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Adam Leitman Bailey, P.C. Wins Summary Judgment in Commercial Breach of Lease and Guaranty Action; Obtains $1.6M Judgment for Landlord

Representing a commercial landlord, Adam Leitman Bailey, P.C. successfully sued the tenant and guarantors for unpaid rent in Manhattan Supreme Court, winning a $1.6M monetary judgment, which included rent arrears accumulated before and during the COVID-19 pandemic.

The tenant rented a prime location to operate a food market at a base rent of about $70,000.00 per month, plus other charges. The tenant began falling behind on rent payments before COVID-19, then completely stopped paying rent. The tenant abandoned the premises and relocated its business elsewhere, leaving over a million dollars in unpaid rent on the table, which sum continued to accrue monthly.

Adam Leitman Bailey, P.C. commenced a breach of lease and breach of guaranty action. The tenant and guarantors answered the complaint and asserted a myriad affirmative defenses, including various COVID-19 defenses such as frustration of purpose, impossibility of performance, commercial impracticability, and casualty. Defendants also argued that the parties agreed to modify the lease terms and that landlord waived certain rights of rent collection under the lease.

We immediately moved for summary judgment. In support of our motion, we laid out landlord’s prima facie case and entitlement to summary judgment, demonstrated tenant’s breaches of the lease and guarantors’ breaches of the guaranty, and included a detailed calculation of damages.

Defendants opposed the motion. Among other defenses, they argued that summary judgment was not warranted because the parties allegedly modified tenant’s lease obligations and landlord waived its rights. Defendants also opposed the motion based on several of their COVID-19 related defenses.

On reply, using most recent case law, we successfully argued that tenant’s COVID-19 related defenses were meritless and should be rejected. We also demonstrated that defendants’ waiver and lease modification arguments were conclusively contradicted and barred by the lease terms.

The Court agreed. By decision entered in March 2022, the Supreme Court granted our motion finding that landlord met its prima facie burden of demonstrating entitlement to judgment for rent, rejected defendants’ defenses, and awarded a monetary judgment to our landlord client against the commercial tenant and guarantors.

Vladimir Mironenko, partner in Adam Leitman Bailey, P.C.’s Landlord-Tenant and Litigation Departments represented the landlord.

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