-against- Motion Sequence No PLAINTIFF'S MEMORANDUM OF LAW IN SUPPORT OF ITS MOTION FOR SUl\1MARY JUDGMENT

Transcription

1 FILED: NEW YORK COUNTY CLERK 02/12/ :41 PM INDEX NO /2014 NYSCEF DOC. NO. 43 RECEIVED NYSCEF: 02/12/2016 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK AI 229 WEST 43RD STREET PROPERTY OWNER, LLC, Index No /2014 Plaintiff, -against- Motion Sequence No. 003 DONALD R. FINLEY, Defendant. PLAINTIFF'S MEMORANDUM OF LAW IN SUPPORT OF ITS MOTION FOR SUl\1MARY JUDGMENT MEISTER SEELIG & FEIN LLP 125 Park Ave., 7 th Floor New York, New York (212) Attorneys for Plaintiff

2 TABLE OF CONTENTS TABLE OF AUTHORITIES... ii PRELIMINARY STATEMENT... 1 FACTUAL BACKGROUND... :... :... 2 ARGUMENT PLAINTIFF IS ENTITLED TO A JUDGMENT AS A MATTER OF LA W... 6 A. Standard of Review... 6 B. AI 229 Is Entitled To Summary Judgment On Count I OfIts Complaint Seeking To Enforce The Unconditional Guaranty For The Aggregate Outstanding Principal And Accrued Interest Owed By Adventure Under Its Commercial Lease With AI CONCLUSION... 13

3 TABLE OF AUTHOROTIES 150 Broadway NY Assoc., L.P. v. Shandell, 910 N.Y.S.2d 763 (Sup. Ct. N.Y. Cnty. 2010) affd sub nom., 150 Broadway N Y. Assoc., L.P. v. Shandell, 90 A.D.3d 498 (1st Dep't 2011) W Village Assoc. v. G & E Realty, Inc., 56 A.D.3d 372- (1st Dep't 2006) Madison Assoc. v. Ryan, 174 A.D.2d 461 (1st Dep't 1991)... 6 Bank Leumi Trust Co. o/new Yorkv. Rattet & Liebman, 182 A.D.2d 541 (1st Dep't 1992)... 6 Bank of Ani., NA. v; Solow, 59 A.D.3d 304 (1st Dep't 2009) , 11 Bank of Am., NA. v. Tatham, 305 A.D.2d 183 (1st Dep't 2003)... 7 Chase Manhattan Bank v. Goldberger, 199 A.D.2d 97 (1st Dep't 1993)... 8 Citibank, NA. v. Plapinger, 66 N.Y.2d 90 (1985) City o/new Yorkv. Clarose Cinema Corp., 256 A.D.2d 69 (1st Dep't 1998)... 7 Culver v. Parsons, 7 A.D.3d 931 (3d Dep't 2004) Equator Int'l, Inc. v. NH St. Investors, Inc., 978 N.Y.S.2d 817 (Sup. Ct. N.Y. Cnty. 2014) Gannett Co. v. Tesler, 177 A.D.2d 353 (1st Dep't 1991) Hotel 71 Mezz Lender LLC v. Mitchell, 63 A.D.3d 447 (1st Dep't 2009) Johnston v. MGM Emerald Enterprises, Inc., 69 A.D.3d 674 (2d Dep't 2010)... 1 ii

4 Kuzyns v. City o/new York, 191 A.D.2d 169 (1st Dep't 1993)... 7 Manufacturers Hanover Trust Co. v. Trans Nat. Commc 'ns, Inc., 36 A.D.2d 709 (1st Dep't 1971)... 8 N. Fork Bank v Hamptons Mist Mgnt. C01p., 225 A.D.2d 595 (2d Dep't 1996)... 9 RCA Corp. v Am. Standards Testing Bur., Inc., 121 A.D.2d 890 (1st Dep't 1986)... 9 Seaman-Andwall Corp. v. Wright Machine Corp., 31 A.D.2d 136 (1st Dep't 1968), aff'd, 29 N.Y.2d 617,324 N.Y.S.2d 420 (1971)... 7 Sheehan v. Gong, 2 A.D.3d 166 (1st Dep't 2003)... 6 Siren Realty Corp. v. Biltmore Prod. Corp., 27 A.D.2d 519 (1st Dep't 1966)... 9 State Bank of India, New York Branch v. Patel, 167 A.D.2d 242 (1st Dep't 1990)... 6 Union Trust Co. of Rochester v. Willsea, 275 N.Y. 164 (1937) United Orient Bank v. Lee, 223 A.D.2d 500 (1st Dep't 1996)... ~ Winegradv. New York Univ. Med. Ctr., 64 N.Y.2d 851 (1985)... 6 Zuckerman v. City o/new York, 49 N.Y.2d 557 (1980)... 7 Statutes 11 U.S.C passim 11 U.S.C. 1112(b)... 5 N.Y. C.P.L.R. 3212(b)... 1 N.Y. C.P.L.R. 3215(f)..., iii

