In this action on commercial-lease guarantees, plaintiffs, Linden Associates L.P. and Cedar Associates L.P. (collectively, landlord), move under CPLR 3212 for summary judgment against defendants-guarantors, Elizabeth Shepherd Buccini and Sarah Easley. Landlord seeks $1,027,578.35 (with interest) in damages, plus attorney fees. Landlord's claimed damages reflect an assessment of several months of holdover use and occupancy (U&O) at 2.5 times rent, as provided for in the lease. In opposition, guarantors argue that (i) upon the expiration of the lease, their obligor (tenant) became a month-to-month tenant at the same rent that applied during the lease term; and (ii) after landlord terminated that month-to-month tenancy, tenant (and thus guarantors) became liable only for fair-market U&O—not 2.5 times the monthly lease rental.

This court concludes that no month-to-month tenancy arose after expiration of the lease; and that guarantors are liable for holdover U&O at 2.5 times rent for the full period claimed by landlord. The summary-judgment motion is granted.

It is common ground between the parties that the underlying lease expired at the end of February 2023 and that the tenant remained in possession of the premises for several more months. The questions presented by this motion pertain to the scope of guarantors' liability given those two facts: In particular, (i) whether tenant was holding over or was a month-to-month tenant in March and April 2023; and (ii) the monthly U&O for which tenant was responsible during the period of any holdover.

I. Whether Tenant was a Holdover Occupant or a Month-to-Month Tenant of the Premises in March and April 2023

A post-expiration month-to-month tenancy will arise when tenant offers, and landlord accepts, rent. (See Real Property Law § 232-c; Barton v Truesdell, 183 AD3d 979, 981-982 [3d Dept 2020]; cf. Mendez v Hidalgo, 82 Misc 3d 391, 396-397 [Civ Ct, Hous Part, NY County 2023] [discussing nature of month-to-month tenancy].) Here, though, it is undisputed that landlord never accepted rent from tenant from the expiration of the lease until tenant's vacatur of the premises. Guarantors advance several grounds for believing that a month-to-month tenancy existed in March and April 2023 even absent acceptance of rent. None are persuasive.

A. Whether Landlord's Sending a March 2023 Rent Statement Gave Rise to (or Support the Existence of) a Month-to-Month Tenancy

In mid-February 2023, landlord sent tenant a monthly rent statement for March 2023, i.e., after the lease's expiration. (See NYSCEF No. 30 at ¶ 18 [party affirmation]; NYSCEF No. 34 [statement].) This statement reflected rent obligations not only for existing rent arrears, but also a new rent obligation in the same amount that had been owed for February 2023. (See id.)

Guarantors argue that by sending this statement, "as a matter of law Landlords elected to exercise their common law option to declare a new term of no longer than a month"—i.e., a month-to-month tenancy. (NYSCEF No. 48 at ¶ 28 [internal quotation marks and alterations omitted].) Guarantors further argue that tenant understood landlord to be holding tenant to a new monthly tenancy at the same rent as before, and that it "remained in the Premises based on that understanding." (Id. at ¶¶ 33-34.)

This argument suffers from several problems. The statement on its face appears to be a standard monthly bill of the sort that would be sent each month during a lease—not a document intended to have the less-common effect of holding tenant to a new month-to-month tenancy after expiration of a multiyear lease. And the statement does not say anywhere that it is intended to have that effect, as one might expect. (See NYSCEF No. 34.) That omission is particularly noteworthy here, because the statement was sent in the middle of ongoing (but ultimately [*2]unsuccessful) negotiations between landlord and tenant about a short-term lease extension. (See NYSCEF No. 30 at ¶ 16.)

