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Fifth Avenue Partners, L.P. v. Doniger

Supreme Court, New York County

April 19, 2013

FIFTH AVENUE PARTNERS, L.P., Plaintiff,
v.
SCOTT P. DONIGER d/b/a FULL CIRCLE POST and FULL CIRCLE POST NYC, LLC. Defendants. Index No. 109774/2011

Unpublished Opinion

DORIS LING-COHAN, J.:

Plaintiff moves for partial summary judgment against defendant Full Circle Post NYC, LLC (Full Circle), on its third cause of action for unpaid use and occupancy, in the amount of $96, 566.12, and for an order striking Full Circle's affirmative defenses. Full Circle cross-moves for an order dismissing plaintiffs third, fourth and fifth causes of action, and for leave to amend its answer pursuant to CPLR §3025(b).

Plaintiff is the owner of a building located at 19 West 21st Street, New York, New York, and the landlord of the commercial space known as Suites 1202, 1203 and 1204 (premises). Defendant Scott P. Doniger d/b/a Full Circle Post (Doniger) was the lessee of the premises, who entered into a lease with plaintiff on August 30, 2007. The lease was for a term of 10 years, commencing on September 1, 2007, and ending on August 31, 2017. Doniger also executed a personal guarantee, upon execution of the lease.

In July 2008, Doniger allegedly sublet the premises, by oral agreement, to Full Circle, without plaintiffs prior knowledge or written consent. Full Circle admittedly occupied the premises until it vacated, on January 29, 2011. Plaintiff alleges that Doniger vacated the premises on February 8, 2011, without plaintiffs consent, and owes base rent and additional rent in the amount of $1, 275, 453.96, for the period of October 2010 through August 31, 2017, based upon the terms of the lease.

On or about January 2011, plaintiff commenced a non-payment proceeding against defendant Doniger, to recover possession of the premises, and to obtain a judgment for the outstanding rent. Doniger defaulted and a judgment of possession and a warrant of eviction were issued in plaintiffs favor.[1]

On August 25, 2011, plaintiff commenced this action against both Doniger and Full Circle. While Full Circle served and filed an answer, Doniger defaulted in answering or making an appearance. By order of this court dated March 26, 2012, plaintiffs motion for a default judgment against defendant Doniger was granted, with an inquest to be conducted as to damages, at, or about, the time of the trial of this case.

As stated, plaintiff now moves for partial summary judgment against Full Circle on its third cause of action and to dismiss Full Circles' affirmative defenses. Full Circle has cross-moved for summary judgment of dismissal of plaintiff s third (use and occupancy), fourth (declaratory judgment that Full Circle is the alter ego of Doniger) and fifth (holding Full Circle liable under the lease based upon such alter ego theory) causes of action, and for leave to amend its answer pursuant to CPLR §3025(b).

Plaintiffs Motion for Partial Summary Judgment - Third Cause of Action

In seeking partial summary judgment on its third cause of action for unpaid use and occupancy, plaintiff alleges that while there is no contractual privity between plaintiff and Full Circle, with respect to the subject commercial space, Full Circle is, nevertheless, liable to plaintiff for unpaid use and occupancy, under the theory of quantum meruit. According to plaintiff, and it is not disputed by Full Circle, during the period from October 2010 through January 2011, Full Circle occupied the subject premises and no rent or use and occupancy was paid. Thus, plaintiff argues it is is entitled to summary judgment on its claim for use and occupancy against Full Circle and seeks the fair market value of such use and occupancy of the subject premises.

"The proponent of a motion for summary judgment must demonstrate that there are no material issues of fact in dispute, and that it is entitled to judgment as a matter of law." Dalla-Stephenson v Waisman, 39 A.D.3d 303, 306 (1st Dept 2007), citing Winegrad v New York Univ. Medical Center, 64 N.Y.2d 851, 853 (1985). Upon proffer of evidence establishing a prima facie case by the movant, "the party opposing a motion for summary judgment bears the burden of 'producing] evidentiary proof in admissible form sufficient to require a trial of material questions of fact.'" People v Grasso, 50 A.D.3d 535, 545 (1st Dept 2008), quoting Zuckerman v City of New York, 49 N.Y.2d 557, 562 (1980). However, the Court of Appeals has made clear that bare allegations or conclusory assertions are insufficient to create genuine, bona fide issues of fact necessary to defeat such a motion. See Rotuba Extruders, Inc. v Ceppos, 46 N.Y.2d 223, 231 (1978).

Applying such principles herein, as further detailed below, plaintiff is entitled to partial summary judgment as to liability on its third cause of action for the fair market value of Full Circle's use and occupancy, of the subject premises, for the time period from October 2010 through January 2011, based upon the theory of quantum meruit, with the issue of damages (the amount of the fair market value), to be determined by a Special Referee, in accordance with CPLR §4317(b), as further detailed below. As stated, significantly, it is not disputed that, Full Circle did in fact occupy the subject premises during the time period alleged by plaintiff and that no lease or other contracted existed between plaintiff and Full Circle.

Under New York law, a landlord's entitlement to receive, and an occupant's obligation to pay, a reasonable fee for use and occupancy of a premises is not contingent on an underlying contract; rather, an occupant's duty to pay the landlord for its use and occupancy of the premises is predicated upon the theory of quantum meruit, and is imposed by law for the purpose of bringing about justice, without reference to the intention of the parties. See Trump CPSLLP v Meyer, 249 A.D.2d 22 (1st Dept 1998)(landlord entitled to use and occupancy where undisputed that tenants' family members resided in the subject joined apartments); Eighteen Assoc, LLC v Nanjim Leasing Corp., 25 A.D.2d 559 (2nd Dept 1999)(the absence of privity of contract is not a bar to a cause of action to recover damages for use and occupancy); Gateway I Group, Inc., v Park Ave. Physicians, P.C., 62 A.D.3d 141, 148-49 (2nd Dept 2009)(owner can sue corporate defendants in quantum meruit based on their use and occupancy of the subject premises).

Here, in response to that portion of plaintiff s motion which seeks summary judgment on its use and occupancy claim based upon quantum meruit, Full Circle submits virtually no opposition as to its liability under such theory, agreeing with plaintiff that there was no lease or contract between Full Circle and plaintiff, and admitting that Full Circle was in fact in possession of the subject premises, as Doniger's subtenant, during the time period claimed by plaintiff. Full Circle merely contests the issue of damages, arguing that plaintiff should not be entitled to any use and occupancy from Full Circle, since plaintiff failed to make repairs to the subject premises, which was severely damaged in a fire, on or about January 2010. Full Circle does not, however, dispute that it occupied the subject premises for the time period claimed by plaintiff and that no rent or use and occupancy was paid during such time. Thus, as there are no factual issues with respect to the fact that Full Circle, as occupant of the subject premises for the time period alleged by plaintiff, is obligated to plaintiff for use and ...


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