Opinion
Index No. 15883/14E Mot. Seq. Nos. 18 19
05-18-2022
Joel Rottenberg, Plaintiff, v. The Alexander Court Condominium, 4102 13TH avenue development, LLC, et al, Defendants. 4102 13th avenue development LLC, Third-party plaintiff, v. 4102 realty, LLC third-party defendant. 4102 13th avenue development LLC, second third-party plaintiff, v. 13TH avenue supermarket, LLC second third-party defendant.
Unpublished Opinion
DECISION/ORDER
HON. DEBRA SILBER, Justice.
The following papers read herein: NYSCEF Document Number
Notice of Motion/Order to Show Cause/ Petition/Cross Motion and Affidavits (Affirmations) Annexed _________150-151, 152-154
Opposing Affidavits (Affirmations) Reply Affidavits (Affirmations) _____________155-156
Upon the foregoing papers, second third-party defendant 13th Avenue Supermarket LLC (Supermarket) [registered d/b/a Gourmet Glatt Market] moves for an order, pursuant to CPLR 2221 (d), granting it leave to reargue its prior motion for an order both awarding it summary judgment dismissing all third-party claims against it and granting it leave to amend its answer. Defendant/third-party plaintiff 4102 13th Avenue Development LLC (Development) cross-moves for an order, pursuant to CPLR 2221 (d), granting it leave to reargue its prior motion for an order awarding it summary judgment on the issue of contractual indemnification against Supermarket. Plaintiff has not responded to either motion.
Background
Plaintiff commenced the instant action on November 10, 2014 against Development and The Alexander Court Condominium alleging that he sustained personal injuries on February 13, 2014 when he slipped and fell on snow and ice on the sidewalk in front of a parking garage entrance on the premises known as 4102 13th Avenue in Brooklyn. Plaintiff's complaint alleged that his injuries were proximately caused by defendants' failure to promptly remove the snow and ice hazard from the sidewalk.
While Development interposed an answer, The Alexander Court Condominium has never appeared. That Development is the owner of the real property at issue is not disputed. Extensive impleader and multi-party practice ensued. Development subsequently commenced separate third-party actions against Supermarket and 4102 Realty LLC. Plaintiff later commenced three separate additional actions seeking damages for his injuries against 4102 Realty LLC., The Alexander Court Condominium a "John Doe," Supermarket, and related entities/companies/natural persons, respectively.
This defendant, an unincorporated association, was not correctly named or served. See § 13 of the General Associations Law.
By order dated March 29, 2018, this court consolidated the three subsequent actions commenced by plaintiff into the instant action. Extensive motion practice and discovery ensued, and, subsequently, both Development and Supermarket moved for summary judgment.
Supermarket also moved for leave to amend its answer to include a statute of frauds (as codified in the General Obligations Law) defense.
The Underlying Motions
In support of its motion for summary judgment, Development argued that it was entitled to judgment on the issue of contractual indemnification against Supermarket. Specifically, Development asserted that it was undisputed that Development was an out-of-possession owner of the subject premises, that Supermarket leased the garage area from Development (indirectly) and operated a supermarket nearby, and that Supermarket used the garage space to park vans used as delivery vehicles. Development noted that Supermarket purchased the supermarket business and goodwill from the prior owner pursuant to a written agreement that conditioned the sale on "Purchaser or his assignee obtaining an assignment of the current lease for the Premises . . . with the consent of the Landlord. If such consent is not obtained, this Agreement may be canceled, in which event Purchaser shall receive a refund of the contract deposit. In addition, the same provision and conditions shall also apply to the lease for the garage adjacent to the Premises." Thus, Development reasoned, Supermarket, by purchasing and operating the subject supermarket and using the subject garage (owned by defendant Development) to store its delivery vans, had explicitly assumed the contractual obligations contained in the written garage lease agreement.
Specifically, Development leased the subject garage to defendant 4102 Realty LLC, which ostensibly either sub-leased to or permitted Supermarket's predecessors, the operators of the nearby supermarket (at 1274 39th Street), to store their delivery vans therein.
Hereinafter referred to as the purchase agreement.
Next, Development pointed out that the original written garage lease agreement contained a broad indemnity clause: "Tenant shall: . . . indemnify and save harmless Landlord . . . from and against all liability (statutory or otherwise), claims, [and] expenses . . . to which any Landlord Party may (except insofar as it arises out of the act or neglect of such Landlord Party), be subject or suffer . . . [or] arising from or in connection with the use by Tenant of, or from any work or anything whatsoever done by Tenant . . . in any part of the Premises . . . during the term of this Lease." Development noted that the indemnity clause expressly excepts purported indemnification for Development's own negligence, and, as such, the clause is enforceable under the General Obligations Law. Development also argued that the written agreement to indemnify was in effect and valid at all applicable times. Lastly, Development argued that there is no serious dispute that plaintiff's alleged slip and fall arose from Supermarket's use of the garage. For these reasons, Development concluded that it was entitled to a judgment of contractual indemnification against Supermarket.
