The opinion
Fenix Capital Funding, LLC v Daily Sale Inc
2026 NY Slip Op 31045(U)
March 16, 2026
Supreme Court, Kings County
Docket Number: Index No. 514943/2025
Judge: Wavny Toussaint
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.
file:///LRB-ALB-FS1/Vol1/ecourts/Process/covers/NYSUP.5149432025.KINGS.001.LBLX036_TO.html[03/25/2026 3:45:50 PM]
FILED: KINGS COUNTY CLERK 03/17/2026 02:16 PM INDEX NO. 514943/2025
NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 03/17/2026
At an IAS Term, Part 70 of the Supreme
Court of the State of New York, held in and
for the County of Kings, at the Courthouse,
at 360 Adams Street, Brooklyn, New York,
on the lb-11\March, 2026.
PRESENT:
HON. WAVNYTOUSSAINT,
Justice.
--------------------------------------------------------X
FENIX CAPITAL FUNDING, LLC, Index No.: 514943/2025
DECISION AND ORDER
Plaintiff,
-against-
DAILY SALE INC/DBA: DAIL YSALE
and YANKI HOFSTATTER,
Defendants.
------------------------_ -------------------------------X
The following e-filed papers read herein: NYSCEF Doc Nos.:
Notice of Motion/Order to Show Cause/
Petition/Cross Motion and
Affidavits (Affirmations) Annexed _ _ _ _ __ 9-20
Opposing Affidavits/ Answer (Affirmations). _ __ 22-26
Affidavits/ Affirmations in Reply _ _ _ _ __
Other Papers: _ _ _ _ _ _ _ _ _ _ _ _ __
Upon the foregoing papers, plaintiff Fenix Capital Funding, LLC ("Plaintiff')
moves (Seq. 0 I) for an order, pursuant to CPLR § 3212, granting summary judgment in its
favor against defendants Daily Sale Inc/OBA: DailySale and Yanki Hofstatter
(collectively, "Defendants"). Defendants oppose the motion.
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BACKGROUND
The Parties
In this merchant cash advance proceeding pitting Plaintiff, a factoring entity in the
merchant cash advance arena, against Defendant, a merchant to which it advanced a lump
sum in consideration for future payments, as well as the merchant's guarantor, the parties
are enmeshed in a dispute as to the enforceability of their underlying transaction.
Tile Underlying Transaction
On February 26, 2025, the parties entered into a contract titled "Future Receivable
Purchase Agreement" (the "Agreement"), pursuant to which Plaintiff advanced to
defendant Daily Sale Inc/DBA: DailySale ("Defendant Seller") the sum of $37,000.00 in
consideration for the purchase of a share of Defendant Seller's future accounts receivable
(see NYSCEF Doc No. 13, Agreement ,i,r 1.1, 1.2). Under the terms of the Agreement,
Defendant Seller sold and assigned to Plaintiff four percent (4%) of its future sales
proceeds, up to an aggregate amount of $51,060.00 (id. ,r 1.2). As set forth in the
Agreement:
"Purchase and Sale of Future Receivables
Fenix Capital Funding, LLC ('FNX') (together with its
successors and/or assigns, the 'Purchaser') hereby purchases
from the merchant set forth above [Defendant Seller] (the
'Merchant'), a percentage ... (the 'Purchase Percentage'), of
the proceeds of all future sales by Merchant, whether the
proceeds are paid by cash, check, ACH and other electronic
transfers, credit card, debit card, bank card . . . and/or other
means ... until Purchaser has received ... [$51,060.00] (the
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'Purchase Amount') in exchange for the advance by FNX to
Merchant of the [$37,000.00] purchase price ... ."(id.at 1).
Pursuant to the Agreement, payment of the future sales proceeds was to be made by daily
Automatic Clearing House ("ACH") transfer from Defendant Seller's ·bank account to
Plaintiff (id. ,r,r 1.1, 1.2).
In conjunction with the Agreement, Defendant Yanki Hofstatter ("Defendant
Guarantor"), the principal and owner of Defendant Seller, executed a personal guaranty of
payment should Defendant Seller default in its obligations arising under the Agreement
(id. at 2). Plaintiff alleges that, in conformity with the Agreement, it remitted the sum of
$37,000.00, less processing and transaction fees, to Defendant Seller (see NYSCEF Doc
No. 17, complaint ,r 7).
Under the terms of the Agreement, Plaintiff was granted a security interest in
Defendant Seller's assets, including its then-existing, and future, receivables as they are
generated in the ordinary course of business (the "Collateral"). In particular, Section 1.6 of
the Agreement provides as follows:
"Section 1.6 Security Interest. As security for all 'Obligations'
... Merchant hereby grants to Purchaser a continuing security
interest in, and, as applicable, a general lien upon and/or a right
of setoff against, all of Merchant's presently existing and
hereafter created Receivables, General Intangibles . . .
including, without limitation, any claims for tax refunds from
any governmental authority due or to become due to Merchant
which claims are hereby assigned to Purchaser, all proceeds of
letters of credit, all credit balances with Purchaser, all
instruments, all deposit accounts, all computer programs,
software, licenses and permits and all Merchant's property of
every kind and description, tangible or intangible, at any time
in Purchaser's possession or subject to Purchaser's control,
whether now or hereafter arising or now owned or hereafter
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acquired and wherever located and all proceeds of the
foregoing." (NYSCEF Doc No. 13, Agreement 11.6).
Plaintiff avers that it perfected its security interest in the Collateral via a UCC-1 Financing
Statement filing (see NYSCEF Doc No. 16, UCC Financing Statement 14). Plaintiff asserts
that on April 24, 2025, Defendant Seller defaulted under the Agreement by failing to remit
its sales proceeds to Plaintiff, in contravention of the Agreement (see NYSCEF Doc No.
17, complaint ,r 10). 1 Plaintiff alleges that Defendant Seller breached its obligations under
the Agreement by placing a stop payment request to its bank for the ACH transfers, or,
alternatively, closed the bank account altogether (see NYSCEF Doc No. 11, Leyvi affirm.
,r 13).
Plaintiff further avers that, at this juncture, Defendant Seller has remitted to Plaintiff
the sum of $24,390.12 in accordance with the Agreement, as reflected in the payment
ledger (see NYSCEF Doc No. 10, Ryvkin aff. ,r 12). Plaintiff posits that, in light of
Defendant Seller's material breach of the Agreement, it is entitled to judgment against
Defendants in the aggregate amount of $52,876.64, which sum consists of the purchased
amount of $51,060.00 less the payments made by Defendant Seller under the Agreement
1 Incongruously, in its affinnation in support of its summary judgment motion, Plaintiff contends that "[ o ]n or about
July 19, 2019, Defendant-seller defaulted under the ... [Agreement] by failing to remit its sales proceeds to Plaintiff
as provided for in the parties' agreement" (see NYSCEF Doc No. 11, Leyvi affinn. ,r 12). Insofar as the July 19, 2019
purported date ofbreach set forth in Plaintiffs moving affirmation precedes by over five years the parties' Agreement
at issue herein (see NYSCEF Doc No. 13, Agreement, p. 2), one is constrained to conclude that the July 19, 2019 date
of breach identified in Plaintiff's affirmation relates to a wholly distinct merchant cash advance transaction featuring
a different set of defendants than those named in the present action.
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in the amount of $24,390.12, plus default fees and contractual penalties amounting to
$24,510.00 (see NYSCEF Doc No. 11, Leyvi affirm. ,i 15). 2
In light of the foregoing, Plaintiff instituted the present action on May 5, 2025,
asserting breach of contract and fraud causes of action. Defendants interposed an answer
with counterclaims on May 28, 2025.
THE PARTIES' CONTENTIONS
In its breach of contract claim, Plaintiff alleges that it duly adhered to the tenns of
the parties' Agreement by remitting to Defendant Seller the agreed-upon sum of
$37,000.00 (less fees) on February 26, 2025, which represented the purchase price of the
receivables sold by Defendant Seller to Plaintiff (see NYSCEF Doc No. 17, complaint ,i
15). Plaintiff contends that, notwithstanding having received the subject $37,000.00
advance, and deriving a consequential benefit from the sum in question, Plaintiff alleges
Defendant Seller breached the terms of the Agreement by failing to remit the agreed-upon
share of its sale proceeds to Plaintiff (id. ,i 16). As a corollary, Plaintiff submits that, in
light of Defendants' material breach of the terms of the Agreement, Plaintiff is entitled to
a judgment against Defendants in the amount of $52,876.64 (see NYSCEF Doc No. 11,
Leyvi affirm. ,i 15).
