Ribellino v Fleet 2000, Inc.

[*1] Ribellino v Fleet 2000, Inc. 2009 NY Slip Op 52033(U) [25 Misc 3d 1211(A)] Decided on October 7, 2009 Supreme Court, Kings County Starkey, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on October 7, 2009
Supreme Court, Kings County

Richard Ribellino & Alva Partnership, Plaintiffs,

against

Fleet 2000, Inc., and Zelig Rosenfeld, Defendants.



7501-2008



For Plaintiff(s):

RICHARD A. KLASS, ESQ.

16 Court Street, 29th Floor

Brooklyn, New York 11241

For Defendant: Zelig Rosenfeld

MARCH ARONSON, ESQ.

107 Smith Street

Brooklyn, New York 11201

James G. Starkey, J.

FACTS AND PROCEDURAL BACKGROUND

Plaintiffs, Richard Ribellino and Alva Partnership seek an order pursuant to CPLR

§ 3212 granting summary judgment against defendant Zelig Rosenfeld in the amount of $157,420.63, with interest from December 1, 2007, as well as costs and reasonable attorney's fees in accordance with the terms of a certain lease. Additionally, plaintiffs move pursuant to CPLR § 3215 for a default judgment against defendant Fleet 2000, Inc. for the same amount,

also with interest from December 1, 2007. Finally, and pursuant to CPLR § § 8201 and 8202, plaintiffs seek costs and disbursements of the instant action and the instant motion. Defendant Zelig Rosenfeld cross-moves for an order denying plaintiffs' summary judgment motion, and for an order dismissing the action as against him.

Plaintiffs commenced this action on March 6, 2008, by filing a summons and complaint dated March 3, 2008, seeking to recover rent arrears pursuant to a commercial lease agreement executed on February 4, 1997, for the premises located at 5901 2nd Avenue in Brooklyn, New York. Issue was joined by service of an answer by defendant Rosenfeld on September 4, 2008. Defendant Fleet 2000, Inc. has not appeared in this action.

Defendant Rosenfeld executed the original lease agreement both as President of Fleet 2000, Inc. and as personal guarantor of performance and payment of rent and additional rent, which guaranty underlies plaintiffs' claims as against defendant Rosenfeld. The initial term of the lease agreement was two years and paragraph 43 provides for two-year renewal periods where, with the exception of the annual rent, all terms and conditions of the of the original lease were expressly preserved. Defendants exercised the options and renewed the lease for successive terms by letters, signed by defendant Rosenfeld, and dated 10/21/98, 1/29/01, 12/31/02 and 12/20/04, respectively. The fourth and final renewal option covered the period of February 1, 2005 to January 31, 2006 and was not exercised.

According to plaintiffs' bill of particulars, the amount of defendants' rent arrears is $157,420.63, and the rent arrears claimed to be owed were reduced to a money judgment entered in the Civil Court of the City of New York, County of Kings on October 29, 2007, as a result of an action brought in that court under Index No. LT 68035/2007.

In opposition, defendant contends that plaintiffs' motion must be denied since it is only supported by an attorney's affirmation, and lacks an affidavit by any person with personal knowledge of the facts. Defendant asserts that the affirmation of plaintiffs' counsel contains allegations which are not supported by the documentary evidence, including but not limited to, (1) the parties to the agreement, (2) the period of the agreement, (3) the liability of the parties, (4) the alleged amount of rental arrears, and (5) the manner in which arrears were computed. Further, defendant contends that he is not a proper party herein, and that by letter dated January 3, 2005 he notified plaintiffs that Fleet 2000, Inc. would cease operations effective February 28, 2005, and that effective March 1, 2005, all assets would be transferred to an entity known as Fleet 2005, Inc., with which defendant would have no connection. In that letter, defendant provided plaintiffs with the name of an individual to contact regarding billing and other inquiries. He thus contends that once the lease expired, a new entity became the tenant which was, at most, [*2]a month-to-month tenant, and that once the lease had expired so did the guaranty upon which plaintiffs rely. This he urges, extinguished his liability for any payments after February of 2005.

Plaintiffs aver that they received Mr. Rosenfeld's letter dated December 24, 2004 indicating his intent to exercise his option to renew the lease, and that defendant continued to maintain occupancy of the premises throughout the renewal period. Plaintiffs, however, deny receiving the January 3, 2005 letter allegedly mailed, noting that such letter must be by registered or certified mail as required under paragraph 38 of the lease. Plaintiffs further argue that defendants' purported assignment, exercised without consent of plaintiffs, is a nullity because it violated the provisions of paragraph 30 of the lease, and further assert that defendants violated the provisions of paragraph 34 by failing to quit the premises and deliver it vacant to the landlord upon the expiration of the lease.

Finally, plaintiffs contend that Rosenfeld is collaterally estopped from challenging the validity of the money judgement, in the amount of $66,400.00, obtained against Fleet 2000 in the Civil Court.

LAW AND APPLICATION

Summary judgment is a drastic remedy as it deprives a party of his or her day in court and should be granted when it is clear that no triable issues of fact exists. See Alvarez v. Prospect Hospital, 68 NY2d 320, 508 NYS2d 923, 501 NE2d 572 (1986). The burden is upon the moving party to make a prima facie showing that the movant is entitled to summary judgment as a matter of law by presenting evidence in admissible form demonstrating the absence of any material facts. See Giuffrida v. Citibank Corp., 100 NY2d 72, 760 NYS2d 397, 790 NE2d 772 (2003). A failure to make that showing requires the denial of the summary judgment motion, regardless of the adequacy of the opposing papers. See Ayotte v. Gervasio, 81 NY2d 1062, 601 NYS2d 463, 619 NE2d 400 (1993). If a prima facie showing has been made, the burden shifts to the opposing party to produce evidentiary proof sufficient to establish the existence of material issues of fact. See Alvarez v. Prospect Hospital, supra at 324. Mere conclusory statements, expressions of hope, or unsubstantiated allegations are insufficient to defeat the motion. See Gilbert Frank Corp. v. Federal Ins. Co., 70 NY2d 966, 525 NYS2d 793 (1988).

