Opinion
Index No. 152582/2023
08-05-2024
45 Broadway Owner, LLC, Plaintiff, v. Wealth Management Associates, LLC, Defendant.
Borah, Goldstein, Altschuler, Nahins & Goidel, P.C., New York, NY (David B. Rosenbaum and Joshua N. Nadelbach of counsel), for plaintiff. Billah Law Firm PLLC, Brooklyn, NY (Mohammad W. Billah of counsel), for defendant.
Unpublished Opinion
Borah, Goldstein, Altschuler, Nahins & Goidel, P.C., New York, NY (David B. Rosenbaum and Joshua N. Nadelbach of counsel), for plaintiff.
Billah Law Firm PLLC, Brooklyn, NY (Mohammad W. Billah of counsel), for defendant.
Gerald Lebovits, J.
Plaintiff, 45 Broadway Owner, LLC, is the owner and landlord of commercial premises located at 45 Broadway in Manhattan. Plaintiff and defendant, Wealth Management Associates, LLC, entered into a lease agreement on August 8, 2011. The lease term was for ten years and two months. (NYSCEF No. 25.) The term began on October 10, 2011, and was set to expire on December 9, 2021. (NYSCEF Nos. 25, 30.)
Defendant vacated the premises on July 31, 2020-almost a year and a half before the lease was set to expire. Plaintiff took the security deposit (a letter/line of credit) and applied it to defendant's rent arrears. The security deposit paid off base rent for August 2020 and half of September 2020 and the electric, additional electric, and real-estate-tax charges for August 2020 and September 2020. Plaintiff now seeks the unpaid balance: $212,948.69.
Plaintiff raises a claim for breach of contract. It claims that defendant defaulted under the lease when it failed to pay rent and additional rent after July 2020 and unilaterally abandoned the premises without authorization on July 31, 2020. Defendant argues that Aron Weber-the regional director of the premises's management company-orally agreed to release defendant from the lease in exchange for plaintiff's retaining the security deposit. (NYSCEF No. 39 at ¶ 19.)
Plaintiff now seeks an order (i) amending the pleadings under CPLR 3025 (c); (ii) granting summary judgment against defendant and awarding plaintiff a money judgment under CPLR 3212; (iii) dismissing defendant's affirmative defenses and counterclaims under CPLR 3211(a); and (iv) granting plaintiff statutory interest, fees, and costs. The motion is granted.
I. Motion to Amend the Pleadings
1. Plaintiff moves to amend its complaint under CPLR 3025 (c). But CPLR 3025 (b) is the "proper vehicle for relief... where, as here, 'limited discovery, if any, ha[s] taken place and no evidentiary hearing or trial ha[s] occurred.'" (558 Seventh Ave. Corp. v Times SQ Photo, Inc., 2023 NY Slip Op 30220 [U], *2 [Sup Ct, NY County 2023, Bannon, J.], citing Janssen v Inc. Vil. Of Rockville Ctr., 59 A.D.3d 15, 24 [2d Dept 2008].) The court considers plaintiff's motion under CPLR 3025 (b).
2. Defendant notes that plaintiff has not given the court an amended or supplemental pleading and therefore may not amend its complaint. (NYSCEF No. 40 at 8.) Typically, failing to attach a proposed amended complaint to the moving papers warrants dismissal under CPLR 3025 (b). (See 558 Seventh Ave., 2023 NY Slip Op 30220 [U] at *2.) But the court may "providently overlook" the absence of an amended complaint "where the proposed amendment is adequately described in the moving papers." (Id.; accord Dogwood Residential, LLC v Stable 49, Ltd., 159 A.D.3d 490, 492 [1st Dept 2018] [granting motion to amend when the proposed amendment was "adequately described" in the notice of motion and attorney affirmation].)
Here, the proposed amendments are minor and adequately described. Weber's affidavit and plaintiff's notice of motion detail the proposed corrections. The original complaint mistakenly lists the end date of the lease as December 10, 2021, instead of December 9, 2021, and the late fee charge for July 2020 as $50.83 as opposed to 50.08. (Compare NYSCEF No. 26 at ¶¶ 22, 28 with NYSCEF No. 25 at ¶¶23, 30). In his affidavit, Weber also notes the correct late-fee total and total gross rent and damages to reflect the 75-cent difference. Additionally, the notice of motion changed the request for statutory interest from July 31, 2020, to September 1, 2020. (Compare NYSCEF No. 20 [notice of motion] with NYSCEF No. 26 at ¶ 36 [complaint].)
