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Woods Lonergan secured a $2.312 million jury verdict for a New York commercial landlord in a dispute involving a commercial lease default and the enforceability of a personal guaranty. The result followed a unanimous reversal by the New York Supreme Court, Appellate Division, First Department, which revived the guaranty claim after it had been dismissed on summary judgment.
In 1471 Second Corp. v. NAT of NY Corp., the dispute centered on whether the individual defendant, Nando Ghorchian, had signed a guaranty securing the restaurant tenant’s obligations under a 10-year commercial lease. After the guarantor challenged the document as fraudulent and forged, Woods Lonergan took the matter through appeal, a four-day jury trial, post-trial motion practice, and a separate attorneys’ fee proceeding.
The jury awarded $1,303,659.46 against the tenant and $1,008,818.50 against the guarantor, for a total verdict of $2,312,477.96. The court later denied the defendants’ motion to set aside the verdict and granted the landlord’s application for attorneys’ fees.
When the Tenant Vacated, the Guaranty Became Central to Recovery
The dispute arose from a 10-year commercial lease for restaurant space in a mixed-use building on Second Avenue in Manhattan. One of the tenant’s principals signed a personal “good guy” guaranty intended to secure the tenant’s lease obligations. When the tenant stopped paying rent and vacated the premises, the landlord pursued claims against both the tenant and the individual guarantor for unpaid rent and other amounts due under the lease.
Although the agreement was styled a “good guy” guaranty, the operative complaint quotes language making the guaranty “absolute and unconditional” as to payment and performance, with indemnification for enforcement costs and attorneys’ fees. Those provisions gave the landlord a contractual basis to pursue the individual guarantor when the tenant’s lease obligations went unpaid.
The dispute therefore became about more than unpaid rent. Whether the guaranty could be enforced would determine a significant part of the landlord’s potential recovery.
After the Guaranty Claim Was Dismissed, the First Department Put It Back in Play
The landlord’s recovery path narrowed when the individual guarantor obtained summary judgment dismissing the claims against him. With the tenant already out of the premises, the ruling left the landlord without one of its principal avenues for recovery. Woods Lonergan appealed, seeking to revive the guaranty claim and preserve the landlord’s ability to pursue recovery against the individual guarantor.
The guaranty referred to the individual defendant as both guarantor and tenant, without expressly naming NAT of NY Corp. as the tenant whose obligations were being guaranteed. Ghorchian argued that this defeated the guaranty. On appeal, the First Department unanimously reversed (1471 Second Corp. v. NAT of NY Corp., 162 A.D.3d 449 [1st Dept 2018]), holding that the lease and guaranty could be read together as contemporaneous writings. As the court explained:
“Agreements executed at substantially the same time and related to the same subject matter are regarded as contemporaneous writings and must be read together as one.”
Because the documents could be read together, the drafting issue did not defeat the guaranty claim as a matter of law. Whether the guaranty was intended to secure NAT’s obligations under the lease was left for the jury:
“Under the circumstances, issues of fact exist as to whether the guaranty was intended as a guaranty of NAT’s obligations under the lease.”
The First Department also rejected Ghorchian’s argument that a later lease amendment discharged the guaranty.
The reversal restored a significant recovery path against the individual guarantor. After trial, the landlord obtained a $1,008,818.50 jury award against him.
After the Appeal, the Commercial Lease Guaranty Dispute in 1471 Second Corp. v. NAT of NY Corp. Went to Jury Trial
The First Department’s reversal restored the guaranty claim. But the commercial landlord still had to prove it at trial. The guarantor challenged both the authenticity and scope of the guaranty, asserting that the document had been forged. After a four-day jury trial in New York Supreme Court, New York County, the jury rejected that defense.
The jury found that the tenant breached the commercial lease and that the individual defendant signed a guaranty intended to cover the tenant’s obligations. It awarded $1,303,659.46 against the tenant and $1,008,818.50 against the guarantor, for a total verdict of $2,312,477.96.
The court later denied the defendants’ CPLR 4404(a) motion to set aside the verdict and granted the landlord’s application for attorneys’ fees as the prevailing party.
The $2.3 Million Verdict Was Not the End of the Landlord’s Recovery
The jury verdict resolved liability and damages, but it did not exhaust the landlord’s contractual remedies. The lease and guaranty contained fee-shifting and indemnification provisions that gave the landlord a basis to pursue attorneys’ fees and enforcement costs incurred in enforcing its rights.
After a separate evidentiary hearing, the landlord was awarded $203,876.88 in attorneys’ fees and $12,660.15 in disbursements against both defendants. The guarantor was also ordered to pay an additional $22,572 in attorneys’ fees and $2,970.85 in disbursements incurred in establishing the amount of the fee award.
