Senex Greenwich Realty Assoc., LLC v 120 Greenwich St. Cafe, Corp.
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Senex Greenwich Realty Assoc., LLC v 120 Greenwich St. Cafe, Corp. 2011 NY Slip Op 32324(U) August 18, 2011 Supreme Court, New York County Docket Number: 114262/09 Judge: Louis B. York 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] SENEX GREENWICH RLTY ASSOC., - vs INDEX NO. 120 GREENWICH ST. CAFE, CORP. MOTION DATE Sequence Number : 002 MOTION SEQ. NO. DEFAULT JUDGMENT 00% MOTION CAL. NO. The following papers, numbered 1 to were read on this motion tolfor PAPER6 NUMBERE;D Notice of Motion/ Order to Show Cauae - Affldavits - Exhiblts ... Answering Affidavits - Exhibits Replying Affidavits Cross-Motion: 0 Yes 0 No Upon the foregolng papers, it Is ordered that thh motion Dated: 81 % & J. S. C. LOU B.YOFp)C Check one: & FINAL DISPOSITION 0 Nbr\l-pmA WOSITIO Check if appropriate: 0 DO NOT POST 0 REFERENCE 0 SETTLE ORDER/ JUDG. 0 SUBMIT ORDER/ JUDG. [* 2] SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: PART 2 X _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ I _ _ _ _ _ _ _ _ _ _ SENEX GREENWICH REALTY ASSOCIATES, LLC., Plaintiff, Index No. : 1 1 4 2 6 2 / 0 9 -against- DFCISIO N 1 2 0 GREENWICH STREET CAFk, CORP. and ANGEL0 TZORTZATOS NEW YORK COUNTY CLERK'S OFFICE LOUIS B. YORK, J . S . C . : Plaintiff moves, pursuant to CPLR 3215, f o r a default judgment: (1) on i t s first cause of action f o r rent and additional rent as against 120 Greenwich Street C a f 6 , Corp. (120 Greenwich) in the sum of $ 4 2 0 , 0 3 4 . 1 0 for Unit A, and setting a hearing to determine the costs of repairing Unit A; (2) on its third cause of action for rent and additional rent as against 1 2 0 Greenwich in the sum of $121,039.04 f o r Unit B, and setting a hearing to determine the costs of repairing Unit B; (3) pursuant to CPLR 3212, for summary judgment as against Angelo Tzortzatos (Tzortzatos) in the sum of $541,073.14, as determined in the first and third causes of action, and setting a hearing to determine the costs of repairing Units A and B; (4) for a default judgment as against Tzortzatos on the second and fourth causes of action, and f o r summary judgment on the portion of the fifth 1 [* 3] cause of action, for legal fees; ( 5 ) , pursuant to CPLR 3211 striking the affirmative defenses o f Tzortzatos; and ( 6 ) , pursuant to CPLR 3211 (a) (7) and 3212, granting it summary judgment dismissing the counterclaims asserted in Tzortzatos answer. BACKGROUND Plaintiff is the owner of commercial premises t h a t it leased to 120 Greenwich pursuant to two 15-year leases, one f o r Unit A and one for Unit B. Motion, Exs. 2 and 3. The leases commenced on September 15, 2007 and October I, 2007, respectively. According to the complaint, 120 Greenwich breached the lease for Unit A on March 13, 2008, by failing to pay the sent due, and eventually abandoned the premises on or about September 28, 2009 (first cause of action). Similarly, the complaint a l l e g e s 'that 120 Greenwich breached the lease f o r Unit B on the same dates (third cause of action). In addition to the rent and additional rent, plaintiff seeks legal fees f o r its expenses incurred with respect to the alleged breaches of these two leases (second and fourth causes of action). In the fifth cause of action, plaintiff seeks judgment against Tzortzatos for the same damages, based on Tzortzatos's personal guaranties executed with respect to these two leases. Motion, Exs. 4 and 5 . On or a b o u t September 28, 2009, 120 Greenwich attempted to surrender possession of Unit A by returning the keys to 2 [* 4] plaintiff s attorneys, but the attorneys rejected the attempted surrender. Motion, Ex. 13. Plaintiff then billed 120 Greenwich vacated, and neither unit has been subsequently re-rented. Motion, Ex. 14. According to th& provisions of the leases, [tlhis Lease a n d the terms and the estate hereby granted are subject to t h e limitation of . . . (iv) whenever Tenant shall abandon the Demised Premises of a substantial portion of the Demised Premises