61 Broadway Owner, LLC v Strategic Capital Solutions, LLC

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61 Broadway Owner, LLC v Strategic Capital Solutions, LLC 2012 NY Slip Op 31146(U) April 23, 2012 Sup Ct, NY County Docket Number: 109736/11 Judge: menzez Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. SCANNED ON 51112012 [* 1] SUPREME COURT OF THE STATE OF NEW YORK - NEW YORK COUNTY PRESENT: MANUEL J. MENDEL PART I3 Justice INDEX NO. 10973611I MOTION DATE 03 -14-2012 MOTION SEQ. NO. 001 MOTION CAL. NO. 61 BROADWAY OWNER, LLC, Plaintiff, agalnstSTRATEGIC CAPTiAL SOLUTIONS, LLC and EDWARD 0. MEHRFAR, Defendants. The following papem, numbered Ito $ Notice of Motion/ Order to Show Cause -Affldavlts - Exhlbl Answerlng Affldavlts - Exhlbits were read on this motion tolfor gummaw iudament cro88 motlon Replylng Affldavlts Cross-Motion: Yes X No NEW YoRK COUNTY CLERK S OFFICE Upon a reading of the foregoing cited papers, It Is ordered that plaintiffs motlon pursuant to CPLR 93212, for summary judgment, is granted only as to defendants first, sixth, eighth, tenth, eleventh, twelfth, thirteenth, fourteenth, fifteenth, eighteenth, nineteenth and twentieth affirmative defenses and all of the defendants counte rclaims. Plaintiff seeks an Order grantlng summary judgment pursuant to CPLR 53212, claiming that there are no issues of fact and It Is entitled to a monetary Judgment agalnst both Strategic Capital Solutions, LLC (hereinafter referred to as SCS ) and Edward 0. Mehrfar, based on the lease and a limited personal guarantee. Plaintiff also seeks an Order granting summary judgment, that strikes and dismisses all of defendants affirmative defenses and counterclaims as having no basis In law or fact. In order to prevail on a motion for summary judgment pursuant to CPLR 93212, the proponent must make a prima facie showing of entitlement to judgment as a matter of law, through admissible evidence, diminatin9 all material issues of fact (Klein v. City of New York, 89 N.Y. 2d 833, 675 N.E. 2d 548, 652 N.Y.S. 2d 723 [ISSS]). Once the moving party has satisfied these standards, the burden shlfts to the opponent to rebut that prima facie showing, by producing contrary evidence In admissible form, sufficient to require a trial of material factual issues (Amatulli v. Delhl Constr. Corp., 77 N.Y. 2d 525, 571 N.E. 2d 645; 569 N.Y.S. 2d 337 [1999]). The Interpretation of leases generally applies the same rules of construction as to contracts (George Backer Management Corp. v. Acme Quilting, 46 N.Y. 2d 21 I, 385 N.E. 2d 1062,413 N.Y.S. 2d 135 [1978]). In those Instances where the terms of the contract are unambiguous, the contract must be enforced by Its terms (Vermont Teddy Bear Co. v. 538 Madison Realty Co., IN.Y. 3d 470,775 N.Y.S. 2d 765,807 N.E. 2d 876 [2004]). [* 2] Plaintiff brought this action seeklng a money judgment to recover rent with escalations, and addltlonal rent based on default and pursuant to a lease agreement with SCS (Mot. Exh. E). Plaintiff asserts causes of action agalnst SCS for rent and addltlonal rent in the amount of $37,169.13 due from February, 2011 through August 31, 2011. Plaintiff also seeks a judgment agalnst SCS for rent and addltlonal rent for the period from September 1, 2011 through March 31, 2014, the end of the lease. Plalntlff asserted separate causes of action against Edward 0. Mehrfar, individually based on his limited personal guaranty (Mot. Exh. E). Plalntlff claims that because all of the rent and additional rent was not paid before SCS vacated the premlses on August 2, 2011, Mr. Mehrfar Is also obligated to pay $37,169.13 through August 31, 2011, and for any other rent or additional rent due untll SCS fully complies wlth any obligations under the lease or a money judgment Is entered. On September 12, 2000, plalntlff and SCS entered into a lease agreement for a term of seven (7) years and three (3) months (Mot. Exh. A). SCS owed a base rent $13,257.73, commencing January 1, 2011, the fifth year of the lease. Plaintiff clalms that the lease Includes provisions that provlde for additional rent for electrical service. The lease also has a provision for the portion of real estate taxes whlch would be charged as additional rent (Mot. Exh. A). Plalntlff states that pursuant to paragraph 18( c )of the lease, it is entitled to legal fees for this action and an evlctlon proceedlng commenced In Civil Court for SCS s default In paying rent. Plaintlff 8 papers make no specific reference to the lease provisions that apply to the remaining amounts charged as addltlonal rent. Plaintiff claims that pursuant to paragraph 2 of the Limited Personal Guaranty, Edward 0. Mehrfar remains llable for the rent and additional rent due through August 1I , 2011 and any accruing amounts untll the entry of judgment or the explratlon of the lease (Mot. Exh. B). Plaintiff relles on the rent ledger to establish that from February, 201 1, SCS dld not pay rent or additional rent (Mot. Exh. F). The ledger annexed to the motion papers Is a print-out titled CM Recelvables Ledger and appears to have been prepared by MRI Management 40, not the Plaintiff. The ledger does not indicate that February rent and addltlonal rent was unpaid. The ledger shows that as of March 28, 201 1, SCS paid all that was owed except for $256.25, billed on March I, 2011, for legal fees. On June 29, 2011, plaintiff commenced a Commercial Landlord and Tenant Non-payment of Rent Eviction proceeding in the Civil Court (Mot. Exh. C). Plaintiff does not provide a basis for charging the March I, 2011 legal fees, three months before It commenced any legal proceedings and why the ledger shows no legal fees were bllled In April of 2011. Plaintiff does not state the basis for charging additional rent under Miscellaneous Tenant, In the ledger (Mot. Exh. F). Plalntlff states the amounts sought are correct and authorlzed pursuant to the lease but does not provide a basis for all the charges. Plalntlff has not established it Is entitled to a money judgment for February, 2011 through August 31,2011 in the amount of $37,109.13, or money judgment for the period from September, 2011 through the explratlon of the lease. There remains Issues of fact concerning the amount of addltlonal rent charged to SCS and the applicable lease provisions for additional rent. Plalntlff has not established that Mr. Mehrfar owes $37,169.13, through August 31, 2011, with accruing amounts pursuant to the guaranty. [* 3] A motion to dismiss affirmative defenses pursuant to CPLR 53212 [e], can be based upon any of the grounds asserted in CPLR 9321 1 [a]. The affirmative defenses should not be dismissed if there is any doubt (Houston v. Trans Union Credit Info. Co., 154 A.D. 2d 312, 540 N.Y.S. 2d 312 [N.Y.A.D. 1'' Dept., 19891). Conclusory affirmative defenses settlng forth no factual basis to formulate a response are a bash for dlsmlssal (Kronlsh Lieb Weiner & Hellman, LLP v. Tahari, Ltd., 35A.D. 3d 317, 829 N.Y.S. 2d 7 [N.Y.A.D. 1 l t Dept., 20061). A process server's affldavlt of service Is prima facie evidence of proper service absent a non-conclusory sworn denial of service ( Ayala v. Basset, 57 A.D. 3d 387,870 N.Y.S. 2d 261 [N.Y.A.D. I Dept., 20081). " Plaintiff has provided the affidavit of its process server and the Secretary of State, it has established that service was proper on both defendants (Mot. Exh. I). The defendants provided no denial of service. The first affirmative defense of lack of Jurlsdlction Is dlsmlssed. Plaintiff has established that pursuant to Article 18 (b) of the lease, it was not under a duty to mitigate damages. Paragraph 1 ( C ) of the lease applies to the payment of rent, and prohibits any, "...setoff, offset, abatement or deduction whatsoever..." (Mot. Exh. A). Paragraph 24 of the lease contains a no waiver clause without a writing signed by the plaintiff (Mot. Exh. A). Defendants sixth affirmative defense of mitigation of damages, thirteenth affirmative defense seeking an offset and nlneteenth afflrmatlve defense of release and waiver, do not apply pursuant to the lease and are dismissed. Defendants' seventh, eighth, tenth, eleventh, twelfth, fourteenth, fifteenth, eighteenth and twentieth affirmative defenses are conclusory or repetitive and are dismIssed. The second, flfth, nlnth, sixteenth and seventeenth affirmatlve defenses pertain to Improper, unreasonable, excessive or miscalculated monetary demands. There is a possible bash for these