Preview
FILED: NASSAU COUNTY CLERK 12/05/2023 05:11 PM INDEX NO. 607313/2023
NYSCEF DOC. NO. 26 RECEIVED NYSCEF: 12/05/2023
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NASSAU
---------------------------------------------------------X
1616 PRESIDENT STREET ASSOCIATES
LLC,
Plaintiff, Index No. 607313/2023
-against-
GLENDON FRASER,
Defendant.
---------------------------------------------------------X
APPE NDIX TO REPLY MEMORANDUM OF LAW IN FURTHER SUPPORT
OF DEFENDANT’S MOTI ON TO DISMISS AND OTHER RELIEF
BROOKLYN LEGAL SERVICES
Parker Winship, Esq.
1709 Saint Marks Avenue, 2nd Floor
Brooklyn, NY 11233
Phone: (718) 237-5516
Email: pwinship@lsnyc.org
Attorneys for Defendant
1 of 34
FILED: NASSAU COUNTY CLERK 12/05/2023 05:11 PM INDEX NO. 607313/2023
NYSCEF DOC. NO. 26 RECEIVED NYSCEF: 12/05/2023
172 Van Duzer Realty Corp. v Globe Alumni Student Assistance Assn., Inc.
Court of Appeals of New York
November 19, 2014, Argued; December 18, 2014, Decided
No. 228
Reporter
24 N.Y.3d 528 *; 25 N.E.3d 952 **; 2 N.Y.S.3d 39 ***; 2014 N.Y. LEXIS 3439 ****; 2014 NY Slip Op 08872
51; Gotlieb v Taco Bell Corp., 871 F Supp 147;
Vanguard Commercial Leasing Corp. v Dayanzadeh,
[1] 172 Van Duzer Realty Corp., Respondent, v Globe 147 AD2d 557, 538 NYS2d 492; Stats, LLC v Elevation,
Alumni Student Assistance Association, Inc., et al., Inc., 2008 NY Slip Op 32449[U]; Fairfield Lease Corp. v
Appellants. Marsi Dress Corp., 60 Misc 2d 363, 303 NYS2d 179;
Ring v Printmaking Workshop, Inc., 70 AD3d 480, 897
Subsequent History: Appeal dismissed by 172 Van NYS2d 11; Holy Props. v Cole Prods., 87 NY2d 130,
Duzer Realty Corp. v. Globe Alumni Student Assistance 661 NE2d 694, 637 NYS2d 964; Gallery at Fulton St.,
Assn., Inc., 164 A.D.3d 1170, 81 N.Y.S.3d 899, 2018 LLC v Wendnew LLC, 30 AD3d 221, 817 NYS2d 237.)
N.Y. App. Div. LEXIS 6141, 2018 WL 4567925 (Sept. II. The Appellate Division's decision conflicts with
25, 2018) precedent from this Court and from the other
Departments of the Appellate Division, which hold that
Prior History: Appeal, by permission of the Court of an acceleration clause will not be enforced when it is
Appeals, from an order of the Appellate Division of the disproportionate to the plaintiff's probable loss. (Truck
Supreme Court in the First Judicial Department, entered Rent-A-Ctr. v Puritan Farms 41 NY2d 361
2nd, 420,
January 22, 2013. The Appellate Division affirmed a NE2d 393 NYS2d States Mgt. Corp. v
1015, 365; Fifty
judgment of the Supreme Court, New York County Pioneer Auto 46 NY2d 389 NE2d 415
Parks, 573, 113,
(Carol R. Edmead, J.), which had awarded plaintiff NYS2d Benderson v Poss, 142 AD2d 530
800; 937,
damages in the sum of $1,488,604.66. The appeal to NYS2d International PubIs. v Matchabelli, 260 NY
362;
the Appellate Division brought up for review an order of 184 NE 51; Gotlieb v Taco Bell 871 F Supp
451, Corp.,
that Supreme Court, which had granted plaintiff's motion Frontier Corp. v Griffin Petroleum 172
147; Leasing Inc.,
for summary judgment on the issue of liability. F Supp 2d 1172; Heller Inc. v Burry, 633 F Supp
Fin.,
706.) Ill. The acceleration clause is unenforceable for
172 Van Duzer Realty Corp. v. Globe Alumni Student
the further reason that there is no corresponding duty of
