Greystone Equip. Fin. Corp. v Motion Imaging, Inc. (2010 NY Slip Op 50726(U))

Greystone Equip. Fin. Corp. v Motion Imaging, Inc.

2010 NY Slip Op 50726(U) [27 Misc 3d 1213(A)]

Decided on April 7, 2010

Supreme Court, Nassau County

Driscoll, J.

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and will not be published in the printed Official Reports.

This matter is before the court on the motion filed by Plaintiff Greystone Equipment Finance Corporation ("Greystone" or "Plaintiff") on December 28, 2009 and submitted on February 5, 2010. For the reasons set forth below, the Court 1) grants Greystone's motion for a default judgment against Defendant Motion Imaging, Inc. ("Motion" or "Obligor") and refers that matter to an inquest on the issues of interest and counsel fees; 2) reserves decision on Greystone's motion to strike the affirmative defenses of, and for summary judgment against, Defendants Robert Thompson ("Thompson"), William Vidro ("Vidro"), Steven Navon ("Navon") and John Conkling ("Conkling") (collectively "Guarantors"); 3) directs that the Guarantors are prohibited from removing, transferring, concealing, disposing of, selling, pledging and/or assigning the equipment that is the subject matter of the master commercial equipment finance lease and related schedules thereto upon which this action is based ("Equipment"); 4) directs the Guarantors to turn the Equipment over to Plaintiff on or before April 23, 2010 upon the condition that Plaintiff posts a bond in the sum of $20,000 as a condition of this injunctive relief; 5) [*2]reserves decision on Plaintiff's motions for summary judgment and for an Order of Seizure, with leave to renew; and 6) directs counsel for Plaintiff and counsel for the Guarantors to appear before the Court for a conference on April 27, 2010 at 9:30 a.m.

BACKGROUND

A. Relief Sought

Plaintiff seeks an Order 1) pursuant to CPLR § 3215, granting a default judgment in favor of Greystone and against Defendant Motion Imaging, Inc. ("Motion" or "Obligor"); 2) pursuant to CPLR § 3211, striking the affirmative defenses of Defendants Thompson, Vidro, Steven Navon ("Navon") and John Conkling ("Conkling"); 3) pursuant to CPLR § 3212, granting summary judgment in favor of Greystone and against Defendants Thompson, Vidro, Navon and Conkling; ^[FN1] and 4) pursuant to CPLR § 7102, a) directing the Defendants immediately to turn over the equipment that is the subject matter of the master commercial equipment finance lease and related schedules thereto upon which this action is based; b) prohibiting the removal, transfer, concealment, disposition, sale, pledging and/or assignment of said equipment;c) directing the Sheriff of any county where said equipment is located to seize same, and if said equipment is not delivered to the Sheriff; 4) permitting the Sheriff to break open, enter, search for and seize said equipment at 975 Main Street, Farmingdale New York 11735; 194 North Oak Street, Massapequa, New York 11758; 8 Greenwood Lane, Woodbury, New York 11797; 8 El Paso Ct., Northport, New York 11731; 39 Cabot Road, Massapequa, New York 11758, and/or such other address at which said equipment may be located. Plaintiff provides a copy of a replevin bond dated December 15, 2009 in the sum of $94,000 (Ex. I to Wolf Aff.), representing two times $47,000, the value of the equipment at issue.

Plaintiff filed this action to recover damages incurred as a result of 1) Motion's breach of a master commercial equipment finance lease and three (3) related schedules to that lease ("Agreement") (Ex. E to Aff. in Support), and 2) the Guarantors' defaults and breaches pursuant to four (4) related personal guarantees ("Guarantees") (Ex. F to Aff. in Support).

Plaintiff filed the summons and complaint ("Complaint") (Ex. B to Aff. in Support) on October 19, 2009 and provides affidavits of service (Ex. C to Aff. in Support) reflecting the service of the Complaint on all Defendants. Defendants served a verified answer ("Answer") dated December 1, 2009.

Greystone is a corporation organized under the laws of the State of Delaware that maintains its principal place of business in Dallas, Texas. Motion is a corporation organized under the laws of the State of New York that maintains its principal place of business at 975 Main Street, Farmingdale, New York 11735 ("Motion's Address"). Thompson resides at 194 North Oak Street, Massapequa, New York 11758. Vidro resides at 8 Greenwood Lane, Woodbury, New York 11797. Navon resides at 8 El Paso Ct., Northport, New York 11731. Conklin resides at 39 Cabot Road, Massapequa, New York 11758. The addresses of the [*3]Guarantors will be referred to collectively as the "Guarantors' Addresses."

