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FILED: NEW YORK COUNTY CLERK 06/27/2022 12:36 PM INDEX NO. 161105/2021
NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 06/27/2022
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
FIFTH PARTNERS LLC,
Index No.: 161105/2021
Plaintiff,
-against-
PUNCH HOUSE FLATlRON LLC, JOSEPH W. FOLEY
and NADA VASILIJEVIC,
AFFIDAVIT IN SUPPORT
Defendants.
STATE OF NEW YORK )
:ss:
COUNTY OF NEW YORK )
RYAN MEHRA, being duly sworn, deposes and says:
1. I am a member of plaintiff FIFTH PARTNERS LLC (“Plaintiff” or “Landlord”)
and am fully familiar with the facts and circumstances set forth herein pertaining to this
action against defendants PUNCH HOUSE FLATlRON LLC, JOSEPH W. FOLEY and
NADA VASILIJEVIC (collectively “Defendants”, and with Plaintiff, the “Parties”).
2. I submit this affidavit in support of Plaintiff’s motion for an order seeking,
among other things, summary judgment against Defendants.
3. Plaintiff should be awarded summary judgment because defendant Punch
House Flatiron LLC (“Tenant” or “Punch House”), as the commercial tenant, defaulted
under its Lease by, among other things, unilaterally abandoning the Premises and
abrogating the parties’ Lease. Defendants Joseph W. Foley (“Guarantor” or “Foley”) and
Nada Vasilijevic (“Co-Guarantor” or “Vasiljevic”) are personally obligated for the amounts
due under an absolute and unconditional written guaranty (Foley and Vasiljevic hereafter
referred to as “Guarantors”).
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4. I oversee all aspects of managing the building known as 19 West 21st Street,
New York, New York 10010 (the “Building”), including rent collection, billing, leasing, and
lease compliance.
5. All records are maintained in a contemporaneous method on an office
computer and, in some cases, in hard copy. They are kept in the normal course of
business, and payments are recorded cotemporaneous with the event. It is part of my
duties to keep and maintain these records.
6. The exhibits referenced and attached below (e.g., the Lease and Guaranty,
each defined below) are copies of the original documents kept in Plaintiff’s office file.
Copies of each were made and compared and they are complete duplicate copies of the
original. These agreements are kept in the normal course of business, and it is part of my
duties to maintain, and ensure Landlord’s maintenance of, such records.
7. This action seeks a judgment against Defendants for all outstanding rent
and additional rent due under the Lease and Guaranty. All amounts are due pursuant to
the express terms of this agreement, as set forth below.
8. None of Defendants’ affirmative defenses create an issue of fact barring
summary judgment and their one counterclaim has no merit. The accompanying
memorandum of law addresses Plaintiff’s rights to the relief sought. A copy of the
Summons and Complaint, and Defendants’ Amended Answer are attached as Exhibits
“A” and “B” respectively.
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FACTUAL BACKGROUND
A. The Parties, the Lease, and this Action
9. Plaintiff was and still is the deed owner of the Building. A copy of the deed
is annexed hereto as Exhibit “C”.
10. Punch House was the commercial tenant of the ground retail space in the
Building (the “Premises”), pursuant to a written lease agreement dated June 14, 2021,
made between Plaintiff, as landlord, and Punch House, as tenant (the “Lease”). (Exhibit
“D” – Lease). The Lease was for a term of five years which term commenced on July 1,
2021 and was due to expire on June 30, 2026. (Exhibit “D”).
11. In consideration of Landlord executing the Lease with Tenant, Guarantors
executed a “Good Guy” guaranty of Lease, sworn to on June 18, 2021. (Exhibit “E” –
Guaranty).
12. Exhibits “D” and “E” are copies of the original Lease and Guaranty. Both are
kept in Landlord’s office file. Both are a complete duplicate copy of the original and I
compared the copies to the original and they are the same. The Lease and Guaranty are
kept in the normal course of my duties as a member.
13. Tenant signed the Lease and collected the keys on June 18, 2021. Almost
immediately afterwards, Defendants emailed Plaintiff explaining that they wanted to
commence renovations in the Premises. (Exhibit “F” – email correspondence).
14. On or about December 1, 2021, Foley, as Tenant’s principal, returned the
keys to the Premises to Landlord’s agent, and Tenant unilaterally abandoned the
Premises as of that date. Landlord never gave Tenant permission to abandon the
Premises, nor did it waive any of its rights under the Lease.
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15. Tenant did open for business but failed to pay Landlord any further
payments other than that paid upfront at the time of the Lease’s execution.
B. Relevant Lease Terms
16. Pursuant to Lease’s preamble, Tenant agreed to pay Landlord rent in
equal monthly installments on the first day of each and every month, without any set-
off or deduction whatsoever (see Exhibit “D”- Lease).