Assistance Assn., Inc., 102 A.D.3d 543, 959 N.Y.S.2d
the landlord to mitigate. (Ross Realty v V & A Iron
39, 2013 N.Y. App. Div. LEXIS 276 (N.Y. App. Div. 1st
Jan. Fabricators, Inc., 5 Misc 3d 72, 787 NYS2d 602; Holy
Dep't, 22, 2013)
Props. v Cole Prods., 87 NY2d 130, 661 NE2d 694, 637
Disposition: Order without and case NYS2d 964; American Capital Access Serv. Corp. v
modified, costs,
remitted to Supreme New York for Muessel, 28 AD3d 395, 814 NYS2d 139; Delvecchio v
Court, County,
further proceedings in accordance with the opinion Bayside Chrysler Plymouth Jeep Eagle, 271 AD2d 636,
herein as so modified, affirmed. 706 NYS2d 724; Bank One, Tex., N.A. v Prudential Ins.
and,
Co. of Am., 878 F Supp 943; International PubIs. v
Counsel: Herzfeld & Rubin, P.C., New York Matchabelli, 260 NY 451, 184 NE 51.) IV. Plaintiff's
[****1] City
(Linda M. Brown and David B. Hamm of counsel), for claims are barred by res judicata. (Matter of Hunter, 4
appellants. I. The Appellate Division's decision conflicts NY3d 260, 827 NE2d 269, 794 NYS2d 286; Jones v
with precedent from this Court and from other Gianferante, 305 NY 135, 111 NE2d 419; 1422 Corp. v
Departments of the Appellate Division, which hold that Rosenfeld, 44 AD3d 451, 842 NYS2d 909; Licini v
an acceleration clause should not be enforced when the Graceland Florist, Inc., 32 AD3d 825, 821 NYS2d 234;
landlord terminates the lease and repossesses the Ross Realty v v & A Fabricators, Inc., 42 AD3d 246, 836
property. States Mgt. Corp. v Pioneer Auto Parks, NYS2d 242; European Am. Bank & Trust Co. v Boyd,
(Fifty
46 NY2d 573, 389 NE2d 113, 415 NYS2d 800; 131 AD2d 629, 516 NYS2d 714; Dart Assoc. v Ste-Con
Benderson v Poss, 142 AD2d 937, 530 NYS2d 362; Corp., 66 AD2d 973, 412 NYS2d 55.)
International Pubis. v Matchabelli, 260 NY 451, 184 NE
2 of 34
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NYSCEF DOC. NO. 26 RECEIVED NYSCEF: 12/05/2023
24 N.Y.3d 528, *528; 25 N.E.3d 952, **952; 2 N.Y.S.3d 39, ***39; 2014 N.Y. LEXIS 3439, ****1; 2014 NY Slip Op
08872, *****08872
[**953] [***40] [*531] Rivera, J.
Cox Padmore Skolnik & Shakarchy LLP, New York City
This appeal involves a dispute over future rental
(Noah B. Potter, Steven D. Skolnik and Sanford Hausler
Payments sought under an [2] acceleration clause from
of counsel), for respondent. I. Judgment enforcing the
an out-of-possession [*532] tenant after termination of
acceleration clause is appropriate because appellants
the leasehold [***41] [**954] agreement. The Appellate
failed to meet their burden of proof. (Truck Rent-A-Ctr. v
Division affirmed an order of Supreme Court which
Puritan Farms 2nd, 41 NY2d 420, 361 NE2d 1015, 393
granted the landowner plaintiff summary judgment on
NYS2d 365; Tenber Assoc. v Bloomberg L.P., 51 AD3d
the issue of liability, and affirmed a judgment for
573, 859 NYS2d 61.) II. This Court should protect
parties'
damages in accordance with the stipulation. We
freedom of contract by rejecting the extreme changes
conclude that the acceleration clause is not per se
proposed by defendants. (Truck Rent-A-Ctr. v Puritan
invalid merely because the landowner terminated the
Farms 2nd, 41 NY2d 420, 361 NE2d 1015, 393 NYS2d
lease and the tenant is no ionger in possession.
