The following e-filed documents, listed by NYSCEF document number (Motion 005) 131, 132, 133, 134, 135, 136, 137, 138, 139, 140, 141, 142, 143, 144, 145, 146, 147, 148, 149, 150, 151, 152, 153 were read on this motion to/for DISMISS. DECISION + ORDER ON MOTION Plaintiffs’ motion to dismiss the two counterclaims asserted by defendants is granted. Background Defendant Toscana Pizza Inc. dba Nolita Pizza (the “Tenant”) entered into a lease with plaintiffs for a commercial space. Plaintiffs contend that the Tenant defaulted under the terms of the lease by not paying rent starting in March 2020 and that the Tenant abandoned the premises. They argue that defendants operated Nolita Pizza and signed a ten-year lease on May 28, 2019 and executed personal guarantees. Plaintiffs point out that the lease contained a “no abatement” clause in which defendants expressly disclaimed a force-majeure protection that might excuse it from paying rent. Plaintiffs maintain that defendants transferred its business and its assets to a new location just a few blocks away. They argue that this new location has the same trade name, owners, and employees as the restaurant they operated in the premises owned by plaintiffs. The Court previously granted judgment on plaintiffs’ first cause of action against the Tenant arising out of the breach of lease. The remaining issues in this case involve plaintiffs’ assertion that defendants fraudulently transferred assets to a new location. Plaintiffs successfully moved to amend their complaint to add a contract claim against the individual defendants on the ground that protections (arising out of the COVID-19 pandemic) for individual guarantors in commercial leases have recently been struck down by a federal court. Defendants then uploaded an amended answer which included counterclaims based on plaintiffs alleged unlawful eviction and conversion of defendants’ personal property. Plaintiffs seek to dismiss these counterclaims and argue that these theories are based on a “false” assertion that plaintiffs locked out defendants and illegally utilized self-help to evict them in August 2020. They show that prior to this allegedly unlawful eviction, defendants informed plaintiffs through counsel that they were terminating their performance under the lease and vacating the premises. Plaintiffs attach two letters to support their claim. In the first letter (dated August 17, 2020), counsel for defendants asserts inter alia that “the Tenant is constrained to notify you pursuant to the lease that the Tenant is shutting its doors and is no longer operating” (NYSCEF Doc. No. 140 at 2). The second letter, dated August 28, 2020, contains similar language and states that “the Tenant is constrained to vacate the above-captioned premises at 128 Second Avenue, New York, New York 10003 (hereinafter referred to as the “subject premises”) immediately” (NYSCEF Doc. No. 141 at 1). Plaintiffs point out that on September 1, 2020, the attorney for defendant submitted a letter in which she complained that defendants had been locked out of the premises (NYSCEF Doc. No. 142). Plaintiffs insist that the documentary evidence irrefutably shows that they did not wrongfully evict defendants because they simply repossessed a vacant premises based on the letters from defendants’ counsel. Plaintiffs also seek to dismiss the conversion counterclaim as this counterclaim did not identify what property was taken and that defendants had already moved out. In opposition, defendants emphasize that plaintiffs have admitted that they used self-help to evict defendants and wrongfully changed the locks. They insist that plaintiffs had no right to change the locks before there was a formal surrender by defendants. Defendants argue that no surrender ever took place. They demand that the Court should find that they are entitled to judgment on these counterclaims (although defendants did not cross-move for this relief) and want an inquest on damages. In reply, plaintiffs observe that defendants did not dispute in their opposition that plaintiffs were entitled to repossess the premises. Discussion “On a motion to dismiss pursuant to CPLR 3211, the pleading is to be afforded a liberal construction. We accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory. Under CPLR 3211(a)(1), a dismissal is warranted only if the documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter of law” (Leon v Martinez, 84 NY2d 83, 87-88, 614 NYS2d 972 [1994]). On this record, many of the facts are undisputed. After defendants had stopped paying rent for months, their lawyer wrote that defendants ceased operations at the premises and then wrote, less than two weeks later, that defendants were vacating immediately. Only after receiving that second letter, instead of commencing a nonpayment proceeding on an empty storefront, plaintiffs utilized self-help to regain possession of the leased premises and changed the locks. The question for this Court is whether this self-help eviction was permissible. “A landlord may, under certain circumstances, use self-help to peaceably re-enter commercial premises and regain possession. This common-law right to re-enter, however, can only be exercised if the lease expressly reserves that right” (1414 Holdings, LLC v BMS-PSO, LLC, 116 AD3d 641, 643, 985 NYS2d 13 [1st Dept 2014] [citations omitted]). Paragraph 17(2) of the lease expressly permits the plaintiffs to use self-help to re-renter the premises and dispossess the Tenant (NYSCEF Doc. No. 136 §17[2]). And there is no doubt that plaintiffs informed defendants they were in default in May 2020 default notice, well before defendants officially gave notice that they had vacated and then plaintiffs repossessed the subject premises. Moreover, the Court finds that plaintiffs submitted documentary evidence refuting the illegal eviction claim based on the letters sent by counsel for defendants. Both letters, one dated August 17, 2020 and the other dated August 28, 2020, state that defendants were vacating the premises “immediately” (NYSCEF Doc. No. 141 at 1; NYSCEF Doc. No. 140 at 1). Upon receiving these letters, months after plaintiffs sent a default notice to defendants for not paying the rent, plaintiffs were entitled to change the locks. Any rational person reading these letters would think that defendants had vacated the premises. Plaintiffs were entitled to rely upon a clear and unambiguous representation from counsel for defendants. The letters do not state that defendants intended to vacate in the future or a threat to vacate. They contained an affirmative statement that defendants were leaving the premises. After receiving this declaration, what were plaintiffs supposed to do? Let the premises sit around vacant indefinitely? The Court also dismisses the conversion counterclaim for two reasons. First, the amended answer does not identify what was allegedly taken from the premises and neither does the affidavit of defendant Salihaj submitted in opposition. Defendants need not provide every detail about items allegedly converted in their pleading, but they did not identify any tangible objects that were converted in opposition even after plaintiffs highlighted this point in their moving papers. Second, defendants explicit vacatur of the premises means that they waived any right to complain about property they may have left in the premises. Defendants cannot send a letter to plaintiffs declaring their immediate vacatur and then insist they are entitled to damages for items they left in the leased space. Summary After months of discussions where plaintiffs sent a default notice based on unpaid rent in May 2020 (NYSCEF Doc. No. 137) and defendants sent emails insisting they were moving out in June 2020, defendants’ attorney sent plaintiffs two letters in August 2020 stating that defendants were vacating the premises with immediate effect. Plaintiffs understandably acted on those messages and repossessed the premises, as the lease entitled them to do. Defendants’ opposition does not directly explain why or how plaintiff or the Court could ignore these letters. Counsel for defendants could have stated that defendants were going to vacate on some future date or demand that plaintiffs accept the surrender on a date certain. Instead, defendants made a representation that they were vacating the premises and now, bizarrely, defendants complain that the locks were changed. Words must have meaning and effect — the Court cannot sustain these counterclaims based on this record. Accordingly, it is hereby ORDERED that plaintiff’s motion to dismiss defendants’ counterclaims is granted and the counterclaims are severed and dismissed. CHECK ONE: CASE DISPOSED X NON-FINAL DISPOSITION X GRANTED DENIED GRANTED IN PART OTHER APPLICATION: SETTLE ORDER SUBMIT ORDER CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT REFERENCE Dated: September 27, 2023
