Conkschm 110 Realty LLC v Macanian

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Conkschm 110 Realty LLC v Macanian 2012 NY Slip Op 32892(U) November 30, 2012 Sup Ct, Suffolk County Docket Number: 14665-11 Judge: Elizabeth H. Emerson 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. [* 1] SHORr FORM ORDER INDEX NO., 14665-11 SUPREME COURT - STATE OF NEW YORK COMMERCIAL DIVISION TRIAL TERM, PART 44 SUFFOLK COUNTY PRESENT: HOll. Elizabeth Hazlitt Emerson MOTION DATE: 11-14-12 SUBMITTED: 2-2-12 ---------------------, CONKSCHM MOTION NO.: OOl-MG 110 REALTY LLC, and MCS REALTY, LLC, Plaintiffs, MEYER, SUOZZI, ENGLISH & KLEIN, P.c. Attornc)'s for Plaintiffs 900 Stewart Avenue, Suite 300 Garden City, New York 11530 -against- ALBERT MACANIAN, DESIGN FURNITURE FARRELL FIUTZ, PC OF Attorneys for Defendants 2488 Montauk Highway Bridgehampton, New York 11932 LONG ISLAND, INC., ALBERT'S FURNITURE GALLERY, INC., ALBERT MACANIAN personally and d/b/a ALBERT'S DESIGN FURNITURE OUTLET and DESIGN FURNITURE GALLERY, DESIGN FURNITURE, LTD. ("'1.1'1)"); and JOHN DOE, INC. NOS. 1-10, Defendants. x Upon the following papers numbered 1-36 read 011 this motioll to dismiss; Notice of Motion and supporting papers _1:11_3 Notice of Cross Motion and supporting papcrs~_; Answering Affidavits and supporting papers 15~26; Replying Affidavits and supporting papers 27-30; Other Plaintiff's memoranda onaw 31-34; Defendants' memorandum orlaw 35-36; it is, ORDERED that the motion (001) by the plaintiffs for partial summary judgment on the issue of liability on the first, second, and fourth causes of action, and an order striking the first through eleventh and thirteenth through sixteenth affirmative defenses is granted; and it is further ORDERED that counsel for movants shall serve a copy of this Order with Notice of Entry upon counsel for the defendants, pursuant to CPLR 2103(b)( 1), (2) or (3), within thirty (30) days of the date the order is entered and thereafter file the affidavit(s) of service with the Clerk of the Court; and it is further [* 2] Index No.: 14665-11 Page 2 ORDERED that the parties are directed to appear January 23, 2013 at 9:45 a.1TI_ III Part 46 for a preliminary conference on In this action, plaintiffs Conkschm 110 Realty LLC and MCS Realty LLC seek to recover the payment oErent and additional rent ii·om the defendants Design Furniture of Long Island, Inc., Albert's Fumiture Gallery, Inc., Albert Macanian personally and d/b/a Albert's Design Furniture Outlet, DesIgn Furniture Gallery, and Design Furniture, LTD., and the balance of a loan made to defendant Maeaulan. The record reveals that in or about September 2004, the defendant Design Furniture of Long Island, Inc. (hereinafter "Design Furniture of LI") entered into a commercial lease agreement with the plaintiff MCS Realty LLC (hereinafter "MCS") to rent the premises located at 1995 Broadhollo\v Road, Huntington, New York for a twenty year term. Pursuant to paragraph 80 In the Rider to the Lease, defendant Macanian, as pnncipal of Design Furniture of LJ, agreed that he would "guarantee the payment of all rent and additional rent payment for the demised premises from the date of any nonpayment of any rent until the date the Tenant surrenders possession of the demised premises to the Landlord in broom clean condition. Principal conJinns and agrees that he is responsible 111 full for any such payments of base or net rent or additional rent not made by the Tenant. This lImIted personal guarantee ofrenta1 payments shall cease on the date that the tenant delivers possession of the premises vacant and broom clean to Landlord with all base or net rents <.md additional rents p3id to the date of delivery of possession." Paragraph 80 also provided that the guarantee would cease on the date that the Landlord consents to an assignment or the lease. The record reveals that in September 2005, MCS transferred title to the denl1sed premIses to the plaintiffConkschml1O Realty, LLC (hereinafter "Conkschm), and subsequently, Design Furniture ofLI executed an Estoppel Certificate nnd Subordination and a Non-Disturbance Agreement pursuant to which it acknowledged th3t Conkschm was the landlord under the lease. Some time in January- 2010, Macanian and Design Fumiture of Ll were unable to pay the additional rent in full. Macanian personally executed a loan agreement with MCS for a loan in the amount or $48,000 at 5% interest on January 2, 2010 in order to assist Macanian in paying the rent. On January 20, 2010, the parties agreed to settle the additional rent ,mears