A party's "request for leave to amend should generally be granted absent prejudice or surprise to the opposing party." (Favourite Ltd. v Cico, 2024 NY Slip Op 01496, *2 [Ct App 2024].) Defendant does not explain why it would be prejudiced or surprised should the court grant plaintiff leave to amend its complaint. Defendant is aware of its monetary obligations under the lease (NYSCEF No. 36 at 3), and the Weber affidavit describes the proposed amendments. (NYSCEF No. 51 at 5). Additionally, the amendments benefit defendant: they reduce the alleged damages by 75 cents and eliminate a month of interest. Plaintiff's motion to amend the complaint is granted.
II. Summary Judgment
A. Prima Facie Case
Plaintiff seeks summary judgment on its cause of action for breach of contract. Plaintiff establishes its entitlement to a money judgment for unpaid rent and additional rent through the lease (NYSCEF No. 29), the rent ledger (NYSCEF No. 32), real-estate-tax invoices (NYSCEF No. 31, 48), affidavits (NYSCEF No. 25, 47), and correspondence with defendant. (NYSCEF No. 35, 49, 50.) Plaintiff establishes that defendant breached the lease by not paying rent and by abandoning the premises mid-lease. (See NYSCEF No. 25 at ¶ 2 [Weber's affidavit].) Plaintiff has made out its prima facie claim for breach of contract.
B. Triable Issues of Fact
Defendant argues that plaintiff is not entitled to summary judgment. It contends that triable issues of material fact include (i) whether defendant was an essential business (NYSCEF No. 38 at ¶ 13); (ii) frustration of purpose and impossibility (NYSCEF No. 40 at 6, 12); (iii) whether the pandemic was a casualty (id. at 15); (iv) whether defendant is entitled to equitable estoppel (NYSCEF No. 38 at ¶ 13); (v) whether plaintiff overcharged for real-estate taxes (NYSCEF No. at 40 at 21); and (vi) whether plaintiff violated the commercial-tenant harassment law. (Id. at 21).
i. Essential or Non-essential Business.
During the COVID-19 pandemic, essential businesses-such as financial institutions-were not subject to in-person restrictions. (See Executive Orders 202.6 and 202.8; NYSCEF No. 22-24.) Defendant argues that it no longer offered financial services and therefore that it was a non-essential business subject to the executive orders. (NYSCEF No. 38 at ¶ 13; NYSCEF No. 39 at ¶¶ 4-5.) Plaintiff argues that defendant was an essential business and thus exempt under the executive orders. Plaintiff claims that WMA offered financial services to its clients, as stated on WMA's website (NYSCEF No. 36 at 7, 16-17)-although defendant claims that the website is outdated. (NYSCEF No. 39 at ¶6.)
The court concludes that it does not matter whether defendant operated an essential or non-essential business. The executive orders did not excuse performance under commercial leases. (See 88 Greenwich Owner v 21 Rector St, 217 A.D.3d 432, 433 [1st Dept 2023].)
ii. Frustration of Purpose and Impossibility
Defendant argues that a triable issue of fact exists about whether the unforeseeable nature of the pandemic and executive orders made the lease's purpose impossible to achieve and frustrated its purpose. (NYSCEF No. 40 at 12.) Defendant argues that the pandemic frustrated the "entire purpose" of the lease because its employees and clients could not come to the office under Executive Order 202.8. (NYSCEF No. 40 at 9.) It claims that "if WMA knew that it would not be able to utilize the office, it would never have entered the Lease." (NYSCEF No. 39 at ¶ 10). This is unavailing; "frustration of purpose is not implicated by temporary governmental restrictions on in-person operations." (Valentino U.S.A., Inc. v 693 Fifth Owner LLC, 203 A.D.3d 480, 480 [1st Dept 2022] [finding that frustration of purpose is a defense only when the contract's purpose has been "completely thwarted"]; Gap, Inc. v 170 Broadway Retail Owner, 195 A.D.3d 575, 577 [1st Dept 2021] [ruling that a party must have been "completely deprived of the benefit of its bargain" for frustration of purpose is a viable defense].)