In opposition, and in support of its own underlying motion, Supermarket first argued that it should be granted leave to amend its answer to Development's third-party complaint because the proposed amendment-asserting that the garage lease is unenforceable under General Obligations Law § 5-701 and § 5-703-would not prejudice or surprise Development. Supermarket pointed out that a copy of the garage lease agreement was attached to Development's second third-party complaint and noted that this document was not executed by any agent or employee of Supermarket. Therefore, reasoned Supermarket, by submitting a copy of the garage lease to this court, Development should not be heard to assert that any defense (including one based on the statute of frauds) against the terms of the subject agreement constitutes surprise or prejudice. Absent surprise or prejudice, concludes Supermarket, leave to amend pleadings should be freely granted by trial courts in this state.
Commonly referred to as the statute of frauds.
Supermarket noted that Development had ample time to engage in discovery with respect to its third-party claims. More specifically, added Supermarket, Development had the opportunity to obtain documents and testimony with respect to whether the subject garage lease agreement is enforceable against Supermarket, which did not execute the agreement. Additionally, continued Supermarket, no note of issue was filed with respect to these third-party claims, and, therefore, Development is permitted to conduct additional discovery with respect to an amended answer. For this additional reason, concluded Supermarket, Development would sustain no surprise or prejudice if the proposed amendment is granted. Therefore, Supermarket argued, the proposed amended answer- which contains the statute of frauds defense-should be deemed filed and served nunc pro tunc.
Next, Supermarket claimed it was entitled to summary judgment dismissing all third-party claims for contractual indemnification and breach of contract based on the garage lease agreement. Supermarket noted that the General Obligations Law precludes the creation of any leasehold lasting over a year unless "by act or operation of law, or by a deed or conveyance in writing, subscribed by the person creating, granting, assigning, surrendering or declaring the same, or by his lawful agent, thereunto authorized by writing." In contrast, continued Supermarket, the subject agreement purported to create a lease of the applicable garage space(s) for a ten-year term (as evidenced by the section that sets forth a payment schedule during the lease term). Moreover, added Supermarket, it is undisputed that Supermarket did not execute the subject lease agreement and that Development is basing its third-party claims for breach of contract and contractual indemnification against Supermarket based on the terms of the garage lease agreement. It is also undisputed, stated Supermarket, that the leasehold did not arise out of operation of law. Supermarket argued that, given that its agents never executed, let alone "subscribed" a document purporting to create a ten-year lease term, any attempt to enforce the contract terms of the document against Supermarket is thus barred by the statute of frauds.
Supermarket acknowledged that the General Obligations Law contains an exception to the statute of frauds if partial performance under the erstwhile unenforceable agreement exists. Supermarket argued that enforcing such a lease agreement requires a trial court to invoke equitable principles; courts interpreting the doctrine of partial performance, continued Supermarket, have held that the conduct of the party seeking to enforce the presumably unenforceable agreement, and its detrimental reliance thereon, are the basis for the application of the doctrine. Supermarket added that courts have also held that the party relying on the doctrine must plead and prove that the part performance is "unequivocally referable" to the parties' alleged agreement. Applicable appellate decisions, Supermarket avers, have held that payment and acceptance of rent is not sufficient to remove otherwise unenforceable contractual obligations from the bar of the statute of frauds.
Here, Supermarket claims, according to the terms of the subject garage lease agreement, any purported assignment of the obligations to Supermarket would have required Development to consent to same. Supermarket surmised that Development, which never consented to any assignment of the subject agreement, is attempting to enforce leasehold obligations against Supermarket, a party that never executed the subject agreement. Supermarket claimed that the record was devoid of any action taken by Development that is "unequivocally referable" to a purported assignment of obligations by Development and the acceptance of same by Supermarket. Supermarket concluded that all third-party claims asserted by Development against it based on the terms of the garage lease agreement-namely, breach of contract and contractual indemnification-are barred by the statute of frauds and thus unenforceable. Accordingly, argued Supermarket, these claims must be dismissed.
Lastly, Supermarket contended that any third-party claims asserted against it sounding in contribution or common-law indemnification must be dismissed because, pursuant to the doctrine of law of the case, Supermarket owed no duty to plaintiff. In this regard, Supermarket noted that it had previously moved for summary judgment dismissing plaintiff's claims against it, which motion was granted by this court's order dated March 21, 2019 (among other things) dismissing plaintiff's claims against Supermarket. The only basis for this decision, reasons Supermarket, is that this court implicitly found that Supermarket owed no duty to plaintiff with respect to the condition of the subject sidewalk. Supermarket concludes that, therefore, it is logically impossible to find it negligent with respect to the instant matter. Since both common-law indemnification and contribution require that the contributor/indemnity was negligent, argued Supermarket, these third-party claims are untenable here. For these reasons, Supermarket sought summary judgment dismissing all third-party claims asserted by Development.