17. Pursuant to Lease at ¶ 40.1, Tenant agreed to pay Landlord base rent
during the Lease term as follows:
Base Rent Period Annual Amount
July 1, 2021 – June 30, 2022 $159,000.00
July 1, 2022 – June 30, 2023 $210,000.00
July 1, 2023 – June 30, 2024 $222,000.00
July 1, 2024 – June 30, 2025 $240,000.00
July 1, 2025 – June 30, 2026 $247,000.00
18. Pursuant to the Lease at ¶ 40.01, Tenant was given a conditional rent
abatement for the second, third and fourth month of the first year’s rental period after
Tenant remitted the first month's rent:
Upon execution of this Lease, Fixed Rent for the first month
of the Lease shall be reduced to $0.00 to give effect to the fact
a full month's rent was received by the Owner at the signing
of this Lease. Provided no default exists under this Lease,
Fixed Rent for the following three (3) month(s) shall be
reduced to $0.00 to give effect to a Rent Abatement …
(Exhibit “D” - Lease)
19. Pursuant to the Lease at ¶ 41.1, Tenant agreed to pay for utilities, including
gas and electrical metered usage as metered by Landlord:
Tenant shall make arrangements directly with the utility
company for furnishing electric current and natural gas and
shall timely pay all charges, including any necessary charges
for installation, conversion or maintenance of electric meters
during the term of the Lease and prior to the Commencement
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Date, if such charges are incurred, to the utility company …
(Exhibit “D”- Lease)
20. Pursuant to the Lease at ¶ 28, Tenant agreed to pay Landlord, as additional
rent, water meter charges of $300.00 per month:
There is no direct water meter recording Tenant's
consumption of water within the Demised Premises therefore,
Tenant shall pay to Owner as Additional Rent the sum of
$300.00 on the first day of each month during the term of this
Lease for Tenant's consumption of cold water … (Exhibit “D”)
21. Pursuant to the Lease at ¶ 42, Tenant agreed to pay Landlord, as additional
rent, a percentage increase in the real estate taxes assessed against the Building above
the base tax year of 2021/2022 at three-point four (3.4%) percent of any increase:
… 42.1.3 The term "Owner's Basic Tax Liability" shall mean
the Taxes attributable to the Land and the Building for the New
York City fiscal year 2021/2022, and "Owner's Base Year"
shall mean the New York City 2021/2022 fiscal, commencing
on July 1st, 2021.
42.1.4 The term "Tenant's Proportionate Share" shall mean
three-point four (3.4%) percent.
42.2 If Taxes payable in any Escalation Year falling wholly or
partially within the Term shall be in an amount constituting an
increase above Owner's Basic Tax Liability, Tenant shall pay
monthly as Additional Rent for such Escalation Year a sum
equal to 1/12th of Tenant's Proportionate Share of the amount
by which Taxes for such Escalation Year exceed Owner's
Basic Tax Liability. Tenant shall, if Owner so elects, pay its
proportionate share of Taxes monthly in advance as
Additional Rent … (Exhibit “D”).
22. Pursuant to the Lease at ¶ 46, Tenant agreed to pay Landlord, as additional
rent, a late charge of six percent (6%) of the monthly balance of rent and additional rent
outstanding past the tenth day of the month:
If Tenant shall fail to pay any installment of Fixed Rent or
Additional Rent within ten (10) days from the date billed,
Tenant shall be required to pay a late charge of six (6) cents
for each dollar unpaid. Such charge is to be computed
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retroactively to the first day of the month Rent was not paid
timely. The late charge described herein is intended to
compensate Owner for additional expenses incurred in
processing late payments and is not intended to alter or
substitute for any other security to which Owner may be
entitled under this Lease. (Exhibit “D”).
23. Pursuant to the Lease at ¶ 18, Tenant agreed to pay Landlord, as liquidated
damages, inter alia, the rent and additional rent for the term constituting the balance of
the term of the Lease, as if it had remained through the completion of the lease, together
with such expenses incurred in connection with re-letting the Premises, including such
costs in putting the Premises in good order, including alterations, repairs, replacements,
legal expenses, brokerage fees and advertising fees:
In case of any such default, reentry, expiration and/or
dispossess by summary proceedings or otherwise, (a) the
Rent, and Additional Rent, shall become due thereupon and
be paid up to the time of such reentry, dispossess and/or
expiration, (b) Owner may relet the premises or any part
thereof, either in the name of Owner or otherwise, for a term
or terms, which may at Owner's option be less than or exceed
the period which would otherwise have constituted the
balance of the term of this Lease and may grant concessions
or free rent or charge a higher rental than that in this Lease,
and/or (c) Tenant or the legal representatives of Tenant shall
also pay Owner as liquidated damages for the failure of
Tenant to observe and perform said Tenant's covenants
herein contained, any deficiency between the rent hereby
reserved and/or covenanted to be paid and the net amount, if
any, of the rents collected on account of the subsequent lease
or leases of the Demised Premises for each month of the
period which would otherwise have constituted the balance of
the term of this Lease. The failure of Owner to relet the
premises or any part or parts thereof shall not release or affect
Tenant's liability for damages. In computing such liquidated
damages there shall be added to the said deficiency such
expenses as Owner may incur in connection with reletting,
such as legal expenses, attorneys' fees, brokerage,
advertising and for keeping the Demised Premises in good
order or for preparing the same for reletting. Any such
liquidated damages shall be paid in monthly installments by
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Tenant on the rent day specified in this Lease … (“Exhibit “D”
- Lease)
24. Pursuant to the Lease at ¶ 19, Tenant agreed to pay and reimburse
Landlord for any expenditure, including but not limited to, reasonable attorney's fees in
the event Tenant defaulted under the Lease:
if Owner, in connection therewith or in connection with any
default by Tenant in the covenant to pay Rent hereunder,
makes any expenditures or incurs any obligations for the
payment of money, including but not limited to attorney's fees,
in instituting, prosecuting or defending any actions or
proceeding, such sums so paid or obligations incurred with
interest and costs shall be deemed to be Additional Rent
hereunder … (Exhibit “D” - Lease).
C. Relevant Guaranty Provisions
25. Pursuant to the Guaranty, Guarantors agreed to be personally liable for
all of Tenant’s Lease obligations including, but not limited to, its monetary
responsibilities. It is an absolute, unconditional, and ongoing guaranty of payment.
(Exhibit “E”).
