Lovell Safety Management Co., L.L.C., Plaintiff, v. USA (2022)

Plaintiff, Lovell Safety Management Co., LLC, moves without opposition for default judgment under CPLR 3215 against defendant, USA Roofing Company Corp. Plaintiff's motion papers show that defendant was properly served. Defendant has not appeared. But plaintiff has not sufficiently proved the facts constituting its claim. The motion is denied without prejudice.

Plaintiff is the manager of "Safety Group 411," a number of construction-related companies that purchase workers' compensation insurance as a group from the New York State Insurance Fund. Plaintiff represents that under the group's rules, it is entitled to receive compensation for its management services from based on a percentage of the workers'-compensation premiums assessed on the group's members. Plaintiff, claiming that defendant has failed to pay $19,449.47 in fees owed to plaintiff for services rendered, has brought breach-of-contract and account-stated claims for that sum.

Plaintiff relies on an affidavit of its controller and the documents attached to the affidavit. This proof falls short in two principal respects. Under the governing contract, the managerial fees to which plaintiff is entitled are computed as a percentage of insurance premiums. But neither the affidavit on which plaintiff relies nor the accompanying documents identify or substantiate the applicable premiums in the years at issue, so as to establish that plaintiff was only charging defendant the contractually provided for percentage of those premiums.

Relatedly, both the verified complaint and the controller's affidavit represent that the contractual premium percentage is "10% of the Standard (i.e. Rating Board or Base) Premium." (NYSCEF No. 1 at ¶ 8; see also NYSCEF No. 6 at ¶ 8 ["For the period in question, Lovell's fee was ten percent (10%) of the standard (i.e. Rating Board) premium charged by SIF to Defendant for workers' compensation insurance coverage"].) But the copy of the group rules attached to the controller's affidavit provides that the manager's fees shall not "be in excess of eight (8) percent of standard (i.e., Rating Board level) premium." (NYSCEF No. 9 at 5 ¶ 7 [E] [emphasis added].) Plaintiff's motion papers do not explain this discrepancy. Given these evidentiary shortcomings, plaintiff has not proven the facts constituting its breach-of-contract claim.

The controller's affidavit and exhibits do not adequately support plaintiff's account-stated claim, either. "An account stated exists where a party to a contract receives bills or invoices and does not protest within a reasonable time." (Bartning v Bartning, 16 AD3d 249, 250 [1st Dept 2005].) To prove defendant's receipt of the invoice, plaintiff must show that the invoice was properly addressed and mailed per plaintiff's regular office mailing procedures. (See Morrison Cohen Singer & Weinstein, LLP v Brophy, 19 AD3d 161, 161-162 [1st Dept 2005].)

Plaintiff has provided what it represents to be accurate versions of the invoice sent to defendant (albeit reconstructed after the fact). (See NYSCEF No. 10.) But plaintiff has not proved that it properly mailed defendant that invoice. The controller's affidavit states in general terms that "in the normal and usual course of its business" it mails monthly invoices to group members "by first class mail on the first business day of each calendar month." (NYSCEF No. 6 at 3 ¶ 10.) The affidavit does not, however, identify the office procedures it employs to carry out those mailings. Further, the affidavit indicates that the invoice on which plaintiff relies was not mailed consistent with plaintiff's usual practice. That is, the affidavit states that the invoice was "rendered to Defendant by first class mail . . . on or about January 23, 2020"—not on the first business day of January 2020. (Id. at ¶ 13.) And the affidavit does not identify the controller's basis for making that statement in any event. Plaintiff has thus not established that it sent defendant a statement of account that defendant retained without objection.

Accordingly, it is

ORDERED that plaintiff's motion for default judgment is denied; and it is further

ORDERED that if plaintiff does not file a renewed default-judgment motion within 30 days of entry of this order, the action will be dismissed; and it is further

ORDERED that plaintiff shall serve a copy of this order with notice of its entry on defendant by certified mail, return receipt requested, directed to plaintiff's last-known address.

12/21/2022

Gerald Lebovits, J.