Ply-Gem Indus., Inc. v Inip Co.
Annotate this CaseDecided on September 27, 2004
Supreme Court, Nassau County
PLY-GEM INDUSTRIES, INC., CARGO CONNECTION LOGISTICS CORP., CARGO CONNECTION LOGISTICS MID-ATLANTIC, LLC, CDI MANAGEMENT, INC. And UNDERWING INTERNATIONAL, LLC, Plaintiffs,
against
INIP CO., MICHAEL J. CHASANOFF, ALLAN CHASANOFF, ROBERT CHASANOFF, STEPHEN G. CHASANOFF, NANCY CHASANOFF BUTLER, SOPHIE ORENSTEIN, individually and as Trustee u/w/o ALBERT ORENSTEIN, deceased, STANLEY PINTO, Individually and as Trustee u/w/o ALBERT ORENSTEIN, deceased, SAMUEL WEINBRG, individually and as Trustee u/w/o ALBERT ORENSTEIN, deceased, HARRIS CHASANOFF, JAY FEDER, Defendants.
14520/2001
ATTORNEY FOR PLAINTIFF
Mc Carter & English, LLP
245 Park Avenue
New York, New York 10167
ATTORNEY FOR DEFENDANTS
(For Inip)
Sahn & Ward, PPLC
Jon Ward, Esq. 666 Old Country Road - Suite 820
Garden City, New York 11530
(for Pidy, Inc.)
Zuckerbrod & Taubenfeld
Martin Zuckerbrod, Esq.
575 Chestnut, P.O. Box 488
Cedarhurst, New York 11516
(for Ben Elias Industry, Inc.)
Glauberman, Kessler & Rotmil, Esqs.
1430 Broadway - Suite 1603
New York, New York 10018
Leonard B. Austin, J.
Plaintiffs move pursuant to CPLR 3212 for summary judgment dismissing Defendant Inip Co.'s ("Inip") counterclaims in this action and its Petitions in two District Court proceedings which were removed to this Court and consolidated for trial.
BACKGROUND
Plaintiff Ply-Gem Industries, Inc. ("Ply-Gem"), together with its subsidiary Studley Products Inc. (formerly Studley Paper Co., Inc.) ("Studley") entered into commercial leases for premises owned by Inip, which premises are located at 90 and 95 Inip Drive in Inwood, New York. The leases are linked by cross-default provisions making a default under one a default under the other. Ply-Gem sought to assign its lease. However, Inip withheld its consent based upon the financial condition of the proposed assignee. It is alleged that Ply-Gem went forward with the assignment notwithstanding the lack of consent. In fact, modification to the demised [*2]premises was undertaken by Ply-Gem and its unauthorized assignee.
By letter dated July 11, 2001, Inip issued Notices of Default/Cure under the lease agreements based upon the wrongful assignment. At the time the Notices were sent,
Ply-Gem was not in possession of the demised premises. The Notices of Default/Cure were sent by certified mail, return receipt requested to addresses admitted to in the District Court proceedings. One was sent to 777 Third Avenue, New York, New York, which is listed as Ply-Gem's "principal office" in its proposed "Consent of Landlord to Lease Assignment". The Notice was also sent by certified mail to Nortek, Inc., Ply-Gem's corporate parent at 50 Kennedy Plaza, Providence, Rhode Island. As noted, in its answer to the District Court Summary Proceeding Petition, Ply-Gem admitted that it "has an address" at both 777 Third Avenue and at 50 Kennedy Plaza.
The Notice of Default/Cure was also sent to Michael J. Sharon, Esq. counsel at Nortek, and Virginia Goodman Futterman, Esq., of London Fischer LLP, counsel for Nortek with respect to the assignment. London Fischer LLP, by letter dated June 27, 2001, had advised counsel for Inip that it represented Ply-Gem with respect to the "Ply-Gem/Inip Co. Lease". Approximately two weeks later, London Fischer also requested counsel for Inip to forward "any communication, verbal, written or otherwise" to Futterman.
Inip served Notices of Termination upon expiration of the cure period, which were again sent by certified mail, return receipt requested to Nortek, Sharon and Futterman. A termination notice was not sent to the Third Avenue address, as the previously sent Notice of Default/Cure was returned with a notation that the addressee was unknown.
