Opinion
No. 008900–11.
2012-04-26
JEM CATERERS OF WOODBURY, LTD., doing, business as Morrell Of Woodbury, Plaintiff, v. WOODBURY JEWISH CENTER, Defendant. Jem Caterers of Woodbury, Ltd., doing business as Morrell of Woodbury and Scott Morrell, Plaintiffs, v. Woodbury Jewish Center, Inc., Cynthia Matte and Raphael C. Adler, Defendants. Action No. 2.
VITO M. DESTEFANO, J.
The following papers and the attachments and exhibits thereto have been read on these motions:
+-----------------------------------------------------------------------------+ ¦Action No. 1—Index No.: 008900–1 ¦1 ¦ +--------------------------------------------------------------------------+--¦ ¦Order to Show Cause (No.01) ¦1 ¦ +--------------------------------------------------------------------------+--¦ ¦Affidavit in Opposition of Motion (# 01) ¦2 ¦ +--------------------------------------------------------------------------+--¦ ¦Memorandum of Law in Opposition of Motion (# 01) ¦3 ¦ +--------------------------------------------------------------------------+--¦ ¦Reply Memorandum of Law in Further Support of Motion (# 01) ¦4 ¦ +--------------------------------------------------------------------------+--¦ ¦Reply Affirmation in further Support of Motion (# 01) ¦5 ¦ +--------------------------------------------------------------------------+--¦ ¦Notice of Motion (# 02) ¦6 ¦ +--------------------------------------------------------------------------+--¦ ¦Memorandum of Law in Support of Motion (# 02) ¦7 ¦ +--------------------------------------------------------------------------+--¦ ¦Memorandum of Law in Opposition to Motion (# 02) ¦8 ¦ +--------------------------------------------------------------------------+--¦ ¦Reply Memorandum of Law in Further Support of Motion (# 02) ¦9 ¦ +--------------------------------------------------------------------------+--¦ ¦Action No. 2—Index No.: 002317–12 ¦ ¦ +--------------------------------------------------------------------------+--¦ ¦Order to Show Cause (# 01) ¦1 ¦ +--------------------------------------------------------------------------+--¦ ¦Memorandum of Law in Support of Motion (# 01) ¦2 ¦ +--------------------------------------------------------------------------+--¦ ¦Affidavit (Cynthia Matte) in Opposition to Motion (# 01) and in Support of¦3 ¦ ¦Cross Motion (# 02) ¦ ¦ +--------------------------------------------------------------------------+--¦ ¦Affidavit of David Rimberg ¦4 ¦ +--------------------------------------------------------------------------+--¦ ¦Affidavit of Steve Schaeperkoetter, P.E. ¦5 ¦ +--------------------------------------------------------------------------+--¦ ¦Affidavit of Martin Edelman ¦6 ¦ +--------------------------------------------------------------------------+--¦ ¦Affidavit of Rabbi Adler ¦7 ¦ +--------------------------------------------------------------------------+--¦ ¦Affidavit of Paul Drazen ¦8 ¦ +--------------------------------------------------------------------------+--¦ ¦Affidavit (Paul Woldar) in Opposition to Motion (# 01) and in Support of ¦9 ¦ ¦Cross Motion (# 02) ¦ ¦ +--------------------------------------------------------------------------+--¦ ¦Affidavit in Opposition to Motion (# 01) ¦10¦ +--------------------------------------------------------------------------+--¦ ¦Notice of Cross Motion ¦11¦ +--------------------------------------------------------------------------+--¦ ¦Memorandum of Law in Opposition to Motion (# 01) and in Support of Cross ¦12¦ ¦Motion (# 02) ¦ ¦ +--------------------------------------------------------------------------+--¦ ¦Reply Memorandum of Law in Support of Motion (# 01) and in Opposition to ¦13¦ ¦Cross Motion (# 02) ¦ ¦ +--------------------------------------------------------------------------+--¦ ¦Reply Affirmation in Further Support of Motion (# 01) and in Opposition to¦14¦ ¦Cross Motion (# 02) ¦ ¦ +--------------------------------------------------------------------------+--¦ ¦Reply Memorandum of Law (# 02) ¦15¦ +-----------------------------------------------------------------------------+
Factual and Procedural Background
On October 27, 1989, Jem Caterers of Woodbury, Ltd, d/b/a Morrell of Woodbury (“Jem”) and Woodbury Jewish Center, Inc. (“Temple”) entered into a license agreement (“license”) whereby the Temple granted Jem a concession, license and privilege to conduct catered functions at its' premises (License at Article 1).
