Adam Leitman Bailey, P.C., successfully represented a commercial landlord in a New York County Supreme Court action arising from a tenant’s default under a commercial lease and the guarantors’ defaults under related personal guaranties. After obtaining a default money judgment against the tenant and guarantors, the firm defeated the defendants’ attempt to vacate the judgment and secured an additional judgment awarding the landlord its contractual attorneys’ fees.

The dispute arose after the commercial tenant defaulted under its lease by failing to satisfy its rental obligations and abandoned the premises. Pursuant to the lease and accompanying guaranties, the landlord commenced an action in Supreme Court seeking to recover unpaid rent, additional rent, and other damages recoverable under the parties’ agreements. Despite being properly served with the summons and complaint, neither the tenant nor the guarantors timely appeared or answered.

Adam Leitman Bailey, P.C., promptly moved for a default judgment. The Court granted the motion and entered judgment against both the tenant and the guarantors, jointly and severally, for the amounts due under the lease and guaranties. Rather than satisfy the judgment, the guarantors moved to vacate their default, contending that they should be permitted to defend the action notwithstanding their failure to answer.

Under New York law, a party seeking to vacate a default must establish both a reasonable excuse for the default and a potentially meritorious defense. The guarantors argued law office failure on the part of their alleged counsel and a meritorious defense based on a flawed interpretation of the guaranty, claiming that the tenants’ vacatur from the premises cut off the guarantors’ monetary obligations.

Adam Leitman Bailey, P.C., successfully demonstrated that the defendants could establish neither requirement. We argued, and the Court agreed, that the guarantors failed to provide sufficient specificity regarding their alleged retention of counsel to defend the action and fatally failed to stay apprised of the status of the action. We also argued that the guarantors’ purported defense lacked merit because, in the guaranties in the cases the guarantors relied upon, the guarantors’ monetary obligations terminated upon the tenant’s surrender of physical possession of the premises, whereas in the guaranty at issue here the guaranty included the required element and pre-condition of payment of the tenant’s arrears. The guarantors failed to demonstrate (or even to sufficiently allege) payment. Therefore, their monetary obligations to the landlord continued to accrue notwithstanding the tenant’s vacatur from the premises.

The Court agreed that the defendants had not demonstrated the type of meritorious defense necessary to justify vacating a duly entered default judgment. The Court denied the guarantors’ motion to vacate in its entirety, leaving the default judgment fully intact. In doing so, the Court reaffirmed that parties cannot simply ignore litigation and later obtain relief based upon conclusory excuses or speculative defenses. The decision preserved the landlord’s judgment and prevented the defendants from using motion practice to delay enforcement.

In addition to defending the judgment, Adam Leitman Bailey, P.C., also sought to recover the attorneys’ fees incurred in enforcing the lease and guaranties. The governing agreements expressly required the tenant and guarantors to reimburse the landlord for reasonable legal fees incurred in enforcing their contractual obligations. We submitted detailed evidence establishing both the contractual entitlement to fees and the reasonableness of the amounts requested.

Despite the guarantors’ written opposition the Court agreed that the landlord was entitled to recover its attorneys’ fees under the parties’ agreements, and awarded an additional judgment for those fees. As a result, the defendants became liable not only for the unpaid rent and other damages awarded in the default judgment, but also for the legal expenses associated with the summons and complaint and the landlord’s motion for default judgment.

Through careful motion practice and a thorough understanding of New York commercial landlord-tenant law, and by promptly pursuing a default judgment, vigorously opposing an attempt to reopen the case, and by obtaining reimbursement of enforcement costs, Adam Leitman Bailey, P.C., efficiently enforced its client’s contractual rights and remedies while minimizing unnecessary delay.

Adam Leitman Bailey, P.C. Partner, Vladimir Mironenko, and Law Clerk, Nurie Metodieva, represented the landlord throughout the Supreme Court proceedings.