Court Opinion

ID: 9930971
Source: CourtListenerOpinion
Date Created: 2024-02-07 21:09:16.735394+00
Date Added: 2024-06-11T12:15:54.083526
License: Public Domain

Grove Equities LLC v Diaz
               2024 NY Slip Op 30363(U)
                    January 31, 2024
           Supreme Court, New York County
        Docket Number: Index No. 152316/2023
                  Judge: Arlene P. Bluth
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.
                                                                                                                        INDEX NO. 152316/2023
  NYSCEF DOC. NO. 56                                                                                              RECEIVED NYSCEF: 01/31/2024

                                   SUPREME COURT OF THE STATE OF NEW YORK
                                             NEW YORK COUNTY
            PRESENT:             HON. ARLENE P. BLUTH                                               PART                              14
                                                                                      Justice
            ---------------------------------------------------------------------------------X      INDEX NO.          152316/2023
             GROVE EQUITIES LLC,
                                                                                                    MOTION DATE         01/23/2024
                                                         Plaintiff,
                                                                                                    MOTION SEQ. NO.         002
                                                 -v-
             RAYMOND DIAZ, AMY DIAZ                                                                   DECISION + ORDER ON
                                                                                                            MOTION
                                                         Defendant.
            ---------------------------------------------------------------------------------X

            The following e-filed documents, listed by NYSCEF document number (Motion 002) 36, 37, 38, 39, 40,
            41, 42, 43, 44, 45, 47, 49, 50, 51, 52, 53, 54, 55
            were read on this motion to/for                                                      JUDGMENT - SUMMARY                   .

                      Plaintiff’s successive motion for summary judgment is granted in part as described

            below.

            Background

                      In this commercial landlord-tenant action, plaintiff seeks to recover against defendants

            (the “Guarantors”). It argues that the tenant, non-party Two Future Dreams, Inc., leased the

            premises located at 43-45 Grove Street in Manhattan and, as of March 1, 2023, the tenant owed

            over $1.3 million in unpaid rent. The tenant ran a laundromat in the commercial space owned by

            plaintiff.

                      Previously, this Court granted plaintiff’s first motion for summary judgment as to

            liability only and directed that there be a trial on damages (NYSCEF Doc. No. 28). The Court

            observed that plaintiff, in the previous motion, appeared to ask for money owed beyond the

            statute of limitations and then “backed off” asking for it by seeking to withdraw those claims

            “without prejudice” in reply (id. at 4). The Court also emphasized that “At the trial on damages,
             152316/2023 GROVE EQUITIES LLC vs. DIAZ, RAYMOND ET AL                                                     Page 1 of 5
             Motion No. 002

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                                                                                                      INDEX NO. 152316/2023
  NYSCEF DOC. NO. 56                                                                          RECEIVED NYSCEF: 01/31/2024

            however, plaintiff will have to prove the amount and calculation of late fees” (id.). The Court

            directed that plaintiff file a note of issue for a trial, but permitted the parties to engage in limited

            discovery regarding the amount of damages sought by plaintiff.

                    Now, plaintiff moves for summary judgment again and emphasizes that recent

            developments justify a second motion. It observes that after this Court granted the previous

            motion as to liability only, plaintiff settled a holdover eviction proceeding with the tenant in

            Civil Court in a stipulation dated July 25, 2023. The stipulation was also signed by the

            defendants in this case, the guarantors. The settlement set up a payment plan for the arrears.

            Plaintiff insists that the tenant paid the first installment under the settlement but then stopped

            paying. Plaintiff argues that under this stipulation, defendants are obligated to pay as guarantors

            based on the tenant’s default.

                    In opposition, defendants characterize the amount plaintiff seeks as liquidated damages

            and insist that plaintiff now wants more than 200% of the amount plaintiff sought in the first

            motion. Defendants insist that this Court should hold a trial in damages. They admit that they

            signed the settlement in Civil Court and acknowledge that the tenant almost immediately

            defaulted.

                    Defendants point out that the tenant tried to set aside the settlement agreement on the

            ground of duress, but the Civil Court denied that effort. They insist that there are issues of fact

            surrounding whether the liquidated damages are an unenforceable penalty and the actual level of

            damages.

                    In reply, plaintiff points out that there is a Civil Court judgment against the primary

            obligor—the tenant—and so the guarantors are also liable. It insists that the defendants are

            barred from relitigating the amount of damages because of the stipulation of settlement under the

             152316/2023 GROVE EQUITIES LLC vs. DIAZ, RAYMOND ET AL                                   Page 2 of 5
             Motion No. 002

                                                            2 of 5
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                                                                                                  INDEX NO. 152316/2023
  NYSCEF DOC. NO. 56                                                                      RECEIVED NYSCEF: 01/31/2024

            doctrine of res judicata. Plaintiff also disputes defendants’ characterization of the damages as

            “liquidated damages.” It emphasizes that the stipulation of settlement contained a sum certain

            already due and is not an estimate as is often implicated in liquidated damages disputes.

