Opinion
No. 504494/2014.
01-29-2016
LITTLE NEST COMMUNITY NURSERY LLC, Plaintiff, v. 501 CHURCH LLC and David Koptiev, Defendants.
Eric R. McAvey, Esq., Queens Village, for Plaintiffs. Nicole R. Giannakis, Esq., Mineola, for Defendants.
Eric R. McAvey, Esq., Queens Village, for Plaintiffs.
Nicole R. Giannakis, Esq., Mineola, for Defendants.
CAROLYN E. DEMAREST, J.
The following e-filed papers read herein:
Papers Numbered
Notice of Motion/Order to Show Cause/
Petition/Cross Motion and
Affidavits (Affirmations) Annexed 25–43
Opposing Affidavits (Affirmations) 43–49
Reply Affidavits (Affirmations) 50–51
Affidavit (Affirmation)
Other Papers
In this action by plaintiff Little Nest Community Nursery LLC (plaintiff) against defendants 501 Church LLC and David Koptiev (Koptiev) (collectively, defendants) alleging claims of breach of contract, fraud, diversion of business opportunities, and unjust enrichment, defendants move, under motion sequence number one, for an order, pursuant to CPLR 3212, granting them summary judgment dismissing plaintiff's complaint against them.
BACKGROUND
Beginning in 2010, plaintiff, a limited liability company, owned and operated an early childhood preschool for children located at 216 Seeley Street, in Brooklyn, New York. In May 2013, plaintiff's principal and sole member, Kathleen Fink (Fink), who, at that time was looking to rent another commercial space to expand her business and operate a preschool, saw a building located at 503 and 501 Church Avenue, in Brooklyn, New York (the property), which was undergoing construction work and had a sign that there was space for rent, and inquired about it. She then met with Koptiev, the manager of 501 Church LLC, who allegedly informed her that the necessary construction work could be performed to the property, which would enable her to obtain a certificate of occupancy from the New York City Department of Buildings (the DOB). Fink claims that Koptiev represented to her that this certificate of occupancy could be obtained on or before September 1, 2013.
Plaintiff allegedly received a lease agreement from defendants on or about May 17, 2013, and, thereafter, entered into negotiations concerning the terms of the lease. During these negotiations, plaintiff was assisted by a former attorney. On May 21, 2013, plaintiff allegedly sent defendants written notice of the items needed in order to obtain the certificate of occupancy for the property, and on May 24, 2013, plaintiff allegedly met with Koptiev and his architect to confirm these needed items. On May 27, 2013, defendants allegedly provided floor plans for the property, and on May 28, 2013, defendants began demolition and construction pursuant to the floor plans provided by plaintiff.
On May 30, 2013, plaintiff, as the tenant, and 501 Church LLC, as the landlord, executed a written lease for the property. Paragraph 91 of the lease, entitled “Arms Length Transaction,” set forth that plaintiff “acknowledge[d] that the lease was fairly negotiated and no pressure was made upon [it] to execute the Lease,” and “expressly acknowledge[d] that the Terms and provisions of the Lease were agreed to by [it] without force or coercion,” and “that [it] was represented by counsel.” Fink has admitted that she read and understood the entirety of the lease before she executed it on behalf of plaintiff, and that there had been extensive negotiations as to the terms of the lease, including many changes requested by plaintiff (Fink's Dep. Transcript at 39–40, 43).
Plaintiff claims that at the time of the execution of the lease, defendants continued to orally assure it that the construction was simple and that it would have a certificate of occupancy by September 1, 2013. However, with respect to oral representations, paragraph 20 of the lease, entitled “No Representations by Owner,” specifically provided:
“Neither Owner nor Owner's agent has made any representations or promises with respect to the physical condition of the building, the land upon which it is erected or the demised premises, the rents, leases, expenses of operation, or any other matter or thing affected or related to the demised premises, except as herein expressly set forth ... Tenant has inspected the building and the demised premises and is thoroughly acquainted with their condition, and agrees to take the same as-is', and acknowledges that the taking of possession of the demised premises by Tenant shall be conclusive evidence that the said premises and the building of which form a part were in good and satisfactory condition at the time such possession was so taken, except as to latent defects. All understandings and agreements heretofore made between the parties hereto are merged in this contract which alone fully and completely expresses the agreement between Owner and Tenant, and any executory agreement hereafter made shall be ineffective to change, modify, discharge or effect an abandonment of it in whole or in part, unless such executory agreement is in writing and signed by the party against whom enforcement of the change, modification, discharge, or abandonment is sought.”