In the first instance, there is no merit to defendant's contention that plaintiffs' motion lacks sufficient support. Although CPLR § 3212(b) requires a motion for summary judgment to be supported by an affidavit of a person having knowledge of the facts, the affidavit of an attorney based on documentary evidence in the attorney's possession may have probative value and should be evaluated by the court. See Getlan v. Hofstra Univ., 41 AD2d 830, 831, 342 NYS2d 44 (2nd Dept. 1973), app. dismissed., 33 NY2d 515, 348 NYS2d 1026 (1973). The affirmation of plaintiffs' attorney asserts that he is fully familiar with the facts of the case and the documentary evidence including, inter alia, a copy of the lease agreement, bills, invoices and correspondence, is sufficient.

A provision in a lease which restricts assignment or subletting and requires consent of the landlord prior to doing so is enforceable. See Matter of Clason Management Co. v. Altman, 40 AD2d 635, 336 NYS2d (1st Dept. 1972). The instant lease agreement contains such a restriction. Paragraph 30 clearly and explicitly bars the tenant from assigning or transferring the lease or subletting the premises, unless the tenant obtains the prior written consent of the landlord — which consent cannot unreasonably be withheld. It also provides that the absence of such [*3]compliance voids any act or instrument purporting to do so. Thus, even assuming that plaintiffs received Rosenfeld's letter of January 5, 2005, there is no showing that such mandated consent in writing was ever procured by defendant, thus defeating any argument that a valid assignment extinguished defendants' obligations under the lease agreement.

It is true that a guaranty is to be interpreted in the strictest manner. See White Rose Food v. Saleh, 99 NY2d 589, 591, 758 NYS2d 253 (2003). But personal guaranties which contain language of a continuing obligation are enforceable and survive payment of the original indebtedness. See USI Capital and Leasing v. Chertock, 172 AD2d 235, 236, 568 NYS2d 74 (1st Dept. 1991). Moreover, termination of a continuing personal guaranty requires compliance with the provisions governing termination expressly set forth in the guaranty. See General Electric Co. v Kessler, 131 AD2d 634, 516 NYS2d 945 (2nd Dept. 1987). In the absence of some writing which addresses termination, a guaranty which is silent on that subject remains in full force and effect. See Chemical Bank v. Geronimo Auto Parts Corp., 225 AD2d 461, 462, 639 NYS2d 340 (1st Dept. 1996).

Although the language of defendant's personal guaranty is silent as to termination, the terms of said guaranty incorporate by reference the provisions of paragraph 39 of the lease, which contains language that obligates defendant, as principal of the lessee, to guarantee full and unconditional performance. Additionally, the same paragraph provides that the lease may be changed or modified only by an instrument in writing signed by the party against whom enforcement of such change or modification is sought. Paragraph 39 also states that: (1) termination shall not be effective until 90 days after receipt of written notice to the Lessor; (2) all rent or additional rent then due and owing to the Lessor shall have been paid at the time of delivery of possession; and (3) upon termination, the premises are to be delivered in broom-clean condition. Defendant fails to demonstrate compliance with any of these conditions. Indeed, defendant offers nothing beyond conclusory assertions that the lease agreement was terminated in accordance with its terms, that notice thereof was conveyed and that a valid assignment was executed. Thus, defendant fails to make a prima facie showing of entitlement to relief on his cross motion.

Also without merit is defendant's argument that Fleet 2005, Inc., which is not a party to this action, became a month to month tenant. Defendant, who vigorously disclaims any connection with this entity, lacks standing to assert any legal arguments on its behalf. See Ellman v McCarty, 70 AD2d 150, 420 NYS2d 237 (2nd Dept. 1979). Equally without merit is defendant's challenge to the underlying Civil Court judgment

against Fleet 2000, Inc. which challenge refers to a proceeding, purportedly dismissed, which was commenced under a different index number from that under which plaintiffs obtained a default judgment dated October 29, 2007 in the amount of $66,400.00. Defendant's papers omit any mention of either the judgment upon which plaintiffs base their res judicata argument, or the stipulation whereby Fleet 2000, Inc. consented to the jurisdiction of that court. Accordingly, plaintiffs are entitled to prevail. Defendant Rosenfeld is barred from now challenging the validity of said judgment. See Eagle Insurance Co. v Facey, 272 AD2d 399, 707 NYS2d 238 (2nd Dept. 2000).

Finally, that branch of plaintiffs' motion seeking a default judgment against Fleet 2000, Inc. is granted as unopposed. See CPLR § 3215. See also, Chemical Bank v. Geronimo Auto [*4]Parts Corp., 225 AD2d at 462.

CONCLUSION

In view of the foregoing, plaintiffs' motion is granted and defendant's cross motion is denied. Pursuant to Article 22 of the Judiciary Law, and in accordance with the applicable provision of the rules of the Chief Administrator of the Courts, upon the filing of the requisite forms this action is assigned to a Judicial Hearing Officer in the JHO Part for the purpose of conducting an inquest as to damages and costs. This constitutes the decision and order of the court.

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J.S.C.