5 Plaintiff AI 229 West 43rd Street Property Owner LLC ("AI 229") respectfully submits this memorandum of law in support of its motion for summary judgment pursuant to CPLR 3212(b) on an action to enforce defendant Donald R. Finley's ("Guarantor") guaranty in the principal amount of $2,231, plus prejudgment and post judgment interest, and granting AI 229 such other and further relief as this Court deems justand proper. PRELIMINARY STATEMENT This is an action to recover over $2.2 million of unpaid rent and other expenses from a guarantor of a tenant who habitually asked for leniency with respect to fulfilling its lease obligations, yet consistently defaulted on them. The tenant, Adventure Entertainment, LLC ("Tenant"), which operated a Jekyll & Hyde Club theme restaur~nt, owes over $2.2 million to AI 229 pursuant to a commercial lease. This includes over $500,000 that AI 229 was required to pay to bond mechanic's liens that contractors filed against the property when Tenant failed to honor its obligations to pay the contractors for the costs Tenant incurred during its build-out. AI 229 exercised extraordinary patience-and incurred substantial costs-in continuing to extend Tenant's time to perform under the lease. But on July 16, 2014, Tenant filed for bankruptcy protection and relief under Chapter 11 of the United States Bankruptcy Code. The Guarantor, the principal of Tenant, personally guaranteed Tenant's performance under the lease, irrespective of any bankruptcy proceeding. Once Tenant filed for Bankruptcy, AI 229 filed this action to enforce its rights under the Guaranty. Thereafter, Tenant's bankruptcy was dismissed. Nevertheless, Guarantor's obligations under his absolute and unconditional guaranty are coextensive with Tenant's obligations under the Lease. See Johnston v. MGM Emerald Enterprises, Inc., 69 A.D.3d 674, 677 (2d Dep't 2010) (plaintiff landlord entitled to summary judgment on the issue of damages in [ / /1] 1

6 ! the form of lessee's unpaid rent where principals of lessee personally guaranteed payment of rent). Accordingly, Guarantor is liable as a matter of law for the principal sum of $2,231, plus prejudgment and post judgment interest under the express terms of the guaranty, and AI 229 is entitled to summary judgment. FACTUAL BACKGROUND The relevant facts herein are set forth in detail in the accompanying Affidavit of Damien Stein, sworn to February 10,2016 ("Stein Aff.") and the Verified Complaint, a copy of which is attached as Exhibit 1 ("CompI.") thereto. On April 5, 2011, AI 229, as Landlord, and Adventure Entertainment LLC, as Tenant, executed a lease (the "Lease") for real property consisting of the specific store area of approximately 2,376 square feet on the ground floor and 21,076 square feet on the second floor, (for a total of 23,452 square feet) in the building located at 229 West 43rd Street (a/k/a 216 West 44th Street) (the "Demised Premises"). CompI. ~ 6 & Exh. A. The Lease was amended by a letter dated April 5, 2011 and again by the First Amendment to the Lease, dated August 23,2013. CompI. ~ 6. Section 1.1 (a) of the Lease provides in relevant part: "Landlord hereby leases to Tenant, and Tenant hereby hires from Landlord, the Premises, for the Term, at an annual rent ("Fixed Rent") as set forth on Exhibit E attached hereto and made a part hereof together with all Additional Rent provided for herein." Lease at 1. A copy of the Lease is attached as Exhibit 3 to the Stein Aff. The Lease defines the term "Additional Rent" as "Tenant's Tax Payment, Tenant's Operating Payment, Percentage Rent and any and all other sums, other than Fixed Rent, payable by Tenant under this Lease or otherwise in connection with the use and occupancy of the Premises." Lease at 1. [ / /1]

