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FILED: NEW YORK COUNTY CLERK 04/18/2024 08:53 AM INDEX NO. 652010/2024
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/18/2024
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
––––––––––––––––––––––––––––X
AFGHAN HOUSE, INC., : Index No. _______________/2024
:
Plaintiff, : SUMMONS
:
-against- : Plaintiff designates New York County as
: the place of trial. The basis of venue is,
JUHUI DENG a/k/a JUTAO DENG, : inter alia, the county in in which
: Plaintiff’s principal office is located.
Defendant. :
:
––––––––––––––––––––––––––––X
TO THE ABOVE NAMED DEFENDANT:
YOU ARE HEREBY SUMMONED to answer the verified complaint in this action and
to serve a copy of your answer, or, if the complaint is not served with this summons, to serve a
notice of appearance, on the plaintiff’s attorneys within twenty (20) days after the service of this
summons, exclusive of the day of service; or within thirty (30) days after completion of service
made in any other manner then by personal delivery within the State. In case of your failure to
appear or answer, judgment will be taken against you by default for the relief demanded in the
verified complaint.
Dated: New York, New York ROSENBERG & ESTIS, P.C.
March 26, 2024 Attorneys for Plaintiff
By: _____________________________
Luise A. Barrack
Moshe B. Nachum
733 Third Avenue
New York, New York 10017
(212) 867-6000
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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
––––––––––––––––––––––––––––X
AFGHAN HOUSE, INC., : Index No. ___________/2024
:
Plaintiff, :
: VERIFIED COMPLAINT
-against- :
:
JUHUI DENG a/k/a JUTAO DENG, :
:
Defendant. :
:
––––––––––––––––––––––––––––X
Plaintiff AFGHAN HOUSE, INC. (“Plaintiff” or “Landlord”), by its attorneys, Rosenberg
& Estis, P.C., for its Verified Complaint, alleges as follows:
THE PARTIES
1. Plaintiff is a New York corporation with a business address at c/o Bernstein Real
Estate, 150 West 30th Street, Floor 20, New York, New York 10001.
2. Upon information and belief, defendant Juhui Deng a/k/a Jutao Deng (“Guarantor”
or “Defendant”) is a natural person, who resides at 64-18 231st Street, Flushing, New York 11364
and maintains a place of business at (i) 124 West 30th Street, New York, New York 10001, and/or
(ii) 1201 Broadway, New York, New York 10001.
THE FACTS
A. The Lease
3. Plaintiff is the owner and landlord of the building known as and located at 124 West
30th Street, New York, New York 10001 (the “Building”).
4. Plaintiff and non-party INSHANDBAGS INC. (d/b/a INS HANDBAGS INC.)
(“Tenant”) are parties to Standard Form of Store Lease and Rider (“Rider”) annexed thereto,
executed on December 28, 2006, by and between Plaintiff, as landlord, and Just Fantastic, Inc.,
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predecessor-in-interest to Tenant (“Tenant’s Predecessor”), as tenant (collectively, the “Original
Lease”), as amended pursuant to that certain First Amendment to Lease, dated February ___, 2012,
between Plaintiff and Tenant’s Predecessor (the “First Amendment”), and pursuant to that certain
Second Amendment to Lease, dated January 31, 2014, between Plaintiff and Tenant (the “Second
Amendment”), and pursuant to that certain Third Amendment to Lease, dated October ___, 2016,
between Plaintiff and Tenant (the “Third Amendment”), and pursuant to that certain Fourth
Amendment to Lease, dated October __, 2018, between Plaintiff and Tenant (the “Fourth
Amendment”, together with the Original Lease, the First Amendment, the Second Amendment
and the Third Amendment, the “Lease”), for the premises known as Store #2 in the Building
(collectively, the “Premises”).
5. Pursuant to the Original Lease entered into by Plaintiff and Tenant’s Predecessor,
Tenant’s Predecessor came into possession of the Premises.
6. Pursuant to that certain Assignment to Lease, executed approximately on March 1,
2012 (the “Assignment”), Tenant’s Predecessor assigned all of its right, title and interest as tenant
in and to the Original Lease as modified by the First Amendment, to Tenant.
I. Base Annual Rent
7. The “Witnesseth” clause of the Original Lease provides in relevant part that Tenant
is required to pay to Plaintiff base rent (the “Base Annual Rent”) in equal monthly installments in
advance on the first day of each month, without any set of or deduction whatsoever.
8. Rider Article R5 of the Original Lease, as amended pursuant to paragraph 2 of the
Fourth Amendment, provides that the Base Annual Rent due for the period from February 1, 2019,
through the lease expiration date of January 31, 2021 (the “Lease Expiration Date”), is at the rate
of $10,000.00 per month.