Although the pandemic might have disrupted defendant's business, it "cannot serve to excuse [defendant's] lease obligations on the grounds of frustration of purpose or impossibility." (Fives 160th LLC v Qing Zhao, 204 A.D.3d 439, 440 [1st Dept 2022].) The pandemic "did not completely defeat the purpose of the parties' [approximately] 10-year lease." (Knickerbocker Retail LLC v Bruckner Forever Young Soc. Adult Day Care Inc., 204 A.D.3d 536, 537-538 [1st Dept 2022].) Defendant was able to use the premises for more than eight years before the start of the pandemic. Moreover, defendant provides no explanation why it could not return to the premises after the executive orders were lifted. (See 652 Hudson Retail Partners LLC v. Nonoo LLC, 2024 NY Slip Op 30624[U], *6 [Sup Ct, NY County 2024] [holding frustration of purpose defense was untenable when defendants did "not explain why they could not resume operation of their business at the premises once the restrictions on defendants' business were lifted"].)
Further, the pandemic did not destroy the premises or make performance objectively impossible. (See Valentino U.S.A., Inc., 203 A.D.3d at 480 ["Impossibility excuses a party's performance only when the destruction of the subject matter of the contract or the means of performance makes performance objectively impossible."] [internal quotation marks omitted].) Additionally, the lease's force majeur clause provides that defendant must perform notwithstanding plaintiff's failure to perform due to a force majeure. (NYSCEF No. 29 at ¶ 26.04.)
iii. Abatement of Rent Due to Casualty
Defendant contends that the pandemic rendered the premises untenantable and therefore is entitled to an abatement of rent. (NYSCEF No. 40 at 14.) Section 20.01 of the lease (titled "Casualty") provides that "[i]f (a) the Premises or any part thereof shall be damaged or rendered untenantable by fire or other insured casualty, (b) Tenant gives notice of such damage or destruction to Landlord, and (c) this Lease is not terminated pursuant to this Article 20, Landlord shall proceed with the repair of such damage... [and] the rent shall be equitably abated to the extent that all or any part of the Premises shall have been rendered untenantable...." (NYSCEF No. 29 at ¶ 20.01.)
Defendant claims that an issue of fact concerns whether the pandemic and executive orders constitute a casualty. (NYSCEF No. 40 at 15.) According to defendant, since the executive orders suspended in-person operations, the premises were effectively "rendered untenantable." (Id.) Plaintiff argues that ¶ 20.01 concerns only incidents that cause physical damage to the premises and therefore that the pandemic and executive orders do not constitute a casualty. (See NYSCEF No. 51 at 9; No. 36 at 15.)
The court agrees with plaintiff. Section 20.01 refers to situations in which the premises is damaged or untenantable due to "fire or other insured casualty." This provision does "does not contemplate loss of use due to a pandemic or resulting government lockdown." (Flatiron 30 LLC v Continuum Co. LLC, 227 A.D.3d 463, 464 [1st Dept 2024].) It contemplates physical damage to the premises. This interpretation is further supported by subsections (b) and (c), which refer to notifying landlord of the damage and landlord's duty to repair damage. Defendant has not raised a triable issue of fact.
iv. Equitable Estoppel
To invoke a defense of equitable estoppel, defendant must establish (1) conduct that "amounts to a false representation or concealment of material facts," (2) "intention, or at least expectation, that such conduct will be acted upon by the other party," and (3) in some situations, knowledge, actual or constructive, of the real facts." (757 3rd Ave. Assoc., LLC v Patel, 117 A.D.3d 451, 453-454 [1st Dept 2014].)
Defendant claims it relied on two of Weber's oral statements. On July 1, 2020, Weber stated that plaintiff would "release WMA from any further lease obligations for the remainder of the lease, if the letter of credit was released and the premises surrendered in good condition." (NYSCEF No. 39 at 5 [WMA's managing member's affidavit].) On July 15, 2020, Weber reiterated his first statement. (See id.) Defendant claims that it sent emails to plaintiff's agents to confirm its release from the lease but received no response. (See NYSCEF No. 39 at 6; NYSCEF No. 40 at 18.) Defendant claims that, in turn, it "expedited the process of drawing the funds through emails and phone calls with the bank; provided direct contact information for the Landlord to draw the funds; and then vacated." (NYSCEF No. 40 at 18.)
Plaintiff argues that the lease contains a no-oral modification clause, and that Weber "never advised Defendant that it could abandon the Premises prior to the Lease's expiration or release it from its monetary obligations[;] Plaintiff drew down on the line of the credit which it was entitled to do pursuant to the Lease[;]... [and] that Defendant did not surrender possession[,] it unilaterally abandoned the Premises." (NYSCEF No. 36 at 11.)