7 Lease at 20. The Lease further provides that: If, because of any act or omission of a Tenant Party, its suppliers or subcontractors, any mechanic's lien, U.C.C. fmancing statement or other lien,. charge or order for the payment of money shall be filed against Landlord, or against any or all portion of the Premises the Building or the Real Property, tenant shall, at its own cost and expense, cause the same to be discharged of record by bonding or otherwise within fifteen (15) days after Tenant has received notice thereof, and Tenant shall, in accordance with Article 29, indemnify defend and save Landlord harmless against and from all costs, expenses, liabilities, suits, penalties, claims and demands (including reasonable attorneys' fees and disbursements) resulting therefrom. On April 5, 2011, "in consideration of, and as an inducement for the granting, execution and delivery of... the Lease," Guarantor simultaneously executed and delivered to AI 229 an absolute and unconditional payment Guaranty, (the "Guaranty") to AI 229. Stein Aff., Exh. 2 at 1. Paragraph 1 of the Guaranty provides in relevant part: Guarantor [Finley], hereby guarantees, absolutely and unconditionally, to Landlord (AI 229) the full and prompt payment, performance and observance of the terms, covenants and conditions of the Lease specifically relating to (i) Tenant's obligation to pay Fixed Rent, Tenant's Tax Payments and Tenant's Operating Payments, including such sums that would be due and payable to Landlord, but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U:S.C. 362(a) (the "Rent Obligations") and (ii) Tenant's Obligations pursuant to Section 4.5 of the Lease (the "Lien Obligations" and Rent Obligations together with Lieri Obligations, collectively, "Obligations") and Guarantor hereby covenants apd agrees to and with Landlord that if Tenant shall default in payment, performance or observance of any Obligations, Guarantor shall and will forthwith pay, perform or observe such Obligations, all upon demand and irrespective of any defense or any right of setoff, credit or claim that Guarantor may have against Landlord."l Stein Aff. ~ 11. Paragraph 4 of the Guaranty further provides in relevant part: This Guaranty is an absolute and unconditional guarantee of payment (not of collection) and performance. The liability of Guarantor is co-extensive with that 1 Defmed terms not defined herein have the same meaning as in the Guaranty. [ / ] 3

8 of Tenant and this. Guaranty shall be enforceable against Guarantor without the necessity of any suit or proceeding on Landlord's part of any kind or nature whatsoever against tenant and without the necessity of any notice of non-payment, non-performance or non-observance or of any notice of acceptance of this Guaranty or of any other notice or demand to which Guarantor might otherwise be entitled, all of which Guarantor hereby expressly waives. Stein Aff. ~ 12 (emphasis added). Lastly, Paragraphs 4 and 5 of the Guaranty provide in relevant part: Guarantor hereby expressly agrees that the validity of this Guaranty and the obligations of Guarantor hereunder shall in no way be terminated, affected, diminished or impaired by reason of... any non-liability of Tenant under the Lease, whether by insolvency, discharge in bankruptcy, or any other defect or defense which may now or hereafter exist in favor of Tenant. This Guaranty shall be a continuing guaranty, and the liability of Guarantor hereunder shall in no way be affected, modified or diminished by reason of... any bankruptcy, insolvency, liquidation, arrangement, assignment for the benefit of creditors, receivership, trusteeship or similar proceeding affecting Tenant, whether or not notice thereof or of any thereof is given to Guarantor. Stein Aff. ~ 13 (emphasis added). Tenant defaulted on various payment Obligations under the Lease, dating as far back as November,2011. Stein Aff. ~ 13. In 2012, several Mechanic's Liens were recorded against the Demised Premises for labor and materials delivered in connection with Tenant's retention of contractors to perform certain work at the Demised Premises. Plaintiff, on behalf of Tenant, procured bonds to discharge these Mechanic's Liens. Stein Aff. ~ 14. The cost of securing these mechanic's liens bonds is set forth in paragraph 2(g) of the First Amendment to Lease, dated August 23, Stein Aff. Exh. 4 ~ 2(g). The total amount AI 229 advanced to secure the mechanic's lien bonds is $500, which equals the "Bond Cost" of $343, (CompI. Exh. C at 1) plus the additional bond cost of$156, ld. Despite AI 229's extensions and accommodations of Tenant's lease obligations, Tenant continued to default.. Stein Aff. ~ 15. On March 26,2014, AI 229 filed a Notice of Petition and [ / ] 4

