Opinion
604183/04.
Decided February 10, 2006.
Motions sequence numbers 002, 003 and 004 are consolidated herein for disposition.
In motion seq. no. 002 plaintiff, Kronish Lieb Weiner Hellman, LLP. ("Kronish"), moves for an order (i) pursuant to CPLR 3212(c) granting summary judgment on the issue of liability as to its third cause of action for trespass and (ii) pursuant to CPLR 3212(b) dismissing all affirmative defenses and counterclaims asserted by defendant Tahari, Ltd. ("Tahari").
In motion seq. no. 003 third-party defendant, 1114 Trizechahn-Swig, LLC ("Trizec"), moves for an order pursuant to CPLR 3211(a)[1] and [7] dismissing Tahari's third-party complaint on the grounds that the claims asserted therein fail to state a cause of action and are otherwise precluded by documentary evidence.
In motion seq. no. 004 third-party defendant, W.R. Grace Co. — Conn. ("Grace"), moves for an order pursuant to CPLR 3211(a)[7] dismissing each of Tahari's third-party causes of action against Grace with prejudice on the ground that none of them set forth a claim upon which relief can be granted; or, in the alternative, pursuant to CPLR 3211(a)[4] dismissing Tahari's fourth third-party cause of action against Grace on the ground that there is a prior action pending between Tahari and Grace for the same cause of action.
Kronish is the tenant of the 46th and 47th floors of an office building located at 1114 Avenue of the Americas in Manhattan (the "building") pursuant to a lease dated May 12, 1993. . Article 35 of the lease gives Kronish the option to lease the 48th floor for a term beginning on June 1, 2003 and ending on April 30, 2014. Trizec is the owner of the building. Grace was the prime tenant of the 33rd through 48th floors pursuant to a lease dated July 7, 1972. The term of Grace's lease was from May 7, 1973 to May 31, 2003. By sublease dated February 23, 1996, Grace sublet the 48th floor to Tahari for a term that ended on May 31, 2003. By letter dated November 15, 2001, Kronish exercised its option to lease the 48th floor. However, Kronish was unable to take possession on June 1, 2003 because Tahari held over.
In June 2003 Trizec commenced an action against Grace and Tahari to recover possession of the 48th floor (the "ejectment action"). After issue was joined, Trizec moved for summary judgment granting it possession of the 48th floor and dismissing Tahari's 41 affirmative defenses and counterclaims. Grace joined in the relief requested by Trizec except that it moved to dismiss Tahari's cross-claims. Tahari moved to amend its answer and to compel Trizec to lease the 48th floor to it. By decision and order dated March 12, 2004 (the "ejectment order" see Kronish's moving papers, exhibit F) this court granted possession to Trizec based upon the following findings: Grace's lease and Tahari's sublease expired on May 31, 2003; Tahari had no written agreement granting it the right to remain in possession of [the 48th floor]; Tahari's arguments regarding representations made to it, fraud perpetrated against it and discrimination against it by Trizec and Grace did not create possessory rights that are superior to Kronish's written option to lease the [48th floor]; documentary evidence established that Kronish obtained the option to lease the [48th floor] prior to Tahari obtaining the sublease with the result that Kronish's right to possession of the [48th floor] was superior to Tahari's; Tahari failed to raise any issue of fact that would justify imposing equitable relief against Kronish; and, Tahari's arguments concerning discrimination, representations, and fraud perpetrated against it by Trizec and Grace, while not creating possessory rights superior to Kronish's written option, were sufficient to survive their pre-discovery motion for summary judgment (see Kronish's moving papers, exhibit F). On December 16, 2004, the Appellate Division unanimously affirmed the ejectment order holding that "[a]ll the written agreements clearly demonstrate that defendant Tahari's right to sublet the [48th floor] expired when the master lease terminated and no triable issue has been raised as to whether defendant Tahari reasonably relied on any contrary representation to its detriment" ( 1114 Trizechahn-Swig, LLC v. W.R. Grace Co.-Conn, 13 AD3d 200, 201 [1st Dept 2004]). Upon Tahari's ejection from the 48th floor, Trizec gave possession to Kronish.
In December 2004 Kronish commenced this action against Tahari seeking to recover damages resulting from Tahari's failure to vacate the 48th floor on May 31, 2003 when its sublease expired. The complaint asserted three causes of action: tortious interference with contract; unjust enrichment; and trespass. Tahari moved to dismiss the complaint pursuant to CPLR 3211(a)[1], [5], [7] and [10]. By decision and order dated May 17, 2005 (the "May 17 Order") this court granted Tahari's motion to the extent of dismissing Kronish's causes of action for tortious interference and unjust enrichment, while sustaining its cause of action for trespass (see Kronish's exhibit I).
