Opinion
12692/2007.
Decided January 17, 2008.
Todd V. Lamb, Esq., Cozen O'Connor, New York, NY, For plaintiff.
Jeremy Panzella, Esq., Rosabianca and Associates, PLLC, New York, NY, For defendant.
By notice of motion dated September 25, 2007, plaintiff moves pursuant to CPLR 3211(b) for an order dismissing defendant's affirmative defenses, and pursuant to CPLR 3212(a) granting him summary judgment on his causes of action for breach of contract and attorney fees. (Affirmation of Todd V. Lamb, Esq., dated Sept. 25, 2007 [Lamb Aff.]). Defendant opposes the motion on the grounds that plaintiff has failed to set forth a prima facie case and that discovery is not complete. (Affirmation of Jeremy Panzella, Esq., dated Oct. 10, 2007 [Panzella Aff.]).
I. BACKGROUND
By deed dated August 27, 1985, plaintiff purchased the premises located at 225 West 15th Street, New York, New York. By written residential lease dated July 9, 2003, non-party Vee Equities agreed to rent to Marco Bianchi a residential apartment in plaintiff's building for one year commencing July 31, 2003 at a monthly rent of $1,175. Bianchi was defendant's childhood friend who had recently emigrated from Italy and was employed at defendant's restaurant. (Affidavit of Jon Vigna, dated Sept. 7, 2007 [Vigna Affid.], Exh. B; Affidavit of Massimiliano Galeano, dated Oct. 10, 2007 [Galeano Affid.]). The lease provides in paragraph three that rent is payable the first of every month. Bianchi gave Vee Equities $2,350 in security.
In a separate writing dated July 16, 2003, defendant agreed to "guarantee and be equally liable for the payment of rent" for Bianchi, and that the guarantee "shall remain in full force and effect throughout the entire term of the lease and as long as Marco Bianchi resides in above said apartment." (Vigna Affid., Exh. D).
Plaintiff alleges that he renewed Bianchi's lease in 2004 and 2005. Although Bianchi paid only $900 of the $1,275 in rent due for May 2006, and failed to pay any rent thereafter, in July 2006, plaintiff renewed the lease for another year. ( Id., Exh. C).
On September 8, 2006, plaintiff served Bianchi with a three-day rent demand and on September 19, 2006, he filed with the court a notice of petition and petition seeking from Bianchi $5,625, comprising $375 for May 2006 and $1,275 each for June and July, $1,350 each for August and September, and not less than $2,500 in attorney fees, costs, and disbursements. ( Id., Exh. E). By judgment dated February 1, 2007, plaintiff obtained, on Bianchi's default, a possessory judgment only. ( Id., Exh. F). Plaintiff explains the delay in obtaining the judgment as resulting from "problems with the Court Clerk's Office," and alleges that Bianchi was evicted on March 1, 2007. ( Id.).
On March 16, 2007, plaintiff commenced the instant action against defendant seeking Bianchi's rent arrears as set forth in the petition, plus rent from October 2006 to his eviction, or $13,725, and additional rent in the form of attorney fees in the amount of $2,391.64. (Lamb Aff., Exhs. 1, G). In his answer, defendant denied liability, interposing 18 affirmative defenses. ( Id., Exh. 3).
On April 12, 2007, plaintiff served defendant with his first notice for discovery and inspection seeking all documents related to defendant's alleged rescission of his guaranty along with proof of transmission of those documents and all documents relating to the guaranty. ( Id., Exh. 4). Defendant objected to the demand as "overly broad, impermissibly vague and duly burdensome," and alleged, upon information and belief, that the guaranty and rescission were already in plaintiff's possession. ( Id., Exh. 5). On May 7, 2007, defendant served plaintiff with a demand for a bill of particulars and discovery demands. (Panzella Aff., Exh. 1). By letter dated May 15, 2007, plaintiff rejected defendant's demands on the ground that they were not certified pursuant to 22 NYCRR § 130-1.1(a). (Lamb Aff., Exh. 6). By letter dated May 16, plaintiff's counsel notified defendant's counsel, inter alia, of his client's denial of having ever received anything from defendant rescinding the guaranty. ( Id., Exh. 7).