26. The Guaranty contains a conditional limitation clause providing that:
The undersigned guarantees to Owner, its successors and
assigns, that he/she will advise Owner of Tenant's intention
to vacate the Demised Premises a minimum of six (6)
months in advance and that he/she will pay to Owner all
Minimum Rent, Additional Rent and any and all other
charges that have accrued or may accrue under the terms
of the Lease (hereinafter collectively referred to as
“Accrued Rent”), to the latest date that Tenant … will have
completely performed the following:
1. Vacated and surrendered the Demised Premises in
broom clean condition to Owner pursuant to the terms of
the Lease, and
2. Delivered the keys to the Demised Premises to Owner,
and
3. Paid to Owner all Accrued Rent to and including the date
which is the later of (a) the actual receipt by Owner of said
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Accrued Rent, (b) the surrender of the Demised Premises,
or (c) receipt by Owner of the keys to the Demised
Premises. (Exhibit “E”) (emphasis added).
27. Aside from returning the keys, none of the conditions in the good guy
guaranty were met. Thus, Guarantors’ liability continues.
PLAINTIFF IS ENTITLED TO SUMMARY JUDGMENT
D. First Cause of Action (Monetary Judgment against Tenant)
28. Tenant breached the Lease by failing to pay Landlord rent and additional
rent when due, and by abandoning the Premises as of December 1, 2021, without
permission or authorization.
29. Tenant owes Plaintiff pre-abandonment rent and additional rent totaling
$32,767.66, 1 calculated as follows:
Base Rent November 2021 $13,250.00
Base Rent December 2021 $13,250.00
Water Meter charges July 2021 – December 2021 @ $300.00 p/m $1,800.00
Electric Meter Charges Billed 7/23/21- 7/1/21-7/9/21 $36.43
Electric Meter Charges Billed 8/25/21-7/9/21-8/9/21 $696.17
Electric Meter Charges Billed 9/27/21-8/9/21-9/8/21 $646.73
Electric Meter Charges Billed 10/19/21-9/8/21-10/5/21 $581.07
Electric Meter Charges Billed 11/18/21-10/5/21-11/5/21 $635.51
Late Fees @ 0.6¢ July 2021 $38.19
Late Fees @ 0.6¢ August 2021 $59.77
Late Fees @ 0.6¢ September 2021 $56.80
Late Fees @ 0.6¢ October 2021 $52.86
Late Fees @ 0.6¢ November 2021 $851.13
Late Fees @ 0.6¢ December 2021 $813.00
30. Pursuant to the Lease, Tenant remains liable for all rents due under the
Lease as if Tenant never abandoned the Premises and remained in possession through
the completion of the Lease. Although not obligated to do so, Plaintiff mitigated its
1 The backup to the electric meter charges is attached as Exhibit “G”.
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damages by re-renting the Premises to a new tenant, as of May 1, 2022. The new tenant
was given a rent abatement for the first five months of the lease term, from May through
September 2022. A copy of the new tenant’s lease is annexed as Exhibit “H”. Tenant
remains liable through that date.
31. Tenant owes to Plaintiff base rent and additional rent as Lease damages,
post abandonment, through September 2022 totaling $135,733.31, calculated as follows:
Base Rents January 1, 2022 – June 30, 2022 $79,500.00
Base Rents July 1, 2022 – September 30, $52,500.00 (@
2022 $17,500.00 p/m)
Water Meter January 2022 – April 2022 $1,200.00 (@
Charges $300.00 p/m)
Electric Billed 12/21/2021 - 11/5/21- $790.31
Charges: 2 12/9/21
Electric 12/9/2021 – 1/10/2022 $504.34
Charges:
Electric 1/10/2022 – 2/9/2022 $353.73
Charges:
Electric 2/9/2022 – 3/11/2022 $281.88
Charges:
Electric 3/1/2022 – 4/11/2022 $540.58
Charges:
Electric 4/11/2022 – 4/30/2022 $62.47
Charges:
32. Tenant owes to Plaintiff late fees as Lease damages, post abandonment,
totaling $3,252.00, calculated as follows:
January 2022 $813.00
February 2022 $813.00
March 2022 $813.00
April 2022 $813.00
33. Pursuant to the Lease at ¶ 40.1, Landlord granted Tenant three months’
free rent totaling $39,750.00 at the commencement of the Leases’ term conditioned on
2 The backup to the electric meter charges is attached as Exhibit “G”.
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Tenant’s lease compliance. Tenant became obligated to reimburse Plaintiff for that
amount upon its abandonment from the Premises. (Exhibit “D” ¶ 40).
34. Plaintiff paid to a broker a brokerage commission of $22,239.00 on account,
in exchange for the broker finding Tenant, who at the time was ready, willing and able to
rent the Premises. (Exhibit “D” ¶ 45 and Exhibit “I” – invoice). The attached invoice is a
duplicate copy of the original kept in Plaintiff’s office.
35. Plaintiff also must pay a broker’s commission of $85,243.64 that was
incurred in securing the new tenant. A copy of the invoice is attached as Exhibit “J”. The
invoice is a duplicate copy of the original kept in Plaintiff’s office.
36. After applying Tenant’s security on deposit of $54,200.00 (the “Security”),
Tenant owes to Landlord unpaid rent, additional rent and accelerated damages totaling
$232,017.95, calculated as follows:
Base Rent & Additional Rent: $135,733.31
Late Fees as Damages January 2022 – April 2022 $3,252.00
Brokerage Fees (incurred for
Tenant): $22,239.00
Free Base Rent Credit: 6/14/21-6/3021,8/21-10/21 $39,750.00
Brokerage Fee (incurred in
securing the new tenant): $85,243.64
Credit for Security on Deposit -$54,200.00
Total Damages: $232,017.95
37. Each amount sought is pursuant to the Parties’ Lease. Therefore, Plaintiff
is entitled to judgment against Defendant Punch House for pre and post abandonment
Lease damages totaling $232,017.95.