On or about December 21, 2007, Greystone and Obligor entered into Master Equipment Agreement No. 060624 ("Contract"), pursuant to which Obligor financed with Plaintiff certain items of equipment ("Equipment"). The Equipment is described in Equipment Schedules 060624-01B, 060624-02B and 060624-03B ("Equipment Schedules"). The Equipment Schedules refer to Motion as the "Lessee" or "Borrower." Each Guarantor executed a Personal Guaranty ("Personal Guaranties") that guaranteed Obligor's obligations under the Contract. Copies of the Contract, Equipment Schedules and Personal Guaranties are annexed as Exhibit A to the Complaint.

Obligor executed and delivered to Plaintiff a 1) Delivery and Acceptance Certificate dated January 23, 2007, 2) Delivery and Acceptance Certificate dated December 26, 2007, and3) Delivery and Acceptance Certificate dated May 15, 2008. In these Delivery and Acceptance Certificates, Obligor represented to Greystone, inter alia, that 1) the Equipment had been delivered to and inspected by the Obligor and was satisfactory to Obligor in all respects;2) Obligor unconditionally accepted the Equipment for all purposes under the Contract; and3) Obligor would perform all of its obligations under the Contract.

Greystone has a perfected first priority security interest in the Equipment and filed financing statements ("Financing Statements") under the Uniform Commercial Code naming Greystone as the Secured Party and Obligor as the Debtor, and describing the Equipment as the collateral. Copies of the Financing Statements are annexed as part of Exhibit A to the Complaint.

Obligor has defaulted under the terms of the Contract by, inter alia, failing to make its monthly payments when due. Greystone made demand on Obligor for all past due amounts, but Obligor has failed to make payment in full. The Guarantors have defaulted under the terms of the Personal Guaranties by failing to make the required payments under the Contract. Greystone similarly made demand on the Guarantors for payment, but they have failed to make payment in full.

Plaintiff alleges in the Complaint that it has performed all its obligations under the Contract, except those whose performance was prevented by Obligor's conduct. As ofOctober 16, 2009, the date of the Complaint, Defendants owed $125,832.90 under the Contract. In addition, the Contract provides that Plaintiff is entitled to costs, including reasonable attorney's fees, incurred in enforcing its rights against the Obligor.

The Complaint contains six (6) causes of action. The first is against Obligor for breach of the Contract. The second through fifth causes of action are asserted against the Guarantors for their breaches of the Personal Guaranties. The sixth cause of action seeks replevin/injunctive relief from all Defendants.

In the first through fifth causes of action, Plaintiff seeks damages of $125,832.90, plus interest, costs and counsel fees. In the sixth cause of action, Plaintiff seeks injunctive relief similar to that sought in the instant motion.

In their Answer, Defendants Thompson, Vidro, Navon and Conkling denied, or denied knowledge or information sufficient to form a belief as to the truth and accuracy of, the allegations in the Complaint. Defendants also asserted five (5) affirmative defenses, which are: 1) the Complaint fails to state a cause of action upon which relief can be granted; 2) the relief [*4]requested is barred by the Statute of Frauds; 3) the causes of action in the Complaint are barred by the doctrines of waiver, laches and promissory and equitable estoppel; 4) Plaintiff's claims should be dismissed on the grounds of documentary evidence; and 5) Plaintiff's claims are barred by the doctrine of unclean hands, as well as the acts and omissions of Plaintiff.

The Contract and Equipment Schedules list Motion's address as 975 Main Street, Farmingdale, New York 11735. The Guaranties contain the Guarantors' Addresses.

Plaintiff provides an Affidavit of Facts of Charles Cross ("Cross"), datedDecember 1, 2009 in which he affirms as follows:

Cross is the Senior Vice President, General Counsel and employee of Greystone, an equipment lease finance company. In those capacities, he has access to, and is the custodian of, Greystone's records, including the Contract, Equipment Schedules, Guaranties and other documentation and records related to this action. The facts set forth in his Affidavit are based on his review of those records and that documentation.