Further, the March 2023 rent obligations set out in the statement were for the same amounts, in the same format, as prior statements: a base rental amount, a credit against that amount, and an amount reflecting real-estate taxes. (See NYSCEF No. 48 at ¶¶ 18-26 [affirmation of counsel].) This format reflected the terms of a January 2022 stipulation amending the lease to provide for a reduced monthly rent relative to the monthly rental originally set by the lease. (See NYSCEF No. 31 at 49-50 ¶ 4.) This stipulation, however, expressly provides in at least three places that this reduced rent obligation (and payment thereof) was in place only through February 28, 2023 (the lease's expiration date). (See id. at 49 ¶ 4, 50 ¶ 4 [c], 50 ¶ 5.) Defendants do not explain why landlord would have held tenant to a new month-to-month lease using not only the rental amount provided for under the now-expired stipulation, but also the format for calculating that amount that had been employed while the stipulation was in effect.

Even if receiving the March 2023 rent statement in mid-February 2023 had led tenant reasonably to understand landlord to be holding tenant to a new monthly tenancy, that understanding would have been dispelled before the end of March.

On March 14, 2023, landlord's counsel sent tenant (and defendant Buccini) a letter notifying tenant that "Landlord hereby rescinds any and all offers heretofore made to Tenant with respect to any extension of the Lease term," whether made in "emails, other correspondence, or documents such as a First Amendment to Lease" that had been previously circulated. (NYSCEF No. 35.) The letter went on to state that "[p]ursuant to the terms of the Lease, the Lease term expired on February 28, 2023," such that "Tenant is currently a holdover Tenant and is subject to all penalties and provisions relating thereto." (NYSCEF No. 35.) Additionally, plaintiffs represent that two days later, on March 16, 2023, landlord sent tenant an invoice that itemized rent owed by tenant for January through March 2023—including holdover rent for March, assessed at 2.5 times monthly rent pursuant to the holdover provision of the lease. (See NYSCEF No. 30 at ¶ 17 [party affirmation]; NYSCEF No. 53 at 4 [transmission email]; NYSCEF No. 33 [invoice].)

On March 17, and again on March 23, tenant attempted to wire landlord an amount equal to one month's rent/additional rent. (See NYSCEF No. 48 at ¶ 39 [guarantors' attorney's affirmation]; NYSCEF No. 53 at 2-4 [email reflecting wire transfers].) Landlord returned both wires. (NYSCEF No. 30- at ¶ 23 [landlord's party affirmation].) And on March 23, landlord's counsel sent tenant (and defendant Buccini) a letter reiterating that "[p]ursuant to the terms of the Lease, your term expired on February 28, 2023," and therefore that as set out in the March 14 letter, "Tenant is a holdover Tenant and is subject to all penalties and provisions relating thereto," including but not limited to holdover rent at 2.5 times base rent. (NYSCEF No. 54 at 1.) The letter also included an offer to extend the expired lease through June 30, 2023 (retroactive to March 1), conditioned on tenant's promptly (i) paying back rent for January and February 2023; (ii) paying base/additional rent for March 2023; and (iii) paying in advance base/additional rent for April through June 2023. (See id. at 1 & n 1.) Nothing in the record indicates that tenant accepted this offer.

In short, the record reflects that in the weeks following the lease's expiration lease, landlord refused (twice) to accept rent from tenant; and that landlord expressly notified tenant three different times that tenant was holding over in the premises at 2.5 times monthly rent—not occupying the premises at monthly rent as a month-to-month tenant. This conduct far outweighs any inference that tenant (or this court) might reasonably draw from the March 2023 rent statement that landlord had sent to tenant before the lease expired. No reasonable jury could conclude in guarantors' favor on this point.

B. Whether Landlord's Sending Tenant a 30-Day Termination Notice Gave Rise to (or Support the Existence of) a Month-to-Month Tenancy

Guarantors also rely on the fact that, in addition to the correspondence discussed above, landlord sent tenant a notice, dated March 23, 2023, stating that it was a 30-day termination of tenant's "tenancy of the above described Premises now held by you under month-to-month hiring"; and warning tenant that if it did not vacate by the April 30 termination date, landlord would bring a holdover eviction proceeding and seek base/additional rent and holdover U&O. (See NYSCEF No. 36 [termination notice]; NYSCEF No. 48 at 9-12 [attorney affirmation].)