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II. Additional Rent
9. Rider Article R28 of the Original Lease provides that:
Notwithstanding anything to the contrary contained
in this Lease, any monies due Landlord other than the
Base Annual Rent are deemed to be additional rent
(“Additional Rent”), and any default in the payment
of Additional Rent shall give to Landlord the same
remedies as it has with respect to a default in the
payment of Base Annual Rent.
10. Rider Article R11 of the Original Lease defines “Rent” as “Base Annual Rent”
together with “Additional Rent.”
A. Real Estate Taxes
11. Pursuant to Rider Article R7 of the Original Lease, as amended pursuant to
paragraph 3 of the Fourth Amendment, Tenant is obligated to pay real estate tax escalations to
Plaintiff, in accordance with the terms thereof, as Additional Rent.
B. Water
12. Pursuant to Article 28 of the Original Lease, Tenant is obligated to pay to Plaintiff
the sum of fifty dollars ($50.00), on the first day of each month, for water charges, as Additional
Rent.
C. Sprinkler
13. Pursuant to Article 29 of the Original Lease, Tenant is obligated to pay to Plaintiff
the sum of fifty dollars ($50.00), on the first day of each month, for Tenant’s portion of the contract
price for the sprinkler supervisory service, as Additional Rent.
D. Late Fees & Interest
14. Rider Article R15 of the Original Lease provides that:
In every case in which Tenant is required by the
terms of this Lease to pay Landlord a sum of money
(including, without limitation, payment of Base
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Annual Rent and Additional Rent) and payment is
not made within ten (10) days after the same shall
become due, Tenant shall pay as Additional Rent
hereunder, a late charge of seventy five ($75.00)
dollars in addition to interest on such sum of money
or so much thereof as shall be unpaid from the date
it becomes due until it is paid. Such interest shall be
computed at a rate which shall be one and one-half
percent (1.5%) per month; provided, however, in no
event shall such interest be in excess of the highest
rate of interest which shall from time to time be
permitted under the laws of the State of New York to
be charged on late payments of sums of money due
pursuant to the terms of a lease.”
E. Attorneys’ Fees
15. Rider Article R18 of the Original Lease provides, in pertinent part, that:
ln the event Tenant is in default of the terms of this
Lease, Tenant shall pay Landlord’s fees and
expenses relating to the default including but not
limited to Landlord pursuing Tenant’s compliance or
Landlord defending its actions as a result of Tenant's
default or any other associated cost or expense
including Landlord's court costs and attorneys fees.
F. Holdover Use & Occupancy
16. Rider Article R16 of the Original Lease provides, in pertinent part, that:
In the event that Tenant does not surrender all of the
demised premises to Landlord upon the expiration or
other earlier termination of this Lease, Tenant shall
pay, as a use and occupation charge during such
“hold-over” period, a monthly amount equal to the
sum of two (2) times the Base Annual Rent being due
and payable during the last month of the term.
B. Defendant’s Guaranty of the Lease
17. As an inducement to Plaintiff entering into the Original Lease, Defendant executed
that certain Guaranty, executed on December 28, 2006, for Plaintiff’s benefit (the “Guaranty”).
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18. Pursuant to the Guaranty, Defendant absolutely, unconditionally, and irrevocably
guaranteed to Plaintiff all Rent payable by Tenant under the Lease through the Surrender Date (as
defined in the Guaranty).
19. Section A of the Guaranty provides in relevant part that:
… The "Surrender Date" means the date that Tenant
shall have performed all of the following: (a) vacated
and surrendered the demised premises to Landlord
(or its managing agent) free of all subleases or
licensees and in broom clean condition, and Tenant
has so notified Landlord or such agent in writing, b)
delivered the keys to the doors to the demised
premises to Landlord (or its managing agent), and (c)
paid all amounts due and payable under the Lease as
Base Annual Rent or Additional Rent or other such
charges to Landlord up until the later of (a) and (b)
above.
20. Section D of the Guaranty provides in relevant part that:
… The validity of this Guaranty shall not be affected
or impaired by reason of the assertion by Landlord
against Tenant of the rights or remedies reserved to
Landlord under the Lease. Guarantor agrees that this
Guaranty shall remain in force and effect as to any
assignment, transfer, renewal, modification or
extension of the Lease whether or not Guarantor shall
have received any notice of or consented to such
renewal, modification, extension, assignment or
transfer.
21. Section E of the Guaranty provides in relevant part that:
… The Guarantor waives notice of any and all
defaults by Tenant in the payment of Base Annual
Rent, Additional Rent, or other charges, and waives
notice of any and all defaults by Tenant in the
performance of any of the terms, of the Lease on
Tenant's part to be performed. Further, Guarantor
waives any and all defenses available to tenant under
the Lease.
