Metered Appliances, Inc. v St. Marks Hous. Assoc., L.P.
Annotate this CaseDecided on February 28, 2005
Supreme Court, Kings County
Metered Appliances, Inc., Plaintiff,
against
St. Marks Housing Associates, L.P., Defendant
16616/04
Francois A. Rivera, J.
Plaintiff moves by order to show cause (hereinafter OTSC) for a temporary restraining order (hereinafter TRO) and preliminary injunction preventing the defendant from terminating its leases and interfering with its laundry equipment and laundry service business. Respondent opposes the motion.
On May 25, 2004, plaintiff commenced an action seeking specific performance of its leases, monetary damages and injunctive relief. On August 6, 2004, defendant answered the complaint. The answer contained twenty five allegations of fact, ten affirmative defenses and ten counterclaims.
Plaintiff is a domestic corporation in the business of installing, operating and servicing coin metered laundry equipment throughout the City of New York and Long Island. Plaintiff's affidavit in support of the OTSC alleges that it entered into several lease agreements with the defendant for spaces in their numerous laundry rooms located in several buildings in Kings County. The address of these building are 651 Rutland Road; 131, 137, and 143 Sterling Street; 161 Clarkson Street; 470, 480 and 500 Montgomery Street; 1777 Bedford Street; and 183 and 225 Rochester Avenue in Brooklyn.
The parties identified the properties located at 651 Rutland Road; 131, 137, and 143 Sterling Street; and 161 Clarkson Street as the "St. Marks I" premises. They identified the properties located at 470, 480 and 500 Montgomery Street as the "St. Marks II" premises. The property located at 1777 Bedford Street they identified as the "Bedford" premise and the properties located at 183 and 225 Rochester Avenue as the "Rochester" premises.
Attached as exhibit A to plaintiff's motion is the lease between the parties, effective December 1, 1993, covering the St. Marks I premises. Attached as exhibit B is the lease for the Bedford premise, also effective December 1, 1993. Attached as exhibit C is the lease between [*2]the parties, effective May 1, 1994, covering the St. Marks II premises. Attached as exhibit D is the lease between the parties, effective May 21, 1996, covering the "Rochester" premises.
Each of the leases for the St. Marks I , St. Marks II, Bedford and Rochester premises are for a ten year term and contain identical provisions in second through the fourteenth paragraph. The second paragraph set the tenant's rent to be sixty per cent (60%) of the collections. The third paragraph contains a provision for automatic renewal for an additional ten year term unless cancelled by written notice sent by either party at least sixty (60) days prior to the expiration of each ten year period. The fourth paragraph gives exclusive dominion and control of the laundry room to the plaintiff. It also provides that the defendant will have its employees open and lock the doors to the premises at the time and hours regulated by the plaintiff. The fifth paragraph prohibits the defendant from installing or permitting any person other than the tenant to install laundry equipment in the building. Only the Rochester lease contains a fifteenth paragraph which purports to limits the landlord's conduct during a claimed default of a lease condition.
Plaintiff received from the defendant, eleven written notices dated April 21, 2004, purporting to terminate the leases for the following premises: 131 Sterling Street, 137 Sterling Street, 143 Sterling Street and 161-167 Clarkson Avenue, 651 Rutland Road, 1777-1779 Bedford Avenue, 470 Montgomery Street, 480 Montgomery Street, 500 Montgomery Street, 183 Rochester Avenue and 225 Rochester Avenue. Each notice advised the plaintiff that if plaintiff did not remove from the premises on May 31, 2004, the defendant would commence summary proceedings to remove the plaintiff for holding over after that date.
Plaintiff contends that the notices purporting to terminate the leases identified as the St. Marks I and Bedford premises, were sent after the ten year leases expired. Plaintiff contends that pursuant to paragraph three of the pertinent leases the notices were untimely and a nullity. Plaintiff also contends that the notices purporting to terminate the St. Marks II leases were also untimely because, although issued before the expiration of the leases, they were not issued prior to April 30, 2004 (at least sixty days prior to the expiration of the ten year lease term).
With regard to the "Rochester Leases", they were not due to expire until April 21, 2006. Plaintiff contends, inter alia, that the notices purporting to terminate these leases before their expiration date was also improper.
