691 Tenth, LLC v. A&M Healthy Grill Nyc Inc.
| Decision Date | 11 August 2022 |
| Docket Number | 155701/2021,MOTION SEQ. NO. 001 |
| Citation | 2022 NY Slip Op 32716 (U) |
| Parties | 691 TENTH, LLC, Plaintiff, v. A&M HEALTHY GRILL NYC INC., AYMAN HAMOUD Defendant. |
| Court | New York Supreme Court |
2022 NY Slip Op 32716(U)
691 TENTH, LLC, Plaintiff,
v.
A&M HEALTHY GRILL NYC INC., AYMAN HAMOUD Defendant.
No. 155701/2021, MOTION SEQ. NO. 001
Supreme Court, New York County
August 11, 2022
Unpublished Opinion
DECISION + ORDER ON MOTION
HON. MARY V. ROSADO, J.S.C.
The following e-filed documents, listed by NYSCEF document number (Motion 001) 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, were read on this motion to/for JUDGMENT-SUMMARY .
Oral argument was held on May 25, 2022 with David B. Rosenbaum appearing on behalf of 691 Tenth, LLC ("Landlord") and Jennifer Addonizio Rozen appearing on behalf of A&M Healthy Grill NYC Inc. ("Tenant") and Ayman Hamoud ("Guarantor") (collectively "Defendants"). Upon the foregoing documents, it is ordered and decided as follows.
I. Procedural Background
On June 15, 2021, Landlord filed a Complaint initiating this action (NYSCEF Doc. 1). Landlord alleges that Plaintiff has failed to pay base rent or late fees since September of 2019, and owes water charges and real estate tax charges (id. at ¶¶ 35-43). Landlord also alleges that the Tenant unilaterally vacated the premises on January 14, 2021, without written notice, breaching the terms of the Lease, which has led to application of the accelerated damages clause of the Lease (id. at ¶¶ 47-51). Landlord further alleges Guarantor has not paid for any of Tenant's deficiencies (id. at ¶¶ 55-61).
Defendants filed an Answer with Counterclaims on July 23, 2021 alleging that Landlord breached the Lease (NYSCEF Doc. 7). Defendants allege that the fire occurred due to Landlord's negligence in maintaining the pipe work for electricity and gas at the Building and that Tenant was forced to go without gas for more than two months and pay out-of-pocket to repair damages to the walls, ceilings and kitchen of the premises (id at ¶¶ 75-80). Defendants claim that due to this fire and the inability to operate the premises for its intended purpose, Defendants were constructively evicted and were forced to relinquish possession of the premises to Landlord (id at ¶ 80-82). Defendants also assert as counterclaims and affirmative defenses breach of the implied covenant of good faith and fair dealing and breach of the covenant of quiet enjoyment as a result of the fire and Landlord's failure to maintain the Building, as well as impracticability and impossibility of performance due to Covid-19 (id ¶¶ 89-99).
Landlord filed a Reply to Defendants' Counterclaims on August 10, 2021 denying the fire impacted Tenant's business and that pursuant to the terms of the Lease it was the Tenant's obligation to make all non-structural repairs to the Premises at Tenant's sole cost and expense (NYSCEF Doc. 9 at ¶¶ 4, 7). Landlord also claims that pursuant to the terms of the Lease, "there shall be no allowance to the Tenant for the diminution of rental value and no liability on the part of [Landlord] by reason of inconvenience, annoyance or injury to business arising from [Landlord], Tenant or others, making or failing to make any repairs" (id..at ¶ 9). Landlord also claims that the terms of the Lease state that "[Landlord] or its agents shall not be liable for any damage to the property of the Tenant." (Id. at ¶ 10). Landlord also denied that its conduct caused the fire damage to the Building and that pursuant to the Lease, Tenant was obligated to maintain gas and electricity at the Premises at its own expense (id. at ¶ 23).
On October 21, 2021, Landlord moved for summary judgment seeking (1) to amend the pleadings to include updated damages; (2) money judgments against Tenant and Guarantor; (3) attorneys' fees; (4) dismissal of Defendants' affirmative defenses, and (5) dismissal of Defendants' counterclaims (NYSCEF Doc. 10).
