18 E. 41 St St. Partners, LLC v. Gamlieli

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2023 NY Slip Op 31511(U)

18 EAST 41 ST STREET PARTNERS LLC Plaintiff, v. ITAY GAMLIELI, Defendant.

Index No. 153624/2021, Motion Seq. No. 002

Supreme Court, New York County

May 5, 2023

Unpublished Opinion

MOTION DATE 01/17/2023

PRESENT: HON. MARY V. ROSADO, JUSTICE

DECISION + ORDER ON MOTION

MARY V. ROSADO, JUDGE

The following e-filed documents, listed by NYSCEF document number (Motion 002) 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43 44, 45, 46, 47, 48 were read on this motion to/for SUMMARY JUDGMENT(AFTER JOINDER.

Upon the foregoing documents, Plaintiff 18 East 41st Street Partners LLC's ("Landlord") motion for summary judgment is granted in part and otherwise denied without prejudice.

I. Background

Landlord owns the building located at 18 East 41 st Street New York, New York 10017 (the "Building") (NYSCEF Doc. 1 at ¶ 1). Non-party Gamlieli Zweig, Inc. ("Tenant") leased the tenth floor of the Building (the "Premises") pursuant to a written lease (the "Lease") dated December 15, 2016 (id. at ¶ 5). Defendant Itay Gamlieli ("Guarantor") executed a written guaranty of the Lease on December 12, 2016 (id. at ¶ 6). Landlord alleges that Tenant defaulted and owes arrears, and therefore Guarantor is liable to Landlord for the Tenant's arrears.

Landlord initiated this action via summons and Complaint on April 15, 2021 (id). On May 21, 2021, Guarantor filed a pre-answer motion to dismiss (NYSCEF Doc. 3). Guarantor claimed the Complaint should be dismissed pursuant to New York City Admin Code § 22-1005 (the "Guaranty Law") (NYSCEF Doc. 4). Guarantor also argued that the Complaint should be dismissed pursuant to the doctrine of impossibility (id.). On July 15, 2022, Justice Tisch issued Decision and Order denying Guarantor's motion to dismiss (NYSCEF Doc. 28). Thereafter, Guarantor filed his Answer with affirmative defenses on August 15, 2022 (NYSCEF Doc. 31).

On December 22, 2022, Landlord filed the instant motion for summary judgment (NYSCEF Doc. 32). Landlord argues that summary judgment is appropriate because it is undisputed that there is an enforceable and absolute guaranty as well as an underlying debt (NYSCEF Doc. 33). Landlord also argues that Guarantor's affirmative defenses should be dismissed because they are boilerplate and conclusory (id).

In support of its motion, Landlord provided the affidavit of Mark Torre ("Torre"), who is the Landlord's managing agent (NYSCEF Doc. 35). Torre provided sworn testimony regarding the terms of the Lease, the Guaranty, and the amount owed by Guarantor as a result of Tenant's defaults (id.). According to Torre, Tenant defaulted on the Lease by failing to pay rent on March 1, 2020 (id. at ¶ 8). Torre testified that Tenant sent an email giving notice of its intention to vacate on June 7, 2021 (id. at ¶ 9). Torre alleges that Guarantor's liability continued for another 90 days until September 7, 2021 (id.). Tenant vacated the premises on June 18, 2021 (id. at ¶ 10). Torre alleges that while Tenant was provided a rent credit under Paragraph 2(D) of the Lease, Tenant's default forfeited the credit and entitled Landlord to reimbursement of the credit (id. at ¶ 11). Torre provided a "calculation" which he says reflects the amount of arrears owed (id. at ¶ 14). Torre claims that the $76,266.67 paid as a security deposit has already been applied to the arrears (id.). Torre alleges that Guarantor has not honored its obligations in paying for Tenant's defaults (id. at ¶ 15).

Guarantor submitted opposition on January 16, 2023 (NYSCEF Doc. 42). Guarantor claims there was a verbal agreement between the parties that if Tenant provided significant improvements to the Premises, Tenant would be provided significant rebates (id. at ¶ 5). Guarantor claims that he, acting on behalf of Tenant, spent over $400,000.00 in remodeling the Premises (id. at ¶ 8). Guarantor claims it would be unjust to hold him accountable for $290,000.00 in forfeited rent credits in lieu of the fact he spent $400,000.00 in improvements to the Premises (id. at ¶ 13).

Guarantor also alleges that Landlord has not submitted sufficient documentary proof of the arrears which are due and owing (id. at ¶ 14). Guarantor further alleges that Torre has failed to provide an adequate foundation to make the "Calculation" spreadsheet admissible for purposes of this summary judgment motion (id. at ¶ 17-18). Guarantor also claims the alleged oral promise creates a genuine issue of fact which warrants denying the instant motion.

Landlord filed its reply on January 18, 2023 (NYSCEF Doc. 46). Landlord argues that Guarantor has not rebutted Landlord's prima facie showing of entitlement to summary judgment. Landlord also argues that Guarantor waived any defenses in the Guaranty. Finally, Landlord asserts that the spreadsheet containing unpaid rent is admissible and sufficient to award summary judgment.