365; Fifty States Mgt. Corp. v Pioneer Auto Parks, 46
However, defendants should have been permitted to
NY2d 573, 389 NE2d 113, 415 NYS2d 800;
present evidence in support of their contention that the
International Pubis. v Matchabelli, 260 NY 451, 184 NE
undiscounted acceleration of all future rents constitutes
51; Olim Realty Corp. v Big John's Moving, 250 AD2d
an unlawful penalty. Therefore, we remit for a hearing,
744, 673 NYS2d 439; Gallery at Fulton St., LLC v
limited to that issue.
Wendnew LLC, 30 AD3d 221, 817 NYS2d 237; Holy
Props. v Cole Prods., 87 NY2d 130, 661 NE2d 694, 637
Real property owner, plaintiff 172 Van Duzer Realty
NYS2d 964; Parsons & Whittemore v 405 Lexington'
Corp. (Van Duzer), and tenant, defendant Globe Alumni
299 AD2d 156, 753 NYS2d 36; Long Is. R.R. Co. v . ,,,,
Student Assistance [ 2] Association, Inc.
Northville Indus. Corp., 41 NY2d 455, 362 NE2d 558, .
(Association), entered into a one-year commercial rental
393 NYS2d 925; Benderson v Poss, 142 AD2d 937, 530
lease agreement. The lease provided that defendant
NYS2d 362; Crown IT Servs., Inc. v Koval-Olsen, 11
Appellants' Globe Institute of Technology, Inc. (Globe) would use
AD3d 263, 782 NYS2d 708.) III. own legal . ,
the property as a dormitory for Globe s for-profit
authority shows that plaintiff's claim is not barred by res
educational institution. Prior to the end of the one-year
judicata. (Gotlieb v Taco Bell Corp., 871 F Supp 147; .
term, Van Duzer and the Association extended the
Benderson v Poss, 142 AD2d 937, 530 NYS2d 362;
lease for a nine-year period, and Globe signed a
Vanguard Commercial Leasing Corp. v Dayanzadeh,
guarantee that it would be jointly and severally liable for
147 AD2d 557, 538 NYS2d 492; Stats ' LLC v Elevation '
the Association's obligations under the lease. Van Duzer
Inc., 2008 NY Slip Op 32449[U]; Fairfield Lease Corp. v
and the Association also executed a Student Dormitory
Marsi Dress Corp., 60 Misc 2d 363, 303 NYS2d 179;
Restrictive Declaration (Declaration) with the New York
Truck Rent-A-Ctr. v Puritan Farms 2nd, 41 NY2d 420, . .
City Department of Buildings indicating, among other
361 NE2d 1015, 393 NYS2d 365; New 24 W. 40th St.
things, that the premises would be used solely as a
LLC v XE Capital Mgt., LLC, 104 AD3d 513, 961 NYS2d .
student dormitory.
139; Gannett Suburban Newspapers v El-Kam Realty
Co., 306 AD2d 312, 760 NYS2d 553; Olim Realty Corp. Several months after the lease
executing extension,
v Big John's Moving, 250 AD2d 744, 673 NYS2d 439; Van Duzer sent the Association a notice to cure for
Ring v Printmaking Workshop, Inc., 70 AD3d 480, 897 failure to maintain the premises in good order, citing
NYS2d 11.) several violations issued the New York
by City
Environmental Control Board, and demanding action be
Judges: Opinion by Judge Rivera. Chief Judge
taken within a month's time. The Association failed to
Lippman and Judges Read, Smith and Pigott concur-
cure, and instead vacated the premises and ceased
Judge Abdus-Salaam dissents and votes to affirm for
paying rent as of February 2008. Van Duzer terminated
reasons stated in the memorandum at the Appellate
the lease, effective March 24, 2008, with notice
Division (102 AD3d 543 [2013])-
to [****3] the Association, and commenced an action to
recover possession and past due rent. In August 2008,
Opinion by: RIVERA
Civil Court awarded Van Duzer possession of the
_ _ premises with a zero dollar money judgment.
