The following papers and the attachments and exhibits thereto have been read on this [*2]motion:

Notice of Motion1

Affirmation in Support2

Affirmation in Support ^[FN1]3

Affidavit in Support4

Affirmation in Opposition5

Affirmation in Further Support6

Affirmation in Further Support7

Affirmation in Further Support8

In an action to recover damages for, inter alia, breach of contract, the Defendants move for an order pursuant to CPLR 3212 dismissing the complaint and granting them summary judgment on their first and second counterclaims.^[FN2]

For the reasons that follow, the motion is granted in part and denied in part.

In early 2004, certain of the Plaintiffs entered into a Stock Purchase Agreement ("Agreement") with Defendant Advanced Back Technologies, Inc. (the "Company"), whose business purpose was the manufacture, promotion, marketing, etc. of a specialized chiropractic chair called the Exten Trac Elite (the "chair").^[FN3]

Paragraph 5 of the Agreement contained various provisions delineating the inherent risk of the Plaintiffs' investment. Specifically, according to the Agreement, the Purchaser ^[FN4] acknowledged that "an investment in the shares is highly speculative, and involved a very high degree of risk and should only be made by persons who can afford the loss of their entire investment"; that "no representation or warranty is made by the Corporation to induce the Purchaser to invest in the Corporation and any representation or warranty not made herein is [*3]specifically disclaimed"; a holder of shares will only be entitled to receive dividends when, as, and if declared by the Board of Directors out of funds legally available therefore"; and that David Cuccia "will be entitled by reason of his ownership of more than a majority of the outstanding common stock, to elect the entire board of directors and effectively control the Corporation and its business" (Ex. "A" to David Cuccia's Affidavit).

On February 5, 2010, Plaintiffs commenced an action asserting causes of action for breach of contract, quantum meruit, unjust enrichment, and fraud/misappropriation. On May 26, 2011, Defendants David Cuccia, David Cuccia, D.C. and the Company answered the complaint and asserted three counterclaims, namely, that they are entitled to reimbursement from Plaintiffs for all expenses, including attorneys' fees, pursuant to the indemnification provision of the Agreement; Plaintiffs breached the warranties, representations and provisions of the Agreement; and defamation insofar as the Plaintiffs' claims for fraud and misrepresentation are false (Answer at ¶¶ 36-38). Defendant Susan Musso Cuccia did not answer the complaint nor did Plaintiffs reply to the counterclaims.

On September 3, 2013, the Defendants moved for summary judgment dismissing the complaint and for judgment on their first two counterclaims.

Dismissal of the Complaint

The Defendants correctly argue that the first cause of action for breach of contract should be dismissed to the extent that it is asserted by any Plaintiffs who were not signatories to the contract and, therefore, lack standing to assert such a claim.^[FN5]

As for the Plaintiffs who are signatories to the Agreement, their first cause of action for breach of contract must fail, in any event. The elements of a cause of action to recover damages for breach of contract are: the existence of a contract; the plaintiff's performance under the contract; the defendant's breach of the contract; and resulting damages (Palmetto Partners, L.P. v AJW Qualified Partners, LLC, 83 AD3d 804 [2d Dept 2011]). The Plaintiffs allege in their complaint that: some of the them performed work and invested money for the "advancement of this joint venture"; Defendants never gave the Plaintiffs responses to their demands regarding the progress of the chair; Defendants misappropriated funds; Defendants never paid any profits or refunded the money invested; Defendants failed to provide an accounting; and Defendants' "failure to pay the amount due and owing despite due demand, constitutes a material breach of the contract" (Complaint at ¶¶ 5-17).