The Underlying Decision and Order
By decision and order dated August 19, 2021, this court decided the underlying motions. As relevant to the instant motions for leave to reargue, this court found that the record established that in 2010, Supermarket, pursuant to a written purchase agreement, bought the physical supermarket from the prior owner. This court noted that the purchase agreement stated that Supermarket was assuming all relevant leases, as well as purchasing the trade name, goodwill, employee information, customer list, furniture and equipment, telephone number, and inventory of the former supermarket owner. Since Supermarket also assumed the obligations of the garage lease agreement, and accepted the benefits thereof, this court reasoned, Supermarket was thus estopped from claiming it is not bound by the terms of the garage lease agreement. In response to Supermarket's argument that no assumption or assignment had taken place because the purchase agreement required the garage landlord (Development) to consent to any such assignment, this court noted that the purchase agreement provided that "[i]f such consent is not obtained, this Agreement may be cancelled, in which event Purchaser shall receive a refund of the contract deposit"- however, this court continued, Supermarket did not seek a refund, neither Supermarket nor the prior owner cancelled the agreement, and the closing of title went as planned. Indeed, this court pointed out, the applicable closing statement, prepared by Supermarket's attorney, indicates that the seller "assigned to Purchaser . . . the lease for the parking lot [sic] at 4102 13th Avenue, Brooklyn, New York without Purchaser obtaining a consent to the assignment. Purchaser accepted the garage lease assignment [emphasis added] without a consent which Seller represented was not obtainable from the owner." For these reasons, this court determined that Supermarket had assumed the obligations under the garage lease agreement and that Supermarket is estopped from disclaiming the validity thereof.
Indeed, the relevant provision in the subject written purchase agreement states that "the same provision [sic] and conditions shall also apply to the lease for the garage adjacent to the Premises"-this clause is easily interpreted as Supermarket's voluntary assumption of the obligations under the garage lease agreement.
The record reflects that after the closing of title in 2010 for the supermarket, Supermarket continuously and exclusively used Development's garage as parking space for its delivery vans.
Indeed, and as pointed out by Development, Supermarket obtained a general liability insurance policy for the subject garage, which is completely incompatible with Supermarket's alleged understanding that it is not subject to the obligations of the garage lease agreement. Development noted, and this court agrees, that since Supermarket's delivery vans are ostensibly insured under commercial motor vehicle liability policies, the only reason for Supermarket to insure the subject garage is because Supermarket believes itself to be the tenant, and as such, is required to purchase and maintain insurance pursuant to the garage lease agreement.
Turning to Supermarket's proposed amended answer, this court denied leave to amend, finding that the proposed amendment-asserting a statute of frauds defense- lacked merit. This court reiterated that although Supermarket did not execute the garage lease agreement, Supermarket did in fact execute a document-the purchase agreement- that unequivocally referred to the garage lease agreement and indicated Supermarket's intent to assume the obligations of the lease. Moreover, although the purchase terms gave Supermarket the option of cancelling the agreement and retrieving its deposit because Development did not consent to the assignment, Supermarket waived its right to cancel the agreement and closed anyway.
Next, this court considered the part performance exception to statute of frauds defenses. Part performance, this court stated, is the doctrine that a party may either waive or "lose the benefit" of a statute of frauds defense if that party allows the other party to the agreement to rely upon the terms of the agreement to an extent that would render the defense inequitable. This court also pointed out that the genesis of the doctrine in courts of equity was to prevent injustice; the court of equity is charged with "address[ing] a myriad of facts and circumstances" in order to determine "what justice and fairness require." Analyzing the facts, this court noted that, after the closing of title, Supermarket: 1) took exclusive possession of the garage; 2) used the garage to park its vans; 3) used the vans to deliver groceries; 4) paid rent from the date of the closing in 2010 to the date of plaintiff's accident in 2014; 5) obtained and kept a copy of the garage lease agreement at the closing of title; and 6) obtained and maintained a general liability insurance policy for claims relating to the garage. Given these facts, this court reasoned, Development was entitled to rely upon Supermarket's complying with its garage lease obligations (including Supermarket's obligation to keep the sidewalk in front of the garage clean and free of snow and ice). It would thus be inequitable, this court concluded, to allow Supermarket "claiming the sanctuary of the statute of frauds" to prejudice Development. For these reasons, this court declined to grant Supermarket leave to add a (meritless) affirmative defense of the statute of frauds to its answer.
In sum, this court denied Supermarket's underlying motion insofar as it sought summary judgment dismissing Development's third-party contractual indemnification claim. Noting that the record established that Supermarket obtained general liability insurance that did not name Development as an additional insured, this court likewise denied summary judgment dismissing Development's third-party breach of contract to obtain and maintain applicable insurance coverage claim. Lastly, this court denied Supermarket leave to amend its answer to assert a (meritless) statute of frauds affirmative defense.
This court did award Supermarket summary judgment dismissing Development's third-party contribution and common-law indemnification claims on the ground that Supermarket owed no duty to plaintiff and thus cannot be held liable in negligence for the subject slip and fall.
Turning to Development's underlying motion, this court noted that the subject garage lease agreement contained a broad indemnification clause whereby Tenant (Supermarket) agreed to indemnify Development against all claims "arising from any condition of the Premises." This court also found that the agreement is valid, enforceable and was in effect at relevant times. Thus, this court reasoned, Development is prima facie entitled to partial summary judgment on the issue of contractual indemnification against Supermarket. However, this court stated, certain facts remained unestablished by the record; for example, one appellate court noted that until issues of fact as to a "storm in progress" are resolved, a property owner's negligence cannot be determined. This court maintained that absent such proof in the record, a property owner is entitled only to conditional summary judgment against the commercial tenant on its claim for indemnification. The rationale, this court explained, is that the indemnitee may obtain the earliest possible determination as to when reimbursement may be reasonably expected provided that there are no issues of fact concerning the indemnitee's active negligence. Accordingly, this court granted Development's underlying motion solely to the extent that Development was awarded a conditional judgment of indemnification against Supermarket.