Defendant may overcome the no-oral modification clause by invoking equitable estoppel. But the "conduct relied upon to establish estoppel must not otherwise be compatible with the agreement as written." (Joseph P. Day Realty Corp. v Jeffrey Lawrence Assoc., Inc., 270 A.D.2d 140, 141 [1st Dept 2000].) And the "acts taken in detrimental reliance [must be] unequivocally referable to the new, oral agreement." (Richardson & Lucas, Inc. v New York Athletic Club of City of New York, 304 A.D.2d 462, 463 [1st Dept 2003].)
Here, nothing about plaintiff's conduct permitted defendant to assume that plaintiff was acting consistently with the oral agreement. (See e.g. EchoStar Satellite L.L.C. v ESPN, Inc., 79 A.D.3d 614, 619 [1st Dept 2010] ["EchoStar was not justified in relying on its perception that Disney had decided not to enforce the interest provisions, because nothing about Disney's conduct permitted such an inference."].)
Moreover, defendant's conduct is not "unequivocally referable" to the modified agreement. (Richardson & Lucas, Inc., 304 A.D.2d at 463.) Vacating the premises is not "unequivocally referable to the claimed oral modification." (Joseph P. Day Realty, 270 A.D.2d at 142.) An early departure is "equally or even more consistent with a breach of the lease." (Id.; accord L & B 595 Madison, Inc. v Ravagnan, 242 A.D.2d 413, 413 [1st Dept 1997] ["[D]efendant's early departure from the premises is not unequivocally referable to an oral modification of the lease, which, by its terms, could only be modified in writing."].)
Additionally, defendant's surrender letter is a self-serving letter that does "not support the claimed modification since unanswered written communications are not, ordinarily, admissible in evidence against the person addressed, as admissions of the truth of a statement contained therein." (Joseph P. Day Realty, 270 A.D.2d at 142.)
Finally, plaintiff's drawing on the line of credit is "likewise of no probative value" in proving the oral modification. (Id.) Once defendant defaulted under the lease, plaintiff "was entitled under the terms of the lease as it already existed to retain the security deposit." (Id.)
Defendant contends that plaintiff's almost-three-year delay in commencing this action, or rejecting the purported modification, supports an equitable-estoppel determination. (NYSCEF No. 40 at 19, citing Joseph P. Day Realty Corp. v Jeffrey Lawrence Assoc., Inc., 270 A.D.2d 140, 142 [1st Dept 2000].) But this argument is undermined by the court's conclusions above.
v. Real-estate Taxes
Defendant claims that plaintiff overcharged defendant in real-estate taxes since the lease began in 2011 and that this claim raises a triable issue of fact warranting denial of plaintiff's summary judgment. (NYSCEF No. at 40 at 20-21).
According to defendant, the branch of plaintiff's motion for summary judgment on its real-estate taxes (additional rent charges) "are barred as they do not reflect the actual taxes paid by the landlord." (NYSCEF No. 40 at 20.) Plaintiff argues that defendant is time-barred by the lease from challenging the taxes. (NYSCEF No. 51 at 12-14.)
Section 5.03 of the lease provides that "Each Landlord's Statement so delivered shall be conclusive and binding upon Tenant unless Tenant notifies Landlord within thirty (30) days after receipt thereof that it disputes the correctness of such Landlord's Statement." (NYSCEF No. 29 at ¶ 5.03 [lease].) Plaintiff represents that it sent defendant the monthly real-estate-tax invoices and that defendant paid the taxes accordingly. (NYSCEF No. 47 at ¶¶ 5-6 [Weber's affidavit].) Defendant did not dispute the charges within 30 days. This defense is therefore time-barred by ¶ 5.03. (See Agip Petroleum Co. v 666 Fifth Ave. P'Ship, 297 A.D.2d 483, 485 [1st Dept 2002] [noting that a lease requiring tenant to contest tax statements within 60 days of their issuance would bar claims contesting those statements made after 60 days].) Thus, defendant has failed to raise a triable issue of fact.
vi. Commercial Tenant Harassment
Defendant contends that plaintiff violated the commercial-tenant harassment law (See Administrative Code of City of NY § 22-902.) Plaintiff denies engaging in commercial tenant harassment and argues that defendant abandoned the premises on its own volition due to financial difficulties. (NYSCEF No. 47 at ¶ 14.)
