Opinion
07-09-2013
MELVILLE INDUSTRIAL ASSOCIATES, Plaintiff, v. LEWIS JOHS AVALLONE AVILES, LLP f/k/a LEWIS JOHS AVALLONE AVILES & KAUFMAN, LLP, Defendant.
RIVKIN RADLER LLP Attorney for Plaintiff LEWIS JOHS AVALLONE AVILES, LLP Attorney for Defendants
SHORT FORM ORDER
PRESENT:
Hon. PETER H. MAYER
Justice of the Supreme Court
MOTION DATE 1-25-13
MOTION DATE 2-19-13
ADJ. DATE 3-5-13
Mot. Seq. #001 - MotD
# 002 - XMotD
HEARING ON ATTORNEYS' FEES SCHEDULED FOR SEPTEMBER 4, 2014 at 10:00 am
RIVKIN RADLER LLP
Attorney for Plaintiff
LEWIS JOHS AVALLONE AVILES, LLP
Attorney for Defendants
Upon the reading and filing of the following papers in this matter: (1) Notice of Motion by the plaintiff, dated December 28, 2012, and supporting papers (including Memorandum of Law); (2) Notice of Cross Motion by the defendant, dated January 25, 2013, and supporting papers (including Memorandum of Law); (3) Affirmation in Opposition by the plaintiff, dated February 12, 2013, and supporting papers (including Memorandum of Law); (4) Reply Affirmation by the defendant, dated January 25, 2013, and supporting papers ( and- after hear ing counsels' oval arguments in support of and opposed to the motiorj); and now
UPON DUE DELIBERATION AND CONSIDERATION BY THE COURT of the foregoing papers, the motion is decided as follows: it is
ORDERED that the motion by the plaintiff for an order pursuant to CPLR 3212 granting summary judgment in its favor against the defendant and dismissing the defendant's counterclaims is granted to the extent of granting summary judgment in its favor against the defendant and dismissing defendant's second, third, fourth, and fifth counterclaims, and is otherwise denied; and it is further
ORDERED that the cross motion by the defendant for an order pursuant to CPLR 3212 granting summary judgment dismissing the complaint and granting summary judgment in its favor against the plaintiff on its first, second, and fourth counterclaims is granted to the extent that the defendant is entitled to a credit in the amount of $85,000.00 towards the principal amount of $146,920.68 due to the plaintiff, and is otherwise denied.
This is an action to recover damages related to the alleged breach of a commercial lease agreement by the defendant. The plaintiff is the owner of the building located at 425 Broad Hollow Road, Melville New York which it leased to the defendant for office space.
In the complaint, the plaintiff alleges that on June 24, 2002, it entered into a 10-year lease with the defendant for a portion of the building ("Suite 400"). The anticipated commencement date of the lease was September 1, 2002 and the termination date was August 31, 2012. According to the plaintiff, the lease provided that the commencement date was not fixed and that it was subject to modification. The plaintiff alleges that the lease specifically provided that if the defendant did not take occupancy on the date set forth in the lease (September 1, 2002), the lease commencement date was to be deemed the date on which the defendant took possession. The plaintiff further alleges that the lease provided that where the commencement date was modified, the lease term would also be modified so that the defendant remained fully responsible under the lease for a 10-year term. In the lease, the defendant acknowledged that it was already in possession of certain portions of the building pursuant to prior written lease agreements ("the original leases"). The lease provided that the original leases would remain in effect until the defendant took possession of Suite 400. The parties agreed that once the defendant took possession of Suite 400, the original leases would be cancelled and merged into the lease. The plaintiff alleges that the defendant first took occupancy of Suite 400 on November 1, 2002. Thus, the plaintiff alleges that the termination date of the lease was October 31, 2012. The plaintiff alleges that on August 31, 2012, the defendant breached the lease by abandoning the premises and failing to pay rent for the months of September 2012 and October 2012. The plaintiff's first cause of action is for monthly rent and interest for the month of September 2012 ($74,885.34), the second cause of action is for monthly rent and interest for the month of October 2012 ($72,035.34), and the third cause of action is for attorney's fees.
