United States District Court, D. Connecticut
RULING ON PLAINTIFF'S MOTION FOR SUMMARY
CHARLES S. HAIGHT, JR. Senior United States District Judge.
Prestige Capital Corporation brings this action against
Defendant Colt's Manufacturing Company, LLC, which
allegedly owes $500, 001.35 to Plaintiff. Plaintiff provides
accounts receivable financing, also known as factoring, to
companies who are in need of immediate cash flow. A third
party company sold and assigned the Defendant's accounts
receivable to Plaintiff.
has moved for partial summary judgment on its breach of
contract claim, pursuant to Rule 56 of the Federal Rules of
Civil Procedure. This Ruling resolves the motion.
STANDARD OF REVIEW
motion for summary judgment shall be granted "if the
movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a
matter of law." Fed.R.Civ.P. 56(a); Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986). The moving party must
"demonstrate the absence of any material factual issue
genuinely in dispute" to be entitled to summary
judgment. Am. Int'l Grp., Inc. v. London Am.
Int'l Corp., 664 F.2d 348, 351 (2d Cir. 1981)
(citing Heyman v. Commerce & Indus. Ins. Co.,
524 F.2d 1317, 1319-20 (2d Cir. 1975)) (internal quotation
marks omitted). All inferences and ambiguities must be viewed
in the light most favorable to the nonmoving party. Rogoz
v. City of Hartford, 796 F.3d 236, 245-46 (2d Cir.
order to defeat a summary judgment motion that is properly
supported by affidavits, depositions, and documents as
envisioned by [Rule 56], the opposing party is required to
come forward with materials envisioned by the Rule, setting
forth specific facts showing that there is a genuine issue of
material fact to be tried." Gottlieb v. Cty. of
Orange, 84 F.3d 511, 518 (2d Cir. 1996). The non-moving
party cannot "defeat the motion by relying on the
allegations in his pleading, or on conclusory statements, or
on mere assertions that affidavits supporting the motion are
not credible." Id. (citations omitted). In
other words, "[w]hen the moving party has carried its
burden under Rule 56, its opponent must do more than simply
show that there is some metaphysical doubt as to the material
facts." Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 586 (1986). The nonmoving party
"must present specific evidence demonstrating a genuine
dispute." Gannon v. UPS, 529 Fed.Appx. 102, 103
(2d Cir. 2013) (citing Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986)). "An issue of fact
is genuine if the evidence is such that a reasonable jury
could return a verdict for the nonmoving party. A fact is
material if it might affect the outcome of the suit under the
governing law." Fincher v. Depository Tr. &
Clearing Corp., 604 F.3d 712, 720 (2d Cir. 2010)
(internal quotation marks and citation omitted); see also
Anderson, 477 U.S. at 248 ("Only disputes over
facts that might affect the outcome of the suit under the
governing law will properly preclude the entry of summary
judgment. Factual disputes that are irrelevant or unnecessary
will not be counted.").
following undisputed or indisputable facts are derived from
the parties' submissions pursuant to Local Rule 56(a) and
the affidavits and exhibits attached to the parties'
submissions. All reasonable inferences have been drawn in
Prestige, a commercial finance company, provides accounts
receivable financing for other companies. Doc. 29-2
("Pl. 56(a) Stmt.") ¶ 1. A company called
Chazkat, LLC, doing business as Bold Ideas, entered into a
Purchase and Sale Agreement ("PSA") with Plaintiff
on or about September 17, 2014, causing the sale of certain
accounts receivable to Plaintiff. Id. ¶¶
2-3. This practice is called factoring and enables companies
to have access to immediate cash flow. Doc. 1
("Compl.") ¶ 9. Bold Ideas sold rifles and
rifle subassemblies to Defendant Colt. Those purchases are
governed by a Manufacturing and Sales Agreement
("MSA") that was signed in November 2015. Pl. 56
(a) Stmt. ¶ 5. Beginning on August 5, 2016, the PSA
included accounts due and owing from the Defendant, meaning
that, although Defendant would normally pay Bold Ideas under
the MSA terms, the PSA's factoring arrangement directed
Defendant to pay Plaintiff any amounts it owed and would owe
to Bold Ideas. Id. ¶¶ 4-6.
several months until March 2017, Bold Ideas remitted invoices
to Defendant, and Defendant made payments on those invoices
in the amount of $6, 000, 292.89 to Plaintiff. Id.
¶¶ 8-9. However, Defendant notified Plaintiff on
March 16, 2017, that it would "not be making any
payments on [the Bold Ideas] account." Doc. 29-7.
Defendant indicated they stopped payments because "[Bold
Ideas] is significantly past due on the reduction of their
obligations/payments due to [Defendant]." Id.
through its counsel, demanded that Defendant pay the alleged
outstanding balance of $1, 173, 750.71 on March 23, 2017. Pl.
56(a) Stmt. ¶ 12. Defendant then made two payments to
Plaintiff: $303, 812.88 on March 31, 2017, and $299, 641.16
on April 7, 2017. Id. ¶ 13. Parties dispute the
amount of the remaining balance that is owed to Plaintiff.
Plaintiff calculates that Defendant still owes $500, 001.35,
id. ¶ 15, whereas Defendant denies it owes
Plaintiff any further sum. Doc. 38-3 ("Def. 56(a)
Stmt.") ¶ 15.
based its calculation on the two aforementioned payments in
2017 and a provision in the MSA limiting Defendant's
setoff amount. Pl. 56(a) Stmt. ¶ 11. The relevant part
(the "10% Provision") in Section 2(a) of the MSA
COLT and BOLD IDEAS acknowledge and agree that COLT,
beginning April 1, 2016, shall have the right of setoff for
any amounts due COLT whatsoever against any amounts COLT is
obligated to pay under this Agreement. Specifically, COLT
shall have the right to setoff up to ten percent (10%) of any
invoice with respect to any amounts due from BOLD IDEAS to
COLT, including royalty payments BOLD IDEAS owes to COLT
under the License Agreement dated as of April 29, 2013, any
warranty or service work for rifles ...