Summary Judgment and Attorneys Fees on Good Guy Guaranty Against Famous Hat Designer – Upheld on Appeal and Settled


August 13, 2012

Wassfam LLC v. Orlando Rene Palacios

In the Fall of 2014, after months of subsequent post-judgment motion practice and extensive collection efforts taken on behalf of the Plaintiff by Itkowitz PLLC, a mutually agreeable settlement was reached on terms satisfactory to the Plaintiff. 

Wassfam LLC v. Orlando Rene Palacios
(Supreme Court, Appellate Division, First Department, June 13, 2013)

Lease guaranty properly enforced despite failure to join as plaintiffs the additional entities in the underlying lease.  Complete relief can be granted and the additional entities will be protected by res judicata.  Moreover, guarantor had no excuse for waiting a year to make his motion on these grounds.  Affirmed — grant of summary judgment to Plaintiff on liability and the award of damages and attorneys’ fees proved at inquest for a judgment amount of $103,489.25.  Link to Full Text of Decision


Wassfam LLC v. Orlando Rene Palacios
(NY Supreme Court, January 24, 2013)

After winning as to liability on summary judgment, Plaintiff successfully established at inquest its entitlement to $59,680.16 in damages (with interest from November 2010), and $30,527.00 in attorneys’ fees.


Wassfam LLC v. Orlando Rene Palacios
(NY Supreme Court, August 15, 2012)

After obtaining a judgment of possession against Tenant Palacios in the New York Civil Court, Plaintiff Landlord sued Tenant pursuant to a written Good Guy Guaranty for unpaid rent owed under a commercial lease. Subsequent to Landlord filing the Note of Issue, Defendant brought an Order to Show Cause, seeking, among other things, to: (1) amend his Answer to assert an affirmative defense based upon Multiple Dwelling Law (MDL) §302 [MDL § 302 precludes landlords of residential buildings from collecting rent absent registration of the building as a multiple dwelling]; (2) strike the Note of Issue; and (3) compel additional discovery. Plaintiff opposed the motion on all counts and cross-moved for summary judgment as to liability. In denying Defendant leave to amend his Answer, the Court noted that although leave to amend pleadings should be freely given, such leave is limited to amendments that have merit. The Court essentially found that where a lease is for commercial use and a landlord expressly prohibits residential use of the premises, a tenant who unilaterally resides at the premises in violation of the lease is not entitled to benefit from MDL § 302. As such, the Court denied Defendant’s application to amend his Answer. Moreover, the Court refused to vacate the Note of Issue on the grounds that Defendant failed to timely move to strike, and found that post-note of issue discovery was unwarranted on the grounds that there were no “unusual or unanticipated circumstances” requiring further discovery. The Court ultimately denied Defendant’s Order to Show Cause on all counts, and also found that Plaintiff established its entitlement to judgment as a matter of law on the issue of liability.

Link to Full Text of Decision