Defendant's commercial-tenant-harassment claim does not raise an issue of fact in opposition to summary judgment. As this court previously noted, "§ 22-903, which carries into effect § 22-902's restrictions, provides expressly that a commercial tenant's bringing of an action claiming harassment does not 'relieve[]' the tenant 'of the obligation to pay any rent for which the commercial tenant is otherwise liable.'" (721 Borrower LLC v Premier Digital Equip. Servs. Inc., 2024 NY Slip Op 50693[U], *2 [Sup Ct, NY County 2024], quoting Administrative Code § 22-903 [b].) Therefore, "[a]t most, a tenant-harassment claim or counterclaim, if successful, would offset the amount of "delinquent rent or other sum for which a court finds such commercial tenant is liable to landlord." (Id., quoting Administrative Code § 22-903 [b].) For this reason, commercial tenant harassment is not an available affirmative defense against a claim for nonpayment of rent.
C. Attorney Fees, Costs, and Interest
In addition to sums owed under the lease, plaintiff seeks statutory interest from September 1, 2020, costs, fees, disbursements, and attorney fees.
Plaintiff has shown its entitlement to interest. When damages accrue at various points during the term of the agreement, interest "shall be computed" from a "single reasonable intermediate date." (CPLR 5001 [b].) Defendant vacated the premises on July 31, 2020, and the lease naturally expired on December 9, 2021. The midpoint is April 5, 2021. Plaintiff is entitled to interest running from April 5, 2021, at the statutory rate. (CPLR 5004.)
Plaintiff is also entitled to attorney fees. A landlord is entitled to recover its reasonable attorney fees if the lease supports that request. (See Universal Commc'ns Network, 85 A.D.3d 668, 670 [1st Dept 2011].) The lease provides that if plaintiff hires an attorney to enforce the lease or collect rent due, or the court finds that defendant defaulted under the lease, defendant "must reimburse [plaintiff] within (10) days after demand therefor for its reasonable attorneys' fees and disbursements and court costs incurred in such proceedings." (NYSCEF No. 29 at ¶ 14.10.) Plaintiff is therefore entitled to its costs, fees, disbursements, and attorney fees.
Plaintiff's motion for summary judgment is granted.
III. Motion to Dismiss Affirmative Defenses and Counterclaims
Plaintiff moves to dismiss defendant's fifteen affirmative defenses and six counterclaims. Plaintiff argues that the defenses and counterclaims either lack merit under CPLR 3211 (b) or are not properly stated under CPLR 3013. (NYSCEF No. 36 at 5.) In its motion papers, defendant does not address all its affirmative defenses and counterclaims. Plaintiff relies on Wing Hon Precision Indus. Ltd. v Diamond Quasar Jewelry, Inc. (154 A.D.3d 550, 551 [1st Dept 2017]), to argue that the unaddressed defenses and counterclaims should be dismissed as abandoned. (NYSCEF No. 51 at 3-4.)
But Wing Hon Precision Indus. Ltd. is readily distinguishable. In that case, defendants failed to address their affirmative defenses on appeal, not on a motion to dismiss before the trial court. This court does not consider defendant's remaining defenses and counterclaims abandoned.
a. Affirmative Defenses
i. Failure to State a Claim, Failure to Plead with Particularity, Equitable Estoppel, Impracticability, Frustration of Purpose, Casualty, Impossibility, Real-estate Overcharge, Attorneys' Fees (First, Second Fourth, Fifth, Sixth, Seventh, Tenth, Thirteenth, and Fourteenth Affirmative Defenses)
Although defendant raises separate defenses for impracticability and impossibility, the court construes these defenses as one defense like defendant does in its memorandum in opposition. (See NYSCEF No. 40 at 12.)
Given the court's conclusions above on the motion for summary judgment, defendant has not stated defenses for failure to state a claim, failure to plead with particularity, equitable estoppel, impracticability, frustration of purpose, casualty, impossibility, real-estate-taxes overcharge, or that it does not have to pay plaintiff's attorney fees.
ii. Insufficient Predicate Notice (Third Affirmative Defense)
A predicate notice applies only to possessory issues. (See RPAPL 711 [2].) Plaintiff was not required to serve a predicate notice; this case is a monetary dispute. This affirmative defense is dismissed.
