Opinion
12893/07.
Decided January 4, 2008.
Sameul Youssof, Brooklyn, NY, Plaintiff, pro se.
Nativ Winiarsky, Esq., KUCKNER BRUH, LLP, New York, NY, Attorney for Defendant.
Upon the foregoing papers in this action by plaintiff Sidereal Studios (Sidereal) against 214 Franklin LLC (Franklin) for a declaratory judgment, a permanent injunction, and damages for an alleged breach of contract ( Sidereal Studios v 214 Franklin LLC, Sup Ct, Kings County, index No. 12893/07 (action No. 1), Sidereal moves, by order to show cause dated April 18, 2007, for an order, pursuant to CPLR 6312, enjoining and restraining Franklin, together with its agents, attorneys, servants, and employees, from: (1) entering, accessing, infringing upon, or otherwise interfering with its commercial space, located at Suite 101 (the demised premises) in the building at 214 Franklin Street, in Brooklyn, New York (the building) for the purpose of undertaking certain construction, alterations, renovations, improvements, and modifications to the building and the demised premises, including, but not limited to, the addition of a new floor, (2) taking back, ousting, evicting, reclaiming, and temporarily or permanently depriving it of any portion of the demised premises in connection with the alteration or otherwise, and (3) taking any other measures which will interfere with its use and occupancy of the demised premises.
Sidereal moves, in a second order to show cause dated July 10, 2007, for an order: (1) declaring a 15-day notice to cure dated June 29, 2007, served on it by Franklin, null and void and of no force and effect, and/or striking the notice to cure in its entirety, in light of a temporary restraining order issued by the court on June 12, 2007, (2) temporarily, preliminarily, and permanently enjoining and restraining Franklin, together with its agents, attorneys, servants, employees, and anyone else acting on its behalf from taking any action to terminate, recover possession of, or otherwise interfere with its leasehold interest in the premises and/or to commence any summary proceeding to evict it from the demised premises based upon this notice to cure, (3) imposing an award of sanctions against Franklin for issuing and serving this notice to cure, which, it alleges, is frivolous, and in violation of the temporary restraining order, and (4) awarding it any other relief this court deems just and proper, including, but not limited to, an award of its legal fees, costs, and disbursements.
Franklin (by a September 7, 2007 cross motion) cross-moves, in action #1, for summary judgment dismissing Sidereal's complaint and granting its counterclaim for: (1) an order declaring that the parties' lease agreement provides it with the right of access to the demised premises for the purpose of installing two support columns, each approximately 1-1 ½ foot square, (2) an order directing Sidereal to provide it with access to the demised premises for the installation of the two support columns, and (3) an order awarding it costs and attorneys' fees as provided in the lease.
In a second action by plaintiffs Sidereal and Samuel Youssof (Youssof) (who is the owner of Sidereal) for injunctive and declaratory relief regarding two notices to cure dated June 18, 2007, damages, and attorneys' fees ( Sidereal v 214 Franklin LLC, Sup Ct, Kings County, index No. 24087/01 (action #2), Sidereal and Youssof move, by order to show cause filed July 3, 2007, for an order: (1) staying and tolling the running and expiration of the cure dates set forth in the two 15-day notices to cure dated June 18, 2007 that Franklin served upon them regarding the demised premises, pending a determination of the underlying merits of this action, (2) temporarily, preliminarily, and permanently enjoining and restraining Franklin, together with its agents, attorneys, servants, employees, and anyone else acting on its behalf, from taking any action to terminate, recover possession of, or otherwise interfere with Sidereal's leasehold interests in the premises and/or to commence any summary proceeding to evict Sidereal from the premises, and (3) awarding Sidereal any other relief this court deems just and proper, including, but not limited to, an award of Sidereal's legal fees, costs, and disbursements.
Franklin is the owner of a building, located at 214 Franklin Street, in Brooklyn, New York, solely occupied by commercial tenants. The two-story structure has an occupancy classification for manufacturing use. Plaintiff leases 1577 square feet of space.
Sidereal is a sole proprietorship, owned by Youssof, who is its president. Sidereal is engaged in the business of architectural woodwork and manufactures, among other things, cabinets, furniture, millwork, and paneling. On September 15, 2004, Sidereal entered into a written lease with Franklin to use and occupy the demised premises (Suite 101 on the first floor of the building) for "woodworking/cabinet space." The lease provides for a base rent of $1,764 per month for 2007. The term of the lease commenced on October 1, 2004 and ran until September 30, 2007. Pursuant to paragraph 60 of the rider to the lease, Sidereal was given an option to renew for two more years, but Franklin could terminate and void this option should Sidereal be found in default of any provision of the lease.