The Current Motions for Leave to Reargue
Both parties now seek leave to reargue the underlying motions. In support of its motion for leave to reargue, Supermarket first contends that this court overlooked the absence of any communications between it and Development sufficient to prove that both parties assented to the terms of the garage lease agreement. There was no "meeting of the minds," emphasizes Supermarket, especially when it came to which party was responsible for maintenance of the sidewalk. Thus, Supermarket suggests that absent proof of a communication between the two parties, there cannot be an enforceable contract between them. For this reason, claims Supermarket, it was error for this court to deny Supermarket leave to amend its answer to Development's third-party complaint to assert the protections of the statute of frauds, as codified by the General Obligations Law.
Next, Supermarket alleges that this court awarded Development "unconditional" summary judgment on the issue of contractual indemnification. However, Supermarket argues, this court overlooked that, pursuant to both the laws of this State and the subject agreement, Development is only entitled to indemnification if it shows it is free from negligence. Here, argues Supermarket, Development made no such showing. Since there has been no determination by this Court that Development is free from negligence, Supermarket asserts that this court should, upon reargument, deny Development summary judgment on its cause of action for contractual indemnification.
Similarly, Supermarket states that this court erred when it ordered Supermarket to defend Development in this action. Supermarket asserts that since it is not an insurer, its duty to defend is no broader than its duty to indemnify. Therefore, reasons Supermarket, it has no duty to defend Development until Development establishes its right to contractual indemnification (assuming it can) at trial.
Also, Supermarket suggests that this court presumed that Development was an additional insured under the subject general commercial liability policy. Instead, Supermarket presses, this court overlooked that Development is not an additional insured and therefore not entitled to coverage. Therefore, Supermarket concludes, it was error for this court to require Supermarket (which, again, is not an insurer) to defend and indemnify Development until such time that a declaratory judgment action is commenced against the insurer. For these reasons, Supermarket argues that this court should grant its motion for leave to reargue, and after doing so, this court should grant Supermarket's underlying motion.
In opposition to Supermarket's motion for leave to reargue, and in support of its own cross motion for leave to reargue, Development first categorizes as frivolous Supermarket's contention that there was no "meeting of the minds" with respect to the garage lease agreement. Development notes that the material terms of the tenancy are spelled out in the written purchase agreement. Development reiterates that, by executing the purchase agreement, which explicitly assigns the rights and obligations contained in the garage lease agreement, Supermarket chose to be bound by the terms of the garage lease agreement between it and Development. Therefore, concludes Development, the requisite "meeting of the minds" in fact took place and there is no merit to Supermarket's proposed statute of frauds defense.
Alternatively, Development argues, this court determined in the underlying order, Supermarket's statute of frauds contentions must be rejected pursuant to the part performance doctrine. Development points out that the doctrine of part performance is based on principles of equity; specifically, recognition of the fact that it would be a fraud to allow one party involved in an agreement to escape performance after permitting the other party to perform in reliance on the agreement. Development also notes that the doctrine applies both when the aggrieved party undertakes affirmative acts as well as where there is extensive inaction. Lastly, Development points out that since the doctrine is applied in determining what justice and fairness require, application of the doctrine must be fact-specific and take all relevant circumstances into consideration.
Here, Development emphasizes, Supermarket, after executing the purchase agreement, promptly took possession of the garage and used it to park its vans, which Supermarket used to deliver groceries. Development points out that Supermarket paid rent for the garage space from the date the purchase closed in 2010 until the date of plaintiff's accident in 2014. Moreover, Development notes that Supermarket had, as of the date when the supermarket purchase deal closed, a copy of the garage lease agreement (further undermining Supermarket's contention that there was no "meeting of the minds" about the subject terms). Based on these facts-Supermarket's behavior being consistent with leasing the garage space, Supermarket's acknowledgement of its obligations such as paying rent, and Supermarket's knowledge of other relevant terms of the agreement (such as snow and ice removal requirements, and the obligation to maintain insurance coverage with Development as an additional insured)-Development argues that it had the right to rely on Supermarket to comply with the terms of the garage lease agreement irrespective of whether the agreement complied with the statute of frauds. Lastly, Development reiterates that, pursuant to the purchase agreement, and as memorialized in the closing statement, Supermarket had the right to cancel the supermarket purchase when the seller wasn't able to obtain consent to assign the garage lease, but "Purchaser accepted the garage lease assignment without a consent which Seller represented was not obtainable from the owner." Thus, Development concludes that this court should deny Supermarket leave to reargue its underlying motion.
Next, Development stresses that this court should not now consider Supermarket's contention that Development, in its underlying arguments and submissions to the court, failed to demonstrate its freedom from negligence. Development claims that Supermarket failed to make such assertions in its underlying papers, and, therefore, these contentions should not be heard in a subsequent motion for leave to reargue. Development emphasizes that a motion for leave to reargue should not allow the movant an opportunity to argue new contentions or legal theories that were not previously advanced in the underlying motion. In this matter, claims Development, Supermarket never argued that Development's underlying motion for summary judgment on the issue of contractual indemnification should be denied due to its purported failure to establish its freedom from fault. Accordingly, concludes Development, Supermarket should not now be heard to make this contention in the context of reargument.
