Opinion
56151/2003.
Decided September 30, 2004.
Carl T. Peluso, Peluso Touger, New York, NY, for Plaintiff.
Howard S. Koh Esq., Meister Seelig Fein LLP, New York, NY, for Defendants.
Plaintiff landlord sues defendants for rent arrears covering August through October 2003, for the store and basement at 287 Church Street, New York County. Defendants move to dismiss plaintiff's breach of contract and unjust enrichment claims against Barocco Foods, Inc., Corrales, and Scials, based on conclusive documentary evidence and failure to state a claim, C.P.L.R. § 3211(a)(1) and (7), and plaintiff's fraudulent conveyance claim against all defendants, based on insufficiently particular pleading. C.P.L.R. §§ 3013, 3016(b). Plaintiff cross-moves to amend the complaint's fraudulent conveyance claim. C.P.L.R. § 3025(b). For the reasons explained below, the court grants defendants' motion to the extent of dismissing the breach of contract and unjust enrichment claims against Barocco Foods, C.P.L.R. § 3211(a)(1) and (7), and, based on this disposition, dismissing the fraudulent conveyance claim against all defendants as moot. The court denies plaintiff's cross-motion as also moot.
I.
PROCEDURAL POSTURE
C.P.L.R. § 3211(e) permits but one motion to dismiss a claim for failure to state a cause of action, C.P.L.R. § 3211(a)(7), but defendants may make such a motion before or after answering. McLearn v. Cowen Co., 60 NY2d 686, 689 (1983); Miller v. Schreyer, 257 AD2d 358, 361 (1st Dep't 1999); Facundo, S.A. v. Pressman, 233 AD2d 117 (1st Dep't 1996). Therefore, contrary to plaintiff's contention that defendants were required to make their current motion before answering, instead of four months afterward, the motion is timely.
II.
THE MERITS OF DEFENDANTS' MOTION
A. APPLICABLE STANDARD
Upon a motion to dismiss the complaint under C.P.L.R. § 3211(a)(1) or (7), the court may not rely on facts alleged by defendants to defeat the complaint unless the evidence demonstrates the absence of any significant dispute regarding those facts and completely negates the allegations in the complaint. Goshen v. Mutual Life Ins. Co. of NY, 98 NY2d 314, 326 (2002); Leon v. Martinez, 84 NY2d 83, 87-88 (1994); Yoshiharu Igarashi v. Shohaku Higashi, 289 AD2d 128 (1st Dep't 2001); Ladenburg Thalmann Co. v. Tim's Amusements, 275 AD2d 243, 246 (1st Dep't 2000). Dismissal of the complaint under C.P.L.R. § 3211(a)(1) requires documentary evidence that conclusively resolves all factual issues and establishes a defense to the action as a matter of law. Baystone Equities v. Gerel Corp., 305 AD2d 260 (1st Dep't 2003; Robinson v. Robinson, 303 AD2d 234, 235 (1st Dep't 2003); Well v. Rambam, 300 AD2d 580, 581 (2nd Dep't 2002); Sung v. Kyung Ip Hong, 254 AD2d 271, 272 (2nd Dep't 1998). If a written agreement between plaintiff and a defendant, rationally construed, is inconsistent with plaintiff's contention that that defendant is obligated to pay plaintiff rent arrears covering August through October 2003, the court may dismiss the claims for rent arrears against that defendant. Baystone Equities v. Gerel Corp., 305 AD2d 260; Robinson v. Robinson, 303 AD2d at 235-36; Bronxville Knolls v. Webster Town Ctr. Partnership, 221 AD2d 248 (1st Dep't 1995); Ozdemir v. Caithness Corp., 285 AD2d 961, 963-64 (3rd Dep't 2001).
