In this action for damages for holding over after the expiration of four commercial leases, plaintiff, Gettinger Associates (Landlord) moves for: 1) summary judgment on liability and damages on its first cause of action; 2) a judgment of liability against defendants on the second cause of action and an order directing a hearing to determine the amount of attorneys' fees and costs recoverable thereon; 3) an order dismissing defendants' nine affirmative defenses; and 4) leave to serve an amended complaint, adding new allegations, new causes of action and two new defendants, One Step Up, Inc. and One Step Up, Ltd.

A. Motion for Summary Judgment

1. Background

The first cause of action seeks damages against defendants One Move Upward, Inc. (Tenant) and Harry Adjmi in connection with an alleged holdover at premises described as Unit 3101 in a building located at 1407 Broadway, New York, NY (Building). Landlord leased Unit 3101 to Tenant, pursuant to a lease dated September 10, 2002 (Lease, Exhibit D to Moving Papers). The original term of the Lease expired on June 30, 2006, but the parties agree that it was extended to July 31, 2006. The parties also entered into three other leases for Unit 3102, Unit 3107, and Unit 3305-3307 and the entire 32nd floor of the Building, which are the subject of other causes of action unrelated to the summary judgment motion. The individual defendant, Harry Adjmi is being sued in the first and second causes of action based upon an alleged personal guaranty of Tenant's obligations under the Lease.

The first cause of action seeks damages in the amount of $31,582.02 from both defendants for holdover use and occupancy from August 1, 2006 through October 2006, pursuant [*2]to a liquidated damages provision in ¶11 the Lease. Paragraph 11 provides that damages for a holdover will be double the monthly rent for the 12-month period preceding the holdover. Paragraph 41 of the Lease states that term "Guarantor" refers to the person guaranteeing Tenant's obligations under the Lease and executing the Guaranty annexed to the Lease as Schedule B. Addendum A to the Lease is entitled "Personal Good-Guy' Guaranty" (Guaranty) signed by Adjmi.^[FN1]

The second cause of action seeks attorneys fees and costs incurred by Landlord in recovering damages for the holdover in Unit 3101. Recovery of attorneys' fees and costs in any action to enforce the provisions of the Lease is authorized by ¶10(k) (Motion, Exh. D, Bates No. 0081), as well as by the Guaranty (Motion, Exh. G).

Adjmi admits that he is an officer of Tenant. He attempts to defeat the Guaranty by saying that he does not recall signing "this specific guaranty in connection with the execution of Lease 3101" and that the copy attached to the motion does not refresh his recollection. He does

not deny that he executed a guaranty of the Tenant's obligations under the Lease. He points out that §41 of the Lease (Bates No. 137) refers to a guaranty annexed to the Lease as Schedule B and that there is no Schedule B annexed to the Lease. In addition, Adjmi argues that the Guaranty is an unwitnessed, undated form that does not refer to the Lease or Unit 3101.

With respect to liability for the three-month holdover for Unit 3101, Mr. Adjmi avers that the Tenant "substantially completed its move out of such space on August 31, 2006" and fully "completed its move in September 2006." Defendants produce two documents in support of their claim that Tenant moved out by August 31. The first, an invoice dated August 31, 2006, from the Building's managing agent, Trebor Management, addressed to "One Step Up, 1407 Bway, 3107," refers to one of Tenant's other units, not Unit 3101. The second, an invoice dated August 31, 2006 from Sher-Del Transfer & Relocation Services, Inc., regarding a move of "One Step Up" from 1407 Broadway, 31st floor, to another location. As noted previously, Tenant leased three units on the 31st floor. Defendants also submit a letter dated October 4, 2006 from Adjmi stating that Tenant vacated all of its premises in the Building prior to September 30, 2006. Defendants urge that they need discovery on the issue of when they moved.

On the issue of the liquidated damages clause in the Lease, Adjmi avers, upon information and belief, that after Tenant vacated, "a substantial portion of the subject units" were leased by plaintiff "at an annual rental similar to that paid by One Move Upward during the final year of each lease term...." Adjmi Affidavit, ¶19.

