295 Broadway Realty Corp. v Alquhshi
Annotate this CaseDecided on May 1, 2019
Civil Court of the City of New York, Kings County
295 Broadway Realty Corp., Petitioner,
against
Abdo Hizam Alquhshi, NEW BROADWAY FINEST DELI CORP., Address 297 Broadway Commercial Space Brooklyn, NY 11211, Respondents.
LT-074035-18/KI
Barry S. Schwartz, Esq.
119 W 57th Street, Suite 813
New York, NY 10019
(212)-397-6661
Counsel for Petitioner
Romuald P. Magda, Esq.
776A Manhattan Avenue
Brooklyn, NY 11222
(718)-389-4112
Counsel for Respondents
Sandra E. Roper, J.
INTRODUCTION
Respondent ABDO HIZAM ALQUHSHI moves This Honorable Court by Order to Show Cause for an Order Vacating the Judgment in the amount of $37,408.33 issued against him personally; Reducing the Judgment amount of $37,408.33 as against Respondent New Broadway Finest Deli Corp. to $7,408.33 by offsetting the amount of $30,000.00 security deposit held by Petitioner; Whereas, Petitioner Cross-Moves to Amend the Judgment issued in the amount of $37,408.33 to Judgment in the amount of $27,819.64, which is after offsetting the amount of $30,000.00 security deposit held by Petitioner, and any and all other further relief deemed just and proper by This Honorable Court.
PROCEDURAL HISTORY
Petitioner commenced this commercial non-payment action as against Respondents by Petition dated June 22, 2018. Notice of Petition and Petition were served on Respondents July 18, 2018. Requisition to the City Marshal for a Warrant of Eviction on August 17, 2018 was rejected on August 20, 2018 as Answer had been previously filed on August 14, 2018 and adjourned to Part 52 on August 20, 2018. Petitioner failed to appear on the return date and thereby case was dismissed for non-appearance of Petitioner. Petitioner served, on August 29, and filed on August 31 an Order to Show Cause vacating the dismissal with return date of September 24, 2018. Relief was granted in favor of Petitioner on September 24, 2018 and case restored to the calendar for October 16, 2018 in Part 52. On said date Petitioner and Respondent New Broadway Finest Deli Corp. appeared and entered into so-ordered stipulation of settlement which provided: entry of Final Judgment of possession entered forthwith, stayed to October 26, 2018; Final Judgment in the amount of $37,408.33; Where Respondents fail to obtain buyer of lease and satisfies judgment on or before October 26, 2018, Petitioner shall tender possession by delivery of keys on or before October 31, 2018; Failure to do so, on or before October 31, 2018, Petitioner may execute warrant upon service of Marshal's Notice after October 31, 2018; Respondents shall be liable for any costs or attorney fees arising from Petitioner regaining possession; Upon breach of stipulation of settlement, all future claims coming due under lease are severed and the stipulation is without prejudice to said claims or any defenses; Respondent's security deposit of $30,000.00 shall be applied to the Stipulation Judgment amount of $37,408.33 as an offset; and, "Time is of the essence as to all dates and payments," dated October 16, 2018. Respondents failed to vacate premises by October 31, 2018 as per stipulation of settlement and did not vacate until December 2018. The premises were re-let in February 2019.
On February 13, 2019, Respondents filed an Order to Show Cause vacating the judgment issued solely as against Respondent Abdo Hizam Alquhshi, and reducing Judgment amount from $37,408.33 to $7,408.33, by offsetting Judgment amount by Respondents security deposit in the amount of $30,000.00, to be heard on February 26, 2019. On February 26, 2019, case was adjourned to March 14, 2019 on consent for Respondents to retain new counsel. Petitioner Cross-Moved by Notice of Motion filed March 8, 2019 to amend the Judgment amount of $37,408.33 to include rent arrears, real estate taxes and water bills and offset by Respondents security deposit in the amount of $30,000.00 to a Judgment of $27,819.64, for same return date of March 14, 2019. Pursuant to a two-attorney stipulation oral argument adjourned to April 2, 2019 for Petitioner's cross-motion and Respondents' order to show cause. After oral arguments, on April 2, 2019, court granted leave to Petitioner to file reply affirmation in further support of cross-motion, which was served on April 9, 2019 as evidenced by affirmation of service by mail to Respondents.