II. MOTION TO DISMISS AFFIRMATIVE DEFENSES
Pursuant to CPLR 3211(b), a party may move for judgment dismissing one or more defenses on the ground that a defense is not stated or has no merit. The standard of review on such a motion is akin to a motion to dismiss pursuant to CPLR 3211(a)(7), that is, the court must consider whether there is any legal or factual basis for the defense. The truth of the allegations is assumed, and if under any view of the facts the defense is stated, the motion to dismiss must be denied. ( Matter of Ideal Mut. Ins. Co., 140 AD2d 62, 68 [1st Dept 1988]).
However, when extrinsic evidence is submitted on the motion, the allegations are not deemed true, and the standard of review is whether the defendant has a defense, not whether she has stated one. ( Biondi v Beekman Hill House Apt. Corp., 257 AD2d 76 [1st Dept 1999]). A defense is thus subject to dismissal when it is established that "the essential facts have been negated beyond substantial question" by the evidentiary material ( Id., 257 AD2d at 81), or
that "a fact indispensable to the defense is not as the defense pleads it, but to the contrary." (Siegel, Practice Commentaries, McKinney's Cons Laws of NY, CPLR C3211:39).
In deciding whether a defense is properly pleaded or has merit, the court may consider any evidence in support of or in opposition to the motion to dismiss. (CPLR 3211[c]; Siegel, NY Prac § 257 [4th ed] [affidavits, depositions, documentary proof, admissions, letters, and any other papers or proof having evidentiary impact in particular situation may be considered on motion to dismiss regardless of ground]).
A. First affirmative defense
Defendant alleges that the claims set forth in the complaint are "frivolous" and he seeks costs and attorney fees pursuant to CPLR § 8303-a. In moving to dismiss this affirmative defense, plaintiff observes that CPLR § 8303-a pertains to actions to recover damages for personal injury and is thus inapposite.
Pursuant to CPLR § 8303-a, the court shall award costs and reasonable attorney fees, if an action to recover damages for personal injury, injury to property or wrongful death is commenced or continued by a plaintiff and is found to be frivolous by the court. As the statute specifically applies only to personal injury, property damage and wrongful death actions, it is inapposite here.
B. Second affirmative defense
Defendant alleges, in pertinent part, that plaintiff caused his damages by his own breach of contract, and asks that any damages assessed against him be reduced in proportion to plaintiff's culpable conduct. Plaintiff argues that such a defense is cognizable only in an action to recover for personal injury. Defendant asserts that plaintiff failed to provide any factual or legal basis for dismissing the defense based on a breach of contract.
The defense that plaintiff's claim is barred by his own conduct is not viable here ( see Nastro Contracting Inc. v Agusta, 217 AD2d 874, 875 [3rd Dept 1995] [plaintiff's culpable conduct may not be asserted as defense to breach of contract]), and is in any event fatally conclusory. ( See Glenesk v Guidance Realty Corp., 36 AD2d 852, 853 [2nd Dept 1971] [defenses that merely plead conclusions of law without supporting facts are insufficiently pleaded]).
C. Third affirmative defense
Defendant alleges that the complaint fails to state a cause of action. Plaintiff maintains that this defense constitutes "mere surplusage" and is more properly advanced in a motion to dismiss pursuant to CPLR 3211(a)(7). Defendant argues that plaintiff's motion is legally insufficient to warrant dismissal of this defense.
Although such a defense is "surplusage," the Appellate Division, First Department, has held that it is harmless to include it in an answer and is not subject to dismissal. ( See Riland v Todman Co., 56 AD2d 350 [1st Dept 1977]). However, the defense may be dismissed if all of the other affirmative defenses set forth in an answer are dismissed. ( See Raine v Allied Artists Productions, Inc., 63 AD2d 914, 915 [1st Dept 1978]).
