Beach Lane Mgt., Inc. v Wasserman

[*1] Beach Lane Mgt., Inc. v Wasserman 2006 NY Slip Op 51883(U) [13 Misc 3d 1217(A)] Decided on July 31, 2006 Supreme Court, New York County Goodman, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 July 31, 2006
Supreme Court, New York County

Beach Lane Management, Inc., As agent for 16-26 East 105, LLC, Plaintiff,

against

Leonard Wasserman, Defendant.



107397/05

Emily Jane Goodman, J.

This is a landlord/tenant dispute in which plaintiff, Beach Lane Management, Inc. (Beach Lane), as agent for 16-26 East 105, LLC, seeks an order, pursuant to CPLR 3213, granting summary judgment in lieu of complaint against defendant Leonard Wasserman (Wasserman) as guarantor on an instrument for the payment of money only.

16-26 East 105, LLC (16-26 East) is the owner/landlord of a multiple dwelling building located at 26 East 105th Street, New York, New York, and Beach Lane is the managing agent for the premises, and, pursuant to a management agreement (Reply Aff., Exhibit H) between Beach Lane and 16-26 East, Beach Lane was given full authority to act on the owner/landlord's behalf, including commencement of legal proceedings.

By standard form apartment lease, dated June 15, 2001 (the Lease), 16-26 East rented apartment No.1 at 26 East 105th Street, New York, New York to tenants Joshua Coren (Coren) and Ari White (White) for a one-year term from July 1, 2001 through June 30, 2002 (Summons with Notice of Motion, Exhibit B). The agreed-upon monthly rent of $1,895.67 was subject to a preferential rider, dated June 25, 2001, which states, in relevant part: Notwithstanding the rent reserved on the face page of this Lease, the tenant shall only be required to pay the sum of $1,600.00 for the term of the Lease. Similarly, the tenant shall only be required to pay the sum of $1,600.00 as a Security Deposit

(Summons with Notice of Motion, Exhibit C).

At the insistence of the owner/landlord, Wasserman executed the Guaranty which is printed at the bottom of the Lease and dated June 22, 2001 (the Guaranty). The Guaranty provides: [t]he undersigned Guarantor guarantees to Owner the strict performance of and observance by Tenant of all the agreements, provisions and rules in the attached Lease. Guarantor agrees to waive all notices when Tenant is not paying rent or not observing and complying with all of the provisions of the attached Lease. Guarantor agrees to be equally liable with Tenant so that Owner may sue Guarantor directly without first suing Tenant. The Guarantor further agrees that his guaranty shall remain in full effect even if [*2]the lease is renewed, changed or extended in any way and even if Owner has to make a claim against Guarantor. Owner and Guarantor agree to waive trial by jury in any action, proceeding or counterclaim brought against the other on any matters concerning the attached Lease or the Guaranty.

On the same date, June 22, 2001, Wasserman signed an additional guaranty in favor of owner/landlord, termed "Guarantor Affidavit," which provides, in relevant part:

Apartment: #1 I, Leonard Wasserman, residing at 13 Warren St. Brooklyn NY 11201, . . . social security . . . , shall guarantee the rental payments for the above referenced apartment should Joshua Coren & Ari White default in any of their payments stipulated in their lease.

Dated: 6/22/01

(Summons with Notice of Motion, Exhibit D).

By Renewal Lease Form, dated February 10, 2002, which was executed by only one tenant, White, and by the owner/landlord, by Mark Scharfman, in his capacity as the vice-resident of Beach Lane (Scharfman), the lease term was extended for a period of two years, commencing July 1, 2002 and ending June 30, 2004. The renewal lease provided for monthly rent in the amount of $2,009.41, and for a preferential monthly rent in the amount of $1,696.00.

By Renewal Lease Form, dated April 15, 2004, the lease term was, again, extended for a period of two years. It commenced on July 1, 2004, was to run through June 30, 2006, and once again, it was executed only by White as tenant, and by Scharfman, in his capacity as the vice-president of Beach Lane. The renewal lease provided for monthly rent in the amount of $2,160.12, and for a preferential monthly rent in the amount of $1,823.20. It is undisputed that Coren was not a signatory to either Renewal Lease Form extension.

Plaintiff alleges that White, in breach of the April 15, 2004 Renewal Lease Form, has not paid rent since July 21, 2003, despite Beach Lane's regular billing procedures and demands for payment, and despite the fact that at no time did White raise any defenses with respect to his obligation to pay rent. Plaintiff claims that by the time this action was commenced, White owed rent in the amount of $42,401.40, and that the judgment plaintiff seeks is based on rent owed from the most recent renewal lease term which commenced on July 1, 2004, and ended on June 30, 2006.

A plaintiff demonstrates entitlement to summary judgment pursuant to CPLR 3213 upon submission of an instrument for the payment of money only which was executed by defendant in favor of plaintiff, and upon submission of proof that defendant failed to make payment in accordance with the terms of the instrument (Seaman-Andwall Corp. v Wright Mach. Corp., 31 AD2d 136, 137 [1st Dept 1968], affd 29 NY2d 617 [1971]).