Opinion
In September 2009, Van Duzer commenced the present
Page 2 of 5
3 of 34
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NYSCEF DOC. NO. 26 RECEIVED NYSCEF: 12/05/2023
24 N.Y.3d 528, *532; 25 N.E.3d 952, **954; 2 N.Y.S.3d 39, ***41; 2014 N.Y. LEXIS 3439, ****3; 2014 NY Slip Op
08872, *****08872
action against defendants for rent arrears and an reduced by the amount of rent Van Duzer was able to
amount equal to the future remaining rent owed on the collect by reletting the premises between August 2008
lease. Van Duzer thereafter moved for summary until February 2011, plus interest.
judgment based on an acceleration clause in the
leasehold agreement which provides that upon the The First Department affirmed, concluding Van Duzer
tenant's default the landowner terminate the made a prima facie showing of entitlement to
may lease,
repossess the and "shall be entitled to accelerated rent under the terms of the lease, and
premises,
as liquidated a sum of money defendants failed to raise a triable issue of fact as to
recover, [*533] damages,
equal to the total of . . . the balance of the rent for the whether the liquidated damages constituted an
term." unenforceable (102 AD3d 543, 959 NYS2d 39
remainder of the The provision also states that penalty
defendants'
"[i]n the event of Lease termination Tenant shall [2013]). The court also [*534] rejected res
continue to be obligated to rent and additional judicata claim finding such damages were unavailable in
pay [3]
rent for the entire Term as though Lease had not the Civil Court summary proceeding.
th[e]
terminated."*
been
On appeal to us, defendants reassert their res judicata
argument and their challenges to the validity of the
Defendants objected to summary judgment, contending
acceleration clause, claiming what amounts to a per se
Van Duzer could not collect under the acceleration
rule barring accelerated rent as damages when the
clause once it terminated the lease and retook
landowner holds rightful possession of the property. We
possession of the property. Defendants also asserted
defendants'
conclude that arguments are
that res judicata barred Van Duzer's damages claims
unpersuasive [****6] except for their contention that
because it could have obtained damages in the prior
they were entitled to a hearing on their claim that the
Civil Court action. Alternatively, defendants requested
acceleration clause constitutes a [4] penalty.
discovery [***42] [**955] in order to establish the lack
of proportionality between Van Duzer's claimed defendants'
[1] As an initial matter, we reject res
damages and probable loss. Van Duzer counter argued
judicata argument because the Civil Court was without
that it had difficulty finding new tenants because the
. authority to address a claim for the balance of rent due
premises was subject to the Declaration's student
. under the acceleration clause in Van Duzer's holdover
dormitory-use limitation. With regard to the res judicata
proceeding (NY City Civ Ct Act § 204; see also Ross
claim, Van Duzer alleged that Civil Court lacked
Realty v V & A Fabricators, Inc., 42 AD3d 246, 836
jurisdiction to award damages based on the acceleration
NYS2d 242 [2d Dept 2007]; Marketplace v Smith, 181
clause.
Misc 2d 440, 442-443, 694 NYS2d 893 [Henrietta Just
Ct, Monroe County 1999]). Thus, Van Duzer was not
Supreme Court granted Van Duzer summary judgment
defendants'
barred from pursuing damages for breach.
on liability, finding the parties had clearly agreed that
upon termination of the lease the Association would be ,
[2] Turning to defendants other arguments, defendants
liable for rent, and referred the matter to a Special . . .