B. UNDISPUTED EVIDENCE
In a prior summary nonpayment proceeding between plaintiff Moskowitz, as the petitioner, and defendant Barocco Foods, as the respondent, Moskowitz v. Barocco Foods, Inc., Index No. LT 88496/2003 (Civ.Ct. NY Co.), these two parties executed a Stipulation of Settlement September 24, 2003. Moskowitz concedes that his petition sought both possession of the store and basement at 287 Church Street, New York County, and rent arrears for the premises. Barocco Foods stipulated that it was a tenant at the premises, was then the sole tenant in possession of the premises, and knew of no other party then claiming possession and that a judgment of possession was to be entered and a warrant of eviction issued in Moskowitz's favor. The parties agreed to stay the warrant's execution upon compliance with specific conditions: Barocco Foods was to pay the $11,621.38 in rent arrears through September 2003 in four equal monthly installments, plus the $5,810.69 current monthly rent, on the first of each month beginning October 1, 2003, through January 1, 2004.
If Barocco Foods failed to make these payments, Moskowitz's remedy, after two days' advance notice to the tenant, was immediate vacatur of the stay on execution of the judgment of possession and the warrant. In that event, Barocco Foods agreed to surrender the premises to Moskowitz and to indemnify him only for costs in removing the tenant from the premises.
A judgment of possession only was entered September 25 and a warrant of eviction issued October 2, 2003. The parties do not dispute that Barocco Foods failed to make the payment due Wednesday, October 1, 2003, and any subsequent payment pursuant to the stipulation. Assuming Moskowitz gave Barocco Foods the stipulated advance notice of the tenant's default immediately, October 2, 2003, the tenant was permitted until Monday, October 6, 2003, to cure its default. NY Gen. Constr. Law §§ 20, 25(1); Messina v. Lufthansa German Airlines, 47 NY2d 111, 115-16 (1979); Ochocinska v. National Fire Adj. Co., 177 AD2d 954, 955 (4th Dep't 1991). The parties do not dispute that on that day Barocco Foods surrendered the premises to the landlord.
C. CONTRACT AND UNJUST ENRICHMENT CLAIMS AGAINST BAROCCO FOODS
The settlement of the nonpayment proceeding, Moskowitz v. Barocco Foods, Inc., in sum, provided that if Barocco Foods paid the installments of rent arrears and current rent on time, the tenant was entitled to remain in the rented premises; if it did not make those payments on time, the tenant was required to surrender the premises and was subject to eviction. Moskowitz disputes neither that the second alternative occurred, nor the finality of the settlement and judgment, based on the stipulation, for possession only.
Moskowitz had a full and fair opportunity to litigate his claim against Barocco Foods for rent covering August through October 2003 in the earlier proceeding, settled those claims there, and never obtained any vacatur or modification of the stipulation or judgment. Boronow v. Boronow, 71 NY2d 284, 290 (1988). There, Moskowitz relinquished his claim for the August and September 2003 rent arrears and the October 2003 rent as it became due in exchange for the immediate surrender of the rented premises after the tenant's default and the agreed notice of and opportunity to cure the default. Steinman v. 319 W. 48th St. Realty Corp., 276 AD2d 355 (1st Dep't 2000). Nothing indicates he severed and reserved the right to claim rent or use and occupancy for August 2003 forward. To the contrary, he raised those claims, but preserved them only insofar as Barocco Foods remained in the rented premises, and waived those raised claims in the event of a surrender or eviction. Boronow v. Boronow, 71 NY2d at 290; Steinman v. 319 W. 48th St. Realty Corp., 276 AD2d 355.
1. Res Judicata
Moskowitz's rent claims resolved in that earlier proceeding are identical to his breach of contract and unjust enrichment claims against Barocco Foods in this action. E.g., Graystone Materials v. Pyramid Champlain Co., 198 AD2d 740, 742 (3rd Dep't 1993). Once claims are brought to final conclusion, it bars all other claims arising from the same transaction or series of transactions, even if based on different theories or seeking a different remedy. Yonkers Contr. Co. v. Port Auth. Trans-Hudson Corp., 93 NY2d 375, 380 (1999); Boronow v. Boronow, 71 NY2d at 290; Hodes v. Axelrod, 70 NY2d 364, 372 (1987); Beninati v. Nicotra, 239 AD2d 242 (1st Dep't 1997).
