Opinion
Index No. 452008/2023 Motion Seq. No. 001 NYSCEF Doc. No. 63
05-17-2024
METROPOLITAN TRANSPORTATION AUTHORITY, NEW YORK CITY TRANSIT AUTHORITY Plaintiff, v. TRINITY NYC HOTEL, LLC, Defendant.
Unpublished Opinion
DECISION + ORDER ON MOTION
SUZANNE J. ADAMS, J.S.C.
The following e-filed documents, listed by NYSCEF document number (Motion 001) 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59 were read on this motion to/for DISMISS.
Upon the foregoing documents, it is ordered that defendant's motion is granted. Defendant is the developer of a hotel located at 50 Trinity Place in Manhattan, and this action is rooted in circumstances relating to the hotel's construction and the contemporaneous litigation between the parties herein regarding same. Said litigation, captioned Trinity NYC Hotel, LLC v. Metropolitan Transportation Authority, et ah, Index No. 150665/2020 (the "Prior Litigation"), was pending before this court. By way of background, in May 2015, plaintiff New York City Transit Authority ("NYCTA") entered into an Easement Agreement pursuant to which defendant agreed to construct a new elevator from the sidewalk on Trinity Place, adjacent to its building site at 50 Trinity Place, to the southbound platform of the R subway train at the Rector Street Station, and an elevator machine room. Such work was undertaken pursuant to a New York City zoning regulation requiring property developers within a certain proximity to subway entrances to make modifications to subway stair locations. Thereafter, in April 2017, NYCTA entered into the
Transit Improvement Agreement with non-party TPH Greenwich Owner LLC ("42Trinity"), the owner and developer of the neighboring property at 42 Trinity Place, in which the latter agreed, inter alia, to construct a new entrance for the Rector Street Station on the Trinity Place sidewalk, which was to include an elevator and elevator machine room. Consequently, defendant and NYCTA entered into a First Amendment to Easement Agreement dated November 29, 2017 (the "First Amendment"), which set forth that:
(1) defendant was relieved of the obligation to construct the new elevator and elevator machine room;
(2) defendant was instead obliged to construct a below ground space without any elevator equipment (the "MTA Room");
(3) both defendant and 42Trinity each considered constructing elevators to the subway within the boundaries of their respective properties, but that the existence of underground cables running north-south made such construction impractical;
(4) 42Trinity agreed in the Transit Improvement Agreement to construct a new elevator in the sidewalk adjacent to 50 Trinity Place;
(5) the "preferable location" of the elevator machine room for the new elevator is approximately located in what was now to be the MTA Room;
(6) the MTA Room would be for NYCTA's exclusive use for any station-related use including, but not limited to, a mechanical room for an elevator that NYCTA or authorized third parties, including 42Trinity, will construct "now or in the future;" and
(7) "once the MTA Room is constructed," NYCTA will permit 42Trinity to construct the elevator machine room for the new elevator "within the MTA Room or the elevator machine room may be constructed elsewhere and/or the MTA Room will be built out as an elevator machine room at a later date."
Defendant began construction of the hotel project in late 2018. However, by late 2019 a dispute arose between the parties regarding occupation of and access to the Trinity Place sidewalk for the continued construction of defendant's hotel and 42Trinity's contemplated installation of the elevator in front of the hotel, resulting in the commencement of the Prior Litigation. Thereafter, extensive motion practice, injunctions, appeals, and various court appearances ensued. Construction of the hotel presumably continued, and is now apparently completed. By so-ordered stipulation dated April 11, 2023, the Prior Litigation was discontinued without prejudice.