D. Fourth and eighth affirmative defenses
Defendant alleges, in substance, that plaintiff's damages were caused by third parties or their agents or employees. Plaintiff relies on the guaranty as documentary evidence requiring dismissal of these defenses. Defendant denies that the guaranty bars the defenses.
As a guarantor is not a party to the principal obligation and the principal debtor is not a party to the guaranty ( Midland Steel Warehouse Corp. v Godinger Silver Art, Ltd., 276 AD2d 341 [1st Dept 2000]), Bianchi's conduct has no bearing on defendant's liability under the guaranty.
E. Fifth affirmative defense
Defendant alleges that plaintiff failed to mitigate his damages. Plaintiff maintains that a landlord's duty to mitigate damage arises only when the tenant delivers possession of the vacant premises, and here, Bianchi delivered possession upon his eviction. As plaintiff seeks to hold defendant liable solely for rent accrued while Bianchi was in possession of the premises, the duty to mitigate is not relevant and, as plaintiff promptly commenced the non-payment summary proceeding, there is no factual basis for the defense.
F. Sixth affirmative defense
Defendant alleges that plaintiff failed to exercise due diligence in obtaining personal jurisdiction over tortfeasors not made party to his lawsuit and that such a failure warrants the apportionment of culpability. Again, plaintiff asserts that such a defense pertains only to personal injury actions, and denies that there is any obligation to join a tenant in a lawsuit against a guarantor of payment, as opposed to a guarantor of collection.
Not only may such a defense not be asserted in a breach of contract action ( see Nastro Contracting Inc., 217 AD2d at 875), but defendant does not address it in his opposition.
G. Seventh affirmative defense
Characterizing defendant's seventh affirmative defense as a reservation of rights, plaintiff contends it is not a defense and is thus improperly pleaded. As defendant does not allege any facts in support of this defense, it is fatally conclusory ( Glenesk, 36 AD2d at 853), and in any event, defendant does not address it in his opposition.
H. Ninth affirmative defense
Plaintiff argues that defendant's affirmative defense based on an alleged lack of personal jurisdiction was waived pursuant to CPLR 3211(e) by virtue of his failure to move for an order dismissing the action based on this defense.
Defendant does not address this portion of plaintiff's motion, and to the extent that the defense is predicated on a claim of improper service, defendant waived it by failing, within 60 days after asserting the defense, to move to dismiss the action on that basis (CPLR 3211[e]).
I. Tenth affirmative defense
Absent a factual basis for defendant's affirmative defense of laches, plaintiff seeks its dismissal. As defendant offers no facts in support of this defense, it too is fatally conclusory. ( See Glenesk, 36 AD2d at 853), and defendant does not address it. In any event, the defense of laches is not a viable defense in an action upon a guaranty. ( M. Lowenstein Sons, Inc. v Austin, 430 F Supp 844 [SDNY 1977]; 63 NY Jur 2d, Guaranty and Suretyship § 321 [as general rule, creditor's laches is not bar to recovery from guarantor]).
J. Eleventh through sixteenth affirmative defenses
Characterizing these defenses as predicated on plaintiff's prior recovery, plaintiff moves to dismiss them, alleging that having been awarded no money judgment against Bianchi in the non-payment proceeding and having provided his own affidavit stating that no portion of the damages have been paid, these affirmative defenses are meritless.
Not only are these defenses fatally conclusory ( Glenesk, 36 AD2d at 853), but defendant does not address them in his opposition papers. In any event, plaintiff's prior proceeding against Bianchi is not legally connected to the instant matter. ( Midland Steel Warehouse Corp., 276 AD2d at 341; see also Marcus Dairy, Inc. v Jacene Realty Corp., 225 AD2d 528 [2nd Dept 1996] [guaranty is separate from contract between creditor and principal debtor and thus party who enters into guaranty of payment may not assert set-offs or defenses which do not arise from guaranty]).
