The following e-filed documents, listed by NYSCEF document number (Motion 001) 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27 were read on this motion for SUMMARY JUDGMENT.

In this commercial-landlord-tenant action, plaintiff-landlord 85 Franklin LLC moves for summary judgment under CPLR 3212 against defendant-guarantor David Doerr Zaus on plaintiff's claims for unpaid rent and use and occupancy (U&O). Plaintiff seeks an award of $2,451,366.31: (i) $420,506.77, comprising unpaid rent through June 30, 2020, and double-rent U&O for July 2020 through November 2020; plus (ii) $1,325,859.54 in double-rent U&O for December 2020 through June 2023; plus (iii) $695,000 in indemnification for a 2023 settlement payment made by plaintiff to subtenants in exchange for their no longer fighting plaintiff's efforts to remove them. Plaintiff also seeks dismissal of defendant's affirmative defenses. Plaintiff's motion is granted, with limited reductions to the total amount claimed.

In April 2017, plaintiff leased a building located at 85 Franklin Street in Manhattan to nonparty Tribeca Heights Enterprises (tenant) for 5 years. Defendant entered into a guarantee of tenant's obligations under the lease.

In November 2019, plaintiff brought a nonpayment eviction proceeding against tenant in the commercial-landlord-tenant part of Civil Court, seeking approximately $181,000 in unpaid rent. In January 2020, plaintiff and tenant entered into a stipulation to resolve that eviction proceeding. Under the stipulation, the nonpayment proceeding would be converted into a [*2]holdover proceeding; and tenant consented to entry of a final judgment of possession for the premises and issuance of a warrant of eviction. Execution of the warrant would be stayed until the stipulation's vacancy date—originally May 31, 2020, but later extended until June 30, 2020. If tenant vacated by the vacancy date, plaintiff would receive an escrowed payment of $25,000 (slightly more than one month's rent), but would otherwise waive the $181,000 in arrears and any rent/additional rent accruing between execution of the stipulation and the vacancy date. If tenant did not vacate by the vacancy date, though, it would be responsible for the existing arrears, unpaid rent accruing through the vacancy date, and double-rent U&O for the length of the post-vacancy-date holdover.

Tenant vacated by the June 30, 2020, vacancy date. But one of tenant's subtenants did not do so. In October 2020, plaintiff moved in the Civil Court proceeding to permit execution of the warrant of eviction and for a monetary award under the stipulation. Civil Court issued a decision in December 2020 granting the motion and awarding plaintiff a judgment for $430,506.77.

However, plaintiff could not even schedule an eviction until February 2022 because of Covid-19-related restrictions on evictions. In February 2022, a city marshal sought to evict the subtenant and an additional occupant (apparently an undertenant of subtenant), but was unable to do so because they claimed to be residential tenants who could not be evicted.

In March 2022, plaintiff brought a holdover eviction proceeding against the subtenant and the undertenant in Housing Court. Plaintiff represents that the subtenant and undertenant then brought an administrative proceeding before the Loft Board claiming to be protected from eviction as loft tenants. In March 2023, plaintiff settled the holdover proceeding as against the subtenant; and in May 2023, plaintiff settled the holdover proceeding as against the undertenant. Under the settlements (and, it appears, a related settlement of the Loft Board proceeding), plaintiff obtained consent to entry judgments of possession for the premises in exchange for paying the subtenant/undertenant a total of $695,000. Plaintiff represents that it recovered possession on June 26, 2023.

Plaintiff then brought this action against defendant under his guarantee of tenant's lease obligations. Plaintiff is seeking the amount of the December 2020 Civil Court judgment, double-rent U&O from December 2020 through June 30, 2023, and the amount of the settlement payment (totaling $2,451,366.31). Plaintiff now moves for summary judgment under CPLR 3212 to obtain the claimed amounts and to dismiss defendant's affirmative defenses.

I. The Branch of Plaintiff's Motion Seeking Summary Judgment on its Claim for the $430,506.77 Awarded by Civil Court in December 2020

Plaintiff first seeks summary judgment against defendant on plaintiff's claim for the amount awarded by Civil Court in December 2020. This branch of plaintiff's motion is granted in part and denied in part.