In addition to the express merger clause in paragraph 20, paragraph 79 of the lease, entitled “No Oral Changes,” provided that “[t]his Lease may not be changed ... orally.”
Paragraph 15 of the lease, entitled “Occupancy,” contained an “as is” clause, as follows:
“Tenant has inspected the demised premises and accepts them as-is', subject to the riders annexed hereto with respect to Owner's work, if any. In any event, Owner makes no representation as to the condition of the demised premises, and Tenant agrees to accept the same subject to violations, whether or not of record.”
Paragraph 52 of the lease, entitled “Demised Premises As Is,' “ further specified that plaintiff agreed to accept the demised premises “as is,” that 501 Church LLC did not make any representations or agreements as to the usability of the property or the purposes for which plaintiff intended to use and occupy it, and that 501 Church LLC was not required to make any repairs to the property except as provided to the contrary in the lease with respect to structural repairs. Specifically, it provided as follows:
“The Tenant acknowledges and represents to the Owner that it has inspected and represented and examined, or caused to be inspected and examined, the Building and the demised premises and that it is fully familiar and satisfied with the physical condition thereof, and the Tenant does hereby agree to accept the Building and the demised premises in their existing condition and state of repair as is', and the Owner shall have no obligation to do any work or make any installation or alteration of any kind to the demised premises except as expressly provided herein. The Tenant acknowledges and agrees that the Owner has not made, and is unwilling to make, any express or implied warranties, representations or agreement and nothing contained in this Lease shall be deemed to be such a warranty, representation or agreement on the part of the Owner, with reference to (a) the condition or usability of the demised premises, (b) the purposes for which the Tenant intends to use and occupy the demised premises and/or (c) the dimensions of and/or the square foot area contained in the demised premises. Except as expressly provided to the contrary with respect to structural repairs, the Owner shall not be required to repair, renovate or redecorate the demised premises at any time during the term of this Lease.”
With respect to obtaining a certificate of occupancy, paragraph 48 of the lease provided that:
“Tenant shall, at its own cost and expense, obtain any and all permits, licenses and/or certifications, of whatsoever kind or nature, from any and all jurisdictions over the demised premises, necessary or required for the occupation and use of the demised premises as provided in this Lease.”
Paragraph 95 of the lease, entitled “Rent Concession,” provided as follows:
“Notwithstanding anything to the contrary contained in this Lease, upon payment of three (3) months security deposit at the time of this Lease and provided Tenant is not in default under this lease, Tenant shall have no obligation to pay the first four (4) months (applicable to the months of June, July, August and September of 2013) of the fixed rent due under this lease (rent free period') subject to all other terms and conditions of this lease including the payment of water charges, sewer charges, electricity charges and real estate taxes. The rent free period under this paragraph shall extend if there are any delays caused by Owner's negligence or omissions which directly cause delays to Tenant's obtaining a [certificate of occupancy] to operate a Day Care facility.”
In addition, with respect to the time it would take to obtain a certificate of occupancy, plaintiff requested that certain language be stricken from paragraph 76 of the lease, entitled “Failure to Do Business,” which treated as a default in performance of a material covenant of the lease, plaintiff's failure to conduct business at the premises. Paragraph 76(a), that specified as such default, plaintiff's failure “to open for business ... on or before ... ninety (90) days following [execution of the lease],” was stricken. Plaintiff's request to strike this language was made in plaintiff's negotiated list of requested changes to the lease, wherein plaintiff, in paragraph 17 thereof, asked that this be stricken because commencing business within 90 days from the signing of the lease was “not feasible given [its] new [certificate of occupancy] application and [the necessary] approval from [the] DOH [and the Fire Department].”
The lease, in paragraph 43, entitled “Insurance,” also contained a provision requiring plaintiff, at its sole expense and as additional rent, to maintain in full force and effect, business interruption insurance. Paragraph 44 of the lease, entitled “Release,” provided that plaintiff and 501 Church LLC released each other “ “from all liability, whether for negligence or otherwise, in connection with any loss covered by insurance policies which the releasor carries with respect to the demised premises ... to the extent that such loss is collectible under such insurance policies.”