Guarantors do not, however, provide any authority for the proposition that serving a notice stating that it is terminating a month-to-month tenancy can itself give rise to a month-to-month tenancy (prospectively or retrospectively) where no tenancy previously existed. To the extent guarantors contend that this termination notice is evidence merely that landlord understood them to be month-to-month tenants in the premises, this contention is insufficient to raise a material dispute of fact. Any argument by tenant to this effect cannot be reconciled with landlord's repeated statements to tenant—made three times in the preceding 10 days—that tenant was a holdover occupant responsible for holdover U&O in the amount of 2.5 base rent.^[FN1]

To the extent guarantors argue that the notice led tenant to understand landlord to be treating them as month-to-month tenants, and that tenant detrimentally relied on that understanding (see NYSCEF No. 48 at ¶¶ 50, 52), guarantors have not raised a material dispute of fact about the reasonableness of that reliance. In particular, an obvious inconsistency existed between the pre-expiration rent statement for March 2023 and the language of the notice (dated March 23), on the one hand, and landlord's statements on March 14, March 16, and March 23 that tenants were holding over, and landlord's refusals on March 17 and March 23 to accept tenant's rent-payment wires, on the other. That inconsistency would have put tenant on inquiry notice about whether the language of the termination notice accurately reflected landlord's understanding of tenant's occupancy of the premises (and whether that occupancy was a holdover or a monthly tenancy). Yet guarantors do not contend that tenant's representatives ever contacted landlord to inquire about, or seek to clarify, that inconsistency. Nor do they explain [*3]why reliance on the notice (or on the March rent statement) could have been reasonable absent inquiry.

C. Whether Landlord's Representations in the Related Civil Court Summary Proceeding Estop Landlord from Disputing the Existence of a Month-to-Month Tenancy

Guarantors contend that landlord's position in this action that tenant held over beginning March 1, 2023, is "irreconcilably inconsistent" with landlord's sworn statements in the related Civil Court Part 52 eviction proceeding—and therefore, implicitly, that landlord is judicially or equitably estopped from departing from those sworn statements. (NYSCEF No. 30 at ¶ 61.) No estoppel exists on this record.

Judicial estoppel "precludes a party who assumed a position in one legal proceeding and prevailed in maintaining that position from assuming a contrary position in another proceeding simply because the party's interests have changed." (Ghatani v AGH Realty, LLC, 181 AD3d 909, 911 [2d Dept 2020].) No judicial estoppel arose here because landlord did not prevail in the Part 52 eviction proceeding on the position that tenant occupied the premises pursuant to a now-terminated month-to-month tenancy.

It is true, as guarantors contend, that landlord's eviction-proceeding petition alleges that after the expiration of the lease tenant "held over and became a month-to-month tenant at the Premises," that this tenancy was terminated "after the service of a 30-Day Notice of Termination of Month-to-Month Tenancy," and that tenant remained in possession after the "expiration of the term of the month-to-month tenancy." (Linden Assoc. L.P. v Kirna Zabete Inc., Index No. LT-310039-23/NY, NYSCEF No. 1 at ¶ 2.) But guarantors do not identify any Civil Court ruling endorsing this position, or otherwise finding for landlord based this position.

To the contrary, the sole favorable ruling for landlord thus far in the Civil Court proceeding was the denial of tenant's motion to dismiss. (See Index No. LT-310039-23/NY, NYSCEF No. 21.) And tenant brought that motion on the specific ground that landlord's petition failed to state properly the facts on which it was based, because the month-to-month tenancy allegation quoted above was contradicted by the petition's later allegation that tenant "hold[s] over and continue[s] in possession of the Premises without the permission of Petitioners after the expiration of the Lease term" (id. at ¶ 5). (See Index No. LT-310039-23/NY, NYSCEF No. 8 [notice of motion]; NYSCEF No. 9 at 3-6 [affirmation of counsel].)