F. Second Cause of Action (Monetary Judgment against Guarantors)
38. Defendant Guarantors executed the Guaranty personally obligating
themselves for Tenant’s Lease obligations (Exhibit “E” - Guaranty). Due to Tenant’s
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failure to abide by the provisions of the Lease, Guarantors are jointly and severally liable
to Plaintiff for all of Tenant’s monetary obligations. Guarantors did not exercise the
conditional limitation clause because Tenant only returned the keys to Plaintiff and did
not satisfy the other requisite conditions.
39. Since the Lease term commenced as of July 1, 2021, Guarantors cannot
use Covid-19 or the Guaranty Law, which expired as of June 30, 2021, as a defense.
G. Third Cause of Action (Legal Fees)
40. The Lease obligates Tenant to reimburse Landlord for its legal fees incurred
in enforcing the Lease. The Guaranty also provides that Guarantors are responsible for
all amounts sought from Tenant and obligates Guarantors to reimburse Plaintiff for its
legal fees incurred in enforcing the Guaranty.
41. Plaintiff seeks summary judgment on the third cause of action, awarding
Plaintiff a separate judgment for Plaintiff’s attorneys’ fees and a judgment for such sums
which the Court should determine at a hearing.
DEFENDANTS’ DEFENSES AND COUNTERCLAIM SHOULD BE DISMISSED
42. The defenses asserted by Defendants are baseless. This action was
commenced seeking rent and additional rent due under the Lease and Guaranty. There
is no law or order that permits Tenant to skirt its contractual Lease obligations nor is there
any principle that permits Tenant to tear up and rescind the Lease. Likewise, Guarantors
should be found liable under the unconditional guaranty.
43. Defendants’ counterclaim is also meritless. Plaintiff never promised
anything to Defendants. At the time of executing the Lease, Plaintiff was performing
mandatory pointing on the exterior of the Premises. Plaintiff may have given an
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approximation to Defendants of when it anticipates the work to be completed, however,
no firm dates were ever given, and no promises were made as it was outside of Plaintiff’s
control. It would have been impossible for Plaintiff to predict a date certain for when the
pointing would be completed.
44. Likewise, Plaintiff never made any representations to Defendants
concerning the new storefront door installation for the same reason. Construction and
ordering materials are outside of Plaintiff’s control.
45. Put simply, Plaintiff never made any misrepresentations of fact. Indeed, the
Lease makes clear that Tenant took the Premises in “as-is” condition and that Plaintiff
made no representations to Tenant concerning the Premises:
Tenant has inspected the premises and accepts them as is,
subject to the riders annexed hereto with respect to Owner’s
work, if any. In any event, Owner makes no representation as
to the condition of the premises or that Tenant’s use is
permitted by the Building’s certificate of occupancy, if any,
and Tenant agrees to accept the same subject to violations,
whether or not of record. If any governmental licenses or
permits shall be required for the proper and lawful conduct of
Tenant’s business, Tenant shall be responsible for and shall
procure and maintain such licenses or permits.
(Exhibit “D”, ¶ 15).
46. Moreover, Tenant was performing his own renovations in the Premises.
(Exhibit “F”). Tenant signed the Lease and collected the keys on June 18, 2021. The
Lease commenced on July 1, 2021. Tenant began its own renovations in the Premises
on July 10, 2021. On July 19, 2021, Landlord completed the installation of glass and the
storefronts framing. On August 22, 2021, Landlord completed the installation of the
entrance doors and five days later installed the glass for the new doors. Thereafter,
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Defendants abandoned the Premises on December 1, 2021, six months into the Lease
term.
4 7. Defendants cannot genuinely claim that rescission of the Lease and
Guaranty is appropriate. Defendants cannot establish their defenses or counterclaim.
Each should be dismissed.
WHEREFORE, Plaintiff requests that Plaintiff's motion be granted in its entirety,
and grant such other, further and different relief as is just and proper.
lf2
RYA'f.l~
~~~Wio before me this
q.:_€(tayof June 2022
VERONICA OSTEWART
NOTAR: PU~UC, STATE OF NEW YORK
Reg1strat1on No. 01 srn392042
Qualified in Queens County
My Commission Expires May 20, 2023
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CERTIFICATION
(of word count)
I, Joshua Nadelbach, the attorney filing the foregoing Affidavit in support, hereby
certify that the document is in compliance with 22 N.Y.C.R.R. § 202.8-b, containing
a total of 3,414words, as counted by the word-processing program.
Dated: New York, New York
June 27, 2022
___________________________
JOSHUA NADELBACH, ESQ.