K. Seventeenth and eighteenth affirmative defenses
Plaintiff argues that these defenses based on, respectively, estoppel and unclean hands, must be dismissed as fatally conclusory.
Defendant asserts no factual basis for these defenses ( Glenesk, 36 AD2d at 853), and does not address them in his opposition.
III. PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT
Summary judgment may be granted upon a prima facie showing of entitlement to judgment as a matter of law, through admissible evidence sufficient to eliminate material issues of fact. (CPLR 3212[b]; Alvarez v Prospect Hosp., 68 NY2d 320, 324; Winegrad v New York Univ. Med. Center, 64 NY2d 851, 853). Failure to make such a prima facie showing requires a denial of the motion, regardless of the sufficiency of the opposing papers. ( Winegrad, 64 NY2d at 853).
When the party seeking summary judgment demonstrates entitlement to judgment, the burden shifts to the opponent to "rebut that prima facie showing" ( Bethlehem Steel Corp. v Solow, 51 NY2d 870, 872), by producing "evidentiary proof in admissible form sufficient to require a trial of material questions of fact." ( GTF Mktg. v Colonial Aluminum Sales, 66 NY2d 965, 968; Zuckerman v City of New York, 49 NY2d 557, 562). In opposing such a motion, the party must "lay bare" its evidentiary proof. ( Silberstein, Awad Miklos, P.C. v Carson, 304 AD2d 817, 818 [2nd Dept 2003]). Conclusory allegations are insufficient to defeat the motion. ( Zuckerman, 49 NY2d 562).
In deciding the motion, the court must draw all reasonable inferences in favor of the non-moving party and must not decide credibility issues. ( Dauman Displays, Inc. v Masturzo, 168 AD2d 204 [1st Dept 1990], lv denied 77 NY2d 939). As summary judgment is a drastic remedy which deprives a party of being heard, it should not be granted where there is any doubt as to the existence of a triable issue of fact ( Chemical Bank v West 95th Street Development Corp., 161 AD2d 218 [1st Dept 1990]), or where the issue is even arguable or debatable ( Stone v Goodman, 8 NY2d 8).
Pursuant to CPLR 3212(f), if the opposing party establishes that facts essential to its opposition exist but cannot then be stated, the court may deny the summary judgment or stay it pending further discovery. The party invoking CPLR 3212(f) must provide a proper evidentiary basis to support its request for further discovery. ( Global Minerals and Metals Corp. v Holme , 35 AD3d 93 , 103 [1st Dept 2006], lv denied 8 NY3d 804).
A. Contentions
In defending against this motion, defendant claims, without dispute, that although he signed the guaranty, he never saw Bianchi's lease. He also alleges that upon discovering some weeks later that Bianchi was stealing from his restaurant, he fired him and orally informed "Carol," the real estate broker for Bianchi's rental, that he was disavowing and rescinding the guaranty. He maintains that the broker agreed to contact plaintiff on defendant's behalf and subsequently informed defendant that plaintiff indicated that he would hold him to the guaranty. Defendant finally contends that he told the broker that he agreed to be responsible for the guaranty for the one year only. (Galeano Affid.).
In reply, plaintiff's attorney denies that the broker was plaintiff's agent or that defendant ever rescinded the guaranty, and argues that any conversation defendant had with the broker was insufficient, as a matter of law, to give plaintiff notice of his intent to rescind the guaranty. He also argues that defendant is not entitled to further discovery concerning Bianchi's unasserted defenses to the nonpayment proceeding absent standing to raise those issues here. (Reply Affirmation of Todd V. Lamb, Esq., dated Nov. 5, 2007).
