Opinion
2015-03-27
MEDLOCK CROSSING SHOPPING CENTER DULUTH, GA. LIMITED PARTNERSHIP, Plaintiff–Respondent, v. KITCHEN & BATH STUDIO, INC., Steve Lindstrom and Nancy Lindstrom, Defendants–Appellants.
Lemery Greisler LLC, Albany (Paul A. Levine of Counsel), for Defendants–Appellants. Bond, Schoeneck & King, PLLC, Rochester (Brian Laudadio of Counsel), for Plaintiff–Respondent.
Lemery Greisler LLC, Albany (Paul A. Levine of Counsel), for Defendants–Appellants. Bond, Schoeneck & King, PLLC, Rochester (Brian Laudadio of Counsel), for Plaintiff–Respondent.
PRESENT: SCUDDER, P.J., CENTRA, PERADOTTO, LINDLEY, AND WHALEN, JJ.
MEMORANDUM:
Plaintiff commenced this action seeking damages for breach of its commercial lease agreement with defendant Kitchen & Bath Studio, Inc. (KBS) and enforcement of the lease guarantee executed by the individual defendants. Contrary to the contention of defendants, we conclude that Supreme Court properly granted that part of plaintiff's motion for summary judgment on the complaint, and awarded plaintiff damages. “When interpreting language in a commercial lease, we apply our well-established precedent concerning the construction of commercial contracts, where we have explained that when parties set down their agreement in a clear, complete document, their writing should ... be enforced according to its terms ... This principle is particularly important in the context of real property transactions, where commercial certainty is a paramount concern, and where ... the instrument was negotiated between sophisticated, counseled business people negotiating at arm's length” (Madison Ave. Leasehold, LLC v. Madison Bentley Assoc. LLC, 8 N.Y.3d 59, 66, 828 N.Y.S.2d 254, 861 N.E.2d 69, rearg. denied8 N.Y.3d 867, 831 N.Y.S.2d 768, 863 N.E.2d 1020 [internal quotation marks omitted] ). Thus, “[c]ourts will give effect to the contract's language and the parties must live with the consequences of their agreement. If they are dissatisfied ..., the time to say so [is] at the bargaining table” (Eujoy Realty Corp. v. Van Wagner Communications, LLC, 22 N.Y.3d 413, 424, 981 N.Y.S.2d 326 [internal quotation marks omitted] ). Here, we conclude that plaintiff established its entitlement to judgment as a matter of law based on defendants' breach of the lease and guaranty, and defendants failed to raise an issue of fact with respect to the affirmative defense of surrender and acceptance ( see Trahwen, LLC v. Ming 99 Cent City # 7, Inc., 106 A.D.3d 1467, 1467, 965 N.Y.S.2d 264, lv. dismissed21 N.Y.3d 1066, 974 N.Y.S.2d 35, 996 N.E.2d 917; Barr v. Country Motor Car Group, 221 A.D.2d 1003, 1003–1004, 635 N.Y.S.2d 370, lv. dismissed88 N.Y.2d 919, 646 N.Y.S.2d 988, 670 N.E.2d 229; see generally Zuckerman v. City of New York, 49 N.Y.2d 557, 562, 427 N.Y.S.2d 595, 404 N.E.2d 718). The lease agreement obligated KBS to pay minimum rent in the amount of $5,625 per month “without any prior demand therefor,” as well as “additional rent” as set forth in the lease. It is well settled that “[a] covenant to pay rent at a specified time ... is an essential part of the bargain as it represents the consideration to be received for permitting the tenant to remain in possession of the property of the landlord” (Fifty States Mgt. Corp. v. Pioneer Auto Parks, 46 N.Y.2d 573, 578, 415 N.Y.S.2d 800, 389 N.E.2d 113, rearg. denied47 N.Y.2d 801, 418 N.Y.S.2d 1028, 391 N.E.2d 1374; see Matter of Birnbaum v. Yankee Whaler, 75 A.D.2d 708, 709, 427 N.Y.S.2d 129, affd.51 N.Y.2d 935, 434 N.Y.S.2d 994, 415 N.E.2d 982). In this case, it is undisputed that KBS failed to pay the full amount of rent due under the lease from March 2009 to September 2010, and that it ceased to make any payments under the lease after September 2010. Plaintiff therefore met its burden of establishing that KBS breached a material term of the lease ( see 172 Van Duzer Realty Corp. v. Globe Alumni Student Assistance Assn., Inc., 24 N.Y.3d 528, 534–535, 2 N.Y.S.3d 39, 25 N.E.3d 952; Fifty States Mgt. Corp., 46 N.Y.2d at 575, 415 N.Y.S.2d 800, 389 N.E.2d 113). Although we agree with defendants that there is an issue of fact whether they abandoned the leased premises, defendants breached the lease by failing to pay rent irrespective of whether they also breached the lease by abandoning the leased premises or ceasing to operate their business, as required by the lease.
