Opinion
14427-2010.
Decided February 8, 2011.
Joseph A. Mulligan, Esq., Babylon, New York, Attorney for Plaintiff.
Steven A. Costantino, Esq., Costantino Costantino, Copiague, New York, Attorney for Defendant A. Mroczkowski.
FRV Car Wash Corp., Copiague, New York, PRO SE.
Francisco Batista, Roslyn, New York, PRO SE.
ORDERED , that the motion (motion sequence number 002) by plaintiff pursuant to CPLR 2221 for leave to renew and reargue plaintiff's motion for a preliminary injunction and money judgment is denied; and it is further
ORDERED , that the cross-motion (motion sequence number 003) by defendants, Andrzej Mroczkowski and Joanna Mroczkowski, for summary judgment dismissing the plaintiff's petition as asserted against them is granted; and it is further
ORDERED , that the motion by plaintiff (motion sequence number 004) for a default judgment against defendant Francisco Batista ("Batista") is denied.
In this proceeding commenced on April 19, 2010, the plaintiff, C D Car Wash Corp., seeks a judgment (1) restraining the defendants, Andrzej Mroczkowski and Joanna Mroczkowski ("Mroczkowskis") from continuing to occupy commercial property located at 521 Oak Street, Copiague, New York (the "subject premises"), (2) awarding possession of the subject premises to plaintiff, and (3) against defendants FRV Car Wash Corp. and Francisco Batista in the principal sum of $757,360.97.
This proceeding arises out of a Lease Agreement ("Lease") between plaintiff, C D Car Wash, Inc., as tenant, and defendants, Andrzej Mroczkowski and Joanna Mroczkowski ("Mroczkowskis"), as landlord, of property located at 521 Oak Street, Copiague, New York ("subject premises") for a period of 20 years commencing December 1, 2004, for the operation of a car wash. On or about June 13, 2007, plaintiff entered into a contract with defendant FRV Car Wash Corp ("FRV") for the sale of the car wash business for the sum of $1,500,000.00. Pursuant to the terms of the contract of sale, FRV, by its President, defendant Francisco Batista ("Batista") executed a "NON-NEGOTIABLE INSTALLMENT PROMISSORY NOTE" ("Note") pursuant to which it agreed to pay plaintiff the sum of $900,000.00, plus interest, payable in monthly installments for 120 consecutive months. At that same time, plaintiff and FRV executed a SECURITY AGREEMENT (Chattel Mortgage) which secured payment of the Note. Pursuant to the Security Agreement, the collateral was defined as "[a]ll of the fixtures, equipment, inventory, bank deposits, case, receivable, claims, stock in trade and all other assets hereinafter acquired by the debtor regarding the business of the debtor at 521 Oak Street, Copiague, New York 11726'". Additionally, plaintiff, FRV and the Mroczkowskis executed an ASSIGNMENT, ASSUMPTION AND MODIFICATION OF LEASE, pursuant to which FRV assumed the obligations of the lease and became the tenant of the subject premises. Plaintiff and FRV entered into an ESCROW AGREEMENT AND REASSIGNMENT OF LEASE ("Reassignment of Lease"), which authorized an escrow agent to release the Reassignment of Lease to plaintiff in the event of an uncured default by FRV under the Note or the Lease. Finally, Batista executed a GUARANTY OF LEASE ("Guaranty"), guaranteeing FRV's obligations under the Lease.
By order dated July 29, 2010, this Court denied plaintiff's motion for a preliminary injunction finding that plaintiff failed to demonstrate a likelihood of success on the merits, as it no longer has any rights to the subject premises. Plaintiff now moves to reargue and renew its motion. The Mroczkowskis oppose plaintiff's motion.
Initially, the Court finds that plaintiff has failed to comply with CPLR 2221(f), which requires the moving party on a combined motion for leave to reargue and leave to renew to identify separately and support separately each item of relief sought. In any event, to the extent that the plaintiff's motion can be read as seeking leave to reargue its motion for a preliminary injunction, that branch of the motion is denied as the plaintiff has failed to demonstrate that the Court overlooked or misapprehended any matters of fact or law (CPLR 2221[d][2]). Additionally, to the extent that plaintiff's motion can be read as seeking leave to renew its motion for a preliminary injunction, that branch of the motion is also denied as the plaintiff has failed to present any new facts not offered on the prior motion that would change the prior determination (CPLR 2221[e][2]). Contrary to the plaintiff's contention, whether or not the Reassignment of Lease was actually released to plaintiff by the Escrowee is irrelevant. The Escrow Agreement clearly provides that the Escrowee was permitted to release the Reassignment of Lease to plaintiff upon default by FRV in making any payment due plaintiff pursuant to the Promissory Note or upon failure of FRV to fulfill its obligations as assignee of the underlying lease. Plaintiff admits that FRV defaulted in making payments to it under the Promissory Note on December 12, 2009. Thus, plaintiff could have sought release of the Reassignment of Lease from the Escrowee at that time. There is no evidence before the court indicating that plaintiff took any steps to facilitate the release of the Reassignment of Lease.