iii. Judicial Reformation of the Lease (Eighth Affirmative Defense)
Defendant claims that the lease required it to comply with all governmental rules pertaining to its occupancy of the premises. It therefore contends that the pandemic and executive orders frustrated the purpose of the lease, and performance "became objectively impossible, commercially impractical,... completely illegal, and contrary to the terms of Lease, and the consideration Defendant received in exchange for the Lease failed." (NYSCEF No. 18 at ¶ 36 [answer].) But as shown above, the government regulations did not have this effect. This affirmative defense is dismissed.
iv. EO 202.8 and Lease Section 10.01 Excuse Performance (Ninth Affirmative Defense)
Defendant argues that defendant could not occupy the premises without violating Executive Order 202.8 and therefore that ¶ 10.01 excuses its performance under the lease. (NYSCEF No. 18 at ¶ 38.) Section 10.01 of the lease provides that "Tenant, at its expense, shall comply with all (a) laws and ordinances and all rules, orders or regulations (present, future, ordinary, extraordinary, foreseen or unforeseen) of any governmental authority... at any time duly issued and in force, affecting or related to the Premises or any part thereof." (NYSCEF No. 29 at ¶ 10.01.) Defendant's defense is unavailing. Section 10.01 does not excuse performance. Rather it provides that defendant must comply with all laws, ordinances, and rules (even extraordinary and unforeseeable ones) at its own expense. (Id.) Defendant therefore had to comply with Executive Order 202.8 and still pay rent.
Further, defendant concedes that Executive Order 202.8 lasted only until June 2020. (See NYSCEF No. 40 at 9.) Yet, defendant vacated the premises in July 2020-over a month after its operations were allowed to restart and almost a year and a half before the lease expired. Defendant's decision to vacate the premises was "voluntary, made for financial reasons" and not due to Executive Order 202.8. (Experience NY Now Inc. v. 126 W. 34th St. Assoc. L.L.C., 224 A.D.3d 441, 442 [1st Dept 2024] [holding that tenant was not excused from paying rent for the period after nonessential businesses were permitted to reopen].) This affirmative defense is dismissed.
v. Plaintiff Did Not Comply with the Lease and Overcharged for Utilities (Eleventh and Twelfth Affirmative Defenses)
Defendant contends the plaintiff (1) did not comply with the lease and (2) overcharged for utilities. (NYSCEF No. 27 at ¶¶ 42-44.) But defendant does not further explain or provide evidence to support these claims. These affirmative defenses are dismissed.
vi. Defendant Does Not Have to Pay Late Fees (Fifteenth Affirmative Defense)
Defendant agreed to pay late fees at a rate equal to 5% of the overdue amount. (NYSCEF No. 29 at ¶ 14.11.) The total late-fee charge is $10,140.41 as broken down in Weber's affidavit. (NYSCEF No. 25 at ¶ 30.) This affirmative defense is dismissed.
D. Counterclaims
i. Declaratory Judgment for Rent Abatement Due to Casualty (First Counterclaim) and Lease Reformation (Second Counterclaim)
As explained above, the pandemic and executive orders do not constitute a casualty, and the pandemic and executive orders did not make performance impossible. Defendant is not entitled to a declaration entitling it to rent abatement or reformation of the lease. These counterclaims are dismissed.
ii. Refund of Prior Rent Payments (Third Counterclaim)
Defendant counterclaims that plaintiff must reimburse it for rent it paid from March through June 2020 ($53,818.16), plus interest on the bases of frustration of purpose, casualty, force majeure, excused performance, and lack of consideration. (NYSCEF No. 27 at ¶¶ 63-64.)
The First Department "has rejected frustration of purpose, impossibility of performance, and failure of consideration as defenses to the nonpayment of rent under a commercial lease as a result of the pandemic." (88 Greenwich Owner LLC v 21 Rector St LLC, 217 A.D.3d 432, 433 [1st Dept 2023].) And as discussed above, there was no casualty, and the force major provision is inapplicable. Additionally, ¶ 4.03 (b) of the lease requires defendant to pay all gross rent "without set off, abatement, deduction or counterclaim." This counterclaim is dismissed.
