Plaintiffs Mme. Pirie's Inc. ("Mme. Pirie's") and Rosa Belleville move pursuant to CPLR 3212 for an order granting summary judgment on their complaint and dismissing the affirmative defenses and counterclaims alleged in the answer filed by defendants Keto Ventures, LLC ("Keto Ventures"), Valerie Keto, as Administrator of the Estate of Jessica Keto ("Estate"), and Jacklyn Keto. Defendants oppose the motion and cross-move by Order to Show Cause to renew their opposition to plaintiffs' application for an order of seizure, which was granted by Decision & [*2]Order dated October 14, 2014 ("Prior Decision"), and for summary judgment on certain counterclaims.

The background to this action is set forth in the Prior Decision and will be only be repeated here insofar as necessary to determination of the pending motions. Briefly, Mme. Pirie's was the owner and operator of Mme. Pirie's Famise Corset and Lingerie Shop ("Shop"), and Rosa Belleville is the corporation's president and sole shareholder. Jessica Keto, now deceased, was a part-time employee at the Shop.

On or about January 16, 2014, Mme. Pirie's entered into an asset purchase agreement with Keto Ventures, a limited liability company of which Jessica Keto was the sole member. Pursuant to an Agreement for Purchase and Sale of Assets ("Purchase Agreement"), Keto Ventures purchased "certain equipment, inventory and personal property" from Mme. Pirie's for a total price of $512,500, allocated as follows: (a) $5,000 for equipment; (b) $243,750 for inventory; and (c) $263,750 for the seller's covenant not to compete and for the good will of the Shop. Of the foregoing sum, $25,000 was paid as a purchase money deposit and another $218,750 was paid at the closing. The remaining $268,750 balance took the form of a promissory note ("Note") pursuant to which Keto Ventures and Jessica Keto (collectively "defendants") agreed to make 36 monthly payments of $6,658.17, followed by a balloon payment of $60,000. Rosa Belleville is the payee on the Note.

The same parties also entered into a Security Agreement by which Rosa Belleville was granted a security interest in all inventory, goods, equipment, appliances, furnishings and fixtures on the premises of the business, as well as any trademarks, trade names and contract rights in which defendants have an interest ("Collateral"). Rosa Belleville filed a UCC financing statement on or about January 30, 2014 naming defendants as debtors with respect to the covered Collateral.

Following the January 16, 2014 closing, defendants took possession of the Shop, and the first monthly installment under the Note was timely paid on March 1, 2014. However, on March 18, 2014, Jessica Keto unexpectedly passed away. By Letters of Administration dated April 7, 2014, Jessica's mother, Valerie Keto, was appointed as Administrator of the Estate. Following Jessica's death, her sister Jacklyn took over the Shop.

Plaintiffs allege that defendants have defaulted under the Note by failing to make the monthly installment payments due on April 1, 2014 and each month thereafter. After giving notice to defendants, Belleville declared a default on July 17, 2014, demanded immediate repayment of the Note and requested that defendants turn over the Collateral to her. Defendants failed to comply, and this action followed.

Plaintiffs' complaint alleges three causes of action: (1) breach of contract (Note); (2) breach of contract (Purchase Agreement); and (3) replevin of collateral (Security Agreement). Through a Verified Answer with Affirmative Defenses and Counterclaims ("Answer"), defendants allege affirmative defenses sounding in fraud, unclean hands, estoppel, impossibility of performance and unconscionability, along with counterclaims sounding in fraud, constructive fraud, breach of the non-compete agreement and breach of fiduciary duty.

Plaintiffs' application for an order of seizure was brought on by an Order to Show Cause ("OTSC") signed on July 22, 2014. As articulated in the Prior Decision, the Court granted the [*3]requested relief upon finding that the prerequisites of CPLR 7102 were met and "that it is highly likely that plaintiffs will succeed on the merits of their complaint seeking recovery under the Note, notwithstanding the various affirmative defenses and counterclaims alleged by defendants."

In particular, the Court determined that "[d]efendants' sweeping claims of fraud are unsupported by proof in admissible form or even detailed factual allegations of an evidentiary nature." In this connection, the Court noted that "Valerie Keto was not involved in or present for any of the discussions or negotiations preceding execution of the Purchase Agreement, Note or Security Agreement".