The Mroczkowskis cross-move for summary judgment dismissing the plaintiff's complaint as asserted against them. In support of the cross-motion the Mroczkowskis argue that the Lease between them and plaintiff, which was assigned to FRV, was terminated on February 23, 2010, when the Suffolk County District Court directed the issuance of Warrants of Eviction against FRV and Batista and a money judgment in favor of the Mroczkowskis against FRV.
The Mroczkowskis submit their own affidavit and an affidavit from Arthur J. Giorgini, Esq., the attorney who represented them in the summary eviction proceeding. The affidavits set forth the following chronology of events: in January 2010 FRV defaulted in the payment of rent under the terms of the Lease Agreement and Assignment; the Mroczkowskis commenced a non-payment eviction proceeding against FRV and Batista in Suffolk County District Court; on January 26, 2010, the return date of the eviction proceeding, the matter was adjourned at the request of Robert Delgado, a principal of FRV until February 2, 2010. On February 2, 2010, an appearance was made in the eviction proceeding on behalf of FRV by Ira Goldberg, Esq., and the matter was adjourned until February 16, 2010; on February 3, 2010, Mr. Giorgini, attorney for the Mroczkowskis, faxed a letter to Mitchell Birzon, Esq., the attorney who represented plaintiff in the assignment of the lease to FRV and the escrowee of the Reassignment of Lease, advising that the Mroczkowskis commenced a landlord-tenant proceeding against FRV and that the matter was scheduled for trial on February 16, 2010. On February 16, 2010, the eviction proceeding was adjourned until February 23, 2010; on February 17, 2010, plaintiff's attorney, Mitchell Birzon, Esq., faxed a letter to the Mroczkowskis attorney acknowledging the commencement of the eviction proceeding against FRV and Batista and discussing the possibility of plaintiff re-taking possession of the premises under a new lease with the Mroczkowskis. On February 23, 2010, FRV and Batista defaulted in the eviction proceeding and a final order was made in favor of the Mroczkowskis awarding them possession, damages in the amount of $14,161.27 against FRV, and a warrant of eviction. On March 2, 2010, the Suffolk County District Court issued a judgment awarding possession of the subject premises to the Mroczkowskis and awarding damages in the amount of $14,151.27 against FRV, and issued a warrant of eviction against FRV and Batista. On April 2, 2010, the Suffolk County Sheriff executed the warrant of eviction and the Mroczkowskis were put in possession of the premises. According to Mr. Giorgini, between February 3, 2010, when counsel for the plaintiff was notified of the pendency of the eviction proceeding, and March 2, 2010, when the judgment and warrant of eviction were issued, the plaintiff did not make a motion for stay of the eviction proceeding nor request any other judicial intervention in that proceeding.
Further, the Mroczkowskis point out that in an affirmation dated April 28, 2010, submitted in support of plaintiff's motion for a preliminary injunction, plaintiff's counsel states that when the plaintiff viewed the premises before execution of the warrant of eviction, plaintiff concluded "that either some vandals or some angry members of FRV did damages before vacating the premises and ran off with the equipment that was the subject of the plaintiff's UCC filings." Thus, the Mroczkowskis contend that the plaintiff admits that all property that was the subject of plaintiff's UCC-1 filings at the premises were removed by someone other than the Mroczkowskis prior to the commencement of the instant action and that any possible rights of the plaintiff in the premises or any item appurtenant thereto ceased to exist before this action was commenced on April 19, 2010. The Mroczkowskis argue that pursuant to RPAPL § 749(3), the issuance of the warrant of eviction cancelled the lease agreement and annulled the landlord-tenant relationship between them.
In opposition to the Mroczkowskis' motion for summary judgment, the plaintiff submits an attorney's affirmation and an affidavit from Eileen Gasparik, a principal shareholder and officer of plaintiff. Without citing to any authority to support its position, plaintiff contends that the judgment in the eviction proceeding is not binding on plaintiff because it was never named and served as a party to that proceeding.
A party moving for summary judgment has the burden of making a prima facie showing of entitlement to judgment as a matter of law, offering sufficient evidence demonstrating the absence of any material issues of fact ( Winegrad v. New York Univ. Med. Ctr., 64 NY2d 85; Zuckerman v. City of New York, 49 NY2d 557). Summary judgment should not be granted where there is any doubt as to the existence of a triable issue; however, once a prima facie showing has been made by the movant, the burden shifts to the party opposing the motion to produce evidentiary proof in admissible form sufficient to establish material issues of fact which require a trial ( see, Zayas v. Half Hollow Hills Cent. School Dist., 226 AD2d 713 [2nd Dept. 1996]).
