Opinion
SP 2855/09.
Decided November 5, 2009.
Thomas A. Toscano, P.C., Attorneys for Petitioner, Mineola, New York.
Sanders Litigation Associates, P.C., Attorneys for Respondent, Roslyn Heights, New York.
The respondents, Iranian Jewish Center of Roslyn, Inc. and Soleyman Saidi, move by way of Order to Show Cause to vacate the stipulation of settlement entered into on August 6, 2009 and to dismiss this landlord/tenant commercial non-payment proceeding in its entirety. The respondents also seek to vacate the judgment of possession and warrant of eviction. The petitioner opposes the motion.
This commercial non-payment proceeding was commenced by 26-44 Lincoln Avenue, LLC on or about April 27, 2009 against Iranian Jewish Center of Roslyn, Inc. [hereinafter "Jewish Center", Soleyman Saidi and John Doe and Jane Doe as undertenants. The Petition alleges that the respondents entered into possession of the premises under a written lease agreement made on or about September 1, 2007, whereby the respondents agreed to pay the petitioner, as rent, the sum of $4,876.00 in advance on the first (1st) of each month. The Petition further alleges that the respondents defaulted in the payment of rent and that the total arrears is $14,628.00. Thus, the petitioner seeks a judgment of possession and warrant of eviction, a money judgment for $14,628.00 with interest thereon from March 1, 2009 and attorney's fees plus costs and disbursements.
On July 2, 2009 the law office of Behnam Kahen, Esq. interposed an Answer denying the allegations of the Petition, asserting ten Affirmative Defenses and one counterclaim.
On August 6, 2009, the parties, through their respective attorneys, settled this summary proceeding by way of a stipulation of settlement which was so ordered by Hon. Robert Bruno. The stipulation of settlement provided for a judgment of possession and warrant of eviction in the petitioner's favor, as well as a money judgment against the respondents in the sum of $34,416.90. Furthermore, provided respondents made full payments and adhered to the terms of the stipulation, the warrant was stayed until October 31, 2009.
Since the execution of the stipulation of settlement, the respondents have discharged their attorney and hired the firm of Sanders Litigation Associates PC. It is the respondents' new attorney who has brought this Order to Show Cause to vacate the stipulation and dismiss this action in its entirety.
The respondents now argue that this Court lacks subject matter jurisdiction over Mr. Saidi, as he is only a guarantor under the lease and thus he should not have been made a party to this summary proceeding. Counsel further claims, that the prior attorney lacked the actual and/or apparent authority to enter into a stipulation of settlement on behalf of Mr. Saidi, as the prior attorney did not represent Mr. Saidi in this proceeding, and therefore, lacked the authority to bind him to such stipulation.
In opposition to the motion, the petitioner claims that even if this Court were to find that as a guarantor Mr. Saidi was not a proper party to this proceeding, the stipulation of settlement is binding and valid as to the Jewish Center.
There is a plethora of case law that stands for the proposition that absent a direct landlord/tenant relationship, a guarantor is not a proper party to a summary proceeding ( see, Phoenix Industries, Inc. v. Ultimate Sports, LLC, 19 Misc 3d 129 [A], 859 NYS2d 906 [App Term 9th and 10th Jud Dists 2008] citing to Realty Equity Holdings 3820 L.L.C. v. DeVito Furniture Corp., 1 Misc 3d 129 [A]; 2003 NY Slip Op 51577[U] [App Term 2nd and 11th Jud Dists 2003]).
In Realty Equity Holdings 3820 L.L.C., supra, the Court dismissed the proceeding against two guarantors. In doing so, the Court stated that "guarantors are not proper parties in a summary proceeding and the obligation they owe to the landlord is not rent" (citing to RPAPL § 741; Goldstein v. 9 Skyline Gym Corp., NYLJ, June 4, 2002 [App Term 9th and 10th Jud Dists]; Stojanoski v. Tonick Enters, NYLJ, April 9, 1996 [App Term 9th and 10th Jud Dists]; see Park Prop. Dev. v. Santos, NYLJ, July 24, 2003 [App Term 2nd and 11th Jud Dists]).
