44th Midtown Holdings LLC v Zaika Food Co. LLC

2024 NY Slip Op 30585(U)

February 23, 2024

Supreme Court, New York County

Docket Number: Index No. 656439/2021

Judge: Louis L. Nock

Cases posted with a "30000" identifier, i.e., 2013 NY Slip

Op 30001(U), are republished from various New York

State and local government sources, including the New

York State Unified Court System's eCourts Service.

This opinion is uncorrected and not selected for official

publication.
656439/2021 44TH MIDTOWN HOLDINGS LLC vs. ZAIKA FOOD COMPANY LLC ET AL

Motion No. 001

Page 1 of 5

The following e-filed documents, listed by NYSCEF document numbers (Motion 001) 7, 8, 9, 10, 11, 12, 

13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 

41, 42, and 43

were read on this motion for SUMMARY JUDGMENT .

LOUIS L. NOCK, J.

Background

Plaintiff commenced this action seeking damages against the defendant Zaika Food 

Company LLC (“Zaika”) and defendant Manmohan Ahluwalia (“Manmohan”) for unpaid rent

and additional rent in connection with leased premises. Zaika was the commercial tenant of the 

Ground Floor Store a/k/a Eastern Store and Lower Level located at 230 East 44th Street, New 

York, New York (the “Leased Premises”), pursuant to a written commercial Lease agreement 

date September 19, 2017, for a term of ten years (the “Lease”). Manmohan is the guarantor of 

Lease. 

On or about November 17, 2019, Zaika provided plaintiff with a “Notice of 

Surrender/Termination,” indicating its intent to surrender the Leased Premises by May 31, 2020, 

and seeking to obtain a termination of the Lease and a release of Manmohan from his

responsibilities under the guaranty (the “Surrender Notice”). However, plaintiff asserts that in 

SUPREME COURT OF THE STATE OF NEW YORK

NEW YORK COUNTY

PRESENT: HON. LOUIS L. NOCK PART 38M

Justice 

---------------------------------------------------------------------------------X INDEX NO. 656439/2021

 MOTION DATE 05/11/2022

 MOTION SEQ. NO. 001

DECISION + ORDER ON 

MOTION

44th MIDTOWN HOLDINGS LLC,

 Plaintiff, 

- v -

ZAIKA FOOD COMPANY LLC and MANMOHAN 

AHLUWALIA,

 Defendants. 

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INDEX NO. 656439/2021

NYSCEF DOC. NO. 44 RECEIVED NYSCEF: 02/23/2024

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656439/2021 44TH MIDTOWN HOLDINGS LLC vs. ZAIKA FOOD COMPANY LLC ET AL

Motion No. 001

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accordance with the Lease and guaranty, the defendants agreed that in order to properly 

effectuate a termination of the Lease and guaranty, the defendants were required to be current 

with their monetary obligations at the time of the Surrender Notice and through the date of the

vacatur. Plaintiff claims that defendants failed to comply with their respective obligations under 

the Lease and guaranty, and as such, the Surrender Notice was null and void, and defendants 

remain liable for the unpaid rent and additional rent. The complaint’s prayer for relief states that

it seeks money judgments against Zaika for $215,032.31 (for outstanding arrears through May

2020), for $93,607.42 (for outstanding arrears through November 2021), and $2,344,829.52 (for

future rents).

Plaintiff now seeks a default judgment against Zaika, although Zaika filed a late answer

with counterclaims along with its counsel’s affirmation of excusable default and statement of

possible merit (NYSCEF Doc. Nos. 30, 31). Plaintiff moves for summary judgment against

Manmohan on his guaranty.

Motion for a Default Judgment against Zaika

Zaika’s counsel attests that the answer with counterclaims were filed late on account of

anticipated adjournments, possible settlement, and personal issues (see, NYSCEF Doc. No. 30 ¶¶

6-39). The court deems those circumstances to constitute excusable default, especially in light of

its filing of its answer and counterclaims, demonstrating a willingness to defend the action (see,

Hunter v Enquirer/Star Inc., 210 AD2d 32 [1

st Dept 1994]).

As for meritorious defense: Zaika asserts the following. Zaika points to a 2019

settlement agreement whereby all rent arrears claims would be settled upon payment of $90,000

(see, NYSCEF Doc. No. 33). Zaika further asserts that it was promised a rent credit of $30,000,

pointing to a confirmation from plaintiff’s agent (see, id., ¶¶ 45-49). Zaika further challenges the

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Motion No. 001

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portion of plaintiff’s claim that it owes a portion of plaintiff’s brokerage expense (see, id., ¶¶ 50-

52). Zaika further challenges plaintiff’s assertion that it was under an obligation to leave its

equipment in the leased premises for the benefit of plaintiff post-vacatur (see, id., ¶¶ 53-56).

