This case is not published in a printed volume and its disposition appears in a table in the reporter.
Attorneys for Plaintiff Storch Amini & Munves PC
Att: Kathleen E. Wright, Esq., Elizabeth J. Shampnoi, Esq., Steven G. Storch, Esq. and Bonnie A. Tucker, Esq.
Attorneys for Defendants Toback, Bernstein & Reiss LLP
Att: Arthur M. Toback, Esq.
Helen E. Freedman, J.
Plaintiff Silvermark Corporation ("Silvermark"), brought this action against its factor Rosenthal & Rosenthal, Inc. ('Rosenthal'), and Star City Sportswear, Inc. ("Star City"), a Silvermark's client, for breach of contract, breach of covenant of good faith and fair dealing, goods sold and delivered, unjust enrichment, fraud, and tortious conversion. Rosenthal now moves to dismiss the complaint based on documentary evidence, pursuant to CPLR 3211(a)(1), and for failure to state a cause of action, pursuant to CPLR 3211(a)(7). Rosenthal also seeks an award of attorneys' fees pursuant to the terms of its contract with plaintiff and imposition of sanctions on the grounds that plaintiff's claims are frivolous.
For the reasons set forth below, Rosenthal's motion to dismiss is granted as to the first, third, fourth, fifth, and sixth causes of action and it is denied as to the second cause of action.
Silvermark is a corporation engaged in the manufacturing of apparel. On or about October 9, 2002, Silvermark entered into a Factoring Agreement ("the Agreement"), with Rosenthal, a company engaged in providing factoring services to vendors. Pursuant to the Agreement, Rosenthal purchased certain approved accounts receivable from Silvermark and advanced sums to it based on the net amount of the purchased receivables. Rosenthal then collected payment from Silvermark's customers and remitted to it any funds remaining after payment of Rosenthal's advances, charges, and interest charges according to the terms of the Agreement.
The relevant portions of the Agreement provide as follows:
2. . . . We shall not be responsible for any non-payment of a receivable because of the assertion of any claim or dispute by a customer or the exercise of any counterclaim or offset (whether or not such claim, dispute, counterclaim or offset relates to the specific receivable) . . . .
3. . . . You shall report to us in writing all disputes and claims made by your customers, and the return of or offer to return any goods, and you will promptly settle all such claims and disputes at your expense. . . . We reserve the right at any time to charge back to your account the full amount of the receivable that has been the subject of a credit issued by you without our consent or that has been involved in any other claim, dispute or return asserted by your customer, and you agree to pay us upon demand the full amount thereof. The charge back to your account of the amount of any receivable shall not be deemed a reassignment thereof to you and title thereto, to the proceeds thereof, to all security and guarantees therefor and to your interest in the goods represented thereby, shall remain in us.
7. . . . All statements, reports or accountings rendered or issued by us to you, including such trial balances and sales summaries, shall be deemed accepted and be finally conclusive and binding upon you unless you notify us to the contrary by registered or certified mail within sixty days after the date such statement, report or ...