Plaintiff ("First Data") moves, pursuant to CPLR Rule 3212 (a), for summary judgment against all defendants, or in the alternative striking defendants' affirmative defenses. Defendants oppose summary judgment, alleging that there are triable issues of fact and that its affirmative defenses are proper. For the reasons that follow: plaintiff's motion for summary judgment is denied because triable issues of fact exist; and, plaintiff's alternative requested relief to strike defendants' affirmative defenses is granted.

This case is a contract dispute about seven credit card "chargebacks," totaling $44,166.48. First Data's business includes the processing of credit card transactions and providing payment to merchants of charges incurred by the holders of credit cards. Defendant Olympia York Builders and Developers, Inc. ("Olympia"), with defendant Mendy Lazar ("Lazar") as a personal guarantor, executed with plaintiff a "Merchant Processing Application and Agreement" on January 5, 2003 [exhibit C of motion]. Defendants also received from plaintiff a lengthy "Merchant Services Program Guide" [exhibit C of motion]. Lazar agreed in § 10 of the "Merchant Processing Application and Agreement" that the "Client [Olympia] has received a copy of the attached Program Guide, which is part of this Merchant Application and by this reference incorporated therein."

Plaintiff's obligation to defendants was to obtain approvals of credit card transactions from cardholders' issuing banks. When First Data receives an approval code from a bank, it advances funds to a merchant, such as Olympia, by depositing funds in the merchants's bank within twenty-four to forty-eight hours. Plaintiff is then subsequently reimbursed by the cardholder's issuing bank. Essentially, First Data makes a short-term loan to a merchant, pending finalization of the credit card transaction.

The above process is subject to disputed charges, called "chargebacks," because while a dispute is being investigated, the credit given to the merchant is reversed. A credit cardholder can dispute a credit card transaction by contacting the issuing bank of the credit card. When a cardholder's bank receives information of the disputed charge, it returns the funds charged to the cardholder's account and requires First Data to obtain the chargebacked funds from the merchant, pending a resolution of the dispute. The dispute is between the cardholder customer and the merchant. It is resolved with the credit cardholder's bank, not with First Data, the provider of processing of the credit transaction and short-terms loans to merchants. First Data's Program Guide in § 9 sets forth an extensive explanation of chargebacks. It states: in § 9.1 that "You [the merchant] are responsible for all chargebacks and related costs arising from your transactions"; in § 17.1 that "You [the merchant] shall be responsible for all chargeback amounts relating to Card transactions as set forth in the Operating Procedures"; and, in § 17.2 that "You [the merchant] shall reimburse us [First Data] for any chargebacks."

Plaintiff, in support of its motion, presents an affidavit by Krista Gebhard, Manager of its Legal Collections/Risk Workout Department. Exhibit D of the motion contains four computer printouts from various December 2004 days, allegedly showing that defendants owed plaintiff $24,704.94 for four chargebacks, and a fifth computer printout, dated January 12, 2005, that is allegedly a summary. Ms. Gebhard's affidavit fails to explain the meaning of these documents and their various codes and symbols. None of these documents mentions First Data. The January 12, 2005-document is named "Marsha" [the Court has no knowledge of what this means]. It lists Olympia at the top, with a Fallsburg, New York address. At the bottom, are numerous numbers and the figure [*3]"24,704.94" circled. The four December 2004 printouts show transactions, which are listed as "Trans Amount," totaling 24,704.19. It should be noted that each of these printout fails to use dollar ($) signs. Each of the four pages has the same 15 digit "Merchant Number." The same number appears on the January 12, 2005 printout after "*MS" [again, the Court has no knowledge of what this means]. The other three chargebacks, allegedly totaling $19,461.54, are listed in a computer printout in exhibit D of the motion, titled "Results of Merchant Transaction Search - Summary." This undated document has various entries in a table, all with the same merchant number as the other five printouts mentioned above. It shows transactions from January 18, 2005 to April 26, 2005. The alleged chargebacks are in a column called "Txn. Type" [the Court assumes this means "transaction type"] and the alleged chargebacks are listed as "CHGBK." The Court notes that, according to this printout, from February 4, 2005 to February 18, 2005 the "Collection Bal" and "Account Bal" [the Court can only assume that "bal" means "balance"] were $0.00 [this document for unexplained reasons uses dollar ($) signs].

Lazar denies owing any money to First Data. He claims, in paragraph 7 of his affidavit in opposition, that the first four chargebacks were caused by First Data's "negligence since it furnished to me defective approval codes which I relied upon to my detriment." He then asserts, in paragraph 8, that he raised the issue with First Data in February 2005, and plaintiff then "reversed the $24,704.94 charge to my account bringing my balance back to zero." With respect to the subsequent three chargebacks totaling $19,461.54, Lazar states, in paragraph 11, that "I have no information about these chargebacks and from what I understand no information was provided by Plaintiff to substantiate said chargebacks."