Furthermore, Development claims that Supermarket's contentions about insurance coverage determinations are irrelevant. Development notes that its third-party claims against Supermarket are for defense, indemnification, and breach of contract to procure and maintain a commercial general liability policy that named Development as an additional insured. None of these claims, Development continues, require the involvement of an ostensible insurance carrier or a declaratory judgment. Instead, posits Development, these claims are properly resolved referring only to the record in this case and what Supermarket either did or failed to do. Development concludes that the issue of whether it is entitled to defense and indemnification as an additional insured under Supermarket's commercial general liability insurance policy is a separate and discrete issue that is not currently before this Court, and argues that this court should simply ignore Supermarket's contentions in this regard.
Lastly, Development argues that this court should grant its motion for leave to reargue, and upon the granting of such leave, award Development a judgment of full-not conditional-contractual indemnification against Supermarket. Development bases its argument on two grounds: first, that its entitlement to contractual indemnification is not contingent upon a determination that Supermarket was negligent but, rather, merely a showing that its presumptive liability is purely vicarious; and second, there is no meaningful dispute that pursuant to the garage lease agreement it was Supermarket's contractual obligation to maintain the subject sidewalk, and that plaintiff is claiming that he slipped, fell and suffered injuries on the sidewalk due to an icy condition. Given that the claim arose out of Supermarket's failure to clear the sidewalk of snow and ice, continues Development, the contractual duty to defend and indemnify is triggered without reference to other facts. It is irrelevant, adds Development, whether Supermarket's acts or omissions are considered negligent. Development asserts that this court erred because when it determined Development's underlying motion for summary judgment, it failed to consider the verified complaint-wherein plaintiff alleged that he fell as a result of an icy sidewalk in the relevant area-as competent evidence of the claim triggering Supermarket's duty to indemnify. Thus, reasons Development, the instant matter subjects it to potential liability "arising from" Supermarket's use of the garage and surrounding sidewalk, and, as such, the duty to defend and indemnify is triggered. Development argues that this is so whether or not a determination of liability has been made. Development concludes that, therefore, it is entitled to an unconditional judgment of contractual indemnification against Supermarket.
Discussion
This court notes the standards for a motion for leave to reargue. CPLR 2221 states, in applicable part:
"(d) A motion for leave to reargue:
1.shall be identified specifically as such;
2. shall be based upon matters of fact or law allegedly overlooked or misapprehended by the court in determining the prior motion, but shall not include any matters of fact not offered on the prior motion . . . ."
A motion for leave to reargue pursuant to CPLR 2221 is addressed to the sound discretion of the court (see e.g. Mansueto v Worster, 1 A.D.3d 412, 413 [2003]; Matter of Hoey-Kennedy v Kennedy, 294 A.D.2d 573, 573 [2002]; South Liberty Realty Corp. v Mercury, 292 A.D.2d 516, 517 [2002]), and may be granted only upon a showing that the court overlooked or misapprehended the facts or the law or for some reason mistakenly arrived at its earlier decision (William P. Pahl Equip. Corp. v Kassis, 182 A.D.2d 22, 26 [1992], lv denied in part and dismissed in part 80 N.Y.2d 1005 [1992], rearg denied 81 N.Y.2d 782 [1993]). Reargument is not designed to allow an unsuccessful party "successive opportunities to reargue issues previously decided" (Id. at 27 [internal citations omitted]).
Here, the court, in its discretion, grants both motions for leave to reargue. However, upon the granting of such leave, the court adheres to its previous determinations. First, with respect to Development's cross motion for leave to reargue, the court notes that Development owns the subject property, and it is on this property that plaintiff allegedly fell. Therefore, Development had the responsibility to assure that the conditions on its property were reasonably safe (Basso v Miller, 40 N.Y.2d 233, 241 [1976]). More specifically, a landowner owes a "nondelegable duty to provide members of the general public with a reasonably safe premises, including a safe means of ingress and egress" (Thomassen v J & K Diner, 152 A.D.2d 421, 424 [1989]).
The court notes that Development is an out-of-possession landlord, who, "is generally not liable for negligence with respect to the condition of property . . . unless . . . either contractually obligated to make repairs and/or maintain the premises or has a contractual right to reenter, inspect and make needed repairs . . . and liability is based on a significant structural or design defect that is contrary to a specific statutory safety provision" (Sapp v. S.J.C. 308 Lenox Ave. Family L.P., 150 A.D.3d 525, 527 [2017]). However, "[w]here a property owner has a nondelegable duty to keep the premises safe, the duty may not be delegated to agents, employees, or independent contractors" (Backiel v Citibank, N.A., 299 A.D.2d 504 [2002]). Here, Development, "as the property owner, had a nondelegable duty to maintain the [adjacent] sidewalk" (Vullo v Hillman Hous. Corp., 173 A.D.3d 600, 600 [2019], citing Bronfman v. East Midtown Plaza Hous. Col, Inc., 151 A.D.3d 639 [2017] and Administrative Code of City of NY § 7-210).
Lastly, any argument that the duty (and potential liability) imposed on out-of-possession landowners by Section 7-210 of the Administrative Code of the City of New York may be delegated to their lessees was squarely rejected by the Court of Appeals in Xiang Fu Hue v Troon Mgt., Inc. (34 N.Y.3d 167, 172 [2019] ["Section 7-210 applies to every 'owner of real property abutting any sidewalk' and makes no distinction for those owners who are out of possession"]; see also Vargas v Weishaus, 199 A.D.3d 620, 623-624 [2021]). Therefore, Development, despite being an out of possession landlord, has a non-delegable duty to keep the sidewalk safe for pedestrians under § 7-210 of the NYC Admin. Code, and is subject to liability for plaintiff's alleged slip and fall on an icy condition on the subject sidewalk.