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Preview
FILED: NEW YORK COUNTY CLERK 06/27/2022 12:36 PM INDEX NO. 161105/2021 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 06/27/2022 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK FIFTH PARTNERS LLC, Index No.: 161105/2021 Plaintiff, -against- PUNCH HOUSE FLATlRON LLC, JOSEPH W. FOLEY and NADA VASILIJEVIC, AFFIDAVIT IN SUPPORT Defendants. STATE OF NEW YORK ) :ss: COUNTY OF NEW YORK ) RYAN MEHRA, being duly sworn, deposes and says: 1. I am a member of plaintiff FIFTH PARTNERS LLC (“Plaintiff” or “Landlord”) and am fully familiar with the facts and circumstances set forth herein pertaining to this action against defendants PUNCH HOUSE FLATlRON LLC, JOSEPH W. FOLEY and NADA VASILIJEVIC (collectively “Defendants”, and with Plaintiff, the “Parties”). 2. I submit this affidavit in support of Plaintiff’s motion for an order seeking, among other things, summary judgment against Defendants. 3. Plaintiff should be awarded summary judgment because defendant Punch House Flatiron LLC (“Tenant” or “Punch House”), as the commercial tenant, defaulted under its Lease by, among other things, unilaterally abandoning the Premises and abrogating the parties’ Lease. Defendants Joseph W. Foley (“Guarantor” or “Foley”) and Nada Vasilijevic (“Co-Guarantor” or “Vasiljevic”) are personally obligated for the amounts due under an absolute and unconditional written guaranty (Foley and Vasiljevic hereafter referred to as “Guarantors”). 1 of 14 FILED: NEW YORK COUNTY CLERK 06/27/2022 12:36 PM INDEX NO. 161105/2021 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 06/27/2022 4. I oversee all aspects of managing the building known as 19 West 21st Street, New York, New York 10010 (the “Building”), including rent collection, billing, leasing, and lease compliance. 5. All records are maintained in a contemporaneous method on an office computer and, in some cases, in hard copy. They are kept in the normal course of business, and payments are recorded cotemporaneous with the event. It is part of my duties to keep and maintain these records. 6. The exhibits referenced and attached below (e.g., the Lease and Guaranty, each defined below) are copies of the original documents kept in Plaintiff’s office file. Copies of each were made and compared and they are complete duplicate copies of the original. These agreements are kept in the normal course of business, and it is part of my duties to maintain, and ensure Landlord’s maintenance of, such records. 7. This action seeks a judgment against Defendants for all outstanding rent and additional rent due under the Lease and Guaranty. All amounts are due pursuant to the express terms of this agreement, as set forth below. 8. None of Defendants’ affirmative defenses create an issue of fact barring summary judgment and their one counterclaim has no merit. The accompanying memorandum of law addresses Plaintiff’s rights to the relief sought. A copy of the Summons and Complaint, and Defendants’ Amended Answer are attached as Exhibits “A” and “B” respectively. 2 2 of 14 FILED: NEW YORK COUNTY CLERK 06/27/2022 12:36 PM INDEX NO. 161105/2021 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 06/27/2022 FACTUAL BACKGROUND A. The Parties, the Lease, and this Action 9. Plaintiff was and still is the deed owner of the Building. A copy of the deed is annexed hereto as Exhibit “C”. 10. Punch House was the commercial tenant of the ground retail space in the Building (the “Premises”), pursuant to a written lease agreement dated June 14, 2021, made between Plaintiff, as landlord, and Punch House, as tenant (the “Lease”). (Exhibit “D” – Lease). The Lease was for a term of five years which term commenced on July 1, 2021 and was due to expire on June 30, 2026. (Exhibit “D”). 11. In consideration of Landlord executing the Lease with Tenant, Guarantors executed a “Good Guy” guaranty of Lease, sworn to on June 18, 2021. (Exhibit “E” – Guaranty). 12. Exhibits “D” and “E” are copies of the original Lease and Guaranty. Both are kept in Landlord’s office file. Both are a complete duplicate copy of the original and I compared the copies to the original and they are the same. The Lease and Guaranty are kept in the normal course of my duties as a member. 13. Tenant signed the Lease and collected the keys on June 18, 2021. Almost immediately afterwards, Defendants emailed Plaintiff explaining that they wanted to commence renovations in the Premises. (Exhibit “F” – email correspondence). 14. On or about December 1, 2021, Foley, as Tenant’s principal, returned the keys to the Premises to Landlord’s agent, and Tenant unilaterally abandoned the Premises as of that date. Landlord never gave Tenant permission to abandon the Premises, nor did it waive any of its rights under the Lease. 3 3 of 14 FILED: NEW YORK COUNTY CLERK 06/27/2022 12:36 PM INDEX NO. 161105/2021 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 06/27/2022 15. Tenant did open for business but failed to pay Landlord any further payments other than that paid upfront at the time of the Lease’s execution. B. Relevant Lease Terms 16. Pursuant to Lease’s preamble, Tenant agreed to pay Landlord rent in equal monthly installments on the first day of each and every month, without any set- off or deduction whatsoever (see Exhibit “D”- Lease). 