Defendants' verified answer [exhibit B of motion] presents a bare, conclusory defense that this Court lacks personal jurisdiction because defendants were never served. Then, defendants present four bare, conclusory affirmative defenses that: plaintiff failed to state a claim upon which relief can be granted; defendants have a defense based upon documentary evidence; plaintiff is barred by laches; and plaintiff is barred by from recovery because of unclean hands. The lack of jurisdiction defense and the four affirmative defenses must be stricken for their lack of particularity and facts. Further, the equitable defenses of laches and unclean hands may not be used in an action at law.

The proponent of summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case. See Alvarez v Prospect Hospital, 68 NY2d 320, 324 (1986); Zuckerman v City of New York, 49 NY2d 557, 562 (1980); Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395, 404 (1957). Failure to make such a showing requires denial of the motion, regardless of the sufficiency of the opposing papers. Matter of Redemption Church of Christ v Williams, 84 AD2d 648, 649 (3d Dept 1981); Greenberg v Manlon Realty, 43 AD2d 968, 969 (2d Dept 1974); Winegrad v New York [*4]University Medical Center, 64 NY2d 851 (1985).

CPLR Rule 3212 (b) requires that for a court to grant summary judgment the court must determine if the movant's papers justify holding as a matter of law, "that the cause of action or defense has no merit." The evidence submitted in support of the movant must be viewed in the light most favorable to the nonmoving party. Marine Midland Bank, N.A. v Dino & Artie's Automatic Transmission Co., 168 AD2d 610 (2d Dept 1990). Summary judgment shall be granted only where there are no issues of material fact and the evidence requires the court to direct judgment in favor of the movant as a matter of law. Friends of Animals, Inc., v Associated Fur Mfrs., 46 NY2d 1065 (1979).

Viewing this case in the light most favorable to the nonmoving party, summary judgment cannot be granted to plaintiff. See Marine Midland, supra. Plaintiff has failed to meets its burden of making a prima facie case for plaintiff's entitlement to judgment as a matter of law. See Alvarez, supra; Zuckerman, supra; Sillman, supra. In the instant case, triable issues of fact exist. There are conflicting affidavits as to whether or not defendants owe any chargebacks to plaintiff. Further, the documents attached in exhibit D of the motion fail to illustrate the explanation presented to the Court in Ms. Gebhard's affidavit. Plaintiff's computer printouts are replete with mumbo-jumbo that plaintiff expects the Court to understand and accept. This information is insufficient to support plaintiff's motion for the drastic remedy of summary judgment. See Friends of Animals, supra.

With respect to that branch of plaintiff's motion to strike defendants' affirmative defenses, the Court will treat each affirmative defense in turn, as well as defendants' first defense of lack of jurisdiction. While plaintiff's notice of motion states that plaintiff is moving to strike "all of the defendants' affirmative defenses," plaintiff, in its affidavit in support of the motion, also challenges defendants' lack of jurisdiction defense in addition to defendants' four affirmative defenses. Defendants, in their affirmation in opposition, defend the jurisdictional defense, as well as the four affirmative defenses. Therefore, the Court will consider that the relief sought by plaintiffs includes striking the lack of jurisdiction defense, along with striking the affirmative defenses.

In examining the defense and affirmative defenses in defendants' verified answer, the Court is mindful of CPLR § § 3013 and 3018 (b). CPLR § 3013 states with respect to pleadings that "[s]tatements in a pleading shall be sufficiently particular to give the court and parties notice of the transactions, occurrences of series of transactions or occurrences intended to be proved and the material elements of each cause of action or defense [Emphasis added]." CPLR § 3018 (b) states, with respect to affirmative defenses, that "[a] party shall plead all matters which if not pleaded would be likely to take the adverse party by surprise or raise issue of facts not appearing on the face of a prior pleading." While the days of courts strictly construing pleadings ended with the CPLR's liberalization of pleading requirements, there are still the above cited minimum [*5]requirements, so that parties and courts will have notice of each defense. In Foley v D'Agostino, 21 AD2d 60 (1st Dept 1964), the Court analyzed the then new CPLR liberalized pleading standards, requirements, holding, at 63, that "it is clear that, under CPLR, the statements in pleadings are still required be factual, that is, the essential facts required to give notice'

must be stated," and "a party may supplement or round out his pleading by conclusory allegations . . . if the facts upon which the pleader relies are also stated."

In the instant action, defendants failed in their verified answer to give more than mere conclusory statements as to their defenses, regular and affirmative. In their opposition papers to the instant motion, defendants fail to give notice as to the material elements of each defense. There is no recitation of facts, as required by CPLR § § 3013 and 3018 (b). The Appellate Division, Second Department, in Glensek v Guidance Realty Corp., 36 AD2d 852, 853 instructed that "[d]efenses which merely plead conclusions of law without supporting facts are insufficient."

