Opinion
Index No.: 650581/2014
08-27-2014
ZV NY, INC. d/b/a ZADIG & VOLTAIRE, Plaintiff, v. HERBERT MOSKOWITZ d/b/a MANHATTAN REALTY COMPANY, Defendant
Motion Date: 6/9/2014
Motion Sequence No.: 002
This action arises out of a commercial landlord-tenant dispute between Plaintiff ZV NY, Inc. d/b/a Zadig & Voltaire and Defendant Herbert Moskowitz d/b/a Manhattan Realty Company. Plaintiff is a tenant in the building located at 153 Mercer Street, New York, New York 10012 (the "Premises"), where it operates a retail store for the sale of men's, women's, and children's clothing. Defendant is Plaintiff's landlord and the owner of the Premises. Now before the Court is Plaintiff's motion for summary judgment on its first cause of action, seeking a declaratory judgment regarding its rights under the parties' lease and a previously issued notice to cure. Defendant opposes and cross-moves for recusal.
BACKGROUND
On December 3, 2013, Defendant sent Plaintiff a notice to cure which states in part that "[y]ou are creating a nuisance in that you are playing loud music and creating vibrations, which are disturbing other tenants in the building and despite numerous requests and warnings have failed to cure this condition." (Affirmation of Lauren Reiter Brody ("Brody Affirm."), Exhibit 2 (the "Notice to Cure").) The issuance of the Notice to Cure stems from noise complaints received by Defendant from certain of the Premises's residential tenants regarding sounds and vibrations emanating from Plaintiff's store. The first documented complaint appears to have been made in October 2013, and other subsequent complaints were made from time to time thereafter through March 7, 2014. The parties agree, though, that there have been no complaints since March.
Plaintiff commenced this action on February 21, 2014, seeking a Yellowstone injunction and a declaratory judgment with respect to its rights under the lease and the effectiveness of the steps which it took to cure the alleged breach. On February 24, the Court issued an order to show cause regarding Plaintiff's request for a Yellowstone injunction, which included a temporary restraining order pending the determination of that issue.
Hearings were held on February 24, April 9, 14, and 23, and May 6, after which the Court issued an order granting Plaintiffs request for a Yellowstone injunction. On March 10, 2014, Defendant filed an answer which includes a single counterclaim for attorneys' fees. Plaintiff moved for summary judgment on May 8, 2014, and Defendant's cross-motion for recusal followed shortly thereafter.
ANALYSIS
I. Defendant's Cross-motion for Recusal
Defendant argues that recusal is mandated by certain of the Rules of the Chief Administrative Judge pertaining to Judicial Conduct, specifically 22 NYCRR 100.3(B)(9)(b) and (E)(1)(a)(i), or, in the alternative, that the Court should exercise its own discretion to recuse itself, referencing three occurrences in support of its position. From the April 14, 2014 hearing, Defendant highlights statements by the Court that the Notice to Cure should be lifted, that the Court could dismiss the Notice to Cure, and that the Court "want[ed] to make sure that nothing happens to [Plaintiff]." (Apr. 14, 2014 Tr. 10:11-12.) Next, on May 5, 2014, Plaintiff filed a letter brief which Defendant characterizes as a letter-motion for summary judgment, arguing that the Court's alleged favoritism so emboldened Plaintiff that it "felt free to submit a letter motion for summary judgment." (Affidavit of Carl T. Peluso ("Peluso Aff.") ¶ 6.) Lastly, Defendant contends that at the May 6, 2014 hearing, "the Court gave the plaintiff's counsel legal advice on how and when to exercise the option to renew the lease." (Peluso Aff. ¶ 8.)
At the outset, it bears mentioning that Defendant has presented its argument in support of this cross-motion in the affidavit of its attorney, rather than in a memorandum of law. This Court's Part Rules provide that "[affirmations submitted in support of or in response to dispositive motions must be separate from any memoranda of law submitted in relation to the motion. Affirmations should not include arguments of law." Commercial Division Rule 17 (NYCRR 202.70(g), Rule 17) also distinguishes between memoranda of law and affidavits or affirmations, addressing the applicable page limits each type of submission. Lastly, Uniform Rule 202.8(c) (22 NYCRR 202.8(c)) provides that "[a]ffidavits shall be for a statement of the relevant facts, and briefs shall be for a statement of the relevant law."