In consideration of the provisions of the license and the relationship between the parties, Jem agreed and acknowledged to remit to the Temple “sums which shall be construed as a contribution to maintenance” ‘ (License at Article 7). The contributions to maintenance are based upon several factors related to the type, size, date and time of the affair being catered. The parties further agreed that Jem was obligated to pay to the Temple a minimum guaranteed contribution to maintenance (License at Article 8).
The license was subsequently amended by the parties numerous times. While the initial term of the license was 15 years, a May 12, 2003 amendment to the license extended the license term to June 30, 2029 (Matte Affidavit in Support of Motion # 01, Action No. 1 at ¶ 12).
In this regard, if the total amount of per person fees are less, in any given fiscal year, than the minimum guarantee applicable to that fiscal year, Jem is obligated to pay the difference between the total amount of the per person fees and the amount of the minimum guarantee (Ex. “D” to Motion # 01, Action No. 1 at Tab “10” at ¶¶ 3–4; Woldar Affidavit in Support of Motion # 01, Action No. 1 at ¶ 5).
Pursuant to an amendment dated August 8, 1996, Jem is obligated to the full amount of the minimum guarantee based upon a fiscal year commencing on July 1 and ending June 30 of each year. “If the total received is less than the annual Minimum Guarantee for that period, any short-fall shall be paid in a lump sum payment on August 1st. Failure to make payments under this Paragraph shall be deemed a material breech of the Agreement and of all amendments thereto. Jem shall have twelve days from the written notice of such failure to make any payments due under this Paragraph to cure such breach” (Ex. “D” to Motion # 01, Action No. 1 at Tab “10” at ¶ 9).
In Article 3 of the license, the Temple agreed that the plumbing, heating, air conditioning, and electrical systems utilized by Jem would be in good working order and would remain in good working order during the term of the license. The Temple also agreed to use its best efforts to provide Jem with all of the utilities (including water, gas, heat, air conditioning, lighting and plumbing) so as to allow Jem to conduct its catering services (License at Article 3).
In January 2010, Jem stopped making contributions towards maintenance
and, six months later, commenced an action for, inter alia, breach of contract, claiming that the Temple breached its obligations under the license to use best efforts to maintain the Temple's property and catering facility and, thus, the Temple's breach of the license constituted a “failure of consideration relieving [Jem] of any obligation to pay contributions to maintenance” (Ex. “A” to Motion # 01, Action No. 1 at ¶ 58; Affirmation in Support to Motion # 01, Action No. 1 at ¶¶ 8, 121). In addition to seeking compensatory damages for the Temple's purported breach, Jem also seeks a declaratory judgment that the Temple has breached the license and that such breach relieved Jem of its obligations to pay contributions to maintenance to the Temple as required under the license (Ex. “A” to Motion # 01, Action No. 1 at ¶¶ 60–64).
The Temple asserts that since January 1, 2010, Jem has not paid “any of the per person' fees for any of the catered affairs” conducted by Jem (Affirmation in Support of Motion # 01, Action No. 1 at ¶¶ 8, 121).
The four causes of action asserted in the Jem complaint are breach of the license agreement, declaratory judgment, unjust enrichment, and mistake of fact (Ex. “A” to Motion # 01, Action No. 1 at ¶¶ 53–76).
The Temple answered the complaint and asserted various affirmative defenses and counterclaims. Specifically, in its first counterclaim, the Temple asked for a judgment declaring that the Temple may “terminate the License Agreement, without any liability to [Jem] for consequential or compensatory damages, based upon [Jem's] material breach of the License Agreement by failing and refusing to pay the Minimum Guarantee for the fiscal year that began July 1, 2009 and ended June 30, 2010 and by failing to cure such failure to pay after receiving notice of its breach” (Ex. “B” to Motion # 01, Action No. 1 at ¶ 136).