Defendants' first defense is lack of personal jurisdiction because defendants were never served. However, plaintiff presents affidavits of service [exhibit F of the motion], with one affidavit showing that service was made upon Lazar, on December 12, 2005, pursuant to CPLR § 308 (4) "nail and mail" service, and the second affidavit showing that service was made upon Olympia, on December 13, 2005, by delivery to an authorized agent in the Office of the New York State Secretary of State, pursuant to BCL § 306. Defendants deny service in a conclusory statement in their verified answer and similar conclusory statements in their papers in opposition to the instant motion. As recently as last month, in Wunsch v Cerwinski, 2007 NY Slip Op 00133 (2d Dept 2007), the Court instructed that "defendant's bare denial of service was insufficient to rebut the prima facie proof of proper service pursuant to CPLR 308 (4) created by the process server's affidavit." See Mauro v Mauro, 13 AD2d 345 (2d Dept 2004); General Motors Acceptance Corp. v Grade A Auto Body, 21 AD3d 447 (2d Dept 2005); Koyenov v Twin-D Transp., Inc., 33 AD3d 967 (2d Dept 2006). Thus, the defense of lack of personal jurisdiction because defendants were never served must be stricken.

Defendants' first affirmative defense, plaintiff's failure to state a claim upon which relief can be granted, must be stricken. In Glensek, supra, at 853, the Court held that "[a] defense that a complaint does not state a cause of action cannot be interposed in any answer." In Propoco, Inc. v Birnbaum, 157 AD2d 774, 775 (2d Dept 1990), the Court stated that "[i]n this Judicial Department, a defense that a complaint does not state a cause of action cannot be interposed in an answer, but must be raised by appropriate motion pursuant to CPLR 3211 (a) (7) (see Bentivegna v Meenan Oil Co., 126 AD2d 506 [2d Dept 1987])." See Petracca v Petracca, 305 AD2d 566 (2d Dept 2003).

Defendants' second affirmative defense that they have "a defense founded upon documentary evidence" has no factual statement. Whatever documents defendants are [*6]referring to are not particularized by the defendants in their verified answer or opposition papers to the motion. Thus, this affirmative defense lacks merit and must be stricken. In Teitler v Max. J. Pollack & Sons, 288 AD2d 302 (2d Dept 2001), the Court instructed that "the documentary evidence that forms the basis of the defense must be such that it resolves all factual issues as a matter of law, and conclusively disposes of the plaintiff 's claim." See Trade Source, Inc. v Westchester Wood Works, Inc., 290 AD2d 437 (2d Dept 2002); Morris v Morris, 306 AD2d 449 (2d Dept 2003); Dodge v King, 19 AD3d 359 (2d Dept 2005); M. Fund, Inc. v Carter, 31 AD3d 620 (2d Dept 2006); Martin v New York Hosp. Medical Center of Queens, 33 AD3d 650 (2d Dept 2006).

Defendants' third affirmative defense is that plaintiff is barred by laches, an equitable defense that defendants are prejudiced by plaintiff's delay in prosecuting the instant action. However, the instant contract action is for money damages and does not seek any equitable relief. The Court, in Brown v Lockwood, 76 AD2d 721, 729 (2d Dept 1980), instructed that "the law of this State is that laches is a purely equitable defense which may not be interposed in an action at law." The Appellate Division, Second Department has continued to disallow the use of the equitable defense of laches in actions at law. Propoco, Inc. v Birnbaum, supra, at 776; County of Rockland v Homicki, 227 AD2d 477 (2d Dept 1996); Hilgendorff v Hilgendorff, 241 AD2d 481 (2d Dept 1997); Cognetta v Valencia Decelopers, Inc., 8 AD3d 318 (2d Dept 2004); Fade v Pugliani/Fade, 8 AD3d 612 (2d Dept 2004). Therefore, defendants' third affirmative, laches, is stricken.

Defendants' fourth affirmative defense is that plaintiff is barred from recovery because plaintiff acted with unclean hands. Not only is plaintiff never put on notice as to what its immoral and/or unconscionable conduct might be, defendants have again pleaded an equitable defense in an action at law. The unclean hands defense must be stricken in this action for money damages. The Court of Appeals in National Distillers & Chemical Corp. v Seyopp Corp., 17 NY2d 12, 15-16 (1966), instructed that:

the equitable rule or maxim that he who comes into equity must

come with clean hands' . . . is never used unless the plaintiff is

guilty of immoral, unconscionable conduct and even then only

when the conduct relied on is directly related to the subject matter

in litigation and the party seeking to invoke the doctrine was injured

by their conduct.'

See Kopsidas v Krokos, 294 AD2d 406 (2d Dept 2002); Manshion Joho Center, Co., Ltd. v Manshion Joho Center, Inc., 24 AD3d 189 (1st Dept 2005); Unger v Leviton, 25 AD3d 689 (2d Dept 2006).

Accordingly, it is

ORDERED, that the branch of plaintiff's motion to strike defendants' affirmative [*7]defenses is granted as follows: defendants' first defense that this Court lacks personal jurisdiction over the defendants is dismissed; defendants' first affirmative defense that plaintiff failed to state a claim upon which relief can be granted is dismissed; defendants' second affirmative defense that defendants have a defense based upon documentary evidence is dismissed; defendants' third affirmative defense that plaintiff is barred from asserting a claim of laches is dismissed; and, defendants' fourth affirmative defense that plaintiff is barred from recovery because plaintiff has acted with unclean hands is dismissed.

This constitutes the Decision and Order of the Court.

ENTER

___________________________

HON. ARTHUR M. SCHACK

J. S. C.