Arthur at the Westchester, Inc. v Westchester Mall, LLC

[*1] Arthur at the Westchester, Inc. v Westchester Mall, LLC 2012 NY Slip Op 50312(U) Decided on February 15, 2012 Supreme Court, New York County Scarpulla, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 February 15, 2012
Supreme Court, New York County

Arthur at the Westchester, Inc., d/b/a Arthur and Evgeny Friedman, Plaintiffs,

against

Westchester Mall, LLC, Defendant.



600293/10



For Plaintiffs:

Tanenbaum & Berger LLP

26 Court Street, Penthouse

Brooklyn, NY 11242

For Defendant:

Braff, Harris & Sukoneck

305 Broadway, Seventh Floor

New York, NY 10007

Saliann Scarpulla, J.

In this action to recover damages for alleged wrongful eviction in the context of a landlord-tenant summary proceeding, plaintiffs Arthur at the Westchester, Inc., d/b/a Arthur ("Arthur") and Evgeny Friedman ("Friedman") (collectively, "plaintiffs") move (1) pursuant to CPLR 3211(b) to dismiss certain affirmative defenses asserted by defendant Westchester Mall, LLC ("Westchester"); (2) pursuant to CPLR 3211(a)(1) and (7) dismissing Westchester's counterclaims seeking judgment against Friedman; (3) for an order striking Westchester's jury demand; (4) pursuant to CPLR 3212 for partial summary judgment on liability on plaintiffs' first and second causes of action for wrongful eviction; and (5) for an order discontinuing plaintiffs' sixth cause of action.

Westchester cross moves (1) pursuant to CPLR 3212 for summary judgment on its [*2]first and second counterclaims; (2) for an order granting Westchester a trial by jury; and (3) pursuant to CPLR 3211(a)(7) dismissing certain causes of action of the plaintiffs' verified complaint for failure to state a cause of action. In support of its cross motion, Westchester asserts it is entitled to summary judgment on its counterclaims for the net present value of the lease, plus attorneys' fees as provided for in the lease, and that it is entitled to recover under the guaranty due to Arthur's default under the lease.

On or about November 4, 2008, Arthur and Westchester entered into a commercial lease agreement, for Arthur to rent a store at the Westchester Mall for a ten (10) year term, to commence on October 1, 2008. In addition, Friedman, as Guarantor, signed a Guaranty of the lease obligations on October 8, 2011. Westchester asserts that Arthur defaulted under the lease by failing to make its monthly rental payments and other charges on July 1, 2009, and continuing thereafter. As a result, on or about September 17, 2009, Westchester commenced a summary proceeding for the nonpayment of rent in the White Plains City Court.

Arthur asserts that it was not properly served with the petition in the summary proceeding. It is not disputed, however, that Arthur failed to appear, and Westchester was granted a default judgment, together with a warrant of eviction, which Westchester caused to be executed on or about October 26, 2009.

After being evicted from the premises, Arthur filed an order to show cause requesting to be restored to possession. The order to show cause contained a temporary restraining order immediately restoring Arthur to possession which was signed by the White Plains City Court. The signed order to show cause provided both that "pending the hearing and determination of this motion, the Respondent [Arthur is] to be re restored to possession of the subject premises forthwith," and that Westchester was ordered "to permit Respondent access for the limited purpose of obtaining its possessions." After a hearing on the order to show cause, Westchester allowed Arthur to re-enter the premises.[FN1] By Decision dated November 24, 2009, the White Plains City Court granted plaintiffs' motion to dismiss the summary proceeding for lack of personal jurisdiction, finding that Westchester's service was not in compliance with the terms of the lease or the applicable RPAPL provisions.

On or about February 4, 2010, plaintiffs initiated this action by filing of a verified complaint, asserting multiple causes of action, including wrongful eviction and defamation. On or about March 24, 2010, Westchester filed its answer, affirmative defenses and counterclaims alleging breaches of the lease.