Since the stipulation and judgment in the earlier proceeding disposed of Moskowitz's claims against Barocco Foods for any rent or use and occupancy from August 2003 forward, the settlement would bar his further litigation of those claims in this or any other action. Boronow v. Boronow, 71 NY2d at 290; Hodes v. Axelrod, 70 NY2d at 372; Buechel v. Bain, 275 AD2d 65, 71-72 (1st Dep't 2000). Such bars, however, are based on res judicata, which Barocco Foods waived by failing to raise the defense in defendants' answer or a motion to dismiss before answering. C.P.L.R. §§ 3018(b), 3211(e). E.g., Mayers v. D'Agostino, 58 NY2d 696, 698 (1982); Ouyang v. Jeng, 260 AD2d 618, 619 (2nd Dep't 1999); State of New York v. International Fid. Ins. Co., 152 AD2d 77, 82 (3rd Dep't 1989).
2. Failure to State a Claim Based on Documentary Evidence
Defendants move to dismiss the complaint not under C.P.L.R. § 3211(a)(5), based on res judicata, but under § 3211(a)(1) or (7), for failure to state a claim, based on documentary evidence that conclusively establishes a defense. At least where a settlement agreement, rather than a decision, previously disposed of claims, § 3211(a)(1) or (7) may authorize dismissal. Small v. Lorillard Tobacco Co., 252 AD2d 1, 5, 11 (1st Dep't 1998), aff'd, 94 NY2d 43 (1999); Jason v. Chusid, 172 AD2d 172, 173 (1st Dep't 1991). See Singleton Mgt. v. Compere, 243 AD2d 213, 214, 216 (1st Dep't 1998).
For this purpose, the stipulation of settlement between plaintiff and Barocco Foods is no different than the classic documentary evidence under C.P.L.R. § 3211(a)(1): an unambiguous contract that definitively disposes of plaintiff's claim and thus precludes an ensuing action on the claim. Bronxville Knolls v. Webster Town Ctr. Partnership, 221 AD2d 248; Well v. Rambam, 300 AD2d at 581; Ozdemir v. Caithness Corp., 285 AD2d at 963. If Barocco Foods failed to pay the August through October 2003 rent now sought, plaintiff's only recourse was to notify Barocco Foods, and if after two days it neither paid nor surrendered the rented premises, to execute the judgment of possession and the warrant of eviction and claim indemnification from Barocco Foods for costs in removing it from the premises. Bronxville Knolls v. Webster Town Ctr. Partnership, 221 AD2d 248. Given the prompt surrender by Barocco Foods in early October 2003, the tenant's agreement to pay the August and September 2003 rent arrears in monthly installments, plus the October 2003 rent, never became effective and enforceable. Well v. Rambam, 300 AD2d at 581. Barocco Foods was obligated to pay that rent arrears and the monthly rent only as a condition of remaining in the premises from October 2003 through January 2004, which plaintiff readily concedes the tenant did not do. Ozdemir v. Caithness Corp., 285 AD2d at 963-64. Therefore the court dismisses the breach of contract and unjust enrichment claims for rent or use and occupancy against Barocco Foods in this action. Steinman v. 319 W. 48th St. Realty Corp., 276 AD2d 355; Twumasi v. TJMT Transp. Servs., 267 AD2d 153, 154 (1st Dep't 1999); Pagan v. Gider, 1 AD3d 583 (2nd Dep't 2003).
D. CONTRACT AND UNJUST ENRICHMENT CLAIMS AGAINST CORRALES AND SCIALS
The prior proceeding did not determine the obligations of Corrales and Scials, who were not parties to it. The complaint here alleges that plaintiff also entered an oral agreement with these individual defendants leasing the premises to them. If this agreement was simply the individual defendants' personal guaranty to pay the rent defendant corporation Barocco Foods owed to plaintiff, the guaranty violates the Statute of Frauds, which requires that an enforceable agreement to answer for another's debt be in a writing specifying the parties, subject, and other essential terms. NY Gen. Oblig. Law § 5-701(a)(2); DeRosis v. Kaufman, 219 AD2d 376, 379 (1st Dep't 1996); Allied Sheet Metal Works v. Kerby Saunders, Inc., 206 AD2d 166, 168 (1st Dep't 1994). See, e.g., Paul, Weiss, Rifkin, Wharton Garrison v. Westergaard, 75 NY2d 755, 756 (1989); Alba v. Lindenman, 289 AD2d 550 (2nd Dep't 2001).
