Representing two Manhattan commercial landlords, Adam Leitman Bailey, P.C. prevailed in two Supreme Court plenary actions, winning money judgments against commercial tenants and guarantors.

In each case, the client entered into a commercial lease to rent a retail store in Manhattan. The lease was guaranteed by a personal good guy guaranty. Each tenant defaulted and stopped paying rent.Adam Leitman Bailey, P.C., commenced non-payment eviction cases. In the first case, we won summary judgment, obtained a judgment of possession, a money judgment, a supplementary money judgment for attorneys’ fees, and evicted the tenant. In the second case, the tenant agreed to surrender the premises and all parties reserved their claims and defenses regarding the rent.Immediately upon regaining possession of each premises, we commenced Supreme Court plenary actions against the tenant and guarantor for their breaches of the respective agreements. In the first case, we further sued the tenant for additional damages accruing following the entry of the money judgment in the eviction case.

In each case, all parties were timely and properly served with the summons and complaint; all parties defaulted in answering.

We moved for default judgment against each tenant and guarantor.

In each case, the opposing parties then hired counsel to prevent the entry of default judgment. They opposed our motions for default judgment and cross-moved for permission to file late answers.

We opposed both cross-motions. We argued that, while courts prefer to resolve disputes on the merits, the defendants in both cases lacked the required reasonable excuse for their default and any meritorious defense to the claims.

In the first case we also argued that the tenant was barred by claim preclusion from rearguing the issues decided in our client’s favor on summary judgment in the commercial eviction case and that the guarantor is similarly barred due to his privity with the tenant.

The Court held:

Defendants do not make out the necessary showing under CPLR 3012 (d). Most fundamentally, they lack any potentially meritorious defenses. Plaintiff previously prevailed in a nonpayment eviction proceeding brought in Part 52 of Civil Court against defendant-tenant and obtained a judgment of eviction in April 2023. Tenant is therefore barred by claim preclusion from raising defenses it might have raised in the nonpayment proceeding. Defendant-guarantor stands in privity with tenant for claim-preclusion purposes and is thus precluded from raising those defenses here. And defendants do not identify any potential defense to plaintiff’s claims for liquidated damages under the lease and guarantee that accrued after the Civil Court granted plaintiff judgment for possession of the premises and unpaid rent. Absent any potentially meritorious defense, no purpose would be served in requiring plaintiff to accept defendants’ untimely answer.

In the second case we demonstrated the lack of any merit to the guarantor’s excuses for failing to answer the complaint, which included incredible claims that (i) he cannot read English, and (ii) he believed that neither he nor the tenant would be subject to further litigation following resolution of the summary eviction proceeding and the vacatur of the premises, despite the settlement agreement (negotiated by counsel for all parties) stating the opposite.

The Supreme Court similarly found for our client in the second case. In both cases, our clients were awarded the money judgments sought.

Partner Vladimir Mironenko of Adam Leitman Bailey, P.C. represented Adam Leitman Bailey, P.C.