513 WEST 26TH REALTY LLC v. GEORGE BILLIS GALLERIES INC (2023)

Order, Supreme Court, New York County (Paul A. Goetz, J.), entered July 20, 2021, which granted defendants’ motion for summary judgment dismissing the second and third causes of action to enforce a guaranty, unanimously reversed, on the law, without costs, the causes of action reinstated, and the matter remanded for further proceedings consistent with this order.

In view of the recent decision in Melendez v. City of New York, ––– F.Supp.3d ––––, 2023 WL 2746183, 2023 U.S. Dist LEXIS 57050 [S.D.N.Y., Mar. 31, 2023, No. 20–CV–5301 [RA] finding the guaranty law (Administrative Code of City of N.Y. § 22–1005) unconstitutional, we remand the constitutional question raised by the parties here so the parties can further develop the record in the trial court for the purpose of applying the Contracts Clause test for constitutionality (see 45–47–49 Eighth Ave. LLC v. Conti, ––– A.D.3d ––––, ––– N.Y.S.3d ––––, 2023 N.Y. Slip Op. 05180 [1st Dept. 2023];  see also 721 Borrower LLC v. Moha, 204 A.D.3d 510, 511, 164 N.Y.S.3d 817 [1st Dept. 2022]).  Plaintiff is directed to serve notice on the City under CPLR 1012(b)(2) and file proof of service in order for the City to “intervene in support of its constitutionality.”  Given the constitutional question, we also reverse the dismissal of the claims for those amounts the court determined were barred by the guaranty law for a determination following the court's resolution of the constitutional issue.

Because plaintiff raised for the first time in its reply brief that the claim against defendant Billis for amounts allegedly owed outside the time period of March 1, 2020 through June 30, 2021 should have not been dismissed, the issue is not properly before this Court (see Matter of Erdey v. City of New York, 129 A.D.3d 546, 546–547, 11 N.Y.S.3d 592 [1st Dept. 2015]).  In any event, the argument is unavailing.