. claim that Van Duzer is barred from collecting unpaid
Referee to determine damages. The court denied
defendants' future rents pursuant to the acceleration clause because
request for
Preview
FILED: NASSAU COUNTY CLERK 12/05/2023 05:11 PM INDEX NO. 607313/2023 NYSCEF DOC. NO. 26 RECEIVED NYSCEF: 12/05/2023 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NASSAU ---------------------------------------------------------X 1616 PRESIDENT STREET ASSOCIATES LLC, Plaintiff, Index No. 607313/2023 -against- GLENDON FRASER, Defendant. ---------------------------------------------------------X APPE NDIX TO REPLY MEMORANDUM OF LAW IN FURTHER SUPPORT OF DEFENDANT’S MOTI ON TO DISMISS AND OTHER RELIEF BROOKLYN LEGAL SERVICES Parker Winship, Esq. 1709 Saint Marks Avenue, 2nd Floor Brooklyn, NY 11233 Phone: (718) 237-5516 Email: pwinship@lsnyc.org Attorneys for Defendant 1 of 34 FILED: NASSAU COUNTY CLERK 12/05/2023 05:11 PM INDEX NO. 607313/2023 NYSCEF DOC. NO. 26 RECEIVED NYSCEF: 12/05/2023 172 Van Duzer Realty Corp. v Globe Alumni Student Assistance Assn., Inc. Court of Appeals of New York November 19, 2014, Argued; December 18, 2014, Decided No. 228 Reporter 24 N.Y.3d 528 *; 25 N.E.3d 952 **; 2 N.Y.S.3d 39 ***; 2014 N.Y. LEXIS 3439 ****; 2014 NY Slip Op 08872 51; Gotlieb v Taco Bell Corp., 871 F Supp 147; Vanguard Commercial Leasing Corp. v Dayanzadeh, [1] 172 Van Duzer Realty Corp., Respondent, v Globe 147 AD2d 557, 538 NYS2d 492; Stats, LLC v Elevation, Alumni Student Assistance Association, Inc., et al., Inc., 2008 NY Slip Op 32449[U]; Fairfield Lease Corp. v Appellants. Marsi Dress Corp., 60 Misc 2d 363, 303 NYS2d 179; Ring v Printmaking Workshop, Inc., 70 AD3d 480, 897 Subsequent History: Appeal dismissed by 172 Van NYS2d 11; Holy Props. v Cole Prods., 87 NY2d 130, Duzer Realty Corp. v. Globe Alumni Student Assistance 661 NE2d 694, 637 NYS2d 964; Gallery at Fulton St., Assn., Inc., 164 A.D.3d 1170, 81 N.Y.S.3d 899, 2018 LLC v Wendnew LLC, 30 AD3d 221, 817 NYS2d 237.) N.Y. App. Div. LEXIS 6141, 2018 WL 4567925 (Sept. II. The Appellate Division's decision conflicts with 25, 2018) precedent from this Court and from the other Departments of the Appellate Division, which hold that Prior History: Appeal, by permission of the Court of an acceleration clause will not be enforced when it is Appeals, from an order of the Appellate Division of the disproportionate to the plaintiff's probable loss. (Truck Supreme Court in the First Judicial Department, entered Rent-A-Ctr. v Puritan Farms 41 NY2d 361 2nd, 420, January 22, 2013. The Appellate Division affirmed a NE2d 393 NYS2d States Mgt. Corp. v 1015, 365; Fifty judgment of the Supreme Court, New York County Pioneer Auto 46 NY2d 389 NE2d 415 Parks, 573, 113, (Carol R. Edmead, J.), which had awarded plaintiff NYS2d Benderson v Poss, 142 AD2d 530 800; 937, damages in the sum of $1,488,604.66. The appeal to NYS2d International PubIs. v Matchabelli, 260 NY 362; the Appellate Division brought up for review an order of 184 NE 51; Gotlieb v Taco Bell 871 F Supp 451, Corp., that Supreme Court, which had granted plaintiff's motion Frontier Corp. v Griffin Petroleum 172 147; Leasing Inc., for summary judgment on the issue of liability. F Supp 2d 1172; Heller Inc. v Burry, 633 F Supp Fin., 706.) Ill. The acceleration clause is unenforceable for 172 Van Duzer Realty Corp. v. Globe Alumni Student the further reason that there is no corresponding duty of Assistance Assn., Inc., 102 A.D.3d 543, 959 N.Y.S.2d the landlord