On May 31, 2013, plaintiff applied for a site inspection with the New York City Department of Housing (the DOH). On June 4, 2013, plaintiff notified its existing clients of the new second location of its preschool at the property, and also advertised this location. On that date, plaintiff also met with Koptiev and his architect to confirm an HVAC permit and a plan for the DOB, and on June 5, 2013, plaintiff met with Koptiev and his plumber to confirm the kitchen and bathroom plan. On June 20, 2013, plaintiff met with the DOH to review the building plans, and the DOH informed plaintiff that it would not schedule its final meeting and inspection until it received the final certificate of occupancy from the DOB. On July 7, 2013, plaintiff received notice from defendants that the plan needed to be amended by the architect, and on July 18, 2013, defendants submitted amended plans to the DOH. On July 18, 2013, the DOB approved the plans for the certificate of occupancy.
Plaintiff alleges that on July 21, 2013, she informed defendants that the newly installed roof at the property was leaking, and was assured by defendants that this problem would be fixed. On July 31, 2013, plaintiff was informed by the DOH as to what was needed in order to complete her application for a license, and that the required inspection by the Fire Department could not be scheduled until a certificate of occupancy was received. Plaintiff informed defendants of this. On August 7, 2013, plaintiff notified defendants of the unfinished construction at the property and claims that they assured it that this problem would be remedied. On September 9, 2013, when the school year began, the certificate of occupancy had not yet been issued, and plaintiff was unable to open its preschool at the property at that time. Plaintiff claims that as a result of this delay in obtaining the certificate of occupancy, it lost clients to competitors.
On November 15, 2013, the final certificate of occupancy was issued by the DOB. On December 4, 2013, the Fire Department inspection was completed. On December 20, 2013, plaintiff was issued a license and permit to operate the preschool at the property. Plaintiff claims that in January 2014, it informed defendants that the roof was leaking and that the plumbing had failed in the bathroom, the sewer, and the kitchen. According to plaintiff, it was assured by defendants that these problems would be fixed.
On May 18, 2014, plaintiff filed this action against defendants, seeking monetary damages in an amount in excess of $500,000. Plaintiff's complaint, dated July 22, 2014, alleges a first cause of action for fraud, a second cause of action for breach of contract, a third cause of action for diversion of business opportunities, and a fourth cause of action for unjust enrichment. Defendants have interposed an answer, dated August 6, 2014, containing denials and defenses. Discovery has been conducted, including the depositions of Fink and Koptiev. On September 24, 2014, defendants filed their instant motion for summary judgment.
DISCUSSION
In support of their motion for summary judgment, defendants point to the fact that plaintiff's claims, as set forth in its complaint and upon which each of its causes of action are predicated, are premised upon oral misrepresentations of the date that a certificate of occupancy for its use of the property as a day care facility or preschool would be obtained, how long the construction at the property would take, and defendants' failure to repair alleged problems with the plumbing and roofing defects despite oral promises that they would do so. Defendants contend that, based upon the express terms of the lease, and as further demonstrated by Fink's deposition testimony, plaintiff's complaint must be dismissed in its entirety.
Plaintiff's second cause of action for breach of contract alleges that defendants breached their oral agreement and their written agreement, and that this breach has caused it to sustain damages. However, plaintiff fails to allege, with specificity, the terms of any oral agreement, or set forth the terms of any written agreement which was breached. Plaintiff concedes that the only written agreement was the lease, but does not point to any provision of the lease which was breached by defendants. It merely states that the lease must be considered as a whole and that there are oral agreements intertwined with it. It asserts that these oral agreements were made by Koptiev. As noted, the alleged oral agreements relate to the time period necessary for plaintiff's acquisition of the certificate of occupancy and completion of construction, and the repair of roof leaks and plumbing.
While plaintiff seeks to add alleged oral agreements to the lease, “[a] lease is a contract” (Genovese Drug Stores, Inc. v. William Floyd Plaza, LLC, 63 AD3d 1102, 1103 [2d Dept 2009] ; see also Vermont Teddy Bear Co. v. 538 Madison Realty Co., 1 NY3d 470, 475 [2004] ), and “[w]here the terms of a contract are clear and unambiguous, the contract must be enforced according to its terms” (Genovese Drug Stores, Inc., 63 AD3d at 1103–1104 ; see also Reiss v. Financial Performance Corp., 97 N.Y.2d 195, 198 [2001] ; W .W.W. Assoc. v. Giancontieri, 77 N.Y.2d 157, 162 [1990] ).