For commercial landlords, that post-trial recovery matters. A verdict may resolve the core liability dispute, but the governing lease and guaranty can create additional rights that materially affect the economics of enforcement. Fee-shifting, indemnification, interest, and other enforcement provisions should be evaluated from the outset and pursued through judgment where appropriate.
The fee decision also underscored why the matter required more than routine lease enforcement. As the Special Referee observed:
“This was not a simple lease dispute – instead it involved a guaranty that was repeatedly challenged by Defendants as fraudulent and a forgery.”
Special Referee’s Decision and Order on Attorneys’ Fees, Aug. 25, 2026
After a Commercial Tenant Defaults, What Legal Options and Recovery Strategies Does a Landlord Have?
A commercial lease default should be evaluated in light of the landlord’s broader business objectives. The immediate issue may be unpaid rent, but the desired outcome may be to recover possession, replace the tenant, enforce a guaranty or other credit support, maximize monetary recovery, preserve the value of the property, or negotiate an orderly exit.
Those objectives should shape the enforcement strategy. Depending on the lease, guaranty, available security, and circumstances of the default, a commercial landlord may consider:
- Enforcing the lease and recovering possession. A commercial landlord may need to determine whether to terminate the lease, recover possession, pursue unpaid rent and additional rent, or preserve claims that survive surrender, abandonment, or termination.
- Pursuing guarantors and other sources of recovery. When the operating tenant cannot satisfy the claim, a personal or “good guy” guaranty, security deposit, letter of credit, indemnity, or other lease security may become central to the landlord’s recovery strategy.
- Testing the governing documents together. The lease should not necessarily be evaluated in isolation. Guaranties, amendments, waivers, assignments, subleases, surrender agreements, and other contemporaneous documents may determine the parties’ rights and the scope of available remedies.
- Using declaratory, injunctive, and appellate remedies where necessary. A disputed interpretation or adverse ruling does not always end the claim. Declaratory relief, emergency relief, dispositive motions, and appeals may be necessary to preserve or restore important contractual rights.
- Pursuing the full economic recovery available under the agreements. Depending on the governing documents, recovery may extend beyond unpaid rent to additional rent, use and occupancy, contractual interest, indemnification, attorneys’ fees, enforcement costs, judgment enforcement, and collection against tenants and guarantors.
- Evaluating negotiated outcomes alongside litigation. In some disputes, a negotiated surrender, workout, restructuring, payment arrangement, or other lease-exit strategy may better advance the landlord’s commercial objectives than litigating every issue through judgment.
The litigation in 1471 Second Corp. v. NAT of NY Corp. illustrates why these issues should be considered as part of a single recovery strategy. The guaranty claim was initially dismissed, restored on appeal, proven at jury trial, and followed by additional contractual fee recovery. The landlord’s ultimate result depended not on a single remedy, but on preserving and enforcing multiple contractual rights through each stage of the dispute.
Commercial Lease Enforcement & Recovery for Owners and Landlords
Commercial landlords may face a range of enforcement and recovery issues when a tenant defaults, vacates, disputes its obligations, or challenges the landlord’s contractual rights. The appropriate strategy depends on the lease, guaranties and other credit support, the available remedies, and the landlord’s broader business objectives. Woods Lonergan represents commercial property owners and landlords across these disputes, including:
| Lease Enforcement & Litigation | Financial Recovery & Resolution |
| Commercial lease default, termination, surrender, abandonment, and recovery of possession | Nonpayment, additional rent, CAM, use and occupancy, tax escalation, and other monetary claims |
| Guaranty and lease-security enforcement, including personal and “good guy” guaranties, security deposits, and letters of credit | Post-termination rent, accelerated-rent, and liquidated-damages disputes |
| Lease interpretation involving amendments, waivers, assignments, subleases, and surrender agreements | Contractual indemnification, attorneys’ fees, interest, and enforcement costs |
| Lease disputes for co-op and condominium boards, including proprietary lease enforcement and the building’s commercial and retail tenants | Judgment enforcement, asset discovery, and collection against tenants and guarantors |
| Declaratory, injunctive, prejudgment, and asset-preservation remedies, including attachment where available | Fraudulent transfer and other asset-recovery claims involving tenants and guarantors |
| Summary judgment and expedited enforcement of lease and guaranty obligations | Negotiated surrender, workout, restructuring, and lease-exit strategies |
| Appeals involving commercial lease and guaranty enforcement | Collection of unpaid maintenance, common charges, and assessments |
James F. Woods and Annie E. Causey represented the landlord. Mr. Woods handled the successful First Department appeal, and Ms. Causey served as trial counsel and handled the attorneys’ fee proceeding.
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