FILED: NEW YORK COUNTY CLERK 06/16/ :20 PM INDEX NO /2015 NYSCEF DOC. NO. 42 RECEIVED NYSCEF: 06/16/2016

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1 FILED: NEW YORK COUNTY CLERK 06/16/ :20 PM INDEX NO /2015 NYSCEF DOC. NO. 42 RECEIVED NYSCEF: 06/16/2016 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK x SCG SIDDHARTH CREATIVE GROUP INC., Index No.: /2015 Plaintiff, -against- VONKLUEGER LLC, Defendants x =============================================================== MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFF S MOTION FOR SUMMARY JUDGMENT =============================================================== Dated: New York, New York June 16, 2016 Henry Bell BELL LAW PLLC Attorney for Plaintiff 747 Third Ave, Second Floor New York, NY Tel: Fax: of 9

2 Table of Contents Section Page PRELIMINARY STATEMENT... 1 STATEMENT OF FACTS The Terms of Service Agreement and the Statement of Work SCG performs and Von Klueger does not provide notice of defect SCG invoices Von Klueger, and Von Klueger does not object STANDARD OF REVIEW... 3 ARGUMENT SCG is entitled to summary judgment on the account stated claim a. Von Klueger did not object to the invoice provided by SCG SCG is entitled to summary judgment on the breach of contract claim b. Von Klueger did not provide written notice to SCG of any alleged defects in the deliverables CONCLUSION... 6 i 2 of 9

3 Table of Authorities Case Pages Absolute Direction, Inc. v. Anderson 201 AD2d 256 (1 st Dep t 1994)... 5 Am. Exp. Bank FSB v. Najieb 125 AD3d 470, (1 st Dep t 2015)... 4 Friedman v. Pesach 160 A.D.2d 460 (1st Dep t 1990)... 3 Goldmuntz v. Schneider 99 AD3d 544, 545 (1 st Dep t 2012)... 4 Healthcare Capital Mgmt., LLC v. Abrahams 300 A.D.2d 108 (1 st Dep t 2002)... 4 Interman Indus. Products, Ltd. v. R.S.M. Electron Power, Inc 37 NY2d 151 (1975)... 4 Morrison Cohen Singer & Weinstein, LLP v. Waters 13 AD3d 51 (1 st Dep t 2004)... 4 Shaw v. Silver 95 AD3d 416 (1 st Dep t 2012)... 4 Statute Pages CPLR 3212(b)... 3 ii 3 of 9

4 PRELIMINARY STATEMENT SCG and Von Klueger entered into a subcontractor agreement whereby SCG would provide Von Klueger with branding and strategic services for ultimate use by Vertical Screen. SCG diligently provided these services, but Von Klueger has refused to pay. Von Klueger now claims that SCG s services were inadequate. However, Von Klueger did not make these claims until after SCG threatened litigation. This fact entitles SCG to summary judgment for two reasons. First, SCG provided Von Klueger with an invoice for the services rendered, which Von Klueger did object to. Because the invoice is undisputed, SCG is entitled to summary judgment on its account stated claim. Second, under the governing agreements, Von Klueger was required to provide written notice to SCG of any defects in the services within three days of delivery. Because Von Klueger did not abide by the notice provisions, they cannot now allege the services were defective, and SCG is entitled to summary judgment on the breach of contract claim. STATEMENT OF FACTS 1. The Terms of Service Agreement and the Statement of Work. SCG agreed to act as a subcontractor for Von Klueger in order to provide services to a third party Vertical Screen. 1 This relationship was memorialized in two separate documents, a Terms of Service Agreement (the TOSA ) and a Statement of Work (the SOW ). The TOSA provided the basic terms and conditions of the agreement, 2 and the SOW specified the services and work product (also known as the Deliverables) SCG would provide. 3 1 Siddharth Aff at 2. 2 Id., Ex. A. 3 Id., Ex. B. 1 4 of 9

5 Under the SOW, SCG was to provide Von Klueger with strategic positioning and branding services for Vertical Screen. 4 These services would ultimately be provided in a strategy document that included position statements, value propositions, and a brand story. 5 The TOSA required SCG to submit these deliverables to Von Klueger for review. 6 The Terms of Service Agreement provided strict deadlines for Von Klueger to object to any of SCG s work. 7 Specifically the Agreement provides: [Von Klueger] within three business days of receipt of each Deliverable, shall notify [SCG], in writing, of any failure of such Deliverable to comply with the specifications set forth in the SOW, or of any other objections, corrections, changes or amendments [Von Klueger] wishes made to such Deliverable. 8 If Von Klueger did not provide this notice, the Deliverable shall be deemed accepted. 9 Upon completion of the work, Von Klueger would have three additional business days to notify SCG of any complaints with the work. 10 If Von Klueger did not do so, the work was deemed to be approved. 11 The TOSA further provided that once approved, or deemed approved, work cannot subsequently be rejected, and the contract will be deemed to have been completed and the remaining payment will become due Id., Ex. B at 2. 5 Id., Ex. B at Id., Ex. A at Id. 8 Id. 9 Id. 10 Id. 11 Id. 12 Id. 2 5 of 9