Defendants opposed Landlord's motion for summary, judgment, arguing there are material issues of fact as to Landlord's performance under the terms of the Lease (NYSCEF Doc. 24 at ¶ 15-17). Defendants also argue that Landlord's liquidated damages clause and late fees clause are unenforceable penalties (id. at ¶¶ 23-32). Moreover, Defendants argue that the Guaranty Law makes the guaranty against Guarantor unenforceable for unpaid rent for the duration of time the Guaranty Law was in effect (id. at ¶¶ 33-35). Defendants also oppose Landlord's motion to dismiss Defendant's affirmative defenses and Counterclaims
II. Factual Background
Landlord owns 691 Tenth Avenue, New York, New York 10036 (the "Building") (NYSCEF Doc. 1 at ¶ 4). Tenant leased a commercial storefront of the Building known as "Store #1" (the "Premises") to operate a restaurant pursuant to a lease with Landlord executed December 15, 2015 (the "Lease") (id. at ¶¶ 5, 7). Tenant's obligations under the Lease were guaranteed by Guarantor pursuant to the guaranty found in ¶ 74 of the Lease (id. at ¶ 8).
The Lease term began January 1, 2016, and was to end December 31, 2025 (id. at ¶ 6). Tenant promised to pay Landlord rent each month, in advance, on the first day of each month (id. at ¶ 9). Tenant also agreed to install meters to track water usage at the Premises and to pay for Tenant's actual water usage (id. at ¶¶ 17-18). Tenant further agreed to pay as additional rent a percentage of real estate tax increase above the base tax years of the real estate taxes assessed in 2016-2017 (id. at ¶¶ 19-20). The Lease also provided that Tenant will reimburse Landlord for costs
and fees expended to enforce the Lease (including attorneys fees) in the event Landlord is found to be the prevailing party, and to pay Landlord as liquidated damages the rent and additional rent for the term constituting the balance of the Lease, offset by any rent collected by Landlord from a new tenant (id at ¶¶ 22-24).
The Guaranty limits Guarantor's liability if Tenant provides notice of its intention to cancel the Lease, if Tenant returns to Landlord vacant and empty possession of the Premises free of all occupants and contents, and if Tenant or Guarantor pay Landlord all rent and additional rents due through the date of lease cancellation (id. at ¶ 29).
Defendants assert that there was a major fire in a residential unit of the Building on September 12, 2020, which caused a gas and water outage at the Premises (NYSCEF Documents 25 at ¶ 5, 26-27, 36). According to a fire incident report by the New York Fire Department ("NYFD"), the fire occurred on September 12, 2020, at 3:03; p.m., which started on the first floor in the bathroom of apartment 2 and then spread to the second-floor bathroom of apartment 6. The cause of the fire was determined to be electrical wiring in the walls between the first and second floors (NYSCEF Doc. 36).
The New York City Department of Housing Preservation and Development ("HPD") cited numerous violations in residential premises after the fire in September of 2020, including unsafe electric wiring conditions on the fourth and first floors, fire damage to apartments on the first, second, third, fourth and fifth floors, a lack of gas to apartments on the third and fifth floors, and defective fire-retardant material on the first, second and fourth floors (NYSCEF Doc. 27).
Defendants allege that the fire occurred due to Landlord's negligence in maintaining the pipe work for electricity and gas at the Building and that Tenant was forced to go without gas for
more than two months and pay out-of-pocket to repair damages to the walls, ceilings and kitchen of the premises (NYSCEF Doc. 25 at ¶¶ 8-10).
Defendants claim that due to the fire and the inability to operate the premises for its intended purpose, Defendants were constructively evicted and were forced to relinquish possession of the premises to Landlord (id. at ¶ 12). In an email dated September 24, 2020, Defendants provided notice to Landlord of the difficulties they were facing due to the fire and that if there was not a plan to make adequate repairs Defendants would need to relocate (NYSCEF Doc. 28), As of September 2021, there were two Environmental Control Board ("ECB") violations issuing partial stop-work orders on repair work being done to the Building (NYSCEF Doc. 30).
III. Discussion
A. Motion to Amend the Pleadings
Landlord seeks to amend its Complaint to conform to the evidence. 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 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. Summary Judgment
i. Standard
When seeking summary judgment, the moving party bears the burden of proving, by competent, admissible evidence, that no material and triable issues of fact exist (Winegrad v New
York Univ. Med. Ctr., 64 N.Y.2d 851, 853 [1985]; Sokolow, Dunaud, Mercadier & Carreras v Lacher, 299 A.D.2d 64, 70 [1st Dept 2002]). Once this showing is made, the burden shifts to the party opposing the motion to produce evidentiary proof, in admissible form, sufficient to establish the existence of material issues of fact which require a trial (see e.g., Zuckerman v City of New York, 49 N.Y.2d 557, 562 [1980]; Pemberton v New York City Tr. Auth, 304 A.D.2d 340, 342 [1stDept 2003]). Mere conclusions of law or fact are insufficient to defeat a motion for summary judgment (see Banco Popular North Am. v Victory Taxi Mgt, Inc., 1 N.Y.3d 381 [2004]).
To sustain a cause of action for breach of contract, Plaintiff must prove the existence of a...
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