At the inception of Sidereal's tenancy in October 2004, Sidereal installed two ventilation fans in the wall of the demised premises, which operate to draw clean air from the hallway of the building into the demised premises. Sidereal maintains expensive bulky machinery (i.e., a cabinet saw, planer, jointer, drum sander, and line boring machine) and raw material and supplies (plywood, sheet goods, lumber exceeding 16 feet in length and hardware) at the demised premises. According to Sidereal, it fully utilizes every square foot of the demised premises for its business operations. As part of its tenancy, Sidereal also made use of a loading dock.
In 2006, Franklin, in order to sustain and enhance the economic viability of its building, decided to add a third floor to increase the amount of the building's rental space. Franklin's original architect, Scarano Architects, PLLC (Scarano) drafted plans. In May or June 2006, Scarano's plans and applications for permits to undertake construction were submitted by Franklin to the New York City Department of Buildings (the DOB). In November 2006, Franklin commenced construction at the building. On November 15, 2006, Franklin received a stop work order for work without a permit from the DOB, but on January 11, 2007, Franklin received the required permit for the alterations. On January 30, 2007, Franklin erected a sidewalk shed in the front of the building. According to Youssof, the narrow spacing of the support columns and low horizontal braces comprising the shed precluded vehicles from backing into the loading dock, rendering the loading dock useless to Sidereal to receive deliveries of materials, such as plywood, lumber, and finished woodwork.
In February 2007, Joseph Torres (Torres), the managing member of Franklin, advised Youssof of Franklin's plan to add a new floor to the building. He informed Youssof of Franklin's original plan, which was to permanently reclaim 307 square feet or 20% of the demised premises for installation of an interior stairwell to serve the new floor. Franklin claimed that it had the right to do so pursuant to paragraphs 13 and 44 of the lease. Paragraph 13 of the lease provides:
"Owner or Owner's agents shall have the right (but shall not be obligated) to enter the demised premises in any emergency at any time, and, at other reasonable times, to examine the same and to make such repairs, replacements and improvements as Owner may deem necessary and reasonably desirable to any portion of the building . . . Owner may during the progress of any work in the demised premises take all necessary materials and equipment into said premises without the same constituting an eviction, nor shall Tenant be entitled to an abatement of rent while such work is in progress, nor to any damages by reason of loss or interruption of business or otherwise."
Paragraph 44 of the rider to the lease provides:
"Tenant shall permit Landlord to erect, use, maintain and repair pipes, ducts, cables, conduits, plumbing, vents and wires to and through the demised premises, as and to the extent that Landlord now, or hereafter may, deem necessary or appropriate for the proper operation and maintenance of the building."
On March 8, 2007, Torres allegedly attempted to convince Youssof to relinquish the space needed by Franklin in exchange for a rent abatement. Youssof stated his unwillingness to allow Franklin to reclaim a portion of the demised premises. On March 20, 2007, Torres allegedly instructed the superintendent and construction foreperson to remove the No Parking-Loading Zone sign in front of the building's loading dock, and to board up the two ventilation fans installed by Sidereal in the area between the demised premises and the hallway. On March 23, 2007, Youssof, Torres, their attorneys, and the managing agent of the building had a meeting, at which Torres stated that he would instruct his architect to file new plans with the DOB to diminish the amount of the taking.
On April 18, 2007, Sidereal commenced action #1 and simultaneously moved by order to show cause for injunctive relief. Sidereal's complaint in action #1 sets forth three causes of action. Sidereal's first cause of action seeks a declaratory judgment that Franklin's reclamation of a portion of the demised premises in connection with the alterations will constitute an unlawful partial taking which will interfere with Sidereal's use and occupancy. Sidereal's second cause of action demands a permanent injunction, precluding Franklin from reclaiming any portion of the demised premises. Sidereal's third cause of action asserts that Franklin permitted the roof drain to become clogged during the construction and that Franklin, therefore, failed to maintain the building's roof drains as required by paragraph 4 of the lease. It claims that this caused significant leaks leading to damage of the demised premises and Sidereal's property therein. It alleges a breach of contract claim and seeks damages allegedly caused by three floods. Sidereal's April 18, 2007 order to show cause seeks a preliminary injunction, enjoining Franklin from reclaiming any portion of the demised premises in connection with its addition of a new floor to the building. A temporary restraining order was initially issued on April 18, 2007, and was revised on June 12, 2007 to enjoin Franklin from evicting Sidereal or from reclaiming any portion of the demised premises in connection with the proposed alteration, pending the further order of the court.
As the construction proceeded, Franklin changed its plans and no longer intends to reclaim any space from the demised premises for the interior stairwell. However, the additional story to the building requires support through the demised premises. Specifically, Franklin needs to install two support columns, each approximately 1-1 ½ foot square, resulting in a taking of a total of approximately three square feet from the 1,577 total square feet leased by Sidereal. Franklin has set forth three counterclaims in its answer in action #1, including a counterclaim for a declaration that the lease affords it the right of access to the demised premises for the installation of the two support columns.
On June 12, 2007, while this issue between the parties remained vehemently disputed, Sidereal chose to exercise its option to extend the lease for an additional two years (until September 30, 2009). By letter dated June 13, 2007, Franklin rejected Sidereal's exercise of its renewal option. Franklin based this rejection on its claim that Sidereal, without first obtaining written consent, had changed the demised premises by cutting holes into the wall which is common with the lobby, and installing the two ventilation fans. Franklin claimed that this violated paragraph 3 of the lease, which provides, in part, that "Tenant shall make no changes in or to the demised premises of any nature without Owner's prior written consent." On June 18, 2007, Sidereal and Youssof received a 15-day notice to cure from Franklin, asserting that they had violated paragraph 3 of the lease by "illegally alter[ing] and damag[ing] the [demised p]remises by cutting large holes into the wall of the lobby . . . and install[ing] two ventilating fans" without Franklin's written consent. This notice required Sidereal and Youssof to cure the alleged breach by July 5, 2007. This notice further provided that in the event Sidereal and Youssof failed to cure, Franklin would seek to terminate the lease.
By letter, also dated June 18, 2007, Franklin's attorney notified Sidereal's attorney that it was seeking to reclaim the three feet for the two columns and offered Sidereal a rental abatement of 25%. By a further letter dated June 25, 2007, Franklin's attorneys again stated its intention to reclaim this space, but modified its rental abatement offer to 10%. The letter also reiterated Franklin's position that Sidereal's option to renew its lease had been forfeited by virtue of its default in relation to its allegedly illegal alteration outlined in the June 13, 2007 letter.
By letter dated June 27, 2007, Sidereal's attorney responded that Franklin's revised offer was unacceptable due to the location of the proposed taking. Sidereal claimed that the proposed taking is located directly behind Sidereal's stationary cabinet saw, and the installation of columns in this location will impede Sidereal from cutting wood and, thereby, from operating its woodworking business. On June 27, 2007, Sidereal and Youssof received a second 15-day notice to cure (also dated June 18, 2007) from Franklin, identical in all manners to the first June 18, 2007 notice to cure, but for a cure date of July 13, 2007. This second notice similarly provided that in the event that Sidereal failed to cure, Franklin would seek to terminate the lease.
On June 29, 2007, Franklin served Sidereal with another 15-day notice to cure, notifying Sidereal and Youssof that Sidereal had violated paragraph 13 of the lease because, following reasonable prior notice from Franklin, Sidereal had failed to provide access to the demised premises to erect and install two floor-to-ceiling columns related to the contemplated construction of the additional floor to the building. The notice demanded that Sidereal cure the default by providing Franklin with the requested access to the demised premises on or before July 20, 2007.
Prior to the lapsing of the curative periods set forth in the two June 18, 2007 notices to cure, Sidereal and Youssof commenced action #2 and moved by order to show cause dated July 3, 2007 for injunctive relief, commonly known as a Yellowstone injunction ( see First Natl.Stores v Yellowstone Shopping Ctr., 21 NY2d 630). The July 3, 2007 complaint in action #2 seeks, among other things, a permanent injunction restraining Franklin from terminating the lease based upon the two June 18, 2007 notices to cure and a declaratory judgment that the installation of the ventilation fans and their continued operation does not violate the lease and that Sidereal's exercise of its option to renew the lease is valid.
On July 10, 2007, Sidereal filed another order to show cause in action #1. It claimed therein that the June 29, 2007 15-day notice to cure violated the June 12, 2007 temporary restraining order.
