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. ZA IKA FOOD COMPANY LLC ET AL

Motion No. 001 Page 1 of 5 The following e

- filed documents, l isted by NYSCEF document number s (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, a n d 43

were read on this motion for S U M M A R Y JUDGMENT

.

L O U I S L

. N O C K

, J

.

B a c k g r o u n d

P l a i n t i f f c o m m e n c e d t h i s a c t i o n seek i n g damages against the d efendant Zaika Food

Company LLC ( “ Zaika ” ) and d efendant Manmohan Ahluwalia ( “ M anmohan ” ) for unpaid rent

a n d additional rent i n c o n n e c t i o n w i t h l e a s e d p r e m i s e s

. Zaika was the commercial tenant of the

Ground Floor Store a/k/a Eastern Store and Lower Level located at 230 East 44 t h Stre et, New

York, New York (the “ Leased Premises ” )

, pursuant to a written commercial Lease agreement

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

Lease

.

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

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

a n d s e e k i n g t o o b t a i n a terminat i o n o f the Lease and a re lease o f Manmohan from his

r e s p o n s i b i l i t i e s u n d e r t h e guaranty (the “ Surrender Notice ” ). However, p l a i n t i f f a s s e r t s t h a t 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 44 t h MIDTOWN HOLDINGS LLC,

Plaintiff,

- v

-

ZAIKA FOOD COMPANY LLC a n d MANMOHAN

AHLUWALIA

,

Defendant s

.

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

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

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### [* 1]656439/2021 44TH MIDTOWN HOLDINGS LLC vs. ZA IKA FOOD COMPANY LLC ET AL

Motion No. 001 Page 2 of 5 accordance with the Lease and g uaranty, the d efendants agreed that in order to properly

effectuate a termination of the Lease and g uaranty, the d efendant s were required to be current

with t h e i r monetary obligations at the time of the Surrender Notice and through the date of the

vacatur. P l a i n t i f

f c l a i m s t h a t d efendants failed to comply with their respective obligations under

the Lease and g uaranty, and as such, the Surrende r Notice was null and void, and d efendants

remain liable for the unpaid rent and additional rent

. T h e c o m p l a i n t ’ s p r a y e r f o r r e l i e f s t a t e s t h a t

i t s e e k s m o n e y j u d g m e n t s a g a i n s t Z a i k a f o r $ 2 1 5

, 0 3 2

. 3 1 ( f

o r o u t s t a n d i n g a r r e a r s t h r o u g h M a y

2 0 2 0 )

, f o r $ 9 3

, 6 0 7

. 4 2 ( f

o r o u t s t a n d i n g a rr e a r s t h r o u g h N o v e m b e r 2 0 2 1 )

, a n d $ 2

, 3 4 4

, 8 2 9

. 5 2 ( f o r

f u t u r e r e n t s )

.

P l a i n t i f f n o w s e e k s a d e f

a u l t j u d g m e n t a g a i n s t Z a i k a

, a l t h o u g h Z a i k a f i l e d a l a t e a n s w e r

w i t h c o u n t e r c l a i m s a l o n g w i t h i t s c o u n s e l ’ s a f f i r m a t i o n o f e x c u s a b l e d e f a u l t a n d s t a t e m e n t o f

p o s s i b l e m e r i t ( N Y S C E F D o c

. N o s

. 3 0

, 3 1 )

. P l a i n t i f f m o v e s f o r s u m m a r y j u d g m e n t a g a i n s t

M a n m o h a n o n h i s g u a r a n t y

.

