RESOURCE fiNANCE COMPANY plf-res, v. CYNERGY DATA LLC, ET AL, def, CARD PAYMENT SERVICES, LLC def-ap

10124. RESOURCE fiNANCE COMPANY plf-res, v. CYNERGY DATA LLC, ET AL, def, CARD PAYMENT SERVICES, LLC def-ap — Reiss Sheppe LLP, New York (Robert J. Grand of counsel), for ap — Foley & Lardner LLP, New York (Akiva M. Cohen of counsel), for res — Order, Supreme Court, New York County (Barbara R. Kapnick, J.), entered September 26, 2011, which denied the motion of defendants Card Payment Services, LLC and Seymour Weissman to dismiss the complaint as against them, unanimously modified, on the law, to grant the motion to the extent of dismissing the second, fifth, sixth, seventh and eighth causes of action as against Card Payment Services and Weissman, and otherwise affirmed, without costs.

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10124. RESOURCE fiNANCE COMPANY plf-res, v. CYNERGY DATA LLC, ET AL, def, CARD PAYMENT SERVICES, LLC def-ap — Reiss Sheppe LLP, New York (Robert J. Grand of counsel), for ap — Foley & Lardner LLP, New York (Akiva M. Cohen of counsel), for res — Order, Supreme Court, New York County (Barbara R. Kapnick, J.), entered September 26, 2011, which denied the motion of defendants Card Payment Services, LLC and Seymour Weissman to dismiss the complaint as against them, unanimously modified, on the law, to grant the motion to the extent of dismissing the second, fifth, sixth, seventh and eighth causes of action as against Card Payment Services and Weissman, and otherwise affirmed, without costs.

Because neither plaintiffs nor their debtors ever obtained the required consent from defendant Card Payment Systems of New York, LLC (CPS LLC) to grant plaintiffs a security interest in CPS LLC’s assets, no such interest was created (see Richard T. Blake & Assoc. v. Aetna Cas. & Sur. Co., 255 AD2d 569 [2d Dept 1998]). Although plaintiffs can enforce debtors’ rights under various noncompetition agreements entered into by Weissman, the breach of such contracts does not support a claim for conversion of wrongfully diverted accounts (see Peters Griffin Woodward, Inc. v. WCSC, Inc., 88 AD2d 883, 884 [1st Dept 1982]). Accordingly, plaintiffs’ claims based on the existence of a security interest in CPS LLC’s assets must be dismissed.

RESOURCE fiNANCE COMPANY plf-res, v. CYNERGY DATA LLC, ET AL, def, CARD PAYMENT SERVICES, LLC def-ap

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