9 ~ Petition in the Civil Court of the City of New York, County of New York, instituting a summary nonpayment proceeding against Tenant. The Petition sought a Final Judgment awarding possession of the Demised Premises to AI 229, the issuance of a warrant to remove Tenant from the possession of the Demised Premises, a judgment for Fixed Annual Rent and Additional Rent, with interest, and the costs and disbursements, including attorneys' fees, incurred by AI 229 in that proceeding. ld. On July 16, 2014, at 11:01 p.m., Tenant filed a Voluntary Petition for bankruptcy protection and relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. Stein Aff.~ 16. AI 229's summary nonpayment proceeding against Tenant was stayed by operation of law. Thereafter, AI 229 commenced this action on July 28,2014. ld., Exh. 5. On October 20,2014, Guarantor served a verified answer through NYSCEF ("Answer"). Stein Aff., Exh. 5. Even though this action was not timely filed, the Court, in a decision dated October 23, 2015, permitted Guarantor to file his answer out of time. Stein Aff., Exh. 6. On March 27,2015, the Bankruptcy Court resolved and dismissed the Bankruptcy Action pursuant to 11 U.S.C. 1112(b) ("March 27 Order"). Id. at ~ 17. However, the Bankruptcy Court did not rule on the amount of rent and additional rent due to AI 229 under the Lease. Stein Aff., Exh. 7, On March 23,2015, Tenant surrendered possession of the Demised Premises to AI 229. ld. at ~ 18. The parties held a Preliminary Conference on November 20,2015, whereby the Court ordered that all demands for discovery and inspection shall be served by all parties no later than January 15, ld. To date, Guarantor has not propounded any discovery demands or interrogatories on AI 229. ld. at ~ 18. [ / ] 5

10 As alleged in the Complaint, the amount due AI 229 under the Amended Lease is $2,231, plus prejudgment and post judgment interest (the "Unpaid Balance"). The Unpaid Balance consists of $1,731, in Obligations plus $500, in Lien Obligations, as provided for in section 2(g) of the First Amendment to Lease. A detailed schedule showing the.breakdown of all amounts due AI 229 is attached as Exhibit 10 to the Stein Aff. ARGUMENT I. AI 229 IS ENTITLED TO A JUDGMENT AS A MATTER OF LAW A. Standard of Review A motion for summary judgment "shall be granted if upon all the papers and proof submitted, the cause of action or defense shall be established sufficiently to warrant the court as a matter oflaw in directing judgment in favor of any party." CPLR 3212(b) (McKinney 2014). Actions for enforcement of a guarantee are precisely the types of actions suited to summary judgment. See, e.g., 185 Madison Assoc. v. Ryan, 174 A.D.2d 461, 461 (1st Dep't 1991) (summary judgment granted in guaranty enforcement action where lease and accompanying principal's guaranty of tenant's obligations were "complete on its face"); Bank Leumi Trust Co. of New York v. Rattet & Liebman, 182 A:D.2d 541 (1st Dep't 1992) (affirming award of summary judgment on unconditional guarantee of promissory note in favor of plaintiff bank); State Bank of India, New York Branch v. Patel, 167 AD.2d 242 (1st Dep't 1990) (same). On a motion for summary judgment, the movant must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact, eliminating the need for trial. Winegrad v. New York Univ. Med. Ctr., 64 N.Y.2d 851, 853 (1985); Sheehan v. Gong, 2 AD.3d 166, 168 (1st Dep't 2003). Once the movant's burden has been met, the party opposing a motion for summary [ / /1] 6