In opposition, the Landlord relies on a copy of a handwritten receipt for the keys, dated October 4, 2006, which was signed by Alex Adjimi and Bob Forman, an employee Trebor Management. In reply, Mr. Forman submitted an affidavit stating that the Tenant did not vacate Unit 3101 until October 4, 2006, when the keys were surrendered. He also states that a copy of the receipt was received by plaintiff's counsel from defendant's counsel on August 24, 2006,^[FN2] but that he was unable to locate Trebor Management's copy of the receipt "despite diligent [*3]searches."

2. Discussion of Motion for Summary Judgment

Landlord is entitled to partial summary judgment on liability only against One Move Upward, Inc. and Harry Adjmi as follows: 1) on the portion of the first cause of action for holding over during the months of August and September 2006; and 2) on the portion of the second cause of action for attorneys' fees and costs attributable to said holdover.

It is well established that summary judgment may be granted only when it is clear that no triable issue of fact exists. Alvarez v. Prospect Hosp., 68 NY2d 320, 325 (1986). The burden is upon the moving party to make a prima facie showing of entitlement to summary judgment as a matter of law. Zuckerman v. City of New York, 49 NY2d 557, 562 (1980); Friends of Animals, Inc. v. Associated Fur Mfrs., Inc., 46 NY2d 1065, 1067 (1979). A failure to make such a prima facie showing requires a denial of the summary judgment motion, regardless of the sufficiency of the opposing papers. Ayotte v Gervasio, 81 NY2d 1062, 1063 (1993). If a prima facie showing has been made, the burden shifts to the opposing party to produce evidentiary proof sufficient to establish the existence of material issues of fact. Alvarez, supra, 68 NY2d at 324; Zuckerman, supra, 49 NY2d at 562. The papers submitted in support of and in opposition to a summary judgment motion are examined in the light most favorable to the party opposing the motion. Martin v. Briggs, 235 AD2d 192, 196 (1st Dept. 1997). Mere conclusions, unsubstantiated allegations, or expressions of hope are insufficient to defeat a summary judgment motion. Zuckerman, supra, 49 NY2d, at 562. Upon the completion of the court's examination of all the documents submitted in connection with a summary judgment motion, the motion must be denied if there is any doubt as to the existence of a triable issue of fact. Rotuba Extruders, Inc. v. Ceppos, 46 NY2d 223, 231 (1978). Although a motion for summary judgment must be supported by proof in evidentiary form Zuckerman, supra, inadmissable evidence may be used to defeat the motion if there is an acceptable excuse for not presenting admissible evidence, Friends of Animals, supra, and if there is other admissible evidence adduced, Memory Gardens v. D'Amico, 91 AD2d 1159 (3rd Dept. 1983).

A motion for summary judgment should not be denied for lack of discovery alone; there must be a showing that, because of lack of disclosure, material facts not presented are unavailable to the party opposing the motion. CPLR §3212(f) provides that "should it appear from affidavits ... that facts essential to justify opposition may exist but cannot then be stated, the court may deny the motion...." The party opposing the motion must demonstrate that the facts are exclusively within the control of the moving party in order to rely on CPLR §3212(f). Stevens v. Hilmy, 185 AD2d 840 (2nd Dept. 1992). A motion for summary judgment should not be denied for lack of disclosure unless the party opposing the motion identifies the needed disclosure. Auerback v. Bennett, 47 NY2d 619, 636 (1979). "To speculate that something might be caught on a fishing expedition provides no basis to postpone decision on summary judgment...." Id.

Applying these standards to the case before the court, Landlord is entitled to partial summary judgment on liability on the first and second causes of action for the holdover through September 30, 2006, plus related attorneys' fees and costs. Defendants have failed to raise an issue of fact as to whether Tenant held over through September 30, 2006 in Unit 3101. In his affidavit, Adjmi admits that Tenant "substantially" moved by the end of August. This is insufficient to counter Landlord's proof that Tenant remained in the space into September. [*4]Substantially moving is not equivalent to vacating the premises. Summary judgment may not be denied due to lack of disclosure on the issue of whether Tenant moved by August 31 because the facts are not exclusively in control of the moving party.