“[C]ourts may not by construction add or excise terms, nor distort the meaning of those used and thereby make a new contract for the parties under the guise of interpreting the writing” (Vermont Teddy Bear Co., Inc., 1 NY3d at 475 [internal quotation marks omitted] ). “It is axiomatic that a contract is to be interpreted so as to give effect to the intention of the parties as expressed in the unequivocal language employed” (Wallace v. 600 Partners Co., 86 N.Y.2d 543, 548 [1995] [internal quotation marks omitted] ).
“Evidence outside the four corners of the document as to what was really intended but unstated or misstated is generally inadmissible to add to or vary the writing” (W.W.W. Assoc., Inc., 77 N.Y.2d at 162 ). “The parol evidence rule, which prohibits the introduction of extrinsic evidence to vary or add to the terms of contract, especially where such contract contains a merger clause ... precludes introduction of a purported oral agreement” (NAB Const. Corp. v. Consol. Edison Co. of New York, Inc., 222 A.D.2d 381, 381 [1st Dept 1995] ).
“Whether or not a writing is ambiguous is a question of law to be resolved by the courts” (W.W.W. Assoc., Inc., 77 N.Y.2d at 162 ). The contract must be “read as a whole to determine its purpose and intent” (id. ). “When a written agreement is clear and unambiguous on its face, extrinsic and parol evidence is not admissible to create an ambiguity' “ (Innophos, Inc. v. Rhodia, S .A., 38 AD3d 368, 369 [1st Dept 2007], quoting Intercontinental Planning v. Daystrom, Inc., 24 N.Y.2d 372, 379 [1969] ; see also W.W.W. Associates, Inc., 77 N.Y.2d at 163 ).
Here, any oral agreement is barred by the explicit terms of paragraphs 20 and 79 of the lease, to which plaintiff agreed, requiring that any modification or change in the lease be made in writing (see General Obligations Law § 15–301 [1 ] ). Furthermore, the merger and integration clause in paragraph 20 of the lease is straightforward, unambiguous, and explicit. Thus, paragraphs 20 and 79 bar the use of parol evidence of the parties' intent and of any other oral agreements or understandings between them (see Schron v.. Troutman Saunders LLP, 97 AD3d 87, 93 [1st Dept 2012], affd sub nom. Schron v. Troutman Sanders LLP, 20 NY3d 430 [2013] ; Fundamental Long Term Care Holdings, LLC v. Cammeby's Funding LLC, 92 AD3d 449, 450 [1st Dept 2012] ; Torres v. D'Alesso, 80 AD3d 46, 56–57 [1st Dept 2010] ). Moreover, the parol evidence rule precludes the use of extrinsic evidence (see Transammonia, Inc. v. Enron Capital & Trade Resources Corp., 278 A.D.2d 152, 153 [1st Dept 2000] ; Katz v. American Tech. Indus., 96 A.D.2d 932, 933 [2d Dept 1983] ; NAB Constr. Corp., 222 A.D.2d at 381 ). Since the lease, consisting of 97 paragraphs on nineteen pages, each initialed by the parites, is unambiguous, the court cannot consider extrinsic evidence of a prior or subsequent oral agreement or the parties' subsequent course of performance (see Cellular Mann, Inc. v. JC 1008 LLC, 113 AD3d 521, 521 [1st Dept 2014] ; Chelsea Piers, L.P. v. Hudson River Park Trust, 106 AD3d 410, 412 [1st Dept 2013] ; Schron, 97 AD3d at 93 ).
Plaintiff cannot avoid the bar of the parol evidence rule or the specific merger clause since plaintiff's claimed oral agreement concerning the certificate of occupancy contradicts the unambiguous provisions of the lease. Paragraph 48 of the lease specifically provided that it was plaintiff's obligation to obtain certificates, such as the certificate of occupancy. In fact, Fink testified, at her deposition, that she was aware that it was her responsibility under the lease to obtain a certificate of occupancy (Fink's Dep. Transcript at 68). Moreover, while plaintiff claims that defendants breached their oral agreements with her due to the delay in the acquisition of the certificate of occupancy beyond the promised date of September 1, 2013, this claim is belied by Fink's deposition testimony wherein she admitted that there was no definite date promised to her as to the acquisition of a certificate of occupancy (id. at 78 ). While Fink, in an affidavit annexed to plaintiff's opposition papers, now states that she executed the lease based on Koptiev's oral representations to her that she would have a legal certificate of occupancy on or before September 1, 2013, this recent statement, which contradicts and appears to be designed to avoid the consequences of her earlier deposition testimony, is insufficient to create any genuine issue of fact (see generally Blochl v. RT Long Is. Franchise, LLC, 70 AD3d 993, 994 [2d Dept 2010] ).
