Opinion
106578/08.
December 16, 2010.
This action is based on Alero Enterprise Inc. s breach or a written commercial lease entered into between plaintiff 400 Mazel LLC, as landlord, and Alero Enterprise Inc. ("Alero"), as tenant, for the operation of a hair salon located al 400 East 77th Street, New York, NY a/k/a 1476 First Avenue. New York, NY (the "Premises"). Joshua Bromberg, as the principal shareholder of Alero, is the individual guarantor of the lease.
In August 2007, plaintiff commenced an illegal sublet/assignment holdover proceeding against Alero in Civil Court, in which it was held that Alero unlawfully sublet/assigned the lease and the use and occupancy of the Premises to Hair Company of New York, Inc. ("Hair Company"). A judgment of possession, warrant of eviction, and a money judgment in the amount of $51,184.37 were entered in that case. In March 2008, plaintiff commenced a holdover proceeding against Hair Company. Hair Company defaulted and a judgment of possession, warrant of eviction, and a money judgment in the amount of $24,000 were awarded. On April 4, 2008, plaintiff recovered legal possession of the Premises.
Plaintiff alleges that partial payments on the judgments were made and thereafter commenced this action to recover the remaining amounts on the judgments. Defendant Bromberg subsequently commenced a third-party action in this case against Alla Shusterman ("Shusterman") and Ateksey Inoyatov ("Inoyatov"), alleging that, as principals of Hair Company, they agreed to indemnify him under his guaranty of the lease to plaintiff. The following causes of action are alleged in the third-party complaint: (1) indemnification for the judgments obtained by plaintiff, 400 Mazel LLC; (2) reimbursement of the security deposit; and (3) breach of fiduciary duty.
Third-party defendant Inoyatov now moves for summary judgment, pursuant to CPLR 3212, dismissing the third-party complaint or, in the alternative, for partial summary judgment dismissing any claims against movant that are for past debts and judgments against Alero and Bromberg and an order stating movant and Hair Company has satisfied all debts and judgments entered against them in favor of plaintiff. Third-party plaintiff opposes the motion and cross-moves for summary judgment against third-party defendant Inoyatov.
Summary judgment is a drastic remedy and should only be granted if the moving party has sufficiently established that it is warranted as a matter of law. Alvarez v Prospect Hosp., 68 NY2d 320, 324 (1986). However, it should be denied if the opposing parry presents admissible evidence establishing that there is a genuine issue of fact remaining. ' Znckerman v City of New York, 49 NY2d 557. 560 (1980). "Moreover, the motion court should draw all reasonable inferences in favor of the nonmoving party in determining whether to grant summary judgment." F. Garojalo Elec. Co. v New York Univ. 300 AD2d 186, 188 (1st Dep't 2002). In deciding such a motion, the court's role is "issue-finding, rather than issue-determination." Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395. 404 (19.57) (internal quotations omitted).
In support of his motion for summary judgment, third-party defendant Inoyatov makes the following arguments. First, movant contends that Bromberg has no claim for indemnification because the instant action is not a result of Bromberg" s personal guaranty of the lease, but instead of Bromberg's own actions in improperly assigning the lease, which caused the judgments to be entered against" him. Second, movant argues that he has already made payment of all debts owed by Hair Company, which consisted of rent owed for the period Hair Company occupied the premises, but that plaintiff has misapplied those payments to debts owed by Alero. Inoyatov asserts that any further recovery by Bromberg of payments from Inoyatov would be unjust. Third, movant contends that Bromberg breached his fiduciary duties to Hair Company and should not profit from his own failures as an officer/director.
In opposition, third-party plaintiff contends that summary judgment should be granted in his favor based on the indemnification language in the stockholders agreement between the parties. Further, Bromberg asserts that, third-party defendant failed to set a date on which his deposition would take place and failed to produce discovery documents as requested in third-party plaintiff's demands and pursuant to court orders.
The Court notes that, although third-party plaintiff raises third-party defendant's failure to participate in discovery in support of his cross motion for summary judgment, third-party plaintiff is not seeking relief for such discovery herein.
In or around December 2005, Inoyatov, Bromberg and Shusterman entered into a stockholders agreement and formed Hair Company. A provision in the stockholders agreement addressed Brombcrg's guaranty of the lease by stating: "During such period of time that Inoyatov and Shusterman are employees of the corporation, they agree to hold harmless and indemnify Bromberg for any liability or damages as a result of Bromberg's personal guaranty of the lease." Inoyatov Aff, Exh 1 at 3.
