MEMORANDUM AND ORDERINTRODUCTION Plaintiff Power Up Lending Group, LTD. (“Plaintiff”) brought the instant action for breach of contract and fraud against Defendants Cardinal Energy Group, Inc. (“Cardinal”) and Timothy W. Crawford (“Crawford,” together with Corporate Defendant, “Defendants”). Presently before the Court is Plaintiff’s motion for summary judgment pursuant to Fed. R. Civ. P. (“Rule”) 56 against Defendant Cardinal on its breach of contract claim, and that defendant’s affirmative defenses. For the reasons set forth below, Plaintiff’s motion is granted.BACKGROUNDThe following facts are taken from the Parties’ Rule 56.1 Statements, and are uncontested unless otherwise stated.On or about November 12, 2015, Plaintiff and Defendant Cardinal entered into a Revenue Based Factoring Agreement (“Agreement”) that provided for an advancement of funds to Defendant Cardinal of “$128,000.00 with an 18 percent specified daily repayment amount of $632.97 and receipt purchased amount of $172,800.00.” (P.’s R. 56.1 Stmt. [ECF No. 22-12] 1.) In other words, Defendants sold 18 percent of its future accounts receivable — paid by way of daily, automatic withdrawals from Defendants’ bank account — until Defendants’ total payments to Plaintiff equaled $172,800.00.Plaintiff disputes that the Agreement is a merchant agreement for future accounts receivable and argues instead that it is “a short-term loan disguised as a Revenue Based Factoring Agreement.” (Def.’s R. 56.1 Stmt. [ECF No. 39-2] 1.) The same date, the parties entered into a Security Agreement and Guaranty, and Defendants supplied a Corporate Resolution executed by Defendant Crawford. (P.’s R. 56.1 Stmt. 2.) Defendant Crawford also executed a Disbursement Authorization, but the parties dispute how much money was disbursed for Defendant Cardinal’s benefit. (Id.
3-4.) Plaintiff claims that $128,000.00 was disbursed. (Id. 4.) Defendant Cardinal claims that Plaintiff deducted $3,250 in charges, and only tendered $124,200 to Defendants.1 (Def.’s R. 56.1 Stmt. 4.) Also on that date, Defendant Crawford executed a Customer Authorization Agreement that provided for ACH credits and debits so that Plaintiff would receive the daily payments as specified therein. (P.’s R. 56.1 Stmt. 5.) Plaintiff claims in its Rule 56.1 Statement that Defendant failed to make payment for December 24 and 28-30, 2015, January 5-7 and 8, 2016, and then ceased to make payments thereafter. (Id. 6-7.) Defendant Cardinal correctly notes that the Complaint states that Defendant also failed to make the required payment on December 31, 2015, and makes no statements about the payments in January, but rather says that Cardinal failed to make any payments after February 2, 2016. (Def.’s R. 56.1 Stmt. 6-7; see also Compl. 18.)At some time in 2016, Defendants blocked the bank account from which automated clearing house2 (“ACH”) payments were being made. (P.’s R. 56.1 Stmt. 8.) Defendants only paid or repaid Plaintiff the sum of $28,0189.10, leaving a balance of $144,710.90. (Id. 9.) The Agreement provides for a default fee of $5,000 and an additional $2,500 bank default charge for impeding the ACH process. (Id. 10.) The sum of $152,210.10 is due under the Agreement. (Id. 11.) On March 18, 2015, Plaintiff issued a “Notice of Default.” (Id. 12.) Plaintiff claims that the defaults were never cured, but Defendant Cardinal disputes that “the notes criminally usurious nature makes the transaction void, ab initio” so there are effective no defaults. (Def.’s R. 56.1 Stmt. 13.)At some time in 2016, Defendant Cardinal filed a Form 10Q with the U.S. Security and Exchange Commission (“SEC”) for the quarter ending March 31, 2016, in which Defendant Cardinal’s balance sheet listed the Agreement as a debt payable in the sum of $150,586.00, and listed this same amount owed to Plaintiff again on page F-11. (P.’s R. 56.1 Stmt. 14-15.)Plaintiff originally stipulated to dismissing Defendant Crawford as part of its motion for summary judgment. However, on