17. Pursuant to Lease at ¶ 40.1, Tenant agreed to pay Landlord base rent during the Lease term as follows: Base Rent Period Annual Amount July 1, 2021 – June 30, 2022 $159,000.00 July 1, 2022 – June 30, 2023 $210,000.00 July 1, 2023 – June 30, 2024 $222,000.00 July 1, 2024 – June 30, 2025 $240,000.00 July 1, 2025 – June 30, 2026 $247,000.00 18. Pursuant to the Lease at ¶ 40.01, Tenant was given a conditional rent abatement for the second, third and fourth month of the first year’s rental period after Tenant remitted the first month's rent: Upon execution of this Lease, Fixed Rent for the first month of the Lease shall be reduced to $0.00 to give effect to the fact a full month's rent was received by the Owner at the signing of this Lease. Provided no default exists under this Lease, Fixed Rent for the following three (3) month(s) shall be reduced to $0.00 to give effect to a Rent Abatement … (Exhibit “D” - Lease) 19. Pursuant to the Lease at ¶ 41.1, Tenant agreed to pay for utilities, including gas and electrical metered usage as metered by Landlord: Tenant shall make arrangements directly with the utility company for furnishing electric current and natural gas and shall timely pay all charges, including any necessary charges for installation, conversion or maintenance of electric meters during the term of the Lease and prior to the Commencement 4 4 of 14 FILED: NEW YORK COUNTY CLERK 06/27/2022 12:36 PM INDEX NO. 161105/2021 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 06/27/2022 Date, if such charges are incurred, to the utility company … (Exhibit “D”- Lease) 20. Pursuant to the Lease at ¶ 28, Tenant agreed to pay Landlord, as additional rent, water meter charges of $300.00 per month: There is no direct water meter recording Tenant's consumption of water within the Demised Premises therefore, Tenant shall pay to Owner as Additional Rent the sum of $300.00 on the first day of each month during the term of this Lease for Tenant's consumption of cold water … (Exhibit “D”) 21. Pursuant to the Lease at ¶ 42, Tenant agreed to pay Landlord, as additional rent, a percentage increase in the real estate taxes assessed against the Building above the base tax year of 2021/2022 at three-point four (3.4%) percent of any increase: … 42.1.3 The term "Owner's Basic Tax Liability" shall mean the Taxes attributable to the Land and the Building for the New York City fiscal year 2021/2022, and "Owner's Base Year" shall mean the New York City 2021/2022 fiscal, commencing on July 1st, 2021. 42.1.4 The term "Tenant's Proportionate Share" shall mean three-point four (3.4%) percent. 42.2 If Taxes payable in any Escalation Year falling wholly or partially within the Term shall be in an amount constituting an increase above Owner's Basic Tax Liability, Tenant shall pay monthly as Additional Rent for such Escalation Year a sum equal to 1/12th of Tenant's Proportionate Share of the amount by which Taxes for such Escalation Year exceed Owner's Basic Tax Liability. Tenant shall, if Owner so elects, pay its proportionate share of Taxes monthly in advance as Additional Rent … (Exhibit “D”). 22. Pursuant to the Lease at ¶ 46, Tenant agreed to pay Landlord, as additional rent, a late charge of six percent (6%) of the monthly balance of rent and additional rent outstanding past the tenth day of the month: If Tenant shall fail to pay any installment of Fixed Rent or Additional Rent within ten (10) days from the date billed, Tenant shall be required to pay a late charge of six (6) cents for each dollar unpaid. Such charge is to be computed 5 5 of 14 FILED: NEW YORK COUNTY CLERK 06/27/2022 12:36 PM INDEX NO. 161105/2021 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 06/27/2022 retroactively to the first day of the month Rent was not paid timely. The late charge described herein is intended to compensate Owner for additional expenses incurred in processing late payments and is not intended to alter or substitute for any other security to which Owner may be entitled under this Lease. (Exhibit “D”). 23. Pursuant to the Lease at ¶ 18, Tenant agreed to pay Landlord, as liquidated damages, inter alia, the rent and additional rent for the term constituting the balance of the term of the Lease, as if it had remained through the completion of the lease, together with such expenses incurred in connection with re-letting the Premises, including such costs in putting the Premises in good order, including alterations, repairs, replacements, legal expenses, brokerage fees and advertising fees: In case of any such default, reentry, expiration and/or dispossess by summary proceedings or otherwise, (a) the Rent, and Additional Rent, shall become due thereupon and be paid up to the time of such reentry, dispossess and/or expiration, (b) Owner may relet the premises or any part thereof, either in the name of Owner or otherwise, for a term or terms, which may at Owner's option be less than or exceed the period which would otherwise have constituted the balance of the term of this Lease and may grant concessions or free rent or charge a higher rental than that in this Lease, and/or (c) Tenant or the legal representatives of Tenant shall also pay Owner as liquidated damages for the failure of Tenant to observe and perform said Tenant's covenants herein contained, any deficiency between the rent hereby reserved and/or covenanted to be paid and the net amount, if any, of the rents collected on account of the subsequent lease or leases of the Demised Premises for each month of the period which would otherwise have constituted the balance of the term of this Lease. The failure of Owner to relet the premises or any part or parts thereof shall not release or affect Tenant's liability for damages. In computing such liquidated damages there shall be added to the said deficiency such expenses as Owner may incur in connection with reletting, such as legal expenses, attorneys' fees, brokerage, advertising and for keeping the Demised Premises in good order or for preparing the same for reletting. Any such liquidated damages shall be paid in monthly installments by 6 6 of 14 FILED: NEW YORK COUNTY CLERK 06/27/2022 12:36 PM INDEX NO. 161105/2021 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 06/27/2022 Tenant on the rent day specified in this Lease … (“Exhibit “D” - Lease) 24. Pursuant to the Lease at ¶ 19, Tenant agreed to pay and reimburse Landlord for any expenditure, including but not limited to, reasonable attorney's fees in the event Tenant defaulted under the Lease: if Owner, in connection therewith or in connection with any default by Tenant in the covenant to pay Rent hereunder, makes any expenditures or incurs any obligations for the payment of money, including but not limited to attorney's fees, in instituting, prosecuting or defending any actions or proceeding, such sums so paid or obligations incurred with interest and costs shall be deemed to be Additional Rent hereunder … (Exhibit “D” - Lease). C. Relevant Guaranty Provisions 25. Pursuant to the Guaranty, Guarantors agreed to be personally liable for all of Tenant’s Lease obligations including, but not limited to, its monetary responsibilities. It is an absolute, unconditional, and ongoing guaranty of payment. (Exhibit “E”). 