COHEN FASHION v. V M OPT

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Docket Number

No. 2007-04711.

Judges

William F. Mastro
Peter B. Skelos
John M. Leventhal

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Smart Summary

Factual and Procedural Background

This case arises from an action to recover damages for breach of a franchise agreement and a sublease. The plaintiffs appealed from an order of the Supreme Court, Nassau County, which denied their motion for summary judgment on the issue of liability and to dismiss the affirmative defenses and counterclaim asserted in the answer.

Legal Issues Presented

Whether the plaintiffs were entitled to summary judgment on the issue of liability for breach of the franchise agreement and sublease.
Whether the defendants' affirmative defenses and counterclaim, based on an alleged oral modification of the franchise agreement, were legally sufficient to preclude summary judgment.
Whether the defendants' affirmative defenses of payment, accord and satisfaction, and statute of limitations were substantiated by factual allegations.

Arguments of the Parties

Appellants' Arguments

The plaintiffs contended they were entitled to summary judgment on liability, asserting no genuine material issue of fact existed to oppose their prima facie case.
They argued the defendants’ claim of an enforceable oral modification was barred by the express terms of the agreement and applicable law.
The plaintiffs maintained that the defendants’ counterclaim for setoff damages, premised on the oral modification, should be dismissed.
They further asserted that the defendants’ affirmative defenses lacked factual support and were conclusory, warranting dismissal.

Respondents' Arguments

The defendants claimed the parties entered into an enforceable oral modification of the franchise agreement.
They asserted a counterclaim for setoff damages based on this alleged oral modification.
The defendants raised affirmative defenses including payment, accord and satisfaction, and expiration of the statute of limitations.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Zuckerman v City of New York, 49 NY2d 557, 562	Standard for establishing entitlement to summary judgment as a matter of law.	Used to determine that the defendants failed to raise a genuine issue of material fact opposing the plaintiffs’ prima facie showing.
Moutafis v Osborne, 7 AD3d 686	Enforceability of oral modifications barred by express contract terms and General Obligations Law § 15-301(1).	Supported preclusion of defendants’ claim of oral modification of the franchise agreement.
Environmental Prods. Servs. v Consolidated Rail Corp., 285 AD2d 700	Same as above regarding oral modifications and contract enforcement.	Reinforced the court’s conclusion that the oral modification claim was barred.
Opton Handler Gottlieb Feiler Landau Hirsch v Patel, 203 AD2d 72	Legal principle barring oral modifications contrary to contract terms.	Applied to negate defendants’ oral modification defense.
Petracca v Petracca, 305 AD2d 566	Dismissal of unsubstantiated affirmative defenses.	Supported dismissal of defendants’ conclusory affirmative defenses.
Coleman v Norton, 289 AD2d 130	Same as above regarding insufficient factual support for affirmative defenses.	Confirmed that defendants’ defenses were conclusory and properly dismissed.
US 7 v Transamerica Ins. Co., 173 AD2d 311	Standard for evaluating affirmative defenses lacking factual basis.	Reinforced the dismissal of defendants’ unsubstantiated defenses.

Court's Reasoning and Analysis

The court reversed the lower court’s order, concluding that the defendants did not raise a genuine material issue of fact to oppose the plaintiffs’ prima facie entitlement to summary judgment. The defendants’ assertion of an enforceable oral modification was barred by the express terms of the franchise agreement and General Obligations Law § 15-301(1), as supported by cited precedents. Because the counterclaim for setoff damages rested on this barred oral modification, it was properly dismissed. Further, the defendants’ affirmative defenses of payment, accord and satisfaction, and statute of limitations were unsubstantiated by any factual allegations and were conclusory, warranting dismissal. The court found the defendants’ remaining contentions meritless without further discussion.

Holding and Implications

The order of the Supreme Court denying summary judgment and dismissing affirmative defenses and counterclaims was reversed, and the plaintiffs’ motion was granted.

This decision directly grants the plaintiffs summary judgment on liability and dismisses the defendants’ affirmative defenses and counterclaim. The opinion does not establish new precedent beyond affirming the application of existing contract and summary judgment principles.

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COHEN FASHION OPTICAL, INC., et al., Appellants, v. V M OPTICAL, INC., et al., Respondents.

Ordered that the order is reversed, on the law, with costs, and the plaintiffs' motion for summary judgment on the issue of liability and to dismiss the affirmative defenses and counterclaim asserted in the answer is granted.

Contrary to the determination of the Supreme Court, the defendants failed to raise a genuine material issue of fact in opposition to the plaintiffs' prima facie showing of entitlement to judgment as a matter of law ( see generally Zuckerman v City of New York, 49 NY2d 557, 562). The defendants' claim that the parties entered into an enforceable oral modification of the subject franchise agreement is precluded by the express terms of the agreement and by General Obligations Law § 15-301 (1) ( see e.g. Moutafis v Osborne, 7 AD3d 686; Environmental Prods. Servs. v Consolidated Rail Corp., 285 AD2d 700; Opton Handler Gottlieb Feiler Landau Hirsch v Patel, 203 AD2d 72). Moreover, since the defendants' counterclaim for setoff damages was premised on the purported oral modification, the plaintiffs were entitled to the dismissal of that counterclaim.

The defendants' affirmative defenses of payment, accord and satisfaction, and expiration of the applicable statute of limitations period were unsubstantiated by any factual allegations and conclusory in nature. Accordingly, the branch of the plaintiffs' motion which was for summary judgment dismissing them should have been granted ( see e.g. Petracca v Petracca, 305 AD2d 566; Coleman v Norton, 289 AD2d 130; US 7 v Transamerica Ins. Co., 173 AD2d 311).

The defendants' remaining contentions are without merit.