Plaintiff commenced the instant action in August 2023, alleging that defendant's refusal to remove a construction fence, sidewalk shed, and related fixtures and equipment during the hotel's construction - which was the crux of the dispute in the Prior Litigation - delayed, impaired, and ultimately prevented 42Trinity from constructing the new elevator pursuant to the aforementioned Transit Improvement Agreement, and resulted in NYCTA and 42Trinity amending their agreement to relieve 42Trinity of its obligation to construct a new elevator and subway entrance on Trinity Place in exchange for a cash payment. Plaintiffs allege that 42Trinity's cash payment does not cover NYCTA's cost to construct a new elevator and stairways in the area at issue, and seeks damages in an amount exceeding $7 million. The Complaint states four causes of action against defendant sounding in breach of implied covenant of good faith and fair dealing, creation and continued maintenance of a private nuisance, creation and continued maintenance of a public nuisance, and improper preliminary injunction. Defendant now moves pursuant to CPLR 3211(a)(1) and (7) to dismiss the Complaint. Plaintiffs oppose the motion.
It is well established that "[o]n a motion to dismiss pursuant to CPLR 3211, the pleading is to be afforded a liberal construction (see, CPLR 3026). We accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory. Under CPLR 3211(a)(1), a dismissal is warranted only if the documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter of law [cite omitted]." Leon v. Martinez, 84 N.Y.2d 83, 87-88 (1994). The criterion under CPLR 3211(a)(7), is whether the proponent of the pleading has a cause of action, not whether he has stated one. Leon, 84 N.Y.2d at 88 (citing Guggenheimer v. Ginzburg, 43 N.Y.2d 268, 275 (1977)).
Plaintiffs suggest that the instant action in some respects constitutes their reassertion of certain of their counterclaims in the Prior Litigation. In the First Cause of Action, for breach of implied covenant of good faith and fair dealing, plaintiffs allege that defendant's refusal to vacate the Trinity Place sidewalk breached the implied covenant in the First Amendment that defendant would allow 42Trinity to construct the new elevator to the subway, such that NYCTA lost the benefit of its objective under the First Amendment (i.e., construction of the elevator). New York law views all contracts as implying a promise to perform under the contract fairly and in good faith. 511 W. 232nd Owners Corp. v. Jennifer Realty Co., 98 N.Y.2d 144, 153 (2002). "This covenant embraces a pledge that 'neither party shall do anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract' [citation omitted]." 511 W. 232nd Owners, 98 N.Y.2d at 153. Plaintiffs contend that defendant's acts prevented 42Trinity from fulfilling its contractual obligation to build the elevator to the Rector Street station, thus depriving plaintiffs of the contractual benefit under the First Amendment. However, this argument does not square with the undisputed fact that plaintiffs themselves unilaterally changed the terms of the First Amendment that they contend was an integral part thereof. In an amendment made as of September 15, 2022, to the Transit Improvement Agreement - to which defendant was never a party - NYCTA agreed to relieve 42Trinity of its obligation to build the elevator in exchange for payment of an unspecified amount of money. There is no allegation in the Complaint that plaintiffs advised defendant of this contemplated arrangement with 42Trinity or sought in good faith to address the situation with defendant prior to relieving 42Trinity of its elevator obligations, effectively altering the claimed obligation of defendant under the First Amendment. Moreover, plaintiffs' claimed damage amount is speculative; the Complaint does not state the termination payment NYCTA received from 42Trinity, nor allege any factual basis for the calculation of over $7 million in damages. See Cristallina v. Christie, Manson & Woods Intl., 117 A.D.2d 284, 295 (1st Dep't 1986). The First Cause of Action therefore fails to state a claim.