In Marburt Holding Corp. v. Picto Group, 5 AD2d 617, 173 NYS2d 762 [1st Dept 1958], the Court discussed the different obligations of a tenant versus guarantor. In doing so, the Court reasoned that where a personal guaranty of a lease is executed guaranteeing full performance of the lease up to an aggregate amount, this does not amount to a landlord/tenant relationship and that a guarantor is not a primary or joint obligor but assumes secondary liability which only accrues upon a default by the tenant. The Court further stated that a "guaranty in its technical and legal sense has relation to some other contract or obligation with reference to which it is a collateral undertaking, it is a secondary and not primary obligation". Thus, despite the guarantor's payment of rent to the landlord, the Court found that it was improper to treat the guarantor as a tenant.
In the instant case, the respondent's counsel correctly points out that if Mr. Saidi was only a guarantor under the lease, he should not have been made a party to this summary proceeding. A review of paragraph 71 of the written lease ( see, Respondent's Exhibit "C") indicates that Soleyman Saidi's name was inserted under the paragraph labeled "Personal Guaranty". In particular, the paragraph reads:
71. Personal Guaranty
Soleyman Saidi will be personally liable for all rent for the occupied subject premises, upon vacancy of the subject premises, the guarantor shall be released from any obligations provided that there are no arrears and the account is up to date.
However, below this paragraph Mr. Saidi signed his name under the heading "TENANT". This, however, does not change the fact that Mr. Saidi was only a guarantor under the lease. There is no other evidence to indicate that he was a tenant. Rather, as counsel points out, he is merely a seventy-eight (78) year old congregant of the Jewish Center, who was acting as a guarantor and not a tenant of the premises. Consequently, under these circumstances, Mr. Saidi is not a proper party to this proceeding. Thus, a summary proceeding cannot be maintained against him.
As this action is being dismissed against Mr. Saidi, the Court need not address the issue of prior counsel's authority to bind Mr. Saidi to the stipulation. However, the remaining question before this Court is the validity of the stipulation of settlement as to the Jewish Center.
A stipulation and order is a binding agreement between the parties to a dispute that is an enforceable contract ( see, Nishman v. DeMarco, 430 NYS2d 339, 76 AD2d 360 [2d Dept 1980]; Viacom Corp. v. Board of Assessors, 744 NYS2d 539, 295 AD2d 791 [3d Dept 2002]). This Court has recognized that "[s]tipulations of settlement which put an end to litigation promote efficient dispute resolution and are essential to the litigation process" ( Matter of Siegel, 5 Misc 3d 1017 [A] [Nassau Sup Ct 2004], aff'd 29 AD2d 914 [2d Dept 2006]).
Therefore, "[a] party to a stipulation is not entitled to withdraw from its agreement unilaterally" ( see, U.S. ex rel. Reilly v. New England Teamsters Trucking Industry Pension Fund, 737 F2d 1274). This is all the more so in the case of "open court" stipulations ( Matter of Dolgin Eldert Corp., 31 NY2d 1, 334 NYS2d 833) within CPLR 2104, where strict enforcement not only serves the interest of efficient dispute resolution but also is essential to the management of court calendars and integrity of the litigation process.
Only where there is cause sufficient to invalidate a contract, such as fraud, collusion, mistake or accident, will a party be relieved from the consequences of a stipulation made during litigation ( see, Matter of Frutiger, 29 NY2d 143, 149-150, 324 NYS2d 36). Moreover, "courts may not rewrite an agreement between parties" ( see, Matter of Evans v. Board of Assessment Review of Town of Catskill, 284 AD2d 753, 755, 727 NYS2d 706 [3d Dept 2001]) and "a court should not, under the guise of interpretation, make a new contract for the parties" ( see, Sklerov v. Sklerov, 231 AD2d 622, 647 NYS2d 532 [2d Dept 1996]). Furthermore, Courts will not set aside a stipulation merely because in "hindsight" a party decides that the terms of the stipulation were "improvident" ( see, Town of Clarkstown v. M.R.O. Pump Tank, 287 AD2d 497, 731 NYS2d 231 [2d Dept 2001]).
In the instant case, the respondent fails to address any reason why the stipulation of settlement should be vacated against the Jewish Center. Moreover, upon review of the stipulation and the fact that there is no question that the Jewish Center was represented by counsel at the time the stipulation was executed, this Court can find no reason to modify or vacate its terms.
Accordingly, the stipulation and the terms thereunder remain in full force and effect. Thus, the judgment of possession and warrant of eviction shall be executed upon immediately without any further stays of this action.
This constitutes the decision and order of this Court.
So Ordered: