A&R Real Estate, Inc. v. Dorian New York LLC

Background

A&R Real Estate, Inc. leased commercial space at 105 Madison Avenue to Dorian New York LLC under a lease beginning on the January 21, 2020 commencement date. Dorya USA, LLC separately signed a guaranty covering Dorian’s rent and lease obligations. The Court had previously ruled that Dorian was liable for breach of the lease and that Dorya was liable under the guaranty. It had also determined that the guaranty’s vacate date was July 29, 2020.

A&R later leased the premises to Moroso Madison LLC beginning August 1, 2021, at a lower rent, and incurred a brokerage commission. A&R moved for summary judgment—a ruling entered when no genuine dispute of material fact requires a trial—on the damages owed by Dorian and Dorya.

Damages owed by Dorian

The Court held that Dorian was liable for the rent, interest on the rent, late charges, electrical charges, and the brokerage commission, including applicable interest. The lease allowed A&R to recover the brokerage expense associated with reletting the premises and the electrical costs specified in the lease. The Court found no genuine factual dispute concerning those categories or the rent, interest, and late charges.

The lease also allowed A&R to recover reasonable attorneys’ fees incurred in enforcing the lease. A&R sought $290,237.38 in attorneys’ fees but had not separated the fees incurred enforcing the lease from those incurred enforcing the guaranty. The Court therefore did not award the attorneys’ fees at that time and required A&R to identify and segregate the lease-enforcement fees. The Court found that the billing rates used by A&R’s law firm were reasonable, and the opinion states that additional documentation was required rather than setting a final fee award.

Damages owed by Dorya

The Court rejected A&R’s request to use August 1, 2021, as the vacate date. It concluded that A&R’s challenge was essentially a request for reconsideration of the earlier ruling and was untimely. The Court therefore reaffirmed July 29, 2020 as the vacate date, ending Dorya’s liability under the guaranty for obligations arising after that date.

As a result, Dorya was liable for rent, interest on the rent, late charges, and electrical charges incurred from January 21, 2020 through July 29, 2020. Dorya was not liable for the brokerage commission incurred when A&R relet the premises in August 2021.

The guaranty allowed recovery of attorneys’ fees arising from Dorya’s default, but not fees incurred solely in enforcing the lease or pursuing claims against Dorian. Because A&R had not separated the fees attributable to enforcing the guaranty from the other fees, the Court did not award attorneys’ fees against Dorya at that time. It again found the billing rates reasonable and required segregated documentation.

Disposition

Judge Ramos granted in part and denied in part A&R’s motion for summary judgment on damages. The Clerk was directed to terminate the motion, and A&R was directed to resubmit attorneys’ fee records identifying separately the fees incurred enforcing the lease and the fees incurred enforcing the guaranty.