With respect to damages, defendants contend that the liquidated damages clause in ¶11 of the Lease is unenforceable. "A contractual provision fixing damages in the event of breach will be sustained if the amount liquidated bears a reasonable proportion to the probable loss and the amount of actual loss is incapable or difficult of precise estimation." Truck Rent-A-Center, Inc. v. Puritan Farms 2nd, Inc., 41 NY2d 420, 425 (1977). A liquidated damages provision will not be enforced where it is a penalty that "lacks a reasonable relation to the amount of probable actual harm." Id. (upholding acceleration of lease payments for truck rentals); see also, Thirty-Third Equities Co. LLC v. Americo Group, Inc., 294 AD2d 222 (1st Dept. 2002)(upholding projected damages equal to 250% of rent reserved in lease where new tenant paid approximately that amount); Lexington Bldg. Co. L.P. v. S-Fer Int'l Corp., 225 AD2d 406 (1st Dept. 1996)(bargain should be enforced where foreseeable damages at time of leasing not disproportionate to actual damages and no evidence of fraud or overreaching).

Here, summary judgment on the amount of damages recoverable on the first cause of action cannot be determined on the record before the court. There is no evidence as to whether, at the time the Lease was executed six years ago, double the rental was a reasonable prediction of the losses Landlord would suffer in the event of a holdover, or whether the damages were incapable of precise estimation. There is no proof of the actual value of Unit 3101 in August 2006 from which the court could determine whether or not double the rent paid by Tenant is grossly disproportionate to the actual loss or market rent. Finally, there is no evidence that Unit 3101 was one of the spaces re-rented after Tenant moved and, if so, for what amount, facts within Landlord's control. Adjmi's affidavit fails to identify which spaces formerly occupied by Tenant were re-rented at a similar rent to what Tenant was paying and Landlord's papers are silent on that issue.

With respect to the October holdover, summary judgment must be denied because Adjmi's affidavit raises an issue of fact as to whether Tenant vacated by the end of September. The October 4 letter sent by Adjmi is inadmissible hearsay. One invoice is of no help because it relates to Unit 3107. The other covers a move from the 31st floor, which could include Unit 3101 but is hearsay. Defendants offer no excuse for their failure to present evidence to authenticate the second invoice and do not state what discovery would aid them in opposing the motion. Nevertheless, the Adjmi affidavit standing alone is sufficient to oppose the motion with respect to the October holdover.^[FN3]

With respect to the Guaranty, Adjmi has failed to raise an issue of fact as to whether he signed it. Adjmi has said that he cannot recall signing it in connection with the Lease for Unit 3101, but he denies neither that it is the applicable Guaranty nor that he guaranteed the Tenant's [*5]obligations under the Lease for Unit 3101. He does not deny that the Guaranty bears his signature. Accordingly, he has failed to submit any proof that opposes Landlord's evidence that the Guaranty presented is the one applicable to Tenant's obligations under the Lease. Adjmi did not come forward with a copy of the allegedly missing Schedule B or give any reason why he was unable to produce it. He also failed to produce a guaranty that refers to the Lease or that contains different terms. He does not state that he is not in possession of copies of the relevant documents. In fact, he avers that the only discovery that has occurred is an exchange of leases. Adjmi Affidavit, ¶23. Nor does he state that he needs discovery to oppose the motion insofar it relates to the Guaranty.

Accordingly, plaintiff is entitled to partial summary judgment on liability against Adjmi on the first and second causes of action insofar as they are asserted against Adjmi with respect to the holdover through September 30, 2006, related attorneys' fees and costs. Summary judgment is denied against Adjmi on the Guaranty with respect to the portion of the first and second causes of action relating to the holdover through the end of October, as there is an issue of fact as to whether the Tenant vacated by September 30.