Paragraph nine of landlord's affirmation in opposition to the motion does say, as tenant now emphasizes (see NYSCEF No. 48 at ¶ 59), that "[n]otwithstanding the Termination Notice, Tenant remained in possession of the Premises without the consent of Landlords, becoming a holdover tenant of the Premises commencing May 1, 2023" (Index No. LT-310039-23/NY, NYSCEF No. 12 at ¶ 9). But ¶ 10, on the same page, discusses the March 14, 2023, letter that, the affirmation says, "unequivocally notified Respondent that Petitioners were not willing to entertain any additional offers to amend the Lease and that Tenant was a holdover." (Id. at ¶ 10.) That paragraph also represents that tenant owed landlord $480,486.37 through April 30, 2023—a [*4]sum that would necessarily reflect the assessment of holdover U&O at 2.5 times base rent for March and April 2023. (See Index No. 653206/2023, NYSCEF No. 39 [landlord's damages calculation].) Additionally, ¶ 13 represents that the termination notice was sent out of concern that tenant's wire transfer of a monthly rent payment, and a delay by landlord's bank in returning the wire, "could have potentially 'opened the door' to an allegation by Tenant that a rental payment was made and deposited by Landlords even though it was forcibly 'given' and 'held' through no fault of Petitioners." (Index No. LT-310039-23/NY, NYSCEF No. 12 at ¶ 13.)

Landlord's opposition to the motion to dismiss, in other words, does not take an unequivocal position on whether tenant was (or was not) a month-to-month tenant in March and April 2023. Nor, for that matter, does Civil Court's denial of the motion. That decision says only that landlord "has sufficiently pled its claims with requisite particularity and sufficient supporting documentation to apprise [tenant] of claims against it." (Index No. LT-310039-23/NY, NYSCEF No. 21.) That conclusion does not endorse, or entail accepting, the position that a month-to-month tenancy existed in March/April 2023.

Landlord is therefore not judicially estopped now from arguing that tenant's occupancy in those months was solely a holdover. Guarantors do not contend that they (or tenant) detrimentally relied on statements by landlord in the Civil Court proceeding that tenant was a month-to-month tenant in March/April 2023. And to the extent that the somewhat contradictory and inartful drafting of landlord's Civil Court papers constitutes an informal judicial admission providing some evidence that a month-to-month tenancy existed during those months, that evidence is not sufficient to create a material dispute of fact.

II. Whether Guarantors are Liable for the Full Amount Claimed by Landlord

In moving for summary judgment, landlord seeks an award of (i) unpaid base rent/additional rent for January and February 2023; (ii) holdover U&O, assessed at 2.5 times monthly base rent, plus additional rent, for March through July 2023; (iii) interest on these rent and U&O arrears; and (iv) attorney fees. Landlord has established its entitlement to these sums as a matter of law.

1. January and February 2023 Rent

It is undisputed that rent/additional rent, in the amounts claimed by landlord, remains outstanding for January and February 2023. Guarantor Buccini asserts in her affirmation, though, that the March 17, 2023, and March 23, 2023, wire transfers from tenant to landlord were payments of rent for January and February 2023 (see NYSCEF No. 49 at ¶ 41); and guarantors argue that because landlord refused to accept these transfers from tenant, it cannot later pursue guarantors for that amount in rent (see NYSCEF No. 51 at 21). But guarantors do not identify any contemporaneous evidence that tenant intended—or that landlord understood—those [*5]transfers to be payments of back rent; as opposed to post-expiration month-to-month rent.^[FN2]

In any event, guarantors provide no authority for the proposition that landlord was required to accept the tender of back rent from tenant, rather than seeking it later from guarantor. At most, guarantors cite Appellate Division precedent for the unremarkable proposition that a guarantor may not be held liable to a creditor unless and until the principal obligor defaults. (See NYSCEF No. 51 at 21, citing Sweeters v Hodges, 256 AD2d 185, 185 [1st Dept 1998].) But as landlord points out (NYSCEF No. 66 at 5), this principle is irrelevant here: Tenant did default with respect to January and February rent, by failing to pay it on time.

