Shabtai v Town Commercial LLC

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[*1] Shabtai v Town Commercial LLC 2018 NY Slip Op 51798(U) Decided on December 9, 2018 Supreme Court, New York County St. George, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 December 9, 2018
Supreme Court, New York County

Lori Shabtai, and LHWS LLC, Plaintiffs,


Town Commercial LLC, and ANDREW HEIBERGER, Defendants.


The appearances of counsel are as follows:

FOR plaintiff:

Simon Miller

Eisner PC

152 West 57th Street 48th Floor, New York, NY 10019

Harris N. Cogan



FOR defendant:

Amanda Beth Grannis

Kaplan Landau

152 West 57th Street 8th Floor, NY, NY 10019
Carmen Victoria St. George, J.

Currently, plaintiffs move under CPLR § 3213 for summary judgment in lieu of complaint. The document under which they proceed as to Town Commercial LLC (Town) is an March 13, 2018 amendment to the original contract between the parties. Among other things, the amendment provides that defendants owe plaintiffs a $487,500 commission due for One Vanderbilt Avenue, a property they sold under the original agreement. In addition, the amendment provides for the payment of commissions upon the successful completion of the sale of another property and for bonus payments and possible penalties for late payments. To establish Heiberger's liability, the motion relies on the March 13, 2018 guaranty that Heiberger signed guaranteeing the amendment to the contract. In a handwritten and initialed notation, the guaranty indicates that it guarantees the amendment only as to the commission for One Vanderbilt Avenue.

In opposition, defendants challenge the amount still outstanding under the agreements and argue that plaintiffs operated in bad faith when they brought this motion. They allege the March 13 agreements were fraudulently obtained and they point to an April 22, 2018 letter agreement relating to Shabtai's resignation from Town. Defendants argue that they would not have agreed to waive certain claims under [*2]the amendment had they realized that Shabtai would immediately resign. Defendants also state that the documents upon which plaintiffs rely are not instruments for the payment of money only — as to the amendment. Therefore, they argue that the motion must be dismissed.

CPLR § 3213 provides a mechanism by which plaintiffs can avoid the necessity of a lawsuit when the debt in question is undisputed. To prevail on a motion for summary judgment in lieu of complaint, therefore, the plaintiff must provide proof of an agreement for money only and the defendant's failure to pay (see Allied Irish Banks, PLC v Young Men's Christian Ass'n of Greenwich, 36 Misc 3d 216, 219 [Sup Ct, NY County 2012]; accord SCP (Bermuda) Inc. v Bermudatel Ltd., 224 AD2d 214, 216 [1st Dept 1996]). The promise must be unconditional, for a sum certain, and due on demand (PDL Biopharma, Inc. v Wohlstadter, 147 AD3d 494, 494 [1st Dept 2017]). The amount of the debt be apparent from the agreement alone (see Allied Irish Banks, PLC 36 Misc 3d at 216, citing Weissman v Sinorm Deli, Inc., 88 NY2d 437, 444 [1996]).

After careful consideration, the Court determines that the amendment is not an instrument for the payment of money only. It refers to the original agreement, for one thing, and therefore the document does not speak for itself. Moreover, although a portion of the agreement does refer to a specific debt, it is not a qualifying instrument "because [it] contain[s] obligations beyond just the payment of money and provide[s] that payment be made in the future for an unidentified amount" (Jfurti, LLC v First Capital Real Estate Advisors, L.P., — AD3d —, 2018 NY Slip Op 06493 [1st Dept 2018] [citation and internal quotation marks omitted], at *2). The provision in question, at paragraph 3, states:

The parties acknowledge that [plaintiff] has executed an exclusive agreement with the owner of the property known as 17 East 27th Street . . . [I]n the event any lease, occupancy or similar transaction is consummated with any tenant with respect to all or any portion of the 27th Street Property . . ., [plaintiff] shall be entitled to 100% of all commissions earned. . .

Because this provision is only triggered if the owner enters into a lease or similar transaction and it is not clear whether this event will occur, and because the provision does not establish the sum that is due, as it will be based on a lease or other rate which has not been determined, the Court cannot determine the amount due to plaintiff based solely on the amendment. Moreover, due to the contingency, plaintiff's right to a commission may not ever arise, and the parties must rely on outside proof — in the form of the lease, occupancy, or other similar transaction — to determine whether the obligation arises as well as the amount of the commission. This, too, means that the amendment does not support CPLR § 3213 relief (Weissman, 88 NY2d at 444-45).

This does not defeat plaintiff's claim against Town, however. Instead, it merely means that, under CPLR § 3213, "the moving and answering papers shall be deemed the complaint and answer, respectively . . ." Based on the agreement, the amendment, and the guaranty, moreover, there is a strong likelihood that plaintiff ultimately will prevail against Town on the continuing action.

The Court determines that a guaranty is a qualifying document, as it relates to the commission for One Vanderbilt Avenue only and as defendants do not challenge the existence of the debt. Defendants' argument that they have made partial payments supports plaintiffs' argument that a debt exists. It merely raises a question of the amount still due, and this is resolvable through an order of reference.

As the Court grants relief under the guaranty, it denies defendants' request that the motion and dispute be dismissed on this issue. The Court also denies the request as it relates to the amendment because, upon the denial of a CPLR § 3213 motion, the Court has the power to deem the moving and answering papers to be the complaint and the answer to the complaint, respectively (see Sea Trade Maritime Corp. v Coutsodontis, 111 AD3d 483, 487 [1st Dept 2013] [citing CPLR § 3213])[FN1] . Here, where Town Commercial clearly owed some commissions under the amendment, it would be inequitable to dismiss the dispute altogether.

Accordingly, it is

ORDERED that the motion for summary judgment in lieu of complaint is granted on liability against Heiberger on the guarantee, and the matter is referred to a referee for a hearing on the amount still due for plaintiffs' commission for One Vanderbilt Avenue; and it is further

ORDERED that this matter is referred to a Special Referee to hear and report on the amount due under the guarantee either with recommendations, or to hear and determine, if the plaintiff so stipulates in writing; and it is further

ORDERED that counsel for plaintiff shall, within 30 days from the date of this order, serve a copy of this order with notice of entry, with a completed Special Referee Information Sheet, upon the Special Referee Clerk in the Motion Support Office to arrange a date for the reference to a Special Referee; and it is further

ORDERED that the motion is denied as against Town, as the amendment is not a qualifying instrument, and this portion of the motion is severed and shall continue; and it is further

ORDERED that, as to Town, the plaintiff's moving papers are hereby deemed plaintiffs' complaint and the answering papers are hereby deemed Town's answer; and it is further

ORDERED that counsel are directed to appear for preliminary conference in Room 308, 80 Street, on February 7, 20 19, at 2:15 PM.




Carmen Victoria St. George, J.S.C. Footnotes

Footnote 1: The provision states that the moving and answering papers shall be considered the complaint and answer unless the Court decides otherwise.