M o t i o n f o r a D e f a u l t J u d g m e n t a g a i n s t Z a i k a

Z a i k a ’ s c o u n s e l a t t e s t s t h a t t h e a n s w e r w i t h c o u n t e r c l a i m s w e r e f i l e d l a t e o n a c c o u n t o f

a n t i c i p a t e d a d

j o u r n m e n t s

, p o s s i b l e s e t t l e m e n t

, a n d p e r s o n a l i s s u e s ( s e e

, N Y S C E F D o c

. N o

. 3 0 ¶ ¶

6

- 3 9 )

. T h e c o u r t d e e m s t h o s e c i r c u m s t a n c e s t o c o n s t i t u t e e x c u s a b l e d e f a u l t

, e s p e c i a l l y i n l i g h t o f

i t s f i l i n g o f i t s a n s w e r a n d c o u n t e r c l a i m s

, d e m o n s t r a t i n g a w i l l i n g n e s s t o d e f e n d t h e a c t i o n ( s e e

,

H u n t e r v E n q u i r e r / S t a r I n c

. , 2 1 0 A D 2 d 3 2 [ 1 s t D e p t 1 9 9 4 ] )

.

A s f o r m e r i t o r i o u s d e f

e n s e : Z a i k a a s s e r t s t h e f

o l l o w i n g

. Z a i k a p o i n t s t o a 2 0 1 9

s e t t l e m e n t a g r e e m e n t w h e r e b y a l l r e n t a r r e a r s c l a i m s w o u l d b e s e t t l e d u p o n p a y m e n t o f $ 9 0

, 0 0 0

( s e e

, N Y S C E F D o c

. N o

. 3 3 )

. Z a i k a f u r t h e r a s s e r t s t h a t i t w a s p r o m i s e d a r e n t c r e d i t o f $ 3 0

, 0 0 0

,

p o i n t i n g t o a c o n f

i r m a t i o n f r o m p l a i n t i f

f ’ s a g e n t ( s e e

, i d

. , ¶

¶ 4 5

- 4 9 )

. Z a i k a f

u r t h e r c h a l l e n g e s t h e INDEX NO. 656439/2021

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

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### [* 2]656439/2021 44TH MIDTOWN HOLDINGS LLC vs. ZA IKA FOOD COMPANY LLC ET AL

Motion No. 001 Page 3 of 5 p o r t i o n o f p l a i n t i f

f ’ s c l a i m t h a t i t o w e s a p o r t i o n o f p l a i n t i f f ’ s b r o k e r a g e e x p e n s e ( s e e

, i d

. , ¶ ¶ 5 0

-

5 2 )

. Z a i k a f

u r t h e r c h a l l e n g e s p l a i n t i f f ’ s a s s e r t i o n t h a t i t w a s u n d e r a n o b l i g a t i o n t o l e a v e i t s

e q u i p m e n t i n t h e l e a s e d p r e m i s e s f o r t h e b e n e f

i t o f p l a i n t i f

f p o s t

- v a c a t u r ( s e e

, i d

. , ¶

¶ 5 3

- 5 6 )

. 1

Z a i k a ’ s b u r d e n i n s e e k i n g t o p r e v e n t a d e f a u l t j u d g m e n t a g a i n s t i t

– e s p e c i a l l y i n l i g h t o f

i t s d e m o n s t r a t e d d e s i r e t o d e f e n d t h e a c t i o n t h r o u g h i t s f i l i n g o f i t s ( b e l a t e d ) a n s w e r w i t h

c o u n t e r c l a i m s

– i s n o t t o c o n c l u s i v e l y s u c c e e d o n i t s s t a t e d d e f e n s e s ; b u t r a t h e r

, a t t h i s p l e a d i n g

s t a g e

, t o s i m p l y “ r a i s e [ ] a n i s s u e a s t o t h e e x i s t e n c e o f a m e r i t o r i o u s d e f e n s e ” ( S o l o m o n

A b r a h a m s

, P

. C

. v P e d

d l e r s ’ P o n d H

o l d i n g C o r

p

. , 1 2 5 A D 2 d 3 5 5

, 3 5 7 [ 2 d D e p t 1 9 8 6 ] )

. T h e

c o u r t f i n d s Z a i k a ’ s s u b m i s s i o n s t o r e a c h t h a t t h r e s h o l d a n d

, t h e r e f o r e

, t h e c o u r t d e n i e s t h e

p l a i n t i f f ’ s m o t i o n f

o r a d e f a u l t j u d g m e n t a g a i n s t Z a i k a

, a n d d e e m s i t s b e l a t e d a n s w e r a n d

c o u n t e r c l a i m s ( N Y S C E F D o c

. N o

. 3 1 ) a s i t s a n s w e r a n d c o u n t e r c l a i m s i n t h i s a c t i o n

, t o w h i c h

p l a i n t i f f m a y r e p l y o n o r b e f

o r e 2 0 d a y s f

r o m t h e d a t e o f f

i l i n g h e r e o f

.