A hearing was held on July 17, 2007 and July 18, 2007. The court found that service of the notice to cure did not constitute contempt of court, but that no notice to cure could be used to commence an eviction proceeding against Sidereal based on Sidereal's denial of access to install the columns, pending the resolution of the underlying issue in action #1, i.e., whether the lease permits Franklin to install these columns.
Thereafter, Franklin, by its cross motion dated August 30, 2007 and filed on September 7, 2007, sought summary judgment dismissing Sidereal's complaint, and for a declaration based on its counterclaim that paragraphs 13 and 44 of the lease provide it with the right of access for the purpose of installing the two support columns. Specifically, Franklin claims that Sidereal is obligated under the lease to provide access to it in connection with building improvements. Franklin contends that Sidereal's continued refusal to allow access to install the two support columns is a violation of the lease and constitutes grounds for eviction. Franklin asserts that it cannot complete its construction of the additional floor and rent out the new space without the installation of the two support columns, explaining that the columns will add a measure of safety required before a new tenant can take occupancy of the new floor.
Sidereal has refused to pay rent, claiming constructive eviction. Franklin, consequently, has commenced a summary proceeding for non-payment of rent in the Civil Court, Kings County.
A hearing was held before this court on October 18, 2007, at which Sidereal and Youssof (now pro se) and Franklin orally argued Sidereal's April 18, 2007 order to show cause in action #1, Sidereal's July 10, 2007 order to show cause in action #1, Franklin's September 7, 2007 cross motion in action # 1, and Sidereal's July 3, 2007 order to show cause in action # 2.
Addressing first whether Sidereal's allegedly unauthorized installation of the ventilation fans constitutes a default under the lease, providing an independent ground for Franklin to terminate the lease and evict plaintiff, paragraph 3 of the lease directs that "Tenant shall make no changes in or to the demised premises of any nature without the Owner's prior written consent."
In his sworn affidavit, Torres states that in June 2007, he first noticed that Sidereal had broken through the interior walls of the premises and installed wall fans that not only alter the premises, but also waft offensive odors and loud noises into the lobby of the building. Franklin contends that this constitutes a change in the demised premises which required Franklin's prior written consent pursuant to paragraph 3 of the lease, and which was never obtained. Torres asserts that he, therefore, served the 15-day notice to cure this default under the lease, but that Sidereal did not remove the fans, and, instead, filed the instant motion.
A Yellowstone injunction serves the purpose of stopping the running of the applicable cure period and may be granted where the moving party has demonstrated that "(1) it holds a commercial lease; (2) it has received from the landlord a notice of default, a notice to cure, or a threat of termination of the lease; (3) the application for a temporary restraining order was made prior to the termination of the lease; and (4) it has the desire and ability to cure the alleged default by any means short of vacating the premises'" ( Purdue Pharma v Ardsley Partners , 5 AD3d 654 , 655, quoting Long Is. Gynecological Servs. v 1103 Stewart Ave. Assoc. Ltd. Partnership, 224 AD2d 591, 593; see also First Natl. Stores, 21 NY2d at 640).
"Since a Yellowstone injunction is designed to avoid the tenant's forfeiture of its valuable leasehold interest while it challenges the propriety of the landlord's default notice, courts [have] accept[ed] far less than the normal showing required for preliminary injunctive relief'" ( Marathon Outdoor v Patent Constr. Sys. Div. of Harsco Corp., 306 AD2d 254, 255, quoting Heavy Cream, Inc. v Kurtz, 146 AD2d 672, 673). Moreover, " Yellowstone injunctions are routinely granted in order to maintain the status quo and prevent forfeiture of the lease while the parties litgate the dispute" ( Purdue Pharma, 5 AD3d at 655-656).
Sidereal has demonstrated that it holds a commercial lease, and has received two notices to cure from Franklin, each of which alleges that Sidereal has breached the lease and that the lease will be terminated if Sidereal fails to cure the alleged defaults. Plaintiffs have also made this application in a timely manner, prior to the expiration of the cure dates. In addition, Sidereal maintains that it has the ability and desire to cure the alleged defaults if found to be in breach of the lease. Plaintiff states that it still has in its possession the pieces of sheetrock which were removed when the fans were originally installed in 2004, and that it can remove the ventilation fans and reinstall the sheetrock in their place. It notes that paragraph 3 of the lease permits its removal of trade fixtures.
