This case concerns a "Revenue Purchase Agreement," an alternative and arguably extreme form of financing for small businesses with very few financing options at their disposal. In the financial and legal world they are known as RPA cases

At bar is a Motion for Summary Judgment brought by plaintiff, a financial services company, against defendant, a Florida-based lawn mower equipment seller. The allegation is breach of contract. Underlying the case are two agreements whereby the plaintiff purchased defendant's Accounts Receivables. In the first transaction plaintiff purchased $102,750 in Accounts Receivable for $75,000, less transaction and legal fees. In the second transaction plaintiff purchased $137,000 in Accounts Receivable for $100,000, less transaction and legal fees. Pursuant to the two agreements, defendant was to make weekly payments from its regular business gross revenue stream. Defendant ceased making payments on the first agreement after having paid approximately $39,000, and on the second agreement after having paid approximately $45,000. Exchange of Discovery has occurred, and a Notice to Admit and Response have been interposed as well. Plaintiff now moves for Summary Judgment against defendants for failure to abide by the contracts. Defendants contend there is no proof as to how [*2]much plaintiff initially funded, and that the transaction and legal fees are illegal or exorbitant.

Although there is no nexus to Erie County, the RPAs at issue—a boilerplate form drafted by plaintiff— stipulates that jurisdiction for any lawsuit shall be in any New York State Supreme Court in New York State. Thus, plaintiff filed this matter in Erie County. There has been no objection.

The agreement explicitly emphasizes that the transaction is not a "loan" which would bring with it the applicability of usury laws, amongst other things. This is acknowledged by defendants.

As plaintiff notes, it is well settled in New York that in order to obtain summary judgment, the moving party must make a prima facie showing of entitlement to judgment as a matter of law (Zuckerman v. New York, 49 NY2d 557 [1980]). Furthermore, where there is no issue of triable fact, summary judgment is granted as a matter of law. For plaintiff to establish a prima facie showing of entitlement in a breach of contract, a plaintiff must show that the defendant breached a binding agreement between the parties which damaged the plaintiff (Stonehill Capital Management LLC v. Bank of the W, 28 NY3d 439 [2016]).

Summary judgment should not be granted where there is any doubt as to the existence of a triable issue (Rotuba Extruder, Inc. v. Ceppor, 46 NY2d 223 [1978]; Friends of Animals, Inc. v. Associated Fur Manufacturers, Inc. 46 NY2d 1065 [1979]). Summary judgment is a drastic remedy because it deprives a litigant of its day in court and should only be used where there is no doubt as to the lack of triable issues or if the facts are not disputed (Andre v. Pomeroy, 35 NY2d 361 [1974]). When deciding a summary judgment motion, the court must construe the facts in a light most favorable to the non-moving party (Marine Midland Bank NA v. Dino & Artie's Automatic Transmission Co., 168 AD2d 610 [2d Dept 1990]; Rebecchi v. Whitemore, 172 AD2d 600 [2d Dept 1991]). The court must draw all reasonable inferences in favor of the party opposing the motion, and the opposing party's statements are deemed to be true (Pantote Big Alpha Goods Inc. v. Schefman, 121 AD2d [1st Dept. 1986]).

Applying this law to the facts at bar, defendants allege there is no proof as to how much plaintiff funded at the commencement of the matter. Plaintiff has submitted Wells Fargo statements ie wire reports reflecting the initial amounts paid, ie approximately $72,000 for one transaction, and approximately $96,000 for the second transaction (NYCEF #33, 34). Defendants contend that the documents are inadmissible hearsay and insufficient to support the motion. The law requires plaintiff to make a prima facie showing of admissible evidence which would eliminate any material issue of fact. That came in the form of the two documents. The burden then shifts to the defendant to provide any issues of fact. Defendants have not done this. To begin with, there is no opposing affidavit substantively contradicting these two statements. Plaintiff has submitted both a party affidavit as well as an attorney affidavit supporting the documentation. Moreover, defendants replied to plaintiff's Notice to Admit with no substantive denial as to the initial funding as well (See also People v. Kennedy, 68 NY2d 569 [1986] recognizing the admissibility under the business records exception if hearsay alleged and CPLR 4518 for admissibility of records kept in the regular course of business). Accordingly, since there is no issue of material fact at bar, plaintiff's motion for Summary Judgment is granted.

Turning to defendants' other legal theory in opposition, defendants contends that [*3]plaintiff's three requested fees —default fee; NSF fee; and legal fees —are unenforceable penalties.

The Court of Appeals held in Truck Rent -A-Center, Inc. v. Puritan Farms 2nd Inc. (41 NY2d 420 [1977]): "The rule is now established. A contractual provision fixing damages in the event of breach will be sustained if the amount liquidated bears a reasonable proportion to the probable loss and the amount of the actual loss is incapable or difficult of precise estimation (citations omitted). If, however, the amount fixed is plainly or grossly disproportionate to the probable loss, the provision calls for a penalty and will not be enforced (citations omitted)."

At bar, the parties contracted for the default fee, NSF fee, and legal fee. $2500 for a default fee and $35 for a non-sufficient funds fee for each contract bear a "reasonable proportion" to the probable loss. Accordingly, they are acceptable.

Attorney fees for almost $16,000 in the first matter and $23,000 in the second matter, while presumably calculated at 30% of the balance due to plaintiff, superficially appear typical in commercial collection matters. However, there is no affidavit or accounting as to how those fees were actually calculated. Accordingly, it is incumbent upon plaintiff's counsel to submit a Motion with an affidavit of calculations and Bill of Costs before the Court is in a position to award attorney's fees.

Plaintiff is directed to order the transcript of the oral argument on August 14, 2025, and attach it to the proposed Order, and submit it to the Court on Notice to opposing counsel.