While third-party defendant focuses on the fact that Bromberg himself caused the default under the lease by failing to make a proper assignment of the lease, such argument is unpersuasive. The language in the stockholders agreement between third-party plaintiff and third-party defendants unequivocally provided that Inoyatov and Shusterman would indemnify Bromberg for "any liability or damages as a result of Bromberg's personal guaranty of the Lease." Id. (emphasis added). Such language is broad on its face, encompassing and covering "any" liability. Indemnification was not limited to situations in which Bromberg did not cause the default or where Inoyatov had the ability to take actions to prevent any default under the lease from occurring.
As Bromberg guaranteed "the full performance and observance of all the covenants, conditions and agreements, therein provided to be performed and observed by Tenant" (Inoyatov Aff, Exh G), and the lease provided that "Tenant . . . expressly covenants that it shall not assign . . . the demised premises . . . without the prior written consent of Owner in each instance" (Inoyatov Alf, Exh F at ¶ 11), it follows that any liability resulting from Bromberg's failure to obtain consent prior to assigning the premises is covered by such indemnification clause. Thus, based on that provision alone. Inoyatov is required to indemnify Bromberg for any liability resulting therefrom.
However, another provision in the stockholders agreement is also relevant. Third-party plaintiff and third-parly defendants also agreed that: "Inoyatov will not be responsible for the debts of Alero Enterprises, Inc., nor shall he be responsible for any expense of Hair Company of New York, Inc. prior to 3/15/06." Id., Exh 11 at 4. Therefore, while movant would be responsible to indemnify Bromberg for his liability under his guaranty of the lease, movant would not be responsible for any portion of Alero's liability or, as a result, Bromberg's liability, prior to Hair Company's possession of the Premises on March 15, 2006. Thus, of the judgments that plaintiff seeks to collect from Bromberg and Alero (and Bromberg, consequently, seeks indemnification of, from Inoyatov), movant is only responsible to indemnify Bromberg for any judgment against Hair Company, i.e. the money judgment entered against Hair Company in the amount of $24,000, and not for the judgments against Alero, i.e. the money judgment entered on January 8, 2008 in the amount of $51,184.37.
With regard to the judgment against Hair Company. Inoyatov contends that he made payments directly to plaintiff to satisfy any outstanding rent owed by Hair Company and, thus, it would be unjust for Bromberg's action for indemnification to continue against him. In support of his position, Inoyatov attaches various checks allegedly sent to plaintiff in an effort to satisfy any outstanding debts. However, movant fails to sufficiently demonstrate that he is entitled to judgment, as a matter of law dismissing the entire third-party action against him. as he has not adequately proved that full payment on the Hair Company judgment has been made sufficient to defeat Bromberg's claim of indemnification. Further, third-party defendant has not demonstrated prima facie entitlement to summary judgment dismissing the second and third causes of action.
Inoyatov contends that he paid plaintiff a total of $64,000 for all of the past rent due by Hair Company, which should have been applied to satisfy Hair Company's judgment. Alekscy Inoyatov Aff ¶¶ 13, 15, 17, 27. However, the court first notes that a large portion of the checks is illegible, making it difficult to clearly decipher who all the checks were made to, how much they were for, and on what dates they were written. Second, from the dates that can be seen, it appears that most, if not all, of the checks were payable to plaintiff before the judgment against Hair Company was entered. Thus, from the evidence submitted, it is unclear whether the judgment against Hair Company has been fully satisfied. Therefore, there is still a dispute as to the amount owed to plaintiff with regard to the Hair Company judgment, and as a result, the amount Inoyatov owes based on Bromberg's claim of indemnification.
Therefore, based on the above, partial summary judgment is granted in favor of third-party defendant Inoyatov only to the extent that the first, cause of action in the third-party complaint is dismissed as to any claims against Inoyatov which seek indemnification of Bromberg's liability of debts of Alero. including the judgment entered against Alero in the amount of $51,184.37.
Accordingly, it is
ORDERED that partial summary judgment is granted in favor of third-party defendant Inoyatov only to the extent that, the first cause of action in the third-party complaint is dismissed as to any claims against Inoyatov that are for past debts and judgments against Alero and Bromberg, and denied in all other respects; and it is further
ORDERED that third-party plaintiff's cross motion for summary judgment is denied; and it is further
ORDERED that the remainder of the action shall continue; and it is further
ORDERED that within 30 days of entry of this order, third-party defendant Aleksey Inoysatov shall serve a copy of this order with notice of entry upon all parties.