which shall remain vacant for a period of thirty (30) consecutive days . . . Landlord may give to Tenant a notice of intention to end the term of this Lease at the expiration of three days from the date of the service of such notice of intention, and upon the expiration of said three (3) days, t h i s Lease and the term and t h e state hereby granted, whether o r not the term shall theretofore have commenced, shall terminate with the same effect as if that date were the expiration date, but Tenant shall remain liable f o r any damages sustained as a result thereof. Motion, Exs. 2 and 3. Plaintiff sent 120 Greenwich the requisite notices on September 30, 2009. Motion, Exs. 15 and 2 0 . According to the guaranties signed by Tzortzatos with respect to these leases, his personal liability is stated as: Notwithstanding anything herein to the contrary, provided Tenant (i) has delivered possession of the Demised Premises to Landlord in the condition required at the expiration of the Lease, vacant and free of all tenants, persons in possession and a l l liens or unpaid equipment leases; and (11) p a y s to Landlord all unpaid Rent, Additional Rent or any other charges which shall have accrued under the terms of this Lease, at any time up to and including such delivery of possession (in good funds which shall be lawful money of the United States of America) . . . all obligations of the Guarantor accruing under this Guaranty 3 [* 5] after the date set f o r t h in Tenant's Notice shall thereupon expire and terminate. Nothing contained in this Article or elsewhere herein shall serve to release Tenant f r o m any liability under the Lease." Motion, Exs. 4 and 5. possession of the two units in the condition required by the leases, and that there remains rent and additional rent due thereon. Therefore, plaintiff maintains that because the conditions specified in the lease remain unsatisfied, Tzortzatos remains liable to it pursuant t o the terms of t h e guaranties. In support of its contention that the units were n o t returned in the appropriate condition and were damaged, plaintiff has included photographs of the t w o units as part of its motion. Motiqn, Ex. 24.l In his opposition to the instant motion, Tzortzatos admits that 120 Greenwich entered into the aforementioned leases and that he executed the aforesaid guaranties, commonly referred t o as "good guy" guaranties. However, Tzortzatos asserts that 120 Greenwich's attempt to surrender the premises on September 28, 2009, effectively extinguished his obligations under the good guy guaranties. Further, Tzortzatos contends that, pursuant to the guaranties, he is only liable f o r unpaid amounts due and owing to plaintiff from 120 Greenwich up to the time that 120 Greenwich 1 The court does not find it necessary, for the purposes of resolving the instant motion, to detail all of the items specified by plaintiff regarding the condition of the units. 4 [* 6] attempted to surrender the keys. In addition to the foregoing, Tzortzatos challenges plaintiff s calculations as to the amounts owed to it from 120 Greenwich. Tzortzatos also asserts that there is a question as to whether 120 Greenwich provided a security deposit f o r Unit B, which, a ccording to Tzortzatos, raises a question as to whether plaintiff commingled funds, resulting i n a conversion. Tzortzatos maintains that the instant motion i s premature, since discovery h a s yet to take place. Lastly, Tzortzatos claims that plaintiff s request for default judgments should be denied, since the request was made more than one year after the default. In his answer, Tzortzatos asserts two affirmative defenses: (1) breach of the covenant of quiet enjoyment; and (2) unlawful discrimination, pursuant to New York State Executive Law 5 296. Additionally, Tzortzatos asserts two counterclaims: (1) damages resulting from the unlawful discrimination; and (2) damages resulting from the breach of the covenant of quiet enjoyment. The court notes that, i n his opposition, T z o r t z a t o s only states that [ilt would be a gross injustice to deny