II. Discussion.

A. Motion for Summary Judgment

Summary judgment is a drastic remedy, to be granted only where the moving party has tendered sufficient evidence to demonstrate the absence of any material issues of fact." (Vega v Restani Const. Corp., 18 N.Y.3d 499, 503 [2012]). The moving party's "burden is a heavy one and on a motion for summary judgment, facts must be viewed in the light most favorable to the non-moving party." (Jacobsen v New York City Health and Hosps. Corp., 22 N.Y.3d 824, 833 [2014]). Once this showing is made, the burden shifts to the party opposing the motion to produce evidentiary proof, in admissible form, sufficient to establish the existence of material issues of fact which require a trial. See e.g., Zuckerman v City of New York, 49 N.Y.2d 557, 562 [1980]; Pemberton v New York City Tr. Autk, 304 A.D.2d 340, 342 [1^st Dept 2003]). Mere conclusions of law or fact are insufficient to defeat a motion for summary judgment (see Banco Popular North Am. v Victory Taxi Mgt., Inc., 1 N.Y.3d 381 [2004]).

"On a motion for summary judgment to enforce a written guaranty, all that the creditor need prove is an absolute and unconditional guaranty, the underlying debt, and the guarantor's failure to perform under the guaranty." (L. Raphael NYC C1 Corp. v Solow Building Company, L.L.C., 206 A.D.3d 590, 592-593 [1st Dept 2022], quoting City of New York v Clarose Cinema Corp., 256 A.D.2d 69, 71 [1st Dept 1998]).

The existence of the absolute and unconditional guaranty is not seriously in dispute (NYSCEF Doc. 37). However, the Court agrees with Guarantor that summary judgment must be denied due to procedural errors in Torre's affidavit. Torre's affidavit purports to admit an exhibit it titles as "Calculation" (NYSCEF Doc. 35). Torre's affidavit is insufficient to authenticate the "Calculation" it seeks to admit in support of Landlord's motion (Oldham v City of New York, 155 A.D.3d 477, 478 [1st Dept 2017]).

Pursuant to CPLR § 4518(a), a document may be considered a business record and therefore exempt from the rule against hearsay if there is testimony which shows it was made in the regular course of any business at the time of the act, transaction, occurrence or event. However, as Guarantor points out, the Torre affidavit does not provide any of this necessary information to authenticate Exhibit 4 as a reliable business record (see NYSCEF Doc. 35). Torre's reply affidavit likewise does nothing to remedy the reliability issue with the "Calculation" that is submitted as evidence of the underlying debt (see generally NYSCEF Doc. 47). While the reply affidavit might address Torre's personal knowledge of the facts of this case, it fails to properly authenticate the "Calculation" as a business record pursuant to CPLR § 4518(a). This failure is fatal to Landlord's evidentiary burden on a motion for summary judgment (see Muslar v Hall, 185 N.Y.S.3d 45, 49-50 [1st Dept 2023] [finding denial of summary judgment appropriate where affidavits failed to lay proper foundation for certain records, making the documents inadmissible]; US Bank N.A. v 532 W. 187 Realty LLC, 211 A.D.3d 596 [1st Dept 2022]; see also O'Connor v Restani Const. Corp., 137 A.D.3d 672, 673 [summary judgment properly denied where affidavit failed to lay sufficient foundation as to whether document was a business record]).

As Landlord has not met its evidentiary burden in proving, through admissible evidence, the existence of an underlying debt, the motion for summary judgment is denied. Since this denial is based on a procedural technicality, the denial is without prejudice.

B. Dismissal of Affirmative Defenses

Landlord also moves to dismiss Guarantor's affirmative defenses pursuant to CPLR §3211(b). The standard of review on a motion to dismiss pursuant to CPLR § 3211(b) is similar to that used under CPLR §3211(a)(7) (87th Street Realty v Mulholland, 62 Misc.3d 213, 215 [Civ Ct, New York City 2018]). The movant bears the burden of establishing the defense or counterclaim is without merit as a matter of law (534 E. 11th St. Hous. Dev. Fund Corp. v Hendrick, 90 A.D.3d 541, 541 [1st Dept 2011]). This burden is a heavy one (Alpha Capital Anstalt v General Biotechnology Corporation, 191 A.D.3d 515 [1st Dept 2021]). The allegations in the answer must be liberally construed and viewed in the light most favorable to the non-movant (182 Fifth Ave v Design Dev. Concepts, 300 A.D.2d 198, 199 [1st Dept 2002]). It is inappropriate to dismiss a defense where there remain questions of fact requiring trial (Granite State Ins. Co. v Transatlantic Reins. Co., 132 A.D.2d 479, 481 [1st Dept 2015]). However, conclusory and boilerplate affirmative defenses should be dismissed (Bankers Trust Co. v Fassler, 49 A.D.2d 855 [1st Dept 1975]; 366 Audubon Holding, LLC v Morel, 22 Misc.3d 1108[A] [Sup. Ct., NY County 2008]).

Guarantor's first affirmative defense, which is a mere...