Sidereal further argues that it has a likelihood of ultimate success on the merits of its claim in action #2. It has submitted the affidavit of Youssof, who attests that the fans were installed at the inception of Sidereal's tenancy in October 2004, over three years ago, with the knowledge and acquiescence of Franklin. Specifically, he states (in contrast to Torres' statement that he first became aware of the fans in June 2007) that he advised Franklin (through its principal, Torres) that he intended to install these fans, and that Torres provided oral consent to this installation. Youssof maintains that Sidereal has openly been operating the fans without incident or objection from Franklin for the past three years. According to Youssof, Franklin, in the three years since the installation of the ventilation fans, had never before taken the position that these ventilation fans constituted a violation of the lease. He claims that following the onset of action #1 and while the temporary restraining order in action # 1 was in effect, Franklin first concocted this default in an attempt to vitiate Sidereal's exercise of its renewal option so that it could gain early access to the demised premises for the purpose of undertaking the alterations to the building.
In addition, Sidereal relies upon a Tenant Estoppel Certificate, drafted by Franklin, which Torres, acting on behalf of Franklin, asked him to sign on March 30, 2006. This certificate, required by Intervest National Bank, which was providing financing to Franklin, states, in section 11, that "[n]either the Tenant nor the Landlord is in default nor has either defaulted or failed to perform, in a timely manner, any obligation under the lease." According to Youssof, at the time Torres entered the demised premises and asked Youssof to sign the Tenant Estoppel Certificate, the ventilation fans had already been in place for approximately a year and a half, and were located in Torres' plain sight directly above the only entrance leading into the demised premises. Youssof further points out that Franklin typed on the Tenant Estoppel Certificate that Sidereal's lease expired on September 30, 2007 "with additional 2 yr option."
With respect to the Tenant Estoppel Certificate, Torres points to the fact that paragraph 38 of the lease required Sidereal to execute a statement certifying that the lease was in effect and indicating whether there was a default by Franklin, as the owner. Franklin contends that this Tenant Estoppel Certificate merely complied with this requirement. Torres asserts that the Tenant Estoppel Certificate was merely intended to relate to Sidereal's obligation to pay rent since this is the type of default with which a lender is concerned, arguing that since Franklin was not a signatory to the Tenant Estoppel Certificate, it could not be binding upon Franklin as a waiver of its right to declare Sidereal in default of the lease ( see generally Balk v 125 W. 92nd St. Corp. , 24 AD3d 193 , 193; HDR, Inc. v International Aircraft Parts, 257 AD2d 603, 604). Torres further asserts (in contrast to Youssof's assertions) that as of March 30, 2006, when the Tenant Estoppel Certificate was signed, he had no knowledge of the ventilation fans, and that he first noticed them in June 2007.
Franklin further relies upon paragraph 25 of the lease, which provides:
"No Waiver:
The failure of Owner to seek redress for violation of, or to insist upon strict performance of any covenant or condition of this lease . . . shall not prevent a subsequent act which would have originally constituted a violation from having all the force and effect of an original violation. The receipt by Owner of rent with knowledge of the breach of any covenant of this lease shall not be deemed a waiver of such breach and no provision of this lease shall be deemed to have been waived by Owner unless such waiver be in writing signed by the Owner."
Franklin asserts that this "no-waiver" clause precludes any claim by Sidereal that Franklin waived its right to enforce the no alterations clause of the lease. It is well established, however, that "a party to a written agreement may orally waive enforcement of one of its terms despite a provision to the contrary" ( Taylor v Blaylock Partners, 240 AD2d 289, 290). Such waiver may also be implied from the conduct of the parties, for example, from the acceptance of rent in disregard of the alleged violation. ( Lee v Wright, 108 AD2d 678). The non-waiver clause of the parties' lease is no bar to waiver because "a contractual provision against oral modification may itself be waived'" ( Madison Ave. Leasehold, LLC v Madison Bentley Assoc. LLC , 30 AD3d 1 , 6, affd on other grounds 8 NY3d 59, quoting Rose v Spa Realty Assoc., 42 NY2d 338, 343). That is, "parties may waive a no-waiver' clause" ( Lee v Wright, 108 AD2d 678, 680 ; see also TSS-Seedman's, Inc. v Elota Realty Co., 72 NY2d 1024, 1027; Madison Ave. Leasehold, LLC, 30 AD3d at 6). Here, the court finds that a triable issue of fact exists as to whether Franklin knowingly acquiesced to the alteration, thus voluntarily and intentionally waiving the written permission requirement in the lease ( see Rose, 42 NY2d at 344; Lee, 108 AD2d at 679; Restoration Realty Corp. v Robero, 87 AD2d 301, 305, affd 58 NY2d 1089).