Attached as Exhibit 2 to defendant's opposition papers is a letter dated June 7, 2002, that was allegedly issued to the plaintiff terminating the St. Marks I leases. Defendant relies on this to dispute the claim of untimely notice to terminate those leases. Defendant submitted an affidavit of its property agent for all the properties in question which claims conduct of the plaintiff which breach all the leases in question. In particular defendant alleges that plaintiff improperly collected the coins from the laundry machines without a representative of the defendant present, and refused to permit the plaintiff to audit its collection. Defendant also alleged inadequate and poor service by the plaintiff. Defendant also contends, inter alia, that the leases are invalid contracts of adhesion containing vague, ambiguous and unenforceable terms. Defendant further contends that the automatic renewal term contained in the third paragraph of every lease violates General Obligations Law § 5-903.
Obligations Law § 5-903(2) provides: No provision of a contract for service, maintenance or repair to or for any real or personal property which states that the term of the contract shall be deemed renewed for a [*3]specified additional period unless the person receiving the service, maintenance or repair gives notice to the person furnishing such contract service, maintenance or repair of his intention to terminate the contract at the expiration of such term, shall be enforceable against the person receiving the service, maintenance or repair, unless the person furnishing the service, maintenance or repair, at least fifteen days and not more than thirty days previous to the time specified for serving such notice upon him, shall give to the person receiving the service, maintenance or repair written notice, served personally or by certified mail, calling the attention of that person to the existence of such provision in the contract.
CPLR §6301 provides : Grounds for preliminary injunction and temporary restraining order. A preliminary injunction may be granted in any action where it appears that the defendant threatens or is about to do, or is doing or procuring or suffering to be done, an act in violation of the plaintiff`s rights respecting the subject of the action, and tending to render the judgment ineffectual, or in any action where the plaintiff has demanded and would be entitled to a judgment restraining the defendant from the commission or continuance of an act, which, if committed or continued during the pendency of the action, would produce injury to the plaintiff. A temporary restraining order may be granted pending a hearing for a preliminary injunction where it appears that immediate and irreparable injury, loss or damage will result unless the defendant is restrained before the hearing can be had.
A preliminary injunction is a drastic remedy which should only be granted if the moving party establishes clear entitlement upon the relevant facts set forth in the moving papers. Bare conclusory allegations are insufficient to support the motion (Wyler v. Wyler 5 Misc 3d 1031(A) [NY Sup. 2004]). The plaintiff's showing on application for a preliminary injunction must be convincing and demonstrate a potentially ineffectual judgment if the defendant is not enjoined. Plaintiff must further show a likelihood of success on the merits, no adequate remedy at law and the balancing of the equities in its favor (Aetna Ins. Co. v. Capasso 75 NY2d 860-862 [1990]; see also South Amherst, Ltd. v. H.B. Singer, LLC 13 AD3d 515 [2nd Dept 2004]).
CPLR 6312(C) provides: Issues of fact. Provided that the elements required for the issuance of a preliminary injunction are demonstrated in the plaintiff`s papers, the presentation by the defendant of evidence sufficient to raise an issue of fact as to any of such elements shall not in itself be grounds for denial of the motion. In such event the court shall make a determination by hearing or otherwise whether each of the elements required for issuance of a preliminary injunction exists.
Plaintiff's pleadings establish the existence of a landlord-tenant dispute between the parties in which the threatened conduct of the defendant, absent an injunction, will potentially put the plaintiff out of business and damage its laundry equipment. Plaintiff also relies on the [*4]judicial policy to grant injunctive relief and maintain the status quo in lease disputes (Coinmatch Corp. v. Harton Associates, 304 AD2d 705 [2nd Dept 2003]).
Defendants pleadings, however, presents evidence which raises an issue of fact about the nature of the lease agreements and the conduct of the parties. In particular, they raise an issue of fact regarding plaintiff's breach of the leases by not permitting an accurate determination of the laundry income collected. They also raise an issue of fact regarding whether the lease agreements are enforceable. Defendants contention that the leases violate General Obligations Law § 5-903, turns on whether the agreements are properly deemed to be leases or licenses. It is the intent of the parties and not the language of the leases which should control the analysis (Linro Equipment Corp. v. Westage Tower Associates 233 AD2d 824 [3rd Dept. 1996]; see also Sebco Laundry Systems, Inc. v. Oakwood Terrace Housing Corp. 277 AD2d 303 [2nd Dept 2003]).
Pursuant to CPLR 6312 (C ), the court should not deny plaintiff's request for injunctive relief based on the issues of facts raised in the pleadings but rather should determine the issues of fact by a hearing. The court hereby orders a factual hearing to determine the intent of the parties in forming these lease agreements. The parties are directed to contact the clerk of Part 52, to schedule a hearing date.
The foregoing constitutes the decision and order of the court.
______________________
J.S.C.
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