me the opportunity to present my defenses and have my counterclaims heard based solely on the habitually unreliable accounting of the plaintiff. Tzortzatos Aff. This is the o n l y opposition posited with respect to the branch of plaintiff s motion seeking 5 [* 7] to dismiss the affirmative defenses and counterclaims. On November 6, 2009, 120 Greenwich was served with a summons and complaint, pursuant to New York Business Corporation Law 5 306 ( b ) , by delivery to the Secretary of State, with an additional copy of the summons and complaint being mailed to 120 Greenwich at 120 Greenwich Street, New York, New York, 120 Greenwich's last known address, and to 120 Greenwich's attorney who represented it in the action entitled 120 Greenwich Street C a f & Corp. v Senex Greenwich R e a l t y Associates, LLC, index number 6 0 0 6 5 7 / 0 9 in this court, and who currently represents Tzortzatos in the present action. Motion, Exs. 6 & 7. To date, 120 Greenwich has failed to answer or to appear in this action. Plaintiff h a s attached an itemized spreadsheet of the amount of rent and additional rent that it claims is owed to it by 120 Greenwich. Motion, Exs. 8 & 17. In reply to Tzortzatos's opposition, plaintiff challenges many of Tzortzatos's computations with respect to the amounts owed, and maintains that, pursuant to the guaranties, Tzortzatos remains liable under the guaranties because the units were not returned in the condition that they were in when initially rented, an allegation that plaintiff says Tzortzatos failed to oppose, and that monies were still owing to plaintiff pursuant to the leases. Lastly, plaintiff avers that the portion of the motion 6 [* 8] seeking a default judgment against 120 Greenwich is timely, because Tzortzatos' attorney requested an extension of time to answer, which was granted through December 2009. Reply, Ex. 3. Plaintiff states that, at that time, it believed that the attorney was representing both defendants, since t h a t attorney ' represented 120 Greenwich in the other proceeding noted above, and it was only when Tzortzatos served his answer that plaintiff realized that 120 Greenwich was unrepresented. Plaintiff claims that it never intended to abandon its action against 120 Greenwich. DISCUSS ION That portion of the motion seeking a default judgment against 120 Greenwich is granted with respect to liability only. CPLR 3215 (a), "Default judgment," states, in pertinent part: "When a defendant has failed to appear, plead or proceed to trial of an action reached and called for trial, or when the court orders a dismissal for any other neglect to proceed, the plaintiff may seek a default judgment against him. " Pursuant to CPLR 3215 (c), the plaintiff must move for entry of judgment within one year of the default. In the instant matter, the motion to enter the default judgment was made a few months after the one-year period had expired. In opposition to this portion of plaintiff's motion, Tzortzatos only cites to Herzbrun v L e v i n e (23 AD2d 7 4 4 [l"' Dept 7 [* 9] 1 9 6 5 ] ) , which denied entry of a default judgment after the one- year period had elapsed because that plaintiff f a i l e d to offer a reasonable excuse for her delay, However, in the case at bar, the court believes, in the exercise of its judicial discretion, that the reasons proffered by plaintiff f o r the slight delay, discussed above, are sufficient to warrant the entry of a default judgment as against 120 Greenwich, with respect to liability only. Thanh Truong v All Pro Air Delivery, I n c . , 278 AD2d 45 (13t Dept 2000). That portion of the motion seeking summary judgment as against Tzortzatos is granted with respect to liability only. "The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case [internal quotation m a r k s and citation omitted] (lat Dept 2 0 0 6 ) . .'I Santiago v Filstein, 3 5 AD3d 184, 185-186 The burden then shifts to the motion's opponent to "present evidentiary facts in admissible form sufficient to r a i s e a genuine, triable issue of fact." Mazurek v Metropolitan Dept 2 0 0 6 ) ; Museum of