1. Guaranty Versus Direct Agreement
The characterization by plaintiff's managing agent of the individual defendants' oral agreement readily might be construed as a guaranty, where Corrales and Scials "took it upon themselves, personally, to be responsible under the contract to pay the rent," Aff. of Herbert Moskowitz ¶ 4, and "agreed to be personally liable for the rent." Id. ¶ 5. The complaint, nevertheless, alleges they "rented a store and basement in 297 Church Street . . . from plaintiff pursuant to an oral lease," Aff. of Racquel Crespi Weintraub, Ex. A ¶ 5, and occupied the premises "without paying rent." Id. ¶ 12. Even though the reference to personal responsibility under the contract for rent may be poorly stated, plaintiff's complaint, liberally construed most favorably to the pleader, permits the inference that Corrales and Scials directly contracted to rent the premises themselves along with Barocco Foods and independently occupied the premises. Cron v. Hargro Fabrics, 91 NY2d 362, 366 (1998); L. Magarian Co. v. Timberland Co., 245 AD2d 69 (1st Dep't 1997); Davis v. CCF Capital Corp., 277 AD2d 342, 343 (2nd Dep't 2000).
Where inconsistencies emerge in the allegations of the party opposing dismissal, the court may not determine that one allegation is true and another, inconsistent allegation is false, unless the allegation to be disregarded is obviously feigned. See Glick Dolleck v. Tri-Pac Export Corp., 22 NY2d 439, 441 (1968); Perez v. Bronx Park S. Assocs., 285 AD2d 402, 404 (1st Dep't 2001). Here the allegations raising the material issues of fact that would sustain a breach of contract, as well as unjust enrichment, Nakamura v. Fujii, 253 AD2d 387, 390 (1st Dep't 1998); Wiener v. Lazard Freres Co., 241 AD2d 114, 119-20 (1st Dep't 1998), are in the earlier affirmative pleading, instead of the affidavit composed to respond to the dismissal motion. Therefore the court does not discern that the complaint is falsely tailored solely to avoid dismissal; nor do defendants so suggest. Alvarez v. New York City Hous. Auth., 295 AD2d 225, 226 (1st Dep't 2002). See Perez v. Bronx Park S. Assocs., 285 AD2d at 404.
Short of that extreme, whether (1) Corrales and Scials guaranteed the rent payments by Barocco Foods, or (2) they either (a) directly contracted to pay rent or (b) occupied the premises rented by Barocco Foods independently of it, is for the fact finder at trial. However incredible the latter two propositions may be upon the current record, and to the extent the inconsistencies between plaintiff's affidavit and the complaint undermine the latter's credibility, the court may not determine these issues in the context of a motion to dismiss. Solow v. Domestic Store Erectors, 303 AD2d 283, 284 (1st Dep't 2003); Bernstein v. Oppenheim Co., 160 AD2d 428, 431 (1st Dep't 1990). See Welch v. Riverbay Corp., 273 AD2d 66 (1st Dep't 2000); Uribe v. Merchants Bank of NY, 239 AD2d 128 (1st Dep't 1997).
2. Judicial Estoppel
Defendants maintain that in the settlement of the prior proceeding, Moskowitz stipulated that only Barocco Foods was the tenant of the store and basement at 287 Church Street, and therefore he is estopped from claiming in this action that Corrales and Scials also rented the premises. Judicial estoppel precludes a party from making claims inconsistent with a position the party successfully maintained in a prior proceeding. Sancham Realty Corp. v. Taub, 292 AD2d 304, 305 (1st Dep't 2002); Secured Equities Invs. v. McFarland, 300 AD2d 1137, 1138-39 (4th Dep't 2002); Missry v. Ehlich, 1 Misc 3d 723, 726 (Civ. Ct. NY Co. 2003). Plaintiff in this action, however, does not take a position inconsistent with his position in the nonpayment proceeding settled September 24, 2003.