March 26, 2019, Plaintiff filed a letter addressed to the undersigned explaining that they wished to withdraw their stipulation of dismissal and proceed solely with their motion for summary judgment against Defendant Cardinal. (Letter from Plaintiff [ECF No. 40] at 2.)DISCUSSIONI. Legal Standard for Summary JudgmentSummary judgment pursuant to Rule 56 is appropriate only where admissible evidence in the form of affidavits, deposition transcripts, or other documentation demonstrates the absence of a genuine issue of material fact, and one party’s entitlement to judgment as a matter of law. See Viola v. Philips Med. SYS. of N. Am., 42 F.3d 712, 716 (2d Cir. 1994). The relevant governing law in each case determines which facts are material; “only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). No genuinely triable factual issue exists when the moving party demonstrates, on the basis of the pleadings and submitted evidence, and after drawing all inferences and resolving all ambiguities in favor of the non-movant, that no rational jury could find in the non-movant’s favor. Chertkova v. Conn. Gen’l Life Ins. Co., 92 F.3d 81, 86 (2d Cir. 1996).To defeat a summary judgment motion properly supported by affidavits, depositions, or other documentation, the non-movant must offer similar materials setting forth specific facts that show that there is a genuine issue of material fact to be tried. Rule v. Brine, Inc., 85 F.3d 1002, 1011 (2d Cir. 1996). The non-movant must present more than a “scintilla of evidence,” Del. & Hudson Ry. Co. v. Consol. Rail Corp., 902 F.2d 174, 178 (2d Cir. 1990) (quoting Anderson, 477 U.S. at 252) (internal quotation marks omitted), or “some metaphysical doubt as to the material facts,” Aslanidis v. U.S. Lines, Inc., 7 F.3d 1067, 1072 (2d Cir. 1993) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986)) (internal quotation marks omitted), and cannot rely on the allegations in his or her pleadings, conclusory statements, or on “mere assertions that affidavits supporting the motion are not credible.” Gottlieb v. Cnty. of Orange, 84 F.3d 511, 518 (2d Cir. 1996) (internal citations omitted).The district court considering a summary judgment motion must also be “mindful…of the underlying standards and burdens of proof,” Pickett v. RTS Helicopter, 128 F.3d 925, 928 (5th Cir. 1997) (citing Anderson, 477 U.S. at 252), because the “evidentiary burdens that the respective parties will bear at trial guide district courts in their determination of summary judgment motions.” Brady v. Town of Colchester, 863 F.2d 205, 211 (2d Cir. 1988). “[W]here the nonmovant will bear the ultimate burden of proof at trial on an issue, the moving party’s burden under Rule 56 will be satisfied if he can point to an absence of evidence to support an essential element of the nonmoving party’s claim.” Id. at 210-11. Where a movant without the underlying burden of proof offers evidence that the non-movant has failed to establish her claim, the burden shifts to the non-movant to offer “persuasive evidence that his claim is not ‘implausible.’” Id. at 211 (citing Matsushita, 475 U.S. at 587).II. The Parties’ ArgumentsA. Plaintiff’s ClaimsPlaintiff sets forth four causes of action in the Complaint: (1) breach of the Agreement by failing to make daily payments in December 2015, and from February 2, 2016 onwards; (2) breach of the Security Agreement and Guaranty, which conferred a security interest in favor of the Plaintiff in the collateral of Defendant Cardinal, “including all accounts, chattel paper, cash, equipment, inventory, and investment property[;]” (3) litigation expenses pursuant to the Agreement, and the Security Agreement and Guaranty, which both provide that in the event of a default, Plaintiff is entitled to recover all reasonable costs; and (4) fraud, for providing false financial information, asset information, banking records, and receipts that Defendants knew to be false at the time such documentation was provided. (Compl.
