This action arises from a commercial dispute between plaintiff Hope Come International Limited (HCI), a foreign supplier registered to do business in New York, and defendant Royal Promotion Group, Inc. (RPG), a designer and manufacturer.

RPG hired HCI to manufacture display goods and corresponding molds. RPG accepted HCI's delivery of display goods without objection and placed new orders with HCI, but made only partial payments toward the total price. HCI made repeated efforts to recoup the remaining funds, evidenced through the extensive email communications between the parties from January 2021 to June 2023. In a reply to one of HCI's emails, Ajay Khanna, RPG's Chief Financial Officer, wrote in October 2022 that RPG was "committed to pay the outstanding monies," and that RPG had an outstanding balance of $1,223,511. (NYSCEF No. 25 at 1.)

After RPG failed to pay the remaining balance, HCI brought this action against RPG for [*2]breach of contract, account stated, and unjust enrichment. RPG counterclaimed for breach of contract, breach of bailment, and unjust enrichment. RPG challenges HCI's legal standing and argues that HCI breached an allegedly "critical" part of their agreement: the right to inspect any of HCI's production factories. (NYSCEF No. 48 at ¶ 6.) RPG worked with its customer, the quality control agency Maesa, to inspect, audit, and approve the factory initially used by HCI for production. HCI shipped at least some of the products to RPG from a different factory, without RPG's consent, but disputes that in doing so it breached a material contract term. (NYSCEF No. 49 at 1.) RPG also contends that an agent of HCI made representations to RPG about HCI's poor financial state, which prompted RPG to switch to a different supplier. (NYSCEF No. 48 at ¶¶ 16—18.) HCI has been storing the manufactured molds since August 2018 in a warehouse in China.

HCI now moves under CPLR 3212 for partial summary judgment on its breach-of-contract and account-stated causes of action and to dismiss RPG's counterclaims and affirmative defenses. HCI seeks $1,190,728.65 in damages on the first and second causes of action (plus interest).

HCI's motion for summary judgment in its favor is denied with respect to its breach-of-contract claim and granted with respect to its account-stated claim. HCI's request for summary judgment dismissing RPG's counterclaims is denied.

RPG argues that HCI's claims fail because it assertedly transacted business in New York before it was legally authorized to do so as a foreign corporation. This argument challenges HCI's capacity to sue. (See (FBB Asset Mgrs. v Freund, 2 AD3d 573, 574 [2d Dept 2003].) As a result, RPG waived the challenge by not raising it in an answer or a motion to dismiss. (See CPLR 3211 [e]; RCA Records v Wiener, 166 AD2d 221, 221 [1st Dept 1990].) Even if the argument were not waived, it would fail on its merits. RPG is arguing only that HCI was an unauthorized foreign corporation when it entered into the contracts at issue in this action—not that HCI remained an unauthorized corporation at commencement of the action. And Business Corporation Law § 1312 (b) expressly provides that the "failure of a foreign corporation to obtain authority to do business in this state shall not impair the validity of any contract or act of the foreign corporation."

RPG next argues that granting summary judgment would be premature here because material discovery, including a noticed deposition, remains outstanding. This argument is persuasive only with respect to HCI's breach-of-contract claim, not also HCI's account-stated claim.

RPG seeks to use the scheduled deposition to uncover evidence related to four subjects: HCI's purported breach of contract concerning factory inspection, HCI's failure to return RPG's assets, HCI's registration date, and HCI's statements concerning its ability to operate. (NYSCEF [*3]No. 56 at 17.) This court agrees that the first two subjects are material to HCI's breach-of-contract claim, because they go to whether HCI properly performed under the contract.^[FN1] (See Marion Scott Real Estate, Inc. v Riverbay Corp., 173 AD3d 588, 588 [1st Dept 2019] [denying summary judgment for breach of contract because the record "does not permit resolution of whether plaintiff or defendant breached the parties' agreement"].) And, because RPG's counterclaim is based on an argument that HCI breached the contract by bypassing factory inspection requirements and refusing to return RPG's assets, these two subjects are relevant to the counterclaim, as well.