11 judgment must supply admissible evidence which demands an adjudication of material facts at trial; "mere conclusions, expressions of hope or unsubstantiated allegations or assertions are insufficient" to warrant denial of the motion. Zuckerman v. City of New York, 49 N.Y.2d 557, 562(1980); Kuzyns v. City of New York, 191 AD.2d 169, 169 (1st Dep't 1993). B. AI 229 Is Entitled To Summary Judgment On Count I Of Its Complaint Seeking To Enforce The Unconditional Guaranty For The Aggregate Outstanding Principal And Accrued Interest Owed By Tenant Under Its Commercial Lease With AI 229. "On a motion for summary judgment to enforce a written Guaranty, all that the creditor need prove is an absolute and unconditional Guaranty, the underlying debt, and the guarantor's failure to perform under the Guaranty." City of New York v. Clarose Cinema Corp., 256 AD.2d 69, 71 (1st Dep't 1998); see also Bank of Am., NA. v. Tatham, 305 AD.2d 183, 185 (1st Dep't 2003) (plaintiffs motion for summary judgment was properly granted upon proof of the loan documents, including the Guaranty agreement, and failure to pay in accordance therewith). Thereafter, the burden shifts to defendant to prove that summary judgment is inappropriate. Seaman-Andwall Corp. v. Wright Machine Corp., 31 A.D.2d 136, 137 (1st Dep't 1968), aff'd, 29 N.Y.2d 617, 324 N.y'S.2d 420 (1971) ("Execution and default having been conceded, it was incumbent on defendants to come forward with evidentiary proof sufficient to raise an issue as to the defenses.") (intemal citations omitted). Because the terms of Guarantor's Guaranty are unambiguous and unconditional, and AI 229 has submitted an Affidavit of nonpayment (which Guarantor cannot dispute), AI 229 has easily met its burden of establishing its entitlement to an award of summary judgment on the issue of the Guarantor's liability. See CompI. ~ 11 & Exh. D at 1. ("This Guaranty is an absolute and unconditional guarantee of payment (not of collection) and performance."); see also Bank of Am., NA. v. Solow, 59 A.D.3d 304, (1st Dep't 2009) ("Plaintiff demonstrated its [ / ] 7

12 entitlement to summary judgment by establishing the existence of a guaranty and submitting an. Affidavit of nonpayment. The guaranty was absolute and unconditional, expressly waived demand or presentment and was expressly made a primary obligation of the defendant.") (internal citations omitted); Manufacturers Hanover Trust Co. v. Trans Nat. Commc 'ns, Inc., 36 A.D.2d 709, 710 (1st Dep't 1971) (trial court order reversed and summary judgment awarded to plaintiffs in action to recover upon absolute and unconditional guarantee); Chase Manhattan Bank v. Goldberger, 199 A.D.2d 97,97 (1st Dep't 1993) (summary judgment granted where guarantee sought to be enforced was unconditional, and defendants could not avail themselves of defense of fraud through parole evidence). In his Answer, Guarantor does not deny that he did not sign the Guaranty. Nor has Guarantor raised any triable issue of fact as to Tenant's continuing default under the Lease or Guarantor's own failure to honor the terms of the Guaranty. Guarantor cannot raise a defense of payment. As Guarantor has not submitted any evidence that he is not bound by the unconditional covenants to pay Tenant's Obligations under the unconditional Guaranty, Guarantor is liable as a matter oflaw. 150 Broadway NY Assoc., L.P. v. Shandell, 910 N.Y.S.2d 763 (Sup. ct. N.Y. Cnty. 2010), aff'd sub nom., 150 Broadway NY Assoc., L.P. v. Shandell, 90 A.D.3d 498 (1st Dep't 2011) (summary judgment on liability granted by default where guarantor submitted no evidence that he was not liable under the guarantee to pay tenant's rent obligations). Guarantor's answer alleges seven purported affirmative defenses, none of which avail him any relief ("Affirmative Defenses"). They are: 1. The Complaint fails to state a cause of action; 2. The arrears allegedly owed by Tenant are incorrect; [ / ] 8

