Opinion
Index 159302/2020
02-22-2022
RCPI LANDMARK PROPERTIES, LLC, Plaintiff, v. COOPER & DUNHAM LLP, ABC CO., XYZ CORP. Defendant. MOTION SEQ. No. 001 002 003
Unpublished Opinion
PRESENT: HON. WILLIAM PERRY Justice.
DECISION + ORDER ON MOTION
WILLIAM PERRY JUDGE.
The following e-filed documents, listed by NYSCEF document number (Motion 001) 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, 84 were read on this motion to/for DISMISSAL.
The following e-filed documents, listed by NYSCEF document number (Motion 002) 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72 were read on this motion to/for MISCELLANEOUS.
The following e-filed documents, listed by NYSCEF document number (Motion 003) 85, 86, 87, 88, 89, 90, 91, 92 were read on this motion to/for MISCELLANEOUS.
Plaintiff RCPI Landmark Properties LLC brings this action against its former commercial tenant, Cooper & Dunham LLP, for unpaid rent and other relief. In motion sequence 001, Defendant moves to dismiss the complaint for legal insufficiency and upon documentary evidence. In motion sequence 002, Plaintiff moves for an order directing payment of use and occupancy fees. In motion sequence 003, Plaintiff moves for the court to hold a hearing to determine whether Defendant has experienced a hardship, as provided by the COVID-19 Emergency Protect Our Small Businesses Act of 2021 ("CEPOSBA"). The motions are fully submitted and consolidated for disposition.
Background
Plaintiff is the owner and landlord of 30 Rockefeller Plaza, New York, NY and, via a lease agreement dated February 26, 2014, leased the 20th floor to Defendant for the period of October 1, 2014 through September 30, 2024. (NYSCEF Doc No. 26, Lease.) On July 15, 2020, Plaintiff issued a default notice to Defendant stating that if Defendant failed to pay its rental arrears of $1,194,054.48 (representing missed rent payments for the months of March 2020 through July 2020) by July 23, 2020, Plaintiff would terminate the lease. (NYSCEF Doc No. 27, Default Notice.) Plaintiff then sent Defendant a notice of termination dated August 3, 2020, notifying Defendant that the lease was to be canceled on August 10, 2020. (NYSCEF Doc No. 28, Termination Notice.)
Plaintiff then commenced this action on November 2, 2020, alleging that Defendant had failed to quit and deliver the premises or pay the balance of the rent due. (NYSCEF Doc No. 1, Complaint.) Plaintiff sets forth causes of action for 1) a declaratory judgment that the lease was terminated; 2) ejectment; 3) lease termination damages in the amount of $2,885,069.76; 4) alternatively, breach of contract damages if the court finds the lease was not terminated, in the amount of $2,095,220.61; 5) expense damages, i.e., attorneys' fees and expenses; and 6) use and occupancy fees.
In motion sequence 001, Defendant moves to dismiss the complaint "for legal insufficiency and upon documentary evidence." (NYSCEF Doc No. 9, Ms001 Memo, at 6.) Defendant argues that relief in the form of a judgment declaring that the lease was properly terminated is unavailable because Plaintiff has an alternative available remedy through its breach of contract claim. (Id. at 7.) Defendant also argues that the liquidated damages clause in the contract is unenforceable on its face, that Plaintiffs termination of the lease bars recovery of accelerated rent, and that it cannot be liable for rent accrued during the COVID-19 period due to the lease's casualty clause, public policy concerns, and the doctrines of frustration, impossibility/impracticability, and unjust enrichment. (Id. at 8-26.) Finally, Defendant argues that documentary evidence (emails and affidavits) establishes that Plaintiff accepted its surrender of the premises on August 31, 2020, when Plaintiffs property manager performed a "walk-through" of the premises. (Id. at 26-29.)
In motion sequence 002, Plaintiff moves by order to show cause for use and occupancy fees based on the allegation that Defendant is still in possession of the premises. Plaintiff seeks an order directing Defendant to pay use and occupancy fees: 1) in the amount of $4,832,888.40 for the period of March 1, 2020 through March 31, 2021; 2) in the amount of $486,954.66 per month from April 1, 2021 onward; and 3) granting Plaintiff leave to seek an immediate order of ejectment if Defendant fails to make said payments. (NYSCEF Doc No. 38, Ms002 Memo.)
Motion sequence 003 is denied as moot, as CEPOSBA protections expired on January 15, 2022, as acknowledged in Plaintiffs February 15, 2022 letter. (NYSCEF Doc No. 94.)
Discussion
On a pre-answer motion to dismiss a complaint for failure to state a cause of action, pursuant to CPLR 3211 [a] [7], "the court should accept as true the facts alleged in the complaint, accord plaintiff the benefit of every possible inference, and only determine whether the facts, as alleged, fit within any cognizable legal theory." (Frank v. DaimlerChrysler Corp., 292 A.D.2d 118, 121 [1st Dept 2002].) However, "factual allegations that do not state a viable cause of action, that consist of bare legal conclusions, or that are inherently incredible or clearly contradicted by documentary evidence are not entitled to such consideration." (Skillgames, LLC v. Brody, 1 A.D.3d 247, 250 [1st Dept 2003].)
