Opinion
Index No. 150348/2022
05-30-2023
39 CAM LLC, Plaintiff, v. Manhattan Total Health & Medical Fitness, P.C. F/K/A MANHATTAN TOTAL HEALTH AND MEDICAL DIAGNOSTIC, P.C., Defendant.
Borah, Goldstein, Altschuler, Nahins & Goidel, P.C., New York, NY (David B. Rosenbaum of counsel), for plaintiff. No appearance for defendant.
Unpublished Opinion
Borah, Goldstein, Altschuler, Nahins & Goidel, P.C., New York, NY (David B. Rosenbaum of counsel), for plaintiff.
No appearance for defendant.
Gerald Lebovits, J.
In this commercial-landlord-tenant action, plaintiff-landlord, 39 CAM LLC, moves without opposition under CPLR 3215 for default judgment against defendant-tenant, Manhattan Total Health & Medical Fitness, P.C. The motion is granted in part and denied in part.
A plaintiff moving for default judgment must establish proper service, defendant's default, and the facts constituting plaintiff's claim. (See CPLR 3215 [f].) Here, landlord has shown that it properly served tenant; and tenant has not appeared. Landlord also has shown that it is entitled to some-but not all-of the amount claimed in unpaid rent.
The lease at issue ran through May 2025. (NYSCEF No. 8 at ¶ 9.) Tenant stopped paying rent in June 2020 and abandoned the premises in July 2020. (See id. at ¶¶ 11-25.) Landlord argues that tenant's abandonment of the premises constitutes an "anticipatory breach/repudiation" of the lease, such that landlord "is entitled to immediately claim damages for a total breach in accordance with the formula set forth... [at] Section 14.05(b)" of the lease. (Id. at ¶ 30.) Landlord seeks rent and additional rent owed from 2020 through the end of the lease in 2025 (as offset by rent paid by the new tenant to whom landlord has relet the premises)-a total of $444,799.23. (NYSCEF No. 8 at ¶¶ 36-37.) But landlord is not entitled to that full amount.
Contrary to landlord's argument, a tenant's anticipatory breach of a lease does not, in itself, permit a landlord immediately to sue for future rent owed through the end of the lease. (See Beaumont Offset Corp. v Zito, 256 A.D.2d 372, 373 [2d Dept 1998], citing Long Is. R.R. Co. v Northville Inds. Corp., 41 N.Y.2d 455, 465 [1977].) A landlord may do so only if the lease provision on which it relies permits acceleration upon a default of future rent owed. (Utility Garage Corp. v National Biscuit Co., 71 A.D.2d 578, 579 [1st Dept 1979].) Section 14.05 (b), on which landlord relies, is not an acceleration clause. Rather, it provides that upon termination of the lease, landlord may collect sums equal to the amount that tenant would have owed absent termination, "payable upon the due dates therefor specified herein until the Expiration Date" of the lease, and offset by the net rents received by landlord from reletting the premises. (NYSCEF No. 18 at 31.) Any post-reletting offset is itself to be calculated using the post-reletting "gross rents as and when received by Landlord." (Id. [emphasis added].) When a lease provides that post-termination "damages are to be paid by the tenant as they become due," the landlord may not "bring a cause of action for additional rent through the end of the term of the lease." (Itel Data Processing Corp. v Dominick Intl. Corp., 58 A.D.2d 576, 577 [2d Dept 1977].)
The lease does, to be sure, contain an acceleration clause, namely § 14.05 (a). But under the terms of § 14.05, landlord must elect between seeking damages under subsection (a) or subsection (b). (See NYSCEF No. 18 at 30.) And landlord's affidavit states expressly that it is relying on § 14.05 (b), not 14.05 (a). (NYSCEF No. 8 at ¶¶ 30, 31.) Given that reliance on subsection (b), landlord may claim only damages equal to the amount in rent/additional rent that would have accrued as of the making of the motion- i.e., March 2023, not May 2025. By this court's calculations using the documentation supplied by landlord, that sum is $387,393.05, not the $444,799.23 that landlord seeks on this motion.
Sections 14.05 (a) and (b) also involve different methods for determining the total amount owed. The acceleration provision of subsection (a) permits landlord to claim from tenant only the present value of the balance of rent owed through the end of the lease, discounted based on the "then current rate of United States Treasury Bills or Notes, as applicable, maturing on the Expiration date." (NYSCEF No. 18 at 30.) That present discounted value is then offset by the "aggregate fair rental value of the Premises for the same period"-not the actual net amount realized by landlord should it succeed in reletting the premises. (Id.)
Landlord also requests an award of attorney fees, as provided for in the lease. Landlord's fee request is granted. This court concludes that the billing records submitted on the motion show that landlord's reasonable attorney fees are $4,924.30.
Accordingly, it is
ORDERED that landlord's motion for default judgment is granted in part and denied in part, and landlord is awarded a judgment against defendant for (i) $387,393.05 in unpaid rent/additional rent; plus (ii) $4,924.30 in attorney fees; plus (iii) costs and disbursements as taxed by the Clerk upon the submission of an appropriate bill of costs; and it is further
ORDERED that landlord shall serve a copy of this order with notice of its entry on defendant by certified mail, return receipt requested, directed to defendant's last-known address; and on the office of the County Clerk, which shall enter judgment accordingly.