Further, Plaintiff has asserted a fraud cause of action, predicated on the proposition
that before the parties entered into the Agreement, Defendants made misrepresentations to
2 Plaintiffs computation is inaccurate as to the aggregate sum it claims to be owed by Defendants (namely,
$52,876.64}, which aggregate alleged outstanding sum amounts to $51,179.88. Indeed, $51,060.00 - $24,390.12 +
$24,510.00=$51, 179.88. As shall appear below, this computational discrepancy shall not affect the outcome of the
present motion.
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Plaintiff, which it reasonably relied on to its detriment (see NYSCEF Doc No. 17,
. '
complaint ,r 26); namely, that Defendants would abide by the terms of the agreed upon
transaction which was to be affected by means of daily ACH withdrawals (id. ,r 27). Within
the framework of its fraud claim, Plaintiff contends that, in reliance on Defendants'
representations, Plaintiff remitted .the sum of $37,000.00 to Defendants and that, despite
having received said sum, Defendants failed to tender to Plaintiff its contracted share of
Defendants' future accounts receivable (id. ,r 28). Plaintiff maintains that, at the time
Defendants made the above misrepresentations, Defendants were aware of their falsity,
rendering such representations fraudulent in nature (id. ,r 30). As Plaintiff indicates,
"Defendants engaged in a 'bait and switch' scheme to commit Plaintiff to purchasing their
future accounts receivable, which they never intended to provide to Plaintiff' (id.). Plaintiff
claims that it reasonably relied on Defen(\ants' misrepresentations to its detriment by
remitting the sum of $37,000.00 (id. 131).
Defendants contend that Plaintiffs summary judgment motion should be denied as
the Agreement, albeit denominated as a "Future Receivable Purchase Agreement,"
constitutes a loan agreement featuring a usurious rate of interest. As Defendants argue, the
Agreement is "[i]n reality . . . a loan agreement that obligates defendants to pay interest
on the loans" (see NYSCEF Doc No. 24, memo. of law 1 I). In particular, Defendants
contend that the "interest charged was in excess of over one hundred and ninety~six percent
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(196%) well beyond the New York State statutory limits for civil and criminal usury.
Accordingly, Defendants contend the loan agreement is unenforceable" (id.). 3
DISCUSSION
The Payment Ledger Is the Basis of Plaintiff's Motion
Plaintiff all but concedes that a payment ledger (the "Payment Ledger") forms the
basis of its summary judgment motion (see NYSCEF Doc No. 15, Payment Ledger at 1).
As is customary in the merchant cash advance context, Plaintiff relies on the Payment
Ledger to buttress its position that Defendants breached the parties' Agreement by failing
to remit payments to Plaintiff in keeping with Defendants' payment duties delineated
therein. Plaintiff chronicles Defendants' alleged breach of contract, relying upon the
Payment Ledger, and argues "Defendant-seller defaulted under the ... [Agreement] by
failing to remit its sales proceeds to Plaintiff as provided for in the parties' agreement" (see
NYSCEF Doc No. 11, Leyvi affirm. ,r 12).
To prevail on its motion for summary judgment against Defendants( by establishing
that Defendants materially breached their contractual duties under the Agreement), it is
incumbent upon Plaintiff to authenticate the Payment Ledger, the document at the heart of
Plaintiffs breach of contract claim. The sole potentially viable vehicle relied upon by
Plaintiff to authenticate the Payment Ledger is the affidavit submitted by Alexander
Ryvkin, Plaintiffs Collection Manager (the "Ryvkin Affidavit" or sometimes "Mr.
3 The New York statutory provision governing usury provides that "[a] person is guilty of criminal usury in the second
degree when, not being authorized or permitted by law to do so, he knowingly charges, takes or receives any money
or other property as interest on the loan or forbearance of any money or other property, at a rate exceeding twenty-
five per centum per annum or the equivalent rate for a longer br shorter period. Criminal usury in the second degree
is a class E felony" (Penal Law § 190.40).