In its answer, the defendant asserts five counterclaims. Its first counterclaim is for the return of its security deposit in the sum of $85,000, the second is for conversion of its security deposit, the third is for an accounting, the fourth is for breach of fiduciary duty based on the plaintiff's alleged conversion of the defendant's security deposit, and the fifth is for money had and received.
The plaintiff now moves for summary judgment in its favor against the defendant and to dismiss the defendant's counterclaims, and the defendant cross-moves for summary judgment dismissing the complaint and for summary judgment in its favor against the plaintiff on its first, second, and fourth counterclaims.
Summary judgment is a drastic remedy and should only be granted in the absence of any triable issues of fact (see Rotuba Extruders, Inc. v Ceppos, 46 NY2d 223, 413 NYS2d 141 [1978]; Andre v Pomeroy, 35 NY2d 361, 362 NYS2d 131 [1974]). It is well settled that the proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient proof to demonstrate the absence of any material issues of fact ( Alvarez v Prospect Hosp., 68 NY2d 320, 324, 508 NYS2d 923, 925 [1986]). Failure to make such a showing requires a denial of the motion, regardless of the sufficiency of the opposing papers ( Winegrad v New York Univ. Med. Ctr ., 64 NY2d 851, 853, 487 NYS2d 316, 318 [1985]). Further, the credibility of the parties is not an appropriate consideration for the Court ( S.J. Capelin Assoc., Inc. v Globe Mfg. Corp., 34 NY2d 338, 357 NYS2d 478 [1974]), and all competent evidence must be viewed in a light most favorable to the party opposing summary judgment ( Benincasa v Garrubbo, 141 AD2d 636, 637, 529 NYS2d 797, 799 [2d Dept 1988]). Once a prima facie showing has been made, the burden shifts to the party opposing the summary judgment motion to produce evidence sufficient to establish the existence of a material issue of fact (see Alvarez v Prospect Hosp., supra).
Here, the lease provided that it was "for the term of ten (10) years (or until such term shall sooner cease and expire as hereinafter provided) to commence on the first (1st) day of September, two thousand two (2002) and to end on the thirty-first (31st) day of August, two thousand twelve (2012)." In paragraph 82 of the rider annexed to the lease, the parties acknowledged all of the original leases which they had entered into for different areas of the building by providing that "[u]pon Tenant remaining in the office and storage areas identified hereunder as Exhibits 'A-1,' 'A-2,' 'A-4,' 'A-5,' 'A-6,' 'A-7,' and 'A-8' and taking possession of the office space identified hereunder as Exhibit 'A-3' [Suite 400] and making the rent payment therefor, the Original Leases shall be deemed cancelled and merged into the within Lease." Paragraph 24 of the lease provided that
If Owner is unable to give possession of the demised premises on the date of the commencement of the term hereof . . . [the] Owner shall not be subject to any liability for failure to give possession on said date and the validity of the lease shall not be impaired under such circumstances, nor shall the same be construed in any w[ays] to extend the term of this lease, but the rent payable hereunder shall be abated (provided Tenant is not responsible for Owner's inability to obtain possession) until after Owner shall have given Tenant written notice that the premises are substantially ready for Tenant's occupancy.In addition, paragraph 45 of the rider annexed to the lease provided that
In addition to the terms and conditions contained in paragraph "24" of the within Lease, anything hereinabove contained to the contrary notwithstanding, the term of this Lease shall commence on the date fixed for commencement of the within lease term as set forth in the preamble on the face page of this Lease or if the premises are not available for occupancy on the lease commencement date, ten (10) days from the time of the mailing of a notice by the Landlord to the Tenant stating that the premises demised hereby are substantially completed and are available for occupancy or on the date the Tenant takes possession of the Demised Premises, whichever date is earlier. . . The term shall be for the balance of the month during which such commencement date occurs plus the period originally specified herein. The Landlord and Tenant agree that after such notice or prior occupancy, that on the request of either, they will enter into an
agreement duly fixing the commencement date and expiration date of the term of this Lease.