Moreover, generally, "[n]onstructural alterations necessary to carry on a tenant's business may be made [upon the demised premises] without the landlord's consent" ( N. S. Decor Fixture Co. v V.J. Enters., 57 AD2d 890, 890 [internal quotation marks omitted]; see also Andrews v Day Button Co., 132 NY 348, 353; Harar Realty Corp. v Michlin Hill, 86 AD2d 182, 186; C. Wayne Motors v Somers, 81 AD2d 964, 965; Williams v Ron-Jay Enters., 65 AD2d 213, 218-219). "This is true even where the lease requires that no alterations may be made without the landlord's consent; provided, however, that such alterations will not injure the reversion, and provided, further, that they are reasonably necessary to enable the tenant to use the premises in the manner set forth in the lease'" ( Williams, 65 AD2d at 218, quoting N. S. Decor Fixture Co., 57 AD2d at 810; see also Rumiche Corp. v Eisenreich, 40 NY2d 174, 180; Harar Realty Corp., 86 AD2d at 186; Klein's Rapid Shoe Repair Co. Inc. v Sheppardel Realty Co., Inc., 136 Misc 332, 334, affd sub nom. Klein's Rapid Shoe Repair Co., Inc. v 120-122 E. 14th St. Corp., 228 App Div 688). Traditionally, installation of items such as exhaust systems have been deemed not to be structural alterations ( see Garrow v Smith, 198 AD2d 622, 636-637; Frequency Elecs. v We're Assoc. Co., 120 AD2d 489, 490).
Youssof, in his sworn affidavit, asserts that the ventilation fans are part and parcel of a woodworking operation. He states that these fans operate solely to draw clean air from the hallway of the building into the demised premises and are critical to Sidereal's operations as well as his own safety and well-being. Specifically, Youssof explains that the very nature of his business means that there is an ongoing presence of wood dust and paint odors in the demised premises, and the ventilation fans supply fresh air into the demised premises to dissipate these impurities. He claims that the fans do not disperse any dust, fumes, or other noxious or injurious substances from the demised premises into the hallway or the parts of the building. Youssof also points out that the commercial tenant in a neighboring unit on Sidereal's floor, who is also a woodworker, has a virtually identical ventilation fan, installed by Franklin, that also supplies air from the hallway into his unit.
Thus, Sidereal has also raised a triable issue of fact as to whether the ventilation fans were trade fixtures, non-structural alterations necessary for the purpose of its business so as not to require Franklin's consent. Consequently, Sidereal and Youssof have adequately demonstrated their entitlement to a Yellowstone injunction to prevent Franklin from evicting them pending litigation of the merits of the dispute regarding the ventilation fans ( see Gihon, LLC v 501 Second St., 306 AD2d 376, 376; Mayfair Super Mkts. v Serota, 262 AD2d 461, 462; Heavy Cream, Inc. v Kurtz, 146 AD2d at 673) and the injunctive relief sought in their July 3, 2007 order to show cause in action #2 must be granted.
Turning to Sidereal's application by Order to Show Cause dated April 18, 2007 in action #1 for a permanent injunction preventing the proposed alteration, Franklin's cross motion to dismiss that action, and Sidereal's further order to show cause dated July 10, 2007, which seeks to prevent the termination of its tenancy due to its opposition to the alteration, the court notes that "[a]bsent . . . a reservation [of rights in the lease] to the landlord, the tenant has the sole and exclusive right to undisturbed possession during the term of the lease and the landlord has no right to take possession of a part of the demised premises to the exclusion of the tenant" ( Camatron Sewing Mach. v Ring Assoc., 179 AD2d 165, 168).
Defendant Franklin relies upon paragraphs 13 and 44 of the Lease as authorizing the construction of two proposed columns within plaintiff's premises. Paragraph 13 permits "access" in order to make repairs and improvements deemed necessary and reasonable to "maintain and replace pipes and conduits in and through the demised premises, and to erect new pipes and conduits therein provided, wherever possible, they are within walls or otherwise concealed" ( emphasis added). Paragraph 44 of the Lease Rider, captioned "Maintenance and Use of Pipes, Cables, Etc." permits Landlord to: "erect, use, maintain and repair pipes, ducts, cables, conduits, plumbing, vents and wires in to and through the demised premises, as and to the extent that Landlord now, or hereafter may, deem necessary or appropriate for the proper operation and maintenance of the building."