The remaining counterclaims seek compensatory damages for, inter alia, sums due and owing pursuant to the license (Ex. “B” to Motion # 01, Action No. 1 at ¶¶ 137–162).
For the fiscal years July 1, 2009 through June 30, 2010, and July 1, 2010 through June 30, 2011, Jem was obligated to pay the Temple a minimum guarantee of $270,000 per year. Jem paid $153,393.14 towards the July 1, 2009 fiscal year and has not made any payments towards the July 1, 2010 fiscal year (Matte Affidavit in Support of Motion # 01, Action No. 1 at ¶¶ 8, 20, 23, 28; Woldar Affidavit in Support of Motion # 01, Action No. 1 at ¶¶ 7–10). By letter dated August 3, 2010, the Temple notified Jem of the default and gave Jem 12 days to cure the default by paying the balance of the minimum guarantee then due for the July 1, 2009 fiscal year. Jem denied that it was in breach and claimed that the Temple was in breach of the license (Matte Affidavit in Support of Motion # 01, Action No. 1 at ¶¶ 26–27).
The additional counterclaims seek: $116,607.86 for amounts due the fiscal year July 1, 2009 through June 30, 2010; $270,000 as the guaranteed minimum contribution toward maintenance for the fiscal year July 1, 2010 through June 30, 2011; reimbursement in the amount of $36,649 for repairs made by the Temple to provide venting for plumbing improperly installed by Jem in the kitchen; annual payments of $15,000 per year for the July 1, 2009 and July 1, 2010 fiscal years; and $500,000 based upon Scott Morell's transfer of stock (Ex. “B” to Motion # 01, Action No. 1 at ¶ ¶ 137–162).
Action No. 1
Motion Sequence No. 1
By order to show cause, the Temple moved for an order pursuant to Article 63 of the CPLR granting it a preliminary injunction, inter alia, “restraining and enjoining” Jem “from entering upon and using, for catering purposes or any other purposes” any portion of the Temple's property unless Jem, in advance and on a going forward basis, pays to the Temple the per person fees that Jem is obligated to pay pursuant to the licensing agreement along with a verified statement setting forth the particulars of each catered event. According to the Temple, Jem has continued to conduct its catering affairs while at the same time withholding the “per person” fees due and owing from each of the catered affairs. The Temple claims that it will “suffer severe prejudice and irreparable harm” if Jem continues to occupy and use the Temple while at the same time withholds the per person fees that Jem is obligated to pay under the terms of the license (Affirmation in Support Motion # 01, Action No. 1 at ¶¶ 3–4).
The Temple asserts that since January 1, 2010, Jem has not paid “any of the per person' fees for any of the catered affairs” conducted by Jem (Affirmation in Support of Motion # 01, Action No. 1 at ¶¶ 8, 121). According to the Temple, nothing in the license indicates that Jem could withhold payment of the per person fees based upon the unilateral belief that the Temple is not fulfilling its obligations under the license with respect to maintenance of the property.
In opposition, Jem argues that the Temple is not entitled to a preliminary injunction for the following reasons: 1) the granting of injunctive relief would provide the Temple with the ultimate relief sought in the action; 2) the claims asserted are breach of contract claims which may be adequately compensated by money damages; and 3) the Temple has failed to establish the three components necessary for the granting of a preliminary injunction (Memorandum of Law in Opposition to Motion # 01, Action No. 1).
For the following reasons, the Temple's motion for a preliminary injunction is denied.
A party moving for a preliminary injunction must demonstrate by clear and convincing evidence, a likelihood of ultimate success on the merits, irreparable injury if the injunction were not granted, and a balancing of equities in favor of the moving party (Family–Friendly Media, Inc. v. Recorder Television Network, 74 AD3d 738 [2d Dept 2010] ). An injunction is a provisional remedy to maintain the status quo until a full hearing can be held on the merits, not to determine the ultimate rights of the parties. As such, the decision whether to grant or deny a preliminary injunction is within the sound discretion of the court ( Id.;Masjid Usman, Inc. v. Beech 140, LLC, 68 AD3d 942 [2d Dept 2009] ).
