Cvar Von Habsburg Group v. Decurion Corporation

Background

Cvar Von Habsburg Group, LLC (CVHG) sought payment from Decurion Corporation and Elk Mountain Resort, LLC for consulting services. The opinion states that Decurion was the parent company and sole member of Elk Mountain, and that CVHG provided services to Decurion and its subsidiaries over several years.

CVHG identified three allegedly unpaid invoices: a July 25, 2012 invoice for $49,265 for strategic evaluations of movie theaters and snack bars; a February 4, 2013 invoice for $58,280 for services related to the potential operation of a resort; and an October 15, 2015 invoice for $84,872 for updating a business plan related to a potential sale of Elk Mountain. CVHG submitted the invoices, fax records, and Dr. Margeaux Cvar’s affidavit describing its billing practice and stating that the defendants did not object to the invoices.

The defendants argued that CVHG had not performed the invoiced work and that the invoices were fraudulent. They pointed to a breakdown in the relationship between Dr. Cvar and Michael R. Forman, Decurion’s former Chairman of the Board and CEO; the alleged sale or nonoperation of businesses and assets referenced in the invoices; and similarities between the 2015 invoice and an invoice from 2000.

Legal standard and analysis

Under Federal Rule of Civil Procedure 56, summary judgment is appropriate when there is no genuine dispute about a material fact and the moving party is entitled to judgment as a matter of law. The court must view the evidence favorably to the nonmoving party, but unsupported or conclusory assertions are insufficient to create a genuine factual dispute.

CVHG brought three New York-law claims for an account stated. An account stated is a claim based on a bill or account that was presented, accepted as correct, and accompanied by a promise to pay. Acceptance and a promise to pay may be implied when a debtor keeps an invoice without objecting within a reasonable time or makes a partial payment.

The defendants argued that New York’s Dead Man’s Statute barred CVHG from relying on Dr. Cvar’s communications and transactions with the deceased Mr. Forman. The court explained that the statute can disqualify an interested party from testifying about personal communications or transactions with a deceased person, but does not exclude documentary evidence of the interested party’s dealings with the deceased. The court therefore considered CVHG’s documentary evidence, including its billing records, invoices, and evidence about the services performed.

The court also found the defendants’ response under the Southern District of New York’s Local Civil Rule 56.1 inadequate. The defendants did not cite evidence supporting their denials, and often responded to CVHG’s factual statements only with the word “Deny.” The court deemed the facts in CVHG’s statement admitted for purposes of the motion. Those admitted facts, supported by record evidence, showed that CVHG presented the invoices for work it performed and that the defendants did not object to or pay them.

The court separately considered the defendants’ evidence and arguments. It found that evidence of continued communications between Dr. Cvar and Mr. Forman, including checks and a 2015 letter, contradicted the claim that their business relationship ended in 2012. The court also found that the record did not prevent CVHG from performing theater-related analysis in 2012 or work concerning Elk Mountain in 2013 and 2015, even though Elk Mountain was not operating at that time. Finally, the court found that the 2015 and 2000 invoices differed apart from their total amounts, which did not support the allegation that the later invoice was copied and used fraudulently.

Ruling

Judge Alvin K. Hellerstein granted CVHG’s motion for summary judgment. The court concluded that the undisputed, or deemed admitted, facts established CVHG’s three account-stated claims and that the defendants’ fraud allegations were speculative and unsupported. The Clerk was directed to terminate the open motion and enter judgment for CVHG against Decurion Corporation and Elk Mountain Resort, LLC in the amount of $183,786, with interest and costs. The scheduled oral argument was canceled.