            Discussion

                   A successive motion for summary judgment is properly denied except where a movant

            “offer[s] any newly discovered evidence or demonstrate[s] other sufficient cause for making the

            second motion” (Brown Harris Stevens Westhampton LLC v Gerber, 107 AD3d 526, 527, 968

            NYS2d 32 [1st Dept 2013]).

                   Here, much has happened to constitute sufficient cause for making a second motion.

            First, plaintiff, the tenant, and defendants all signed a stipulation of settlement (NYSCEF Doc.

            No. 40). That stipulation noted that the current arrears were $1,475,043.11 and that “in between

            any default under this Stipulation and the date on which Petitioner obtains possession either

            through eviction or surrender, use and occupancy shall accrue at three times the rate set forth

            herein ($14,000.00)” (id. ¶¶ 7 ,17). The stipulation also noted that the guarantors waived

            discovery in this action and “any objections to the Current Arrears being due in the Supreme

            Court action against Guarantors Raymond Diaz and Amy Diaz ("Guarantors"), [are] waived with

            prejudice” (id. ¶ 16).

                   There is no dispute that the tenant defaulted after making a single payment and the

            plaintiff entered a judgment against the tenant in July 2023 (NYSCEF Doc. No. 41). Nor do the

            defendants deny signing the stipulation of settlement in which the “Guarantors reaffirm the

            terms, covenants, and conditions of their guaranty of the Lease” (NYSCEF Doc. No. 40, ¶ 20).

                   The Court grants the motion as it fails to see what issues could be raised at a trial. The

            fact is that defendants expressly waived their rights to discovery and to objecting to the “current

             152316/2023 GROVE EQUITIES LLC vs. DIAZ, RAYMOND ET AL                               Page 3 of 5
             Motion No. 002

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                                                                                                  INDEX NO. 152316/2023
  NYSCEF DOC. NO. 56                                                                      RECEIVED NYSCEF: 01/31/2024

            arrears” in this action as part of the settlement. Accordingly, they cannot contest the amount

            plaintiff seeks. Moreover, plaintiff established its entitlement to the $1,608,089.02 it seeks

            through the rent ledger (NYSCEF Doc. No. 42), which details the amount of the judgment plus

            additional charges, including the stipulated holdover amount, that have accrued since July 25,

            2023.

                    The Court rejects defendants’ attempt to characterize the amount plaintiff seeks as

            impermissible liquidated damages and therefore as an unenforceable penalty. The fact is that the

            parties stipulated to the arrears a few months ago and the judgment was for the “current arrears,”

            not an estimate or prediction. And to the extent that defendants claim that the holdover amount

            (three times the rent) was an unenforceable penalty, the First Department disagrees (Victoria's

            Secret Stores, LLC v Herald Sq. Owner LLC, 211 AD3d 657, 657 [1st Dept 2022] [finding that a

            holdover rent at three times the monthly rent was not an unenforceable penalty]).

                    In other words, defendants cannot seek to litigate issues that they expressly waived in

            connection with the settlement. As the Civil Court judge noted in denying the tenant’s duress

            claims, “Payments of the settlement sum were staggered, with different amounts due at specific

            dates, in increasing amounts over time, which respondent had negotiated with petitioner, as

            opposed to a more commonly negotiated settlement where there is payment of a lump sum

            upfront, followed by equal payments of the remaining balance spread over time” (NYSCEF Doc.

            No. 55, Addendum at 7-8). The fact is that the parties (the landlord, the tenant and the

            guarantors) negotiated a settlement over many weeks and the tenant defaulted. That default is

            not an opportunity for the guarantors to start litigating all over again.

                    The Court denies the branch of plaintiff’s motion that seeks legal fees as neither the

            affidavit in support (NYSCEF Doc. No. 38) nor the reply papers make any arguments about legal

             152316/2023 GROVE EQUITIES LLC vs. DIAZ, RAYMOND ET AL                               Page 4 of 5
             Motion No. 002

                                                           4 of 5
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                                                                                                     INDEX NO. 152316/2023
  NYSCEF DOC. NO. 56                                                                           RECEIVED NYSCEF: 01/31/2024

            fees. And while the statement of material facts (NYSCEF Doc. No. 37) demands legal fees, it

            does not cite a specific basis to recover legal fees.

                    Accordingly, it is hereby

                    ORDERED that plaintiff’s motion for summary judgment is granted only to the extent

            that the Clerk is directed to enter judgment in favor of plaintiff and against defendants, jointly

            and severally, in the amount of $1,608,089.02 plus statutory interest from November 2, 2023

            along with costs and disbursements upon presentation of proper papers therefor.

                    1/31/2024                                                             $SIG$
                      DATE                                                        ARLENE P. BLUTH, J.S.C.
             CHECK ONE:               X   CASE DISPOSED                    NON-FINAL DISPOSITION

                                          GRANTED             DENIED   X   GRANTED IN PART             OTHER

             APPLICATION:                 SETTLE ORDER                     SUBMIT ORDER

             CHECK IF APPROPRIATE:        INCLUDES TRANSFER/REASSIGN       FIDUCIARY APPOINTMENT       REFERENCE

             152316/2023 GROVE EQUITIES LLC vs. DIAZ, RAYMOND ET AL                                  Page 5 of 5
             Motion No. 002

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