BRIGHT AND PRUDENT INVESTMENTS LIMITED v. HOROWITZ (2021)

The following e-filed documents, listed by NYSCEF document number (Motion 003) 23, 24, 25, 26, 27, 28, 29 were read on this motion to/for JUDGMENT - DEFAULT.

In this action to enforce a personal guaranty, plaintiff Bright and Prudent Investments Limited moves, pursuant to CPLR 3215, for leave to enter a default judgment against defendant Ping Kei Wilson Chan (Chan). Chan has submitted no opposition.

Background

The court assumes familiarity with the facts set out in a decision and order dated December 24, 2020 (NY St Cts Elec Filing [NYSCEF] Doc No. 17). Briefly, plaintiff loaned $250,000 to nonparty Bag Studio LLC (Bag Studio) pursuant to a loan agreement dated October 26, 2017 (the Agreement) (NYSCEF Doc No. 1, ¶¶ 1 and 9-10). Interest accrued at 8% per annum (id., ¶ 10). The principal was to be repaid in consecutive monthly installments until October 26, 2020, when the balance of the unpaid principal and interest were to be paid in full (id.). The Agreement also called for a late charge of $160 for each monthly payment made more than seven days late (id., ¶ 11). Defendant Kenneth Horowitz (Horowitz) and Chan unconditionally guaranteed Bag Studio's obligations under the Agreement (id., ¶ 14). When Bag Studio failed to repay any part of the principal, interest or late charges when due, plaintiff commenced this action for breach of contract, unjust enrichment and an account stated. The court (Sherwood, J.) has already awarded plaintiff summary judgment against Horowitz on its causes of action for breach of contract and for an account stated (NYSCEF Doc No. 17). Plaintiff now moves for leave to enter a default judgment against Chan.

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]). “ ‘[B]y defaulting, a defendant admits all traversable allegations contained in the complaint, and thus concedes liability, although not damages’ ” (HF Mgt. Servs. LLC v Dependable Care, LLC, ––– AD3d ––––, 2021 NY Slip Op 05459, *1 [1st Dept 2021] [citation omitted]; Rokina Opt. Co. v Camera King, 63 NY2d 728, 730 [1984]). Plaintiff has met this burden.

First, plaintiff has demonstrated service of the summons and complaint upon Chan and that Chan's time to answer or otherwise appear in this action has expired. According to the complaint, Chan resides in Hong Kong SAR (NYSCEF Doc No. 1, ¶ 6). Under CPLR 313, “[a] person subject to the jurisdiction of the courts of the state may be served with the summons without the state, in the same manner as service is made within the state.” The statute permits a plaintiff “ ‘to use the service methodologies of CPLR 308, 309, 310, 311, and 312-a, etc. wherever the defendant (or person authorized to accept service on defendant's behalf) may be found’ ” (Morgenthau v Avion Resources Ltd., 11 NY3d 383, 389 [2008] [citation omitted]). As is relevant here, service of process upon Chan was effectuated through the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, commonly referred to as the Hague Convention (20 UST 361), to which Hong Kong is a signatory (see Colebrooke Theat. LLP v Bibeau, 155 AD3d 581, 581 [1st Dept 2017], lv dismissed 31 NY3d 944 [2018]). An affirmation of service from Chiu Hon-Chung, Bailiff's Assistant of the High Court of Hong Kong, shows that Chan was personally served with summons and complaint when he visited the Bailiff Office at the Kwun Tong Law Courts Building in Kowloon on January 18, 2021 (NYSCEF Doc No. 22 at 2-3). Plaintiff has also furnished proof that it served additional notice of the summons and complaint to Chan's place of employment as required under CPLR 3215 (g) (3) (i) (NYSCEF Doc No. 26 at 1).

To sustain a cause of action for breach of contract, the plaintiff must plead the existence of a contract, the plaintiff's performance, the defendant's breach and damages (see Harris v Seward Park Hous. Corp., 79 AD3d 425, 426 [1st Dept 2010]). In addition, a party seeking to enforce a written guaranty need only prove “an absolute and unconditional guaranty, the underlying debt, and the guarantor's failure to perform under the guaranty” (Gansevoort 69 Realty LLC v Laba, 130 AD3d 521, 521 [1st Dept 2015] [internal quotation marks and citation omitted]). “[W]here a guaranty is clear and unambiguous on its face and, by its language, absolute and unconditional, the signer is conclusively bound by its terms absent a showing of fraud, duress or other wrongful act in its inducement” (Citibank, N.A. v Uri Schwartz & Sons Diamonds Ltd., 97 AD3d 444, 446-447 [1st Dept 2012] [internal quotation marks and citation omitted]). Plaintiff has demonstrated the merits of this claim through its submission of the Agreement and an affirmation from Ying Kit Mak (Mak), plaintiff's owner (NYSCEF Doc No. 25, Mak aff, ¶ 2). Section IX of the Agreement provides, in relevant part, that “Ping Kei Wilson CHAN unconditionally guarantees all the obligations of the Borrower under this Agreement and agrees that any modifications of the terms of payment or extension of time of payment shall in no way impair its guarantee, and expressly agrees its guarantee of any modifications or extensions of this Agreement” (id. at 9). A separate “Notice to Co-Signer” provides that Chan agreed to guarantee Bag Studio's debt, and that “[t]he creditor can collect this debt from you without first trying to collect from the borrower” (id. at 13). Mak states that Bag Studio has not paid back any of the principal, although it has “consistently wired the same amount of interest payments ($1,666,67) over the years” (id., ¶ 17). Bag Studio, though, neglected to pay the late fees due on 11 occasions (id., ¶ 18). On or about December 12, 2019, plaintiff accelerated the loan, as was permissible under the Agreement (id., ¶ 20). Email correspondence between Mak and Chan dated December 20, 2019 reveals that Chan claimed he was unable to “handle this loan at the moment” (id. at 21).

Accordingly, it is

ORDERED that the motion brought by plaintiff Bright and Prudent Investments Limited for leave to enter a default judgment against defendant Ping Kei Wilson Chan on its first cause of action is granted, without opposition; and it is further

ORDERED that the Clerk of the Court is directed to enter judgment in favor of plaintiff Bright and Prudent Investments Limited against defendant Ping Kei Wilson Chan in the amount of $251,760.00, with interest at the statutory rate from December 26, 2019, together with costs and disbursements as taxed by the Clerk upon the submission of an appropriate bill of costs.

Robert R. Reed, J.