3. Affirmative Defenses

Not one of the affirmative defenses is supported by facts contained in the record and, accordingly, defendants' affirmative defenses are dismissed. The nine affirmative defenses raised in defendants' answer, dated December 15, 2006, are: failure to state a cause of action (1st); complaint barred by documentary evidence (2nd); estoppel (3rd); waiver or release (4th); costs and attorneys' fees not recoverable (5th); damages not due to defendants' wrongdoing (6th); defendants fully performed (7th); payment (8th); defendants not indebted to plaintiffs (9th). Bare legal conclusions without supporting factual allegations are insufficient to raise affirmative defenses. Robbins v. Growney, 229 AD2d 356, 357 (1st Dep. 1996); citing Bentivegna v. Meenan Oil Co., 126 AD2d 506 (2nd Dept. 1987). Here, the affirmative defenses are bare legal conclusions or contradicted by the terms of the Lease and Guaranty. Thus, defendants' affirmative defenses are dismissed.

B. Motion to Amend

A motion to amend should be freely granted in the absence of prejudice or surprise. Murray v. New York, 43 NY2d 400, 406 (1977). Defendants object to the adding of claims against One Step Up, Inc., (One Step Inc.) and One Step Up, Ltd. (One Step Ltd.), based upon guarantees of the leases for Units 3107 and 3305. The guarantees were executed by Adjmi on behalf of One Step Inc., but Adjmi now says that One Step Inc. does not exist. Defendants challenge the validity of claims against Adjmi personally based on the two On Step Inc. guarantees, which are asserted on the theory that Adjmi is personally liable because he gave a guarantee on behalf of a non-existent corporation. Defendants claim that Landlord may not maintain an action for fraud based on alleged misrepresentations by Adjmi that One Step Inc. was a corporation with sufficient assets to support the guarantees. Lastly, defendants dispute Landlord's right to make alternative claims against One Step Ltd., based upon the same representations and guarantees.

The new claims state valid causes of action and, therefore, leave to amend is granted. There is some evidence to support the new claims. Exhibit R to the motion is a printout of computerized information of the New York State Department of State Division of Corporations, which states that Adjmi is the Chairman or Chief Executive Officer of One Step Ltd. Adjmi [*6]does not deny his connection with One Step Ltd. In addition, the invoices defendants submit to prove that Tenant moved out by August 31 were addressed to "One Step Up," without "Inc." or "Ltd." following the name. Mr. Gettinger's reply affidavit states that Adjmi requested that One Step Inc. be made the guarantor and represented that it had sufficient assets. In addition, Landlord correctly points out that the absence of a corporate record for One Step Inc. in New York State is not dispositive as to whether there is a foreign corporate entity with that name. At this stage, before discovery has taken place, it is premature to determine that there is no One Step Inc. in any jurisdiction.

The claims against Mr. Adjmi personally with regard to the guarantees by a non-existent corporation are proper. Where an individual purports to act for a non-existent corporation, he can be held to be personally liable. Bay Ridge Lumber Co. v. Groenendaal, 175 AD2d 94 (2nd Dept. 1991).

The claims against One Step Ltd. are proper because One Step Ltd. is an existing entity for which Adjmi had the authority to act and there is evidence that he used the name One Step in transactions regarding Tenant's move from the Building and two guarantees.

The fraud claims are proper as well. A party who is fraudulently induced to enter into a contract may join a cause of action for fraud with one for breach of the same contract, if the misrepresentations alleged consist of material facts made with a present, but undisclosed intent not to perform, so long as the misrepresentations are not the intention not to perform the contract. Eastman Kodak Co. v Roopak Enters., Ltd., 202 AD2d 220, 222 (1st Dept. 1994). Here, the alleged representations by Adjmi, that One Step Inc. was a corporation with sufficient assets to guarantee Tenant's obligations, meet this standard.