With respect to contractual indemnification, it is well-settled law that such clauses are to be strictly construed to avoid reading into them duties which the parties did not intend to be assumed (Mikulski v. Adam R. West Inc., 78 A.D.3d 910, 911 [2010]; Nesterczuk v. Goldin Mgt., Inc., 77 A.D.3d 800, 804-805 [2010]). The right to contractual indemnification depends upon the specific language of the contract (Holub v Pathmark Stores, Inc., 66 A.D.3d 741, 742-743 [2009]; George v Marshalls of MA, Inc., 61 A.D.3d 925, 930 [2009]). "[A] party is entitled to full contractual indemnification provided that the intention to indemnify can be clearly implied from the language and purposes of the entire agreement and the surrounding facts and circumstances" (Drzewinski v Atlantic Scaffold & Ladder Co., 70 N.Y.2d 774, 777 [1987], quoting Margolin v. New York Life Ins. Co., 32 N.Y.2d 149, 153 [1973]).
However, exceptions to broad indemnity provisions exist. Here, the applicable indemnity provision explicitly excludes indemnification for claims "insofar as . . . arises out of the act or neglect of such Landlord Party," and there is no dispute that "Landlord Party" refers to Development. Also, a party cannot seek contractual indemnification for its own negligence (see General Obligations Law § 5-322.1; Itri Brick & Concrete Corp. v Aetna Cas. & Sur. Co., 89 N.Y.2d 786 [1997]). "[A] party seeking contractual indemnification must prove itself free from negligence, because to the extent its negligence contributed to the accident, it cannot be indemnified therefor" (Cava Constr. Co., Inc. v Gealtec Remodeling Corp., 58 A.D.3d 660, 662 [2009]; see also Bellefleur v Newark Beth Israel Med. Ctr., 66 A.D.3d 807, 808 [2009]). As long as an owner or general contractor is not negligent, the statute [General Obligations Law § 5-322.1] does not bar a party from receiving contractual indemnification, even if the clause is broadly worded to include indemnification for the indemnitee's own negligence (Itri Brick & Concrete Corp., 89 N.Y.2d at 795, n 5; see also Delaney v Spiegel Assocs., 225 A.D.2d 1102, 1104 [1996]). If a court has not yet made a finding with respect to which parties are negligent, summary judgment on a claim for contractual indemnification should generally be denied as premature (Bellefleur, 66 A.D.3d at 808; see also State of New York v Travelers Prop. Cas. Ins. Co., 280 A.D.2d 756, 757-758 [2001]). However, when an indemnitee moves for summary judgment on the issue of contractual indemnification, and the record contains no evidence that the indemnitee was negligent, the indemnitee is generally entitled to conditional summary judgment on its cause of action for contractual indemnification (see e.g., Rodriguez v Flushing Town Ctr. III, L.P., 133 A.D.3d 647, 648 [2015]; Best v Tishman Constr. Corp. of N.Y., 120 A.D.3d 1081, 1082 [2014]).
In this matter, the court has not yet made a finding of negligence and, as a result, it would be premature for this court to award Development summary judgment with respect to contractual indemnification (see e.g., Bellefleur, 66 A.D.3d 807). Indeed, contractual indemnification is generally decided as a matter of law pursuant to the terms of the contract, after the trier of fact determines culpability. However, the record contains no indication that Development was actively negligent-accordingly, as their liability would be purely vicarious, this court, in its underlying order, awarded Development conditional summary judgment on its cause of action for contractual indemnification (see e.g., Rodriguez, 133 A.D.3d 647).
The court also notes that the record contains no evidence that Development would obtain a windfall as a result of indemnification; there appears to be no other source of indemnity. Also worth noting is that the indemnity issues in the instant action do not mirror those commonly found in a construction site accident action that implicates the Labor Law.
Similarly, this court adheres to its prior determination as it pertains to Supermarket's prior summary judgment motion. Supermarket advances four contentions in support of its motion. First, Supermarket argues that there is no enforceable contract because of the absence of any communications and the lack of a "meeting of the minds." Supermarket points to the fact that no relevant document (including the subject garage lease) in the record has been executed by both it and Development. Indeed, Supermarket correctly notes that in Flores v Lower E. Side Serv. Ctr., Inc. (4 N.Y.3d 363), the Court of Appeals "concluded that the absence of an executed document [does] not end the inquiry" into whether an enforceable contract exists, stating:
"In determining whether the parties entered into a contractual agreement and what were its terms, it is necessary to look . . . to the objective manifestations of the intent of the parties as gathered by their expressed words and deeds . . . [a]nd, while it is the responsibility of the court to interpret written instruments . . . where a finding of whether an intent to contract is dependent as well on other evidence from which differing inferences may be drawn, a question of fact arises" (Flores, 3 N.Y.3d at 368-369, quoting Brown Bros. Elec. Contrs. v Beam Constr. Corp., 41 N.Y.2d 397, 399-400).
