Facts
- 29 Holding Corp. (plaintiff) owned a residential building at 707 East 187th Street in the Bronx.
- Lizabeth Diaz (defendant) was a tenant in the building under a written lease that began in 1992.
- Reinaldo Colon, Miguel Lopez, and Luis R. Acosta signed a written guaranty of Diaz’s lease obligations.
- The guaranty provided that the guarantor was equally liable with the tenant; the landlord could sue the guarantor directly without first suing the tenant; and the guaranty would remain in effect even if the lease was “renewed, changed or extended in any way.”
- Diaz renewed the lease in 1993 and again in 1995. The 1995 renewal term ran from May 1, 1996, through April 30, 1998.
- Diaz vacated the apartment in May 1997 and did not pay rent from May 1997 through April 1998.
- The unpaid rent for that 12-month period was $6,963.84.
- 29 Holding sued Diaz and the guarantors to recover the unpaid rent and moved for summary judgment against Colon. The other defendants did not appear on the motion.
- Colon opposed the motion and asserted defenses including failure to mitigate damages and alleged failure to register the premises with DHCR.
Issues
- Whether Colon’s 1992 guaranty—stating it remains effective if the lease is “renewed, changed or extended”—made him liable for rent due under later written renewal leases that he did not sign.
- Whether the court could impose a mitigation duty on a residential landlord despite First Department Appellate Term precedent applying the traditional rule that landlords have no duty to mitigate after a tenant abandons before lease end.
- Whether the landlord’s proof established entitlement to summary judgment against Colon and whether Colon raised any triable issue of fact through his defenses.
Decision
- The court granted 29 Holding’s motion for summary judgment against Colon on the guaranty for the unpaid rent.
- The court held that the guaranty’s express language covered renewals, changes, or extensions, so Colon’s liability extended to rent owed during the May 1, 1996 to April 30, 1998 renewal term.
- The court rejected Colon’s mitigation defense, concluding it was required to follow controlling First Department Appellate Term authority that a residential landlord generally has no duty to mitigate after abandonment (absent an agreement to the contrary).
- The court found Colon’s other defenses were conclusory or legally insufficient and did not create a material factual dispute.
Legal Principles
- Summary judgment is appropriate only where the movant establishes entitlement to judgment as a matter of law and the opponent fails to show a genuine dispute of material fact; the court’s function is issue-finding, not deciding disputed facts.
- A guaranty is enforced according to its plain terms; when a guaranty states it continues if the lease is “renewed, changed or extended,” the guarantor remains liable for obligations arising under later renewals within that language.
- Where a guaranty permits suit directly against the guarantor, the landlord may proceed against the guarantor without first obtaining a judgment against the tenant.
- An uncompensated guarantor may limit future exposure by revoking the guaranty with reasonable notice to the principal, but absent revocation the guaranty’s stated scope controls.
- A trial court must follow controlling appellate authority in its department; it may not apply a different rule because it views the older rule as outdated.
- Under controlling First Department authority applied by the court, a residential landlord is generally not required to relet or otherwise mitigate rent damages after a tenant abandons before lease expiration, unless the parties agreed to such a duty.
- Conclusory defenses, unsupported by evidence, do not defeat summary judgment based on documentary proof of a lease, guaranty, default, and damages.
Conclusion
In 29 Holding Corp. v. Diaz, the Bronx County Supreme Court granted summary judgment to a residential landlord against the tenant’s guarantor for unpaid rent after the tenant vacated mid-term, holding that the guaranty’s broad language extended to later written renewals and that the court was required to apply First Department authority rejecting a mitigation requirement for residential landlords in this context.