13 The Complaint fails to allege arrears with specificity; 4. Waiver, estoppel, and unclean hands; 5. AI 229 failed to pay certain moneys to Tenant pursuant to the lease; 6. AI 229's unpaid rent is not accurately computed; and 7. AI 229 may not prosecute this action during Tenant's bankruptcy. None of these so-called Affirmative Defenses are viable. Affirmative Defenses 1 (failure to state a cause of action) and 4 (waiver, estoppel, and unclean hands) are mere boilerplate. Guarantor has not supplied any facts necessary to support either defense. 170 W Village Assoc. v. G & E Realty, Inc., 56 A.D.3d (1st Dep't 2006) ("The commercial tenant's challenged affirmative defenses, which pleaded conclusions of law without supporting facts, were properly stricken as insufficient.") (internal citations omitted); see also Siren Realty Corp. v. Biltmore Prod. Corp., 27 A.D.2d 519, 520 (1st Dep't 1966) (reversing trial court and awarding plaintiff summary judgment where defendant's affidavit in support was conclusory and stated no triable issues of fact). Such conclusory defenses raise no triable issues of fact to warrant dismissal of summary judgment. North Fork Bank v. Hamptons Mist Mgmt. Corp., 225 A.D.2d 595, 596 (2d Dep't 1996) (In an action to recover upon a guaranty, where plaintiff submitted only the guaranty and proof of nonpayment, "defendants' unsubstantiated and conclusory allegations failed to raise triable issues of fact which would have precluded the court from granting the plaintiff's motion."); RCA Corp. v. Am. Standards Testing Bur., Inc., 121 AD.2d 890, 891 (1st Dep't 1986) ("[Plaintiff] established a prima facie case of breach of contract [guaranty]. The Guarantor's bare, conclusory averments are insufficient as 'a matter of law to demonstrate a real defense requiring a trial."). [ / /1] 9

14 Likewise, Affirmative Defense 5 is vague and conclusory. It mysteriously alleges that AI 229 somehow failed to pay Tenant undefined "certain sums. of money," causing Tenant to file for bankruptcy. Although the Lease makes plain that the Landlord is required to make certain contributions to the tenant, such contributions are only to be made if Tenant has committed "no material default (by way of example only, failure to timely pay Rent, failure to maintain the required insurance, failure to comply with section 4.5 or section 34.1), [which] shall be continuing at the time of any progress payment...." Lease ~ 31.1(a). Tenant continues to be in material default for at least its failure to timely pay rent. Stein Aff. ~ 16. Further, the alleged unpaid sums are not identified and the amount allegedly owed Tenant is not specified. Even if such a defense was legitimate, and it is not, the defense belongs to Tenant, as it is a claim under the Lease, not the Guaranty. It cannot be asserted by Guarantor in any case, since he has waived such a defense in his Guaranty. Guaranty at 2. See, e.g., Hotel 71 Mezz Lender LLC v. Mitchell, 63 A.D.3d 447, 448 (1st Dep't 2009) (Defendant guarantor in a loan transaction could not assert a defense of frustration of performance, as the alleged conduct was between the lender and borrower and the defense belonged to the borrower alone, and the guarantor "fail[ ed] to identify a single contractual provision that plaintiff allegedly breached."). Therefore, Guarantor's claim that AI 229 owes further monies to Tenant cannot be alleged as an affirmative defense. Affirmative Defenses 2, 3, and 6 all make the bare assertion that AI 229's calculations of unpaid rent are inaccurate. But, the circumstances of AI 229's claim and damages are fully described in the Complaint submitted herewith, which was verified by AI 229's COO Damien Stein, as well as in Mr. Stein's Affidavit. The Stein Aff. tenders sufficient proof as to the amount of the underlying debt and how it was computed by identifying each of the missing rent [ / ] 10