"Thus, under the analysis in Brown, an unsigned contract may be enforceable, provided there is objective evidence establishing that the parties intended to be bound (see also Matter of Municipal Consultants & Publs. v Town of Ramapo, 47 N.Y.2d 144 [1979] [publishing contract was enforceable
even though it was never signed by a representative of the town])" (Flores, 3 N.Y.3d at 369 [internal quotation marks omitted]).
Here, contrary to Supermarket's arguments, the purchase agreement and related closing documents-whereby Supermarket unequivocally sought to assume the rights and obligations of the garage lease-constitutes the "objective manifestation[]" (Id. at 368) of Supermarket's intent to be bound to the garage lease. Therefore, to the extent that the subject garage lease constitutes an "unsigned contract," other documents in the record render the lease enforceable against Supermarket (Id.).
The same reasoning explains why Supermarket's purported defenses of the statute of frauds and General Obligations Law § 5-701 lack merit. The statute of frauds is inapplicable here as this is not a case involving (for example) an "agreement to agree" (cf. Benedict Realty Co. v City of New York, 45 A.D.3d 713 [2007]). Indeed, in this matter, there is no alleged oral agreement to enforce, let alone an oral agreement purporting to contradict a written contract. To the contrary, the relevant written agreements in the record-the purchase agreement and garage lease-indicate that Supermarket, the party to be charged with enforcement of the garage lease, essentially "admitted" or "affirmed" the terms of the lease when it closed the supermarket purchase deal (see 61 NY Jur 2d, Frauds, Statute of § 227). Thus, the combination of both the purchase agreement with the closing documents and the garage lease contain the material obligations of the lease and Supermarket's unequivocal desire to assume those obligations., Consequently, the statute of frauds is not applicable here.
It bears repeating that, under the terms of the purchase agreement, Supermarket had the right to cancel the deal if Development's consent to Supermarket's assumption of the garage lease could not be obtained. However-and as unequivocally shown by the purchase agreement closing documents-Supermarket closed the deal notwithstanding the absence of Development's consent.
Alternatively, if the subject writings are not considered sufficient to charge Supermarket with the terms of the garage lease, "[n]othing contained in the Statute of Frauds governing real property contracts abridges the powers of courts of equity to compel the specific performance of agreements in cases of part performance" (61 NY Jur 2d, Frauds, Statute of § 264, citing General Obligations Law 5-703 [4]). The doctrine of part performance is designed to prevent a party from inducing full or partial performance from another and then claiming the sanctuary of the statute of frauds (see Eujoy Realty Corp. v Van Wagner Communications, LLC, 22 N.Y.3d 413 [2013]). Also, the doctrine "is based upon the equitable principle that it would be a fraud to allow one party, insisting on the Statute of Frauds, to escape performance after permitting the other party, acting in reliance, to substantially perform, the acts of part performance must have been those of the party insisting on the contract, not those of the party insisting on the Statute of Frauds" (Id., citing Messner Vetere Berger McNamee Schmetterer Euro RSCG Inc. v Aegis Group PLC, 93 N.Y.2d 229 [1999]). Here, Supermarket occupied the relevant garage space, used same to conduct its grocery delivery business and paid rent for the space. Accordingly, Development was entitled to rely on Supermarket's complying with the obligations contained in the garage lease.
The Court of Appeals in Messner Vetere noted that "[i]t is long settled under New York's Statute of Frauds that an oral agreement to convey an estate or interest in real property, other than a lease for a term not exceeding one year, is nugatory and unenforceable, and [a] party to the agreement may legally and rightfully refuse to recognize or perform it (Woolley v Stewart, 222 NY 347, 350-351 [1918]; General Obligations Law § 5-703). A party may, however, lose the benefit of the defense of the Statute of Frauds, or waive its protection, by inducing or permitting without remonstrance another party to the agreement to do acts, pursuant to and in reliance upon the agreement, to such an extent and so substantial in quality as to irremediably alter [the] situation and make the interposition of the statute against performance a fraud (222 NY, supra, at 351)" (Messner Vetere, 93 N.Y.2d at 235 [internal quotations omitted]).
Supermarket relies on Messner Vetere to support its arguments, but its reliance is misplaced. First, the principle of Messner Vetere supports the proposition that a party is entitled to rely on another party's part performance for statute of frauds purposes; this bolsters Development's position against Supermarket. Second, here, and unlike in Messner Vetere, there is no purported oral agreement to be enforced. To the contrary, the instant matter concerns a written agreement that, although not signed by Supermarket, was both delivered to Supermarket and agreed to by Supermarket (as part of the purchase closing documents). Even if, as Supermarket contends, Messner Vetere holds that payment of rent to a landlord is not by itself indicative of a new tenant's assumption of written lease terms, here, in contrast, Supermarket both received the garage lease terms and executed an agreement to be bound by the garage lease terms before it took possession of the garage space and paid rent in connection therewith. Lastly, and contrary to Supermarket's allegations, by occupying the garage space with delivery vans and paying rent for the space, Supermarket's behavior is in fact "unequivocally referable" to the garage lease (Toobian v Golzad, 193 A.D.3d 778, 780 [2021], quoting Messner Vetere, 93 N.Y.2d at 235; see also Weiss v Halperin, 149 A.D.3d 1143, 1145 [2017]; Barretti v Detore, 95 A.D.3d 803, 806 [2012]). Indeed, Supermarket, after agreeing to be bound by the terms of the garage lease, occupied the garage space with its vans and paid rent. Supermarket's behavior is thus "conduct which is inconsistent with any other explanation" other than its willful assumption of the terms of the garage lease (Barretti, 95 A.D.3d at 806 [internal quotation marks omitted]). For these reasons, the court rejects Supermarket's arguments concerning the statute of frauds, the General Obligations Law, and its request for leave to amend its third-party answer.