Cross confirms the allegations in the Complaint, specifically that 1) Motion entered into the Contract corresponding to the Equipment Schedules; 2) the Guarantors executed the Guaranties; 3) Motion executed and delivered to Greystone the Delivery and Acceptance Certificates; 4) Greyston has a perfected first priority security interest in the Equipment and filed the Financing Statements; 5) Defendants have defaulted on the Contract and Guaranties by failing to make required payments; 6) Greystone has demanded payment from all Defendants;7) Defendants remain in default of their obligations; and 8) Greystone performed all its obligations under the Contract and Equipment Schedules, except as may have been prevented by the conduct of Motion.

Cross also affirms, as alleged in the Complaint, that on October 16, 2009, the aggregate amount due and owing to Greystone under the Contract and Equipment Schedules was $125,832.90 ("Balance"). Cross submits that Motion and the Guarantors owe Greystone the Balance, plus 1) interest thereon at the statutory rate of 9% per annum, 2) costs and disbursements and 3) reasonable counsel fees.

With respect to Greystone's application for injunctive/replevin relief, Section 8(b), titled "Remedies," sets forth Greystone's remedies in the event of a default, which includes Motion's failure to make required payments within ten (10) days of the due date. Subparagraphs (a) and (f) of the Remedies provision authorize Greystone to do the following in the event of Motion's default:

sole expense, any or all Equipment to such location as Greystone may designate...,

(f) exercise any other right or remedy which may be available to it under applicable

law, or proceed by appropriate court action to enforce the terms hereof or to recover

damages for the breach hereof, including reasonable attorneys' fees and court costs... [*5]

Cross avers, upon information and belief, that the Equipment was delivered to the Defendants at 975 Main Street, Farmingdale, New York 11735, the address set forth in the Contract, and that the Equipment is in the possession or control of the Defendants. Greystone has made demand upon the Defendants to return the Equipment, which they have failed to do. Cross affirms that the Equipment has a fair market value of $47,000.

Plaintiff submits that it has demonstrated its right to a default judgment against Motion by establishing 1) service of the Complaint on Motion pursuant to BCL § 306, 2) Motion's failure to appear or answer the Complaint, 3) the existence and terms of the Contract, 4) Plaintiff's performance pursuant to the Contract, 5) Motion's breach of the Contract by failing to make required payments and to return the Equipment to Greystone, and 6) Plaintiff's damages, as outlined in Cross' Affidavit.

Plaintiff further submits that it has demonstrated its right to summary judgment against the Guarantors by establishing 1) the Guarantors' execution of the Guaranties and 2) Guarantors' failure to make the required payments under the Agreement and Guaranties.

Plaintiff also argues that the Guarantors' Affirmative Defenses lack merit. Motion ^[FN2] selected the Equipment it wished to purchase as well as the vendor, and negotiated the terms and price. Only then did Greystone, Motion and the Guarantors enter into the Agreement and Guarantees. Thus, Greystone merely financed the transaction by purchasing the Equipment from the supplier that Motion selected and leasing the Equipment to Motion based on the representations in the Agreement and Guaranties. Pursuant to the express terms of the Agreement, Greystone retains sole title to the Equipment and, at the end of the term of the Agreement, the Defendants are required to return the Equipment to Greystone.

Greystone made no representations or warranties to the Defendants other than those found in the Agreement and Guarantees, as demonstrated by the following language in paragraph three (3) of the Contract, titled "No Warranties":

Plaintiff also cites the following language in paragraph two (2) of the Contract, titled [*6]"Acceptance; Term and Installment Payments":

Plaintiff submits that the first Affirmative Defense, alleging that the Complaint fails to state a cause of action, must fail, first because that defense is mere surplusage which is raised more appropriately in a motion to dismiss pursuant to CPLR § 3211(a)(7). Plaintiff also submits that the Complaint is sufficient in light of its description of 1) the nature of the Agreement and Guaranties between the parties, 2) the delivery and acceptance of the Equipment, 3) the nature of Defendants' breaches of the Agreement and Guaranties, and 4) Greystone's damages.Plaintiff also contends that the second Affirmative Defense, alleging the Statute of Frauds, is not viable in light of the written documentation that Plaintiff has produced reflecting the agreements among the parties.