Plaintiff's claim that defendants promised that the certificate of occupancy would be obtained by September 1, 2013 is further contradicted by paragraph 95 of the lease, which specifically provided that there was no obligation by plaintiff to pay rent for the first four months of the lease, and such rent concession would be extended if there were any delays in obtaining a certificate of occupancy to operate a day care facility due to 501 Church LLC's negligence or omissions. Since the lease was executed on May 30, 2013, the rent concession ran for the months of June, July, August, and September 2013. Thus, if defendants had assured plaintiff that the certificate of occupancy would be obtained by September 1, 2013, as plaintiff claims, there would have been no reason for plaintiff to have been given a rent concession for the month of September, after she already had an operable day care facility. Therefore, the rent concession for September 2013 provided by this lease term belies plaintiff's claim that there could have been any representation or expectation that the certificate of occupancy would be obtained prior to September 1, 2013.
Indeed, in an e-mail by Fink stating her final changes/revisions to the lease, dated May 29, 2013 (which was one day prior to the execution of the lease), she informed Albert Aranbaev, who prepared the lease on behalf of defendants, that as to the rent concession provision of the lease, she had “expressed her concern to [Koptiev] regarding the possible length of time that a new certificate of occupancy] w[ould] take-hopefully not more than 3 months but it could be longer-it's an unknown,” and that “[w]ith that consideration, [she was] asking to increase [the] rent concession from 2 months to 4 months.” This e-mail demonstrates plaintiff's understanding that the certificate of occupancy would likely be acquired after September 1, 2013 and that it was unknown exactly how long it would take to acquire it.
Furthermore, plaintiff's list of items needed to open its day care facility (defendant's exhibit H), entitled “Group Child Care Permit Application Procedures at a Glance,” which was issued by the DOH, includes 13 steps required to be taken by plaintiff. Step 4 of this list, which addresses lead testing, notes that “[l]ead testing may take up to 30 days,” and step 5 of this list notes that “[o]btaining a certificate of occupancy could “may take up to 90 days.” Fink testified, at her deposition, that the lead test could not be performed until the plumbers actually finished their work at the property (Finks' Dep. Transcript at 67). Since this list, which is referred to in paragraph 13 of plaintiff's complaint as being sent to defendants on May 21, 2013, was in plaintiff's possession prior to the execution of the lease, plaintiff was thus necessarily aware of the extensive time needed to obtain a certificate of occupancy and ultimately open for business. In fact, plaintiff did not receive its certification from the DOH until one month after receiving the certificate of occupancy (Fink's Dep. Transcript at 94).
In addition, plaintiff's knowledge of the uncertainty of the time period in which a certificate of occupancy would be obtained is evidenced by its request to delete from paragraph 76 of the lease the language which would have required it to commence business within 90 days from the execution of the lease. As discussed above, plaintiff stated that this was “not feasible” given the new certificate of occupancy application and the needed approval from the DOH and the Fire Department.
Plaintiff's further claim that defendants breached the lease by misrepresenting how long construction at the property would take is similarly barred by the express merger clause under the lease. In addition, plaintiff's claim that defendants breached the lease with respect to representations that the plumbing within the premises would be repaired is barred by the express terms of the lease. Specifically, paragraph 55 of the lease provided that “[t]he tenant, at [its] own cost and expense, shall maintain and make any and all necessary repairs to the plumbing facilities serving the demised premises, including, but not limited to the plumbing, pipes, lines or conduits of the demised premises.” Thus, there was no obligation on the part of 501 Church LLC under the lease to perform any plumbing repairs.
With respect to the repairs to the roof, Koptiev attests that 501 Church LLC made its best efforts to ensure that the repair of the roof was completed. Plaintiff, in opposition to this summary judgment motion, has failed to present any evidence as to any defects or malfunctions in the roof which defendants failed to repair, nor does it present any evidence as to any alleged damages sustained as a result of such defects, however, defendant 501 Church LLC would be responsible to make structural repairs pertaining to the entire structure and plaintiff has, therefore, alleged a breach of contract as to the roof repairs.
