X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

By Mastro, J.P.; Balkin, Barros and Christopher, JJ. Merchant Funding Services, LLC, res, v. Micromanos Corporation, etc. ap — (Index No. 598/17) Appeal by the defendants from an order of the Supreme Court, Orange County (Catherine M. Bartlett, J.), dated May 4, 2017. The order denied the defendants’ motion to vacate a judgment by confession entered in the Nassau County Clerk’s office on January 24, 2017, which is in favor of the plaintiff and against the defendants in the total sum of $159,479.32. ORDERED that the order is affirmed, with costs. The plaintiff filed an affidavit of nonpayment dated January 23, 2017, in support of entry of a confession of judgment. The affidavit of nonpayment states, in relevant part, that on November 28, 2016, the defendant Micromanos Corporation (hereinafter Micromanos) entered into a “secured merchant agreement” (hereinafter the agreement) pursuant to which the plaintiff agreed to buy all rights of Micromanos’s future accounts receivable, which had a face value of $224,250. The purchase price for the receivables was $150,000. Pursuant to the agreement, Micromanos authorized the plaintiff to debit from its bank account a “specified percentage,” which the agreement stated was 15 percent of Micromanos’s accounts receivable, until the purchased amount of $224,250 was paid in full. In accordance with an addendum to the agreement, each business day, the plaintiff debited $2,995, which the parties agreed was “a good-faith approximation of the specified percentage,” based on Micromanos’s receipts due to the plaintiff pursuant to the agreement. The defendant Atsumassa Tochisako personally guaranteed Micromanos’s performance of its obligations under the agreement. The plaintiff alleged in the affidavit of nonpayment that Micromanos made payments totaling $97,025 and then defaulted by ceasing to make payments, leaving a balance due of $127,225, even though Micromanos was still conducting regular business operations and still in receipt of accounts receivable. The judgment by confession adjudged that the plaintiff was entitled to recover from the defendants, jointly and severally, the sum of $127,225, plus interest at 16 percent, costs and disbursements, and attorneys’ fees in the sum of $31,806.25, for a total sum of $159,479.32. The defendants moved to vacate the judgment by confession on the ground that the agreement constitutes a usurious loan. The plaintiff opposed the motion. The Supreme Court denied the motion, concluding that the agreement is not on its face and as a matter of law a criminally usurious loan and that, consequently, the defendants failed to establish an exception to the general rule that relief from a judgment by confession must be sought by way of a plenary action. The defendants appeal. “Generally, a person seeking to vacate a judgment entered upon the filing of an affidavit of confession of judgment must commence a separate plenary action for that relief” (Regency Club at Wallkill, LLC v. Bienish, 95 AD3d 879, 879; see Morocho v. Monterroza, 170 AD3d 710, 711; A.B.J.M. Corp. v. Prudenti, 270 AD2d 219, 220; City of Poughkeepsie v. Albaino, 122 AD2d 14, 14). Here, the grounds for vacatur relied upon by the defendants do not fall within an exception to the general rule (see Morocho v. Monterroza, 170 AD3d at 711). Accordingly, we agree with the Supreme Court’s determination denying the defendants’ motion. In light of our determination, we need not address the parties’ remaining contentions. MASTRO, J.P., BALKIN, BARROS and CHRISTOPHER, JJ., concur.

By Austin, J.P.; Roman, Hinds-Radix and Christopher, JJ. QFC, LLC, etc., ap, v. Iron Centurian, LLC res — (Index No. 51302/17) Appeal by the plaintiff from an order of the Supreme Court, Westchester County (David F. Everett, J.), dated July 5, 2017. The order granted the defendants’ motion to vacate a judgment by confession entered in the Westchester County Clerk’s office on January 31, 2017. ORDERED that the order is reversed, on the law, with costs, and the defendants’ motion is denied without prejudice to the defendants commencing a plenary action to vacate the judgment by confession. “Generally, a person seeking to vacate a judgment entered upon the filing of an affidavit of confession of judgment must commence a separate plenary action for that relief” (Regency Club at Wallkill, LLC v. Bienish, 95 AD3d 879, 879; see Morocho v. Monterroza, 170 AD3d 710, 711; Posner v. Posner, 277 AD2d 298). Here, the grounds for vacatur relied upon by the defendants do not fall within an exception to the general rule (see Morocho v. Monterroza, 170 AD3d at 711; cf. Rubashkin v. Rubashkin, 98 AD3d 1018; Cole-Hatchard v. Nicholson, 73 AD3d 834). Accordingly, the Supreme Court should have denied the defendants’ motion without prejudice to their right to commence a plenary action to vacate the judgment by confession. In light of our determination, we need not address the parties’ remaining contentions. AUSTIN, J.P., ROMAN, HINDS-RADIX and CHRISTOPHER, JJ., concur.

 
Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.

More From ALM

Premium Subscription

With this subscription you will receive unlimited access to high quality, online, on-demand premium content from well-respected faculty in the legal industry. This is perfect for attorneys licensed in multiple jurisdictions or for attorneys that have fulfilled their CLE requirement but need to access resourceful information for their practice areas.
View Now

Team Accounts

Our Team Account subscription service is for legal teams of four or more attorneys. Each attorney is granted unlimited access to high quality, on-demand premium content from well-respected faculty in the legal industry along with administrative access to easily manage CLE for the entire team.
View Now

Bundle Subscriptions

Gain access to some of the most knowledgeable and experienced attorneys with our 2 bundle options! Our Compliance bundles are curated by CLE Counselors and include current legal topics and challenges within the industry. Our second option allows you to build your bundle and strategically select the content that pertains to your needs. Both options are priced the same.
View Now

New York Legal Awards 2021

October 13, 2021
New York, NY

The New York Law Journal honors attorneys and judges who have made a remarkable difference in the legal profession in New York.


Register

General Counsel Conference East 2021

September 22, 2021 - September 23, 2021
New York, NY

GCC East addresses General Counsel trends in regulatory, data protection, tech management, legal operations, and leadership.


Register

New Jersey Legal Awards 2021

September 23, 2021
Virtual, NJ

New Jersey Law Journal honors lawyers leaving a mark on the legal community in New Jersey with their dedication to the profession.


Register

Director of Title IX & EEO

Galloway, New Jersey, United States

Stockton University is ranked among the top public universities in the Northeast with more than 160 undergraduate and graduate programs, as ...


Apply Now ›

Commercial Litigation Associate

Orlando, Florida, United States

A highly-regarded and prominent business litigation boutique in Orlando is seeking a young commercial litigation associate with a sophistica...


Apply Now ›

Litigation Associate

Tampa, Florida, United States

A well-respected regional law firm that has represented businesses in Tampa Bay for decades is seeking a commercial litigation associate to ...


Apply Now ›

BARTON GILMAN LLP

09/14/2021
CLT Web

Barton Gilman Expands Into Connecticut


View Announcement ›

BARTON GILMAN LLP

09/14/2021
TLI Web

Barton Gilman LLP is excited to announce that its expansion into Philadelphia


View Announcement ›

STARR, GERN, DAVISON & RUBIN

09/13/2021
NJLJ Web

STARR, GERN, DAVISON & RUBIN would like to congratulate Ira M. Starr as Partner and Ana Rita Ferreira as an Associate


View Announcement ›