1995 Cam LLC v. W. Side Advisors, LLC
| Decision Date | 01 September 2022 |
| Docket Number | 159492/2021,Motion Seq. No. 001 |
| Citation | 2022 NY Slip Op 32951 (U) |
| Parties | 1995 CAM LLC, Plaintiff, v. WEST SIDE ADVISORS, LLC. GARY LIEBERMAN Defendant. |
| Court | New York Supreme Court |
MOTION DATE 01/06/2022
DECISION ON MOTION -SUBMIT ORD/JGMT (AMENDED)
The following e-filed documents, listed by NYSCEF document number (Motion 001) 9 10 1112 13 14 15, 16, 17, 18, 19, 20, 21, 22 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 3637' 3s' 39' 4o' 41' 42' 43,44,45,46,47,48,49,50 .' '' '' were read on this motion to/for DISMISS
Oral argument took place on June 1, 2022. with David Rosenbaum appeared for Plaintiff 1995 Cam LLC ("Landlord") and Thomas C. Lambert appeared for Defendants West Side Advisors, LLC ("Tenant") and Gary Lieberman ("Guarantor") (collectively "Defendants"). Upon oral argument and the foregoing documents, the Court's decision is as follows.
I. Factual Background
Landlord owns Suite 800 of 1995 Broadway, New York, New York 10023 (the "Premises") (NYSCEF Doc. 1 at ¶¶ 2 5). Tenant and Landlord executed a written agreement dated November 23, 2004 (the Lease") wherein Tenant leased the Premises from Landlord (id. at ¶ 5). The Premises were leased to operate an executive and administrative office for Tenant's asset management business (id. at ¶ 7). The Lease went through various modifications extending the lease term, including a second modification dated March 23, 2016 (the "Second Modification") which extended the lease term to February 28, 2023 (id at ¶¶ 8-11).
Pursuant to the terms of the Second Modification, Tenant agreed to pay Landlord monthly rent in the amount of $24,835.79 from March 1, 2020 through February 28, 2021, on or before the first day of each month (id. at ¶¶l 7-18). The monthly rent increased to $27,378.56 from March 1, 2021 through February 28, 2022 and to $28,063.02 per month from March 1, 2022 through February 28, 2023 (id. at ¶¶ 19-20). Tenant also agreed to pay, as additional rent, electric charges at a rate of $1,218.75 per month, and upon signing a third modified agreement, agreed to pay as additional rent air conditioning electric charges in the amount of $208.33 per month (id. at ¶¶ 22-23). Tenant also agreed to pay a variety of other fees as additional rent, including a real estate tax escalation charge, freight elevator charges, water meter usage charges cleaning services charges, trash removal services, and late fees (id. at ¶¶ 24-28). Finally, Tenant also agreed to a liquidated damages clause which required payment of the rent and additional rent constituting the balance of the term of the Lease as if Tenant had remained in possession through completion of the Lease, along with costs in re-letting the Premises, as said damages accrued each month (id. at ¶ 29). Tenant agreed that if Landlord had to enforce the terms of the Lease, Tenant would pay Landlord for reasonable attorneys' fees (id. at ¶ 30).
The Second Modification contained a guaranty (the "Guaranty") whereby Guarantor agreed to pay for all of Tenant's monetary obligations (id. at ¶ 31). The Guaranty limited Guarantor's liability if Tenant gave thirty days' notice of its intent to vacate the Premises, that all rent is paid up to the date the Premises were vacated, and that the Premises are completely vacated and surrendered pursuant to the terms of the Lease (NYSCEF Doc. 16 at ¶ 9).
Tenant has stopped paying rent, electric charges, A/C electric charges, late fees, and real estate tax charges since July 2020 (NYSCEF Doc. 23 at¶¶ 47-49; 51). On October 28, 2020, Tenant sent Landlord a notice of its intention to surrender the Premises as of November 30, 2020, and Tenant did vacate the Premises on or before November 30, 2020 (NYSCEF Doc. 1 at ¶¶ 14-15). Tenant is no longer in business (NYSCEF Doc. 47 at ¶ 5). There was no written agreement whereby Landlord accepted Tenant's surrender of the Premises (NYSCEF Doc. 48 at ¶ 9).
Landlord filed a Complaint seeking to recoup damages for Tenant's breach of the Lease allegedly incurred both pre- and post-vacatur, as well as attorneys' fees. (NYSCEF Doc 1). Landlord also seeks declaratory judgment that Guarantor is not protected by New York City Administrative Code § 22-1005 (the "Guaranty Law"). Defendants filed a pre-answer motion to dismiss seeking dismissal of Landlord's second, third, and fourth causes of action based on CPLR §§ 3211(a)(1) and (7) (NYSCEF Doc. 9). Tenant argued it surrendered the Premises in accordance with the terms of the Lease, and that the Guaranty is unenforceable against Guarantor pursuant to il the Guaranty Law. Landlord in turn opposed Tenant's motion to dismiss arguing that the Guaranty Law does not apply, and cross-moved for summary judgment and to amend its pleadings to conform to new amounts due pursuant to CPLR § 3025(c).
