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Court Finds Conflicting Inferences And Credibility Issues Too Great To Satisfy Summary Judgment Burden

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  • Posted on: May 30 2018

When a complaint is served and filed, a defendant can respond to the pleading in many ways. For example, he/she can answer the complaint or file a motion to dismiss. If the defendant files an answer or the court denies the motion, discovery ensues. Sometimes, a party may conclude that the facts and law necessitate the filing of a motion for summary judgment, even before the close of discovery. Regardless of the timing, the moving party must establish their prima facie entitlement to judgment as a matter of law. The failure to do so, as the defendants learned in UB Distributors, LLC v. S.K.I. Wholesale Beer Corp., 2018 N.Y. Slip Op. 03559 (2d Dept. May 16, 2018) (here), will result in denial of the motion.

Background

The plaintiff, UB Distributors, LLC (“UB”), commenced the action against the defendants, asserting causes of action sounding in fraud, negligent misrepresentation, conversion, and unjust enrichment, among other things. UB alleged that the defendants fraudulently obtained payments from it under the Returnable Container Act by redeeming empty beverage containers that had already been redeemed by a deposit initiator. In particular, UB alleged that sudden and drastic shifts in the defendants’ empty container redemption volume indicated fraudulent activity and corresponded in time with a double-redemption scheme uncovered on Long Island in the summer of 2009. The defendants denied the allegations and asserted counterclaims against UB.

The defendants moved for summary judgment dismissing the complaint, arguing, among other things, that UB lacked any direct evidence of their participation in the scheme. UB opposed the motion and cross-moved for summary judgment dismissing the defendants’ counterclaims.

The motion court denied the motion and cross motion. The defendants appealed the denial of their motion. The Appellate Division, Second Department, affirmed.

The Standard on Summary Judgment

A defendant seeking summary judgment bears the initial burden of demonstrating its entitlement to judgment as a matter of law by submitting evidentiary proof in admissible form, even though the ultimate burden of proof at trial falls upon the plaintiff. See Zuckerman v. City of New York, 49 N.Y.2d 557, 562 (1980). For this reason, the ultimate burden of proof after trial plays no part in the assessment of whether there are relevant factual issues presented on a motion for summary judgment. See generally Jacobsen v. New York City Health & Hosps. Corp., 22 N.Y.3d 824 (2014).

On a motion for summary judgment, a moving defendant must affirmatively demonstrate the merit of its claim or defense. The movant cannot satisfy this burden by merely pointing to gaps in the plaintiff’s case. See Marielisa R. v. Wolman Rink Operations, LLC, 94 A.D.3d 963 (2d Dept. 2012). See also Winegrad v. New York Univ. Med. Ctr., 64 N.Y.2d 851 (1985).

The court’s function on a motion for summary judgment is “to determine whether material factual issues exist, not to resolve such issues.” Lopez v. Beltre, 59 A.D.3d 683, 685 (2d Dept. 2009). A motion for summary judgment, therefore, “ ‘should not be granted where the facts are in dispute, where conflicting inferences may be drawn from the evidence, or where there are issues of credibility’ ” Ruiz v. Griffin, 71 A.D.3d 1112, 1115 (2d Dept. 2010), quoting Scott v. Long Is. Power Auth., 294 A.D.2d 348, 348 (2d Dept. 2002). See also Bykov v. Brody, 150 AD 3d 808, 809 (2d Dept. May 10, 2017) (“Resolving questions of credibility, determining the accuracy of witnesses, and reconciling the testimony of witnesses are for the trier of fact.”) (citation and internal quotation marks omitted).

The Court’s Ruling

The Court found that denial of summary judgment was appropriate in light of the credibility issues of the witnesses and the conflicting inferences that could be drawn from the evidence submitted. The Court explained:

Here, the defendants failed to establish their prima facie entitlement to judgment as a matter of law. While the defendants submitted the deposition transcripts of their two principals and warehouse manager in which those witnesses denied that the defendants engaged in a double-redemption scheme, those witnesses also testified that the defendants kept no records of their container redemption transactions or records of a “cashbox” they used to pay some of their redemption expenses. Those witnesses offered vague and conflicting testimony as to why the defendants’ redemption volume fell so drastically around the time prosecutors acted on the double-redemption scheme on Long Island. Where, as here, conflicting inferences can be drawn from the evidence and issues of credibility exist, summary judgment is inappropriate.

“In light of the defendants’ failure to meet their prima facie burden,” the Court “agree[d] with the Supreme Court’s determination to deny their motion for summary judgment, regardless of the sufficiency of the plaintiff’s opposition papers.”

Takeaway

UB Distributors is a good example of the shifting burdens associated with a summary judgment motion. As a general matter, the courts view the evidence submitted in a light most favorable to the party opposing the motion and give the non-movant the benefit of every favorable inference. Cortale v. Educ. Testing Serv., 251 AD 2d 528, 531 (2d Dept. 1998).  Notwithstanding, the burden remains on the proponent of the motion to establish entitlement to summary judgment as a matter of law.  Failure by the movant to make the prima facie showing will result in the denial of the motion, regardless of the sufficiency of the opposing paper. See Alvarez v. Prospect Hosp., 68 N.Y.2d 320, 324 (1986); Winegrad v. New York Univ. Med. Ctr., 64 N.Y.2d 851, 853 (1985).  However, if the movant makes the requisite showing, the burden shifts to the party opposing the motion for summary judgment to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact that require a trial of the action. Zuckerman, 49 N.Y.2d at 562. In UB Distributors, since the defendants could not meet their burden, the burden never shifted to UB to establish the existence of material issues of fact necessary to defeat the motion.

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