Likelihood of Success on the Merits
The Temple argues that it has a “very strong likelihood of success on the merits of its counterclaim that [it] is entitled to a judicial declaration that [it] may terminate the License Agreement on the ground that [Jem] materially breached the License Agreement by failing to pay the Minimum Guarantee for the fiscal year that ended on June 30, 2010 and then failed to cure its material breach after receiving a Notice of Default” (Affirmation in Support of Motion # 01, Action No. 1 at ¶ 6). According to the Temple, because Jem only has a license to use the Temple for catering services, the Temple has the right and power to terminate the license without any liability or consequential damages owed to Jem on the ground that Jem has breached the license by failing to pay the minimum guaranteed contributions toward maintenance (Affirmation in Support of Motion # 01, Action No. 1 at ¶ 6).
Jem argues that a preliminary injunction should not be granted where the relief the Temple seeks is unwarranted pursuant to the licensing agreement. In this regard, Jem points out that the Temple cannot identify a contract provision allowing them to collect fees in advance.
There is no merit to the Temple's counterclaim seeking a judicial declaration that the Temple may terminate its license on the basis of Jem's purported breach because declaratory relief is unnecessary and inappropriate where the Temple has an adequate alternative remedy in an action for breach of contract (Morgenthau v. Erlbaum, 59 N.Y.2d 143, 148 [1983] [court may exercise its discretion in not affording declaratory relief when other remedies are available and adequate]; Alizio v. Feldman, 82 AD3d 804 [2d Dept 2011]; BGW Development Corp. v. Mount Kisco Lodge No. 1552 of the Benevolent and Protective Order of Elks of the United States of America, 247 A.D.2d 565 [2d Dept 1998] ). Thus, the Temple has failed to satisfy the first prong in a preliminary injunction analysis.
Irreparably Injury
The Temple further argues that if Jem continues to use its premises for a catering business and not pay the sums due pursuant to the license agreement, the Temple, its members, and the community will be irreparably harmed in that the Temple will be: forced to terminate teachers from the Temple's school; unable to raise salaries; forced to raise its membership fees, and; unable to maintain its religious, cultural, community, and social activities (Woldar Affidavit in Support of Motion # 01, Action No. 1 at ¶¶ 19–20). The harm is irreparable, according to the Temple, because if the Temple is compelled, by “economic duress”, to terminate its employees and indefinitely suspend all of its activities, those actions cannot be remedied in the future, even if the Temple prevails on its counterclaims against Jem.
Contrary to the Temple's assertions, however, it is asserting breach of contract claims that may be adequately compensated by monetary damages (Dinner Club Corp. v. Hamlet on Olde Oyster Bay Homeowners Ass'n, Inc., 21 AD3d 777 [1st Dept 2005] ). In this regard, the availability of breach of contract (counter) claims for which the Temple seeks compensatory damages (and, as will be discussed infra, other relief available in a summary proceeding), undermines any contention that the Temple will suffer imminent and irreparable harm ( see Family–Friendly Media, Inc. v. Recorder Television Network, 74 AD3d 738, 739 [2d Dept 2010] ). In addition, the court notes that the contributions to maintenance are not the Temple's sole source of income but, rather, represent approximately 25 percent of the Temple's revenue (Ex. “L” to Affidavit in Opposition to Motion # 01, Action No. 1 at pp 6–7).
Balance of Equities
With respect to the third prong of the preliminary injunction analysis, the Temple argues that “it is patently inequitable, unfair, and unjust that [Jem] should continue free-riding' during the pendency of the above-captioned civil action, at the expense of [the Temple], thereby substantially exacerbating [the Temple's] already weakened financial condition to the detriment of [the Temple], its members, their respective families, and the community at large” (Affirmation in Support of Motion # 01, Action No. 1 at ¶ 8).
In contrast, Jem argues, as noted, that there has been a failure of consideration because the Temple has not adequately and properly maintained the premises. Specifically, Jem asserts that it “fully complied with its obligations under the Agreement by providing first class' catering services” and that the Temple has “not adhered to its obligations under the Agreement by failing to use prior contributions to maintenance, to inter alia, maintain the plumbing systems, air conditioning systems, roof and parking lot areas at the Premises” (Memorandum of Law in Opposition to Motion # 01, Action No. 1 at pp 19–20). According to Scott Morell, the President of Jem, “Jem has repeatedly asked [the Temple] to make the necessary repairs only to be met with inaction. [Jem] reasonably believed that [the Temple's] failure to properly maintain the Premises constituted a failure of consideration and material breach of the Agreement which relieved Jem of its obligation to pay contributions to maintenance unless and until [the Temple] takes the necessary action to properly repair and maintain the premises” (Affidavit in Opposition of Motion # 01, Action No. 1 at ¶ 16).