B. Analysis
1. Plaintiff's prima facie case
A plaintiff-obligee, in an action against a guarantor, has the burden of proving all of the essential elements of the cause of action set forth, including the execution and existence of the contract on which she sues, that it is supported by consideration, and that it is valid, if its validity is placed in issue. (63 NY Jur 2d, Guaranty and Suretyship § 366). A prima facie case is established on a guaranty where it is shown that there exists an obligation for the payment of money under the guaranty, and a failure to pay in accordance with such terms. ( Id., § 346). While a guarantor is not bound by a default judgment against her principal and is free to contest her liability, the default judgment constitutes prima facie evidence against the guarantor. ( Id.). The burden of proof then shifts to the defendant to demonstrate by admissible evidence the existence of a genuine issue of fact as to her liability. ( Id., § 366).
Absent any contention in defendant's answer, apart from his irrelevant denial of having seen Bianchi's lease ( see Midland Steel Warehouse Corp., 276 AD2d at 341 [principal obligation and guaranty are separate obligations]), that the guaranty was invalid, and given the default judgment granting plaintiff possession of the premises upon proof that Bianchi failed to pay rent, plaintiff has set forth, prima facie, his entitlement to judgment. It must thus be determined whether defendant has raised an issue of fact sufficient to warrant a trial.
Although defendant agreed to remain liable for Bianchi's rent "throughout the entire term" of a one-year lease, and despite the absence of any provision for lease renewals, having also agreed to remain liable for Bianchi's rent "for as long as Bianchi resides in . . . the apartment," I find that his liability extends to the day of Bianchi's eviction. (63 NY Jur 2d, Guaranty and Suretyship § 102; see 29 Holding Corp. v Diaz , 3 Misc 3d 808, 811 [Sup Ct, Bronx County 2004] [guarantee provided for continuing liability as it was broadly worded and applied not only to renewal of lease but also if lease was changed or extended in any way]).
Defendant also, however, claims that he orally revoked his guaranty by telling the broker who, defendant alleges without dispute, was plaintiff's agent. "A continuing guaranty may be terminated by the guarantor by notice to the obligee . . . revoking his liability for obligations that may be incurred subsequent to the notice." ( 27th St. Assocs., LLC v Lehrer, 4 AD3d 165, 166 [1st Dept 2004]). Such notice may be orally conveyed ( Id.), and where a continuing guaranty does not require a written notice of termination nor prohibit oral termination, oral notice is sufficient (63 NY Jur 2d, Guaranty and Suretyship § 157). Defendant bears the burden of proving that notice was given. ( Id.).
The relationship between a principal and agent may be terminated solely by act or agreement of the parties or by operation of law. (2A NY Jur 2d, Agency § 33). An agency that is limited to a particular accomplishment of some particular transaction terminates upon completion of the transaction for the accomplishment of which it was created. (2A NY Jur 2d, Agency § 35). The burden of proving a revocation or termination of an agency relationship is on the party asserting it. (2A NY Jur 2d, Agency § 33). In Dubbs v Stribling Assocs., 274 AD2d 32, 37 (1st Dept 2000), the court's finding that the principal-broker relationship terminated by reason of the accomplishment of the transaction for which the defendant-brokers were hired was based on its factual finding that the broker was hired to find a purchaser for the plaintiffs' apartment.
Here, by contrast, there are no facts alleged concerning the scope of the agreement between plaintiff and the broker and whether it was limited to the Bianchi transaction. Consequently, there is an insufficient basis upon which to find that the agency terminated upon execution of Bianchi's lease. Plaintiff's attorney's affirmation has no probative value in that regard. ( Zuckerman, 49 NY2d at 565).
As defendant's notice to the broker would have been sufficient if given during the pendency of the agency relationship, and absent facts sufficient to establish that the agency relationship had already terminated, I find that defendant has raised a factual issue as to whether he effectively revoked the guaranty.
2. Discovery
Given this result, I need not decide whether plaintiff's motion should be denied due to the alleged outstanding discovery.
IV. CONCLUSION
Accordingly, plaintiff's motion to dismiss defendant's affirmative defenses is granted, and his motion for summary judgment is denied. This constitutes the decision and order of the court.