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Ryvkin"). The section of the Ryvkin At1idavit relevant to the admissibility of the Payment
Ledger reads as follows:
"10. On or about 04/24/2025 [the "April 24th entry"],
defendant-seller materially breached the ... [Agreement] by
placing a stop payment on Plaintiffs ACH withdrawal for the
specified daily amount. A true copy of Plaintiffs payment
ledger maintained in the ordinary course of its business
demonstrating all payments made by defendant-seller is
annexed hereto as Exhibit 'C'.
* * *
"12. As demonstrated in the annexed payment ledger, to
date, defendant-seller has paid plaintiff the amount of
$24,390.12 under the ... [Agreement]." (see NYSCEF Doc
No. 10, Ryvkin aff. ,r,r 10, 12).
The Business Records Analysis
Plaintiffs above-quoted bid to authenticate the Payment Ledger is unavailing as
Plaintiff fails to adhere to the requirements of the business record exception to the hearsay
rule embodied in CPLR § 4518 (a), 4 which provides that:
"(a) Generally. Any writing or record, whether in the form
of an entry in a book or otherwise, made as a memorandum or
record of any act, transaction, occurrence or event, shall be
admissible in evidence in proof of that act, transaction,
occurrence or event, if the judge finds that it was made in the
regular course of any business and that it was the regular course
of such business to make it, at the time of the act, transaction,
occurrence or event, or within a reasonable time thereafter."
The Appellate Division, Second Department has held that, pursuant to CPLR § 4518 (a),
in order to establish a foundation for the admission of a hearsay business record, such as
4Hearsay is an out-of-court statement offered to prove the truth of the matter asserted (Quinche v Gonzalez, 94 AD3d
1075, 1075 [2d Dept 2012]); Ge/pi v 37ih Ave. Realty Corp., 281 AD2d 392, 392 [2d Dept 2001]).
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the Payment Ledger herein, the proponent of the record must, at a minimum, satisfy the
following three requirements:
"First, the proponent must establish that the record be made in
the regular course of business-essentially, that it reflects a
routine, regularly conducted business activity, and that it be
needed and relied on in the performance of functions of the
business ... Second, the proponent must also demonstrate that
it be the regular course of such business to make the record
... essentially, that the record be made pursuant to established
procedures for the routine, habitual, systematic making of such
a record ... Third, the proponent must establish that the record
be made at or about the time of the event being recorded-
essentially, that recollection be fairly accurate and the habit or
routine of making the entries assured" (Bank ofN. Y Mellon v
Gordon, 171 AD3 d 197, 205 [2d Dept 2019] [internal citations
and quotation marks omitted]; see also Yassin v Blackman, 188
AD3d 62, 65-66 [2d Dept 2020]; Corsi v Town ofBedford, 58
AD3d 225, 229 [2d Dept 2008]).
An analysis of the Ryvkin Affidavit reveals that Mr. Ryvkin fails to establish that
the Payment Ledger was made at or about the time of the events being recorded (Bank of
N. Y Mellon v Demasco, 226 AD3d 855, 857 (2d Dept 2024]), notwithstanding his general
recitations found in Paragraph 3 thereof. Critically, Mr. Ryvkin fails to confirm whether
the specific April 24th entry (or any of the other entries), actually were made "at or about
the time" they occurred; a confirmation which is necessary in order to permit the Court to
gauge whether recollection of the entry was fairly accurate and the habit or routine making
of the entries assured (Bank of NY. Mellon v Gordon, 171 AD3d at 205). Having
sidestepped the core temporality element, required under CPLR § 4518, Plaintiff failed to
lay a foundation for the admission of the hearsay Payment Ledger ( U.S. Bank NA. v
Kochhar, 176 AD3d 1010, 1012 [2d Dept 2019)). Accordingly, Plaintiffs attempted
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reliance on the Payment Ledger to underpin its position that Defendants breached the
Agreement must fail (Id.). Without the Payment Ledger, Plaintiff cannot establish
Defendants' payment history and alleged default under the Agreement.