afflrmatlve defenses. The third and fourth affirmative defenses pertain to compliance with condition precedent to obligations under the lease. Defendants state they complied in all material respects with the conditions precedent to the lease and guarantee. They also state plaintiff failed to provide authority, direction and cooperation which was a condition precedent to any obligations. The seventh affirmative defense states that plaintiffs damages were caused in whole or In part by the plaintiff. There is a potentlal merit to these defenses. The lease at paragraph 33 permits the plaintiff to apply the security deposit to arrears (Mot. Exh. A). Pialntiff is not obligated under the lease to apply the securlty deposit to the arrears and has stated that it has not done so because it is waiting for a judgment or a determination of the full amount of damages. Pursuant to paragraph 3 of the Limited Personal Guarantee, the security deposit shall not be credited against the amounts owed by elther the tenant or the Guarantor. Defendants first four counterclaims seek the return of the security deposit and letter of credit or the application to the amount plaintiff claims It Is owed. Defendants are not entltled to [* 4] this relief pursuant to the lease and guarantee. The first, second, third and fourth counterclaims are dismissed. The fifth counterclaim seeks damages based on rellance on representations, agreements and covenants that there is no money owed after the surrender of the premises..Paragraph 24 of the lease contains a no waiver clause (Mot. Exh. A) without a writing slgned by the plaintlff. Defendants do not provide any proof signed wrltlngs exist. The fifth counterclaim Is dismissed. The sixth counterclaim states the conclusory claim of breach of implied covenant of good faith and fair dealing. The implied covenant of good faith and fair dealing requires proof and facts to establish that a party lntentlonally sought to prevent performance of a contract ( Dalton v. Educational Testing Service, 87 N.Y. 2d 384,663 N.E. 2d 289, 639 N.Y.S. 2d 977 [ISM]). Defendants provide no basls for thls counterclaim and It is dlsmissed. The seventh counterclalm seeks attorney fees. Defendants have not stated a bash to obtain attorney fees based on the lease and guarantee. They did not obtain dismissal of the Civil Court Eviction proceedlngs on the merits. The seventh counterclaim is dismissed. Summary Judgment cannot be avoided by a claim that discovery is needed unless an evldentiary basis is provided establlshlng that the discovery sought will produce relevant evidence (Lee v. Ana Development Corp., 83 A.D. 3d 545, 921 N.Y.S. 2d 232 [N.Y.A.D. lrt Dept., ZOII]). Defendants seek discovery and pursuant to CPLR 93212[fl, claim that summary judgment should be denied. They claim discovery is needed as to plalntlff s possible purpose in preventing SCS from vacating the premises and mitigation of damages. Defendants have not stated a basls to prevent the granting of partial summary judgment. Upon review of all the papers submitted, this Court finds that there remain issues of fact concerning the amount of additional rent charged to SCS and the applicable lease provisions for additional rent. There also remalnlng issues of fact concerning the amounts owed by Edward 0. Mehrfar under the guaranty. Plaintiff is entitled to partial summary Judgment pursuant to CPLR 93212[e], Concerning some of the afflrmative defenses and defendants counterclaims. Accordingly, it is ORDERED that plaintiffs motion pursuant to CPLR $3212 for summary judgment, Is granted only as to defendants first, slxth, eighth, tenth, eleventh, twelfth, thIrteent h, fourteenth, fifteenth, eighteenth, nIneteent h and twentieth affirmative defenses and these are dismissed, and it is further, ORDERED, that all of the defendants counterclaims, are dismissed, and it is further, ORDERED, that the remainder of plaintiffs motion is denied. [* 5] This constitutes the declslon and order of this court. Dated: April 23, 2012 ENTER: 0 FINAL DISPOSITION X Check if appropriate: 0 DO NOT POST Check one: NON-FINAL DISPOSITION REFERENCE FILED APR 30 2012 NEW YORK COUNW CLERItS OFFICE

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