L. Raphael Nyc C1 Corp. v. Solow Bldg. Co.

206 A.D.3d 590

172 N.Y.S.3d 10

L. RAPHAEL NYC C1 CORP. doing business as Raphael Temple of beauty, Plaintiff,

v.SOLOW BUILDING COMPANY, L.L.C., Defendant–Appellant,Bergdorf Goodman, Inc., Defendant,Ronit Raphael Leitersdorf, Additional Counterclaim Defendant–Respondent.

16239

Index No. 651456/18

Case No. 2019–03560

Supreme Court, Appellate Division, First Department, New York.

ENTERED June 30, 2022

Rosenberg & Estis, PC, New York (Norman Flitt of counsel), for appellant.

Kapnick, J.P., Friedman, Moulton, Shulman, Pitt, JJ.

Order, Supreme Court, New York County (W. Franc Perry, III, J.), entered August 9, 2019, which, to the extent appealed from as limited by the briefs, granted the motion of defendant landlord Solow Building Company, L.L.C. (Solow) to the extent of awarding it partial summary judgment with respect to the liability of additional counterclaim defendant guarantor Ronit Raphael Leitersdorf (Leitersdorf) for the amount due and owing by plaintiff tenant L. Raphael NYC C1 Corp. (C1 Corp.) on a judgment of the Civil Court, New York County, entered June 18, 2018 (Civil Court judgment), but deferred entry of judgment as to that amount, reduced by the amount of C1 Corp.’s security deposit, until the conclusion of the action, and denied so much of the motion as was for partial summary judgment with respect to Leitersdorf's liability for use and occupancy charges still allegedly due and owing, for partial summary judgment with respect to Leitersdorf's liability for Solow's attorneys’ fees and costs incurred in the Civil Court proceeding, and for a declaration that Leitersdorf remains liable for future additional money damages and attorneys’ fees and costs that Solow may incur in connection with this action, unanimously reversed, on the law, with costs, and the motion granted to the extent of (1) awarding Solow partial summary judgment on the issue of liability on its fourth and fifth counterclaims as against Leitersdorf, (2) severing so much of those counterclaims as is predicated on the Civil Court judgment and Solow's attorneys’ fees and costs incurred in the Civil Court proceeding, and (3) remanding the case for (a) an immediate trial or hearing on the issue of damages as to those predicates for those counterclaims, and (b) further proceedings consistent with this order.

In January 2013, Solow leased the ninth floor of its building on West 58th Street in Manhattan to C1 Corp. At that time, Leitersdorf executed a broad, absolute, and unconditional guaranty in favor of Solow guaranteeing to pay for any breach of the lease by C1 Corp. or any default by C1 Corp. in connection therewith. In November 2015, C1 Corp. began withholding rent from Solow due to a dispute concerning construction taking place in the building by defendant Bergdorf Goodman, Inc. (Bergdorf). In July 2016, Solow and C1 Corp. entered into an amendment of their lease agreement in an effort to settle the dispute, in which Leitersdorf confirmed and agreed that her guaranty of the original lease agreement remained in full force and effect. Leitersdorf had previously confirmed and agreed to the validity of her guaranty in connection with a January 2014 amendment of the lease. Nevertheless, C1 Corp. continued not paying rent.

After serving C1 Corp. with the requisite notices as per their lease agreement, Solow commenced the Civil Court proceeding in February 2018, during the pendency of which C1 Corp. commenced this action against Bergdorf and Solow. The Civil Court proceeding was terminated with the entry of the Civil Court judgment, which was in favor of Solow and against C1 Corp. in the amount of $379,291.26, and which judgment remains unsatisfied.

Upon bringing Leitersdorf into this action as an additional counterclaim defendant, Solow asserted against her, as its fourth counterclaim, a cause of action for "money damages," and, as its fifth counterclaim, a cause of action for "attorneys’ fees." Solow then moved, among other things, for partial summary judgment against Leitersdorf on those counterclaims for three separate money judgments – one for the principal and interest due on the Civil Court judgment; one for use and occupancy during C1 Corp.’s holdover; and one for its attorneys’ fees, costs, and disbursements in the Civil Court proceeding – as well as a declaration that Leitersdorf would be liable to Solow for any further money damages awarded to Solow against C1 Corp. Insofar as relevant to this appeal, Supreme Court granted Solow partial summary judgment on its counterclaims against Leitersdorf for the principal and interest due on the Civil Court...