Opinion
SP 982/04.
Decided August 3, 2004.
Paul B. Bergins, White Plains, New York, Attorney for Petitioner.
Dibbini Cacace, By: James G. Dibbini, White Plains, New York, Attorneys for Respondent.
Petitioner's motion pursuant to CPLR 3211 (a) (1); (7) and CPLR 3211 (b) for an order dismissing the respondent's affirmative defenses and counterclaims is granted; motion pursuant to CPLR 3212 for an order awarding summary judgment is granted. Respondent's motion pursuant to CPLR 3211 (a) (7) and CPLR 3211 (a) (10) for an order dismissing the petition, or in the alternative, pursuant to CPLR 3024 (a) for a more definite statement, is denied in its entirety.
Facts
On February 13, 1997 the parties executed a commercial lease agreement wherein the respondent assumed possession of premises in the Galleria at White Plains, a shopping mall located in Westchester County, New York (hereinafter "Galleria"). In or about June 1997, the respondent, a self-proclaimed "grilled chicken baron" and provider of "the best grilled chicken sandwich on earth," opened for business, catering to patrons in the Galleria's food court. At that time, J.C. Penney, Macy's and Bunnies Children's Department were the three anchor stores operating in the Galleria.
The petitioner commenced the instant proceeding on April 29, 2004 to recover: (1) possession of the subject premises; (2) a money judgment based upon the respondent's failure to pay rent for the period January 2004 thru April 2004; and (3) reasonable attorney's fees pursuant to a lease provision which provides for the same. On May 10, 2004, the respondent served its answer which pleaded general denials, five affirmative defenses and two counterclaims.
Discussion
The respondent's first affirmative defense seeks dismissal of the proceeding based upon the petitioner's failure to properly identify "Woodlawn Partners" as a corporation. It is evident from the lease that the respondent failed to disclose its corporate status at the time of execution. However, a review of Federal and State taxpayer documents, a certificate of incorporation, cancelled checks, liability insurance agreements and a stock certificate manifestly shows that the respondent is a corporation. Nonetheless, the omission from a pleading of a party's corporate status does not ipso facto warrant dismissal.
It is well settled that "amendments [of a caption] are permitted where the correct party defendant has been served with process, but under a misnomer, and where the misnomer could not possibly have misled the defendant concerning who it was that the plaintiff was in fact seeking to sue" ( Creative Cabinet Corp. of America, Inc. v. Future Visions Computer Store, 140 A.D.2d 483, 484 [2d Dept. 1988]; see also Kurz v. Casey, 81 A.D.2d 634 [2d Dept. 1981]; Cutting Edge, Inc. v. Santora, 4 A.D.3d 867 [4th Dept. 2004]; Air Tite Manufacturing, Inc. v. Acropolis Associates, 202 A.D.2d 1067 [4th Dept. 1994]). In this proceeding, the respondent fails to allege that it was misled or otherwise prejudiced by the petitioner's failure to designate the respondent as a corporation ( see e.g. Ober v. The Rye Town Hilton, 159 A.D.2d 16 [2d Dept. 1990]).
Accordingly, the caption is amended to reflect the name Woodlawn Partners, Inc. d/b/a Ranch 1 as the proper respondent (CPLR 305 [c]). The respondent's first affirmative defense is dismissed.
The second affirmative defense in the respondent's answer alleges that the petitioner failed to serve a demand for rent as proscribed in the parties' lease. Notably, the respondent's motion papers are devoid of evidence in support of this defense. Rather, the respondent's moving papers attack service of the notice of petition and petition, alleging that the same were not served in accordance with a notice provision in the lease.
Annexed to the petition is a "Notice of Rental Amounts Delinquent" dated February 12, 2004 which appears to comply in all respects with a rent demand.
It has long been recognized that a landlord and tenant may, by the terms of a lease, agree to a specific manner of service of notices, and that those terms are generally enforceable (see Miller v. MMT Corporation, 182 Misc.2d 670 [Civ. Ct. N.Y. Co. 1999]). Paragraph 56 of the lease states in pertinent part as follows: "Notices: Every notice, demand, request or other communication which may be or is required to be given under this Lease shall be in writing and shall be sent by either expedited courier or mail service bearing proof of receipt, such as Federal Express or by United States Certified or Registered Mail, postage prepaid, return receipt requested, and shall be addressed: . . . (b) if to tenant, to tenant's notice address [271 East 237th Street, Bronx, New York 10470]."