As an initial matter, to the extent plaintiff is arguing that the December 2020 Civil Court decision necessarily establishes defendant's liability for the $430,506.77 awarded in that decision, this court disagrees. Civil Court's decision holds tenant liable for that amount under the stipulation between plaintiff and tenant. Defendant's guarantee, however, is limited by its express terms to tenant's obligations under the lease; and the stipulation was not made part of the lease.

That said, plaintiff's complaint and motion papers make clear that its cause of action against defendant for this amount is predicated on the lease, as well as on the guarantee. The court concludes that plaintiff has established its entitlement to judgment as a matter of law on [*3]this claim with respect to liability; and that plaintiff is entitled to nearly all of the damages it claims.

First, defendant is responsible for the rent arrears as of the initial execution date of the lease, and for the unpaid rent/additional rent that accrued between then and the vacancy date (approximately $264,000). Defendant does not contest his liability for this sum.

Second, defendant is responsible for holdover U&O accruing after the vacancy date. Section 6.2.1 (b) of the lease makes tenant responsible for post-termination holdover U&O, accruing at 1.5 times monthly rent for the first two months of a holdover, then at double rent thereafter. Plaintiff does not contend that tenant itself failed to vacate by the vacancy date. Rather, plaintiff's U&O claim is based on imputing the subtenant/undertenant's holdovers to the tenant for purposes of tenant's lease obligation to pay holdover U&O, and then holding defendant responsible for that (imputed) obligation. This court agrees that for these purposes, the holdover by tenant's subtenant/undertenant is properly imputed to tenant. (See Stahl Assocs. Co. v Mapes, 111 AD2d 626, 629 [1st Dept 1985]; accord Radin v Arthur Holding Co., 149 AD2d 576, 577 [2d Dept 1989].)

To the extent that defendant's party affidavit is suggesting that he should not be held liable for that holdover because the subtenant was not residing on the premises at the vacancy date, such that plaintiff could have evicted the subtenant (and the undertenant) earlier than it did, that argument is unavailing. This argument is, in substance, a defense to otherwise-applicable lease provisions that would make the tenant liable for the holdover—a defense personal to the tenant. Defendant, having executed an absolute and unconditional guarantee, cannot raise a defense of the tenant, even if that means that defendant-guarantor's liability is ultimately greater than that of tenant-obligor. (See Royal Equities Operating, LLC v Rubin, 153 AD3d 516, 517 [1st Dept 2017]; I Bldg, Inc. v Cheung, 137 AD3d 478, 478 [1st Dept 2016].)

For the same reason, there is no merit defendant's argument that he cannot be held liable for double-rent U&O because that U&O constitutes an impermissible penalty. That argument is a defense that can only be raised by the tenant, not by defendant. In any event, caselaw makes clear that a double-rent holdover U&O provision in a commercial lease does not constitute an impermissible penalty. (Victoria's Secret Stores, LLC v Herald Square Owner LLC, 211 AD3d 657, 181 NYS3d 531 (1st Dept. 2022).)

Further, in light of the unconditional character of defendant's guarantee, the court is not persuaded by his argument under CPLR 3212 (f) that additional discovery in the form of a deposition of plaintiff's principal (or former principal) is needed. Defendant does not show how information that is exclusively in plaintiff's possession and that could be elicited by the deposition would be material to opposing plaintiff's summary-judgment motion, as required under CPLR 3212 (f). (See Voluto Ventures, LLC v Jenkens & Gilchrist Parker Chapin LLP, 44 AD3d 557, 557 [1st Dept 2007].)

All that said, plaintiff is not entitled to the full $430,000 that it claims on this cause of action. That amount is derived from the terms of the stipulation, under which holdover U&O is set at double the last monthly rent, running from the vacancy date. Under the lease, which defines the parameters of defendant's liability, the U&O accruing during the first two months following the vacancy date is set at 1.5 times rent, not double rent. Thus, defendant's liability under the lease on plaintiff's first cause of action is $409,744.90, not the approximately $430,000 awarded against tenant under the stipulation in the Civil Court proceeding.