To this end, plaintiff submits copies of the initial Lease, along with the preferential lease rider, the two Renewal Lease Forms, along with their respective preferential lease riders, the Guaranty, and the Guarantor Affidavit, both of which were signed on June 22, 2001, and Scharfman's sworn affidavit attesting to the accuracy of the allegations, and the accuracy of the submitted rent ledger for apartment #1 which details the relevant billing period, billing and adjustments pertinent to apartment #1, including the date and amounts paid towards rent, and the running balance of unpaid rent for that apartment. [*3]

In opposition to the motion, Wasserman offers an array of defenses, including the defense of the warranty of habitability. "The warranty of habitability, set forth in Real Property Law § 235-b, is a fundamental feature of the lease of residential property, and assures that the duty to maintain the premises in a habitable condition is coextensive and interdependent with the duty to pay rent" (Fourth Federal Savings Bank v 32-22 Owners Corp., 236 AD2d 300, 301 [1st Dept 1997] [citation omitted]). Relying on this warranty, Wasserman argues that when the Lease was executed, neither he, nor White, nor Coren, knew that the premises, apartment #1, was illegal and in violation of the certificate of occupancy, that the discovery was not made until an investigation was prompted by the appearance of leaks and vermin, and that the decision not to pay rent was not made until these problems came to light.

Wasserman's next argument that summary judgment is inappropriate because a summary holdover proceeding to dispute the same issues, pending before the Landlord Tenant part of the Civil Court, has been rendered moot by the November 14, 2005 court-ordered stipulation entered into by the parties in Civil Court [FN1].

With respect to his obligations as a guarantor, Wasserman contends that his Guaranty secured the obligation of the "Tenant," that the word "Tenant" was defined as Coren and White collectively, and that while the Guaranty covers the obligations of the "Tenant" if the lease is renewed, changed, or extended in any way, it does not go so far as to create an obligation on Wasserman's part to guaranty the obligation of White when he became the sole tenant under a Renewal Lease Form. This assertion is unsupported by an explanation as to how the failure of the renewal leases to include Coren as a signatory does not constitute a "change" within the meaning of the Guaranty, nor does Wasserman offer an explanation as to why he, as a guarantor, is not relieved of his obligations where, as here, the Guaranty allows for changes in the terms of the lease (White Rose Food v Saleh, 292 AD2d 377, 378 [2nd Dept 2002] affd 99 NY2d 589 [2003]).

In addition, while courts do not favor imposing an indefinite obligation on a guarantor of a residential lease (29 Holding Corp. v Diaz, 3 Misc 3d 808, 813 [Sup Ct, Bronx County 2004]), Wasserman offers no evidence that he took any steps to terminate his continuing obligations under the Guaranty, and it is well settled that "[a] continuing guaranty may be terminated by the guarantor by notice to the obligee . . . revoking his liability for obligations that may be incurred subsequent to the notice" (27th Street Assoc., LLC v Lehrer, 4 AD3d 165, 167 [1st Dept 2004]).

The burden rests with plaintiff, as movant, to demonstrate entitlement to summary judgment, and despite the documentary evidence offered by plaintiff, including, but not limited to, the leases, the Guaranty, and the Guarantor Affidavit, Scharfman's sworn affidavit attesting to the accuracy of the allegations, and the accuracy of the submitted rent ledger for the subject apartment, together with the deficiencies present in defendant's arguments, the motion for [*4]summary judgment in lieu of complaint is denied.

Contrary to plaintiff's assertions, the Guaranty is not an instrument for the payment of money only, because by obligating the Guarantor to guarantee the Tenant's strict performance of "all the agreements, provisions and rules in the attached Lease," not merely the financial obligations, it goes beyond merely guaranteeing payment of rent, and as such it possesses characteristics quite different from one for the payment of a sum of money only. Had the Legislature intended that this simplified procedure for accelerated judgment (CPLR 3213) be applicable to agreements wherein but one (or some) of the provisions related to the payment of money, the word only' would have been deleted from the critical phrase in the provision under discussion

(Times Square Associates v Grayson, 39 AD2d 845 [ 1st Dept 1972] [internal quotation marks and citations omitted]; see also, 6B Carmody-Wait 2d, NY -

Prac § 39:228, at 413 - 414). The fact that the Guaranty is not an instrument for the payment of money only does not, however, preclude plaintiff from seeking summary judgment in a plenary action pursuant to CPLR 3212 (Technical Tape, Inc. v Spray-Tuck, Inc., 146 AD2d 517, 518 [1st Dept 1989]).

Turning to the Guarantor Affidavit, a review of this document reveals that, while it is an instrument for the payment of money only, it does not contain language similar to that in the Guaranty, obligating Wasserman to make rental payments for apartment #1 should the Lease be renewed, changed or extended and White and Coren default in their rent. In contrast, it guaranties rental payments only under the "Lease," and White and Coren did not default under the original lease. Thus, even if the court could view the Guaranty Affidavit (which executed on the same day as the Guaranty), as a separate obligation, a guarantor should not be bound beyond the express terms of his guaranty (Wesselman v Engel Co., 309 NY 27, 30 [1955]).

Finally, the fact that no defense was presented to the payment of rent prior to the institution of this action is just one factor to consider with respect to Wasserman's assertion that rent was withheld due to the purported violation of the warranty of habitability, and the supposed illegality of the apartment conversion. The merits of these defenses and assertions depend on the circumstances of the case, and cannot be determined at this juncture.

Accordingly, it is

ORDERED that the motion for summary judgment pursuant to CPLR 3213 is denied. The moving and answering papers are deemed the complaint and answer respectively, and the parties are directed to appear in Part 17 on September 28, 2006 for a preliminary conference in this matter.

Dated: July 31, 2006

ENTER:

___________________________ [*5]

J.S.C. Footnotes

Footnote 1:The landlord tenant proceeding, which was commenced by Beach Lane, named White as a defendant/respondent under Civil Court of the City of New York County of New York index number 72499/05. Pursuant to a November 14, 2005 court-ordered stipulation of settlement, the landlord tenant matter was "discontinued without prejudice to petitioner's bringing an ejectment action in supreme court, without costs or legal fees to either party." The instant action names only Wasserman as a defendant.