The clear intent of Paragraph 13 is to permit landlord the access necessary to address needed repairs and maintenance. See generally, Cut-Outs, Inc. v Man Yun Real Estate Corp., 286 AD2d 258, 260-61 [1st Dept 2001]. There is no suggestion therein that a portion of the demised premises may be permanently confiscated at will. The prohibition against a rent abatement during the period when work is in progress does not contemplate that tenant will be permanently deprived of the use of a portion of the premises but, that such inconvenience will be temporary. Similarly, while Paragraph 44 is broader in permitting the erection and use of "pipes, ducts, cables, conduits, plumbing, vents and wires in to and through the demised premises," this authorization is limited to intrusions "necessary or appropriate for the proper operation and maintenance of the building." See generally, Paine Chriscott v Blair House Assoc., 70 AD2d 571 [1st Dept 1979]. The landlord's prerogative to alter or improve the building for its benefit cannot be interpreted so broadly as to deprive plaintiff of the effective use of its space without limitation. Such interpretation would render the lease itself meaningless in that tenant could thereby be deprived of the entire benefit of the contract at the whim of the landlord without recourse. The lease here does not expressly reserve to the landlord the right to permanently occupy a portion of the demised premises in violation of tenant's right to use and occupancy. See Camatron Sewing Mach., 179 AD2d at 168.
In Huron Assoc., LLC v 210 E. 86th St. Corp. ( 18 AD3d 231 ), cited by defendant, where a commercial lease similarly gave the landlord the right to enter the tenant's premise "to make such repairs . . . as [landlord] may deem necessary and reasonably desirable to any portion of the building," the landlord sought access to enter the tenant's leased premises to perform certain sheet bracing and column reinforcement in conjunction with the addition of two floors to the building. The Appellate Division, First Department expressly held that the parties' lease gave the landlord "a right of access to [the leased space] to make any building improvements it reasonably deem[ed] desirable" ( 18 AD3d at 231). It further declared that the tenant was in default of its lease obligation to give the landlord such access to the demised premises to perform this work and required the tenant to pay the landlord's reasonable attorneys' fees as a consequence of the default under the terms of the lease ( Id. at 232). There is no suggestion in the decision, however, that landlord had the right to permanently take a portion of tenant's space for its own use; the only issue was the right of access.
In Eastside Exhibition Corp. v 210 E. 86th St. Corp. ( 23 AD3d 100 ), where the commercial lease at issue similarly contained a provision permitting the landlord access to the demised premises to make repairs and improvements without abatement of rent, the Appellate Division, First Department, rejected the trial court's finding that a "de minimus exception" to the rule that any unauthorized taking is an actual eviction had been recognized, but approved the proportional abatement of rent as compensation for such partial evictions as consistent with modern reality. Whether the partial eviction proposed here can be fairly compensated by money damages or effectively deprives plaintiff of the entire use of the leasehold, and thus constitutes a constructive eviction as to the entire tenancy, remains a question of fact for trial.
Franklin has submitted a diagram, which shows the plans for the area in which each column will be erected. Franklin asserts that the columns are necessary for safety reasons to support the load of the third floor, and to ensure the structural integrity of the building. pointing out that the columns were in the original plans approved by the DOB ( see Transcript dated October 18, 2007 at 18). While Youssof, in opposition, conclusorily asserts that these columns are unnecessary, he has made no evidentiary showing to support Sidereal's burden on its request for injunctive relief. The structural necessity for the columns thus must be resolved in defendant's favor.
However, while the parties' lease permits Franklin to enter Sidereal's demised premises at reasonable hours to make alterations in connection with the addition of the third floor to the building, it does not authorize Franklin to permanently deprive Sidereal of the use of any portion of the demised premises ( see Eastside Exhibition Corp., 23 AD3d at 103). If the demised premises are rendered unusable to Sidereal by the placement of these columns, such a deprivation would constitute a complete constructive eviction, which would suspend Sidereal's liability for any rent ( id.). Moreover, such a complete eviction would breach the lease and would permit the entry of a permanent injunction ( see Camatron Sewing Mach., 179 AD2d at 168; Eastside Exhibition Corp., 23 AD3d at 103-105).