Based on the submissions of the Defendants, which include the pleadings as well as the affidavits of David Cuccia (President and Chairman of the Board of Directors) and Maria Cuccia [*4](Treasurer, Secretary and Chief Executive Officer), the Defendants have made a prima facie showing that they have not breached the Agreement. These submissions establish that Plaintiff Corey Massella was the only Plaintiff to provide services to the Company and that he was paid for his services;^[FN6] that the Company updated the shareholders and advised of shareholders' meetings with various correspondence from December 2004 through September 2010; and that the Plaintiffs have never demanded to inspect the books or that they be paid for services that were purportedly rendered. Moreover, the Agreement that was purportedly breached does not contain any provision for the distribution of profits or the return of Plaintiffs' investment. To the contrary, the Agreement specifically sets forth that the investment was "highly speculative and involved a very high degree of risk" and should only be made by "persons who can afford the loss of their entire investment". Last, the Agreement also states that David Cuccia is entitled to "effectively control the Corporation and its business." These submissions demonstrate that the Defendants have not breached the Agreement and, thus, the Defendants have prima facie established their entitlement to summary judgment dismissing the first cause of action for breach of contract.

In the quantum meruit claim, the Plaintiffs allege that they "performed other types of legal, marketing, chiropractic, and accounting services for the defendants in furtherance of the special insistence and request of Defendant" and that they "furnished investigative surveillance along with database investigation, materials, labor and services" (Complaint at ¶ 21).

In order to establish a claim in quantum meruit, a plaintiff must demonstrate: the performance of the services in good faith; the acceptance of the services by the person to whom they are rendered; an expectation of compensation therefor; and the reasonable value of the services (Candreva v Ultra Kote Applied Technology, Ltd., 44 AD3d 601 [2d Dept 2007]). Here, the Defendants' submissions establish that the Plaintiffs did not perform services for the Company (except for Massella, who was compensated for his accounting services).

In opposition, the affidavits of Jeffrey Byrne, Fred Jones, Edward Schein, and Corey Massella ^[FN7] consist of tailored, bare and conclusory allegations which are insufficient to rebut the [*5]Defendants' prima facie showing ^[FN8] (see Marine Midland Bank, N.A. v Dino & Artie's Automatic Transmission, 168 AD2d 610 [2d Dept 1990] [plaintiff cannot defeat prima facie showing with "general conclusory allegations which contain no specific factual references"]; Siegel, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C3212:16, at 324).^[FN9] In this regard, the court notes that it was incumbent upon the Plaintiffs to provide the court with proof that they performed services and the reasonable value of such services as "[i]t is difficult to imagine precisely what type of documentary evidence defendant[s] could produce to establish a negative, namely plaintiff[s]' non-contribution—even were it defendant[s'] burden to do so" (Moses v Savedoff, 96 AD3d 466, 470 [1st Dept 2012]). "[O]ur jurisprudence does not require a defendant [moving for summary judgment] to prove a negative on an issue as to which [it] does not bear the burden of proof'" (Martinez v Hunts Point Co-op. Market, Inc., 79 AD3d 569, 570 [1st Dept 2010] [citations omitted]). Thus, the Plaintiffs have failed to raise a triable issue of fact as to their purported services rendered to the Company (see Moses v Savedoff, 96 AD3d at 470, supra).

Plaintiffs allege in their third cause of action that in "performance of its work under the contract, defendant was unjustly enriched" (Complaint at ¶ 23) (emphasis added). As mentioned, however, the Plaintiffs have failed to rebut the Defendants' prima facie showing that services were not rendered. Moreover, in light of the Agreement upon which this cause of action is expressly premised, the Plaintiffs who executed the Agreement may not recover under an unjust enrichment theory (Whitman Realty Group, Inc. v Galano, 41 AD3d 590 [2d Dept 2007] [recovery for unjust enrichment is barred when there exists a valid and enforceable express contract between the parties]). [*6]

The fourth cause of action, which is denominated as a claim for "failure to give an accounting, fraud and misrepresentation", alleges that the Defendants: misrepresented the Plaintiffs; misappropriated funds; "enticed the Plaintiffs to the [sic] Defendants to enter into" the Agreement; and committed fraud by entering into the Agreement "fully knowing that they did not intend on adhering to said agreement" (Complaint at ¶¶ 26-28). Defendants argue that dismissal is warranted as "the claim is barred by the statute of limitations, and because no facts are alleged in the Verified Complaint so as to permit a reasonable inference of the alleged conduct. The singular basis for the fraud claims is the alleged breach of contract claim" (Affirmation in Support at ¶ 6).