Art, 27 AD3d 227, 228 ( l S t see Zuckerrnan v City of N e w York, 4 9 N Y 2 d 557, 562 (1980). If there is any doubt as to the existence of a triable fact, the motion f o r summary judgment must be denied. N Y 2 d 223, 2 3 1 ( 1 9 7 8 ) . See Rotuba Extruders, Inc. v Ceppos, 4 6 [* 10] Pursuant to the terms of the good guy guaranty quoted above, in order for Tzortzatos to be relieved of his obligations, a twopronged test must be met: first, 120 Greenwich must have delivered possession of the Demised Premises to plaintiff in the condition required at the expiration of the lease: vacant and free of all tenants, p e r s o n s in possession and all liens or' unpaid equipment leases; and second, 120 Greenwich must have paid to plaintiff all u n p a i d rent, additional rent or a n y other charges which shall have accrued under the terms of the lease. In his o p p o s i t i o n , Tzortzatos does not deny that some monies may be owing to plaintiff and, hence, at least one of the conditions that would excuse the guarantee has not been satisfied. Therefore, Tzortzatos remains liable to plaintiff f o r any sums 4f rent, additional rent, or other charges that 120 Greenwich owed to plaintiff. That portion of the motion seeking a default judgment as against 120 Greenwich for attorney's fees, causes of action two and four, and seeking summary judgment as against Tzortzatos for attorney's fees, part of the fifth cause of action, is granted, with the amount of such fees to be determined at a later hearing. Pursuant to paragraph 19 of the leases, plaintiff is entitled to attorney's fees f o r instituting or defending any action based on a default by 120 Greenwich. "The lease entitles [plaintiff] to recover attorney's fees incurred in connection 9 [* 11] with tenant's default." Huron Associates, LLC v 210 E a s t 86th Street Cosp., 18 A D 3 d 231, 232 (13t Dept 2005); R u b i n v Dondysh, 153 Misc 2d 657 (App Term, 2d Dept 1991). This right to attorneys' fees is premised upon the leases' provisions dealing w i t h 120 Greenwich's default, and is not based on which party may be victorious i r i the action. Huron Associates, LLC v 210 E a s t 86th Street Corp., s u p r a . However, that portion of the motion seeking specific dollar damages is denied. The amount of rent, additional rent, and o t h e r charges, if any, allegedly owing to plaintiff presents a factual dispute that cannot be resolved on the papers alone. Therefore, the issue of the amount of damages, if any, owing to plaintiff shall be sent to a Special Referee to hear and r e p o r t that issue. That portion of the motion seeking to dismiss Tzortzatos' affirmative defenses and counterclaims, pursuant to CPLR 3211 (a) (7), is granted. CPLR 3211 (a), "Motion to dismiss cause of action," states that: " [ a ] party may move for judgment dismissing one or more causes of action asserted against h i m on t h e ground that: * * * (7) the pleading fails to state a cause of action A s stated in L a d e n b u r g Thalrnann & C o . , I n c . v Tim's Amusements, Inc. (275 A D 2 d 243, 246 [ l S t Dept 2 O O O ] ) , "the court's task is to determine only whether 10 ... . If [* 12] the facts as alleged, accepting them as true and according plaintiff every possible favorable inference, fit within any cognizable legal theory (Leon v Martinez, 84 N Y 2 d 83, 8 1 - 0 8 [1994])." "Although on a motion to dismiss [the] allegations are presumed to be true and accorded every favorable inference, conclusory allegations - claims consisting of bare legal conclusions with no factual specificity - are insufficient to survive a motion to dismiss." Godfrey v Spano, 13 NY3d 3 5 8 , 3 7 3 (2009). To defeat a pre-answer motion to dismiss pursuant to CPLR 3211, the opposing party need only assert facts of an evidentiary nature which fit within any cognizable legal theory. Co. Fashions, I n c . Bonnie & v Bankers T r u s t CO., 2 6 2 A D 2 d 1 8 8 (' Dept 1 ' 1999). In the instant matter, Tzortzatos has failed to provide any evidence sufficient to withstand plaintiff's motion. "'Whether the breach of a covenant [of