With regard to defendants' complaints about false or misleading financial projections allegedly supplied to Jessica Keto by plaintiffs' accountant, the Court determined that "it appears unlikely that defendants will be able to establish that these future projections represent actionable statements of fact, that the accountant's projections were knowingly false when made, that plaintiffs made or induced the alleged misrepresentations by the certified public accountant, and that Jessica Keto justifiably relied upon the future projections supplied by plaintiffs' accountant in entering into the relevant agreements "

As to alleged discrepancies in the valuation of the Shop's inventory, the only proof in admissible form before the Court "show[ed] that the purchase price was based upon a multiple of the owner benefit historically derived from the business, not the value of its inventory". The Prior Decision also noted that Jessica Keto's employment in the Shop at pertinent times gave her personal knowledge of the inventory on hand, thereby making it doubtful that she could have reasonably relied upon the price allocation in the Purchase Agreement as a factual representation as to the value of inventory on hand.

Finally, "defendants' highly conclusory assertions that Rosa Belleville breached a duty of trust or confidence owed to Jessica or exerted undue influence [were found by the Court to] lack factual support."

Summary judgment is a drastic remedy and should only be granted if there are no material issues of disputed fact (Sillman v Twentieth-Century Fox Film Corp., 3 NY2d 395 [1957]). In evaluating a motion for summary judgment, a court should simply determine whether material issues of disputed fact preclude the grant of judgment as a matter of law (S. J. Capelin Assoc. v Globe Manufacturing Corp., 34 NY2d 338 [1974]). The party moving for summary judgment has the initial burden of coming forward with admissible evidence to support the motion, so as to warrant the Court directing judgment in movant's favor; the burden then shifts to the opposing party to demonstrate, by admissible evidence, the existence of any factual issue requiring a trial of the action (see Zuckerman v City of New York, 49 NY2d 557 [1980]).

In support of their motion, plaintiffs submit the Note, Purchase Agreement and Security Agreement, along with competent proof of defendants' defaults thereunder. Plaintiffs also submit argument and evidence seeking to establish that the affirmative defenses and counterclaims alleged in defendants' Answer lack merit as a matter of law.

In opposition, defendants argue principally that they should be permitted an opportunity [*4]for discovery, particularly with regard to their affirmative defenses and counterclaims predicated upon allegations of fraud and undue influence. With respect to the fraud-based defenses and counterclaim, defendants now emphasize plaintiffs' alleged misrepresentations concerning the annual "owner benefit" realized by Belleville from the business. Defendants maintain that Belleville's selective disclosure of her 2012 owner benefit in reference to what she was able to "t[ake] out of the business annually" is inconsistent with the substantially lesser benefits realized by Belleville in preceding years. In this connection, defendants assert that information concerning the "owner benefit" was disclosed only through the deposition of plaintiffs' accountant, the transcript of which was not received until after determination of plaintiffs' application for the order of seizure.

Defendants also continue to take issue with the amount of the purchase price allocated to inventory, submitting an affidavit from a former employee of the Shop "who was aware that [Belleville] had informed Jessica that there was $500,000 in inventory on hand in the store." The same former employee avers that every time that Jessica Keto returned from a business meeting with Belleville, she "was clearly intoxicated or under the influence of some other substance."

Defendants argue that the foregoing allegations, alleged inconsistencies and other proof offered in opposition to the motion suffice to raise triable issues of fact or, at the very least, warrant additional discovery.

CPLR 3212 (f) provides as follows: "Should it appear from affidavits submitted in opposition to the motion that facts essential to justify opposition may exist but cannot then be stated, the court may deny the motion or may order a continuance to permit affidavits to be obtained or disclosure to be had and may make such other order as may be just." "Speculation by the opposing party will not suffice and, thus, such party must demonstrate how further discovery might reveal material facts in the exclusive knowledge" of the movant (Bevens v Tarrant Mfg. Co., Inc., 48 AD3d 939, 942 [3d Dept 2008]).