to mitigate. (Ross Realty v V & A Iron 39, 2013 N.Y. App. Div. LEXIS 276 (N.Y. App. Div. 1st Jan. Fabricators, Inc., 5 Misc 3d 72, 787 NYS2d 602; Holy Dep't, 22, 2013) Props. v Cole Prods., 87 NY2d 130, 661 NE2d 694, 637 Disposition: Order without and case NYS2d 964; American Capital Access Serv. Corp. v modified, costs, remitted to Supreme New York for Muessel, 28 AD3d 395, 814 NYS2d 139; Delvecchio v Court, County, further proceedings in accordance with the opinion Bayside Chrysler Plymouth Jeep Eagle, 271 AD2d 636, herein as so modified, affirmed. 706 NYS2d 724; Bank One, Tex., N.A. v Prudential Ins. and, Co. of Am., 878 F Supp 943; International PubIs. v Counsel: Herzfeld & Rubin, P.C., New York Matchabelli, 260 NY 451, 184 NE 51.) IV. Plaintiff's [****1] City (Linda M. Brown and David B. Hamm of counsel), for claims are barred by res judicata. (Matter of Hunter, 4 appellants. I. The Appellate Division's decision conflicts NY3d 260, 827 NE2d 269, 794 NYS2d 286; Jones v with precedent from this Court and from other Gianferante, 305 NY 135, 111 NE2d 419; 1422 Corp. v Departments of the Appellate Division, which hold that Rosenfeld, 44 AD3d 451, 842 NYS2d 909; Licini v an acceleration clause should not be enforced when the Graceland Florist, Inc., 32 AD3d 825, 821 NYS2d 234; landlord terminates the lease and repossesses the Ross Realty v v & A Fabricators, Inc., 42 AD3d 246, 836 property. States Mgt. Corp. v Pioneer Auto Parks, NYS2d 242; European Am. Bank & Trust Co. v Boyd, (Fifty 46 NY2d 573, 389 NE2d 113, 415 NYS2d 800; 131 AD2d 629, 516 NYS2d 714; Dart Assoc. v Ste-Con Benderson v Poss, 142 AD2d 937, 530 NYS2d 362; Corp., 66 AD2d 973, 412 NYS2d 55.) International Pubis. v Matchabelli, 260 NY 451, 184 NE 2 of 34 FILED: NASSAU COUNTY CLERK 12/05/2023 05:11 PM INDEX NO. 607313/2023 NYSCEF DOC. NO. 26 RECEIVED NYSCEF: 12/05/2023 24 N.Y.3d 528, *528; 25 N.E.3d 952, **952; 2 N.Y.S.3d 39, ***39; 2014 N.Y. LEXIS 3439, ****1; 2014 NY Slip Op 08872, *****08872 [**953] [***40] [*531] Rivera, J. Cox Padmore Skolnik & Shakarchy LLP, New York City This appeal involves a dispute over future rental (Noah B. Potter, Steven D. Skolnik and Sanford Hausler Payments sought under an [2] acceleration clause from of counsel), for respondent. I. Judgment enforcing the an out-of-possession [*532] tenant after termination of acceleration clause is appropriate because appellants the leasehold [***41] [**954] agreement. The Appellate failed to meet their burden of proof. (Truck Rent-A-Ctr. v Division affirmed an order of Supreme Court which Puritan Farms 2nd, 41 NY2d 420, 361 NE2d 1015, 393 granted the landowner plaintiff summary judgment on NYS2d 365; Tenber Assoc. v Bloomberg L.P., 51 AD3d the issue of liability, and affirmed a judgment for 573, 859 NYS2d 61.) II. This Court should protect parties' damages in accordance with the stipulation. We freedom of contract by rejecting the extreme changes conclude that the acceleration clause is not per se proposed by defendants. (Truck Rent-A-Ctr. v Puritan invalid merely because the landowner terminated the Farms 2nd, 41 NY2d 420, 361 NE2d 1015, 393 NYS2d lease and the tenant is no ionger in possession. 