M o t i o n f o r S u m m a r y J u d g m e n t a g a i n s t M a n m o h a n 2

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

unconditional guaranty where the p laintiff proves the existence of a g uaranty, the underlying

debt, and the g uarantor's failure to perfo r m under the g uaranty ( City o f N

. Y

. v C larose Cinema

Corp. , 256 A D 2d 69 [ 1 s t D e p t 1998 ] ). On a motion for summary judgment to enforce a written

guaranty, p l a i n t i f

f m u s t prove : (i) the existence of an unconditional guaranty; (ii) the underlying

debt; and (iii) failure by the guarantor to perfo r m under the guaranty ( s e e

, i d

. )

.

1 Z a i k a a l s o a r g u e s t h a t t

h e G o v e r n o r ’ s C O V I D

- 1 9

- r e l a t e d s h u t d o w n s i n 2 0 2 0 c o n s t i t u t e a d e f e n s e ( s e e

, N Y S C E F

D o c

. N o

. 3 0 ¶

¶ 5 7

- 6 0 )

. H o w e v e r

, t h e A p p e l l a t e D i v i s i o n h a s a l r e a d y c o u n s e l e d t h a t s u c h c i r c u m s t a n c e s d o n o t

c o n s t i t u t e a d e f

e n s e t o t h e n o n p a y m e n t o f r e n t ( s e e

, e

. g

. , 5 5 8 S e v e n t h A v e

. C o r p

. v T i m e s S q u a r e P h o t

o I n c

. , 1 9 4

A D 3 d 5 6 1 [ 1 s t D e p t ]

, a

p p e a l d i s m i s s e d 3 7 N Y 3 d 1 0 4 0 [ 2 0 2 1 ] )

.

2 Z a i k a ’ s c o u n s e l i n f

o r m s t h a t h e t e c h n i c a l l y r e p r e s e n t s o n l y Z a i k a

, n o t M a n m o h a n ( s e e

, N Y S C E F D o c

. N o

. 3 0 ¶ 3 )

. M a n m o h a n h a s t i m e l y a p p e a r e d i n t h i s a c t i o n b y w a y o f f i l i n g o f a p r o s e a n s w e r ( s e e

, N Y S C E F D o c

. N o

. 1 5 )

. INDEX NO. 656439/2021

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

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### [* 3]656439/2021 44TH MIDTOWN HOLDINGS LLC vs. ZA IKA FOOD COMPANY LLC ET AL

Motion No. 001 Page 4 of 5 W h i l e i t i s t r u e t h a t t h e terms of Manmohan ’ s g uaranty are unambiguous ( s e e

, N Y S C E F

D o c

. N o

. 1 9 ) , and the r e i s n o d i s p u t e t h a t h e e x e cuted the g uaranty, t h e i s s u e s o f f a c t r a i s e d b y

Z a i k a ’ s s u b m i s s i o n s i n o p p o s i t i o n t o p l a i n t i f f ’ s m o t i o n f

o r a d e f a u l t j u d g m e n t ( d e n i e d a b o v e )

r e n d e r i t i m p o s s i b l e a t t h i s t i m e t o c o n c l u s i v e l y e s t a b l i s h M a n h o m a n ’ s l i a b i l i t y