In support of this motion, plaintiffs argue that Westchester's first, second, third, fourth, fifth, sixth, seventh, eight, ninth, tenth, eleventh, twelfth, thirteenth, fourteenth, fifteenth, sixteenth, seventeenth, eighteenth, nineteenth, twentieth, twenty-first, twenty-fifth, twenty-sixth and twenty-seventh affirmative defenses are "meritless both in law and in fact and are merely frivolous objections." Plaintiffs also assert that the counterclaims as asserted against [*3]Friedman, with respect to his liability as the guarantor of the lease, should be dismissed because the guaranty was signed twenty-seven (27) days before the execution of the lease at issue, and otherwise lacks consideration. In support of their motion for partial summary judgment, plaintiffs assert that because the White Plains City Court found the eviction was improper due to Westchester's improper service, the resulting eviction was unlawful and plaintiffs are entitled to damages for wrongful eviction. Lastly, plaintiffs argue that the jury demand should be dismissed because there is a jury waiver provision in the lease.

In opposition to plaintiffs' motion to dismiss the affirmative defenses, Westchester asserts that because Arthur breached the material covenants to the lease, the fourth, fifth, sixth, seventh, eighth, ninth, tenth, eleventh, twelfth, thirteenth, fourteenth, sixteenth, seventeenth, eighteenth, twentieth, twenty-first, twenty-second, twenty-third, twenty-fifth and twenty-sixth contractual affirmative defenses are proper. Westchester further argues that the first, second, third and nineteenth procedural affirmative defenses are viable because there has been no discovery on these issues. In addition, Westchester asserts it has a right to trial by jury because the jury waiver provision in the lease must be strictly construed. Moreover, Westchester asserts that the guaranty is a legally valid and binding contract. Lastly, Westchester argues that all of plaintiffs' causes of action must be dismissed for failure to state a cause of action because Arthur was not wrongfully evicted from the premises as Westchester had the right to self help under the lease, and Westchester's letter to Arthur did not contain any malicious or injurious statements.

At the oral argument on these motions, I granted plaintiffs' motion to strike the jury demand. In addition, I granted plaintiffs' motion to dismiss Westchester's first, second, third, fourth, fifth, seventh, eighth, twelfth, thirteenth, fourteenth, fifteenth, sixteenth, eighteenth, nineteenth, twentieth, twenty-first, twenty-fifth, twenty-sixth and twenty-seventh affirmative defenses. I denied plaintiffs motion to dismiss as it pertained to Westchester's sixth, ninth, tenth, eleventh, seventeenth, twenty-second, twenty-third and twenty-fourth affirmative defenses.

I also denied Westchester's motion for summary judgment on the counterclaims, without prejudice to resubmit the motion at the close of discovery. I reserved for this decision plaintiffs' motion to dismiss defendant's counterclaims against Friedman pursuant to CPLR 3211(a)(1) and (7) as they pertain to the guaranty, plaintiffs' motion seeking partial summary judgment on their first and second causes of action for wrongful evictions as to liability alone, and defendant's cross motion to dismiss Friedman's defamation claims, pursuant to CPLR 3211(a)(7).

Discussion

Plaintiffs argues that the counterclaims as asserted against Friedman, seeking to recover against him under the guaranty should be dismissed based on documentary evidence pursuant to 3211(a)(1), and for failure to state a cause of action under CPLR 3211(a)(7). On a motion to dismiss pursuant to CPLR § 3211(a), the test is not whether the opposing party "has artfully drafted the [pleading], but whether, deeming the [pleading] to allege whatever can be reasonably implied from its statements, a cause of action can be sustained." Jones [*4]Lang Wooton USA v. LeBoeuf, Lamb, Greene & Macrae, 243 AD2d 168, 176 (1st Dep't 1998).