The Second Cause of Action alleges the creation and maintenance of a private nuisance. The cases cited by both parties show that New York law contemplates that such a tort arises out of an interference with the rights of privately owned property. The Court of Appeals in Copart Indus, v. Consolidated Edison Co. of N.Y., 41 N.Y.2d 564, 568 (1977), distinguished between private and public nuisances, quoting Prosser to note that "public and private nuisances 'have almost nothing in common, except that each causes inconvenience to someone, and it would have been fortunate if they had been called from the beginning by different names.'" The Court stated that "[a] private nuisance threatens one person or a relatively few [citation omitted], an essential feature being an interference with the use or enjoyment of land [citation omitted]. It is actionable by the individual person or persons whose rights have been disturbed (Restatement, Torts, notes preceding § 822, p 217). A public, or as sometimes termed a common, nuisance is an offense against the State and is subject to abatement or prosecution on application of the proper governmental agency (Restatement, Torts, notes preceding § 822, p 217; see Penal Law, § 240.45). It consists of conduct or omissions which offend, interfere with or cause damage to the public in the exercise of rights common to all [citation omitted], in a manner such as to offend public morals, interfere with use by the public of a public place or endanger or injure the property, health, safety or comfort of a considerable number of persons [citations omitted]." Copart, 41 N.Y.2d at 568. The property at issue in the Complaint is a public sidewalk, such that the doctrine of "private" nuisance does not apply. As such, dismissal of the Second Cause of Action is warranted. Dismissal of the Third Cause of Action for creation and maintenance of a public nuisance is also warranted. The Complaint does not allege that defendant's construction fence, shed, etc., on Trinity Place "interfere[d] with or cause[ed] damage to the public" in the public's use of the sidewalk, or endangered anyone's property, health, or safety. Rather, plaintiffs allege that defendant's occupation of the sidewalk prevented the construction of the subway entrance and/or elevator, to the public's detriment. Apart from the fact that there never was an elevator in that location, nor does there appear to be one presently, the alleged thwarting of said construction does constitute a public nuisance as per New York law.
Finally, plaintiffs fail to state a claim for damages for an improper preliminary injunction. The holding of Margolies v. Encounter, Inc., 42 N.Y.2d 475 (1977), relied upon by plaintiffs, does not obtain in light of the Court of Appeal's clarification of its holding in J.A. Preston Corp. v. Fabrication Enters., 68 N.Y.2d 397 (1986). The Court in J.A. Preston explained that "[f]he granting or refusal of a temporary injunction does not constitute the law of the case or an . adjudication on the merits, and the issues must be tried to the same extent as though no temporary injunction had been applied for." 68 N.Y.2d at 402. The preliminary injunction in the matter underlying J.A. Preston "rested on Special Term's conclusion after an evidentiary hearing that there were issues of fact and, in any event, CPLR 6312(b) is concerned not with finality in terms of this court's jurisdiction, but with a final determination of rights between the parties." Id. at 404. The Court of Appeals held that "[t]hus when defendant consents to the discontinuance of the action without reserving his rights on the undertaking, there can be no recovery on the bond because there can be no such final determination [citation omitted] . . .." Id. Plaintiffs herein did not reserve any rights to pursue collection on defendant's bond in the Prior Litigation, while in Margolies, the "defendant's right to recover on the undertaking had not been defeated by its consent to discontinuance in view of the reservation of its right to recover on the bond [emphasis added]." J. A. Preston Corp., 68 N.Y.2d at 407. The Fourth Cause of Action should therefore be dismissed.
The Second Department appears to further question the Margolies holding in light of J.A. Preston: "Accordingly, [in J.A. Preston] the Court of Appeals rejected the plaintiffs claim that its undertaking should be discharged following an affirmance by the Appellate Division of an order granting it a preliminary injunction. The converse of the reasoning of the Court of Appeals, however, may be equally true. Our prior order vacating the preliminary injunction did not determine, as a matter of law, that [plaintiff therein] could not prevail on its claims for equitable relief; we determined only that at that juncture, [the plaintiff] had not made the requisite showing of probabilities. [The plaintiff] may yet prevail on its equitable claims, in which case the preliminary injunction it obtained would not, in hindsight, have been improvidently granted, notwithstanding our assessment of the deficiencies of [the plaintiffs] showing at that time. [emphasis added] Accordingly, for purposes of finally determining the propriety of a preliminary injunction to ascertain whether liability will attach as a consequence of the award itself, the 'final determination' envisioned by CPLR 6312(b) is the final determination of the merits of the plaintiffs claim for equitable relief." Straisa Realty Corp. v. Woodbury Associates, 185 A.D.2d 96, 99-100 (2nd Dep't 1993).
Accordingly, it is hereby
ORDERED that defendant's motion is granted and the Complaint is dismissed.
This constitutes the decision and order of the court.