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22. Pursuant to Section G of the Guaranty, Defendant agreed to pay attorneys’ fees,
court costs and other expenses incurred by Plaintiff in successfully enforcing or attempting to
enforce the Guaranty.
C. Tenant’s Failure to Pay Rent Prior to Lease Expiration
23. Through December 31, 2019, there was an unpaid Rent balance due from Tenant
in the amount of $720.27.
24. Then, Tenant failed to pay to Landlord, any Rent for January 2020.
25. Thereafter, from March 1, 2020, through the Lease Expiration Date, Tenant failed
to pay any Rent to Landlord and accordingly, through the Lease Expiration Date, Tenant was in
Rent arrears in the total amount of $123,959.47 (the “Rent Arrears”).
D. Tenant’s Month-to-Month Tenancy, Failure to Pay Use & Occupancy and Eviction
26. Tenant failed to vacate the Premises and surrender same to Landlord on or before
the Lease Expiration Date and instead held over in possession of the Premises without permission
of Landlord.
27. Notwithstanding Landlord’s right pursuant to Rider Article R16 of the Original
Lease to charge Tenant for its use and occupancy of the Premises in the amount of two times the
Base Annual Rent being due and payable during the last month of the term (i.e., $20,000.00 per
month) for the entire period in which Tenant held over in possession, Landlord instead elected to
charge Tenant Base Annual Rent at the same rate which was due and payable during the last month
of the term, to wit: $10,000.00 per month (the “Holdover Rate”).
28. After the Lease Expiration Date, Tenant tendered to Landlord several partial
payments toward Tenant’s monthly use & occupancy, totaling $12,000.00, which Landlord
accepted, thus creating a month-to-month tenancy.
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29. Thereafter, Landlord served Tenant with a thirty-day notice of termination,
terminating Tenant’s tenancy at the Premises, effective June 30,2023 (the “Termination Date”).
30. Tenant failed to vacate the Premises and surrender same to Landlord on or before
the Termination Date and thus, Landlord commenced a holdover summary proceeding in the Civil
Court of New York, New York County captioned AFGHAN HOUSE, INC. v. INSHANDBAGS
INC. et al (LT-315472-23/NY) (the “Summary Proceeding”), in which Landlord sought inter alia,
a judgment of possession for the Premises and money judgments for the Rent Arrears, use and
occupancy at the Holdover Rate from the Lease Expiration Date through the date upon which
Landlord would be restored to possession of the Premises, and attorneys’ fees.
31. The Civil Court issued a Decision, Verdict, and Order after Inquest, dated
December 1, 2023 in the Summary Proceeding (the “First Order”) pursuant to which, inter alia,
the Court ordered the Clerk of the Court to enter a judgment against Tenant, awarding legal
possession of the Premises to Plaintiff, together with a money judgment in the amount of
$465,000.00 (not including pre-judgment interest), comprised of the Rent Arrears and $341,040.53
in unpaid use and occupancy (the “Holdover Arrears”).
32. Accordingly, the Court then issued a Landlord and Tenant Judgment, awarding
legal possession of the Premises to Plaintiff, together with a money judgment in the amount of
$550,813.84 (the “First Judgment Amount”), representing the Rent Arrears, plus the Holdover
Arrears, plus statutory pre-judgment interest.
33. Then, on January 25, 2024, the Civil Court conducted an attorneys’ fees hearing
and issued a Decision and Order in the Summary Proceeding, pursuant to which the Court awarded
a judgment in the amount of $19,066.87 (the “Second Judgment Amount”) to Plaintiff,
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representing attorneys’ fees plus costs and disbursements incurred by Plaintiff (the “Attorneys’
Fees and Costs”), pursuant to Rider Article R18 of the Original Lease.
34. Accordingly, the Court then issued a Landlord and Tenant Judgment awarding a
money judgment to Plaintiff in the amount of the Attorneys’ Fees.
35. On February 14, 2024, Tenant was evicted from the Premises by a Marshal of the
City of New York and physical and legal possession of the Premises was returned to Plaintiff.
36. To date, Tenant has failed to pay any portion of the First Judgment Amount and/or
the Second Judgment Amount, to Plaintiff.
37. Exclusive of the statutory interest portion of the First Judgment Amount, Guarantor
is liable to Plaintiff in the amount of $484,066.87 (“Guaranteed Amount”), representing the Rent
Arrears, plus the Holdover Arrears, plus the Attorneys’ Fees and Costs.
38. As of the date hereof, Guarantor has failed to pay the Guaranteed Amount, or any
portion thereof, to Plaintiff.
39. Accordingly, Guarantor is in material breach of his obligations under the Guaranty,
for the entire Guaranteed Amount, in the total sum of $484,066.87.
