Motion to Dismiss an MCA Complaint
5 Grounds Courts Can Consider

A dismissal motion needs a legal ground the record supports, not a grievance about the price of the advance.

That an MCA balance feels unpayable states no ground for early dismissal, and courts deny motions that argue burden instead of law. The five grounds below come from the motion to dismiss statute, and each depends on the allegations, the documents and the procedural choices made before the motion. Availability is a question for counsel, not a ranking of defenses that have worked elsewhere. The price of the advance, however steep, states no ground by itself.

Documentary Evidence

The exhibit decides the motion before the argument begins. A defense founded on documentary evidence requires proof that establishes the defense as a matter of law, an extremely demanding standard that punishes selective quotation. Often we see the wrong amendment attached, and the motion then attacks a contract the complaint never invoked. Counsel should ensure the exhibit is the governing version, with every amendment and restatement in the chain behind it.

The contract helps the defense, though the funder chose every word in it. A payment record or signed release may raise a separate question about what remains due, so gather the complete history rather than extracting a favorable sentence. That is the exhibit to build around. The document must defeat the claim, not only dispute it. The motion should connect each page to the element it answers, since a broad accusation that the funder ignored the contract leaves the legal link unfinished.

Jurisdiction Over the Defendant

Objections the owner raises, or waives, in the first response will outlive every other issue in the motion. Where the defendant sits outside New York, counsel examines location, contract provisions and service history before selecting a jurisdiction objection, and a clause choosing New York law is not a complete analysis by itself. Identify and preserve the summons, the service papers and the agreement showing the exact basis the plaintiff asserts against each defendant. Whether consent buried in a funding agreement carries the same weight as consent negotiated between merchants is a question courts answer one contract at a time.

Another Action Pending

A singular feature of MCA litigation is parallel paper in several courts at once. Where another action sits pending between the same parties over the same cause, the court may defer to it, though the section gives discretion rather than a command and dismissal is not automatic. Counsel should identify the earlier docket and assess whether consolidation, stay or dismissal serves the defense. This ground is compact and extremely factbound.

Payment, Release, and Time Bars

Years after funding, old paper still decides new motions. The statute lists arbitration and award, estoppel, discharge in bankruptcy, payment, release, res judicata, limitations and statute of frauds as grounds, and MCA files implicate several of them at once. A prior settlement with a signed release, a balance paid in full, a limitations defense measured from accrual: each needs dates rather than impressions. Gather and keep every receipt, every credit memo and every settlement draft, then construct a chronology that shows the balance falling, stalling or climbing across the life of the advance.

The limitations defense begins with accrual, encounters tolling language buried in the amendments and ends with counsel reading dates rather than arguing equities. Most owners signed the release without reading it. That is common, and counsel works from there. Any payment made after default, even casually, can affect the limitations analysis, so the chronology must record what was paid and when. Resist the urge to treat a paid invoice as a paid balance. A release signed at funding covers later disputes like a blanket cut for a different bed, present and careful and the wrong shape.

Failure to State a Cause of Action

Months into litigation, the complaint still must state a claim the law recognizes. The pleading faces liberal construction in favor of the plaintiff, which makes this ground a test of legal sufficiency rather than credibility. Here the characterization fight belongs (a claim the reconciliation history answers better than briefing does): unless the sum advanced was repayable absolutely, the transaction is not a loan, and courts weigh the reconciliation provision, the finite term and the bankruptcy recourse to decide the point, on the MCA characterization analysis in LG Funding. The price felt ruinous. The pleading decides.

The complaint frames the advance as a purchase in order to avoid the loan characterization the defense needs. Corporate borrowers may assert criminal usury as a defense though not as a counterclaim, a distinction counsel must preserve in the pleading. Delancey Street offers a free confidential initial review of business debt concerns, and a merchant weighing a dismissal motion can ask whether the account is eligible for settlement assistance. The company acts as a settlement company and coordinates legal matters with independent counsel, since it is not a law firm. Consultation is where this conversation begins. Simply bring the same exhibit the motion would use, and ensure no position is conceded in correspondence before counsel approves it. Dismissal rewards the defense pleaded with documents, not the grievance behind it.