365; Fifty States Mgt. Corp. v Pioneer Auto Parks, 46 However, defendants should have been permitted to NY2d 573, 389 NE2d 113, 415 NYS2d 800; present evidence in support of their contention that the International Pubis. v Matchabelli, 260 NY 451, 184 NE undiscounted acceleration of all future rents constitutes 51; Olim Realty Corp. v Big John's Moving, 250 AD2d an unlawful penalty. Therefore, we remit for a hearing, 744, 673 NYS2d 439; Gallery at Fulton St., LLC v limited to that issue. Wendnew LLC, 30 AD3d 221, 817 NYS2d 237; Holy Props. v Cole Prods., 87 NY2d 130, 661 NE2d 694, 637 Real property owner, plaintiff 172 Van Duzer Realty NYS2d 964; Parsons & Whittemore v 405 Lexington' Corp. (Van Duzer), and tenant, defendant Globe Alumni 299 AD2d 156, 753 NYS2d 36; Long Is. R.R. Co. v . ,,,, Student Assistance [ 2] Association, Inc. Northville Indus. Corp., 41 NY2d 455, 362 NE2d 558, . (Association), entered into a one-year commercial rental 393 NYS2d 925; Benderson v Poss, 142 AD2d 937, 530 lease agreement. The lease provided that defendant NYS2d 362; Crown IT Servs., Inc. v Koval-Olsen, 11 Appellants' Globe Institute of Technology, Inc. (Globe) would use AD3d 263, 782 NYS2d 708.) III. own legal . , the property as a dormitory for Globe s for-profit authority shows that plaintiff's claim is not barred by res educational institution. Prior to the end of the one-year judicata. (Gotlieb v Taco Bell Corp., 871 F Supp 147; . term, Van Duzer and the Association extended the Benderson v Poss, 142 AD2d 937, 530 NYS2d 362; lease for a nine-year period, and Globe signed a Vanguard Commercial Leasing Corp. v Dayanzadeh, guarantee that it would be jointly and severally liable for 147 AD2d 557, 538 NYS2d 492; Stats ' LLC v Elevation ' the Association's obligations under the lease. Van Duzer Inc., 2008 NY Slip Op 32449[U]; Fairfield Lease Corp. v and the Association also executed a Student Dormitory Marsi Dress Corp., 60 Misc 2d 363, 303 NYS2d 179; Restrictive Declaration (Declaration) with the New York Truck Rent-A-Ctr. v Puritan Farms 2nd, 41 NY2d 420, . . City Department of Buildings indicating, among other 361 NE2d 1015, 393 NYS2d 365; New 24 W. 40th St. things, that the premises would be used solely as a LLC v XE Capital Mgt., LLC, 104 AD3d 513, 961 NYS2d . student dormitory. 139; Gannett Suburban Newspapers v El-Kam Realty Co., 306 AD2d 312, 760 NYS2d 553; Olim Realty Corp. Several months after the lease executing extension, v Big John's Moving, 250 AD2d 744, 673 NYS2d 439; Van Duzer sent the Association a notice to cure for Ring v Printmaking Workshop, Inc., 70 AD3d 480, 897 failure to maintain the premises in good order, citing NYS2d 11.) several violations issued the New York by City Environmental Control Board, and demanding action be Judges: Opinion by Judge Rivera. Chief Judge taken within a month's time. The Association failed to Lippman and Judges Read, Smith and Pigott concur- cure, and instead vacated the premises and ceased Judge Abdus-Salaam dissents and votes to affirm for paying rent as of February 2008. Van Duzer terminated reasons stated in the memorandum at the Appellate the lease, effective March 24, 2008, with notice Division (102 AD3d 543 [2013])- to [****3] the Association, and commenced an action to recover possession and past due rent. In August 2008, Opinion by: RIVERA Civil Court awarded Van Duzer possession of the _ _ premises with a zero dollar money judgment. Opinion In September 2009, Van Duzer commenced the present Page 2 of 5 3 of 34 FILED: NASSAU COUNTY CLERK 12/05/2023 05:11 PM INDEX NO. 607313/2023 NYSCEF DOC. NO. 26 RECEIVED NYSCEF: 12/05/2023 24 N.Y.3d 528, *532; 25 N.E.3d 952, **954; 2 N.Y.S.3d 39, ***41; 2014 N.Y. LEXIS 3439, ****3; 2014 NY Slip Op 08872, *****08872 action against defendants for rent arrears and