AS AND FOR A FIRST CAUSE OF ACTION
(Breach of Contract - Guaranty)
40. Plaintiff repeats and re-alleges each and every allegation set forth above as if fully
incorporated herein.
41. The Guaranty is a valid and binding contract entered into by Defendant for
Plaintiff’s benefit.
42. Plaintiff has complied with its obligations under the Guaranty and the Lease.
43. Defendant breached the Guaranty by failing to pay the Guaranteed Amount to
Plaintiff.
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44. Plaintiff has and will continue to incur damages as a result of the Defendant’s
breach of the Guaranty.
45. By reason of the foregoing, Plaintiff has been damaged and is entitled to a judgment
against Defendant, in an amount currently unknown, the full amount of which shall be determined
at trial, but believed to exceed $484,066.87, as well as interest and attorneys’ fees pursuant to the
Lease and the Guaranty.
AS AND FOR A SECOND CAUSE OF ACTION
(Attorneys’ Fees - the Guaranty)
46. Plaintiff repeats and re-alleges each and every allegation set forth above as if fully
incorporated herein.
47. Pursuant to the Guaranty, Defendant is required to reimburse Plaintiff for its
expenses incurred in connection with enforcing its rights under the Guaranty, including, without
limitation, for its attorneys’ fees, court costs and other expenses.
48. Plaintiff has incurred and will continue to incur attorneys’ fees, court costs and
other expenses to enforce its rights under the Guaranty, as a result of Defendant’s failure to timely
pay the Guaranteed Amount to Plaintiff.
49. Based on the foregoing, Plaintiff is entitled to an award of attorneys’ fees incurred
in connection with this action in an amount to be determined at a hearing or trial but believed to
exceed $25,000.00.
WHEREFORE, Plaintiff respectfully demands judgment as follows:
a) on the First Cause of Action, a money judgment against Defendant, in an
amount currently unknown, the full amount of which shall be determined at
trial, but believed to exceed $484,066.87, as well as interest and attorneys’
fees pursuant to the Guaranty; and
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b) on the Second Cause of Action, an award of attorneys’ fees incurred in
connection with this action in an amount to be determined at a hearing or
trial, but believed to exceed $25,000.00 pursuant to the Guaranty; and
c) granting Plaintiff such other and further relief as the Court deems just and
proper.
[SIGNATURE PAGE TO FOLLOW]
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Dated: New York, New York ROSENBERG & ESTIS, P.C.
March 26, 2024 Attorneys for Plaintiff
By:
Luise A. Barrack
Moshe B. Nachum
733 Third Avenue
New York, New York 10017
(212) 867-6000
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VERIFICATION
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
ANDREW HIRSCH, being duly sworn, deposes and says:
1. I am the General Counsel and Director of Operations of Bernstein Management
Corp. d/b/a Bernstein Real Estate, agent and authorized signatory of AFGHAN HOUSE, INC.
("Plaintiff"), plaintiff in this action.
2. I have read the foregoing Verified Complaint and know the contents thereof; and
the same is true to my knowledge, except as to the matters therein stated to be alleged upon
information and belief, and as to those matters, I believe them to be true. The source of my
information and belief is the books and records of Plaintiff.
3. This Verification is made by deponent because Plaintiff is a domestic corporation
and as the General Counsel and Director of Operations of Bernstein Management Corp. d/b/a
Bernstein Real Estate, Plaintiff's agent, I am an authorized signatory thereof.