It is undisputed that Jem has not paid the Temple any of the “per person” fees for catered affairs since January 1, 2010 allegedly due to the Temple's failure to adequately and properly maintain the plumbing, air conditioning, roof and parking lot areas. Notwithstanding the Temple's purported breach, Jem has nevertheless continued to conduct its catered functions at the Temple during this period. In addition, the evidence before the court demonstrates that since the inception of the license agreement in 1992, the Temple has sought to maintain the premises, including paying $587,286.38 in necessary repairs and capital improvements in connection with the roof, HVAC units, plumbing, and parking areas (Michael Cohn Affidavit in Support of Motion # 01, Action No. 1 at ¶ 23 (specific areas which were purportedly not maintained). Under these circumstances, the balance of equities is in favor of the Temple.
Notwithstanding the balance of equities in favor of the Temple, the granting of injunctive relief is nevertheless improper given the Temple's failure to demonstrate a likelihood of success that it will prevail on the merits or that it will suffer irreparable harm if the injunction is not granted.
Contrary to Jem's contention, the granting of a preliminary injunction does not provide the Temple with the ultimate relief sought in the action. The Temple, in its counterclaims, seeks a declaratory judgment allowing it to terminate the license without any liability, and also damages for breach of the license agreement. Such relief is not the same as that sought in the preliminary injunction, namely, requiring Jem to pay the per person fees as per the license agreement on a going forward basis (SHS Baisley, LLC v.. Res Land, Inc., 18 AD3d 727 [2d Dept 2005] ).
Motion Sequence No. 2 in Action No. 1
Jem moves for an order pursuant to CPLR 3211(a)(1) and (7) dismissing the Temple's first counterclaim, which seeks a judgment declaring that the Temple may “terminate the License Agreement, without any liability to [Jem] for consequential or compensatory damages, based upon [Jem's] material breach of the License Agreement by failing and refusing to pay the Minimum Guarantee for the fiscal year that began July 1, 2009 and ended June 30, 2010 and by failing to cure such failure to pay after receiving notice of its breach” (Ex. “B” to Motion # 01, Action No. 1 at ¶ 136).
Jem also seeks dismissal of the first counterclaim pursuant to CPLR 3211(a)(1) insofar as the license agreement does not provide an express right of termination in the event of an uncured breach by Jem (Memorandum of Law in Support of Motion # 02, Action No. 1 at pp 5–6). According to Jem, the court cannot imply a right of termination where the contract does not provide one. In opposition, the Temple argues that a non-breaching party may terminate a contract in the event the other party materially breaches the contract, regardless of the presence, or lack thereof, of a termination provision (Memorandum of Law in Opposition to Motion # 02, Action No. 1 at p 6). Contrary to Jem's contention, a license is revocable at the will of the licensor and, thus, the absence of any termination provision in the license is not determinative ( see discussion, infra ). Moreover, to accept Jem's argument would lead to the absurd conclusion that its license could never be terminated irrespective of any breach of the agreement by it.
In support of dismissal, Jem argues that the Temple has an adequate remedy at law and, accordingly, the first counterclaim seeking declaratory relief should be dismissed.