Guarantors are thus responsible for base and additional rent for January and February 2023.^[FN3]

2. Holdover U&O for March through July 2023

As discussed above in Point I, this court has concluded that tenant was holding over from the day after the lease expired, March 1, 2023, until tenant vacated the premises, July 19, 2023 (see NYSCEF No. 30 at ¶ 28). The lease provides that if tenant holds over, it must pay U&O pursuant to a formula set in the lease. (See NYSCEF No. 31 at art 56 [lease].) Under the formula, tenant must pay the full amount in monthly U&O for "each calendar month or part thereof (even if such part shall be a small fraction of a calendar month)." (Id.) That amount comprises (i) 2.5 times the highest monthly base rent set by the lease; plus (ii) the monthly additional rent that "would have been payable pursuant to this lease had this lease not expired"; plus (iii) any other amounts in additional rent that would have been payable had the lease not expired. (Id. at art 56 [a]-[c].) Landlord has provided a chart setting out the amounts in U&O, based on this formula, that it claims for March through July 2023. (See NYSCEF No. 39.) This court is satisfied that landlord's calculations—which guarantors do not dispute—are accurate.

Guarantors argue that landlord may not collect these amounts from them, because any obligation to pay U&O after the end of the tenancy "is not an obligation 'under the Lease' and is therefore outside the scope of the guaranty." (NYSCEF No. 48 at ¶ 82.) This argument is without [*6]merit. Article 56 of the lease, governing holdover U&O, expressly provides that its provisions "shall survive the expiration or sooner termination of this Lease." (NYSCEF No. 31 at art. 56.) Additionally, the guarantees provide that they cover "performance of all of Tenant's monetary obligations under and in accordance with the Lease."^[FN4] (NYSCEF No. 32 at 1, 4 [emphasis added].) At a minimum, this guarantee encompasses payment of post-expiration holdover U&O that is expressly provided for in the lease.

Landlord has established its entitlement to these sums as a matter of law.^[FN5] Landlord's request to amend the pleadings to conform to the proof (i.e., to seek U&O also for July 2023) is granted.

3. Interest and Attorney Fees

Adding the amounts owed by guarantors for unpaid rent/additional rent for January and February 2023, and the amounts owed by guarantors for holdover U&O for March through July 2023, landlord is entitled to collect rent/U&O arrears totaling $1,027,578.35. Landlord is also entitled to interest on these arrears. At oral argument on this motion, landlord's counsel stated that landlord was seeking interest computed on the total amount of arrears, running from July 2023—the last month in which arrears were incurred. Given that guarantors would be responsible for U&O for the full month of July regardless whether tenant occupied the premises for one day in July or for the full 31 days, this court concludes that the appropriate course is to award interest on the first day after the period for which tenant (and thus guarantors) are being assessed U&O, or August 1, 2023.

Landlord also seeks an award of attorney fees incurred in this action, as provided for in the guarantees. Landlord's request for fees is granted. The amount of those fees will be determined by motion made on notice within 30 days of service of a copy of this order with notice of its entry.

Accordingly, it is

ORDERED that the branch of landlord's motion seeking to conform the pleadings to the proof is granted; and it is further

ORDERED that the branch of landlord's motion seeking summary judgment in its favor is granted, and landlord (Linden Associates L.P. and Cedar Associates L.P.) is awarded a judgment against guarantors Elizabeth Shepherd Buccini and Sarah Easley, jointly and severally, for $1,027,578.35, with interest on that sum running from August 1, 2023, plus costs and disbursements as taxed by the Clerk upon the submission of an appropriate bill of costs; and it is further

ORDERED that landlord may enter a supplemental judgment for the amount of its reasonable attorney fees incurred in this action, with the amount of those fees to be determined by motion made on notice within 30 days of service of notice of entry; and it is further

ORDERED that landlord serve a copy of this order with notice of its entry on all parties 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.