A. Recusal Under the Administrative Rules of Judicial Conduct
Defendant seeks recusal pursuant to 22 NYCRR 100.3(B)(9)(b), which provides that "[a] judge shall not . . . with respect to cases, controversies or issues that are likely to come before the court, make commitments that are inconsistent with the impartial performance of the adjudicative duties of the office." Defendant also argues that recusal is warranted by 22 NYCRR 100.3(E)(1)(a)(i), which provides that "[a] judge shall disqualify himself or herself in a proceeding in which the judge's impartiality might reasonably be questioned, including but not limited to instances where . . . the judge has a personal bias or prejudice concerning a party."
The Court's statements at the April 14, 2014 hearing about lifting the Notice to Cure were attributable to Defendant's repeated assurance that it was satisfied "with respect to the technical aspect of the fix." (Apr. 14, 2014 Tr. 3:17-18.) As such, it seemed reasonable to conclude that the Notice to Cure should be withdrawn. While the Court initially posited that it could lift the Notice to Cure, in light of Defendant's objections, the Court instead directed the parties to brief that issue—a direction with which only Plaintiff complied.
The Court's statement that it "[did] not want anything to happen to [Plaintiff]" is entirely consistent with having issued a Yellowstone injunction earlier in that hearing. (Apr. 14, 2014 Tr. 7:8.) That statement is also consistent with, and is in essence a restatement of, the purpose of such an injunction, which is to "'maintain[] the status quo so that a commercial tenant, when confronted by a threat of termination of its lease, may protect its investment in the leasehold by obtaining a stay tolling the cure period so that upon an adverse determination on the merits the tenant may cure the default and avoid a forfeiture.'" Universal Communications Network, Inc. v. 229 W. 28th Owner, LLC, 85 A.D.3d 668, 669 (1st Dep't 2011) (citation omitted).
While it is unclear why Defendant believes that Plaintiff's decision to file its May 5th letter brief is probative of this Court's partiality, as noted above, Plaintiff's letter brief was submitted pursuant to the Court's direction that the parties submit "memoranda of law . . . as to whether or not the Court can dismiss the notice to cure if the conditions have been met." (Apr. 23, 2014 Tr. 7:22-24.) In doing so, the Court acknowledged Defendant's position that the Court lacked authority to dismiss the notice to cure and that the issue of the notice to cure's continued validity and enforceability was not properly before the Court. Notwithstanding the Court's direction, Defendant chose not submit its own brief on that issue.
Lastly, a court's statements to a litigant regarding compliance with applicable legal requirements or the consequences of its failure to do so, in this instance with respect to the option to renew the lease, does not evince the impartiality which Defendant suggests. See, e.g., Kay Inves. Series A, LLC v. Nordica Invests. LLC, 2013 NY Slip Op. 32834(U), at *13-14 (Sup. Ct. NY. Cnty. Nov. 1, 2013) (noting that "[g]iven the details of the proposed sale, the court reminds the parties that such sale must comply with the Company's operating agreement" and thereafter explaining further requirements with which the proposed sale must comply); Matter of Reul, 74 A.D.3d 1630, 1631 (3d Dep't 2010) (reminding the respondent "of her continuing obligation to not only completely comply with the remaining condition of this Court's December 9, 2004 decision, but to adhere to the rules governing the proper maintenance of attorney escrow accounts").
Defendant's conclusion that this Court made a commitment to Plaintiff "that if [Plaintiff] followed the Court's instruction regarding exercising the option to renew the lease, then the Court would find for plaintiff if defendant did not renew plaintiff's lease" is unsupported by the record. (Peluso Aff. ¶ 8.) Notwithstanding Defendant's characterization, the transcript of the May 6, 2014 hearing is devoid of any statement by the Court evincing such a commitment. In fact, the Court did not comment on the prospect of the parties returning to litigate the question of Plaintiff's option renewal, although that possibility was noted by counsel for both parties. (May 6, 2014 Tr. 7:15-22.)
Based on the foregoing, Defendant's assertion that the Court has manifested "actual basis [sic], prejudice, and [a] present and preemptive commitment to plaintiff," (Peluso Aff. ¶ 8), is unsupported by the record, such that its request for recusal pursuant to 22 NYCRR 100.3(B)(9)(b) and (E)(1)(a)(i) is denied.