Here, the Mroczkowskis have made a prima facie showing that the plaintiff is not entitled to possession of the subject premises. "The issuance of the warrant of eviction terminated any existing tenancy and annulled the landlord-tenant relationship as a matter of law" ( Rocar Realty Northeast, Inc. v. Jefferson Valley Mall Limited Partnership , 38 AD3d 744 , 747 [2nd Dept. 2007] citing RPAPL § 749 and Galapo v. Feinberg, 266 AD2d 150, 151 [1st Dept. 1999]; Frey v. Rose , 51 AD3d 859 [2nd Dept. 2008]). In opposition, the plaintiff has failed to come forward with any evidence that it retained any interest in the lease after it was assigned to FRV such that it was a necessary party to the eviction proceeding. Therefore, contrary to the plaintiff's contention, the Mroczkowskis were under no obligation to notify plaintiff of the eviction proceeding against FRV, as plaintiff parted with its entire interest in the leasehold in assigning the lease to FRV ( see, Anjo Rest. Corp. v. Sunrise Hotel Corp., 98 Misc 2d 597 [Sup Ct, Nassau County 1979]; cf. Dun-Donnelly Publ. Corp. v. Kenvic Assoc., 225 AD2d 373 [1st Dept. 1996][plaintiff not have possessory interest where it assigned lease]). Moreover, contrary to plaintiff's contention, because plaintiff was not in possession of the subject premises, it would not have been a proper party to the summary eviction proceeding ( Park Prop. Dev. v. Santos , 1 Misc 3d 16, 17 [App Term 2d Dept 2003]). In any event, the undisputed evidence indicates that on February 3, 2010, approximately one month before the issuance of a warrant of eviction, the plaintiff was made aware of the pendency of the eviction proceeding and that Ms. Gasparik, plaintiff's President, personally appeared in Suffolk County District Court thereafter, yet plaintiff failed to seek injunctive relief or take any other action in connection with the eviction proceeding.
With regard to the plaintiff's claim that it is entitled to possession of the "collateral" as defined in its Security Agreement with FRV, the Mroczkowskis have demonstrated that the plaintiff admitted that when it examined the premises before execution of the warrant of eviction, it concluded that either some vandals or some angry members of FRV did damages before vacating the premises and ran off with the equipment that was the subject of the plaintiff's UCC filings. Moreover, as previously determined by this Court in its order dated July 29, 2010, the plain language of paragraph 22 of the lease gives the Mroczkowskis the right to possession of the property upon the execution of the warrant of eviction ( see, Elias v. Ferri , 46 AD3d 743 [2nd Dept. 2007]). In its opposition papers, the plaintiff fails to address the issue of its alleged right to possession of the collateral vis a vis the Mroczkowskis. Therefore, it has failed to overcome the Mroczkowskis prima facie showing of entitlement to judgment as a matter of law on this claim.
Finally, the plaintiff's motion for a default judgment against Batista, is denied. As recently stated by the Appellate Division, Second Department in McGee v. Dunn ( 75 AD3d 624 [2nd Dept. 2010]):
Although a defaulting defendant is deemed to have admitted all the allegations in the complaint, "the legal conclusions to be drawn from such proof are reserved for the Supreme Court's determination" ( Venturella-Ferretti v. Ferretti , 74 AD3d 792 , 793, 901 N.Y.S.2d 551; see CPLR 3215[b]; Green v. Dolphy Constr. Co., 187 AD2d 635, 636, 590 N.Y.S.2d 238). There is no "mandatory ministerial duty'" to enter a default judgment against a defaulting party ( Resnick v. Lebovitz , 28 AD3d 533 , 534, 813 N.Y.S.2d 480, quoting Gagen v. Kipany Prods., 289 AD2d 844, 846, 735 N.Y.S.2d 225 [internal quotation marks omitted]). Instead, the court must determine whether the motion was supported with "enough facts to enable [the] court to determine that a viable cause of action exists" ( Woodson v. Mendon Leasing Corp., 100 NY2d 62, 71, 760 N.Y.S.2d 727, 790 N.E.2d 1156; see Cardo v. Board of Mgrs., Jefferson Vil. Condo 3 , 29 AD3d 930 , 932, 817 N.Y.S.2d 315; Beaton v. Transit Facility Corp. , 14 AD3d 637 , 789 N.Y.S.2d 314). "In determining whether the plaintiff has a viable cause of action, the court may consider the complaint, affidavits, and affirmations submitted by the plaintiff" ( Litvinskiy v. May Entertainment Group, Inc. , 44 AD3d 627 , 627, 841 N.Y.S.2d 882).
Here, plaintiff asks the court to enter a default judgment against Batista based on his guaranty of FRV's obligations to the Mroczkowskis under the Lease. However, plaintiff seeks judgment in the amount of $757,360.97, the amount allegedly due and owing to plaintiff by FRV under the Note. Even though no opposition to plaintiff's motion for a default judgment has been submitted, it has not been demonstrated that Batista personally guaranteed FRV's obligations under the Note. Notably, plaintiff does not seek a default judgment against FRV under the Note. Accordingly, plaintiff's motion for a default judgment against Batista in the amount of $757,360.97, plus interest, costs and disbursements, is denied.
Counsel are directed to appear for a conference on April 11, 2011 at 9:30 o'clock a.m. before the undesigned.
This constitutes the DECISION and ORDER of the Court.