In June 2005 Tahari served its answer to the complaint. Tahari's answer contains Tahari's version of the underlying facts, a general denial, specific denials, 19 affirmative defenses, seven counterclaims and a third-party complaint against Trizec and Grace (see Kronish's exhibit J). Tahari also introduces for the first time a whole set of claims based on purported negotiations among Tahari, Trizec and non-party HBO pertaining to a lease or sublease for the second or 36th floor of the building.
The first five counterclaims asserted by Tahari against Kronish can be summarized as follows: (1) maliciously interfering with a contract between HBO and Tahari; (2) maliciously inducing Trizec to breach its contract with HBO; (3) maliciously interfering with a lease between HBO and Tahari; (4) maliciously interfering with actual and prospective business relations between and among the parties to the ejectment action in order to prevent settlement of that action; and, (5) causing a loss of business opportunity by forcing Tahari to split its facilities between different buildings. The sixth counterclaim asserts a claim for punitive damages and the seventh asserts a claim for attorney's fees.
In July 2005, after serving its reply, Kronish made the instant motion for an order granting it summary judgment with respect to liability and dismissing all affirmative defenses and counterclaims asserted by Tahari. Kronish's motion was followed by Trizec's and Grace's motions to dismiss Tahari's third-party complaint.
Kronish contends that it is entitled to summary judgment on the issue of liability as a matter of law because all of the legal and factual issues underlying its cause of action for trespass have been resolved in its favor by the ejectment order, which was affirmed by the Appellate Division, and the May 17 Order. Kronish then argues that Tahari's counterclaims and affirmative defenses should be dismissed because they are either based on allegations that were rejected by this court and the Appellate Division, or allegations that cannot be sustained as a matter of law. Kronish argues further that Tahari's affirmative defenses and counterclaims are not relevant to Kronish's motion because they address the issue of damages, not liability.
In opposition to Kronish's motion Tahari makes the following arguments: summary judgment is premature because Tahari requires discovery to ascertain inter alia whether Kronish interfered with Tahari's sublease with HBO; Kronish is not entitled to partial summary judgment because Tahari's liability to Trizec has not been established in the ejectment action and because Tahari's claims and defenses were sustained in that action; Trizec's ejectment action bars this action because Tahari cannot be exposed to double liability; and, Kronish misconstrued the Appellate Division decision which merely affirmed that Trizec was the landlord. Tahari then argues that its affirmative defenses and counterclaims should be liberally construed because Kronish's motion for summary judgment is really a CPLR 3211(b) motion to dismiss defenses.
The court finds that Kronish is entitled to summary judgment on the issue of liability. The proponent of a motion for summary judgment must establish his cause of action or defense sufficiently to warrant the court in directing judgment in his favor as a matter of law (see CPLR 3212[b]; Friends of Animals v. Associated Fur Manufacturers, Inc., 46 NY2d 1065, 1067). In the ejectment action this court found inter alia that Kronish's right to possession of the 48th floor was superior to Tahari's (see Kronish's exhibit F, p. 5). In the May 17 Order in this action the court stated that "[t]he issue of possession of the [48th floor] has already been decided" (see Kronish's exhibit I, p. 4).
This action springs from the ejectment action. As noted by Tahari's attorney in her affirmation in opposition to Trizec's motion in this action (motion seq. no. 003), the motions in the ejectment action and this action "all spring from a single substantive controversy which revolves around a common set of operative facts" (emphasis in original; see Mack September 14, 2005 affirmation, P. 2, ¶ 4). Whether labeled stare decisis ("to stand by things decided," i.e., to adhere to precedent; see Black's Law Dictionary [8th ed. 2004]), law of the case (see Martin v. City of Cohoes, 37 NY2d 162, 165 ["when an issue is once judicially determined, that should be the end of the matter as far as Judges and courts of co-ordinate jurisdiction are concerned"]), collateral estoppel (see D'Arata v. New York Central Mutual Fire Insurance Company, 76 NY2d 659, 664 [the doctrine of collateral estoppel is based on the general notion that a party should not be permitted to relitigate an issue decided against it provided (1) the party seeking the benefit of collateral estoppel must prove that the identical issue was necessarily decided in the prior action and is decisive in the present action and (2) the party to be precluded from relitigating an issue must have had a full and fair opportunity to contest the prior determination]), or res judicata (see Schwartz v. Public Administrator of the County of Bronx, 24 NY2d 65, 70 ["One who has had his day in court should not be permitted to litigate the question anew"]), the court concludes that the question of possession has already been decided and that Kronish is entitled to summary judgment on the issue of liability as to its third cause of action against Tahari for trespass.