Adjmi argues that fraud does not lie because Landlord cannot prove the element of reasonable reliance on the alleged representations concerning One Step Inc. Defendants rely on the rule that where parties have equal means of learning the true facts through an examination of public records and the information is not peculiarly within the knowledge of the party making the representation, reliance is not reasonable. Howard v. Weaver, 244 AD2d 225 (1st Dept. 1997)(failure to examine rent registration exemption filed with N.Y.S. Div. of Housing & Community Renewal); Chan v. Bay Ridge Park Hill Realty Co., 213 AD2d 467, 468 (2nd Dept. 1995)(failure to check record title to property). Reliance on an affirmative misrepresentation is justified unless it is utterly unreasonable in light of information openly available or a person of normal intelligence or experience would recognize at once that the representation was preposterous or obviously false. Corva v. United Services Automobile Assoc., 108 AD2d 631 (1st Dept. 1985)(attorney's reliance on representation at time of settlement as to limits of insurance policy actionable).

In the case before the court, it cannot be said that the alleged representation about One Step Inc.'s financial condition was an open fact or one that a person of normal intelligence and experience would recognize as patently false. Although Landlord could have checked the Secretary of State's records to ascertain that One Step Inc. is not a New York corporation, the further representation as to its financial condition was not a public record and was peculiarly with Adjmi's knowledge. Accordingly, it is

ORDERED that the plaintiff's motion for summary judgment is granted solely to the extent of granting judgment on liability against defendants Harry Adjmi and One Move Upward, Inc., on the portion of plaintiff's first and second causes of action seeking damages for holding [*7]over in the months of August and September 2006, with interest from September 30, 2006, reasonable attorneys' fees and costs, and in all other respects the motion is denied; and it is further

ORDERED that the portions of the first and second causes of action relating to the holdover in the months of August and September 2006 are hereby severed and the remainder of the action shall continue as a separate action; and it is further

ORDERED that the issues of 1) whether the liquidated damages clause in the Lease is enforceable; 2) if said clause is not enforceable, the amount of damages recoverable under the first cause of action; and 3) the amount of reasonable attorneys' fees and costs incurred in connection with the August and September 2006 holdover (2nd cause of action) is referred to a Special Referee to hear and report with recommendations, unless the parties consent to a determination by the Special Referee, in which case the Special Referee may hear and determine said issues; and it is further

ORDERED that plaintiff shall serve a copy of this order with notice of entry on the Clerk of the Reference Part (Room 119) to arrange a date for the reference to a Special Referee and the Clerk shall notify all parties of the date of the hearing on the issue of attorney's fees; and it is further

ORDERED that plaintiff's motion to dismiss the nine affirmative defenses raised in defendants' answer, dated December 15, 2006, is granted and said affirmative defenses are hereby dismissed; and it is further

ORDERED that the motion to amend the complaint is granted, the amended complaint in the proposed form annexed to the moving papers shall be deemed served upon the parties who have already appeared in this action upon service of a copy of this order with notice of entry; and it is further

ORDERED that plaintiff shall serve a supplemental summons and amended complaint upon One Step Up, Inc. and One Step Up, Ltd. with twenty days of service upon plaintiff of a copy of this order with notice of entry; and it is further

ORDERED that the caption of the action is hereby amended as follows:

GETTINGER ASSOCIATES a/k/a

GETTINGER ASSOCIATES, L.P., Plaintiff,

-against-

ONE MOVE UPWARD, INC., HARRY ADJMI,

ONE STEP UP, INC. and ONE STEP UP, LTD., Defendants;

ORDERED that plaintiff shall serve a copy of this order with notice of entry on the Clerk of the Court and the Clerk of the Trial Support Office, Room 158M, who shall amend their records to reflect the amended caption and the severance ordered herein; and it is further

ORDERED that the parties shall appear for a pretrial conference in Part 54, Room 1227, of the courthouse located at 111 Centre Street, New York, NY, on May 8, 2008 at 9:30 A.M. [*8]

Dated: April 2, 2008ENTER:

___________________________________

J.S.C.