Plaintiff argues, however, that although the lease contains clauses precluding oral modification, there was part performance that was unequivocally referable to a modification of the lease. While oral modifications are barred where a contract requires a modification to be in writing pursuant to General Obligations Law § 15–301, an exception to this statute of frauds provision is where there is part performance, but such part performance must be unequivocally referable to the subsequent oral agreement (see Matter of Irving O. Farber, PLLC v. Kamalian, 16 AD3d 506, 506–507 [2d Dept 2005] ; Richardson & Lucas, Inc. v. New York Athletic Club of City of NY, 304 A.D.2d 462, 463 [1st Dept 2003] ; Calica v. Reisman, Peirez & Reisman, 296 A.D.2d 367, 369 [2d Dept 2002] ). Here, however, plaintiff points to representations allegedly made by Koptiev prior to the execution of the lease. Thus, the merger clause in the leases and the parol evidence rule bar plaintiff from relying on any claimed part performance to take the alleged oral agreement out of the statute of frauds (see Clark Const. Corp. v. BLF Realty Holding Co., 28 AD3d 367, 368 [1st Dept 2006] ).
Plaintiff also points to conduct by Koptiev after the execution of the lease, and argues that this shows that there was a subsequent oral modification, and part performance by the actions taken by him. Specifically, plaintiff asserts that Koptiev made telephone calls on its behalf regarding the status of the certificate of occupancy and attempted to expedite obtaining the certificate of occupancy and that he called the architect and followed-up on the status of the certificate of occupancy. This argument, however, is unavailing since such conduct is not unequivocally referable to the alleged oral modification (see Matter of Irving O. Farber, PLLC, 16 AD3d at 506–507 ; Richardson & Lucas, Inc, 304 A.D.2d at 463 ; Balzano v. Lublin, 162 A.D.2d at 253 ). Rather, any efforts by Koptiev to expedite obtaining the certificate of occupancy are consistent with his and 501 Church LLC's attempt to avoid any delay in plaintiff's obtaining a certificate of occupancy so as to avoid a further rent free period pursuant to paragraph 95 of the lease.
Moreover, the court notes that plaintiff has failed to substantiate its claim of damages (see Balzano, 162 A.D.2d at 253 ). Plaintiff's claims as to consequential damages for loss of future profits allegedly sustained by it are speculative (see Bi–Economy Mkt., Inc. v. Harleysville Ins. Co. of NY, 10 NY3d 187, 193 [2008] ). Furthermore, paragraphs 43 and 44 of the lease provided that any interruption to plaintiff's business was to be covered by insurance obtained by plaintiff, which plaintiff could not recall whether it had been obtained as required. In addition, in a non-payment landlord tenant action commenced by 501 Church LLC against plaintiff in the Civil Court, Kings County, 501 Church LLC and plaintiff entered into a stipulation, dated September 3, 2014, which included a credit of $6,680 to plaintiff for purposes of settling the matter. Koptiev, in his affidavit (which, in this regard, is undisputed by plaintiff), attests that this included the additional concession of a month and a half of rent, and that, in total, plaintiff has already received five and a half months of rent concessions, which equals the entire time period from execution of the lease to receipt of the certificate of occupancy in November 2013.
Thus, based upon the parol evidence rule and the merger clause, as well as the express lease terms, plaintiff's breach of contract claim must be limited to the alleged failure to make structural repairs.
Plaintiff's first cause of action for fraud alleges that defendants made misrepresentations and omissions of fact regarding their ability to secure a certificate of occupancy in a timely manner and their ability to properly construct a preschool. Plaintiff asserts that defendants knew that these representations were false when made and that the omissions of fact were material when made, and that it justifiably relied upon these misrepresentations and omissions of fact regarding its ability to open a preschool at a new location on or before September 2013. It further asserts that defendants thereby caused it to suffer damages.
Plaintiff asserts that the merger clause is ineffectual to exclude evidence of fraudulent inducement, and contends that it relied upon Koptiev's misrepresentations that he could secure the certificate of occupancy before September 1, 2013 when it executed the lease. Plaintiff further claims that it relied upon Koptiev's misrepresentation that he was a member of 501 Church LLC, when he was actually only its managing agent. Plaintiff also claims that Koptiev made oral representations with respect to the repair of the property both before and after the lease was executed, and that Koptiev must have guaranteed the work to be done in a certain time frame because he acquired the contractors who performed the construction work at the property.
