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Principis Capital lawsuit: what the Second Department held in I Do

Principis Capital lawsuit coverage of I Do: Kings denied SJ, then the Second Department reversed and granted the funder judgment. Why it was not a loan.

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By Anonymous MCA industry contributor Research, writing and editorial review · MCA sales background

A Principis Capital lawsuit search usually lands on private New York collection litigation naming Principis Capital, LLC, and on the Second Department framework that later MCA opinions keep citing. The lead published signal is Principis Capital, LLC v. I Do, Inc., 2022 NY Slip Op 00203, 201 AD3d 752. Kings County denied Principis summary judgment; the Second Department reversed on January 12, 2022, granted Principis judgment on the complaint, and dismissed the defendants' affirmative defenses and counterclaims after holding the revenue-purchase agreement was not a loan under the three-factor test. Later panels in Apollo, Spin Capital, Diesel Funding, and True Business Funding quote this opinion when they sort receivables purchases from absolute loans. This page sticks to that Slip Opinion and the Kings order it reversed. It is not a prediction about your file.

Editorial update: 2026-10-27 · Desk research of the published Second Department opinion (and the Kings order it reversed). Not legal advice.

Quick answer

ItemPublic record
Lead published casePrincipis Capital, LLC v. I Do, Inc., 2022 NY Slip Op 00203, 201 AD3d 752 (2d Dept Jan. 12, 2022)
Trial courtSupreme Court, Kings County (Fisher, J.), order dated May 29, 2018 (Index No. 517860/17; App. Div. docket 2018-12193)
Trial posturePrincipis's motion for SJ on the complaint and, in effect, to dismiss affirmative defenses/counterclaims denied
Appellate outcomeOrder reversed insofar as appealed from; those SJ branches granted
Core holdingMonthly-payment adjustments based on sales + non-finite term + no bankruptcy-as-default → not a loan; usury defense unavailable

Soft next step if papers name Principis Capital: compare your remittance-adjustment / reconciliation language, term, and bankruptcy default clauses to the package Kings denied and the Second Department enforced before you assume either label controls.

What happened below and on appeal

On or about March 7, 2017, Principis and I Do, Inc. entered a written agreement. I Do sold an interest in future receivables for a $38,429.39 purchase price. In exchange, I Do authorized Principis to debit a percentage of monthly sales revenue until Principis received $52,456.12 (the purchased amount). On default, the full uncollected purchased amount became immediately due. Michael Bartels signed a personal guaranty. Principis funded about March 15, 2017.

Principis sued in September 2017 for breach (among other claims), alleging that after roughly $10,183.22 in payments, I Do defaulted around August 2017. The defendants admitted funding, execution, and the approximate payments paid, but raised affirmative defenses and counterclaims. Principis moved for summary judgment on the complaint and, in effect, to dismiss those defenses and counterclaims. Kings denied the motion on May 29, 2018. Principis appealed.

What the Second Department held

If the agreement were a loan, criminal usury could void it (Davis). Usury requires a loan; without absolute repayment there is no loan (LG Funding). Courts usually weigh three factors: (1) a reconciliation provision; (2) whether the term is finite; (3) recourse if the merchant declares bankruptcy.

Here Principis established the deal was not a loan:

  1. The agreement provided for adjustments to monthly payments based on changes in I Do's monthly sales.
  2. Because monthly amounts could change, the term was not finite.
  3. No contractual provision made bankruptcy an event of default (cf. Davis; LG Funding).

Principis otherwise made out agreement and breach; the defendants raised no triable issue. Kings should have granted SJ on the complaint and dismissed the affirmative defenses and counterclaims. Dillon, J.P., Barros, Christopher, and Zayas concurred.

Why this matters for "Principis Capital lawsuit" searches

I Do is the template Second Department reverse-and-grant that later funder-side opinions lean on when remittance adjustments, a non-finite term, and no bankruptcy-as-default are in the contract. It sits across the aisle from Crystal Springs, where fixed daily debits, no reconciliation duty, and bankruptcy/default acceleration made repayment absolute. Compare:

If your caption is Principis collecting after a Kings-style SJ denial, I Do is the published Second Department signal that adjustment-based remittances, a non-finite term, and missing bankruptcy-as-default language can support funder judgment as a matter of law.

Related funder lawsuit pages

For a cross-funder view of cases like this one, check the MCA lawsuit tracker.

Sources (public)

  • Principis Capital, LLC v. I Do, Inc., 2022 NY Slip Op 00203, 201 AD3d 752 (2d Dept Jan. 12, 2022), NY Courts reporter

Takeaway

Treat "Principis Capital lawsuit" search intent primarily through I Do: Kings denied funder SJ; the Second Department reversed and granted it after finding monthly remittance adjustments, a non-finite term, and no bankruptcy-as-default clause. That three-factor framing is the receivables-vs-loan signal later panels keep citing. It is not a statewide ban and not an FTC refund story.

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