Defendant briefly states that ¶ 19.01 (a) of the lease entitles it to a full abatement when there was no access to the premises. (NYSCEF No. 40 at 11.) The court agrees with plaintiff that ¶ 19.01 applies when the premises are condemned or taken through eminent domain. This provision does not apply here.
iii. Return of Security Deposit (Fourth Counterclaim)
Defendant demands the return of its $34,149.84-security deposit, plus interest. (NYSCEF No. 27 at ¶¶ 64-66.) Defendant claims that plaintiff took the funds without providing a default or cure notice and while Executive Order 202 was in effect. It claims that plaintiff applied the security deposit to the rent. (NYSCEF No. 27 at ¶65.) Plaintiff argues that it was authorized to draw on the security deposit pursuant to ¶ 27.01 of the lease (titled "Security") and therefore that defendant is not entitled to a refund. (NYSCEF No. 36 at 21.)
Section 27.01 provides that "it is agreed that in the event Tenant defaults in respect of any of the terms, provisions and conditions of this Lease, including, but not limited to, the payment of Basic Rent and Additional Charges, Landlord may use, apply or retain the whole or any part of the security so deposited to the extent required for the payment of any Basic Rent and/or Additional Charges and/or any other sum as to which Tenant is in default...." (NYSCEF No. 29 at 27.01.) Plaintiff was therefore allowed to draw on the security deposit and apply it to the rent arrears once defendant defaulted on the Lease. This counterclaim is dismissed.
iv. Commercial Tenant Harassment (Fifth Counterclaim)
Defendant alleges that plaintiff "violated the NYC Administrative Code § 22-902(a) by engaging in commercial tenant harassment of the defendant." (NYSCEF No. 18 at ¶ 68.) Defendant contends that "Plaintiff drew upon the Defendant's letter of credit for Defendant's alleged failure to pay rent during a period when the plaintiff knew that Defendant was unable use or occupy the premises because of the Executive Orders that prohibited defendant from operating its business within the premises and, as such, had committed an act that would reasonably cause defendant to surrender its rights." (NYSCEF No. 18 at ¶ 73.) Defendant claims that plaintiff's actions constituted a threat to defendant based on its status as a business "impacted by Covid-10." (Administrative Code § 22-902 [10] [c].) Defendant also contends that plaintiff's maintenance of this action constitutes commercial tenant harassment. (NYSCEF No. 40 at 22.)
The Administrative Code defines commercial-tenant harassment as "any act or omission by or on behalf of a landlord that (i) would reasonably cause a commercial tenant to vacate covered property, or to surrender or waive any rights under a lease or other rental agreement or under applicable law in relation to such covered property." (§ 22-902 [a].) Defendant's allegations, however, do not amount to a claim that plaintiff acted or failed to act in a way that would reasonably cause a commercial tenant to vacate the premises. Defendant voluntarily abandoned the premises based on alleged oral representations, not due to plaintiff's violation of one of the § 22-902 factors. (§ 22-902 [a] [1]-[14].) Nor does defendant explain how plaintiff threatened defendant based on its impacted-by-Covid-19- status. (See Administrative Code § 22-902 [a] [11].) Finally, plaintiff's initiation and maintenance of this action does not constitute commercial tenant harassment, especially given defendant vacated the premises years before plaintiff brought this action. (See 163-01 29th Ave., LLC v Four Corners Pizzeria, Inc., 2022 NY Misc. LEXIS 19337, *13 [Sup Ct, Queens County 2022] [holding that an action for unpaid rent is not commercial tenant harassment, especially when defendants vacated the premises before the action was initiated].)
v. Attorney Fees (Sixth Counterclaim)
Defendant is not entitled to legal fees given the remainder of its counterclaims are dismissed.
Plaintiff's motion to dismiss defendant's counterclaims is granted.
Accordingly, it is
ORDERED that the branch of plaintiff's motion seeking summary judgment on its claims against defendant is granted, and plaintiff is awarded a judgment against defendant for $212,948.69 in unpaid rent and additional rent, with interest running at the statutory rate from April 5, 2021; plus costs and disbursements as taxed by the Clerk upon the submission of an appropriate bill of costs; and it is further
ORDERED that plaintiff may enter a supplemental judgment for its reasonable attorney fees, with the amount of those fees to be determined by motion made on notice; and it is further
ORDERED that the branch of plaintiff's motion to dismiss defendant's affirmative defenses is granted; and it is further
ORDERED that the branch of plaintiff's motion to dismiss defendant's counterclaims is granted; and it is further
ORDERED that that plaintiff shall serve a copy of this order with notice of its entry on defendant, and on the office of the County Clerk (by the means set forth in the court's e-filing protocol, available on the e-filing page of the court's website, https://ww2.nycourts.gov/courts/1jd/supctmanh/E-Filing.shtml), which shall enter judgment accordingly.