Defendants further contend that plaintiff terminated the lease when it locked KBS out of the leased premises, thereby relieving KBS of the obligation to pay rent. We reject that contention. As a “general principle[,] ... where a tenant removes from premises ..., the conventional relationship of landlord and tenant ceases and the landlord may not recover from the tenant, as rent, subsequent installments thereof for which the lease provides” (International Publs. v. Matchabelli, 260 N.Y. 451, 453–454, 184 N.E. 51, rearg. denied261 N.Y. 622, 185 N.E. 765). That principle, however, “do[es] not prevent [the] landlord and tenant from contracting as they please, even in respect to periods subsequent to ... the termination of the relationship of landlord and tenant” (id. at 454, 184 N.E. 51; see Hermitage Co. v. Levine, 248 N.Y. 333, 337, 162 N.E. 97; Mann v. Munch Brewery, 225 N.Y. 189, 194, 121 N.E. 746) and, here, the plain language of the lease provides that KBS's obligation to pay rent survives plaintiff's reentry to the premises upon KBS's default ( see Olim Realty Corp. v. Big John's Moving, 250 A.D.2d 744, 744, 673 N.Y.S.2d 439; see also 172 Van Duzer Realty Corp., 24 N.Y.3d at 534; Fifty States Mgt. Corp., 46 N.Y.2d at 579, 415 N.Y.S.2d 800, 389 N.E.2d 113).
Finally, defendants contend that, because the court found that there is a question of fact with respect to their counterclaim for conversion, the court likewise should have found that there is a question of fact with respect to the complaint inasmuch as the counterclaim and complaint arise from the same facts and there thus may be “inconsistent judgments on the very same case.” We reject that contention. “ Conversion is the ‘unauthorized assumption and exercise of the right of ownership over goods belonging to another to the exclusion of the owner's rights' ” (Vigilant Ins. Co. of Am. v. Housing Auth. of City of El Paso, Tex., 87 N.Y.2d 36, 44, 637 N.Y.S.2d 342, 660 N.E.2d 1121). “A landlord has no absolute right to retain ... personal property belonging to a tenant. Even where a tenant is legally dispossessed, the landlord's rights extend only to the real property. [The landlord] acquires no concomitant right to use or retain the tenant's personal property” (Glass v. Wiener, 104 A.D.2d 967, 968, 480 N.Y.S.2d 760). Here, plaintiff asserts that KBS failed to remove its personal property after notice to do so, thereby abandoning any claim to the property. KBS, however, asserts that it attempted to gain access to its property, but that plaintiff failed to grant the necessary access. The parties' conflicting accounts of their conduct after the lockout presents an issue of fact on defendants' counterclaim, but is wholly irrelevant to plaintiff's breach of contract cause of action for unpaid rent ( see generally Glass, 104 A.D.2d at 968–969, 480 N.Y.S.2d 760). Thus, there is no danger of inconsistent judgments.
It is hereby ORDERED that the corrected order so appealed from is unanimously affirmed without costs.