AFGHAN HOUSE, INC., a New York corporation,
Plaintry
By: Bernstein anagement Corp. d/b/a Bernstein
York corporation, Agent
By:
tame: Àndrew Hirsc
Title: General Coúnsel / Director of
Operations
Sworn to before me this
day of March, 2024
NOTARY PUBLIC Stee otNew Mk
No.4894883
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FILED: NEW YORK COUNTY CLERK 04/18/2024 08:53 AM INDEX NO. 652010/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/18/2024 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ––––––––––––––––––––––––––––X AFGHAN HOUSE, INC., : Index No. _______________/2024 : Plaintiff, : SUMMONS : -against- : Plaintiff designates New York County as : the place of trial. The basis of venue is, JUHUI DENG a/k/a JUTAO DENG, : inter alia, the county in in which : Plaintiff’s principal office is located. Defendant. : : ––––––––––––––––––––––––––––X TO THE ABOVE NAMED DEFENDANT: YOU ARE HEREBY SUMMONED to answer the verified complaint in this action and to serve a copy of your answer, or, if the complaint is not served with this summons, to serve a notice of appearance, on the plaintiff’s attorneys within twenty (20) days after the service of this summons, exclusive of the day of service; or within thirty (30) days after completion of service made in any other manner then by personal delivery within the State. In case of your failure to appear or answer, judgment will be taken against you by default for the relief demanded in the verified complaint. Dated: New York, New York ROSENBERG & ESTIS, P.C. March 26, 2024 Attorneys for Plaintiff By: _____________________________ Luise A. Barrack Moshe B. Nachum 733 Third Avenue New York, New York 10017 (212) 867-6000 RE\10055\0028\5414026v1 1 of 13 FILED: NEW YORK COUNTY CLERK 04/18/2024 08:53 AM INDEX NO. 652010/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/18/2024 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ––––––––––––––––––––––––––––X AFGHAN HOUSE, INC., : Index No. ___________/2024 : Plaintiff, : : VERIFIED COMPLAINT -against- : : JUHUI DENG a/k/a JUTAO DENG, : : Defendant. : : ––––––––––––––––––––––––––––X Plaintiff AFGHAN HOUSE, INC. (“Plaintiff” or “Landlord”), by its attorneys, Rosenberg & Estis, P.C., for its Verified Complaint, alleges as follows: THE PARTIES 1. Plaintiff is a New York corporation with a business address at c/o Bernstein Real Estate, 150 West 30th Street, Floor 20, New York, New York 10001. 2. Upon information and belief, defendant Juhui Deng a/k/a Jutao Deng (“Guarantor” or “Defendant”) is a natural person, who resides at 64-18 231st Street, Flushing, New York 11364 and maintains a place of business at (i) 124 West 30th Street, New York, New York 10001, and/or (ii) 1201 Broadway, New York, New York 10001. THE FACTS A. The Lease 3. Plaintiff is the owner and landlord of the building known as and located at 124 West 30th Street, New York, New York 10001 (the “Building”). 4. Plaintiff and non-party INSHANDBAGS INC. (d/b/a INS HANDBAGS INC.) (“Tenant”) are parties to Standard Form of Store Lease and Rider (“Rider”) annexed thereto, executed on December 28, 2006, by and between Plaintiff, as landlord, and Just Fantastic, Inc., RE\10055\0028\5397750v3 2 of 13 FILED: NEW YORK COUNTY CLERK 04/18/2024 08:53 AM INDEX NO. 652010/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/18/2024 predecessor-in-interest to Tenant (“Tenant’s Predecessor”), as tenant (collectively, the “Original Lease”), as amended pursuant to that certain First Amendment to Lease, dated February ___, 2012, between Plaintiff and Tenant’s Predecessor (the “First Amendment”), and pursuant to that certain Second Amendment to Lease, dated January 31, 2014, between Plaintiff and Tenant (the “Second Amendment”), and pursuant to that certain Third Amendment to Lease, dated October ___, 2016, between Plaintiff and Tenant (the “Third Amendment”), and pursuant to that certain Fourth Amendment to Lease, dated October __, 2018, between Plaintiff and Tenant (the “Fourth Amendment”, together with the Original Lease, the First Amendment, the Second Amendment and the Third Amendment, the “Lease”), for the premises known as Store #2 in the Building (collectively, the “Premises”). 5. Pursuant to the Original Lease entered into by Plaintiff and Tenant’s Predecessor, Tenant’s Predecessor came into possession of the Premises. 6. Pursuant to that certain Assignment to Lease, executed approximately on March 1, 2012 (the “Assignment”), Tenant’s Predecessor assigned all of its right, title and interest as tenant in and to the Original Lease as modified by the First Amendment, to Tenant. I. Base Annual Rent 7. The “Witnesseth” clause of the Original Lease provides in relevant part that Tenant is required to pay to Plaintiff base rent (the “Base Annual Rent”) in equal monthly installments in advance on the first day of each month, without any set of or deduction whatsoever. 