ROUTETRADER INCORPORATED v. SURATEL INC (2022)

The following e-filed documents, listed by NYSCEF document number (Motion 003) 31, 32, 33, 34, 35, 36, 37, 38 were read on this motion for JUDGMENT - DEFAULT

In this action for breach of contract, unjust enrichment and an account stated, plaintiff Routetrader Incorporated (plaintiff or RTX), moves, pursuant to CPLR 3215, for leave to enter a default judgment against defendant Suratel, Inc. Defendant has not submitted any opposition.

BACKGROUND

Plaintiff is a full-service telecommunications service provider (NYSCEF doc. no. 34, Gregory Kuczinski [Kuczinksi] affirmation, Ex A1, ¶ 6). Defendant provides telecommunications services to its clients, also known as “end users” (id., ¶ 7). On or about January 18, 2017, plaintiff and defendant entered a “Routetrader Master Services Agreement” (the Agreement) under which plaintiff would furnish certain services to defendant in exchange for a fee (id., ¶ 8). Regarding the charges payable to plaintiff for its services, the Agreement states, in relevant part:

“4.3 Unless otherwise varied by a Schedule, the Customer shall pay each invoice sent by RTX, in full and in cleared funds, within seven (7) days of receipt to a bank account nominated in writing by RTX and RTX shall be entitled to invoice every seven (7) calendar days. In relation to any pre-paid services, the Customer shall receive an invoice following the end of each month detailing the usage in such month.

4.4. Without prejudice to any other right or remedy that it may have, if the Customer fails to pay RTX on the due date the Customer shall pay interest on the overdue amount at a percentage rate of 1.5% per month or the maximum rate allowed by law, whichever is less. Such interest shall accrue on a daily basis from the due date until actual payment of the overdue amount, whether before or after judgment. The Customer shall pay the interest together with the overdue amount”

(id. at 18). The parties executed an addendum to the agreement dated March 22, 2019 to add a new paragraph 24.4 to the Agreement to allow plaintiff to assign its invoices (id., ¶ 9; NYSCEF Doc No. 35, Kuczinski affirmation, Ex A1 at 14). Plaintiff furnished defendant with telecommunications services under the Agreement from January 2017 to December 2020 (NYSCEF Doc No. 34, ¶ 15).

When defendant failed to pay certain invoices that plaintiff submitted for payment, plaintiff commenced this action on March 12, 2021 by filing a summons and complaint asserting three causes of action for (1) breach of contract; (2) unjust enrichment and (3) account stated. Plaintiff then obtained an order extending its time to serve defendant with process and an order directing service by publication (NYSCEF Doc No. 36, Kuczinski affirmation, Ex B at 5).

Plaintiff now moves for leave to enter a default judgment against defendant for its failure to answer the complaint. The motion is supported by the summons and complaint, two affidavits of service by publication, and an affidavit from plaintiff's executive chairman, Mark Ryan (Ryan). The Agreement and nine invoices are attached to the complaint (see CPLR 3014).

DISCUSSION

It is well settled that an application for a default judgment must be supported with “proof of service of the summons and the complaint[,] proof of the facts constituting the claim, [and] the default” (CPLR 3215 [f]). “[A] complaint verified by someone or an affidavit executed by a party with personal knowledge of the merits of the claim” satisfies this statutory requirement (Beltre v Babu, 32 AD3d 722, 723 [1st Dept 2006]). The plaintiff must offer “some proof of liability to satisfy the court as to the prima facie validity of the uncontested cause of action” (Feffer v Malpeso, 210 AD2d 60, 61 [1st Dept 1994]). “The standard of proof is not stringent, amounting only to some firsthand confirmation of the facts” (id.). A party in default “admits all traversable allegations in the complaint, including the basic allegation of liability, but does not admit the plaintiff's conclusion as to damages” (Rokina Opt. Co. v Camera King, 63 NY2d 728, 730 [1984]).

Plaintiff has demonstrated that notice of this action was published for four consecutive weeks in the New York Law Journal beginning November 15, 2021 and in the Daily News beginning November 24, 2021 (NYSCEF Doc No. 37, Kuczinski affirmation, Ex C]), as required by this court's prior order dated November 5, 2021 (NYSCEF Doc No. 36 at 7). CPLR 316 (c) provides, in part, that “[s]ervice by publication is complete on the twenty-eighth day after the day of first publication.” Under CPLR 320 (a), defendant had 30 days to answer the complaint (see Deutsche Bank Natl. Trust Co. v Bakarey, 198 AD3d 718, 722 [2d Dept 2021]). Plaintiff has established that defendant did not answer or otherwise appear or seek an extension of time to do so.

As to the facts constituting the claim, Ryan avers that the parties entered into a written agreement for certain services to be provided by plaintiff, and that the invoices attached to the complaint are outstanding (NYSCEF Doc No. 33, Ryan aff, ¶¶ 2-4). He summarizes the amounts due on each invoice, inclusive of the 1.5% monthly interest for each past due invoice, as follows:

(id., ¶ 5). Ryan further avers that the original invoice amount for invoice no. L105837 was $268,552.38 as pled in the complaint, but defendant has paid $185,000.95 towards that amount (id., ¶ 6). Defendant, though, has made no further payments. The outstanding amount due is $1,471,235.05, exclusive of contractual interest ¹ (id.).

Here, plaintiff's proof is sufficient to establish the facts constituting the first cause of action for breach of contract, namely the existence of a valid contract, the plaintiff's performance, the defendant's breach, and damages (Harris v Seward Park Hous. Corp., 79 AD3d 425, 426 [1st Dept 2010]). Plaintiff is also entitled to recover prejudgment interest at the contractual rate of 1.5% per month (see CPLR 5001 [a]). Because the defaults in payment occurred on various dates, the court selects December 15, 2019 as a single reasonable intermediate date from which prejudgment interest at the contractual rate shall be calculated (see CPLR 5001 [b]).

Given the existence of a valid written contract that governs the dispute at issue, plaintiff is not entitled to recover on the second cause of action for unjust enrichment (Clark-Fitzpatrick, Inc. v Long Is. R.R. Co., 70 NY2d 382, 388 [1987]). As for the third cause of action for an account stated, plaintiff has not presented any proof that the invoices submitted with the complaint were ever mailed or delivered to defendant, which is necessary to establish an account stated (see Morrison Cohen Singer & Weinstein, LLP v Brophy, 19 AD3d 161, 161-162 [1st Dept 2005]).

Accordingly, it is

ORDERED that the motion by plaintiff Routetrader Incorporated for a default judgment against defendant Suratel, Inc. (motion sequence no. 003) is granted, without opposition; and it is further

ORDERED that the Clerk of the Court is directed to enter judgment against defendant Suratel, Inc. in the amount of $1,471,235.05, together with interest thereon at the contractual rate of 1.5% per month from December 15, 2019 until the entry of judgment, and at the statutory rate thereafter, as calculated by the Clerk, together with costs and disbursements as taxed by the Clerk upon submission of an appropriate bill of costs.

FOOTNOTES

1.   Invoice no. L105936 submitted with the complaint reflects an amount due of $231,331.92 (NYCEF Doc No. 35 at 22), not $331,921.65 as Ryan has attested. Nevertheless, the outstanding amount due discussed in Ryan's affidavit is correct.

Robert R. Reed, J.