DISCUSSION
It is longstanding well established law: "[w]hen an agent acts on behalf of a disclosed principal, the agent will not be personally liable for a breach of contract unless there is clear and explicit evidence of the agent's intention to be personally bound" (Weinreb v Stinchfield, 19 AD3d 482, 483 [2nd Dept 2005]; see Savoy Record Co. v Cardinal Export Corp., 15 NY2d 1, 4, 203 NE2d 206, 254 NYS2d 521 [1964]; Mencher v Weiss, 306 NY 1, 4, 114 NE2d 177 [1953]; Holzer Assoc. v Orta, 250 AD2d 737, 672 NYS 2d 915 [1998]; Palisades Off. Group v Kwilecki, 233 AD2d 490, 491, 650 NYS 2d 990 [1996]). In Salzman v Beck, even where there is a clause "buried" within a contract that attempts to bind an individual personally whereas the contract was to bind a corporate entity, will not stand to bind the individual personally unless there is a clear intent to so bind that individual personally (Salzman Sign Co. v Beck, 10 NY2d 63 [Ct App 1961]). Salzman held that individual signed solely as an agent of his principal, the corporation, thereby binding only the corporate entity and not the individual. Salzman holds:
"We think that precedent and policy require an affirmance here. In modern times most commercial business is done between corporations, everyone in business knows that an individual stockholder or officer is not liable for his corporation's engagements unless he signs individually, and where individual responsibility is demanded the nearly universal [*2]practice is that the officer signs twice — once as an officer and again as an individual. There is great danger in allowing a single sentence in a long contract to bind individually a person who signs only as a corporate officer. In many situations the signing officer holds little or no stock and if the language of the agreement makes him individually liable his estate may be stuck for a very large obligation which he never dreamed of assuming. We think the better rule is the one used here — that is, that the statement in the contract purporting to bind the signing officer individually is not sufficient for Statute of Frauds purposes without some direct and explicit evidence of actual intent." (id at 67).Even though the determination of this issue is fact specific, precedent provides sufficient guidelines in which to determine the intent of the signatory based upon certain discernible conduct. As Salzman states the "nearly universal practice" is where there are not two separate signatures by the same signatory in question contravenes that signatory intended to be personally bound to the contract and rather solely signed as agent for corporate principal. Generally, in contractual disputes of this ilk, the drafter seeks to bind the non-drafter signatory personally in addition to the corporate principal. However, "[i]n cases of doubt or ambiguity, a contract must be construed most strongly against the party who prepared it, and favorably to a party who had no voice in the selection of its language" (67 Wall St. Co. v Franklin Natl. Bank, 37 NY2d 245, 249 [Ct App1975]; see also Jacobson v Sassower, 66 NY2d 991, 993 [Ct App 1985]).
