Telcar Group, Ltd., now known as Mignone Holdings, Ltd., plaintiff-respondent, v. Telcar Certified, Ltd., et al., defendants third-party plaintiffs-appellants;  Angelo Mignone, third-party defendant-respondent. (2010)

Argued-May 21, 2010

DECISION & ORDER

In an action, inter alia, for a declaratory judgment and to recover damages for conversion, the defendants third-party plaintiffs appeal from an order of the Supreme Court, Suffolk County (Pines, J.), dated September 14, 2009, which granted the motion of the plaintiff and the third-party defendant for summary judgment on the complaint and dismissing the defendants' counterclaims and the amended third-party complaint, and to sever the third-party defendant's counterclaim.

ORDERED that the order is modified, on the law, by deleting the provision thereof granting those branches of the motion of the plaintiff and the third-party defendant which were for summary judgment on the first and second causes of action of the complaint alleging conversion, and substituting therefor a provision denying those branches of the motion;  as so modified, the order is affirmed, without costs or disbursements.

The defendants third-party plaintiffs were in discussions to purchase a company known as Telcar Holdings, Ltd. (hereinafter Telcar Holdings).   At that time, Telcar Holdings had a secured line of credit with Commerce Bank. At some point, Telcar Holdings defaulted and Commerce Bank sought Telcar Holdings's assets which secured the loan.   The defendants third-party plaintiffs entered into an asset purchase agreement with Commerce Bank to purchase those assets of Telcar Holdings which secured the loan.

The Supreme Court properly determined that the plaintiff established, prima facie, that it was entitled to judgment as a matter of law on the third and fourth causes of action seeking a declaration that the plaintiff owned the disputed receivables (see Zuckerman v. City of New York, 49 N.Y.2d 557).   In opposition, the defendants failed to raise a triable issue of fact.   Thus, the Supreme Court properly granted that branch of the motion of the plaintiff and the third-party defendant which was for summary judgment dismissing the defendants third-party plaintiffs' first and second counterclaims/causes of action pertaining to the disputed receivables (see Vasquez v. Soto, 61 AD3d 968).

Although the plaintiff demonstrated ownership of the disputed receivables, it failed to demonstrate as a matter of law that the defendants third-party plaintiffs converted the disputed receivables (see Watson v. Pascal, 27 AD3d 459, 460).   Therefore, the Supreme Court improperly granted those branches of the motion of the plaintiff and the third-party defendant which were for summary judgment on the first and second causes of action to recover damages for conversion (see Eight In One Pet Prods. v. Janco Press, Inc., 37 AD3d 402, 402-403).

The defendants third-party plaintiffs' remaining contentions are without merit.

RIVERA, J.P., BALKIN, LEVENTHAL and ROMAN, JJ., concur.

ENTER:

James Edward Pelzer

Clerk of the Court