"On a motion addressed to the sufficiency of the complaint pursuant to CPLR 3211(a)(7), the facts pleaded are presumed to be true and accorded every favorable inference. However, allegations consisting of bare legal conclusions, as well as factual claims either inherently incredible or flatly contradicted by documentary evidence, are not entitled to such consideration." Franklin v. Winard, 199 AD2d 220, 221 (1st Dep't 1993); see also Leder v. Spiegel, 31 AD3d 266 (1st Dep't 2006) affd 9.NY3d 836 (2007). Thus, "a CPLR 3211(a)(1) motion may be appropriately granted only where the documentary evidence utterly refutes [the] factual allegations, conclusively establishing a defense as a matter of law.'" Jesmer v. Retail Magic, Inc., 55 AD3d 171, 180 (2d Dep't 2008) (quoting Goshen v. Mutual Life Ins. Co. of NY, 98 NY2d 314, 326 (2002)).

Plaintiffs assert that the guaranty lacks consideration, a requisite element for a contract, because the guaranty was dated October 8, 2008 and the lease was dated November 4, 2008. Plaintiffs argue that because there was no lease in place on the date of the execution of the guaranty, the guaranty was a legal nullity as there was nothing to which the surety's obligation could attach. Plaintiffs rely on Hall & Co. v. Continental Casualty Co., 34 AD2d 1028 (3d Dep't 1970). The Court in Hall & Co. held that, "[a] surety bond attaches to the principal contract and must be construed in conjunction therewith so that, if no underlying agreement ever came into existence, there is nothing to which the surety's obligation can attach and it is, therefore, a nullity." Hall & Co., 34 AD2d at 1028 (internal citations omitted). Plaintiffs argue that when the lease was executed on November 4, 2008, Friedman should have, but did not, execute a new guaranty, and failure to do so now prohibits Westchester from holding Friedman responsible under the October 8, 2008 guaranty.

In opposition, Westchester argues that the fact that a guaranty is executed on a different date than that of the execution of the principal agreement does not constitute a lack of consideration because the two agreements are deemed to have been made contemporaneously. Westchester distinguishes this situation from that in Hall & Co., as in Hall the underlying agreement never came to be.

Arthur's argument that the guaranty was not supported by valid consideration is without merit. The guaranty does not "lack consideration simply because [it was not] executed contemporaneously with the" lease. Teitlebaum v. Mordowitz, 248 AD2d 161 (1st Dep't 1998). "[T]he guaranty explicitly provided that the guaranty was issued in order to induce the [landlord] to enter into the lease with the tenant. Although the two documents were not executed on the same date, they were part of the same transaction, and there was no need for new or additional consideration to make the guaranty valid and enforceable." Michelin Mgmt. Co., Inc. v Mayaud, 307 AD2d 280, 281 (2d Dep't 2003). Accordingly, plaintiffs' motion to dismiss the counterclaims as against Friedman seeking to recover under the guaranty is denied.

Plaintiffs also move for partial summary judgment on their first and second causes of action for wrongful evictions as to liability alone. A movant seeking summary judgment [*5]must make a prima facie showing of entitlement to judgment as a matter of law, offering sufficient evidence to eliminate any material issues of fact. Winegrad v. New York Univ. Med. Ctr., 64 NY2d 851, 853 (1985). Once a showing has been made, the burden shifts to the opposing party who must then demonstrate the existence of a triable issue of fact. Alvarez v. Prospect Hosp., 68 NY2d 320, 324 (1986); Zuckerman v. City of New York, 49 NY2d 557 (1980). A motion for summary judgment must be denied if there is any doubt as to the existence of a triable issue of fact. See Rotuba Extruders, Inc. v. Ceppos, 46 NY2d 223, 231 (1978).

Plaintiffs now move for partial summary judgment, as to liability only, on their causes of action for wrongful eviction, arguing that as the White Plains City Court found that the notice of petition and petition were not properly served and were in fact dismissed, the eviction was therefore unlawful.