Next, Plaintiff submits that the third Affirmative Defense, based on waiver, lacks merit because Greystone never waived its rights and remedies under the Agreement and Guarantees, and there is no evidence from which the Court may infer such a waiver, particularly because Greystone contacted Defendants on numerous occasions regarding their obligations under the Agreement and Guarantees. Moreover, the portion of the third Affirmative Defense based on promissory and/or equitable estoppel must fail because 1) Defendants have failed to provide Plaintiff with notice, pursuant to CPLR §§ 3013 and 3016(b), of the circumstances on which this defense is based; 2) Defendants have failed to demonstrate that Greystone made misleading statements or representations on which Defendants relied to their detriment; 3) Greystone made no representations or warranties under than those contained in the Agreement and Guaranties; and 4) the Agreement states that any modification must be in writing, and no such modifications were executed.

Plaintiff contends that the fourth Affirmative Defense, based on documentary evidence, also lacks merit in light of Defendants' failure to come forward with any evidence to substantiate its claim, and in light of the fact that the documentation provided by Plaintiff supports its motion.

Plaintiff also argues that the fourth Affirmative Defense, alleging laches, lacks merit. Preliminarily, laches is applicable to an action at law and, therefore, may not bar Plaintiff's causes of action for breach of contract for money damages. Moreover, Defendants have failed to provide Plaintiff with notice, pursuant to CPLR §§ 3013 and 3016(b), of the circumstances on which this defense is based. Finally, this defense must fail because Plaintiff filed the Complaint within the applicable statute of limitations period and Defendants have demonstrated no prejudice with respect to that filing. [*7]

Finally, Plaintiff submits that the fifth Affirmative Defense, based on unclean hands, must fail because 1) it is inapplicable to an action at law and therefore would not bar Plaintiff's instant action for breach of contract and money damages; 2) Defendants have failed to provide the required notice under CPLR §§ 3013 and 3016(b); 3) Plaintiff has fulfilled its obligations pursuant to the Agreement and Guaranties; and 4) Defendants have failed to demonstrate that Greystone made misleading statements or representations.

Plaintiff also contends that it is entitled to an Order permitting it to repossess the Equipment by virtue of 1) Defendants' default under the Agreement and Guaranties,2) Defendants' refusal to return the Equipment despite Plaintiff's demand, and 3) the applicable provisions of the Agreement stating that the Equipment is the property of Greystone. Plaintiff provides a bond (Ex. I to Aff. in Support) to secure the requested Order of Replevin. That bond is in the sum of $94,000, representing twice the fair market value of the Equipment as described by Cross in his Affidavit.

Plaintiff affirms that, upon affirmation and belief, the Equipment is located at Motion's Address and at the Guarantors' Addresses and that it can be easily moved, secreted and liquidated by Defendants. Plaintiffs submit that, in light of Defendants' failure to return the Equipment, it is likely that they will take steps, including secretion or sale of the Equipment, designed to deprive Greystone of its ownership rights in the Equipment.

The Defendants have submitted no opposition or other response to Plaintiff's motion.

To grant summary judgment, the court must find that there are no material, triable issues of fact, that the movant has established his cause of action or defense sufficiently to warrant the court, as a matter of law, directing judgment in his favor, and that the proof tendered is in admissible form. Menekou v. Crean, 222 AD2d 418, 419-420 (2d Dept 1995). If the movant tenders sufficient admissible evidence to show that there are no material issues of fact, the burden then shifts to the opponent to produce admissible proof establishing a material issue of fact. Id. at 420. Summary judgment is a drastic remedy that should not be granted where there is any doubt regarding the existence of a triable issue of fact. Id.

CPLR § 3215(a) permits a party to seek a default judgment against a Defendant who fails to make an appearance. The moving party must present proof of service of the summons and the complaint, affidavits setting forth the facts constituting the claim, the default, and the amount due. CPLR § 3215 (f); Allstate Ins. Co. v. Austin, 48 AD3d 720 (2d Dept. 2008). The moving party must also make a prima facie showing of a cause of action against the defaulting party. Joosten v. Gale, 129 AD2d 531 (1st Dept. 1987). To avoid the entry of a default judgment, Defendants are thus required to demonstrate a reasonable excuse for the default and a meritorious defense to the action. Matone v. Sycamore Realty Corp., 50 AD3d 978 (2d Dept. 2008), lv. app. den. 11 NY3d 715 (2009); Grinage v. City of New York, 45 AD3d 729 (2d Dept. 2007).

