The following e-filed documents, listed by NYSCEF document number (Motion 007) 124, 125, 126, 127, 128, 129, 130, 131, 132, 133, 134, 135, 136, 137, 138, 139, 140, 141, 142, 143, 144, 145 were read on this motion to/for DEFAULT JUDGMENT. DECISION ORDER ON MOTION Under motion sequence 007, plaintiffs move for a default judgment against defendant Jason Nissen (Nissen) for a fourth time on the first and fifth causes of action. On the first cause of action for fraud, plaintiffs’ previous application was denied because submission of testimony from a federal court proceeding where defendant Nissen admitted to fraud was not collateral to the contract at issue here. On the fifth cause of action for breach of contract relating to two guarantees of payment executed by Nissen, plaintiffs’ previous application was denied because plaintiffs failed to cure the specific deficiencies identified by the court in motion sequence 005. Specifically: (i) Nissen did not execute one of the notes at issue and it contained no guarantee, (ii) plaintiffs provided no evidence of defendant’s payment history beyond general allegations in the complaint’s sole exhibit (Complaint, Ex. A [Doc. No. 1]) which lacks sufficient foundation, and (iii) plaintiffs summary of defendant NEA’s payments under these contracts do not specify which contracts or notes those payments have gone to (Doc. No. 96). Plaintiffs here begin by noting that the complaint has been verified by Yaron Turgeman, plaintiffs principal who has personal knowledge of this matter (Pl. Aff. 3 [Doc. No. 130]). Next, with regard to the fraud claim, plaintiffs argue that Nissen’s fraudulent statements were made outside of the contracts to induce plaintiffs into making a series of loans evidenced by promissory notes (id. 4). Here, plaintiffs note they only seek to collect on three March 1, 2017 notes under their fraud claim: (i) a note in the amount of $10 million (Ex. D [Doc. No. 134]), (ii) a note in the amount of $8 million (Ex. E [Doc. No. 135]), and a note in the amount of $810 thousand (Ex. F [Doc. No. 136]). Plaintiffs argue that the March 1, 2017 date is pivotal here as plaintiffs did not advance new funds for these three notes on this date but, instead, these amounts were already due to plaintiffs under a series of prior loans made to Nissen’s company which were payable on February 23, February 28, and March 1, 2017 (Ex. G, [the "Prior Notes"] [Doc. No. 137]; Pl. Aff. 5). On March 1, 2017, Nissen visited plaintiffs to say he was unable to repay the Prior Notes on their due dates as he had already re-invested the funds due to plaintiffs into a new set of tickets to the NCAA March Madness Tournament (Pl. Aff. 5). Nissen suggested executing a new set of promissory notes which would encompass the amounts due to plaintiffs on February 23, February 28, and March 1, 2017 in order to avoid having plaintiffs exercise their rights under the Prior Notes (id. 6). In inducing plaintiffs to enter into these new notes, however, plaintiffs argue that Nissen made a false statement of present fact by saying he had re-invested the money from the Prior Notes into the March Madness tickets (id.). This, plaintiffs argue, is the fraud complained of (id.). As to the breach of contract claim, plaintiffs argue that the post-March 1, 2017 payments that are listed as Exhibit A to the complaint are unrelated to the three notes at issue here and are, instead, repayments of prior loans and advances as, even after March 1, 2017, Nissen convinced plaintiffs to make additional advances totaling $3.76 million (id. 7; Ex. H). Plaintiffs argue the vagueness created by Nissen’s dealing should not allow him to escape judgment. Defendant argues, in opposition, that plaintiffs have failed to cure any of the deficiencies previously identified by the court (Doc. No. 139). As to the fraud claim, defendant argues that plaintiffs have still not identified any misrepresentation of present facts by Nissen that were collateral to the contract and which induced plaintiffs into entering the notes (Def. Aff.
8-10; Orix Credit All., Inc. v. R.E. Hable Co., 256 AD2d 114, 115 [1st Dept 1998]). Defendant advises that all three Notes state that “The Maker shall use the Principal Amount to purchase tickets to the Basketball March Madness Tournament” (Def. Aff. 10; Pl. Aff., Exs. D-F at §1). Defendant argues the alleged misrepresentation made by Nissen was not “collateral or extraneous to” the notes as Nissen’s alleged misrepresentation regarding how the money would be used is explicitly incorporated into the contracts (Def. Aff. 11; see Gupta Realty Corp. v. Gross, 251 AD2d 544, 545 [2d Dept 1998] ["[T]he alleged misrepresentations were not collateral or extraneous to the contract since they were expressly incorporated into the mortgage modification agreement”]). Defendant notes that this court’s previous decisions have rejected plaintiffs’ prior arguments regarding the fraud claim for this same reason, noting that “[h]owever, plaintiffs also allege that each contract contained that same representation as one of its terms” (Def. Aff.