Based on the foregoing, specifically the language in paragraph 45 of the rider, which states that if the premises was not available for occupancy on September 1, 2002, the commencement date of the lease shall be either 10 days after the mailing of a notice by the plaintiff to the defendant that the premises is ready for occupancy or on the date that the defendant took possession of the premises, whichever is earlier, and that the term of the lease shall be for the balance of the month during which such commencement date occurs plus the period originally specified in the lease, the plaintiff asserts that since the defendant did not take possession of Suite 400 until November 1, 2002, the commencement date of the lease was November 1, 2002 and the termination date was October 31, 2012, 10 years later. The defendant interprets this language differently, to wit, that the "period originally specified in the lease" means the exact period specified in the lease (through August 31, 2012), not a 10-year period from the commencement date.
While the lease is ambiguous with respect to the termination date, the plaintiff annexed to its moving papers copies of two "Tenant Estoppel Certificates" signed by the defendant. Each certificate states that the "[t]enant hereby certifies that the following representations with respect to the Lease are accurate and complete as of the date hereof..." Directly beneath that statement, the certificates state that the commencement date of the lease was November 1, 2002 and the expiration date was October 31, 2012. One of the certificates is not dated and the other is dated "November 2002." In his affidavit in support of the defendant's cross motion, Robert Avallone, the managing partner of the defendant law firm, acknowledged that he signed the estoppel certificates immediately after Suite 400 was completed and that the plaintiff completed Suite 400 sometime in October or November 2002.
In Bed N' Bath of Spring Val. v Spring Val Partnership (185 AD2d 584, 586 NYS2d 416 [3d Dept 1992]), the plaintiff executed an estoppel agreement containing various representations, including the plaintiff's obligation to pay a share of shopping center operating costs which included plaintiff's pro rata share of management fees or 4% of the gross rentals paid to the landlord under all leases of the premises. The plaintiff brought a declaratory judgment action to resolve a dispute between it and the new owner over the proper amount of plaintiff's pro rata share of management fees under the lease. The plaintiff alleged that its obligation was controlled by the language in the lease limiting management fees to those "which are normal and usual for the market area," not by the language in the estoppel certificate. The Appellate Division, Third Department, affirmed the Supreme Court's determination that the language in the estoppel certificate which defined management fees was binding upon the plaintiff.
Since it has been held that "an estoppel certificate will be enforced unless the certifying party can show a defense to the making of the document, such as fraud or duress, or that the assignee accepted the certificate with knowledge of the contrary, and true, state of the facts" ( JRK Franklin, LLC v 164 E. 87th St. LLC, 27 AD3d 392, 393, 812 NYS2d 506, 507 [1st Dept 2006]) and the defendant has not shown such a defense, the court finds the estoppel certificates sufficient to establish as a matter of law that the termination date of the lease was October 31, 2012. As a result, the plaintiff is entitled to judgment on its first and second causes of action, as the defendant breached the lease by failing to pay the plaintiff rent for the months of September 2012 and October 2012. However, since it is undisputed that the defendant paid the plaintiff the sum of $85,000.00 as a security deposit and the plaintiff is still in possession of the security deposit, the defendant's cross motion is granted to the extent that it is entitled to a credit in the amount of $85,000.00 towards the principal amount of $146,920.68 due to the plaintiff.
Turning to the plaintiff's third cause of action for attorney's fees, the lease specifically provides that if the defendant defaulted under the lease and the plaintiff incurred any expenses in connection with the defendant's default, including attorney's fees, the defendant would reimburse the plaintiff for any such expenses. Since the defendant defaulted under the lease by failing to pay rent for the months of September 2012 and October 2012, the plaintiff is entitled to its attorney's fees.
Accordingly, the plaintiff's motion for summary judgment is granted to the extent of granting summary judgment in its favor against the defendant and dismissing defendant's second, third, fourth, and fifth counterclaims, and is otherwise denied, and the defendant's cross motion for summary judgment is granted to the extent that the defendant is entitled to a credit in the amount of $85,000.00 towards the principal amount of $146,920.68 due to the plaintiff.
The court directs the parties to appear for a hearing at the Supreme Court Building, One Court Street, Part 17, Riverhead, New York at 9:30 a.m. on September 4, 2013, and to produce all appropriate documentation and other evidence relative to the plaintiff's claim for attorney's fees. The court further directs that entry of judgment in accordance with this order be held in abeyance pending the outcome of the hearing.
_________________
PETER H. MAYER, J.S.C.