B. Discretionary Recusal
In the alternative, Defendant requests that this Court exercise its discretion to recuse itself. "In the absence of statutory grounds, the decision upon a recusal motion is a discretionary one 'within the personal conscience of the court,' and should not be disturbed '[u]nless the moving party can point to an actual ruling which demonstrates bias.'" Yannitelli v. D. Yannitelli & Sons Constr. Corp., 247 A.D.2d 271, 271 (1st Dep't 1998). For the reasons stated above, Defendant has not identified "an actual ruling which demonstrates bias" and the request is denied.
Based on the foregoing, Defendant's cross-motion for recusal is denied.
II. Plaintiff's Motion for Summary Judgment
Plaintiff moves for summary judgment, seeking a declaratory judgment that it has cured the alleged default, is not in breach of the Lease, and that Defendant cannot terminate the lease. Plaintiff also seeks an award of costs related to making this motion. In its opposition, Defendant also requests and award of legal fees and sanctions.
A. The Standard on Summary Judgment
A motion for summary judgment "shall be granted if, upon all the papers and proof submitted, the cause of action or defense shall be established sufficiently to warrant the court as a matter of law in directing judgment in favor of any party." CPLR 3212(b). However, "facts must be viewed in the light most favorable to the non-moving party," Vega v. Restani Constr. Corp., 18 N.Y.3d 499, 503 (2012), and "the motion shall be denied if any party shall show facts sufficient to require a trial of any issue of fact." CPLR 3212(b). Once the moving party has demonstrated the absence of any triable issue of fact through the submission of sufficient evidence, "the burden shifts to the opposing party to submit proof in admissible form sufficient to create a question of fact requiring a trial." Kershaw v. Hosp. for Special Surgery, 114 A.D.3d 75, 82(1st Dep't 2013).
B. Whether Plaintiffs Motion Is Procedurally Improper
Defendant first argues that Plaintiff's motion is procedurally deficient because Plaintiff failed to submit an "affidavit . . . by a person having knowledge of the facts" as required by CPLR 3212(b). Instead, Plaintiff submitted an affirmation of its attorney, along with accompanying exhibits. However, "'[t]he affidavit or affirmation of an attorney, even if he has no personal knowledge of the facts, may, of course, serve as the vehicle for the submission of acceptable attachments which do provide evidentiary proof in admissible form, e.g., documents, transcripts. Such an affidavit or affirmation could also be accepted with respect to admissions of a party made in the attorney's presence.'" Grossberg Tudanger Adver., Inc. v. Weinreb, 177 A.D.2d 377, 378 (1st Dep't 1991) (quoting Zuckerman v. New York, 49 N.Y.2d 557, 563 (1980)); accord Furlender v. Sichenzia Ross Friedman Ference LLP, 79 A.D.3d 470, 470 (1st Dep't 2010) (quoting Zuckerman v. New York, 49 N.Y.2d 557, 563 (1980)) ("The affidavit of defendant's attorney was a proper vehicle for the submission of acceptable attachments providing 'evidentiary proof in admissible form, e.g., documents,' even though the attorney had no first-hand knowledge of the underlying facts."). As such, Plaintiff's use of an attorney affirmation as the means of introducing exhibits in support of its motion is not dispositive.
C. Whether Issues of Fact Preclude Granting Summary Judgment
Defendant next argues that issues of fact preclude granting summary judgment. However, Defendant's counsel stated in open court at the April 14, 2014 hearing that "[w]e understand that the audio limiter was installed just before we came to court last time. . . . [s]o we're perfectly satisfied with the technical aspects of the fix." (Apr. 14, 2014 Tr. 2:16-25.) Defendant's counsel thereafter reiterated that "with respect to the technical aspect of the fix, we are satisfied." (Apr. 14, 2014 Tr. 3:17-18.) According to the First Department, "admissions made by counsel on behalf of their clients are binding." Morel v. Schenker, 64 A.D.3d 403, 403 (1st Dep't 2009). Similarly, as one court explained, "[a]dmissions of fact by counsel with the implied authority of their clients are binding upon their clients." Genson v. Sixty Sutton Corp, 2009 NY Slip Op. 32467(U), at *5 (Sup. Ct. N.Y. Cnty. Oct. 8, 2009), aff'd, 74 A.D.3d 560 (1st Dep't 2010). Here, counsel's use of the word "we" indicates that he was speaking on his client's behalf and that he was authorized to do so.