The Undated, Vague Payment Ledger
Even assuming, arguendo, that Plaintiff had duly authenticated the Payment Ledger
on which its summary judgment motion rests, a substantive review of this document reveals
that it does not bear any discernable nexus to the parties' transaction. Notably, the Payment
Ledger: (i) does not feature the specific names of the parties to the present proceeding,
namely, Plaintiff Fenix Capital Funding, LLC or Defendants Daily Sale Inc/OBA:
DailySale and Yanki Hofstatter; (ii) does not reference the parties' alleged Agreement; and
(iii) is undated (see NYSCEF Doc No. 15, Payment Ledger at 1).
In sum, the Payment Ledger on which the viability of Plaintiff's motion hinges
could relate to a payment history between parties wholly unrelated to the parties to the
instant action, bound by a contract unrelated to the within Agreement (id.). Indeed, the
Payment Ledger, a skeletal spreadsheet nebulously titled "Payments for Deal ID: 383579"
consists of a mere six columns bearing the following scant information: (i) a column titled
"Effective Date" comprised of 12 dates ranging from "03/03/25" to "05/01/25" (id.); (ii) a
column titled "Amount" featuring the sum "$2,836.37" or the symbol"-" associated with
various dates; (iii) a column titled "Return Code" featuring the undefined code "R29"
connected to the date "05/01/29" (id.); (iv) a column titled "Returned Fee" consisting of
two "$50.00" entries relating to the date "05/01/25" (id.); (v) a column titled "Source"
featuring 12 rows, each of which contains the undefined compound term "ACH works"
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(id.); and (vi) a column titled "Trans Desc" consisting of 12 rows featuring the term "FNX"
(id.).
In light of the inscrutable code-laden nature of the spreadsheet featured in the
Payment Ledger, it scarcely comes as a surprise that in his affidavit, Mr. Ryvkin steers
clear of any analysis of the Payment Ledger itself, and in conclusory fashion states the
ledger supports Plaintiffs position that Defendants breached their payment duties under
the Agreement by merely remitting $24,390.12 5 of the $51,060.00 agreed-upon moni~~ due
to Plaintiff (see NYSCEF Doc No. 10, Ryvkin aff. ,i,r 10, 12). Based on the foregoing, the
Court finds that the undated Payment Ledger neither references the Agreement nor the
specific parties to the present proceeding, and cannot plausibly serve as the cornerstone of
plaintiffs summary judgment motion (US. Bank NA. v Ramanababu, 202 AD3d 1139,
1141-1142 [2d Dept 2022]; Citigroup v Kopelowitz, 147 AD3d 1014, 1015 [2d Dept
2017]).
Plailttiff's Hearsay Contention
Plaintiff additionally argues Defendant Seller materially breached the parties'
Agreement by issuing a stop payment directive to its banking institution as to Plaintiffs
ACH withdrawal, halting automatic payments to Plaintiff emanating from Defendant
Seller's account. As the Ryvkin Affidavit asserts:
"7. Critical to facilitating the transaction set forth in the ...
[Agreement], Section 6.1 of the ... [Agreement] contains
5 A computation of the data featured in the "Amount" column of the Payment Ledger redoubles the conundrum
engendered by this document as the eight $2,836.67 figures set forth in the column in question amount to a mere
$22,693.36 in the aggregate, which figure differs from, and is less than, the $24,390.12 sum Alexander Ryvkin,
Plaintiffs Collection Manager, avers Defendants remitted to Plaintiff(see NYSCEF Doc No. 10, Ryvkin aff. 1112).
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defendant-seller's express covenant not to revoke the ACH
authorization which permits Fenix Capital Funding, LLC to
withdraw the specified percentages by ACH debits to
defendant-seller's bank account.
* * *
"I 0. On or about 04/24/2025, defendant-seller materially
breached the ... [Agreement] by placing a stop payment on
Plaintiff's ACH withdrawal for the specified daily amount."
(see NYSCEF Doc No. 10, Ryvkin aff. i1i17, 10).