in the amount 01'$77,984.48 hy the acceptance of the payment of $22,000. Included in the agreement was the plan for Maca11lan to pay the loan amount of$48,000 in twelve equal monthly installments beginning on June 1,2011 through May, 1,2012. Design Furniture ofLI failed to pay base rent in July 2010. In August and September 2010, Conkschm sent notices of default and demanded the payment of rent and additional rent. On October 4, 2010, Conkschm served Design Furniture of L1 with a three day notice of nonpayment On or about November 10, 2010, Design Furniture of L1 surrendered possession orthe premises, but allegedly left celtain vehicles on the premises. Inasmuch as [* 3] Index No.: 14665-11 Page 3 Macanian and Design Furniture of LI have failed to pay rent and additional rent, the instant action was commenced. The plaintiff seeks the payment of$939,292.21 in rent and additional rent as of October 1,2011. The complaint alleges eleven causes of action. In the first cause of action, it is alleged thai the defendant Macanian breached a b'1larantee for failing to pay rent and additional rent from July 1, 2010 through January 2011 in the amount of $419,81 1. In the second cause of action, it is alleged that Macanian breached Lheguarantee for failing to pay rent and additional rent to thc datc that Design Furniture ofLI turned over possession of the premises to Conkschm in the amoutn fo $419,811.42. The third cause of action alleges that Design Furniture of Ll and Macanian repudiated the lease for the remainder of the 20 year lease term. The fourth cause of action alleges that Macanian breached the loan agreement with MCS in the amount of$48,000. In the fifth and sixth causes of action, the complaint alleges that Macanian and Design Furniture of LI breached the lease by failing to pay rent and additional rent. In the seventh cause of action, Conkschm alleges that Macanian ignored corporate fornlalities and commingled the assets of the defendant Albert's Furniture Design, Ltd, Design Furniture ofLI, personal assets and the other Macal1.ian entities. In addition, the complaint alleges that Macanian dissolved Design Furniture ofLI in 2006 and did not notify the landlord. After vacating the premises, Macanian opened a new store called Albert's Design Furniture Outlet, which was staffed by the same employees, used the same phone number, signage, inventory, vendors, and customer information as Design Furniture of LL In the eighth cause of action, the complaint alleges that defendants Albert's Dcsib'l1 Furniture Outlet, Albert's Inc., and DeSIgn, Ltd. arc liable for Design Furniture of LI's debts inasmuch as these stores sell the same merchandise, have the same owner, officer and director, use the same signagc, are located on the same block, use the same equipmcnt and tractor trailers, conduct business under a similar name as the original store, use the original telephone number, employs the same staff and uses the same vendors as Design Furniture of LT. In the ninth cause of action the complaint alleges that Macalllan effected a fraudulent conveyancc of all Design Furniture of LI's assets to himself, Alhert's Inc., Design, Ltd. for no consideration with the intent to hinder, delay or defhlud present and future creditors of Design Furniture ofLT, including the plaintiffs. In the tenth cause of action the complaint alleges that Macanian is liable for constructive fraud by the transfer oj' Design Furniture of Ll's assets to himself and his companies. in the eleventh cause of action, the complaint alleges that Macanian fraudulently executed the additional rent agreemenl on behalf of Design Furniture of LI after he dissolved the corporation. The plaintiffs now move for partial summary judgment on the issue of liability on the first, second, and fourth causes of action, and an order striking the first through eleventh and thirteenth through sixteenth affirmative defenses. A party moving for summary judgment must make a prima facie showing of entitlement as a matter of law, offering sufficient evidence to demonstrate the absence of any material issues of fact (Willegrad v New York UII;V.Med. Or., 64 NY2d 851,487 NYS2d 316 [1985]; Zuckerman )1 New York, 49 NY2d 557, 427 NYS2d 595 [1980]). Of course, sununary judgment is a drastic remedy and should not be granted where there is any doubt as to the existence of a triable issue (Stewart Title Ius. Co. v Equitable Land Servs., 207 AD2d 880, 616 NYS2d 650 [2d Dept 1994]), [* 4] [ndex No.: 14665-11 Page 4 but once a prima facie showing has been made, the burden shifts to