C. Applicable Causes of Action

To establish a cause of action for breach of contract, one must demonstrate: 1) the existence of a contract between the plaintiff and defendant, 2) consideration, 3) performance by the plaintiff, 4) breach by the defendant, and 5) damages resulting from the breach. Furia v. [*8]Furia, 116 AD2d 694 (2d Dept. 1986).

To establish an entitlement to judgment as a matter of law on a guaranty, plaintiff must prove the existence of the underlying obligation, the guaranty, and the failure of the prime obligor to make payment in accordance with the terms of the obligation. E.D.S. Security Sys., Inc. v. Allyn, 262 AD2d 351 (2d Dept., 1999). To be enforceable, a guaranty must be in writing executed by the person to be charged. General Obligations Law § 5-701(a)(2); see also Schulman v. Westchester Mechanical Contractors, Inc., 56 AD2d 625 (2d Dept., 1977). The intent to guarantee the obligation must be clear and explicit. PNC Capital Recovery v. Mechanical Parking Systems, Inc., 283 AD2d 268 (1st Dept., 2001), app. dism., 98 NY2d 763 (2002). Clear and explicit intent to guaranty is established by having the guarantor sign in that capacity and by the language contained in the guarantee. Salzman Sign Co. v. Beck, 10 NY2d 63 (1961); Harrison Court Assocs. v. 220 Westchester Ave. Assocs., 203 AD2d 244 (2d Dept., 1994).

Provisions or stipulations in contracts for payment of attorney's fees in the event it is necessary to resort to aid of counsel for enforcement or collection are valid and enforceable. Roe v. Smith, 278 NY 364 (1938); National Bank of Westchester v. Pisani, 58 AD2d 597 (2d Dept. 1977). Attorneys' fees may be awarded pursuant to the terms of a contract only to an extent that they are reasonable and warranted for services actually rendered. Kamco Supply Corp. v. Annex Contracting Inc., 261 AD2d 363 (2d Dept. 1999).The court should consider the following factors in determining the reasonable value of the services rendered: 1) the time and labor required, the difficulty of the questions involved, and the skill required to handle the problems presented, 2) the lawyer's experience, ability and reputation, 3) the amount involved and benefit resulting to the client from the services, 4) the customary fee charged for similar services, 5) the contingency or certainty of compensation, 6) the results obtained, and 7) the responsibility involved. Diaz v. Audi of America, Inc., 57 AD3d 828, 830 (2d Dept. 2008). In making an award of attorney's fees, the court must possess sufficient information upon which to make an informed assessment of the reasonable value of the legal services rendered. NYCTL 1988-1 Trust v. Shabbos, Inc., 37 AD3d 789, 791 (2d Dept. 2007), quoting SO/Bluestar, LLC v. Canarsie Hotel Corp., 33 AD3d 986 (2d Dept. 2006).

A complaint may be dismissed based upon documentary evidence pursuant toCPLR § 3211(a)(1) only if the factual allegations contained therein are definitively contradicted by the evidence submitted or a defense is conclusively established thereby. Yew Prospect, LLC v. Szulman, 305 AD2d 588 (2d Dept. 2003); Sta-Bright Services, Inc. v. Sutton, 17 AD3d 570 (2d Dept. 2005).

A motion interposed pursuant to CPLR §3211 (a)(7), which seeks to dismiss a complaint for failure to state a cause of action, must be denied if the factual allegations contained in the complaint constitute a cause of action cognizable at law. Guggenheimer v. Ginzburg, 43 NY2d 268 (1977); 511 W. 232nd Owners Corp. v. JenniferRealty Co., 98 NY2d 144 (2002). When entertaining such an application, the Court must liberally construe the pleading. In so doing, the Court must accept the facts alleged as true and accord to the plaintiff every favorable inference which may be drawn therefrom. Leon v. Martinez, 84 NY2d 83 (1994). However, on such a motion, the Court will not presume as true bare legal conclusions and factual claims which are [*9]flatly contradicted by the evidence. Palazzolo v. Herrick, Feinstein, 298 AD2d 372 (2d Dept. 2002).

As the Statute of Frauds is an affirmative defense, it is incumbent on the movant to demonstrate that there was in fact no written contract, or note or memorandum, of the transaction at issue. Subgar Realty Corp. v. Gothic Lumber, 80 AD2d 774 (1st Dept. 1981), quoting General Obligations Law § 5-703 (2).