II. The Branch of Plaintiff's Motion Seeking Summary Judgment on its Claim for [*4]the $1,325.849.54 in U&O Accruing from December 1, 2020, through June 30, 2023

On plaintiff's second cause of action, plaintiff is seeking an award of U&O for the period from December 1, 2020 (the first month after the Civil Court decision), through June 30, 2023 (the last month in which the subtenant/undertenant remained in possession), at double the amount in rent that would have been owed at the end of the lease. Plaintiff's request for summary judgment on this cause of action is granted in part and denied in part.

For the reasons discussed above, the court concludes that plaintiff is entitled to summary judgment in its favor on its claim to be entitled to U&O under the lease due to the holdover of the subtenant/undertenant. The amount of U&O to be awarded is slightly less than plaintiff claims, though.

Plaintiff seeks an award of twice $21,384.67, which plaintiff contends to be the "fixed rent payable in the final month of the lease term." This court does not agree that $21,384.67 is the base amount used to determine monthly U&O here. Plaintiff relies on § 3.2.1 (e) of the lease, which enumerates the monthly rent to be paid in each year of the lease. The $21,384.67 figure is the monthly rent for the fifth and final year of the lease—assuming the lease ran for the full five years defined in the "Term" provision of the lease, § 1.2. But the lease did not run for that full period. Instead, its term was terminated by the stipulation in June 2020.

Section 1.2 of the lease provides expressly that the original five-year term of the lease is subject to "earlier cancellation or termination of this lease." And the lease's holdover provision, § 6.2.1 (b), provides for double the rent "payable in the final month of the Term," as defined in § 1.2. As a result, the applicable rent for U&O purposes is that payable in June 2020—i.e., during the lease's fourth year, not its fifth. The base figure is therefore $20,761.81, not $21,384.67. Two times that figure is $41,523.62.

Plaintiff claims entitlement to 31 months of U&O, from December 1, 2020, through June 30, 2023. This court agrees that plaintiff is entitled to the full $41,523.62 for 30 of those months. With respect to the 31st month, however, June 2023, plaintiff acknowledges that it recovered possession of the premises on June 26, 2023, not June 30. Plaintiff is thus entitled only to its pro rata share of that month.

With these limited reductions, plaintiff has shown entitlement as a matter of law on its second cause of action to $1,281,834.15.

III. The Branch of Plaintiff's Motion Seeking Summary Judgment on its Claim for Indemnification for the $695,000 Settlement

Plaintiff's third cause of action seeks to recover the amount of the settlements that it paid to the subtenant/undertenant to secure their vacatur from the premises earlier than would have occurred had the Loft Board and Civil Court holdover proceedings involving those parties been litigated to conclusion. Plaintiff contends that as a matter of law this settlement amount comes within the indemnification language of § 6.2.1 (a) of the lease, which makes tenant responsible for "any loss, cost, liability, claim, damage and expense" resulting from tenant's delay in surrendering possession upon termination of the lease. This court agrees.

With respect to the specific amount claimed, plaintiff does not explain why it paid such a large sum in settling these proceedings. On this record, considered in isolation, this court is somewhat skeptical that it would be appropriate to award that full amount in indemnity. But, as with the U&O award discussed above, only the tenant may maintain an argument for a reduction or offset in its liability under this lease provision. Defendant-guarantor may not do so. Plaintiff has thus shown that it is entitled to summary judgment on this claim for the full $695,000 [*5]sought.

Finally, for the reasons already discussed, this court agrees with plaintiff that all of defendant's affirmative defenses are meritless as a matter of law and should therefore be dismissed.

Plaintiff has not sought interest on the sums claimed (whether in the complaint or on this motion), so no interest is awarded.

Accordingly, it is

ORDERED that plaintiff's summary judgment motion is granted in part and denied in part as set forth above; and it is further

ORDERED that the affirmative defenses asserted in defendant's answer are dismissed; and it is further

ORDERED that plaintiff is awarded a judgment against defendant for $2,386,579.05, plus costs and disbursements as taxed by the Clerk upon the submission of an appropriate bill of costs; and it is further

ORDERED that plaintiff serve a copy of this order with notice of its entry on defendant and on the office of the County Clerk (by the means set forth in the court's e-filing protocol, available on the e-filing page of the court's website, https://ww2.nycourts.gov/courts/1jd/supctmanh/E-Filing.shtml), which shall enter judgment accordingly.