III. Discussion A. Amend Pleadings
Pursuant to CPLR 3025(b), absent prejudice, a party may amend its pleading at any time upon such terms as may be just (see also Hancock v 330 Hull Realty Corp., 225 A.D.2d 365 [1st Dept 1996]). CPLR 3025(c) provides that "the court may permit pleadings to be amended before or after judgment to conform them to the evidence, upon such terms as may be just including the granting of costs and continuances." Defendants have not opposed this branch of Landlord's !l motion, nor have they shown how they might be prejudiced. Therefore, Landlord's motion seeking to amend its Complaint to conform to the evidence in the record is granted.
B. Motion to Dismiss i. Standard
A motion to dismiss based on documentary evidence pursuant to CPLR § 3211(a)(1) is appropriately granted only when the documentary evidence utterly refutes the plaintiff s factual allegations, conclusively establishing a defense as a matter bf law (Goshen v Mutual Life Ins. Co. of New York, 98 N.Y.2d 314 [2002]). The documentary evidence must be unambiguous, of undisputed authenticity, and its contents must be essentially undeniable (VXILux Holdco S.A.R.L. v SIC Holdings, LLC, 171 A.D.3d 189, 193 [1st Dept 2019]). A court may not dismiss a complaint based on documentary evidence unless the factual allegations are definitively contradicted by the evidence (Leon v Martinez, 84 N.Y.2d 83, 88 [1994]).
On a motion to dismiss based on failure to state a cause of action pursuant to CPLR § 3211(a)(7) the Court must accept as true the facts as alleged in the Complaint and afford a plaintiff the benefit of every possible favorable inference (Sassi v Mobile Life Support Services, Inc., 37 N.Y.3d 236, 239 [2021]; Chapman, Spira &Carson, LLC v Helix BioPharma Corp., 115 A.D.3d 526, 527 [1st Dept 2014]). The Court's inquiry in determining a motion to dismiss pursuant to CPLR § 3211(a)(7) is whether the alleged facts fit within any cognizable legal theory (Leon v Martinez, 84 N.Y.2d 83, 87-88 [1994]).
ii. The Complaint Partially Survives Defendants' Motion to Dismiss
Tenant argues that the documentary evidence conclusively establishes that Tenant properly surrendered the Premises so as to cut off Guarantor's liability pursuant to the terms of the Guaranty. Moreover, Tenant argues that the Guaranty is unenforceable against Guarantor for rent accrued between March 7,2020 and June 30,2021 pursuant to the Guaranty Law. The Court rejects both arguments.
First, the terms of the Guaranty expressly state that Guarantor's liability is limited only if Tenant "completely vacated and surrendered the Demised Premises to Owner free and clear of any
II and all subtenants and/or occupants pursuant to the terms of the Lease" (NYSCEF Doc. 28 at ¶ 9) (emphasis added). Pursuant to the terms of the Lease, "No act or thing done by Owner or Owner's agents during the term hereby demised shall be deemed an acceptance of a surrender of said premises and no agreement to accept such surrender shall be valid unless in writing signed by Owner" (NYSCEF Doc. 26 at ¶ 25). Moreover, the Lease explicitly provides that "No employee of Owner or Owner's agent shall have any power to accept the keys of said premises prior to the termination of the Lease and the delivery of keys to any such agent or employee shall not operate as a termination of the Lease or a surrender of the premises.'' (id.). Because there is no documentary evidence of any written agreement whereby Landlord accepted Tenant's surrender, the Complaint cannot be dismissed according to documentary evidence as, per the terms of the Lease, Tenant did not validly surrender the Premises.
Defendants' argument based on the Guaranty Law is similarly unavailing. The Lease states that the Premises shall be used as executive and administrative offices in connection with Tenant's asset management business (id. at ¶ 2). To qualify for the protections of the Guaranty Law, one of the following conditions must be satisfied: (1) the tenant was required to cease serving customers food or beverage for on-premises consumption or to cease operation; (2) the tenant was a non-essential retail establishment subject to in-person limitations or (3) the tenant was required to close to the public (New York City Admin Code § 22-1005). Tenant falls within the category of essential services related to financial markets (Executive Order [Cuomo] No. 202.6 [9 NYCRR 8.202.6]; see also "Guidance on Executive Order 202.6", Empire State Development ). Therefore, since Tenant does not meet any of the three categories required for the Guaranty Law to apply, Defendants' argument that the Guaranty Law bars Landlord's cause of action seeking enforcement of the Guaranty is without merit.
However Defendants have successfully shown documentary evidence sufficient to dismiss...
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