The doctrine of laches bars recovery where a plaintiff's inaction has prejudiced the defendant and rendered recovery inequitable. This doctrine has no application in actions at law. Blinds To Go v. Times Plaza, 45 AD3d 714 (2d Dept. 2007).

The equitable estoppel doctrine precludes a defendant from raising the statute of limitations when defendant's affirmative wrongdoing, such as fraud, misrepresentation, or deception, prevented plaintiff from bringing a timely action. Zumpano v. Quinn, 6 NY3d 666, 674 (2006).

To establish a viable claim for promissory estoppel a plaintiff must allege (1) a clear and unambiguous promise, (2) reasonable and foreseeable reliance by the party to whom the promise is made, and (3) an injury sustained in reliance on the promise. Williams v Eason, 49 AD3d 866, 867 (2d Dept. 2008). Plaintiff must prove all three elements to sustain a cause of action for promissory estoppel. Kennedy v . Leibowitz, 303 AD2d 375 (2d Dept. 2003).

CPLR § 3013, titled "Particularity of statements generally," provides as follows:

Statements in a pleading shall be sufficiently particular to give the court and partiesnotice of the transactions, occurrences, or series of transactions or occurrences, intended to be proved and the material elements of each cause of action or defense.

Where a cause of action or defense is based upon misrepresentation, fraud, mistake,wilful default, breach of trust or undue influence, the circumstances constituting thewrong shall be stated in detail.

CPLR § 7101 provides that "[A]n action under this article may be brought to try the right to possession of a chattel."

(c) Affidavit. The application for an order of seizure shall be supported by an affidavitwhich shall clearly identify the chattel to be seized and shall state:

1. that the plaintiff is entitled to possession by virtue of facts set forth; 2. that the chattel is wrongfully held by the defendant named; 3. whether an action to recover the chattel has been commenced, the defendants served, whether they are in default, and, if they have appeared, where papers may be served uponthem; 4. the value of each chattel or class of chattels claimed, or the aggregate value of all chattels claimed; [*10] 5. if the plaintiff seeks the inclusion in the order of seizure of a provision authorizing the sheriff to break open, enter and search for the chattel, the place where the chattel islocated and facts sufficient to establish probable cause to believe that the chattel islocated at that place; 6. that no defense to the claim is known to the plaintiff; and 7. if the plaintiff seeks an order of seizure without notice, facts sufficient to establish that unless such order is granted without notice, it is probable the chattel will becomeunavailable for seizure by reason of being transferred, concealed, disposed of, or removedfrom the state, or will become substantially impaired in value.

1. Upon presentation of the affidavit and undertaking and upon finding that it is probablethe plaintiff will succeed on the merits and the facts are as stated in the affidavit, the courtmay grant an order directing the sheriff of any county where the chattel is found to seizethe chattel described in the affidavit and including, if the court so directs, a provision that, if the chattel is not delivered to the sheriff, he may break open, enter and search for the chattel in the place specified in the affidavit. The plaintiff shall have the burden of establishing the grounds for the order.

Under CPLR § 7102(d), a court may grant an order of seizure upon the presentation of an affidavit and undertaking and upon a determination that the plaintiff will likely succeed on the merits and that the facts are as stated in the affidavit. Amplicon, Inc. v. Information Management Technologies, 1999 U.S. Dist. LEXIS 13464, p.3 (S.D.NY 1999). See also Ukryn v. Morgan Marine, 100 AD2d 649 (3d Dept. 1984), appeal withdrawn, 62 NY2d 977 (1984) (order of seizure dependent on court's finding that it is probable that plaintiff will succeed on the merits). In an action for recovery of chattels pursuant to CPLR § 7101, the sole issue is which party has the superior possessory right to the chattels. Merrill Lynch v. American Standard Testing, 2010 U.S. Dist. LEXIS 2278, p. 21 (E.D.NY, January 12, 2010), citing Christie's Inc. v. Davis, 247 F. Supp. 2d 414, 419 (S.D.NY 2002), quoting Honeywell Information Systems, Inc. v. Demographic Systems, Inc., 396 F. Supp. 273, 275 (S.D.NY 1975).

