HOMELINK INTERNATIONAL INC v. LAW OFFICES OF SANJAY CHAUBEY (2025)

Order, Supreme Court, New York County (Louis L. Nock, J.), entered on or about November 11, 2024, which denied defendant's motion to dismiss the complaint, unanimously affirmed, without costs.

In January 2020, defendant subleased office space from nonparty Homelink International LLC. In March 2020, defendant stopped paying rent and in November 2023, vacated the subject premises.  In February 2023, prior to defendant vacating the premises, the LLC assigned its right, title, and interest in the sublease to plaintiff Homelink International Inc. Thereafter, plaintiff commenced this action against defendant for unpaid rent from March 2020 to November 2023, and for monetary damages for late fees, interest, electricity charges, office insurance, and service charges.

Supreme Court properly denied defendant's motion to dismiss.  “On a pre-answer motion to dismiss for lack of standing, the burden lies with the defendant to establish prima facie that plaintiff has no standing to sue” (Credit Suisse Fin. Corp. v. Reskakis, 139 A.D.3d 509, 510, 32 N.Y.S.3d 93 [1st Dept. 2016]).  Here, defendant failed to meet its burden because it did not provide any evidence in support of its argument that the assignment to plaintiff of the former LLC's right, title, and interest in the sublease was invalid, or that there was no privity of contract between plaintiff and defendant.

Defendant further did not establish entitlement to dismissal of the action under Business Corporation Law § 1312(a), which bars suits by foreign corporations that do business in New York without authorization.  Defendant failed to demonstrate that plaintiff was a foreign corporation and its “activities [were] so systematic and regular as to manifest continuity of activity in New York” requiring compliance with Business Corporation Law § 1312 (see Nick v. Greenfield, 299 A.D.2d 172, 173, 753 N.Y.S.2d 45 [1st Dept. 2002]).  Moreover, Business Corporation Law § 1312 “exists to regulate foreign corporations doing business in New York State and not to enable avoidance of contractual obligation” (Acno–Tec Ltd. v. Wall St. Suites, L.L.C., 24 A.D.3d 392, 393, 806 N.Y.S.2d 551 [1st Dept. 2005]).

Nor is this action barred by res judicata under CPLR 3217(c).  The two prior nonpayment proceedings between nonparty Homelink International LLC and defendant for the nonpayment of rent were not adjudicated on the merits or dismissed with prejudice.  Rather, one of the prior proceedings was dismissed without prejudice (see 420 E. Assoc. v. Estate of Lennon, 225 A.D.2d 326, 326, 638 N.Y.S.2d 472 [1st Dept. 1996]), and the other was voluntarily discontinued by notice, making CPLR 3217(c) inapplicable.  As such, the doctrine of res judicata does not apply (see generally UBS Sec. LLC v. Highland Capital Mgt., L.P., 86 A.D.3d 469, 473–474, 927 N.Y.S.2d 59 [1st Dept. 2011]).

We have considered defendant's remaining arguments and find them unavailing.