Pursuant to CPLR 3001, the Supreme Court may render a declaratory judgment having the effect of a final judgment as to the rights and other legal relations of the parties to a justiciable controversy whether further relief is or could be claimed. However, declaratory relief is unnecessary and inappropriate where the plaintiff has an adequate alternative remedy in an action for breach of contract ( Morgenthau v. Erlbaum, 59 N.Y.2d 143, 148 [1983] [court may exercise its discretion in not affording declaratory relief when other remedies are available and adequate]; Alizio v. Feldman, 82 AD3d 804 [2d Dept 2011]; BGW Development Corp. v. Mount Kisco Lodge No. 1552 of the Benevolent and Protective Order of Elks of the United States of America, 247 A.D.2d 565 [2d Dept 1998] [“cause of action for a declaratory judgment is unnecessary and inappropriate when the plaintiff has an adequate, alternative remedy in another form of action such as breach of contract” ‘, quoting Apple Records v. Capital Records, 137 A.D.2d 50, 54 [1st Dept 1988]; Wells Fargo Bank v. GSRE II, Ltd., 92 AD3d 535 [1st Dept 2012] [plaintiff may not seek declaratory relief when other remedies are available, such as a breach of contract action]; Niagara Falls Water Board v. City of Niagara Falls, 64 AD3d 1142 [4th Dept 2009]; Main Evaluations, Inc. v. State, 296 A.D.2d 852 [4th Dept 2002] [cause of action seeking a declaration that defendant breached the contract was dismissed as unnecessary and inappropriate where the plaintiff had an adequate alternative remedy in an action for breach of contract] ).
Jem also argues that the counterclaim for declaratory judgment should be dismissed because it fails to state a claim and is flatly contradicted by the express terms of the license which does not provide for a right of termination in the event of a breach (Memorandum of Law in Support of Motion # 02, Action No. 1 at pp 4, 7).
Contrary to the Temple's contention,
it does have an adequate remedy at law to recover possession of the property, namely, a summary proceeding in District Court pursuant to RPAPL.
The Temple argues that it does not have an adequate remedy at law for Jem's continued use and occupancy of the Temple's property because an eventual award of money damages will not “fully” compensate the Temple for the time that Jem has used the Temple's property after Jem materially breached the license agreement. In this regard, the Temple further argues that it has been deprived of its right to use its own property under circumstances where Jem has “no right to continued possession” (Memorandum of Law in Opposition to Motion # 02, Action No. 1 at p 11).
In this regard, in February 2012, the Temple served a 10–day notice to quit upon Jem as a predicate to commencing a summary proceeding (Ex. “G” to Order to Motion # 01, in Action No. 2).
Pursuant to RPAPL 713, “a special proceeding may be maintained under this article after a ten-day notice to quit has been served upon the respondent ... upon the following grounds: He is a licensee of the person entitled to possession of the property at the time of the license, and ... his license has been revoked by the licensor....”
In an order to show cause in a second action entitled Jem Caterers of Woodbury, Ltd d/b/a Morrell f Woodbury and Scott Morrell v. Woodbury Jewish Center, Inc., Cynthia Matte and Raphael C. Adler, Index No. 002317/12, the Temple was restrained from taking any action to enforce the termination notice against Jem.
Moreover, the Temple's request for a declaration allowing it to terminate its license, without any liability to Jem, does not constitute a justiciable or actual controversy, and, accordingly, the court declines to make such a ruling (Chanos v. MADAD, LLC, 74 AD3d 1007 [2d Dept 2010]; United Water New Rochelle, Inc. v. City of New York, 275 A.D.2d at 464,supra [courts may not issue advisory opinions which can have no immediate effect]; Long Island Lighting Co. v. Allianz Underwriters Insurance Co., 35 AD3d 253 [1st Dept 2006]; Siegel, McKinney's Practice Commentaries, CPLR C3001:3 [declaratory judgment requires an actual controversy and may not be used as a vehicle for an advisory opinion] ). A “justiciable controversy” involves “a real dispute between adverse parties, involving substantial legal interests for which a declaration of rights will have some practical effect” (Chanos v. MADAD, LLC, 74 AD3d 1007 [2d Dept 2010] ). However, because the courts are not permitted to issue decisions that can have no immediate effect and may never resolve anything, the “courts will not entertain a declaratory judgment action when any decree that the court might issue will become effective only upon the occurrence of a future event that may or may not come to pass” (New York Public Interest Research Group, v. Carey, 42 N.Y.2d 527, 531 [1977];Cuomo v. Long Island Lighting Co., 71 N.Y.2d 349 [1988];United Water New Rochelle, Inc. v. City of New York, 275 A.D.2d 464 [2d Dept 2000] [declaratory relief improper where case presented hypothetical issues concerning future events which may or may not occur] ).