The affidavit of service filed by the petitioner demonstrates that the notice of petition and petition were personally delivered to the respondent's managing agent at the subject premises and mailed in compliance with RPAPL § 735. In addition, the affidavit of service and accompanying return receipts indicate that the pleadings were sent by certified and regular mail to the tenant's notice address.
The Court finds that service was effectuated in accordance with both the applicable lease provision and RPAPL § 735. Further, the respondent has received actual notice of this proceeding ( see e.g. Mid Island Shopping Plaza Co. v. Judith's Clockworks, Ltd., 135 A.D.2d 617 [2d Dept. 1997]). The respondent's second affirmative defense is dismissed.
The respondent's third affirmative defense states that both the petition and "notice to quit" are defective because each paper was signed by petitioner's general manager. While an improperly verified pleading may be treated as a nullity, it may be so considered only if timely notice is given to the adversary with "due diligence" ( see Chan v. Adossa, 195 Misc.2d 590 [App. Term 2d Dept. 2003]; CPLR 3022). This requirement applies in a summary proceeding ( see Miller v. MMT Corporation, supra; SLG Graybar, L.L.C. v. John Hannaway Law Offices, 182 Misc.2d 217 [Civ. Ct. N.Y. Co. 1999]; Ft. Holding Corp. v. Otero, 157 Misc.2d 834 [Civ. Ct. N.Y. Co. 1993]). "Due diligence" has been interpreted to mean notice given immediately or within twenty-four hours of the receipt of a defective pleading ( see Ladore v. The Mayor and Board of Trustees of the Village of Portchester, 70 A.D.2d 603 [2d Dept. 1979]; Air New York, Inc. v. Alphonse Hotel Corp., 86 A.D.2d 932 [3rd Dept. 1982]).
Respondent's moving papers fail to address any verification defect in the "notice to quit."
The first time the respondent raised the issue of improper verification was in its answer dated May 6, 2004, seven days after the service of the petition and well beyond a period of time acceptable under the prevailing case law. Moreover, the respondent has never argued that the alleged improper verification resulted in prejudice to a substantial right (see Theodoridis v. American Transit Insurance Co., 210 A.D.2d 397 [2d Dept. 1994]). Accordingly, the objection is deemed waived and the respondent's third affirmative defense is dismissed.
Notwithstanding the foregoing, the Court concludes that the verification in the petition and "notice to quit" is proper. The proof in support of the petitioner's motion indicates that the general manager has been employed in such a capacity for approximately fifteen years and that her day to day management of the Galleria resulted in numerous dealings with the respondent's President. Given these facts, the general manager of the Galleria had authority to bind the landlord and the respondent has offered no evidence to refute this conclusion (see 54-55 Street Co. v. Torres, 171 Misc.2d 237 [App. Term 1st Dept. 1997]; Teachers College v. Wolterding, 75 Misc.2d 465 [Civ. Ct. N.Y. Co. 1973], rev'd on other grounds 77 Misc.2d 81 [App. Term 1st Dept. 1974]).
In its fourth affirmative defense/first counterclaim the respondent alleges that the petitioner has failed to secure and maintain three anchor stores in the Galleria from April 2001 through September 2003, thereby decreasing the flow of traffic in the mall and resulting in lost business and revenue in the amount of $420,000. Paragraph 2(c) of the lease states in relevant part as follows: "The location and boundaries of the premises are outlined on diagrams of the shopping center which are marked 'Exhibit A' and 'Exhibit A-1' attached to this lease, and made a part hereof. Exhibits A and A-1 show the general layout of the shopping center, certain proposed department stores adjoining the shopping center and other tenants, but shall not be deemed to be a warranty, representation or agreement on the part of landlord that said shopping center or said department stores and/or any additional or different department stores or other tenants will be as shown on Exhibits A and/or A-1 or will, in fact, occupy stores in the shopping center."
While the city court's jurisdiction over an action is limited to $15,000.00 (UCCA 202), no such monetary limit applies to a counterclaim (UCCA 208 [b]).