8. Rider Article R5 of the Original Lease, as amended pursuant to paragraph 2 of the Fourth Amendment, provides that the Base Annual Rent due for the period from February 1, 2019, through the lease expiration date of January 31, 2021 (the “Lease Expiration Date”), is at the rate of $10,000.00 per month. -2- RE\10055\0028\5397750v3 3 of 13 FILED: NEW YORK COUNTY CLERK 04/18/2024 08:53 AM INDEX NO. 652010/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/18/2024 II. Additional Rent 9. Rider Article R28 of the Original Lease provides that: Notwithstanding anything to the contrary contained in this Lease, any monies due Landlord other than the Base Annual Rent are deemed to be additional rent (“Additional Rent”), and any default in the payment of Additional Rent shall give to Landlord the same remedies as it has with respect to a default in the payment of Base Annual Rent. 10. Rider Article R11 of the Original Lease defines “Rent” as “Base Annual Rent” together with “Additional Rent.” A. Real Estate Taxes 11. Pursuant to Rider Article R7 of the Original Lease, as amended pursuant to paragraph 3 of the Fourth Amendment, Tenant is obligated to pay real estate tax escalations to Plaintiff, in accordance with the terms thereof, as Additional Rent. B. Water 12. Pursuant to Article 28 of the Original Lease, Tenant is obligated to pay to Plaintiff the sum of fifty dollars ($50.00), on the first day of each month, for water charges, as Additional Rent. C. Sprinkler 13. Pursuant to Article 29 of the Original Lease, Tenant is obligated to pay to Plaintiff the sum of fifty dollars ($50.00), on the first day of each month, for Tenant’s portion of the contract price for the sprinkler supervisory service, as Additional Rent. D. Late Fees & Interest 14. Rider Article R15 of the Original Lease provides that: In every case in which Tenant is required by the terms of this Lease to pay Landlord a sum of money (including, without limitation, payment of Base -3- RE\10055\0028\5397750v3 4 of 13 FILED: NEW YORK COUNTY CLERK 04/18/2024 08:53 AM INDEX NO. 652010/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/18/2024 Annual Rent and Additional Rent) and payment is not made within ten (10) days after the same shall become due, Tenant shall pay as Additional Rent hereunder, a late charge of seventy five ($75.00) dollars in addition to interest on such sum of money or so much thereof as shall be unpaid from the date it becomes due until it is paid. Such interest shall be computed at a rate which shall be one and one-half percent (1.5%) per month; provided, however, in no event shall such interest be in excess of the highest rate of interest which shall from time to time be permitted under the laws of the State of New York to be charged on late payments of sums of money due pursuant to the terms of a lease.” E. Attorneys’ Fees 15. Rider Article R18 of the Original Lease provides, in pertinent part, that: ln the event Tenant is in default of the terms of this Lease, Tenant shall pay Landlord’s fees and expenses relating to the default including but not limited to Landlord pursuing Tenant’s compliance or Landlord defending its actions as a result of Tenant's default or any other associated cost or expense including Landlord's court costs and attorneys fees. F. Holdover Use & Occupancy 16. Rider Article R16 of the Original Lease provides, in pertinent part, that: In the event that Tenant does not surrender all of the demised premises to Landlord upon the expiration or other earlier termination of this Lease, Tenant shall pay, as a use and occupation charge during such “hold-over” period, a monthly amount equal to the sum of two (2) times the Base Annual Rent being due and payable during the last month of the term. B. Defendant’s Guaranty of the Lease 17. As an inducement to Plaintiff entering into the Original Lease, Defendant executed that certain Guaranty, executed on December 28, 2006, for Plaintiff’s benefit (the “Guaranty”). -4- RE\10055\0028\5397750v3 5 of 13 FILED: NEW YORK COUNTY CLERK 04/18/2024 08:53 AM INDEX NO. 652010/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/18/2024 18. Pursuant to the Guaranty, Defendant absolutely, unconditionally, and irrevocably guaranteed to Plaintiff all Rent payable by Tenant under the Lease through the Surrender Date (as defined in the Guaranty). 19. Section A of the Guaranty provides in relevant part that: … The "Surrender Date" means the date that Tenant shall have performed all of the following: (a) vacated and surrendered the demised premises to Landlord (or its managing agent) free of all subleases or licensees and in broom clean condition, and Tenant has so notified Landlord or such agent in writing, b) delivered the keys to the doors to the demised premises to Landlord (or its managing agent), and (c) paid all amounts due and payable under the Lease as Base Annual Rent or Additional Rent or other such charges to Landlord up until the later of (a) and (b) above. 20. Section D of the Guaranty provides in relevant part that: … The validity of this Guaranty shall not be affected or impaired by reason of the assertion by Landlord against Tenant of the rights or remedies reserved to Landlord under the Lease. Guarantor agrees that this Guaranty shall remain in force and effect as to any assignment, transfer, renewal, modification or extension of the Lease whether or not Guarantor shall have received any notice of or consented to such renewal, modification, extension, assignment or transfer. 