Pursuant to CPLR 3211(a)(1), in order to prevail on a motion to dismiss based on documentary evidence, "the documents relied upon must definitively dispose of plaintiff s claim." (Bronxville Knolls v. Webster Town Ctr. Partnership, 221 A.D.2d 248, 248 [1st Dept 1995].) Dismissal pursuant to CPLR 3211(a)(1) is warranted only if the documentary evidence submitted "utterly refutes plaintiffs factual allegations" (Goshen v. Mutual Life Ins. Co. of NY, 98 N.Y.2d 314, 326 [2002]) and "conclusively establishes a defense to the asserted claims as a matter of law." (Weil, Gotshal & Manges, LLP v. Fashion Boutique of Short Hills, Inc., 10 A.D.3d 267, 271 [1st Dept 2004] [internal quotation marks omitted].)
Defendant's motion to dismiss in granted in part, to the extent that the court dismisses Plaintiffs causes of action for ejectment and use and occupancy fees. It is undisputed that Defendant physically vacated the premises on August 30, 2020, as established by Defendant's submissions of affidavits, emails with Plaintiffs property management company regarding Defendant's move out, and photographs. (See NYSCEF Doc Nos. 13, 14, 15, 16, 61-67, 82, 83, 84.) Plaintiff, however, argues that it had "no right to re-enter the Premises other than by legal process," pursuant to Article 15.2(a)(i) of the lease, which provides that if Plaintiff terminates the lease due to Defendant's default, Plaintiff
and its agents may immediately, or at any time after such termination, re-enter the Premises or any part thereof, without notice, either by summary proceedings, or by any other applicable action or proceeding, or otherwise in accordance with applicable legal proceedings (without being liable to indictment, prosecution or damages therefor), and may repossess the Premises and dispossess Tenant and any other persons or entities from the Premises and remove any and all of their property and effects from the Premises.(NYSCEF Doc No. 26, Lease, at 41.)
Plaintiffs allegation that it had "no right to re-enter the Premises" is refuted by the record and, in any event, does not entitle it to recover use and occupancy fees where Defendant did not actually remain in possession by occupying the premises. (See 44-45 Broadway Leasing Co., LLC v. 45th St. Hospitality Partners LLC, 198 A.D.3d 451 [1st Dept 2021] [use and occupancy fees unavailable to landlord where there was no dispute that tenant timely vacated premises, even if it did not comply with all removal obligations in so doing]; Landmark Holdings NYC, LLC v. Bradshaw, 2022 WL 294127, at *3 [Sup Ct, NY County, Jan 28, 2022] ["Use and occupancy is an obligation imposed on a quantum meruit basis where a tenant remains in possession of real property but pays no rent [and is] meant to compensate the owner/landlord for the loss of its ability to rent the subject property at the prevailing market rate"].) Accordingly, because the portion of Defendant's motion seeking dismissal of this cause of action is hereby granted, Plaintiffs motion sequence 002 seeking use and occupancy fees is likewise denied.
Further, as it is undisputed that Defendant did in fact vacate the premises, the portion of Defendant's motion seeking dismissal of Plaintiff s cause of action for ejectment is granted. (See 1641 Parker Ave. Assocs. v. Parker, 2022 WL 489638, at *3 [Sup Ct, NY County, Feb 17, 2022].)
However, the balance of Defendant's motion seeking dismissal of the remaining causes of action is denied. New York courts have held that the doctrines of frustration, impossibility/impracticability, and unjust enrichment do not excuse a commercial tenant from paying rent due to the COVID-19 pandemic, nor does a casualty clause contained in a commercial lease. (ESRT 10 Union Square LLC v. James Hill, Inc., 2022 WL 103409, at *4 [Sup Ct, NY County, Jan 11, 2022]; 274 Madison Co. LLC v. Carnegie Nat. Abstract LLC, 2021 WL 4264007 [Sup Ct, NY County 2021].) Defendant's remaining arguments are without merit. As such, it is hereby
ORDERED that Defendant's motion sequence 001 for dismissal is granted in part, to the extent that the second cause of action for ejectment and the sixth cause of action for use and occupancy fees are dismissed; and it is further
ORDERED that the remainder of Defendant's motion sequence 001 seeking dismissal of the first, third, fourth, and fifth causes of action is denied; and it is further
ORDERED that Plaintiff's motion sequence 002 is denied for the reasons stated above; and it is further
ORDERED that Plaintiffs motion sequence 003 is denied as moot; and it is further
ORDERED that Defendant is directed to serve an answer to the complaint within 20 days after service of a copy of this order with notice of entry.