the party opposing the motion to produce evidentiary proof in admissible form sufficient to establish material issues of fact which require a trial of the action (Alvarez vPrmpect Hosp., 68 NY2d 320, 508 NYS2d 923 [19g6J). The evidence submttted by the plaintiffs was sufficient to meet their burden of establishing, as a matter of law, that the defendant Macani,m is liable as guaranty for the rent and additional rent, as well as the personal loan (Eiseman v State, supra; McNulty v City of New York, supra). In support oftbe motion, the plaintiffs submit, inter alia, the pleadings, a letter dated August 4, 2010 from Conkschm to Design Furniture ofLI, a copy of the three day rent demand dated October 4, 2010, a copy of a letter dated August 4, 20 10 from MCS to Macallian stating the Macanian is in default of the loan agreement, a copy ora letter dated December 1, 2010 from Conkschm's attoll1cy to Macanian's counsel regarding sunender of the premises and Conkschm's position that it is reserving all rights with regard to any claims for breach of the lease agreement against Design Fumiturc ofLI, Macanian and their affiliates, a copy of the lease and rider, a copy of payments made by Design Furniture of LI to Conkschm, and a copy of the loan agreement. In addition, the plaintiffs submit the personal affidavit of Steven Scrota. Steven Serota avers in his affidavit that he is a member ofConkschm and MCS. He states that the term of the lease commenced on or about March 1, 2005 and terminates on April 30, 2005. The parties agreed on the base rent, which would gradually increase over time, and the payment of additional rent which included real estate taxes, insurance, water charges, land rent and maintenance and repairs. Serota states that the initial default occuned in January, 20 I0 by the defendants' failure to pay additional rent totaling $77,984.48. Although the plaintiffs agreed to accept $22,000 in full payment of the outstanding additional rent arrears, it was conditioned upon the defendants making full payment of any scheduled rent payment in a timely manner. At the same time, MCS lent MacaniwI the sum 01'$48,000, conditioned upon the payment of all scheduled rent paymentsThe defendants failed to pay rent and additional rent in October 2011 totaling $939,929.21. After serving notices of nonpayment upon the defendants, on or about November 31, 2010, Destgn Furniture of Ll vacated the building, however did not rcmove all property fTom the premises until January 2011. As the movmg plamtiffs made a prima facie showing of entitlement to summary judgment, the burden shifts to the defendants to dcmonstrate the existence of a triable issue of fact (see All'Urez v Prml'ect Hosp., supra; Zuckerman v City o/New York, supra; .Mllrray v Hirsch, 58 ADJd 701, 871 NYS2d 673 [2d Dept 2009J, Iv dell 12 NY3d 709, 881 NYS2d 18 [2009]). The detCndants failed to meet this burden. In opposition, the defendants submit an affidavit by MacallJan, wherem he states that he was fonnedy the president of Design furniture of Long Island, Inc., WIdwas also fonnerly aiEliated with Albert's Fumiture Gallery, Tnc. He does not dispute the existence of the lease, or that MCS transferred title to the premises to Conkschm in 2005. He acknowledged that Design Furniture of Ll was baving difficulty paying the rent in January 2010. He further stated that he and Design Furniture of Ll entered into agreements with Conkschm and MCS without the benefit oflegal counsel 111 order to settle the rent arrears. He disputes the amount of the sum due and avers that he was not credited for the payment 01'$22,000. Macanian stated that Design Fumiture ofLl o\ves the plaintiff,:>the sum of$254,966, and they offered partial payment of $170,000 in full satisfaction of all past rents and additional rents through October 30,2010, but the plall1tiffs declined to accept partial payment. Macanian stated that he offered to apply the security deposit to pay an additional $80,000, but again, the plaintiffs refused payment. Accordingly, the plaintiffs' motion seeking partial summary judgment on the first, second, [* 5] Index No.: 14665-11 Page 5 and fourth causes of action is granted. As a result the first through eleventh and thirteenth through sixteenth affirmative defenses which relate to the first, second, and fourth causes of action are hereby stncken. The parties are directed to appear for a preliminary conference on January 23,2013 at 9:45 a.lll. DATEO; November 30, 2012 HOM. EtlZABErn HAZLm EMERSOtf J. S.C.

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