Here, however, paragraph 52 of the lease specifically disclaimed that 501 Church LLC made any representations or agreements as to the usability of the property for the purposes for which plaintiff intended to use and occupy it, and further provided that 501 Church LLC was not required to make repairs to the property except structural repairs. This specific disclaimer (along with the merger clause in paragraph 20 of the lease) belies the allegations in plaintiff's complaint that the agreement was executed in reliance upon any contrary oral representations (see Danann Realty Corp. v. Harris, 5 N.Y.2d 317, 320–321 [1959] ; Taormina v. Hibsher, 215 A.D.2d 549, 549–550 [2d Dept 1995] ). Thus, plaintiff may not predicate its claim upon oral representations that it expressly represented, in the lease, it was not relying upon. Plaintiff does not state how the fact that Koptiev was 501 Church LLC's managing agent, rather than its member, was material since there is no question that Koptiev had the authority to execute the lease on 501 Church LLC's behalf. Finally, the substance of plaintiff's fraud cause of action mirrors its breach of contract claims and is not sustainable as an independent cause of action (Sforza v. Health Ins. Plan of Greater NY, 210 A.D.2d 214 [2d Dept 1994] ). Therefore, summary judgment dismissing plaintiff's first cause of action for fraud is mandated (see CPLR 3212[b] ).
Plaintiff's third cause of action for “diversion of business opportunities” alleges that defendants' conduct constitutes an unlawful diversion of business opportunities, and that this conduct has caused it to suffer damages. Plaintiff, in opposition to defendants' motion, does not specifically address defendants' contentions regarding the lack of viability of this cause of action.
It is well established that a claim for diversion of business opportunities applies to directors and officers or others who occupy a fiduciary position in relation to a corporation, and precludes them from diverting from the corporation, an opportunity in which the corporation has an interest or tangible expectancy, or property that is deemed an asset of the corporation, in violation of the duty of loyalty (see Bankers Trust Co. v. Bernstein, 169 A.D.2d 400, 401 [1st Dept 1991] ; Alexander & Alexander of New York, Inc. v. Fritzen, 68 N.Y.2d 968, 969 [1986] ). It is thus wholly inapplicable to this action involving a landlord and tenant dispute regarding obligations under a commercial lease. Even if treated as the more appropriate cause of action for interference with prospective economic advantage, the pleading fails to state such cause of action as there is no allegation that improper means were employed for the purpose of injuring plaintiff (Alexander, 68 N.Y.2d at 969 ). Consequently, summary judgment dismissing plaintiff's third cause of action is warranted (see CPLR 3212[b] ).
Plaintiff's fourth cause of action for unjust enrichment alleges that defendants have been unjustly enriched, causing it to suffer damages. However, “[i]t is well settled that [w]here the parties [have] executed a valid and enforceable written contract governing a particular subject matter, recovery on a theory of unjust enrichment for events arising out of that subject matter is ordinarily precluded' “ (Simkin v. Blank, 19 NY3d 46, 55 [2012], quoting IDT Corp. v. Morgan Stanley Dean Witter & Co., 12 NY3d 132, 142 [2009] ).
In seeking to sustain its unjust enrichment claim, plaintiff argues that in this case, it has alleged a cause of action for fraud, and that if the court upholds its fraud claim, this may result in the lease being unenforceable and that there are factual issues in dispute with respect to the existence of oral contracts. This argument is unavailing. The court has found that plaintiff's fraud claim is not viable and must be dismissed, and has also found that the alleged oral agreements are barred by the parol evidence rule. Thus, since there is a valid and enforceable contract governing the subject matter of plaintiff's claim, namely, the lease, summary judgment dismissing plaintiff's fourth cause of action for unjust enrichment must be granted (see CPLR 3212 [b] ).
CONCLUSION
Accordingly, defendants' motion for summary judgment dismissing plaintiff's complaint against them is granted to the extent that the first cause of action for fraud, the third cause of action for diversion of business opportunities and the fourth cause of action for unjust enrichment are dismissed entirely and the second cause of action for breach of contract is limited to plaintiff's claims of failure to repair the roof.
This constitutes the decision, order, and judgment of the court.
And it is further ordered, that this action is hereby referred to Justice Ash in Commercial Part 11 for conference on March 3, 2016.?