The White Plains City Court's "determination in the eviction proceeding that the landlord wrongfully evicted the [] plaintiffs collaterally estops the landlord from denying its liability to the [] plaintiffs in this action absent a showing that it did not have a full and fair opportunity to litigate the issue of its wrongdoings in [City] Court." Mayes v. UVI Holdings, L.L.C., 268 AD2d 209, 209 (1st Dep't 2000). Westchester does not argue that it did not have a full and fair opportunity to make such a showing.[FN2] Absent such a showing, it is proper to grant plaintiffs' motion for partial summary judgment, as to liability, on wrongful eviction. Hernandez v. Nelson, 143 AD2d 632, 633 (2d Dep't 1988). "A judgment of possession in favor of the landlord which is later reversed or vacated renders the resultant eviction unlawful, and the tenant is thereby entitled to be restored to the premises and to damages." Maracina v. Shirrmeister, 105 AD2d 672, 673 (1st Dep't 1984).

Moreover, Westchester's arguments in opposition lack merit. Westchester asserts that there was ambiguity in an Order to Show Cause, dated October 26, 2009 (approximately one month before the White Plains Court's written decision), and that the reentry was neither unlawful nor forcible, as Westchester had a right to self-help under the lease.[FN3] Accordingly, [*6]plaintiffs' motion for partial summary judgment on liability on their first and second causes of action for wrongful eviction is granted.

Lastly, Westchester cross moves to dismiss plaintiffs' cause of action for defamation for failure to state a cause of action. Plaintiffs assert in the complaint that Westchester sent a letter, dated October 27, 2009, to Arthur and sent a courtesy copy to Progressive Credit Union. In the complaint, plaintiffs assert that Friedman "had and has a personal financial relationship with Progressive Credit Union, in that it is one of his primary lenders," and that Arthur had no business relationship with Progressive Credit Union. In this letter Westchester states

Please be advised that as of October 27 2009 Tenant has failed to remove equipment/furnishing from The Westchester Mall. This letter will serve to advise Tenant that if the reaming items in the space are not removed from the premises on or before November 9, 2009, Landlord will deem the equipment/furnishings abandoned and will act accordingly. Please contact the mall offices . . . and arrange an appointment for the removal of the equipment/furnishings . . . .

Plaintiffs allege in the complaint that this letter constitutes an injurious falsehood to Friedman in light of the White Plains City Court's directive to Westchester to allow Arthur possession of the store, and that the letter was false in light of the later dismissal of the summary proceeding.

The elements of a cause of action for defamation "are a false statement, published without privilege or authorization to a third party, constituting fault as judged by, at a minimum, a negligence standard, and it must either cause special harm or constitute defamation per se." Dillon v. City of New York, 261 AD2d 34, 38 (1st Dep't 1999) (citing Restatement (Second) of Torts § 558). CPLR 3016 (a) provides that when pleading a cause of action for defamation, "the particular words complained of shall be set forth in the complaint." "The complaint also must allege the time, place and manner of the false statement and specify to whom it was made." Dillon, 261 AD2d at 38 (citations omitted).

"On a motion to dismiss a claim for libel on the ground that the offending statement is not defamatory, the court must determine whether the contested statements are reasonably susceptible of a defamatory connotation. In determining [this] the court must examine not only the particular words claimed by the plaintiff to be defamatory but the entire communication in which those words appeared. The court must also read the alleged defamatory words against the background of their issuance, giving due consideration to the circumstances underlying the publication of the communication in which the words appeared." Cordero v. NYP Holdings, Inc., 64 AD3d 407, 412-13(1st Dep't 2009) (internal citations omitted).

Here, the allegations satisfy the specificity requirements of CPLR 3016(a), and also adequately set for the time, place and manner of the alleged false statement and specify to whom it was made. However, "truth provides a complete defense to defamation claims." Dillon, 261 AD2d at 39 (citations omitted). See also Panghat v. New York Downtown Hosp., [*7]85 AD3d 473 (1st Dep't 2011) ("the truth or substantial truth of the statements is a complete defense to the claim of defamation").

