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Kelly, Grossman & Flanagan, LLP v Quick Cash, Inc. :: March, 2012 :: New York Ot... http://law.justia.com/cases/new-york/other-courts/2012/2012-ny-slip-op-50560-u.html Page 4 of 6 15/10/2012 the agreements, not providing accurate up to date status of the collateral cases and refusing to provide the settlement documents as required by the contracts. A party moving for summary judgment must make a prima facie showing of entitlement as a matter of law, offering sufficient evidence to demonstrate the absence of any material issues of fact. Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 487 NYS2d 316 (1985); Zuckerman v New York, 49 NY2d 557, 427 NYS2d 595 (1980). Of course, summary judgment is a drastic remedy and should not be granted where there is any doubt as to the existence of a triable issue, Stewart Title Ins. Co. v Equitable Land Servs., 207 AD2d 880, 616 NYS2d 650 (2d Dept 1994), but once a prima facie showing has been made, the burden shifts to the party opposing the motion to produce evidentiary proof in admissible form sufficient to establish material issues of fact which require a [*5]trial of the action. Alvarez v Prospect Hosp., 68 NY2d 320, 508 NYS2d 923 (1986). "[I]t is well settled that when parties set down their agreement in a clear, complete document, their writing should . . . be enforced according to its terms.'" South Rd. Assoc., LLC v International Bus. Machs. Corp., 4 NY3d 272, 277, 793 NYS2d 835 (2005), quoting Vermont Teddy Bear Co. v 538 Madison Realty Co., 1 NY3d 470, 475, 775 NYS2d 765 (2004). When interpreting a contract, "the court should arrive at a construction which will give fair meaning to all of the language employed by the parties to reach a practical interpretation of the expressions of the parties so that their reasonable expectation will be realized." Herzfeld v Herzfeld,50 AD3d 851, 857 NYS2d 170 (2d Dept 2008). If the terms of a written contract are clear and unambiguous, intent of the parties must be found within the four corners of the contract. Correnti v Allstate Props., LLC, 38 AD3d 588, 832 NYS2d 594 (2d Dept 2007). Extrinsic evidence of the parties' intent may be considered only if the agreement is ambiguous, which is an issue of law for the courts to decide. Innophos, Inc. v Rhodia, S.A., 10 NY3d 25, 852 NYS2d 820 (2008). A contract is unambiguous if the language it uses has a definite and precise meaning, unattended by the danger of misconception in the purport of the agreement itself and there is no reasonable basis of difference of opinion. Greenfield v Philles Records, Inc., 98 NY2d 562, 750 NYS2d 565 (2002). In order to constitute a transaction subject to the Penal Code § 190.40, prohibiting criminal usury, such transaction must constitute a loan. Donatelli v Siskind, 170 AD2d 433, 565 NYS2d 264 (2d Dep't 1991). Usury laws do not apply to investments (GOL § 5 -501[2]). Where a transaction involves interest to be paid based upon a contingency which is in the control of the debtor, usury will not apply. Summer v People, 29 NY 337 (1864). In order to determine whether a particular transaction qualifies as a loan subject to a criminal usury prohibitions, courts look to the purpose of the transaction; i.e., to lend money at a usurious rate dictated by the lender. Donatelli v Siskind, 170 AD2d 433, 565, NYS2d 224 (2d Dep't 1991). Thus, the purpose of a transaction is determined by its true character, under all circumstances, rather than by its title. Vjuetta v Euro-Quest Corp., 29 AD3d 895 (2d Dep't 2006). The contracts dated May 6, 2005, October 10, 2006, December 7, 2006, April 9, 2007, June 5, 2007, and September 9, 2007 provide at paragraph 4.7 or 4.8 : "Attorney represents and warrants that Attorney fully understands that the Advance made hereunder is not a recourse loan, but a non-recourse financial transaction pursuant to which Investor's funds are at full risk." The Addendum to the Agreements by and among Quick Cash, Money For Lawsuits and Casefunding and affiliated entities, Muraca & Kelly, Dennis Kelly, Esq., David Grossman, Esq., Flanagan & Associates, PLLC, Suzanne Flanagan, Esq., and Kelly Grossman & Flanagan, LLP, dated August 13, 2009, page 8, provides, in part: * * * Upon the signing of this Addendum, the Flanagan Recourse Agreement(s) shall be deemed null and void and the amounts due pursuant to those recourse agreement(s) are now incorporated in full [*6]herein as non-recourse. Defendants have demonstrated their prima facie entitlement to judgment as a matter of law by proving that the disputed contracts are non-recourse advance agreements. In support of their motion, defendants contend that none of the contracts that exist as of