This contention, however, is not buttressed by documentary evidence other than the
inadmissible hearsay statement to this effect set forth by Mr. Ryvkin, who has no personal
knowledge of the directions given by Defendants to their bank, particularly as it relates to
the issuance of a stop payment directive. The Court finds Plaintiff's hearsay contention
regarding the ACH payments unavailing.
As the Appellate Division, Second Department held in reversing the trial court's
grant of summary judgment to plaintiff, a banking institution, where, as here, plaintiff
failed to support its moving affidavit with documentary evidence substantiating
defendant's alleged breach of contract:
"The plaintiff failed to demonstrate, prima facie, the
defendant's default in payment under the note. In her affidavit,
Wallace stated that the defendant failed to make certain
payments due under the terms of the note and mortgage, but
she failed to identify the records that she relied upon and did
not attach those records to her affidavit (citations omitted)
Thus, her assertions as to the defendant's default were
inadmissible hearsay (citations omitted) . . . Since Wallace's
affidavit was the only evidence of default proffered in support
of its motion, the plaintiff failed to establish its prima facie
entitlement to judgment as a matter of law" ( US. Bank NA. v
Zakarin, 208 AD3d 1275, 1277 [2d Dept 2022]; see also S.MS.
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Fin. XXXI, LLC v Hutson, 190 AD3d 1002, 1003 [2d Dept
2021]).
For all the foregoing reasons, the Payment Ledger is inadmissible. Having no
support for its motion, Plaintiff has failed to establish its prima facie entitlement to
judgment as a matter of law on the breach of contract cause of action (Federal Natl Mtge.
Assn. v Marlin, 168 AD3d 679, 680-681 [2d Dept 2019]; Deutsche Bankv Natl. Trust Co.
v Brewton, 142 AD3d 683,685 [2d Dept 2016]).
Plaintiffs Fraud Cause ofAction
A fraud cause of action is not legally cognizable where the fraud claim relates to a
breach of contract (Board of Mgrs. ofBeacon Tower Condominium v 85 Adams St., LLC,
136 AD3d 680, 684 [2d Dept 2016]; WIT Holding Corp. v Klein, 282 AD2d 527, 528 [2d
Dept 2001]). Here, Plaintiffs fraud cause of action is inextricably interwoven with the
parallel breach of contract claim. Indeed, Plaintiffs fraud claim rests on the notion that
before the parties entered into the Agreement, Defendants made misrepresentations to
Plaintiff, upon which Plaintiff relied (see NYSCEF Doc No. 17, complaint ,r 26). As
previously detailed (id. ,r 27), Plaintiff tendered $37,000.00 to Defendants and that, despite
having received the subject sum from Plaintiff, Defendants refused to tender to Plaintiff its
contracted share of Defendants' future accounts receivable (id. ,r 28).
Plaintiff avers that Defendants knew their representations were false (id. ,r 30). As
Plaintiff alleges in the complaint, "Defendants engaged in a 'bait and switch' scheme to
commit Plaintiff to purchasing their future accounts receivable, which they never intended
to provide to Plaintiff' (id.). Under these circumstances, Plaintiff's fraud claim is not
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legally cognizable, as it is premised on an alleged misrepresentation of intent to perform
contractual obligations and therefore fails to state a viable cause of action for fraud ( WIT
Holding, 282 AD2d at 528; Non-Linear Trading Co. v Braddis Assoc., 243 AD2d 107, 118
[1st Dept 1998]). Defendants' purported failure to tender to Plaintiff the agreed-upon share
of Defendants' future accounts receivable constitutes but a breach of contract to be
enforced through a cause of action on the Agreement, as distinguished from a fraud claim
(Westminster Constr. Co. v Sherman, 160 AD2d 867, 868 [2d Dept 1990]).
In short, in its fraud cause of action, Plaintiff does no more than recast its breach of
contract claim using fraud-related nomenclature.
CONCLUSION
Accordingly, it is hereby
ORDERED, that plaintiff Fenix Capital Funding, LLC's motion (Seq. 01) for an
order, pursuant to CPLR § 3212, granting summary judgment in its favor against
defendants Daily Sale Inc/OBA: DailySale and Yanki Hofstatter, is denied in every respect.
Any arguments not expressly addressed herein were considered and deemed to be
without merit.
This constitutes the decision and order of the Court. ....... ~
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