference, the court (N.
Bannon, J~S.C) found that its prior court order had not been
complied with in that defendant again failed to produce the
documents plaintiff demanded, and defendant's deposition had not
been conducted, without reasonable excuse see NYSCEF Doc. No. 25,
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Status Conference Order, November 30, 2023 (emphasis added]). The
court ordered defendant to serve a Jackson Affidavit see Jackson
v City of New York, 185 AD2d 768 [1st Dept 1992]) and evidence of
the alleged cyber-attack by December 29, 2023, and to complete the
deposition of defendant by December 29, 2023 (id.).
On December 13, 2023, defendant submitted a Jackson Affidavit
and a letter from an insurance adjuster regarding the alleged
cyber-attack (see NYSCEF Doc. Nos. 26, 27). However, neither the
affidavit nor the letter provided any specific information
regarding the alleged cyber-attack, or the specific, detailed
efforts defendant made to recover and provide the necessary
documents to plaintiff Further, Jack Saadia,
defendant's Vice President, remotely appeared for his scheduled
deposition, but the deposition could not proceed because Mr. Saadia
alleged that the device he was using was "not operational" (NYSCEF
Doc . No . 51 ) .
Shortly thereafter, having made no progress on discovery,
plaintiff filed Note of Issue (see NYSCEF Doc. No. 28, Note of
Issue, January 31, 2024), followed by the subject motion (seq. no.
001}, on March 27, 2024.
Here, plaintiff seeks an order, pursuant to CPLR § 3212,
granting it summary judgment against defendant on its first cause
of action (breach of contract) and fourth cause of action (account
stated) . Therein, among other things, plaintiff contends
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entitlement to summary judgment, arguing no triable issues of fact
exist that plaintiff provided services pursuant to a written
contract, and that defendant failed to pay for those services in
breach of that contract.
In support of its motion, plaintiff submits the pleadings
herein (NYSCEF Doc. No. 001); the MSA (NYSCEF Doc. No. 33); the
SOW (NYSCEF Doc. No. 34); the schedule of unpaid invoices {NYSCEF
Doc. No. 35); copies of the unpaid invoices (NYSCEF Doc. No. 36);
e-mails from plaintiff to defendant (NYSCEF Doc. No. 37); letters
exchanged between the parties {NYSCEF Doc. Nos. 38 - 40); internal
e-mails exchanged between employees of defendant (NYSEF Doc. Nos.
41 - 50); and an affidavit by Viswanatha Sastry Rachakonda, CEO of
plaintiff {NYSCEF Doc. No. 30) . Plaintiff requests an award of
damages in an amount "no less than $390,918.80" {NYSCEF Doc. No.
001, Complaint).
Pending plaintiff's motion (seq. no. 001), counsel for
defendant filed a motion to withdraw {seq. no. 002). The
undersigned granted the motion, stayed the matter for thirty days,
ordering defendant to notify the court as to their new counsel
within thirty days, and ordering defendant to submit opposition
papers to plaintiff's motion for summary judgment within thirty
days of entry of counsel's notice of appearance see NYSCEF Doc.
No. 58, Decision and Order, July 2, 2024).
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On July 29, 2024, this court held a status conference wherein
defendant failed to appear, to seek an adjournment, or to present
a reason for failing to appear and/ or obtain counsel. Further,
defendant's counsel, if any, has failed to file a notice of
appearance on behalf of defendant, and defendant has not contacted
the court to extend the stay or for more time to obtain counsel.
Defendant has not submitted opposition papers to plaintiff's
motion for summary judgment, and defendant has not made itself
available for deposition. Therefore, the court marked the subject
motion (seq no. 001) submitted without opposition.
ANALYSIS
On a motion for summary judgment, the moving party must 'make
a prima facie showing of entitlement to judgment as a matter of
law, tendering [evidentiary proof in admissible form] to
demonstrate the absence of any material issues of fact'" {Nomura
Asset Capital Corp. v Cadwalader, Wickersham & Taft LLP, 26 NY3d
40, 49 [2015], citing Alvarez v Prospect Hosp., 68 NY2d 320, 324
[1986]; CPLR §. 3212 [b]; Friends of Animals v Associated Fur Mfrs.,
46 NY2d 1065, 1066 [1979] [providing movant must support the
subject application with "'evidentiary proof in admissible
form'n]). Further, it is black letter law that such proof shall
include the "affidavitn of a person having personal knowledge of
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the facts, "a copy of the pleadings" and "other available proof,
such as depositions and written admissions" (CPLR § 3212 [b]}.
The court must view the facts in the light most favorable to
the non-movant, giving it the benefit of all reasonable inferences
see De Lourdes Torres v Jones, 26 NY3d 742 [2016]). If the moving
party makes the requisite showing, the non-moving party then has
the burden "'to establish the existence of [factual issues] which
require a trial of the action'" (id. at 763, citing Vega v Restani
Constr. Corp., 18 NY3d 499, 503 (2012], quoting Alvarez, 68 NY2d
at 324) .
Liability
A breach of contract claim requires the plaintiff to show
that a contract exists, the plaintiff performed in accordance with
the contract, the defendant breached its contractual obligations,
and the breach resulted in damages (34-06 73, LLC v Seneca Ins.
