Ten West Thirty Third Associates, Plaintiff, v. ABG (2023)

This is an action to collect unpaid rent allegedly owed under a commercial lease, brought by plaintiff-landlord, Ten West Thirty Third Associates, against defendant-tenant, ABG Accessories, Inc. Plaintiff now moves under CPLR 3025 (b) to amend its complaint to add claims for unpaid rent that accrued since the filing of the complaint; and moves under CPLR 3212 for summary judgment for that greater amount. The motion for leave to amend is granted in part and denied in part; the motion for summary judgment is denied.

Landlord brought this action in March 2021, seeking $56,741.34 in allegedly unpaid rent and additional rent, plus attorney fees. (See NYSCEF No. 1 at 3-4.) This motion was filed in December 2022. Landlord contends that the alleged unpaid rent and additional rent, offset by application of tenant's security deposit, totaled $489,200.90 as of August 2022. (See NYSCEF No. 5 at 3.) Landlord seeks leave to amend its complaint to seek that larger amount in damages. This court agrees that amendment is warranted to take into account any additional damages that accrued after the complaint was filed. But landlord has not shown that its damages as of the filing of the current motion total $489,200.90.

1. The parties' lease reflects that upon a default by tenant and landlord's retaking possession, landlord may, if it chooses, relet the premises. In that event, tenant owes liquidated damages equal to the net deficiency (if any) between the amount that landlord receives in monthly rent from the new tenant and the amount that landlord would have received from the old tenant. (See NYSCEF No. 8 at 4 ¶ 18.) It is undisputed that tenant vacated the premises at the end of December 2020. (See NYSCEF No. 11.) The affidavit of landlord's managing agent indicates that landlord relet the premises (see NYSCEF No. 5 at ¶ 13); and the ledger submitted by landlord suggests that this reletting occurred in fall 2021 (see NYSCEF No. 13 at 9 [reflecting an additional-rent charge for the amount of a brokerage commission]).

But landlord has not said how much it is charging the new tenant in rent, or when those rent payments began. It is therefore unclear whether the $489,200.90 in claimed unpaid rent must be reduced to reflect landlord's mitigation of damages. Alternatively, it is possible that landlord is seeking on this motion only to add damages accrued through August 2022 because landlord began mitigating its damages thereafter through rent from the new tenant. This court lacks the information needed to tell one way or the other. As a result, the court cannot grant landlord leave to amend to add a particular amount in claimed damages—only for the amount in additional damages accrued since the filing of the complaint, taking into account any offsetting rent payments from landlord's new tenant.

2. Landlord's claim for summary judgment suffers from a similar defect. Landlord has not shown its entitlement as a matter of law to $489,200.90, because landlord's motion papers do not address whether that amount must be reduced to account for rent payments from the new tenant.

Additionally, as tenant points out, landlord's opening motion papers do not address tenant's affirmative defenses (or otherwise provide evidence that would disprove all of those defenses). Rather, landlord filed a memorandum of law discussing those defenses after tenant filed its opposition papers. (See NYSCEF No. 18.) Landlord might well have prepared that memorandum at the same time as the other papers submitted in support of the motion, and intended to file it then. (See id. at 11 [date of memorandum].) Landlord did not do so, however. As a result, tenant did not have an opportunity to respond to the arguments in the memorandum. In these circumstances, this court declines at this time to consider those arguments.

This court's conclusion on this point is bolstered by tenant's contentions that no discovery has yet taken place in this action, and that discovery may uncover evidence relevant to some of tenant's affirmative defenses. Landlord does not dispute these contentions.¹ To be sure, tenant could have sought that discovery earlier. But given that landlord took no steps to prosecute this action for 18 months after tenant filed its answer (not even filing an RJI), this court is disinclined to deem tenant to have waived discovery.²

Accordingly, it is

ORDERED that the branch of landlord's motion seeking leave to amend to increase the amount of damages sought on landlord's first cause of action is granted in part and denied in part as set forth above; and it is further

ORDERED that the branch of landlord's motion seeking summary judgment on the first cause of action for unpaid rent and additional rent is denied without prejudice; and it is further

ORDERED that the branch of landlord's motion seeking summary judgment on the second cause of action for attorney fees is denied without prejudice; and it is further

ORDERED that the parties shall appear before this court for a telephonic preliminary conference on April 14, 2023.

DATE 3/22/2023

FOOTNOTES

1.   Landlord requested and received additional time to file reply papers. (See NYSCEF No. 19). No reply was filed.

2.   Tenant also argues that this lack of prosecution warrants dismissal of the action altogether. But tenant did not file the predicate 90-day notice required by CPLR 3216 to support a failure-to-prosecute dismissal.

Gerald Lebovits, J.