23 E. 39TH St. Developer, LLC v. 23 E. 39TH St. Mgmt. Corp., 2016–13440

• Decision Date: 15 May 2019
• Docket Number: 2016–13440,Index No. 606401/15
• Citation: 101 N.Y.S.3d 199,172 A.D.3d 964
• Parties: 23 EAST 39TH STREET DEVELOPER, LLC, Appellant-Respondent, v. 23 EAST 39TH STREET MANAGEMENT CORPORATION, et al., Respondents-Appellants.
• Court: New York Supreme Court — Appellate Division

172 A.D.3d 964

101 N.Y.S.3d 199

23 EAST 39TH STREET DEVELOPER, LLC, Appellant-Respondent,

v.23 EAST 39TH STREET MANAGEMENT CORPORATION, et al., Respondents-Appellants.

2016–13440

Index No. 606401/15

Supreme Court, Appellate Division, Second Department, New York.

May 15, 2019

Submitted January 28, 2019

Robinson Brog Leinward Greene Genovese & Gluck, P.C., New York, N.Y. (Andrew B. Zinman of counsel), for appellant-respondent.

Brian H. Bluver, New York, NY, for respondents-appellants.

ALAN D. SCHEINKMAN, P.J., JOHN M. LEVENTHAL, FRANCESCA E. CONNOLLY, VALERIE BRATHWAITE NELSON, JJ.

DECISION & ORDER

In an action, inter alia, to recover damages for breach of a commercial lease and breach of a personal guaranty, the plaintiff appeals, and the defendants cross-appeal, from an order of the Supreme Court, Nassau County (Randy Sue Marber, J.), entered November 23, 2016. The order, insofar as appealed from, granted that branch of the defendants' motion which was pursuant to CPLR 3211(a)(5) to dismiss the complaint. The order, insofar as cross-appealed from, in effect, denied that branch of the defendants' motion which was to impose sanctions pursuant to 22 NYCRR 130–1.1.

ORDERED that the order is reversed insofar as appealed from, on the law and the facts, and that branch of the defendants' motion which was pursuant to CPLR 3211(a)(5) to dismiss the complaint is denied; and it is further,

ORDERED that the order is affirmed insofar as cross-appealed from; and it is further,

ORDERED that one bill of costs is awarded to the plaintiff.

On December 29, 2008, the defendant 23 East 39th Street Management Corporation (hereinafter Management) commenced an action in the Supreme Court, New York County (hereinafter the New York County action), alleging that the plaintiff, 23 East 39th Street Developer, LLC (hereinafter the landlord), unlawfully converted Management's security deposit. In January 2009, the landlord filed an answer and asserted a counterclaim against Management, alleging that Management did not comply with the notice of termination provision in the rider to the lease, and that Management was thus liable for rent and other expenses past due that had accrued from May 2008 through January 15, 2009. The landlord also filed a third-party complaint against the defendant Allen Gutterman, the president of Management, alleging that he failed to comply with the surrender declaration provision in a personal guaranty he had signed guarantying the lease, and that he was thus also liable for the past due rent and expenses through January 15, 2009. In the New York County action, the court awarded summary judgment to Management on the security deposit conversion cause of action insofar as asserted against the landlord, and summary judgment to the landlord on its counterclaim and third-party cause of action against Management and Gutterman, respectively, for rent and other expenses due from May 2008 through January 15, 2009, in an amount to be determined by a Special Referee.

On October 5, 2015, while the appeals were still pending, the landlord commenced this action in the Supreme Court, Nassau County. In the complaint, the landlord alleged that Management failed to properly terminate the lease, prematurely vacated the premises, and remained liable for the balance of the term of the lease, which expired on September 30, 2012. The landlord further alleged that Gutterman failed to timely deliver a surrender declaration required by the guaranty and, thus, he remained liable for the balance of the term of the lease. In the complaint, the landlord specifically stated that the rent due from the defendants for November 2008 through January 2009 was the subject of the pending appeals in the New York County action, and that in this action, the landlord was seeking only the unpaid rent and expenses from February 2009 through the end of the lease term.

The defendants moved in this action pursuant to CPLR 3211(a)(5) to dismiss the complaint based on res judicata and collateral estoppel, and to impose sanctions pursuant to 22 NYCRR 130–1.1. The Supreme Court granted that branch of the motion which was to dismiss the complaint and, in effect, denied that branch of the motion which was to impose sanctions. The landlord appeals, and the defendants cross-appeal.

Pursuant to CPLR 3211(a)(5), a party may move to dismiss a cause of action based on the doctrine of res judicata (see Williams v. City of Yonkers, 160 A.D.3d 1017, 1018, 76 N.Y.S.3d 92 ; Rudovic v. Rudovic, 131 A.D.3d 1225, 1227, 16 N.Y.S.3d 856 ). "Under res judicata, or claim preclusion, a valid final judgment bars future actions between the same parties on the same cause of action" ( Parker v. Blauvelt Volunteer Fire Co., 93 N.Y.2d 343, 347, 690 N.Y.S.2d 478, 712 N.E.2d 647 ). " ‘[O]nce a claim is brought to a final conclusion, all other claims arising out of the same transaction or series of transactions are barred, even if based upon different theories or if seeking a different remedy’ " ( id. at 347, 690 N.Y.S.2d 478, 690 N.Y.S.2d 478, 712 N.E.2d 647, quoting O'Brien v. City of Syracuse, 54 N.Y.2d 353, 357, 445 N.Y.S.2d 687, 429 N.E.2d 1158 ; see Matter of Hunter, 4 N.Y.3d 260, 269, 794 N.Y.S.2d 286, 827 N.E.2d 269 ). Accordingly, "a disposition on the merits bars litigation between the same parties, or those in privity with them, of a cause of action arising out of the same transaction or series of transactions as a cause of action that either was raised or could have been raised in the prior proceeding" ( Sciangula v. Montegut, 165 A.D.3d 1188, 1190, 87 N.Y.S.3d 47 [internal quotation marks omitted]; see Matter of Hunter, 4 N.Y.3d at 269, 794 N.Y.S.2d 286, 827 N.E.2d 269 ; Chapman Steamer Collective, LLC v. KeyBank N.A., 163 A.D.3d 760, 761, 81 N.Y.S.3d 501 ). "[N]o action can be brought for future rent in the absence of an acceleration clause" ( Beaumont Offset Corp. v. Zito, 256 A.D.2d 372, 373, 681 N.Y.S.2d 561 ; see Runfola v. Cavagnaro, 78 A.D.3d 1035, 1035, 910 N.Y.S.2d 910 ; 210 W. 29th St. Corp. v. Chohan, 13 A.D.3d 613, 614, 786 N.Y.S.2d 322 ). Here, the lease did not contain an acceleration clause, and the landlord could not have asserted a cause of action...