1

Zaika’s burden in seeking to prevent a default judgment against it – especially in light of

its demonstrated desire to defend the action through its filing of its (belated) answer with

counterclaims – is not to conclusively succeed on its stated defenses; but rather, at this pleading

stage, to simply “raise[] an issue as to the existence of a meritorious defense” (Solomon

Abrahams, P.C. v Peddlers’ Pond Holding Corp., 125 AD2d 355, 357 [2d Dept 1986]). The

court finds Zaika’s submissions to reach that threshold and, therefore, the court denies the

plaintiff’s motion for a default judgment against Zaika, and deems its belated answer and

counterclaims (NYSCEF Doc. No. 31) as its answer and counterclaims in this action, to which

plaintiff may reply on or before 20 days from the date of filing hereof.

Motion for Summary Judgment against Manmohan

2

A plaintiff meets its prima facie burden for summary judgment to enforce an absolute and 

unconditional guaranty where the plaintiff proves the existence of a guaranty, the underlying 

debt, and the guarantor's failure to perform under the guaranty (City of N.Y. v Clarose Cinema 

Corp., 256 AD2d 69 [1

st Dept 1998]). On a motion for summary judgment to enforce a written 

guaranty, plaintiff must prove: (i) the existence of an unconditional guaranty; (ii) the underlying 

debt; and (iii) failure by the guarantor to perform under the guaranty (see, id.).

1 Zaika also argues that the Governor’s COVID-19-related shutdowns in 2020 constitute a defense (see, NYSCEF

Doc. No. 30 ¶¶ 57-60). However, the Appellate Division has already counseled that such circumstances do not

constitute a defense to the nonpayment of rent (see, e.g., 558 Seventh Ave. Corp. v Times Square Photo Inc., 194

AD3d 561 [1

st Dept], appeal dismissed 37 NY3d 1040 [2021]).

2 Zaika’s counsel informs that he technically represents only Zaika, not Manmohan (see, NYSCEF Doc. No. 30 ¶ 3).

Manmohan has timely appeared in this action by way of filing of a pro se answer (see, NYSCEF Doc. No. 15).

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Motion No. 001

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While it is true that the terms of Manmohan’s guaranty are unambiguous (see, NYSCEF

Doc. No. 19), and there is no dispute that he executed the guaranty, the issues of fact raised by

Zaika’s submissions in opposition to plaintiff’s motion for a default judgment (denied above)

render it impossible at this time to conclusively establish Manhoman’s liability, as a guarantor of

Zaika, or the extent of any such liability. Colloquially stated, the guaranty presents as a “Good

Guy” guaranty, whereby the guarantor’s obligation ceases upon surrender of the leasehold (see,

NYSCEF Doc. No. 19 § 2). Plaintiff asserts that said provision provides no relief to Manhoman

because, in plaintiff’s view, Zaika has not fulfilled its payment obligations as of the date of the

vacatur. However, as observed above, the issue of Zaika’s obligations, if any, and the extent

thereof, are matters that emain in issue in this action, thereby precluding summary judgment

against Manhoman. As the Appellate Division, First Department, declared:

In granting partial summary judgment, Special Term abused its discretion. It resolved

issues of fact presented by the papers, rather than merely determining that there were 

genuine issues of fact requiring a trial. The role of the court on a motion for summary 

judgment is issue finding not issue resolution.

(Dependable Lists, Inc. v Malek, 98 AD2d 679, 680 [1

st Dept 1983], appeal dismissed 62 NY2d

645 [1984].)

Accordingly, it is

ORDERED that plaintiff’s motion for a default judgment against defendant Zaika Food

Company LLC is denied; and, accordingly, it is

ORDERED that the answer and counterclaims filed herein as NYSCEF Doc. No. 31 shall

be deemed said defendant’s answer and counterclaims in this action, to which plaintiff may reply

(as to the counterclaims) on or before 20 days from the date of filing hereof; and it is further

ORDERED that plaintiff’s motion for summary judgment against defendant Manmohan

Ahluwalia is denied; and it is further

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Motion No. 001

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ORDERED that a preliminary conference will be convened on March 20, 2024, at 10:00

a.m., at the Courthouse, 111 Centre Street, Room 1166, New York, New York.

This will constitute the decision and order of the court.

ENTER:

2/23/2024 $SIG$

DATE LOUIS L. NOCK, J.S.C.

CHECK ONE: CASE DISPOSED X NON-FINAL DISPOSITION

GRANTED X DENIED GRANTED IN PART OTHER

APPLICATION: SETTLE ORDER SUBMIT ORDER

CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT REFERENCE

INDEX NO. 656439/2021

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