Applying these principles, the Court finds that defendants have made a sufficient showing of the need for further disclosure. Plaintiffs' responses to defendants' allegations of fraud and undue influence rest largely upon a series of affidavits sworn to by Rosa Belleville. None of the individual defendants were present for any of the discussions or negotiations preceding the transaction, and the record does not disclose percipient witnesses to certain key events. Thus, given the passing of Jessica Keto, material facts germane to defendants' counterclaims and defenses appear to lie in the exclusive possession of movants. Under the circumstances, defendants should be accorded the opportunity to inquire into the affidavit testimony submitted by or on behalf of plaintiffs.^[FN1] Accordingly, the Court will exercise its discretion under CPLR 3212 (f) to deny the dispositive motions as premature.

On the basis of the same record and arguments adduced in opposition to plaintiffs' motion for summary judgment, defendants also seek to renew their opposition to plaintiffs' prior application for an order of seizure.

A motion for leave to renew " must be based upon newly discovered evidence which existed at the time the prior motion was made, but was unknown to the party seeking renewal, along with a justifiable excuse as to why the new information was not previously submitted'" (2 N. St. Corp. v Getty Saugerties Corp., 68 AD3d 1392, 1396 [3d Dept 2009], quoting Tibbits v Verizon, NY, Inc., 40 AD3d 1300, 1302-1303 [3d Dept 2007]; see JPMorgan Chase Bank, N.A. v Malarkey, 65 AD3d 718, 719-720 [3d Dept 2009]). "Renewal is not a means by which to remedy the failure to present evidence which, with due diligence, could have been produced at the time of the original motion'" (2 N. St. Corp., 68 AD3d at 1396-1397, quoting Kahn v Levy, 52 AD3d 928, 930 [3d Dept 2008]).

While defendants have shown how further discovery might disclose facts in the exclusive possession of plaintiffs that are material to defendants' counterclaims and affirmative defenses, the present record falls well short of establishing evidentiary facts "that would change the [Court's] prior determination" to grant the order of seizure (CPLR 2221 [e] [2]).

Even if defendants could succeed in establishing an actionable misrepresentation of fact on the basis of Belleville's use of the terms "annually" and "annual" in describing her 2012 "owner benefit", it remains unlikely that they can demonstrate that Jessica Keto actually and reasonably relied upon any such misrepresentation. The largest component of the owner benefit, the "self-salary" paid to Belleville, is conspicuously disclosed on Mme. Pirie's prior income tax returns, but it does not appear that Jessica Keto performed the basic due diligence of requesting these tax returns or other documents reflecting the Shop's historical financial performance. Nor does it appear that Jessica Keto made any inquiry to Belleville or her accountant regarding the "owner benefit" document relied upon by defendants. And to the extent that Belleville's use of the terms "annual" or "annually" are susceptible to more than one reasonable interpretation, defendants also would also appear to have difficulty in establishing scienter. Finally, the remaining "new" proof relied upon by defendants, including the affidavit of Sharon Farber, consists largely of inadmissible hearsay, conclusory assertions and speculation.

Accordingly, in the absence of persuasive proof in admissible form supporting their claims of Belleville's wrongdoing, the Court remains of the view that plaintiffs are highly likely to succeed on the merits of their claims to recover under the Note, Purchase Agreement and Security Agreement — whether upon a renewed motion for summary judgment at the conclusion of discovery or at a plenary t rial of the action.

Accordingly, it is

ORDERED, that plaintiffs' motion for summary judgment is denied as premature; and it is further

ORDERED that the branch of defendants' motion seeking summary judgment is denied as premature; and it is further

ORDERED that the branch of defendants' motion seeking renewal is denied; and it is further

ORDERED that parties shall confer regarding a schedule for discovery and the filing of a note of issue and shall, within thirty (30) days from the date of this Decision & Order, either: (i) stipulate to a scheduling order, which shall be submitted to the Court for approval; or (ii) request a scheduling conference with the Court.

This constitutes the Decision and Order of the Court. This Decision and Order is being transmitted to plaintiffs' counsel; all other papers are being returned to the Albany County Clerk . The signing of this Decision and Order shall not constitute entry or filing under CPLR Rule 2220. Counsel is not relieved from the applicable provisions of that Rule respecting filing, entry and Notice of Entry.