These facts are in sharp contradiction with Supermarket's argument, made in the underlying motion, that the rule of Messner Vetere suggests that the mere payment of rent to a landlord is "not enough" for the doctrine of part performance to apply where the statute of frauds would render a lease unenforceable. Even if Supermarket's argument is accepted, the record here demonstrates that Supermarket's actions-especially, executing the purchase agreement whereby Supermarket expressly agreed to assume the terms of the garage lease-constituted more than the mere payment of rent.
Next, the court rejects Supermarket's assertion that it "misapprehended the law in granting unconditional summary judgment to 4102 Development on its contractual indemnification claim[.]" This argument is belied by the clear text of the underlying decision, in which this court:
"ORDERED that Mot. Seq. #16 is granted to the extent that Development is entitled to summary judgment on its cause of action for contractual indemnification and an order of conditional indemnification [emphasis added]."
As seen above, the order explicitly states that Development was awarded an order of conditional indemnification. Thus, there is no merit to Supermarket's argument that this court erred when it granted unconditional contractual indemnification to Development.
The court turns to Supermarket's argument that it has no duty to defend Development in the instant action. Specifically, Supermarket asserts that the court overlooked that Supermarket is not an insurer, and, therefore, has no duty to defend Development. However, this court disagrees. To be sure, a party that is not an insurer generally has no duty to defend an indemnitee beyond the duty to indemnify (see e.g., Bellefleur v Newark Beth Israel Med. Ctr., 66 A.D.3d 807, 809 [2009]). However, here, by assuming the obligations of the garage lease, Supermarket was required to (but did not) obtain commercial liability insurance that covered Development. "[W]here, as here, a party gives a promise to procure insurance to protect from a certain amount of liability . . . the promising party must pay any costs, including defense costs" (Inner City Redevelopment Corp. v Thyssenkrupp El. Corp., 128 A.D.3d 425, 426 [2015] [reversing trial court's holding that that there was no duty to defend or indemnify unless there was a finding of negligence]; see also Dresser-Rand Co. v Ingersoll Rand Co., 2015 WL 4254033, S.D. NY July 14, 2015 at *7 ["where an indemnitor has expressly assumed the obligation to insure, it has also assumed the concomitant duty to defend"]). Supermarket, by promising both to indemnify Development for all claims arising from use of the garage space, and to obtain insurance covering Development, "is acting like an insurer, and has a broad duty to defend, as an insurer would" (Id.) because of "its promise to procure insurance" (Id. citing Hoverson v Herbert Constr. Co., 283 A.D.2d 237, 238 [2001]; Structure Tone v Burgess Steel Prods. Corp., 249 A.D.2d 144 [1998]). Given that, in this context, Supermarket has a "broad duty to defend" (Id.), Supermarket's argument that this court erred when it directed Supermarket to defend Development in this action lacks merit.
Lastly, this court rejects Supermarket's contention that this court overlooked that Development "may not be an additional insured" covered by Supermarket's liability policy, and, as such, resolution of the coverage issues herein requires a declaratory judgment action with the carrier's participation. This argument is peculiar, since Development has asserted a third-party claim for breach of contract against Supermarket, alleging that Supermarket failed to procure the contractually-required insurance for the benefit of Development. Indeed, Supermarket's affirmation in support states that "Development is not listed as an additional insured" on the commercial liability insurance policy obtained by Supermarket that covers the garage space. The breach of the covenant to procure and maintain insurance is thus evident from the record (see e.g. DiBuono v Abbey, LLC, 83 A.D.3d 650, 652 [2011] ["A party seeking summary judgment based on an alleged failure to procure insurance naming that party as an additional insured must demonstrate that a contract provision required that such insurance be procured and that the provision was not complied with"], quoting Rodriguez v Savoy Boro Park Assoc. Ltd. Partnership, 304 A.D.2d 738, 739 [2003]). Given that the garage lease required Supermarket to maintain insurance coverage for Development's benefit, and that Supermarket has essentially admitted that no such coverage existed at the applicable times, there are no issues of fact with respect to Supermarket's breach of the garage lease (cf. Harasim v EIjin Constr. of N.Y., Inc., 106 A.D.3d 642, 644 [2013]). Lastly, the court reiterates that in this context, Supermarket is in fact "acting like an insurer" and thus has a duty to defend Development in this action (Inner City Redevelopment Corp., 128 A.D.3d at 426). For these reasons, Supermarket's breach is established irrespective of whether its insurance carrier undertakes the defense of Development, and a declaratory judgment action would thus be superfluous.
Conclusion
For the foregoing reasons, it is
ORDERED that the motion of second third-party defendant 13th Avenue Supermarket LLC for leave to reargue is granted, and upon reargument, the court adheres to its previous determinations; and it is further
ORDERED that the motion of defendant/second third-party plaintiff 4102 13th Avenue Development, LLC for leave to reargue is granted, and upon reargument, the court adheres to its previous determinations.
The foregoing constitutes the decision and order of the court.