The fraud-based cause of action was not pleaded with particularity so as to inform the Defendants of the alleged wrongful conduct and give notice of the allegations the Plaintiffs intend to prove and, therefore, must be dismissed (see Pludeman v Northern Leasing Systems, Inc., 10 NY3d 486 [2008]).^[FN10]

Accordingly, the Defendants' motion for summary judgment dismissing the complaint is granted with respect to Defendants David Cuccia, David Cuccia, D.C. and the Company. Insofar as no answer has been interposed by Defendant Susan Musso Cuccia, issue has not been joined with respect to her and, therefore, summary judgment, which is purportedly sought on her behalf, is premature.

Dismissal of the complaint against Susan Musso Cuccia is warranted in any event. The Plaintiffs did not move for a default judgment against Susan Musso Cuccia within one year after she defaulted and, therefore, the complaint, insofar as asserted against her, is dismissed sua sponte as abandoned pursuant to CPLR 3215(c), which provides:

If the plaintiff fails to take proceedings for the entry of judgment within one year after the default, the court shall not enter judgment but shall dismiss the complaint as abandoned, without costs, upon its own initiative or on motion, unless sufficient cause is shown why the complaint should not be dismissed.

Summary Judgment on the First and Second Counterclaims

The Defendants also argue that Plaintiffs breached the warranties, representations and provisions of paragraph five of the Agreement (second counterclaim) and, as such, Defendants are entitled to reimbursement from those Plaintiffs who signed the Agreement for all expenses, [*7]including attorneys' fees, pursuant to the indemnification provision of the Agreement (first counterclaim) (Answer at ¶¶ 36-37).^[FN11]

The counterclaims were interposed on May 26, 2011. There is no reply to the counterclaims in the record before this court and, as such, the Plaintiffs are in default with respect to the counterclaims asserted against them.

The law is well settled that when a defendant asserting a counterclaim fails to seek leave to enter a default judgment within one year after the default on the counterclaim has occurred, the counterclaim is deemed abandoned (McKinney's CPLR 3215(c); Wells Fargo Bank, N.A. v Chaplin, 107 AD3d 881 [2d Dept 2013]).

Here, because the answering Defendants who asserted the counterclaims failed to seek leave for the entry of a default judgment within one year after Plaintiffs' default on the counterclaims, the court, sua sponte, dismisses the counterclaims, as abandoned, pursuant to CPLR 3215(c).^[FN12]

Other Relief Sought in Opposition

"Given the language of CPLR 2215, and the contexts in which it is applicable . . . a party seeking relief in connection with another party's motion is, as a general rule, required to do so by way of a cross motion" (Fried v Jacob Holding, Inc., 110 AD3d 56 [2d Dept.2013]). As such, the relief requested by counsel in Plaintiffs' opposition papers, namely that the case be transferred to District Court "so that said matter can finish discovery . . . or in the alternative receiving a ruling from Your Honor that the Plaintiffs I represent still maintain their shares in the Corporation at issue", is denied (Plaintiffs' Opposition at pp 5-6).

Based on the foregoing, it is hereby [*8]

Ordered that the Defendants' motion for summary judgment is granted to the extent that the complaint is dismissed, insofar as asserted against Defendants David Cuccia, David F. Cuccia, D.C., and Advanced Back Technologies, Inc., and it is further

Ordered that the complaint, insofar as asserted against Susan Musso Cuccia is dismissed as abandoned pursuant to CPLR 3215(c), without costs; and it is further

Ordered that the branch of the Defendants' motion seeking judgment on the first and second counterclaims is denied; and it is further

Ordered that the counterclaims asserted in the Defendants' answer are dismissed as abandoned pursuant to CPLR 3215(c), without costs.

This constitutes the decision and order of the court.

Dated: December 20, 2013

_____________________________

Hon. Vito M. DeStefano, J.S.C.