SMG AUTOMOTIVE HOLDINGS LLC v. BROOKLYN STORE LLC (2026)

DECISION & ORDER

In an action, inter alia, for declaratory relief, the plaintiff appeals from an order of the Supreme Court, Kings County (Lawrence Knipel, J.), dated June 9, 2025.  The order, insofar as appealed from, denied those branches of the plaintiff's motion which were for summary judgment on the first cause of action and dismissing the counterclaims, and pursuant to CPLR 3211(b) to dismiss the first, second, third, fourth, fifth, seventh, tenth, eleventh, twelfth, and thirteenth affirmative defenses.

ORDERED that the order is modified, on the law, by deleting the provision thereof denying those branches of the plaintiff's motion which were pursuant to CPLR 3211(b) to dismiss the second, third, seventh, tenth, eleventh, twelfth, and thirteenth affirmative defenses and so much of the fourth affirmative defense as alleged that the action was barred by the statute of frauds, and substituting therefor a provision granting those branches of the motion;  as so modified, the order is affirmed insofar as appealed from, without costs or disbursements.

In May 2012, the defendant leased certain commercial property to Kings Automotive Holdings, LLC (hereinafter Kings), at which Kings operated a car dealership.  The lease agreement granted Kings the option to purchase the property from the defendant (hereinafter the purchase option).  In February 2017, Kings executed a sublease agreement with the plaintiff.  Separately, Kings and the plaintiff executed an agreement to assign to the plaintiff the purchase option.  In July 2021, the parties engaged in the process to exercise the purchase option, but they failed to agree to a fair market value for the property.

The plaintiff commenced this action, inter alia, for a judgment declaring that it had standing to exercise the purchase option.  The defendant interposed an answer asserting various affirmative defenses and three counterclaims.  The plaintiff moved, among other things, for summary judgment on the first cause of action and dismissing the counterclaims, and pursuant to CPLR 3211(b) to dismiss the first, second, third, fourth, fifth, seventh, tenth, eleventh, twelfth, and thirteenth affirmative defenses.  In an order dated June 9, 2025, the Supreme Court, inter alia, denied those branches of the plaintiff's motion.  The plaintiff appeals.

Pursuant to CPLR 3211(b), “[a] party may move for judgment dismissing one or more defenses, on the ground that a defense is not stated or has no merit.”  “When moving to dismiss an affirmative defense, the plaintiff bears the burden of demonstrating that the affirmative defense is ‘without merit as a matter of law’ ” (Bank of N.Y. v Penalver, 125 AD3d 796, 797, quoting Vita v New York Waste Servs., LLC, 34 AD3d 559, 559;  see Diversified Bldg. Co., LLC v Nader Enters., LLC, 243 AD3d 542, 543).

The Supreme Court properly denied those branches of the plaintiff's motion which were pursuant to CPLR 3211(b) to dismiss the first and fifth affirmative defenses and so much of the fourth affirmative defense as alleged that the action was barred by parol evidence.  With respect to the first affirmative defense, alleging failure to state a cause of action, “ ‘no motion lies under CPLR 3211(b) to strike this affirmative defense as this amounts to an endeavor by the plaintiff to test the sufficiency of [its] own claim’ ” (Diversified Bldg. Co., LLC v Nader Enters., LLC, 243 AD3d at 544, quoting Lewis v US Bank N.A., 186 AD3d 694, 697;  see Jacob Marion, LLC v Jones, 168 AD3d 1043, 1044).  Moreover, the plaintiff failed to establish that the fifth affirmative defense, alleging lack of standing, and so much of the fourth affirmative defense as alleged that the action was barred by parol evidence were without merit as a matter of law (see Muniz v SPO Rest., LLC, 227 AD3d 1002, 1004;  Henrich v Phazar Antenna Corp., 33 AD3d 864, 867).

However, the Supreme Court should have granted those branches of the plaintiff's motion which were pursuant to CPLR 3211(b) to dismiss the second, third, seventh, tenth, eleventh, twelfth, and thirteenth affirmative defenses and so much of the fourth affirmative defense as alleged that the action was barred by the statute of frauds.  The plaintiff met its burden of demonstrating that those affirmative defenses were without merit as a matter of law, and in opposition, the defendant failed to raise, or allege, a triable issue of fact with respect to those affirmative defenses.  Moreover, the defendant has abandoned any contentions regarding those affirmative defenses, as it failed to address them in its brief (see U.S. Bank N.A. v Gonzalez, 172 AD3d 1273, 1275;  Marcum, LLP v Silva, 117 AD3d 917, 919).

The Supreme Court properly denied that branch of the plaintiff's motion which was for summary judgment on the first cause of action, which sought a judgment declaring that the plaintiff had standing to exercise the purchase option.  The plaintiff demonstrated its prima facie entitlement to judgment as a matter of law on the first cause of action through its submission of, among other things, the assignment agreement (see General Obligations Law § 5–1107).  Thus, the plaintiff established, prima facie, that it had standing to exercise the purchase option (see generally 298 Humboldt, LLC v Torres, 197 AD3d 1081 1083).

In opposition, however, the defendant demonstrated that that branch of the motion was premature.  “A party who contends that a summary judgment motion is premature is required to demonstrate that discovery might lead to relevant evidence or the facts essential to justify opposition to the motion were exclusively within the knowledge and control of the movant” (Cajas–Romero v Ward, 106 AD3d 850, 852;  see Kuhbach v Mordas, 242 AD3d 1076, 1078).  Here, the defendant demonstrated that further discovery, including the deposition of the plaintiff's president and discovery related to whether the plaintiff's assignment was valid, may result in the disclosure of evidence that could potentially impact the plaintiff's entitlement to judgment as a matter of law (see Zihui Lin v Cheng Liu, 245 AD3d 988, 990;  Kuhbach v Mordas, 242 AD3d at 1078).

Moreover, the Supreme Court properly denied that branch of the plaintiff's motion which was for summary judgment dismissing the counterclaims.  Contrary to the plaintiff's contention, it failed to meet its prima facie burden, as it failed to eliminate the existence of triable issues of fact as to the counterclaims (see Kuhback v Mordas, 242 AD3d at 1078).  Accordingly, the court properly denied that branch of the plaintiff's motion which was for summary judgment dismissing the counterclaims regardless of the sufficiency of the plaintiff's opposition papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853).

BRATHWAITE NELSON, J.P., CHRISTOPHER, VENTURA and GOLIA, JJ., concur.