quiet enjoyment] is alleged as a defense to an action for rent due, or is used as a basis f o r an action for damages, the determining factor, w i t h few exceptions, is whether the tenant has v a c a t e d the premises.' The tenant must also have performed all covenants which are a condition precedent to i t s right to insist upon the covenant [internal citations omitted] . " D a n c e Magic, I n c . v Pike R e a l t y , Inc., 85 AD3d 1 0 8 3 ( 2 d Dept 2011). In the case at bar, 120 Greenwich vacated the premises, not because of any infringement on its covenant of quiet enjoyment, 11 [* 13] but, as the affidavit of Tzortzatos, who was the owner of 120 Greenwich, avers: ' "I nearly lost everything I have worked f o r trying to make 120 Greenwich successful. In September of 2009, 120,Greenwich simply could not afford to remain open any longer and I, as President of 120 Greenwich, made the difficult decision of closing the business down. The meant not only losing the business, b u t surrendering the space that the defendant spent approximately a half million dollars to improve." Tzortzatos admits that the decision to vacate the premises was a financial one, not one based on a violation of the covenant Of quiet enjoyment, and he goes on to admit that he did fall behind on rent. Id. Therefore, based on t h e foregoing, the affirmative defense and counterclaim based on a breach of the covenant of quiet enjoyment has no basis in fact and must be dismissed. Similarly, there is no basis alleged for maintaining the violation of Executive Law ยง 296. The only subdivision of that statute, which deals with unlawful discriminatory practices, that could be applicable to t h e instant matter is subsection 5 (b), concerning the rent of commercial space. However, since plaintiff did rent commercial space to 120 Greenwich, a corporation, and no p r o t e c t e d status h a s been alleged, the affirmative defense and counterclaim based on a violation of Executive Law 5 296 cannot be maintained. The court also notes that Tzortzatos has provided no 12 [* 14] argument as to why his affirmative defenses and counterclaims should not be dismissed, except for the statement noted above, that it would be unfair to dismiss them based on plaintiff's calculations of amounts due to it, an argument that in no way relates to the merits of the defenses and counterclaims. CONCLUSION Based on the foregoing, it is hereby ORDERED that t h e portion of plaintiff's motion seeking entry of a default judgment as against defendant 120 Greenwich Street Caf6, Corp. is granted on the issue of liability o n l y on the first, second, third and fourth causes of action; and it is further ORDERED that the p o r t i o n of plaintiff's motion s e e k i n g summary judgment as against defendant Angelo Tzortzatos on the fifth cause of action is granted on the issue of liability only; and it is further ORDERED that the portion of plaintiff's m o t i o n seeking to dismiss the affirmative defenses and counterclaims asserted by defendant Angelo Tzortzatos is granted and said affirmative defenses and counterclaims are dismissed; and it is further ORDERED that the issue of the amount of damages, if any, for rent, additional rent, costs of repair and attorney's fees owing to plaintiff is referred to a Special Referee to hear and decide, and enter ajudgment thereon; 13 [* 15] and it is further ORDERED that counsel f o r plaintiff shall, within 30 days from the date of this o r d e r , serve a copy of this order with notice of e n t r y , t o g e t h e r w i t h a completed Information Sheet,2 upon the Special Referee C l e r k in the Motion Support O f f i c e (Room 119M), who is directed to place this matter on the calendar of the Specia; Referee s Part f o r the earliest convenient date. ENTER: Louis E. York., J . S . C . FILED NEWYORK COUNTY CLERK S OFFICE . Copies are available in Rm, 119M at 60 Centre Street and on the Court s website at www,nvcgms.gov/supctmanh under the References section of the Courthouse Procedures link. 14
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