6 2. SCG performs and Von Klueger does not provide notice of defect. SCG provided final deliverables on two separate occasions to Von Klueger. On June 13, 2013, SCG provided Von Klueger with strategy documents as outlined in the SOW. 13 On July 17, 2013, SCG provided Von Klueger final documents to be used in the style guides provided to Vertical Screen. 14 Von Klueger did not notify SCG in writing of any problems with these deliverables SCG invoices Von Klueger, and Von Klueger does not object. On November 17, 2013 after the work was completed, SCG sent an invoice to Von Klueger for an outstanding balance of $45, Von Klueger never objected to this invoice. 17 STANDARD OF REVIEW Summary judgment should be granted "if, upon all the papers and proof submitted, the cause of action or defense shall be established sufficiently to warrant the court as a matter of law in directing judgment in favor of any party." 18 When there is no genuine issue as to any material fact and the disposition of the causes of action at issue may be decided as a matter of law, summary judgment is appropriate. 19 To prevail on a summary judgment motion, the moving party must produce evidentiary proof sufficient to warrant the direction of summary judgment in his or her favor. 20 Once this requirement is met which it has been here the burden shifts to 13 Id., Ex. C, D. 14 Id., Ex. E, F. 15 Id. at 6, 8, Id., Ex. H. 17 Id. at CPLR 3212(b). 19 Friedman v. Pesach, 160 A.D.2d 460, (1st Dep t 1990). 20 Id. 3 6 of 9

7 the opposing party to submit proof, in admissible form, sufficient to create a question of fact requiring a trial. 21 ARGUMENT 1. SCG is entitled to summary judgment on the account stated claim. An account stated is an account balanced and rendered, with an assent to the balance express or implied; so that the demand is essentially the same as if a promissory note had been given for the balance. 22 Where an account is rendered showing a balance, the party receiving it must, within a reasonable time, examine it and object, if he disputes its correctness. If he omits to do so, he will be deemed by his silence to have acquiesced, and will be bound by it as an account stated, unless fraud, mistake or other equitable considerations are shown. 23 It is well settled law that if a defendant has not objected to an account stated, plaintiff is entitled to summary judgment. 24 The opposing party has the burden of showing that they objected to the invoices within a reasonable time Id. 22 Interman Indus. Products, Ltd. v. R.S.M. Electron Power, Inc., 37 NY2d 151, 153 (1975) (internal quotations and citations omitted) 23 Shaw v. Silver, 95 AD3d 416, 416 (1 st Dep t 2012) (internal quotations and citations omitted) 24 E.g. Am. Exp. Bank FSB v. Najieb, 125 AD3d 470, 471 (1 st Dep t 2015) ( Plaintiff's submission of statements that were retained by defendants for several months without protest was sufficient to entitle plaintiff to judgment on its cause of action for an account stated. ); Goldmuntz v. Schneider, 99 AD3d 544, 545 (1 st Dep t 2012) (affirming summary judgment on account stated because defendant's receipt and retention of plaintiff's invoices without objection over a reasonable period of time gave rise to an account stated ); Morrison Cohen Singer & Weinstein, LLP v. Waters, 13 AD3d 51, 52 (1 st Dep t 2004) (reversing denial of summary judgment on account stated because plaintiff's invoices were retained without any objection for a sufficient length of time as a matter of law to establish defendant's liability on the account stated cause of action ); Healthcare Capital Mgmt., LLC v. Abrahams, 300 A.D.2d 108, 108 (1 st Dep t 2002) ( belated objection [to account stated] is insufficient to avoid summary judgment ). 25 Healthcare Capital Mgmt., 300 AD2d at of 9

8 a. Von Klueger did not object to the invoice provided by SCG. SCG has established an account stated because they rendered an account to Von Klueger which Von Klueger never objected to. On November 17, 2013, Rahul Siddharth of SCG ed Peter Von Klueger a final invoice. 26 The invoice showed that Von Klueger owed SCG $45,000. Von Klueger did not dispute this invoice until the filing of the answer in this case, over a year after receiving the invoice. 27 Because an account was rendered and Von Klueger did not object SCG is entitled to summary judgment on the account stated claim. 2. SCG is entitled to summary judgment on the breach of contract claim. A court may grant summary judgment when a contract requires a party to provide notice of any alleged breach. 28 If the party opposing summary judgment did not comply with the notice provisions, then the movant is entitled to summary judgment on liability. 29 b. Von Klueger did not provide written notice to SCG of any alleged defects in the deliverables. SCG is entitled to summary judgment because Von Klueger did not provide written notice of any defect in the deliverables provided by SCG. The TOSA required Von Klueger to notify SCG in writing of any defect in the deliverables within three days. 30 Von Klueger did not provide any such notice to SCG. 31 Von Klueger s discovery responses further prove this point. In response to an interrogatory, Von Klueger failed to identify any written notices provided to 26 Siddharth Aff, Ex. H. 27 Id. 28 Absolute Direction, Inc. v. Anderson, 201 AD2d 256, 256 (1 st Dep t 1994) 29 Id. 30 Siddharth Aff, Ex. A at Id. at 6, 8, of 9

9 SCG. 32 Furthermore, the documents produced by Von Klueger do not contain any written notice of defect. Because Von Klueger did not comply with the notice requirements in the TOSA, SCG is entitled to summary judgment. CONCLUSION Von Klueger belatedly alleged that SCG s services were inadequate, and this fact is fatal to their claims. The TOSA required prompt notification of any defects in the deliverables, which Von Klueger did not provide. Because Von Klueger did not comply with the notice provisions of the TOSA, SCG is entitled to summary judgment on the breach of contract claim. Furthermore, SCG invoiced Von Klueger for the services provided. Once again Von Klueger did not object, and thus SCG is entitled to summary judgment on the account stated claim. In order to prevail against SCG, Von Klueger would have had to voice its concerns before this litigation. For these reasons, Von Klueger s belated attempt to avoid its contractual obligations cannot stand, and this court should grant this motion for summary judgment. /s/henry Bell Henry Bell, Esq. 32 Bell Affirmation, Ex. L at 5 (Response to Interrogatory 5). 6 9 of 9