Kronish also seeks dismissal of Tahari's counterclaims pursuant to CPLR 3212(b). As noted above, when the Appellate Division affirmed this court's ejectment order it stated that "[a]ll of the written agreements clearly demonstrate that defendant Tahari's right to sublet the [48th floor] expired when the master lease terminated and no triable issue has been raised as to whether defendant Tahari relied on any contrary representation to its detriment" ( 1114 Trizechahn-Swig, LLC v. W.R. Grace Co.-Conn, supra, 13 AD3d at 201). The Appellate Division's decision appears to go further than the ejectment order, which preserved Tahari's claims against Trizec and Grace. In what is arguably an attempt to avoid the consequences of the Appellate Division's determination, Tahari has invoked HBO, which was not a party to the ejectment action and is not a party to this action. The allegations comprising Tahari's first three counterclaims are supported by the affidavit of Norman Bobrow, a real estate broker, who states that his firm is and was at all relevant times the exclusive representative for Tahari with respect to commercial and retail space in New York City. According to Mr. Bobrow, HBO, as sublessor, and Tahari, as sublessee, reached agreement on all of the terms of the "HBO sublease" deal for space in the building. The Bobrow affidavit is in apparent response to the affidavit of Michael Moorin attached to Kronish's moving papers. Mr. Moorin states that at all relevant times he was the Vice President of Real Estate for HBO and that HBO and Tahari never reached an agreement. The affidavits present differing versions of the underlying facts.
Given appellate court pronouncements that conflicting affidavits warrant denial of a motion for summary judgment since the court may not pass on issues of credibility (see S.J. Capelin Associates, Inc. v. Globe Manufacturing Corp., 34 NY2d 338, 341, that the motion should be viewed in the light most favorable to the opposing party (see Hotopp Associates Ltd. v. Victoria's Secret Stores Inc., 256 AD2d 285 [1st Dept 1998]) and that the motion is properly denied if there is any doubt as to the existence of a triable issue (see Sillman v. Twentieth Century fox Film Corp., 3 NY2d 395, 404), the court will deny Kronish's motion to the extent that it seeks dismissal of Tahari's first five counterclaims. Tahari's sixth counterclaim will be dismissed because a claim for punitive damages should not be asserted as a separate cause of action (see Holoness Realty Corp. v. New York Property Ins., 75 AD2d 569, 570 [1st Dept 1980]) and because such damages are not warranted herein (Kopec v. Hempstead Gardens, Inc., 264 AD2d 714, 716 [2nd Dept 1999]). Tahari's seventh counterclaim will be dismissed because under New York law the general rule (with no exceptions applicable herein) is that attorney's fees are not recoverable by the prevailing party in the absence of a statute, court rule, or agreement between the parties (see Hooper Associates Ltd. v. AGS Computers Inc., 74 NY2d 487).
As noted earlier, Tahari's answer contains 19 affirmative defenses. Kronish seeks dismissal pursuant to CPLR 3212(b). In its memorandum of law Kronish specifically addresses the the eighth through seventeenth affirmative defenses. Tahari's eighth affirmative defense, failure to state a cause of action, will be dismissed in view of the court's finding in the May 17 Order that Kronish's complaint states a valid cause of action for trespass. Tahari's ninth affirmative defense, that this action is barred by the doctrine of waiver, will be dismissed because it is insufficiently pleaded and totally bereft of factual support (see Herbert Paul, P.C. v. Coleman, 236 AD2d 268, 269 [1st Dept 1997]). The same applies to Tahari's tenth (this action is barred by the doctrine of laches), eleventh (action barred by the doctrine of unclean hands), twelfth (action barred by the doctrine of unconscionability), thirteenth (action barred by doctrine of illegality), and fourteenth (action barred by doctrine of negligence per se) affirmative defenses. Tahari's remaining affirmative defenses are consistent with its contentions herein and will not be disturbed.
Tahari's third-party claims against Trizec can be summarized as follows: (1) Trizec's opposition to HBO sublease and breach of its contract with HBO caused damages to Tahari; (2) Trizec's discrimination against Mr. Tahari (not a party herein) on the basis of national origin proximately caused damages claimed by Tahari; (3) Kronish's damages were caused by one or both third-party defendants (contribution); (4) damages for loss of present and future business opportunities; (5) punitive damages; and, (6) attorney's fees. The same third-party claims are asserted against Grace except for the first two.
Trizec's motion to dismiss Tahari's third-party complaint against it is based on the following contentions: the ejectment order contains a determination that Tahari breached its subleasehold obligations to Trizec by failing to vacate the 48th floor on May 31, 2003 when Tahari's sublease expired; Tahari's assertion that Trizec is responsible for Kronish's damages because Trizec prevented Tahari from vacating the 48th floor is "ridiculous" and otherwise belied by the ejectment order; and, Tahari's assertion that Trizec opposed a sublease between Tahari and HBO and thereby discriminated against Elie Tahari on the grounds of national origin is "pure fabrication" and otherwise belied by the ejectment order.