21. Section E of the Guaranty provides in relevant part that: … The Guarantor waives notice of any and all defaults by Tenant in the payment of Base Annual Rent, Additional Rent, or other charges, and waives notice of any and all defaults by Tenant in the performance of any of the terms, of the Lease on Tenant's part to be performed. Further, Guarantor waives any and all defenses available to tenant under the Lease. -5- RE\10055\0028\5397750v3 6 of 13 FILED: NEW YORK COUNTY CLERK 04/18/2024 08:53 AM INDEX NO. 652010/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/18/2024 22. Pursuant to Section G of the Guaranty, Defendant agreed to pay attorneys’ fees, court costs and other expenses incurred by Plaintiff in successfully enforcing or attempting to enforce the Guaranty. C. Tenant’s Failure to Pay Rent Prior to Lease Expiration 23. Through December 31, 2019, there was an unpaid Rent balance due from Tenant in the amount of $720.27. 24. Then, Tenant failed to pay to Landlord, any Rent for January 2020. 25. Thereafter, from March 1, 2020, through the Lease Expiration Date, Tenant failed to pay any Rent to Landlord and accordingly, through the Lease Expiration Date, Tenant was in Rent arrears in the total amount of $123,959.47 (the “Rent Arrears”). D. Tenant’s Month-to-Month Tenancy, Failure to Pay Use & Occupancy and Eviction 26. Tenant failed to vacate the Premises and surrender same to Landlord on or before the Lease Expiration Date and instead held over in possession of the Premises without permission of Landlord. 27. Notwithstanding Landlord’s right pursuant to Rider Article R16 of the Original Lease to charge Tenant for its use and occupancy of the Premises in the amount of two times the Base Annual Rent being due and payable during the last month of the term (i.e., $20,000.00 per month) for the entire period in which Tenant held over in possession, Landlord instead elected to charge Tenant Base Annual Rent at the same rate which was due and payable during the last month of the term, to wit: $10,000.00 per month (the “Holdover Rate”). 28. After the Lease Expiration Date, Tenant tendered to Landlord several partial payments toward Tenant’s monthly use & occupancy, totaling $12,000.00, which Landlord accepted, thus creating a month-to-month tenancy. -6- RE\10055\0028\5397750v3 7 of 13 FILED: NEW YORK COUNTY CLERK 04/18/2024 08:53 AM INDEX NO. 652010/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/18/2024 29. Thereafter, Landlord served Tenant with a thirty-day notice of termination, terminating Tenant’s tenancy at the Premises, effective June 30,2023 (the “Termination Date”). 30. Tenant failed to vacate the Premises and surrender same to Landlord on or before the Termination Date and thus, Landlord commenced a holdover summary proceeding in the Civil Court of New York, New York County captioned AFGHAN HOUSE, INC. v. INSHANDBAGS INC. et al (LT-315472-23/NY) (the “Summary Proceeding”), in which Landlord sought inter alia, a judgment of possession for the Premises and money judgments for the Rent Arrears, use and occupancy at the Holdover Rate from the Lease Expiration Date through the date upon which Landlord would be restored to possession of the Premises, and attorneys’ fees. 31. The Civil Court issued a Decision, Verdict, and Order after Inquest, dated December 1, 2023 in the Summary Proceeding (the “First Order”) pursuant to which, inter alia, the Court ordered the Clerk of the Court to enter a judgment against Tenant, awarding legal possession of the Premises to Plaintiff, together with a money judgment in the amount of $465,000.00 (not including pre-judgment interest), comprised of the Rent Arrears and $341,040.53 in unpaid use and occupancy (the “Holdover Arrears”). 32. Accordingly, the Court then issued a Landlord and Tenant Judgment, awarding legal possession of the Premises to Plaintiff, together with a money judgment in the amount of $550,813.84 (the “First Judgment Amount”), representing the Rent Arrears, plus the Holdover Arrears, plus statutory pre-judgment interest. 33. Then, on January 25, 2024, the Civil Court conducted an attorneys’ fees hearing and issued a Decision and Order in the Summary Proceeding, pursuant to which the Court awarded a judgment in the amount of $19,066.87 (the “Second Judgment Amount”) to Plaintiff, -7- RE\10055\0028\5397750v3 8 of 13 FILED: NEW YORK COUNTY CLERK 04/18/2024 08:53 AM INDEX NO. 652010/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/18/2024 representing attorneys’ fees plus costs and disbursements incurred by Plaintiff (the “Attorneys’ Fees and Costs”), pursuant to Rider Article R18 of the Original Lease. 34. Accordingly, the Court then issued a Landlord and Tenant Judgment awarding a money judgment to Plaintiff in the amount of the Attorneys’ Fees. 35. On February 14, 2024, Tenant was evicted from the Premises by a Marshal of the City of New York and physical and legal possession of the Premises was returned to Plaintiff. 