Franklin argues that the alterations are de minimus since they would take less than a quarter of one percent of Sidereal's space. Sidereal contends that the proposed taking, although not of a substantial portion of the space, is not of inessential space and is of practical significance. Sidereal asserts that the location of the proposed columns is directly behind its stationary cabinet saw and will, therefore, impede plaintiff from cutting wood. As the cutting of wood is essential to the operation of Sidereal's business, Sidereal claims that it will be entirely deprived of the use of the demised premises by the proposed placement of columns. Franklin, in response, disputes that the construction of the two columns would in any manner interfere with or even affect Sidereal's woodworking and cabinet making business. It points to photographs of the demised premises, which show wide open areas, and asserts that Sidereal can simply reconfigure the placement of its heavy stationary machinery to allow for the placement of the columns. While there is no de minimus exception to the rule that any unauthorized taking is an actual eviction, a partial eviction may be compensated by monetary damages proportionate to the taking ( see Paine Chriscott v Blair House Assocs., 70 AD2d 571, 572; Eastside Exhibition Corp., 23 AD3d at 104-105). Thus, the court must consider the amount of space involved in the taking and the effect upon plaintiff's business and determine an appropriate remedy for any losses suffered by the tenant who will be, at least partially, evicted ( see Appliance Giant, Inc. v Columbia 90 Assoc., LLC, 8 AD3d 932, 933; 81 Franklin Co. v Ginaccini, 160 AD2d 558, 559; Paine Chriscott, 70 AD2d at 572; Bijan Designer for Men v St. Regis Sheraton Corp., 142 Misc 2d 175, 178-179, affd 150 AD2d 244).
The court finds, based upon the evidence adduced, that Sidereal has not demonstrated a sufficient probability of success on the merits to warrant the summary granting of a permanent injunction enjoining Franklin's alteration altogether ( see Eastside Exhibition Corp., 23 AD3d at 105; Huron Assoc., LLC, 18 AD3d at 231; Paine Chriscott, 70 AD2d at 572). A hearing is required to determine the degree to which Sidereal's use of the demised premises would be diminished by the proposed construction.
Consequently, Sidereal's April 18, 2007 motion for injunctive relief in action #1 is granted only to the extent of extending the temporary restraining order against further construction pending decision by the court and setting this matter down for a hearing to determine the extent to which the proposed columns may effect an eviction in violation of the terms of the lease. Sidereal's July 10, 2007 motion in action #1 is dismissed both as duplicative and as having been determined by prior rulings of this Court and as otherwise without merit.
Franklin's cross motion seeking dismissal of Sidereal's third cause of action in action #1 for breach of contract based upon an alleged leak is premised upon Sidereal's failure to comply with Paragraphs 4 and 9 of the lease in that no notice of such leak was given, thus precluding recovery for any damages sustained ( see e.g. Cooke v Soule, 56 NY 420, 423-424; Hirsch v Radt, 228 NY 100, 106; J.C. Penney Co. v Teddam Realty Corp., 33 AD2d 1006, 1007). Sidereal, in response, has set forth no opposing arguments. Thus, dismissal of this cause of action is warranted ( see CPLR3212 [b]).
Sidereal and Youssof's July 3, 2007 motion in action #2 for a Yellowstone injunction with respect to the two June 18, 2007 notices to cure is granted pending further order of this Court.
Franklin's cross motion in action #1is granted to the extent that Sidereal's third cause of action is dismissed, and a declaratory judgment is granted upon Franklin's counterclaim declaring that the lease permits Franklin the right of access to the demised premises for the purpose making repairs or doing maintenance necessary to the operation of the building and is otherwise denied pending further hearing.
A hearing shall be held at 10 am on February 4, 2008 in Courtroom 756 of 360 Adams Street to determine the extent to which Sidereal's ability to use the demised premises will be diminished by erection of the proposed columns and whether such diminished use in fact constitutes a total eviction or can be reasonably compensated by abatement of rent. The remaining portions of defendant's motion to dismiss are held in abeyance pending the outcome of such hearing. Although the terms of the lease clearly permit the landlord to enter upon the premises for the purpose of erecting columns and the tenant's failure to provide access may constitute a breach of the lease, if the construction of the columns is found to be a total eviction, Sidereal's resistance may have been justified. The issue of attorneys' fees will accordingly be addressed following the hearing. The issue of landlord's purported waiver of its contractual right to require written permission to install the ventilation fans alleged to constitute an additional breach by Sidereal will also be addressed at such hearing. The Civil Court nonpayment summary proceeding is stayed pending the determination of this action.
This constitutes the decision and order of the court.