In support of its motion to dismiss the third-party complaint, Grace contends that Tahari's third-party causes of action against it fail to state a claim upon which relief can be granted or are flatly contradicted by the evidence. According to Grace: Tahari's third third-party cause of action for contribution should be dismissed under the doctrine of law of the case in view of the court's finding in the ejectment action that Tahari had no right to hold over; Tahari's fourth third-party cause of action should be dismissed because it is based on bare legal conclusions and claims that were previously asserted in the ejectment action; Tahari's fifth third-party cause of action for punitive damages should be dismissed because New York does not recognize an independent claim for punitive damages; and, Tahari's sixth third-party cause of action for attorneys fees should be dismissed because it is not based on an agreement between the parties, statutory authorization or a ruling by the court.
In opposition to Trizec's motion to dismiss Tahari's third-party complaint, Tahari makes the following arguments: Trizec is seeking to relitigate motions which were made in the ejectment action; as a result of the ejectment action the adequacy of Tahari's discrimination claim is res judicata and Trizec is collaterally estopped from seeking dismissal of that claim; and, there are genuine issues of fact with regard to Tahari's other claims against Trizec.
In opposition to Grace's motion to dismiss the third-party complaint Tahari makes the following arguments: Grace's motion, like Trizec's, "deliberately misrepresents" this court's ejectment order in attempting to use it as a basis for dismissal; Tahari's cross-claims against Grace in the ejectment action do not constitute a prior action pending' under CPLR 3211(a) [4] because Tahari's claim for contribution against Trizec and Grace herein is a different cause of action from Tahari's counterclaims and cross-claims in the ejectment action; and, the court's finding in the ejectment action that Kronish had a superior right to possession of the 48th floor does not preclude Tahari's claim for contribution against Grace herein pursuant to the doctrine of law of the case because Tahari's claims against Grace were sustained in the ejectment action.
The court finds that Tahari's third-party claims except for the sixth and seventh survive the third-party defendants' motions to dismiss. Trizec seeks dismissal of the third-party claims pursuant to CPLR 3211(a)[1] (a defense founded on documentary evidence) and [7] (the pleading fails to state a cause of action). Grace seeks dismissal pursuant to CPLR(a) [4] (another action pending between the same parties for the same cause of action) and [7].
A defense based upon documentary evidence is not dispositive unless the documents submitted resolve all of the factual issues as a matter of law (see Lake Placid Village, Inc. v. Lake Placid Main Street Corporation, 90 AD2d 873, 874 [3rd Dept 1982]). Such is not the case here. CPLR 3211(a)[4]'s requirement that the prior action or proceeding be "for the same cause of action" is an essential that seriously limits the availability of this defensive motion (see Kent Development Co., Inc. v. Liccione, 37 NY2d 899, 901). Grace has failed to satisfy the court that dismissal under this Rule is warranted. The standards applicable to a motion to dismiss pursuant to CPLR(a)[7] are well known. "[t]he sole criterion is whether the pleading states a cause of action, and if from its four corners factual allegations are discerned which taken together manifest any cause of action cognizable at law a motion for dismissal will fail [citations omitted]" ( Guggenheimer v. Ginzburg, 43 NY2d 268, 275). Given this standard, Tahari's first five third-party causes of action will survive the third-party defendants' motions to dismiss. Tahari's fifth (punitive damages) and sixth (attorney's fees) third-party causes of action will be dismissed for the reasons stated above with respect to Tahari's counterclaims.
Accordingly, it is hereby
ORDERED that Kronish's motion (seq. no. 002) is granted as follows: With respect to the first branch of its motion Kronish is granted summary judgment on the issue of liability as to its third cause of action for trespass. The question of damages on that cause of action shall be tried jointly with the remaining liability issues. With respect to the second branch of its motion Kronish is granted summary judgment dismissing Tahari's sixth and seventh counterclaims and Tahari's eighth, ninth, tenth, eleventh, twelfth, thirteenth and fourteenth affirmative defenses. In all other respects the motion is denied; and it is further
ORDERED that Trizec's motion (seq. no. 003) is granted to the extent that the fifth and sixth third-party causes of action asserted by Tahari against Trizec are dismissed. In all other respects the motion is denied; and it is further
ORDERED that Grace's motion (seq. no. 004) is granted to the extent that the fifth and sixth third-party causes of action asserted by Tahari against Grace are dismissed with prejudice. In all other respects the motion is denied; and it is further
ORDERED that counsel for plaintiff and defendant shall appear for a conference to determine if any further discovery is required at I.A. Part 15, Room 335, 60 Centre Street, New York, NY on March 17, 2006 at 11:00 a.m.
The Clerk is directed to enter judgment accordingly.
This constitutes the decision and order of the court.