Plaintiffs seek dismissal of the counterclaims and two consolidated summary proceedings on the grounds that the Notice of Default/Cure and Notice of Termination were not served in accordance with the provisions of paragraph 15 of the Lease Extension Agreement dated August 1, 1992. Plaintiffs aver that notice should have been "delivered personally" at the demised premises or "sent to that address", even though such service would not have resulted in actual notice to either Ply-Gem or Studley, both of whom had been out of possession of the leased premises since June 1998. Indeed, Studley Products which underwent a second name change to VCB Products, Inc, was apparently dissolved.
DISCUSSION
Plaintiff has failed to establish as a matter of law that the lease agreement required notice to be sent only to the leased premises. Moreover, Ply-Gem has waived its right to insist on strict compliance with the notice provisions in the lease, since it failed to raise same as required in its answer to the Petition in the District Court. In addition to this failure, Plaintiffs have made affirmative use of the Court by commencing an action and seeking consolidation of the District Court actions. In addition, Ply-Gem has fully engaged in this litigation including moving for summary judgment, engaging fully in disclosure and filing a Note of Issue. Significantly, Ply-Gem has allowed over two and one half years to elapse before raising this threshold issue of improper notice. [*3]
A.Propriety of the Service of the Notice of Default/Cure
A lease is to be interpreted in the same manner as any other contract "so as to give effect to the intention of the parties as expressed in the unequivocal language employed". Breed v. Insurance Co. of No. America, 46 N.Y.2d 351, 355 (1978). See also, Backer Mgt. Corp. v. Acme Quilting Co., 46 N.Y. 211 (1978); and 1009 Second Ave. Assocs. v. New York City Off Track Betting Corp., 248 A.D.2d 106 (1st Dept. 1998). The language chosen by the parties "is the only sure guide" as to their intention. Matter of Loew's Buffalo Theatres, 233 N.Y. 495, 501 (1922). In particular, when lease provisions have been negotiated by experienced business entities, "there is no basis 'to interpret an agreement as impliedly stating something which the parties have neglected to specifically include'." 415 Fifth Ave. Realty Assocs. v. Yeshiva Univ., 228 A.D.2d 178 (1st Dept. 1996), quoting from, Rowe v. Great Atlantic & Pacific Tea Co., 46 N.Y.2d 62, 72 (1978).
The Lease Extension Agreement dated August 1, 1992, at paragraph 15, page 11, states that any notice given by the Landlord to the Tenant:shall be deemed duly given and complete if either delivered personally to the Tenant at 95 Inip Drive, or send (sic) to that address by certified mail return receipt requested . . . (Emphasis added.)
The 90 Inip Drive lease contains the same provision at paragraph 14, page 10. Ply-
Gem contends that the quoted language mandates service of notice exclusively at the leased premises. The Court disagrees
The construction of the quoted notice provision may be dependent upon who it was intended to protect the landlord or the tenant. The use of the word "deemed" is significant to such construction. If it is intended to protect the landlord, the quoted provision could be construed to merely provide an address at which Notice would be deemed sufficient even if not actual. In other words, the language could be read to permit constructive rather than actual notice at a permissible rather than exclusive address.
The language of the lease term here is susceptible of such construction, as it is not couched in mandatory or exclusive language. In contrast, a lease which requires that any notice "shall be deemed duly given only if in writing, and if delivered personally or posted by registered or certified mail, return receipt requested" is mandatory. (Emphasis added). Shaughnessy v. Baron, 151 A.D.2d 561 (2nd Dept.1989). Also illustrative is language found in Greaves Lane, LLC v. NBM Dev., LLC, 2002 WL 1868882 (N.Y.C. Civ. Ct, 2002), where the lease provided that service "is not effective unless" given in the manner stated. In Brooks Drug, Inc. v. 279 Sunrise Highway, Inc., 2002 WL 1969248 (Dist Ct. Nassau Co, 2002), the lease required that all notices "shall be . . . served as follows . . ." (Emphasis added).