Under the circumstances, a declaratory judgment is both unnecessary and inappropriate and, accordingly, Jem's motion seeking dismissal of the Temple's first counterclaim for a declaratory judgment is granted ( see Singer Asset Finance Co., LLC v. Melvin, 33 AD3d 355 [1st Dept 2006] ).
In addition to the second counterclaim, which seeks damages for the same time period as that asserted in the first counterclaim for which the Temple seeks declaratory relief, the Temple's remaining three counterclaims seek compensatory damages based upon monies owed as a result of Jem's purported breach of the license.
Action No. 2
The complaint in the second action asserts causes of action sounding in defamation, breach of contract, declaratory judgment, and monetary damages arising out of the Temple's “improper attempt to terminate the License Agreement with Jem without any factual or legal basis” (Motion # 01, Action No. 2 Complaint).
As indicated, with the commencement of Action No. 2, Jem moves for an order granting it a temporary restraining order (“TRO”) and preliminary injunction enjoining, restraining, and prohibiting the Temple from: 1) taking any action to enforce the notice of termination and ten-day notice to quit; 2) terminating the license; 3) interfering with Jem's use and occupancy of the premises and Jem's business operations; 4) serving any further notices of termination and/or notices to quit in connection with any claimed default; 5) instituting any summary proceedings or other actions to recover possession of the premises; and 6) tolling and staying the time period set forth in the termination notice by which Jem was required to vacate. The TRO was granted by this court on March 15, 2012 pending the determination of the motion.
The Temple cross-moves for an order vacating the TRO or, in the alternative, requiring Jem pay to the Temple $611,607.86 for monies due and $25,000 per month for use and occupancy during the pendency of the litigation as a condition for injunctive relief; or, increasing the undertaking to one million dollars.
For the reasons that follow, Jem's motion is denied and the Temple's cross motion is granted in part and denied in part.
In support of its motion, Jem argues that the termination notice is “fatally defective and unenforceable, as a matter of fundamental contract law, because the License Agreement does not provide [the Temple] with a right of termination”, even if Jem breaches by failing to pay contributions to maintenance (Memorandum of Law in Support of Motion # 01, Action No. 2 at pp 5–6).
The court agrees with Jem's assertion that the license fails to set forth a termination provision in the event of a breach. However, the agreement is expressly stated to be a license and, as such, is revocable at the will of the licensor (the Temple), regardless of any provisions contained within the agreement.
Unlike a lease, a license gives no interest in land but confers only the non-exclusive, revocable right to enter the land of the licensor to perform an act ( Nextel of New York, Inc. v. Time Management Corp., 297 A.D.2d 282 [2d Dept 2002]; Rosential v. Rosential, 20 A.D.2d 71 [1st Dept 1963] [a licensee is “one who enters upon or occupies lands by permission, express or implied, of the owner, or under a personal, revocable, nonassignable privilege from the owner, without possessing any interest in the property, and who becomes a trespasser thereon upon revocation of the permission of the privilege”] ). If a license has been granted, as in the case at bar, the rights and obligations of the parties are governed by the law of contracts (Rasch's Landlord & Tenant, § 4:18 [4th ed] ). Specifically,
Despite the language of the agreement granting Jem an exclusive license, the parties:
[A]cknowledge that the terminology of the exclusivity as used for purposes of this Agreement is not intended to exclude the Temple from exercising its dominion. The Agreement herein is a license for purposes of dispensing food and beverage in connection with catered affairs of a religious nature. The parties acknowledge that said Agreement will reflect the foregoing solely and under no circumstances is it intended that such Agreement be construed as a lease agreement nor is it a conveyance of all or any portion of realty (License at Article ¶ 23).
A license is revocable, even though a consideration has been paid therefore or money has been expended, on the faith of the license. Where, however, the license is given in pursuance of a contract for a definite term, upon a valuable consideration, a breach of the contract gives rise to a personal action. While the right to injunctive relief may not follow from its termination, it is the basis for the breach of the contract which created it.
(Melodies, Inc. v. Mirabile, 4 Misc.2d 1062 [City Court Albany 1957]; Nemmer Furniture Co. v. Select Furniture Co., 25 Misc.2d 895 [Supreme Court Erie County 1960] ). Moreover, injunctive relief is generally not available when a license is revoked. “A revocable license is not sufficient to sustain a complaint for an injunction to restrain the licensor from interfering with the exercise of the license” (49 N.Y. Jur 2d Easements § 244).