Summary judgment in HCI's favor on its breach-of-contract claim would therefore be premature.^[FN2]

A different result obtains with respect to HCI's account-stated claim. An account-stated claim is an "independent cause of action," resting on different grounds from the breach-of-contract claim. (Aronson Mayefsky & Sloan, LLP v Praeger, 228 AD3d 182, 183 [1st Dept 2024].) In particular, whether HCI did or did not comply with the factory-inspection requirement of the contract, or for that matter whether HCI did or did not return RPG's assets, is irrelevant from an account-stated perspective. Instead, the question is merely whether RPG manifested express or implied consent to the outstanding account balance stated in invoices or the like sent by HCI to RPG. (See Morrison Cohen Singer & Weinstein v Ackerman, 280 AD2d 355, 355-356, [1st Dept 2001].) RPG has not shown that the outstanding discovery would be material to that question.

To support its account-stated claim, plaintiff submits invoices and payment receipts, along with emailed communications in which RPG acknowledges an outstanding balance and agrees to pay it down. (NYSCEF Nos. 25—32, 35, 37—38.) RPG does not dispute the veracity of these emails but contests their admissibility under CPLR § 4547, which bars the introduction of evidence from "compromise negotiations."

Regardless of the admissibility (or not) of the emails, the invoices and evidence of partial payments are alone sufficient to grant summary judgment on account stated.^[FN3] Partial payments [*4]toward an account reflect an acknowledgment of the account's correctness, thereby establishing an account stated. (See Parker Chapin Flattau & Klimpl v Daelen Corp., 59 AD2d 375, 378 [1st Dept 1977].) RPG has not provided evidence that might show it objected to HCI's invoices in the manner set forth in the contract. Nor does RPG's memorandum of law on this motion contend that an inconsistency exists between RPG's purchase orders and HCI's invoices. At most, RPG asserts in conclusory fashion that the account balance HCI seeks to recover is inaccurate. That assertion, standing alone, is insufficient to raise a triable issue of fact. For this same reason, RPG's third affirmative defense—reading, in its entirety, "Over charge" (NYSCEF No. 3 at 3)—is dismissed.

HCI has established as a matter of law that it is entitled to the amount claimed on its account-stated cause of action.^[FN4]

Finally, HCI seeks dismissal of RPG's affirmative defenses. To the extent those defenses are being raised against HCI's breach-of-contract claim, the request for dismissal is denied as premature. The only affirmative defense that appears to have been raised specifically against the account-stated claim, the third defense, is dismissed as discussed above.

Accordingly, it is

ORDERED that the branch of HCI's motion seeking summary judgment in its favor on its breach-of-contract claim is denied; and it is further

ORDERED that the branch of HCI's motion seeking summary judgment in its favor on its account-stated claim is granted; and it is further

ORDERED that the branch of HCI's motion seeking summary judgment dismissing RPG's counterclaims is denied; and it is further

ORDERED that the branch of HCI's motion seeking summary judgment dismissing RPG's affirmative defenses is granted as to the third affirmative defense and otherwise denied without prejudice; and it is further

ORDERED that Hope Come International Limited is awarded a judgment against defendant Royal Promotion Group, Inc. for $1,190,728.65, with interest on that sum at the statutory rate running from the reasonable intermediate date of June 15, 2022, plus costs and disbursements as taxed by the Clerk upon the submission of an appropriate bill of costs; and it is further

ORDERED that the balance of the claims and counterclaims in this action are severed and shall continue; and it is further

ORDERED that the parties shall appear before this court for a telephonic preliminary conference on March 7, 2025; and it is further

ORDERED that HCI serve a copy of this order with notice of its entry on RPG and on the office of the County Clerk (by the means set forth in the court's e-filing protocol, available on the e-filing page of the court's website, https://ww2.nycourts.gov/courts/1jd/supctmanh/E-[*5]Filing.shtml), which shall enter judgment accordingly.