36. To date, Tenant has failed to pay any portion of the First Judgment Amount and/or the Second Judgment Amount, to Plaintiff. 37. Exclusive of the statutory interest portion of the First Judgment Amount, Guarantor is liable to Plaintiff in the amount of $484,066.87 (“Guaranteed Amount”), representing the Rent Arrears, plus the Holdover Arrears, plus the Attorneys’ Fees and Costs. 38. As of the date hereof, Guarantor has failed to pay the Guaranteed Amount, or any portion thereof, to Plaintiff. 39. Accordingly, Guarantor is in material breach of his obligations under the Guaranty, for the entire Guaranteed Amount, in the total sum of $484,066.87. AS AND FOR A FIRST CAUSE OF ACTION (Breach of Contract - Guaranty) 40. Plaintiff repeats and re-alleges each and every allegation set forth above as if fully incorporated herein. 41. The Guaranty is a valid and binding contract entered into by Defendant for Plaintiff’s benefit. 42. Plaintiff has complied with its obligations under the Guaranty and the Lease. 43. Defendant breached the Guaranty by failing to pay the Guaranteed Amount to Plaintiff. -8- RE\10055\0028\5397750v3 9 of 13 FILED: NEW YORK COUNTY CLERK 04/18/2024 08:53 AM INDEX NO. 652010/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/18/2024 44. Plaintiff has and will continue to incur damages as a result of the Defendant’s breach of the Guaranty. 45. By reason of the foregoing, Plaintiff has been damaged and is entitled to a judgment against Defendant, in an amount currently unknown, the full amount of which shall be determined at trial, but believed to exceed $484,066.87, as well as interest and attorneys’ fees pursuant to the Lease and the Guaranty. AS AND FOR A SECOND CAUSE OF ACTION (Attorneys’ Fees - the Guaranty) 46. Plaintiff repeats and re-alleges each and every allegation set forth above as if fully incorporated herein. 47. Pursuant to the Guaranty, Defendant is required to reimburse Plaintiff for its expenses incurred in connection with enforcing its rights under the Guaranty, including, without limitation, for its attorneys’ fees, court costs and other expenses. 48. Plaintiff has incurred and will continue to incur attorneys’ fees, court costs and other expenses to enforce its rights under the Guaranty, as a result of Defendant’s failure to timely pay the Guaranteed Amount to Plaintiff. 49. Based on the foregoing, Plaintiff is entitled to an award of attorneys’ fees incurred in connection with this action in an amount to be determined at a hearing or trial but believed to exceed $25,000.00. WHEREFORE, Plaintiff respectfully demands judgment as follows: a) on the First Cause of Action, a money judgment against Defendant, in an amount currently unknown, the full amount of which shall be determined at trial, but believed to exceed $484,066.87, as well as interest and attorneys’ fees pursuant to the Guaranty; and -9- RE\10055\0028\5397750v3 10 of 13 FILED: NEW YORK COUNTY CLERK 04/18/2024 08:53 AM INDEX NO. 652010/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/18/2024 b) on the Second Cause of Action, an award of attorneys’ fees incurred in connection with this action in an amount to be determined at a hearing or trial, but believed to exceed $25,000.00 pursuant to the Guaranty; and c) granting Plaintiff such other and further relief as the Court deems just and proper. [SIGNATURE PAGE TO FOLLOW] - 10 - RE\10055\0028\5397750v3 11 of 13 FILED: NEW YORK COUNTY CLERK 04/18/2024 08:53 AM INDEX NO. 652010/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/18/2024 Dated: New York, New York ROSENBERG & ESTIS, P.C. March 26, 2024 Attorneys for Plaintiff By: Luise A. Barrack Moshe B. Nachum 733 Third Avenue New York, New York 10017 (212) 867-6000 - 11 - RE\10055\0028\5397750v3 12 of 13 FILED: NEW YORK COUNTY CLERK 04/18/2024 08:53 AM INDEX NO. 652010/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/18/2024 VERIFICATION STATE OF NEW YORK ) ) ss.: COUNTY OF NEW YORK ) ANDREW HIRSCH, being duly sworn, deposes and says: 1. I am the General Counsel and Director of Operations of Bernstein Management Corp. d/b/a Bernstein Real Estate, agent and authorized signatory of AFGHAN HOUSE, INC. ("Plaintiff"), plaintiff in this action. 2. I have read the foregoing Verified Complaint and know the contents thereof; and the same is true to my knowledge, except as to the matters therein stated to be alleged upon information and belief, and as to those matters, I believe them to be true. The source of my information and belief is the books and records of Plaintiff. 3. This Verification is made by deponent because Plaintiff is a domestic corporation and as the General Counsel and Director of Operations of Bernstein Management Corp. d/b/a Bernstein Real Estate, Plaintiff's agent, I am an authorized signatory thereof. AFGHAN HOUSE, INC., a New York corporation, Plaintry By: Bernstein anagement Corp. d/b/a Bernstein York corporation, Agent By: tame: Àndrew Hirsc Title: General Coúnsel / Director of Operations Sworn to before me this day of March, 2024 NOTARY PUBLIC Stee otNew Mk No.4894883 - 12 - 13 of 13