29TH STREET ASSOCIATES LLC v. SYED (2023)

This is an unopposed motion-action on a commercial-lease guarantee. Plaintiff, 29th Street Associates LLC, moves under CPLR 3213 for summary judgment in lieu of complaint against defendants-guarantors, Masiulia Syed and Sayed Rahman. The motion is denied.

The accelerated procedure provided for by CPLR 3213 is available only for “instruments for the payment of money only” (or for payments on judgments). An “absolute and unconditional guarantee of payment” will constitute an instrument for the payment of money only. (Punch Fashion, LLC v Merchant Factors Corp., 180 AD3d 520, 521 [1st Dept 2020].) The agreement at issue here, however, expressly provides that it guarantees payment of all of tenant's obligations under the lease, and any damages stemming from tenant's breach of those obligations (whether monetary or no). (See NYSCEF No. 7 at 1.) It is therefore a guarantee of performance; and, as a guarantee of performance, does not qualify as an instrument for the payment of money only. (See Punch Fashion, 180 AD3d at 521; Dresdner Bank AG. (NY Branch) v Morse/Diesel, Inc., 115 AD2d 64, 68 [1st Dept 1986].)

To be sure, the Appellate Division, First Department, held in iPayment, Inc. v Silverman (192 AD3d 586, 587 [1st Dept 2021]), that a commercial-lease guarantee containing “an unconditional obligation to pay all rent and additional rent owed under the sublease” was not foreclosed from CPLR 3213 treatment because the guarantor also undertook to guarantee other obligations owed by the subtenant. But the guarantee in iPayment specifically broke out in a separate sentence the guarantor's unconditional payment obligation (see Index No. 652238/2020, NYSCEF No. 7, at 1)—thus, in effect, treating that obligation as divisible from the rest. (See Dresdner Bank, 115 AD2d at 68-69 [distinguishing the guarantee before the court from an agreement that contained divisible parts addressing payment and non-payment obligations, respectively].¹ ) The guarantee here, on the other hand, deals with both payment and performance obligations together and does not describe the payment obligation as unconditional. (See NYSCEF No. 7 at 1.) It thus does not count as an instrument for the payment of money only under iPayment. For that reason, plaintiff's CPLR 3213 motion must be denied.² This motion-action is converted into a plenary action, in which defendants will be afforded 20 days to serve and file an answer or responsive motion.

Accordingly, it is

ORDERED that plaintiff's CPLR 3213 motion is denied; and it is further

ORDERED that the motion-action is converted into a plenary action, with plaintiff's motion papers deemed to be a complaint and supporting exhibits; and it is further

ORDERED that defendants shall, within 20 days of entry of this order, serve and file an answer or responsive motion; and it is further

ORDERED that plaintiff serve copies of this order with notice of its entry on defendants by certified mail, return receipt requested, directed to their respective last-known addresses.

FOOTNOTES

1.   Accord ESRT 1350 Broadway, L.L.C. v Kors, 2023 WL 1963902, at *1 n 1 (Sup Ct, NY County Feb. 9, 2023) (holding that a guarantee qualifies for CPLR 3213 treatment when it imposes performance and payment obligations in separate paragraphs and expressly provides that the guarantee of performance does not limit the guarantor's obligations under the guarantee of payment).

2.   Given this court's conclusion on this point, the court does not resolve plaintiff's additional claim for attorney fees, as provided for under the lease and incorporated into the guarantee. The court notes, however, that the affirmation of plaintiff's counsel does not attach contemporaneous documentation (such as timesheets, billing records, or the like) to support the claimed number of hours already devoted to the matter. (See NYSCEF No. 4 at ¶ 8.) To the extent that plaintiff is claiming entitlement to a particular amount in fees based on counsel's advance estimate of the time and expense needed to litigate and collect on any judgment (compare NYSCEF No. 2 at 1 [notice of motion], with NYSCEF No. 4 at ¶ 7), that estimate would not be an adequate basis to award the requested amount in fees, either.

Gerald Lebovits, J.