The letter at issue was dated October 27, 2009. Pursuant to the default judgment, Arthur was evicted on October 26, 2009. The order to show cause signed by the White Plains City Court on October 26, 2009, contained contradictory language, indicating both that Arthur should be allowed access only to remove its possessions, and also that Arthur should be restored to the premises. In light of the default judgment of eviction then in effect against Arthur, as well as the language in the order to show cause, drafted by plaintiffs, the statements contained in the letter directing Arthur to make an appointment to remove its equipment and furnishings cannot be deemed an injurious falsehood. Cordero, 64 AD3d at 413. The fact that the White Plains City Court later amended the language of the order to show cause and eventually dismissed the petition altogether does not affect the truth of the statements made in the letter at the time they were issued. Accordingly, Westchester's motion to dismiss the cause of action for defamation is granted for failure to state a cause of action.

In accordance with the foregoing, it is

ORDERED that the motion by plaintiffs Arthur at the Westchester, Inc., d/b/a Arthur and Evgeny Friedman to dismiss certain affirmative defenses is granted only to the extent that defendant Westchester Mall, LLC's first, second, third, fourth, fifth, seventh, eighth, twelfth, thirteenth, fourteenth, fifteenth, sixteenth, eighteenth, nineteenth, twentieth, twenty-first, twenty-fifth, twenty-sixth and twenty-seventh affirmative defenses are dismissed, and is denied as it pertains to the sixth, ninth, tenth, eleventh, seventeenth, twenty-second, twenty-third and twenty-fourth affirmative defenses for the reasons set forth on the record on August 3, 2011 ; and it is further

ORDERED that plaintiffs' motion to dismiss defendant's counterclaims as they pertain to plaintiff Evgeny Friedman is denied; and it is further

ORDERED that plaintiffs' motion to strike defendant's jury demand is granted for the reasons set forth on the record on August 3, 2011; and it is further

ORDERED that plaintiffs' motion for partial summary judgment as to liability on plaintiffs' first and second causes of action for wrongful eviction is granted, with the issue of damages on these two causes of action to be tried with the remaining causes of action and counterclaims; and it is further

ORDERED that plaintiffs' unopposed motion to discontinue the sixth cause of action is granted and the sixth cause of action is severed and discontinued; and it is further

ORDERED that defendant's cross motion for summary judgment on its first and second counterclaims is denied for the reasons set forth on the record on August 3, 2011; and it is further

ORDERED that defendant's cross motion for an order granting a trial by jury is denied for the reasons set forth on the record on August 3, 2011; and it is further

ORDERED that defendant's cross motion to dismiss plaintiffs' defamation cause of action for failure to state a claim is granted and the cause of action is dismissed. [*8]

.This constitutes the decision and order of the Court.

Dated:New York, New York

February 15, 2012

E N T E R:

_____________________________

Saliann Scarpulla, J.S.C. Footnotes

Footnote 1: At the hearing, the White Plains City Court clarified the language of the order to show cause by removing the language regarding the " limited purpose of obtaining its possession."

Footnote 2: Any attempt to make such an argument would be fruitless, as Westchester had a full and fair opportunity to litigate this issue before the White Plains City Court. The Court held an oral argument, and entertained full briefing, including reply and sur-reply papers, before rendering its written decision.

Footnote 3: Westchester already raised this argument regarding the alleged ambiguity in the order to show cause at the October 30, 2009 hearing before the White Plains Court. At that time the Court, over Westchester's objection, removed the language "and are further ordered to permit respondent access for the limited purpose of obtaining it's [sic] possessions" from the Order to Show Cause, thereby removing any potential ambiguity. As Westchester acknowledges in its moving papers. Further, the Court stated clearly "[Arthur] is allowed to re-enter . . . They are back in." As the Court removed the complained of language from the Order to Show Cause, this argument is now moot.