Kelly, Grossman & Flanagan, LLP v Quick Cash, Inc. :: March, 2012 :: New York Ot... http://law.justia.com/cases/new-york/other-courts/2012/2012-ny-slip-op-50560-u.html Page 5 of 6 15/10/2012 today are true loan documents and they are not subject to the usury statutes. Copies of the alleged loan documents executed between the parties all so demonstrate. Plaintiffs' contention that the language in the contacts was ambiguous, that "borrower" and "lender," automatically qualify the contracts as loans and that the origination fees and processing fees, typically charged in connection with loans, qualify the contracts as loans is unpersuasive. In fact, the Defendants were always at risk of no recourse whenever one of the underlying cases went to trial and resulted in no recovery. Such circumstances simply cannot be stated to constitute a "loan". The Court finds that the language in the contracts was not ambiguous, and the intent of the parties is clear, as demonstrated by the plaintiffs' express acknowledgment, as sophisticated attorneys, in each contract that a non-recourse agreement for a cash advance was entered into and not a loan. The Court finds the holding in Matter of Strategies, LLC v. Ferreira (28 Misc 3d 1205[A], 2010 NY Slip Op 51159[U][2010]), to be persuasive. In that proceeding to confirm an arbitration award, the petitioner was a limited liability company that provided funding for a legal action brought by respondent Baltazar Ferreira, in which he was represented by respondent, the law firm of Jeffrey Lessoff. The funding, approximately $120,000, was a non-recourse advance pursuant to two agreements between the parties. The respondents agreed to pay petitioner from the proceeds received in the underlying action. The underlying action was subsequently settled for $250,000 and respondents began collecting the settlement proceeds. After respondents failed to pay petitioner its share of the settlement proceeds, petitioner initiated arbitration proceedings pursuant to the agreements to collect its share. An arbitrator issued an award in favor of petitioner holding respondents jointly and severally liable for approximately $120,000, plus 2.99% interest per month compounded monthly in accordance with the contract, plus additional simple interest and attorneys' and arbitration fees. In granting petitioner's motion to confirm the award of the arbitrator, the Supreme Court, New York County (Hunter, J.) rejected the respondents claim that the interest rate that was part of the arbitration award amounted to usury. In holding that the defense of usury was not applicable, the Court stated: The concept of usury applies to loans, which are typically paid at a fixed or variable rate over a term. The instant transaction, by contrast, is an ownership interest in proceeds for a claim, contingent on the actual existence of any proceeds, Had respondents been unsuccessful in negotiating a settlement or winning a judgment, petitioner would have no contractual right to payment. Thus, usury does not apply to the instant case. (See O'Farrell v. Martin, 292 NYS 581 [City Ct. NY 1936] [holding "[W]hen payment or enforcement rests on a contingency, the agreement is valid though it provides for a return in excess of the legal rate of interest."]). [*7] Similarly, here, the transactions between the parties create ownership interests in proceeds of claims, contingent on the actual existence of any proceeds. Plaintiffs would have no contractual right to payment had Defendants been unsuccessful in negotiating settlements or winning judgments in the underlying actions. Therefore, under the circumstances, usury does not apply and the Defendants' motion for summary judgment dismissing Plaintiffs' complaint is granted. Defendants' request for an award of its attorneys' fees is referred to a conference on April 23, 2012, at 10:00 a.m. before the undersigned. This constitutes the DECISION and ORDER of the Court. Dated: March 29, 2012 Riverhead, New York EMILY PINES J. S. C.
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