an reduced by the amount of rent Van Duzer was able to amount equal to the future remaining rent owed on the collect by reletting the premises between August 2008 lease. Van Duzer thereafter moved for summary until February 2011, plus interest. judgment based on an acceleration clause in the leasehold agreement which provides that upon the The First Department affirmed, concluding Van Duzer tenant's default the landowner terminate the made a prima facie showing of entitlement to may lease, repossess the and "shall be entitled to accelerated rent under the terms of the lease, and premises, as liquidated a sum of money defendants failed to raise a triable issue of fact as to recover, [*533] damages, equal to the total of . . . the balance of the rent for the whether the liquidated damages constituted an term." unenforceable (102 AD3d 543, 959 NYS2d 39 remainder of the The provision also states that penalty defendants' "[i]n the event of Lease termination Tenant shall [2013]). The court also [*534] rejected res continue to be obligated to rent and additional judicata claim finding such damages were unavailable in pay [3] rent for the entire Term as though Lease had not the Civil Court summary proceeding. th[e] terminated."* been On appeal to us, defendants reassert their res judicata argument and their challenges to the validity of the Defendants objected to summary judgment, contending acceleration clause, claiming what amounts to a per se Van Duzer could not collect under the acceleration rule barring accelerated rent as damages when the clause once it terminated the lease and retook landowner holds rightful possession of the property. We possession of the property. Defendants also asserted defendants' conclude that arguments are that res judicata barred Van Duzer's damages claims unpersuasive [****6] except for their contention that because it could have obtained damages in the prior they were entitled to a hearing on their claim that the Civil Court action. Alternatively, defendants requested acceleration clause constitutes a [4] penalty. discovery [***42] [**955] in order to establish the lack of proportionality between Van Duzer's claimed defendants' [1] As an initial matter, we reject res damages and probable loss. Van Duzer counter argued judicata argument because the Civil Court was without that it had difficulty finding new tenants because the . authority to address a claim for the balance of rent due premises was subject to the Declaration's student . under the acceleration clause in Van Duzer's holdover dormitory-use limitation. With regard to the res judicata proceeding (NY City Civ Ct Act § 204; see also Ross claim, Van Duzer alleged that Civil Court lacked Realty v V & A Fabricators, Inc., 42 AD3d 246, 836 jurisdiction to award damages based on the acceleration NYS2d 242 [2d Dept 2007]; Marketplace v Smith, 181 clause. Misc 2d 440, 442-443, 694 NYS2d 893 [Henrietta Just Ct, Monroe County 1999]). Thus, Van Duzer was not Supreme Court granted Van Duzer summary judgment defendants' barred from pursuing damages for breach. on liability, finding the parties had clearly agreed that upon termination of the lease the Association would be , [2] Turning to defendants other arguments, defendants liable for rent, and referred the matter to a Special . . . . claim that Van Duzer is barred from collecting unpaid Referee to determine damages. The court denied defendants' future rents pursuant to the acceleration clause because request for