But see U.S. Ice Cream Corp., v. Carvel Corp., 136 A.D.2d 626 [2d Dept 1988] [under limited circumstances, injunctive relief may be obtained to prevent the breach of a contract granting an exclusive license] ).
Given the well-settled law on licenses, it is beyond cavil that the Temple, as licensor, is permitted to revoke the license subject to any remedies available to Jem, as licensee, for breach of the license agreement and, moreover, Jem, as licensee, is not entitled to an injunction restraining the Temple from exercising its rights to revoke the license.
Contrary to Jem's contention, U.S. Ice Cream Corp. v. Carvel Corp. (136 A.D.2d 626 [2d Dept 1988] ) (“Carvel”) and Mr. Natural v. Unadulterated Food Products (152 A.D.2d 729 [2d Dept 1989] ) do not support a different conclusion. Unlike the licensors in the Carvel
“In the absence of any proof that Carvel [licensor] will be harmed by the granting of injunctive relief in order to maintain the status quo, the existence of disputed factual issues should not preclude the remedy” (136 A.D.2d at 628,supra ).
cases, the licensor at bar will suffer hardship if the preliminary injunction is granted. In this regard, the potential harm suffered by the Temple if Jem were permitted to continue its catering on the premises is based upon sworn allegations made against Scott Morrell and related to the Temple Beth Torah of Melville. The allegations against Morrell, which on their face constitute violations of Jewish law concerning kashrut, include: 1) preparation of non-kosher foods in a kosher kitchen; 2) transportation of kosher food in the same trucks used to transport non-kosher food; 3) use of the same serving dishes for both kosher and non-kosher foods; and 4) charging customers for tips for the catering staff while retaining the tip money received for himself (Morrell) or his entities (Affidavit of Rabbi Drazen in Opposition to Motion # 01, Action No. 2 at ¶¶ 5–6). In short, numerous affidavits indicate that the reputation of the Temple's Rabbi and its congregation will be “irreparably harmed” and “will continue to be doubted so long as Morrell” continues catering on the Temple's premises (Affidavit of Rabbi Drazen in Opposition to Motion # 01, Action No. 2 at ¶ 16).
“[T]he existence of a factual dispute will not bar the granting of a preliminary injunction if one is necessary to preserve the status quo and the party to be enjoined will suffer no great hardship as a result of its issuance.” The licensor in Mr. Natural had not shown that it would “even be inconvenienced by a preliminary injunction” (152 A.D.2d at 730,supra ).
“The rabbi's trust is violated when a caterer, such as Scott Morrell, is accused of violating the sanctity of kashrut. Once a religious congregation and the surrounding Jewish community become aware that a rabbi's trust in a caterer has been breached by accusations of a violation of the laws of kashrut, the reputation of the rabbi and that of his/her congregation concerning their covenant to God is irreparably harmed. Rabbi Adler's reputation and that of the kashrut of [the Temple] will continue to be doubted so long as Morrell stays in place” (Affidavit of Rabbi Drazen in Opposition to Motion # 01, Action No.2 at ¶¶ 15–16). According to Rabbi Martin Edelman, the “allegations made against Scott Morrell jeopardize the reputation of both Rabbi Adler and the [Temple] congregation for failing to adhere to the laws of kashrut in compliance with this covenant with God. Under Jewish law, even the suspicion of violating the laws of kashrut is sufficient to support Rabbi Adler's religious determination that Scott Morrell can no longer serve as kosher caterer to [the Temple]” (Affidavit of Rabbi Edelman in Opposition to Motion # 01, Action No. 2 at ¶ 15).
Based on the foregoing, it is hereby ordered, in Action No. 1, that the Temple's motion for a preliminary injunction is denied and Jem's motion for an order pursuant to CPLR 3211(a)(7) is granted; and it is further ordered, in Action No. 2, that Jem's motion for a preliminary injunction is denied, the Temple's cross motion for an order vacating the March 15, 2012 TRO is granted, the TRO is hereby vacated, and the remaining branches of the Temple's cross motion are denied as academic.
This constitutes the decision and order of the court.