At the outset, a lease is subject to the rules of construction applicable to any other agreement ( see George Backer Management Corp. v. Acme Quilting Co., Inc., 46 N.Y.2d 211). When interpreting a contract, it has been repeatedly held that complete writings should generally be enforced according to their terms and that this rule has even greater force in the context of real property transactions where the instrument was negotiated between sophisticated, counseled business people dealing at arm's length ( see Wallace v. 600 Partners Co., 86 N.Y.2d 543). Further, courts are extremely reluctant to interpret an agreement as impliedly stating something which the parties have neglected to expressly include (see Vermont Teddy Bear Co., Inc. v. 538 Madison Realty Company, 1 N.Y.3d 470).
Although not raised in the papers before the Court, it should be noted that had the respondent so intended to protect itself from damage occasioned by the closure of an anchor store in the Galleria, it could have negotiated such a provision prior to execution of the lease. Indeed, commercial agreements may specifically address the issue raised herein and allow for a tenant to terminate the lease upon notice and/or seek a rent abatement when a mall's anchor store vacates the premises ( see e.g. Tops Markets, Inc. v. Congel, 295 A.D.2d 1009 [4th Dept. 2002] [the parties negotiated a "shortfall agreement" wherein the tenant was to receive compensation for the decrease in value of premises leased in a shopping plaza resulting from the absence of anchor tenants] ; see also Massachusetts Mutual Life Insurance Company v. Associated Dry Goods Corp., 786 F. Supp. 1403, 1412 [U.S. Dist. Ct., N.D. Ind. 1992] [specialty stores such as Radio Shack, Lerners, Nu Vision, Sycamore Shops and J. Riggins each negotiated a provision which would allow for termination of the lease or rent abatement in the event an anchor store ceased operation in the Scottsdale Mall]).
The lease implicated in this proceeding was the product of negotiations undertaken by sophisticated business entities, each represented by an attorney, and there is simply no basis for reading anything into the lease that is not expressly stated therein (see The City of New York v. P.A. Building Company, 284 A.D.2d 225 [1st Dept. 2001]). The unambiguous language in paragraph 2(c) of the lease negates any liability where, as here, an anchor store no longer occupies space in the Galleria (see e.g. Airy Development Associates v. Savings Bank of Utica, 241 A.D.2d 720 [3rd Dept. 1997] [nothing in a commitment letter required lender to provide assurances of an anchor store's continued occupancy]).
In or about April 2001, the J.C. Penney Department Store ceased operation in the mall. It was not until September 2003 that Sears opened its doors for business in the location once occupied by J.C. Penney.
Similarly, the Court rejects the respondent's contention that the lease somehow implied a certain level of profitability based upon the flow of traffic from the anchor stores and potential business arising therefrom. In short, no reference is made in the lease to a guaranteed minimum level of profitability and the merger clause contained therein precludes resort to extrinsic evidence ( see 80 State Street, LLC v. Allwen, Inc. d/b/a Wendy's, 6 A.D.3d 978 [3rd Dept. 2004]).
Having failed to negotiate the appropriate protective language, the respondent can be said to have willingly assumed the business risk associated with the closing of an anchor store ( see Rodas v. Manitaras, 159 A.D.2d 341 [1st Dept. 1990]). The respondent's fourth affirmative defense/first counterclaim is dismissed.
The fifth affirmative defense/second counterclaim is premised upon the same theory of recovery stated above, but the respondent seeks a rent abatement in the sum of $420,000. Alike the analysis stated heretofore, the respondent fails to offer any basis for this claim other than the petitioner's alleged obligation to maintain three anchor stores in the Galleria. Moreover, a review of the lease fails to show a liquidated damages clause that would support a rent abatement under the circumstances presented ( see APW, Inc. v. Marx Realty Improvement Co., Inc., 291 A.D.2d 333 [1st Dept. 2002]). For the reasons previously set forth, the respondent's fifth affirmative defense/second counterclaim is dismissed.
Although the lease has a provision which precludes the respondent from bringing a counterclaim in an action for nonpayment of rent, the petitioner has elected to move for judgment upon the same, or in the alternate, for severance or dismissal without prejudice.
Although rendered moot in view of the above conclusions, it is significant to note that the respondent fails to offer any evidence that the alleged damages were contemplated at the time the parties executed the lease (see Authentic Fitness Corporation v. Polymer Research Corporation of America, 251 A.D.2d 209 [1st Dept. 1998]), or that its business loses were directly traceable to the alleged breach and capable of proof with reasonable certainty (see Authentic Fitness Corporation, supra; John Quincy Adams Productions, Inc. v. Public Broadcasting Communications, Inc., 184 A.D.2d 434 [1st Dept. 1992]). In fact, the respondent makes no effort to explain why its rent default occurred approximately four months after the anchor store vacancy was filled by a new anchor tenant.