In comparison, the lease language here may be construed to provide one address where notice is sufficient or, "deemed to be duly given and complete", regardless of whether it results [*4]in actual notice. Accordingly, as the language of the notice provision is not exclusive, its interpretation is not a matter "to be determined solely by the court". See, Matter of Cale Dev. Co. v. Conciliation & Appeals Bd., 94 A.D.2d 229, 234, (1st Dept. 1983), affd., 61 N.Y.2d 976 (1984). Thus such provision cannot support summary judgment.
Even were the Court to find the notice term to be unambiguous and the service method exclusive, Plaintiffs, by their failure to raise the defense in the District Court, as required by RPAPL 731(2); by their failure to raise it on their prior motion for summary judgment; and by their unwarranted delay, have waived any right to demand notice in compliance with the lease. Metropolitan Transportation Auth. v. Cosmopolitan Aviation Corp., 99 A.D.2d 767 (2nd Dept. 1984).
With respect to the statutory waiver in District Court proceedings,
RPAPL § 731(2), in relevant part, provides :
. . . the notice of petition shall specify the time and place of the hearing on the petition and state that if respondent shall fail at such time to interpose and establish any defense that he may have, he may be precluded from asserting such defense or the claim on which it is based in any other proceeding or action. (Emphasis added.)
The failure on the part of a summary proceeding respondent, in interposing an answer, to allege a legal defense "will bar him from seeking affirmative relief in another action". 3 Dolan, Rasch's Landlord & Tenant § 43:36 at 136 (4th Ed.).
The Court finds, contrary to the contentions of the movants, that objection to the method of service of the Notices was not clearly preserved in the summary proceeding. It was not identified among the fifteen affirmative defenses raised. There is no defense alleging defective, absent or improper predicate notice. The defense of failure to state a cause of action, is not applicable to the technical defect raised here. See, Miller v. MMT Corp., 182 Misc.2d 670 (NYC Civ. Ct. 1999), where the court held that technical noncompliance with lease service provision supports the defense of failure to state a cause of action only if notice was not received. If notice was received, and not promptly objected to, the defect is waived.
In general, a waiver has been defined as "the voluntary abandonment or relinquishment of a known right". Jefpaul Garage Corp. v. Presbyterian Hosp. in City of New York, 61 N.Y.2d 442, 446 (1984). The Second Department in Metropolitan Transportation Auth. v. Cosmopolitan Aviation Corp., supra, addressed waiver in a context highly relevant here; to wit: whether a petition should have been dismissed against tenant Cosmopolitan based upon a defective notice of default. The Second Department held at 768:
. . . [N]ot only did Cosmopolitan receive actual notice of its defaults, it proceeded to trial without raising an objection to the notice and affirmatively embraced the court's jurisdiction by raising counterclaims. Cosmopolitan's first objection to the default notice came on the 18th day [*5]of trial, which was two and one-half years after it received the notice, over two years after it received the dispossess petition, over one year from serving its answer and counterclaims . . . Cosmopolitan has, therefore, waived its right to complain about any defect which may have existed in the default notice. (Citations omitted.)
Plaintiffs argue that, since the trial has not commenced, the foregoing authority is inapposite. The Court disagrees. As in Cosmopolitan Aviation, the Notice of Default/Cure and the Notice of Termination were received at the time they were served. Only after extended delays and extensive litigation was the defense even raised. It has been approximately three years since the notices were served and well over two years since the summary proceeding petition was served and filed. Much motion practice six motions has ensued prior to this one. The District Court proceedings were removed to this Court and consolidated for trial. The Note of Issue was filed and a motion for summary judgment was made in October 2002. Throughout all of this litigation, no mention of any defective notice was raised until this second motion for summary judgment.
The Court finds, as a matter of law, that Plaintiffs have long since waived their "right to complain about any defect which may have existed in the default notice". Metropolitan Transportation Auth. v. Cosmopolitan Aviation Corp., supra at 768. Plaintiff's motion for summary judgment must be denied.
Accordingly, it is,
ORDERED, That Plaintiffs' motion for summary judgment is denied; and it is further,
ORDERED, that counsel are directed to appear for a conference to schedule the trial of this matter on October 22, 2004 at 9:30 a.m.
This constitutes the decision and Order of the Court.
Dated: Mineola, NY _____________________________
September 27, 2004 Hon. LEONARD B. AUSTIN, J.S.C.
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