902 ASSOCIATES v. Wellie Chao, Defendant. (2023)

Order, Supreme Court, New York County (Debra James, J.) entered February 9, 2022, which, to the extent appealed from as limited by the briefs, granted plaintiff's motion for a default judgment against defendant Union Square 902 Suites, LLC and denied defendant's cross motion to vacate its default and to serve a late answer, unanimously affirmed, without costs.

The court providently exercised its discretion in denying defendant's cross motion to vacate its default and to serve a late answer, as defendant failed to demonstrate a meritorious defense to this action seeking to recover unpaid rent (see Simon & Schuster, Inc. v. Howe Plastics & Chems. Co., 105 A.D.2d 604, 605, 481 N.Y.S.2d 82 [1st Dept. 1984]).  Defendant's reliance on article 85.02 of the lease as a basis for an impossibility of performance defense is unavailing.  That provision provides for rent abatement during the period that defendant is “prevented from conducting its business in the demised premises by ․ Governmental Authority.”  However, defendant's principal did not aver in his affidavit that defendant's business was shut down due to the pandemic-related executive orders;  he claimed only that its revenues decreased significantly.  Further, it is undisputed that defendant did not resume paying rent even after the governmental restrictions were lifted.  Because defendant was able to continue operations, albeit in a limited capacity, its performance of the lease was not rendered impossible by the pandemic-related regulations (see Gap, Inc. v. 170 Broadway Retail Owner, LLC, 195 A.D.3d 575, 577, 151 N.Y.S.3d 37 [1st Dept. 2021];  558 Seventh Ave. Corp. v. Times Sq. Photo Inc., 194 A.D.3d 561, 562, 149 N.Y.S.3d 55 [1st Dept. 2021], appeal dismissed, 37 N.Y.3d 1040, 154 N.Y.S.3d 564, 176 N.E.3d 301 [2021]).  For similar reasons, the court also correctly rejected defendant's frustration of purpose defense (see Gap, Inc., 195 A.D.3d at 577, 151 N.Y.S.3d 37;  558 Seventh Ave. Corp. 194 A.D.3d at 561–562, 149 N.Y.S.3d 55).

Plaintiff's contention that article 27 of the lease controls is unpreserved and, in any event, unavailing.