The recent Merrill Lynch decision is instructive. There, the court granted plaintiff's motion for an order of seizure. The court concluded that plaintiff clearly had the superior possessory right to the collateral in light of the facts that 1) plaintiff held a perfected security interest in the collateral; 2) defendants were in default of the applicable agreement and guaranties; and 3) the agreement provided that one of plaintiff's remedies, in the event of a default by defendant, was to take possession of the collateral with or without the use of any judicial process. Id. at 21-22. The court also rejected defendants' contention that they had a good faith defense to the action based on the parties' course of conduct, concluding that it was the terms of the applicable contracts between the parties, not the parties' past course of conduct, that determined whether defendants were in default of their obligations. Id. at 22.

The Court concludes that Plaintiff has demonstrated its right to a default judgment against [*11]Motion by demonstrating that 1) Motion entered into the Contract; 2) Plaintiff performed its obligations under the Contract; and 3) Motion has failed to make required payments pursuant to that Contract. Accordingly, the Court grants Plaintiff judgment against Motion in the sum of $125,832.90, plus interest, costs and expenses, and attorney's fees to be determined at an inquest.

The Court also concludes that Plaintiff has demonstrated its right to some measure of injunctive relief by 1) its demonstration that Guarantors have failed to make required payments under their Guaranties; 2) its allegations that Guarantors may dispose of the Equipment; 3) the danger that the Equipment, in which Plaintiff has a security interest, may be removed or disposed of and 4) the lack of any apparent prejudice to Defendants if the Court grants injunctive relief. Accordingly, the Court a) directs that Defendants are prohibited from removing, transferring, concealing, disposing of, selling, pledging and/or assigning the Equipment; and b) directs the Defendants to turn the Equipment over to Plaintiff on or before April 23, 2010. The Court directs Plaintiff to post a bond in the sum of $20,000 as a condition of this injunctive relief.

The Court, however, reserves decision on Plaintiff's motion for summary judgment and request for an Order of Seizure, with leave to renew should Guarantors fail to comply with the Court's directives regarding the return of the Equipment. If Defendants do not comply with the Court's directive to return the Equipment on or before April 23, 2010, the Court will permit Plaintiff to renew its applications at the conference on April 27, 2010.

ORDERED, that Plaintiff have judgment by default against Defendant Motion Imaging, Inc. in the sum of $125,832.90, plus interest, costs and expenses, and attorney's fees; and it is further

ORDERED, that this matter is respectfully referred to Special Referee Frank Schellace (Room 060, Special 2 Courtroom, Lower Level) to hear and determine all issues relating to the determination of interest, costs and expenses, and attorney's fees as to the default judgment, pursuant to CPLR § 3215, on May 5, 2010 at 10:00 a.m.; and it is further

ORDERED, that Plaintiff's attorneys shall serve upon the Defendant Motion Imaging, Inc. by certified mail, return receipt requested, a copy of this Order with Notice of Entry, a Notice of Inquest or a Note of Issue and shall pay the appropriate filing fees on or before April 23, 1010; and it is further

ORDERED, that the County Clerk, Nassau County is directed to enter a judgment in favor of the Plaintiff and against the Defendant Motion Imaging, Inc. in accordance with the decision of the Special Referee; and it is further

ORDERED, that Defendants Robert Thompson, William Vidro, Steven Navon, and John Conkling are prohibited from removing, transferring, concealing, disposing of, selling, pledging and/or assigning the equipment that is the subject matter of the master commercial equipment finance lease and related schedules thereto upon which this action is based; and it is further

ORDERED, that Defendants Robert Thompson, William Vidro, Steven Navon, and John Conkling are directed to turn over to Plaintiff, on or before April 23, 2010, the equipment that is the subject matter of the master commercial equipment finance lease and related schedules thereto upon which this action is based; and it is further

ORDERED, that Plaintiff is directed to post a bond in the sum of $20,000 as a condition of this injunctive relief; and it is further [*12]

ORDERED, that Plaintiff is directed to serve a copy of this Order on Defendants Robert Thompson, William Vidro, Steven Navon, and John Conkling on or before April 15, 2010 via overnight mail; and it is further

ORDERED, that counsel for Plaintiff, counsel for Defendants Robert Thompson, William Vidro, Steven Navon, and John Conkling, and any Defendants who are unrepresented by counsel, are directed to appear at a conference before the Court on April 27, 2010 at 9:30 a.m.