There, Moskowitz elected to pursue relief, monetary and possessory, solely against Barocco Foods. He was entitled to limit his proceeding and may have done so because, while Corrales and Scials may have agreed to rent the premises, the individual defendants were not then in occupancy.
The stipulation in that proceeding provides, first, that:
Respondent, Barocco Foods, Inc., is the tenant of record of the Store Basement of 297 Church Street . . .,
Weintraub Aff., Ex. E at 2 ¶ B, and second, that:
Respondent represents that it is in sole possession of the premises sought to be recovered herein and that there are no other persons and/or entities in possession of the premises. The Respondent further represents that it is not aware of any other persons and/or entities having any rights to or claims in the premises.
Id. at 4 ¶ 5. Moskowitz stipulated that Barocco Foods was the tenant, but not that it was the sole tenant. Only Barocco Foods represented it was in sole possession and unaware of any other party claiming a right to the premises and only as of September 24, 2003. Moskowitz did not take a position as to who was in sole possession or had a right to possession, let alone who was in possession at any other time. Kalikow v. 78/79 Co. v. State of New York, 174 AD2d 7, 11 (1st Dep't 1992); Abramovich v. Harris, 227 AD2d 1000, 1001 (4th Dep't 1996); Hinman, Straub, Pigors Manning v. Broder, 124 AD2d 392, 394 (3rd Dep't 1986); Missry v. Ehlich, 1 Misc 3d at 727. In fact, defendants' attorney claims that if, as plaintiff contends, Corrales and Scials were also tenants under an oral rental agreement, they were entitled to remain in possession until they surrendered, "which they have not," or a judgment of possession against them, "which has not occurred." Reply Mem. at 4.
Finally, defendants' attorney claims that plaintiff's rent bills and notices to Barocco Foods are further evidence that Barocco Foods was the sole tenant. Even were the court to look to these facts to defeat the complaint, see Goshen v. Mutual Life Ins. Co. of NY, 98 NY2d at 326; Leon v. Martinez, 84 NY2d at 87-88; Ladenburg Thalmann Co. v. Tim's Amusements, 275 AD2d at 246; IMO Indus. v. Anderson Kill Olick, 267 AD2d 10, 11 (1st Dep't 1999), identification by defendants' attorney, who lacks personal knowledge, of the documents attached to her affirmation as bills and notices forwarded by plaintiff to Barocco Foods would be unavailing. Her attempt to lay the foundation for these documents' admissibility and her conclusions about their transmission and import are of no probative value. See Jenkins v. Alexander, 9 AD3d 286, 780 N.Y.S.2d 133, 135 (1st Dep't 2004); Fernandez v. City of New York, 272 AD2d 71 (1st Dep't 2000); Perez v. Brux Cab Corp., 251 AD2d 157, 159 (1st Dep't 1998); Williams v. Citibank, 247 AD2d 49, 52 (1st Dep't 1998).
III.
CONCLUSION
In sum, plaintiff's complaint raises factual issues regarding an oral rental agreement with defendants Corrales and Scials and their independent occupancy of the rental premises. Therefore the court denies dismissal of plaintiff's first and second claims, for breach of contract and unjust enrichment, against these defendants. C.P.L.R. § 3211(a)(7). Plaintiff's prior settlement resolved these claims against defendant Barocco Foods. Therefore the court dismisses these claims against Barocco Foods. C.P.L.R. § 3211(a)(1). Based on this dismissal, whether Barocco Foods fraudulently conveyed its assets to the other defendants, as alleged in plaintiff's third claim, to avoid paying to plaintiff the rent previously settled, is moot. Therefore the court dismisses plaintiff's third claim, for fraudulent conveyance, against all defendants and denies plaintiff's cross-motion to amend that claim. This decision constitutes the court's order and judgment of dismissal as to Barocco Foods, Inc., and Barocco Greenwich, Inc.