15 payments, pass-through expenses, and unpaid Mechanic's Liens. See Stein Aff., Exh. B; see also Equator Int'l, Inc. v. NH St. Investors, Inc., 978 N.Y.S.2d 817,823 (Sup. Ct. N.Y. Cnty. 2014) ("[A] sworn Affidavit by one of Plaintiffs directors... satisfied the higher pleading standard... to support the allegations in the Affidavit of facts and to verify how the amount due and owing is calculated.") (internal quotations and citations omitted); see also Bank of Am., NA., 59 AD.3d at ("Plaintiff demonstrated its entitlement to summary judgment -by establishing the existence of a guaranty and submitting an Affidavit of nonpayment."). Regardless, the Complaint itself "may be used as the Affidavit of the facts constituting the claim and the amount due." CPLR 3215(f) (emphasis added)? Purported Affirmative Defenses of speculative or incalculable damages are thus inapplicable. Finally, Guarantor's Affirmative Defense-that AI 229 may not commence this action on account of Tenant's bankruptcy-has no support in the law and is expressly waived by the Guaranty. Culver v. Parsons, 7 A.D.3d 931, (3d Dep't 2004) ("[A] defendant's liability as a guarantor generally is not impaired by the discharge of a principal's obligation in a bankruptcy proceeding and, thus, plaintiff may seek recovery from defendant notwithstanding [defendant's] bankruptcy petition."); Union Trust Co. of Rochester v. Willsea, 275 N.Y. 164, 167 (1937) ("[T]he liability of one who is a guarantor or surety for a bankrupt shall not be altered by the discharge of such bankruptcy."). This contingency was contemplated by the parties and thereafter waived. Thus, Guarantor's liability is co-extensive with that of Tenant's. See CompI. ~ 11 & Exh. D at 2; Id. ("[T]he liability of Guarantor hereunder shall in no way be affected, 2 Additionally, even if the Court were to find a genuine issue of material fact concerning the amount of Al 229's damages, the solution would be to grant AI 299 judgment on liability and hold an inquest on damages, which would be done either by the Court or by a Special Referee. [ / ] 11

16 modified or diminished by reason of... any bankruptcy... or similar proceeding affecting Tenant."). In fact, Guarantor cannot assert any such defenses, all of which he expressly waived. See United Orient Bank v. Lee, 223 A.D.2d 500,500 (1st Dep't 1996) ("As the guarantees contained waivers of all defenses other than payment, defendants were precluded from asserting claims of release."); Gannett Co. v. Tesler, 177 A.D.2d 353, 353 (1st Dep't 1991) (holding that all defenses were properly rejected because, "by the plain language of the guarantee, defendant was -. precluded from raising any defenses or counterclaims relating to the underlying debt"); Citibank, NA. v. Plapinger, 66 N.Y.2d 90,95 (1985) (Defense of fraud could not be sustained in guarantee action, and summary judgment reinstated, where defendant guarantors signed an "absolute and unconditional" guarantee, "irrespective of any lack of validity of the [underlying agreement]... or any other circumstance which might -otherwise constitute a defense" to the guarantee.) (internal quotations omitted). Here, Guarantor's obligations are unequivocal and unavoidable. As the Guarantor, he expressly agreed, "Guarantor shall and will forthwith pay, perform or observe [Tenant's] Obligations... irrespective of any defense," (CompI. ~ 11) including "any... notice or demand to which Guarantor might otherwise be entitled, all of which Guarantor hereby expressly waives." Guaranty at 2. Guarantor contracted that the validity of the Guaranty and all Guarantor's obligations "shall in no way be terminated, affected, diminished or impaired by reason of... any... defense which may now or hereafter exists in favor of tenant." Id. at 3. Indeed, Guarantor contracted that this obligation "shall be enforceable against Guarantor without the necessity of any suit or proceeding on Landlord's part of any kind or nature whatsoever against tenant...." Id. (emphasis added). In any event, even though Tenant's bankruptcy has [ / /1] 12

17 been dismissed, Guarantor still refuses to honor his Guaranty and has not taken this action seriously; despite the Court's Preliminary Conference Order, Guarantor failed to serve any discovery by its January 15, 2016 deadline. Stein Aff. ~ 19. Because Guarantor cannot assert. any defense or raise any triable issues of fact, he cannot defeat entry of summary judgment in favor of AI 229. CONCLUSION AI 229 has made a prima facie case for enforcement of Guarantor's Guaranty in the principal amount of $2,231, plus prejudgment and post judgment interest, entitling it to judgment as a matter of law on the Complaint. Accordingly, the Court should grant AI 229 summary judgment.. Dated: New York, NY February 10,2016 MEISTER SEELIG & FEIN LLP B~ 125 Park Avenue, 7th Floor New York, New York Tel: (212) Attorneys for Plaintiff [ / ] 13