In the instant matter, the contract at issue is a commercial lease dated August 9, 2017. Petitioner-Corporate Landlord entered into the commercial lease at issue with Respondent-Tenant New Broadway Finest Deli Corp. and seeks to personally contractually bind Respondent Abdo Hizam Alquhshi, as a guarantor for the corporate principal. Whereas, Respondent Alquhshi argues that he never intended to be personally bound to the lease agreement and solely signed as officer and agent of the corporate principal. The actual lease is indispensable to this analysis and decision and is therefore wholly incorporated by reference as APPENDIX A. Petitioner drafted the 13-page, 86 clause, small font printed lease. On the first page of the lease where the parties are inserted, there are two lines: one in which is typed or computer printed the name of Petitioner and on the second line is manually-printed in presumably indelible ink the name of Respondent Alquhshi and underneath his manually-printed name is the typed or computer printed corporate principal name, to wit, New Broadway Finest Deli Corp. On the left of this principal corporate name is manually-printed in presumably indelible ink the initials of "AA". At the bottom left of page 8 there are two lines: top line contains a signature and beneath the signature line appears the name of Petitioner, with, "Witness for Owner" at the left of this signature line; on the bottom line appears the name of New Broadway Finest Deli Corp, with "Witness for Tenant" at the left of this signature line. This same identical formatted language is contained on bottom right of the last page of lease, to wit, page 13 with the very same identical signatures.
Petitioner's argument that since Respondent Alquhshi signed without indication that signing as an officer or agent on behalf of corporate principal, then that is indication that he signed with intent to be bound personally contravenes the "nearly universal practice." Where Petitioner sought to bind Respondent Alquhshi personally, then Petitioner as drafter should have provided two lines; one for Respondent Alquhshi to bind corporate principal as officer or agent; and second line for Respondent Alquhshi to be bound personally. Petitioner failed to so draft this lease to avoid any ambiguity or doubt as to its intent and import as to the meeting of the minds of both signatories. Therefore, in the light most favorable to the non-drafter Respondent Alquhshi there is no explicit or clear evidence of Respondent Alquhshi's intent to be personally bound by this lease. The law is forthright, there must be clear, explicit evidence of agent's intention to be personally bound. Although lease has manually-printed name of Respondent Alquhshi on a line in the front of the lease where the parties are named, there is only one signature line for corporate tenant principal and no specifically designated signature line at the end of the lease or on page 8 for Respondent Alquhshi. Further vitiating Petitioner's contentions: Petitioner drafted Clause 86, which has a typed or computer printed name as an intended personal party designated as a guarantor for lease: "ADEL SM ALI as [*3]Tenant is personally responsible for any loss rent and for any free months that landlord has to give to a new tenant if current tenant terminate a contract." Quite notably, this intended guarantor clause does not bear the name of Respondent Alquhshi, but rather bears the name of another individual natural person; and, Petitioner drafted Clause 82 bears a preceding blank line followed by the following language, "as Tenant is responsible for this lease of contract and can be personally sued if he owes the landlord any money in water bills, lawyer fees, in any real estate taxes or any back rent or any expenses. Tenant will be sued." Again, quite notably this line does not bear the name of Respondent Alquhshi but rather Petitioner as drafter left this line blank. Petitioner further argues that Respondent Alquhshi appeared and was bound by in court stipulation of settlement dated October 16, 2018. Respondent Alquhshi is President of corporate principal. He did not appear in court on said date and was not signatory thereto, even though his name appeared as appearing party; rather, its Vice President, Abdo Quhshi, executed the stipulation and also hired its counsel. Respondent Alquhshi Affidavit Clause 8. Therefore, Petitioner's argument fails that said stipulation of settlement personally binds Respondent Alquhshi for judgment in favor of Petitioner. Based upon the totality of the circumstances fully discussed herein, it is found that Respondent Alquhshi, personally, was not a proper party as a respondent in this instant Non-Payment Summary Proceeding for Commercial Rent Arrears.
For the foregoing reasons: 1- Action as against Respondent Alquhshi is DISMISSED as an improper party; 2- Judgment entered on October 16, 2018 in the amount of $37,408.33 is VACATED; 3- As against wholly and solely Respondent New Broadway Finest Deli Corp. as per Petitioner's updated calculations in its Cross-Motion, Judgment in the amount of $27,819.64 is GRANTED.
This constitutes the opinion, decision, and order of This Honorable Court.
Dated: May 1, 2019
Brooklyn, New York
SO ORDERED:
______________________________
SANDRA E. ROPER
Judge of the Civil Court
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