In support of the motion for summary judgment, the petitioner submits the affidavit of its general manager, an individual with personal knowledge of the facts. Based upon this affidavit and documentary exhibits in support thereof, it is established that the respondent discontinued payment of rent in January 2004 and has made no payment of rent since said date. As indicated above, the gravamen of the respondent's defense to payment of rent is the petitioner's alleged failure to maintain three anchor stores in the Galleria.
In this case, any claim for damages under the lease does not suspend the respondent's independent obligation to pay rent ( see 113 Downtown LLC v. B G Enterprises of Staten Island, 2002 WL 31056700 [App. Term 1st Dept. 2002]; see also Westchester County Industrial Development Agency v. Morris Industrial Builders, 278 A.D.2d 232 [2d Dept. 2000] ; Towers Organization, Inc. v. Glockhurst Corporation, N.V., 160 A.D.2d 597 [1st Dept. 1990]; Earbert Restaurant, Inc. v. Little Luxuries, Inc., 99 A.D.2d 734 [1st Dept. 1984]). The respondent's obligation to pay rent existed completely independent of the success or failure of the business ventured upon the premises ( see Foyer Key Sung v. Ramirez, 121 Misc.2d 313 [Sup. Ct. Queens Co. 1983]), and this is especially true in light of the "no set off or deduction" provision in the parties' lease (see Lincoln Plaza Tenants Corp. v. MDS Properties Development Corp., 169 A.D.2d 509 [1st Dept. 1991]; Martin v. Glenzan Associates, Inc., 75 A.D.2d 660 [3d Dept. 1980]; Orlowsky v. East House Enterprises, Inc., 32 Misc.2d 664 [App. Term 1st Dept. 1961]; 342 Madison Avenue Associates Limited Partnership v. Suzuki Associates, Ltd., 187 Misc.2d 488 [Sup. Ct. N.Y. Co. 2001]). Further, while the implied covenant of good faith and fair dealing applies to a commercial lease (see Becker Parkin Dental Supply v. 450 Westside Partners, LLC, 776 N.Y.S.2d 796 [1st Dept. 2004]), the opposition papers offer nothing to suggest that the petitioner has breached the same by having the subject vacancy.
Last, although the respondent has not affirmatively sought leave to conduct discovery in this proceeding (CPLR § 408), the moving papers nonetheless have annexed various discovery demands. "Before a party can defeat a motion for summary judgment claiming ignorance of facts due to unconducted discovery, he must show that he has made reasonable attempts to discover these facts and that the facts sought would give rise to a triable issue" (Gillinder v. Hemmes, 298 A.D.2d 493 [2d Dept. 2002]). "Moreover, the mere hope that evidence sufficient to defeat the motion may be uncovered during the discovery process is not enough to defeat a motion for summary judgment" ( Drepaul v. Allstate Insurance Company, 299 A.D.2d 391 [2d Dept. 2002]).
Discovery is deemed presumptively antithetical to the purpose of a summary proceeding ( see Neighborhood Partnership Housing Development Fund Corp. v. Okolie, 2003 WL 1923731 [App. Term 2d 11th Jud. Dists.]). In order for a party to conduct discovery in a summary proceeding it must be shown that the issues are novel or complex, or that ample need exists for the requested responses ( see Neighborhood Partnership Housing Development Fund Corp., supra; Zirinsky v. Violet Mills, Inc., 152 Misc.2d 538 [Civ. Ct. Queens Co. 1991]).
Applying the foregoing law, the respondent has failed to articulate any basis for leave to conduct discovery in this proceeding. In addition, the respondent has failed to persuade this Court that the requested material would ultimately raise a triable issue of fact. To the extent the respondent seeks leave to serve the aforementioned discovery demands, said application is denied.
Conclusion
Upon all the papers and proof submitted, the petitioner has established entitlement to judgment as a matter of law. The respondent's papers fail to raise a material triable issue of fact.
Accordingly, summary judgment is granted in favor of the petitioner for the relief demanded. The parties are directed to contact the Court to obtain a hearing date on the issue of attorney's fees.
THIS DECISION CONSTITUTES THE ORDER OF THE COURT