26. The Guaranty contains a conditional limitation clause providing that: The undersigned guarantees to Owner, its successors and assigns, that he/she will advise Owner of Tenant's intention to vacate the Demised Premises a minimum of six (6) months in advance and that he/she will pay to Owner all Minimum Rent, Additional Rent and any and all other charges that have accrued or may accrue under the terms of the Lease (hereinafter collectively referred to as “Accrued Rent”), to the latest date that Tenant … will have completely performed the following: 1. Vacated and surrendered the Demised Premises in broom clean condition to Owner pursuant to the terms of the Lease, and 2. Delivered the keys to the Demised Premises to Owner, and 3. Paid to Owner all Accrued Rent to and including the date which is the later of (a) the actual receipt by Owner of said 7 7 of 14 FILED: NEW YORK COUNTY CLERK 06/27/2022 12:36 PM INDEX NO. 161105/2021 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 06/27/2022 Accrued Rent, (b) the surrender of the Demised Premises, or (c) receipt by Owner of the keys to the Demised Premises. (Exhibit “E”) (emphasis added). 27. Aside from returning the keys, none of the conditions in the good guy guaranty were met. Thus, Guarantors’ liability continues. PLAINTIFF IS ENTITLED TO SUMMARY JUDGMENT D. First Cause of Action (Monetary Judgment against Tenant) 28. Tenant breached the Lease by failing to pay Landlord rent and additional rent when due, and by abandoning the Premises as of December 1, 2021, without permission or authorization. 29. Tenant owes Plaintiff pre-abandonment rent and additional rent totaling $32,767.66, 1 calculated as follows: Base Rent November 2021 $13,250.00 Base Rent December 2021 $13,250.00 Water Meter charges July 2021 – December 2021 @ $300.00 p/m $1,800.00 Electric Meter Charges Billed 7/23/21- 7/1/21-7/9/21 $36.43 Electric Meter Charges Billed 8/25/21-7/9/21-8/9/21 $696.17 Electric Meter Charges Billed 9/27/21-8/9/21-9/8/21 $646.73 Electric Meter Charges Billed 10/19/21-9/8/21-10/5/21 $581.07 Electric Meter Charges Billed 11/18/21-10/5/21-11/5/21 $635.51 Late Fees @ 0.6¢ July 2021 $38.19 Late Fees @ 0.6¢ August 2021 $59.77 Late Fees @ 0.6¢ September 2021 $56.80 Late Fees @ 0.6¢ October 2021 $52.86 Late Fees @ 0.6¢ November 2021 $851.13 Late Fees @ 0.6¢ December 2021 $813.00 30. Pursuant to the Lease, Tenant remains liable for all rents due under the Lease as if Tenant never abandoned the Premises and remained in possession through the completion of the Lease. Although not obligated to do so, Plaintiff mitigated its 1 The backup to the electric meter charges is attached as Exhibit “G”. 8 8 of 14 FILED: NEW YORK COUNTY CLERK 06/27/2022 12:36 PM INDEX NO. 161105/2021 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 06/27/2022 damages by re-renting the Premises to a new tenant, as of May 1, 2022. The new tenant was given a rent abatement for the first five months of the lease term, from May through September 2022. A copy of the new tenant’s lease is annexed as Exhibit “H”. Tenant remains liable through that date. 31. Tenant owes to Plaintiff base rent and additional rent as Lease damages, post abandonment, through September 2022 totaling $135,733.31, calculated as follows: Base Rents January 1, 2022 – June 30, 2022 $79,500.00 Base Rents July 1, 2022 – September 30, $52,500.00 (@ 2022 $17,500.00 p/m) Water Meter January 2022 – April 2022 $1,200.00 (@ Charges $300.00 p/m) Electric Billed 12/21/2021 - 11/5/21- $790.31 Charges: 2 12/9/21 Electric 12/9/2021 – 1/10/2022 $504.34 Charges: Electric 1/10/2022 – 2/9/2022 $353.73 Charges: Electric 2/9/2022 – 3/11/2022 $281.88 Charges: Electric 3/1/2022 – 4/11/2022 $540.58 Charges: Electric 4/11/2022 – 4/30/2022 $62.47 Charges: 32. Tenant owes to Plaintiff late fees as Lease damages, post abandonment, totaling $3,252.00, calculated as follows: January 2022 $813.00 February 2022 $813.00 March 2022 $813.00 April 2022 $813.00 33. Pursuant to the Lease at ¶ 40.1, Landlord granted Tenant three months’ free rent totaling $39,750.00 at the commencement of the Leases’ term conditioned on 2 The backup to the electric meter charges is attached as Exhibit “G”. 9 9 of 14 FILED: NEW YORK COUNTY CLERK 06/27/2022 12:36 PM INDEX NO. 161105/2021 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 06/27/2022 Tenant’s lease compliance. Tenant became obligated to reimburse Plaintiff for that amount upon its abandonment from the Premises. (Exhibit “D” ¶ 40). 34. Plaintiff paid to a broker a brokerage commission of $22,239.00 on account, in exchange for the broker finding Tenant, who at the time was ready, willing and able to rent the Premises. (Exhibit “D” ¶ 45 and Exhibit “I” – invoice). The attached invoice is a duplicate copy of the original kept in Plaintiff’s office. 35. Plaintiff also must pay a broker’s commission of $85,243.64 that was incurred in securing the new tenant. A copy of the invoice is attached as Exhibit “J”. The invoice is a duplicate copy of the original kept in Plaintiff’s office. 