, a s a g u a r a n t o r o f

Z a i k a

, o r t h e e x t e n t o f a n y s u c h l i a b i l i t y

. C o l l o q u i a l l y s t a t e d

, t h e g u a r a n t y p r e s e n t s a s a “ G o o d

G u y ” g u a r a n t y

, w h e r e b y t h e g u a r a n t o r ’ s o b l i g a t i o n c e a s e s u p o n s u rr e n d e r o f t h e l e a s e h o l d ( s e e

,

N Y S C E F D o c

. N o

. 1 9 § 2 )

. P l a i n t i f f a s s e r t s t h a t s a i d p r o v i s i o n p r o v i d e s n o r e l i e f t o M a n h o m a n

b e c a u s e

, i n p l a i n t i f

f ’ s v i e w

, Z a i k a h a s n o t f

u l f i l l e d i t s p a y m e n t o b l i g a t i o n s a s o f t h e d a t e o f t h e

v a c a t u r

. H o w e v e r

, a s o b s e r v e d a b o v e

, t h e i s s u e o f Z a i k a ’ s o b l i g a t i o n s

, i f a n y

, a n d t h e e x t e n t

t h e r e o f

, a r e m a t t e r s t h a t e m a i n i n i s s u e i n t h i s a c t i o n

, t h e r e b y p r e c l u d i n g s u m m a r y j u d g m e n t

a g a i n s t M a n h o m a n

. A s t h e A p p e l l a t e D i v i s i o n

, F i r s t D e p a r t m e n t

, d e c l a r e d :

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

i s s u e s o f f

a c t presented by the papers, rather than merely determining that there were

genuine i s s u e s o f f

a c t requiring a trial. The role of the court on a motion for summary

judgment is issue finding not issue resolution

.

( D e p e n d a b l e L i s t s

, I n c

. v M a l e k

, 9 8 A D 2 d 6 7 9

, 6 8 0 [ 1 s t D e p t 1 9 8 3 ]

, a p p e a l d i s m i s s e d 6 2 N Y 2 d

6 4 5 [ 1 9 8 4 ]

. )

A c c o r d i n g l y

, i t i s

O R D E R E D t h a t p l a i n t i f

f ’ s m o t i o n f

o r a d e f a u l t j u d g m e n t a g a i n s t d e f e n d a n t Z a i k a F o o d

C o m p a n y L L C i s d e n i e d ; a n d

, a c c o r d i n g l y

, i t i s

O R D E R E D t h a t t h e a n s w e r a n d c o u n t e r c l a i m s f i l e d h e r e i n a s N Y S C E F D o c

. N o

. 3 1 s h a l l

b e d e e m e d s a i d d e f

e n d a n t ’ s a n s w e r a n d c o u n t e r c l a i m s i n t h i s a c t i o n

, t o w h i c h p l a i n t i f f m a y r e p l y

( a s t o t h e c o u n t e r c l a i m s ) o n o r b e f o r e 2 0 d a y s f

r o m t h e d a t e o f f

i l i n g h e r e o f ; a n d i t i s f

u r t h e r

O R D E R E D t h a t p l a i n t i f

f ’ s m o t i o n f

o r s u m m a r y j u d g m e n t a g a i n s t d e f e n d a n t M a n m o h a n

A h l u w a l i a i s d e n i e d ; a n d i t i s f u r t h e r INDEX NO. 656439/2021

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

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### [* 4]656439/2021 44TH MIDTOWN HOLDINGS LLC vs. ZA IKA FOOD COMPANY LLC ET AL

Motion No. 001 Page 5 of 5 O R D E R E D t h a t a p r e l i m i n a r y c o n f e r e n c e w i l l b e conve ned o n M a r c h 2 0

, 2 0 2 4

, a t 1 0 : 0 0

a

. m

. , a t t h e C o u r t h o u s e

, 1 1 1 C e n t r e S t r e e t

, R o o m 1 1 6 6

, N e w Y o r k

, N e w Y o r k

.

T h i s w i l l c o n s t i t u t e t h e d e c i s i o n a n d o r d e r o f t h e c o u r t

.

E N T E R :

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

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

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