Co., 39 NY3d 44, 52 [2022]; Second Source Funding, LLC v
Yellowstone Capital, LLC, 144 AD3d 445 [1st Dept 2016]).
Plaintiff's submissions establish entitlement to summary
judgment on its breach of contract cause of action. Specifically,
the duly executed MSA and SOW establish that the parties entered
into a written contract for plaintiff to provide digital marketing
services to defendant for a period of one-year, and under the
contract, defendant was required to pay plaintiff's invoices
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within thirty days of receipt see NYSCEF Doc. Nos. 33, 34). The
various invoices (NYSCEF Doc. No. 36) reflect that defendant failed
to pay for the digital marketing services that plaintiff provided,
and defendant's internal e-mails demonstrate that the payments
were kept on hold well beyond the thirty-day timeframe without any
explanation. This is sufficient to establish a prima facie case
for breach of contract (see George S. May Intern. Co. v Thirsty
Moose, Inc., 19 AD3d 721 [3d Dept 2005]; Calm Ave, LLC v Baker,
224 AD3d 426 [1st Dept 2024]; Hussey v Joseph N. Leggio Agency,
Inc., 299 AD2d 690 [3d Dept 2002]).
An account stated claim is an independent cause of action and
not duplicative of a breach of contract claim (Aronson Mayefsky &
· Sloan, LLP v Praeger, 228 AD3d 182 [1st Dept 2024]). Summary
judgment is appropriate where a defendant receives and retains
invoices for professional services rendered, and fails to object
within a reasonable time (see e.g. Mintz & Gold LLP v Daibes, 125
AD3d 488 [1st Dept 2015]; Berkman Bottger & Rodd, LLP v Moriarty,
58 AD3d 539 [1st Dept 2009]; Glazer v Falberg, 85 AD2d 938 [1st
Dept 1981]).
Here, the admissible evidence submitted by plaintiff
namely, the timely submitted invoices; the numerous follow-up e-
mails from plaintiff to defendant as to the status of the
outstanding invoices, and defendant's acknowledgment of such;
defendant's failure to object to the invoices or plaintiff's
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performance within a reasonable time; defendant's internal e-mails
confirming that the payments due were placed on an inexplicable,
indefinite hold; and the affidavit of plaintiff's CEO, who has
personal knowledge of the facts in the instant matter
establishes that an account has been stated see NYSCEF Doc Nos.
30, 35, 36, 37, and 41 - 50). Therefore, plaintiff is entitled to
summary judgment on the account stated cause of action see Cohen
Tauber Spievak & Wagner, LLP · v Alnwick, 33 AD3d 562 [ 1st Dept
2006]; I.S. Design, Inc v Planned Mgmt. Const. Corp., 243 AD2d 425
[1st Dept 1997]).
Further, by failing to oppose the motion, defendant has
failed to raise any material, triable issue of fact (Sears Holding
Mgmt. Corp. v Rockaway Realty Assocs., LP, 176 AD3d 433, 433 [1st
Dept 2019] [holding: "as defendants submitted no relevant
admissible evidence in opposition to the motion, we affirm the
grant of summary judgment for breach of contract in plaintiff's
favor"); Zuckerman v City of New York, 49 NY2d 557, 560 [1980)).
Therefore, this court grants summary judgment for breach of
contract and account stated in plaintiff's favor.
The remaining causes of action for unjust enrichment and
quantum merit are dismissed as duplicative of the breach of
contract and account stated claims (see Br.own v Brown, 12 AD3d 176
[1st Dept 2004) ; Dipizio Const. Co. v Niagara Frontier Transp.
Auth., 107 AD3d 1565 [1st Dept 2013]).
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Damages
As plaintiff requests "no less than $390,918.80", which
cannot be ascertained in total, plaintiff is directed to an
Inquest to determine the amount of damages (see CPLR 3212 [c];
Murray v Farrell, 97 AD3d 953 [3d Dept 2012]).
Accordingly, it is hereby:
ORDERED that plaintiff's unopposed motion for summary
judgment (seq. no. 001) is granted, in part, as to defendant's
liability on the first (breach of contract) and fourth (account
stated) causes of action, and the motion is otherwise denied; and
it is further
ORDERED that this matter is scheduled for an Inquest for the
assessment of damages before Justice Emily-Morales Minerva in Part
42 at 111 Centre Street New York, NY 10013, in Courtroom 574 on
October 24, 2024, at 10:00 A.M.; and it is further
ORDERED that, within ten (10) days of this order, plaintiff
IQUANTI, INC., shall serve a copy of this Order, with notice of
entry, by overnight mail, return receipt requested, on defendant
RTW RETAILWINDS ACQUISITION LLC, as well as by electronic mail on
defendant at sugeidy@tfxny.com, and shall file such notice via
NYSCEF.
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THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT .
. · D~TE
~
CHECK ONE: CASE DISPOSED NON-FINAL DISPOSITION
GRANTED. □ DENIED GRANTED IN PART □ OTHER
APPLICATION: SETTLE ORDER SUBMIT ORDER
CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT □ REFERENCE
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