36. After applying Tenant’s security on deposit of $54,200.00 (the “Security”), Tenant owes to Landlord unpaid rent, additional rent and accelerated damages totaling $232,017.95, calculated as follows: Base Rent & Additional Rent: $135,733.31 Late Fees as Damages January 2022 – April 2022 $3,252.00 Brokerage Fees (incurred for Tenant): $22,239.00 Free Base Rent Credit: 6/14/21-6/3021,8/21-10/21 $39,750.00 Brokerage Fee (incurred in securing the new tenant): $85,243.64 Credit for Security on Deposit -$54,200.00 Total Damages: $232,017.95 37. Each amount sought is pursuant to the Parties’ Lease. Therefore, Plaintiff is entitled to judgment against Defendant Punch House for pre and post abandonment Lease damages totaling $232,017.95. F. Second Cause of Action (Monetary Judgment against Guarantors) 38. Defendant Guarantors executed the Guaranty personally obligating themselves for Tenant’s Lease obligations (Exhibit “E” - Guaranty). Due to Tenant’s 10 10 of 14 FILED: NEW YORK COUNTY CLERK 06/27/2022 12:36 PM INDEX NO. 161105/2021 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 06/27/2022 failure to abide by the provisions of the Lease, Guarantors are jointly and severally liable to Plaintiff for all of Tenant’s monetary obligations. Guarantors did not exercise the conditional limitation clause because Tenant only returned the keys to Plaintiff and did not satisfy the other requisite conditions. 39. Since the Lease term commenced as of July 1, 2021, Guarantors cannot use Covid-19 or the Guaranty Law, which expired as of June 30, 2021, as a defense. G. Third Cause of Action (Legal Fees) 40. The Lease obligates Tenant to reimburse Landlord for its legal fees incurred in enforcing the Lease. The Guaranty also provides that Guarantors are responsible for all amounts sought from Tenant and obligates Guarantors to reimburse Plaintiff for its legal fees incurred in enforcing the Guaranty. 41. Plaintiff seeks summary judgment on the third cause of action, awarding Plaintiff a separate judgment for Plaintiff’s attorneys’ fees and a judgment for such sums which the Court should determine at a hearing. DEFENDANTS’ DEFENSES AND COUNTERCLAIM SHOULD BE DISMISSED 42. The defenses asserted by Defendants are baseless. This action was commenced seeking rent and additional rent due under the Lease and Guaranty. There is no law or order that permits Tenant to skirt its contractual Lease obligations nor is there any principle that permits Tenant to tear up and rescind the Lease. Likewise, Guarantors should be found liable under the unconditional guaranty. 43. Defendants’ counterclaim is also meritless. Plaintiff never promised anything to Defendants. At the time of executing the Lease, Plaintiff was performing mandatory pointing on the exterior of the Premises. Plaintiff may have given an 11 11 of 14 FILED: NEW YORK COUNTY CLERK 06/27/2022 12:36 PM INDEX NO. 161105/2021 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 06/27/2022 approximation to Defendants of when it anticipates the work to be completed, however, no firm dates were ever given, and no promises were made as it was outside of Plaintiff’s control. It would have been impossible for Plaintiff to predict a date certain for when the pointing would be completed. 44. Likewise, Plaintiff never made any representations to Defendants concerning the new storefront door installation for the same reason. Construction and ordering materials are outside of Plaintiff’s control. 45. Put simply, Plaintiff never made any misrepresentations of fact. Indeed, the Lease makes clear that Tenant took the Premises in “as-is” condition and that Plaintiff made no representations to Tenant concerning the Premises: Tenant has inspected the premises and accepts them as is, subject to the riders annexed hereto with respect to Owner’s work, if any. In any event, Owner makes no representation as to the condition of the premises or that Tenant’s use is permitted by the Building’s certificate of occupancy, if any, and Tenant agrees to accept the same subject to violations, whether or not of record. If any governmental licenses or permits shall be required for the proper and lawful conduct of Tenant’s business, Tenant shall be responsible for and shall procure and maintain such licenses or permits. (Exhibit “D”, ¶ 15). 46. Moreover, Tenant was performing his own renovations in the Premises. (Exhibit “F”). Tenant signed the Lease and collected the keys on June 18, 2021. The Lease commenced on July 1, 2021. Tenant began its own renovations in the Premises on July 10, 2021. On July 19, 2021, Landlord completed the installation of glass and the storefronts framing. On August 22, 2021, Landlord completed the installation of the entrance doors and five days later installed the glass for the new doors. Thereafter, 12 12 of 14 FILED: NEW YORK COUNTY CLERK 06/27/2022 12:36 PM INDEX NO. 161105/2021 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 06/27/2022 Defendants abandoned the Premises on December 1, 2021, six months into the Lease term. 4 7. Defendants cannot genuinely claim that rescission of the Lease and Guaranty is appropriate. Defendants cannot establish their defenses or counterclaim. Each should be dismissed. WHEREFORE, Plaintiff requests that Plaintiff's motion be granted in its entirety, and grant such other, further and different relief as is just and proper. lf2 RYA'f.l~ ~~~Wio before me this q.:_€(tayof June 2022 VERONICA OSTEWART NOTAR: PU~UC, STATE OF NEW YORK Reg1strat1on No. 01 srn392042 Qualified in Queens County My Commission Expires May 20, 2023 13 13 of 14 FILED: NEW YORK COUNTY CLERK 06/27/2022 12:36 PM INDEX NO. 161105/2021 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 06/27/2022 CERTIFICATION (of word count) I, Joshua Nadelbach, the attorney filing the foregoing Affidavit in support, hereby certify that the document is in compliance with 22 N.Y.C.R.R. § 202.8-b, containing a total of 3,414words, as counted by the word-processing program. Dated: New York, New York June 27, 2022 ___________________________ JOSHUA NADELBACH, ESQ. 14 14 of 14