Opinion
16522-16522A Index No. 652678/21 Case No. 2022–00543
10-25-2022
NATIONAL COMMUNITY REINVESTMENT COALITION, INC. doing business as National Community Reinvestment Coalition, Plaintiff–Respondent, v. MICRO OFFICE MANAGEMENT LLC, Defendant–Appellant.
James J. DeCristofaro, New York, for appellant. Landy Wolf, PLLC, New York (David A. Wolf of counsel), for respondent.
James J. DeCristofaro, New York, for appellant.
Landy Wolf, PLLC, New York (David A. Wolf of counsel), for respondent.
Webber, J.P., Singh, Moulton, Gonza´lez, Pitt, JJ.
Judgment, Supreme Court, New York County (Laurence L. Love, J.), entered July 29, 2021, in favor of plaintiff against defendant in the amount of $276,928.61, and bringing up for review an order, same court and Justice, entered July 16, 2021, which granted plaintiff's motion for summary judgment in lieu of a complaint and denied defendant's cross motion to dismiss the action, unanimously affirmed, with costs.
The gravamen of this appeal is whether a stipulation of settlement was a modification or a novation of the underlying sublease agreement, which had been guaranteed by defendant. We find that to the extent defendant's claim of novation is not barred by the absolute and unconditional nature of the guaranty (see Cooperatieve Centrale Raiffeisen–Boerenleenbank, B.A., "Rabobank Intl.," N.Y. Branch v. Navarro, 25 N.Y.3d 485, 493, 15 N.Y.S.3d 277, 36 N.E.3d 80 [2015] ; cf. United Orient Bank v. Bao Lee, 223 A.D.2d 500, 637 N.Y.S.2d 96 [1st Dept. 1996] ), the record evidence established, as a matter of law, that the stipulation was a modification, and thus it did not relieve defendant of its guaranty, which expressly applies to modifications (see Leeward Isles Resorts, Ltd. v. Hickox, 49 A.D.3d 277, 277, 853 N.Y.S.2d 41 [1st Dept. 2008], lv dismissed 11 N.Y.3d 914, 873 N.Y.S.2d 528, 901 N.E.2d 1282 [2009] ; Bier Pension Plan Trust v. Estate of Schneierson, 74 N.Y.2d 312, 315–316, 546 N.Y.S.2d 824, 545 N.E.2d 1212 [1989] ). The stipulation's operative terms clearly and unambiguously continued the sublease in full effect except as expressly modified by the stipulation. That language establishes that plaintiff, the primary tenant, and the subtenant did not intend to extinguish the sublease and replace it with the stipulation (see e.g. Harlem Suites, LLC v. 231 Norman Ave., LLC, 88 A.D.3d 532, 533, 930 N.Y.S.2d 582 [1st Dept. 2011] ; 2402 E. 69th St., LLC v. Corbel Installations, Inc., 183 A.D.3d 859, 861–862, 124 N.Y.S.3d 632 [2d Dept. 2020] ).
Defendant's reliance on the language in a "Wherefore" clause of the stipulation stating that the subtenancy had been terminated is unavailing. Although that statement conflicts with the operative terms discussed above, it does not render those terms ambiguous, and thus does not raise an issue of fact regarding whether the subtenant and plaintiff intended to extinguish the sublease and replace it with the stipulation (see Grand Manor Health Related Facility, Inc. v. Hamilton Equities Inc., 65 A.D.3d 445, 447, 885 N.Y.S.2d 255 [1st Dept. 2009] ; Matter of Legion of Christ, Inc. v. Town of Mount Pleasant, 151 A.D.3d 858, 860, 54 N.Y.S.3d 681 [2d Dept. 2017] ). Defendant's reliance on the holdover proceeding is also unavailing because plaintiff's commencement of that proceeding does not manifest an unequivocal intention to extinguish the sublease, especially in light of the stipulation's unambiguous substantive provisions continuing the sublease (see Arici v. Poma, 202 A.D.3d 584, 585, 163 N.Y.S.3d 521 [1st Dept. 2022] ).
Defendant's claim that the stipulation materially altered the subtenant's financial condition is speculative because the record is devoid of any evidence of the subtenant's financial condition at the time of the sublease or the stipulation (cf. Jones v. Ballon, Stoll & Itzler, 1990 WL 113120 [S.D. N.Y., July 27, 1990, No. 88–CV–8459 (CSH)] ). To the extent defendant contends that the stipulation expanded its risk because without that agreement, its liability would have been cut off in February 2019, defendant does not provide support for its position.