The Notice to Cure makes specific reference to Articles 35 and 57 and Rule 4 of the parties' lease. Article 35 of the lease requires that Plaintiff and its employees, among others, comply with the "Rules and Regulations" which are set forth at the end of the lease. Rule 4 provides in pertinent part that Plaintiff shall not use the premises "in a manner offensive or objectionable to Owner or other occupants of the building by reason of noise . . . and/or vibrations." (Brody Affirm., Exhibit 1 (the "Lease") at 19.) Article 57.A similarly requires that "no noise or music will be audible to, nor any vibration be sensed by, any residential tenant in the building, and that any necessary remedial measures shall be Tenant's responsibility and at Tenant's sole cost and expense. Music shall be solely of a background nature." (Lease at 10.)
Significantly, Defendant "does not dispute that since March 7, 2014, there have been no complaints" with respect to noise or vibrations from the premises and there is nothing elsewhere in the record to suggest that any such issues arose subsequent to that date. (Defendant's Statement of Material Fact ¶ 41.) While Defendant argues that there are remaining factual questions as to whether the "the lock box recommended by the defendant's expert" was installed and locked, the location of the keys to that box, and the volume of Plaintiff s sound system, (Defendant's Memorandum in Opposition at 4), those remedies are not required by the Lease, nor are they within the scope of the Notice to Cure.
The Court reminds the parties to familiarize themselves with the Commercial Division Rules, as well as other rules of practice applicable to this Court. Commercial Division Rule 19-a(d) requires that "[e]ach statement of material fact by the movant or opponent pursuant to subdivision (a) or (b), including each statement controverting any statement of material fact, must be followed by citation to evidence submitted in support of or in opposition to the motion." 22 NYCRR 202.70(g), Rule 19-a(d). Defendant's responsive statement of material fact appears to contain only five evidentiary citations despite providing responses to forty-one separate statements.
As to the relief to which Plaintiff is entitled, in a similar case, the First Department explained that "[h]aving completely cured the default identified in the notice, plaintiff is entitled to the declaratory relief it seeks, i.e., a declaration that because S&J has vacated, it 'is not in default upon the grounds stated in the Highpoint Notice of Default' and that Highpoint 'is precluded from terminating the Lease upon th[ose] grounds.'" Duane Reade v. Highpoint Assoc. IX, LLC, 36 A.D.3d 496,497 (1st Dep't 2007).
Based on the foregoing, Plaintiff has established its entitlement to a declaratory judgment which is limited in scope as follows: (1) Plaintiff has cured the default alleged in the Notice to Cure; (2) Plaintiff is not, on the basis of this record, in default upon the grounds stated in the Notice of Default; and (3) at present, Defendant is precluded from terminating the Lease upon those grounds. The Court makes no determination as to whether Plaintiff is in breach of any other provision of the Lease or whether Defendant has the right to terminate the Lease on some other basis.
Plaintiff's request for an award of fees and costs with respect to making this motion is denied, as Defendant's assertion that Plaintiff was not entitled to declaratory relief prior to making this motion did not rise to the level of being frivolous. Defendant's request for sanctions and legal fees was improperly raised in Defendant's attorney's affidavit in opposition to Plaintiff's motion for summary judgment. Further, Defendant failed to demonstrate that Plaintiff's meritorious arguments in this litigation were frivolous, and, accordingly, Defendant's request for an award of legal fees and sanctions is also denied.
CONCLUSION
Accordingly, it is hereby
ORDERED that Plaintiff's motion for summary judgment on its first cause of action, seeking a declaratory judgment is granted with respect to the grounds stated in the December 3, 2013 notice to cure (the "Notice to Cure"), Plaintiff's cure of the breach alleged in the Notice to Cure, and Defendant's right to terminate the parties' lease on those grounds; and it is further
ADJUDGED and DECLARED that (1) Plaintiff has cured the default alleged in the Notice to Cure; (2) Plaintiff is not currently in default upon the grounds stated in the Notice of Default; and (3) at present, Defendant is precluded from terminating the parties' lease upon those grounds; and it is further
ORDERED that Defendant's cross-motion for recusal is denied.
This constitutes the decision and order of the Court. Dated: New York, New York
August 27, 2014
ENTER:
/s/_________
Hon. Eileen Bransten, J.S.C.