1523 Real Estate, Inc. v East Atl. Props., LLC
Annotate this CaseDecided on April 14, 2005
Supreme Court, Kings County
1523 Real Estate, Inc., Plaintiff,
against
East Atlantic Properties, LLC, Defendant.
9506/04
Ira B. Harkavy, J.
Upon the foregoing papers, plaintiff 1523 Real Estate, Inc. moves for an order, pursuant to CPLR 3212, granting summary judgment on its first, second and third causes of action. Defendant East Atlantic Properties, LLC, cross-moves for an order cancelling the notice of pendency filed in this matter and for an award of sanctions, costs and attorneys fees.
Plaintiff commenced this action to enforce a lease provision requiring that defendant execute in recordable form a memorandum of lease in order to give potential purchasers of the subject property notice of plaintiff's right of first refusal. On October 3, 2002, plaintiff and defendant executed a ten-year commercial lease for the subject premises at 1523 Voorhies Avenue in Brooklyn. The lease included a provision granting a right of first refusal to plaintiff in the event defendant offered the property for sale. [*2]
Further, article XVII of the lease provides: "Memorandum of Lease. Simultaneously with the execution and delivery of this Lease, Landlord and Tenant shall execute a Memorandum of Lease, in recordable form, which shall be recorded to evidence of record this Lease and Tenant's rights hereunder, including Tenant's right of first refusal, and such other matters as may be required to constitute a valid Memorandum of Lease."
According to the affidavit of plaintiff's president, Dr. Elliot Meisenberg, offered in support of its motion for summary judgment, plaintiff sent a memorandum of lease to defendant to be executed in accordance with the lease on three separate occasions, but defendant failed to execute the memorandum. Defendant subsequently sent plaintiff a letter, dated March 22, 2004, stating that plaintiff was in "default" of the lease and that "the demand for the Memorandum of Lease is declined until such time that all issues in dispute between the Landlord and Tenant are settled."
Plaintiff seeks summary judgment on its first three causes of action—specific performance of the clause directing the execution of a memorandum of lease, a mandatory injunction compelling the execution of a memorandum of lease, and a declaratory judgment declaring that plaintiff has a right of first refusal to purchase the premises and declaring that defendant may not sell the premises without offering plaintiff the right of first refusal.
Whether or not to award specific performance is a decision that rests in the sound discretion of the trial court (see Van Wagner Advertising Corp. v S & M Enterprises, 67 NY2d 186, 191-192 [1986]). Specific performance is available, in appropriate circumstances, for breach of a commercial or residential lease (id. at 192; see Papa Gino's of America, Inc. v Plaza at Latham, 135 AD2d 74 [1988][commercial lessee was entitled to specific performance of lease provision prohibiting leasing to other tenants who operated competing businesses.]). The granting of a mandatory injunction is an extraordinary remedy and the court must weigh the conflicting considerations of benefit to the plaintiff and harm to the defendant which would follow the granting of such a drastic remedy (Sunrise Plaza Assoc. v International Summit Equities Corp., 288 AD2d 300, 301 [2001]). In a situation where "the wrong was unwarranted or where the defendant acted with full knowledge and planned his violation of plaintiff's rights, his position does not appeal to the equitable conscience and an injunction should issue" (Goldfarb v Freedman, 76 AD2d 565, 574 [1980] citing Bullock v Steinmil Realty, 1 Misc 2d 46 [1955], affd 3 AD2d 806 [1957]; Todd v North Ave. Holding Corp., 121 Misc 301 [1923], affd 208 App Div 854 [1924]; McKenna v Levy, 182 App Div 678 [1918]; Cummins v Colgate Props. Corp., 2 Misc 2d 301 [1956]).
Where the terms of a written contract are clear and unambiguous, the courts will enforce it according to its terms (see W.W.W. Assoc. v Giancontieri, 77 NY2d 157 [1990]; Automotive Mgt. Group v SRB Mgt. Co., 239 AD2d 450[1997]). The contract clearly and [*3]unequivocally requires that a memorandum of lease be executed by plaintiff and defendant "[s]imultaneously with the execution and delivery of" the lease. There is no dispute that the lease was executed and delivered. While defendant contends, in essence, that plaintiff is in default of the lease, there is no language which abrogates defendant's obligation to execute a memorandum of lease in the event of plaintiff's default. Moreover, there is clearly no hardship or prejudice to be suffered by defendant if it is compelled to execute a memorandum of lease, which would not effect any claims or defenses it may have vis a vis plaintiff, but would only serve to provide notice to potential purchasers of the lease and the right of first refusal clause. Accordingly, the equities clearly favor specific performance and an injunction mandating that defendant execute a memorandum of lease as per the terms of article XVII.
Plaintiff's motion for summary judgment on its first and second causes of action is granted. Defendant is directed to execute and deliver to plaintiff or its attorney a memorandum of lease within 20 days of the service of this order with notice of entry.
Turning to the branch of plaintiff's motion seeking summary judgment on its third cause of action for a declaratory judgment that plaintiff possesses a right of first refusal, it is axiomatic that the proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law tendering sufficient evidence to demonstrate the absence of any material issues of fact (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]). Failure to make such prima facie showing requires a denial of the motion regardless of the sufficiency of the opposing papers (id.) The proof submitted to the court should be scrutinized carefully in the light most favorable to the party opposing the motion (see Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395, 404 [1957]). In this instance, plaintiff has not established as a matter of law that it is in compliance with all the terms of the contract. As defendant points out, the right of first refusal as stated in the lease is "subject to the terms hereof." It is unclear as to whether "hereof" refers to only the terms of that particular article or to the entire lease. In the latter case, it is reasonable to interpret the agreement as requiring that plaintiff satisfy all of its obligations under the lease before the right of first refusal may be invoked. Where interpretation of contract terms or provisions are susceptible to at least two reasonable interpretations, and intent must be gleaned from disputed evidence or from inferences outside the written words, it becomes an issue of fact that must be resolved by trial (Amusement Bus. Underwriters v American Intl. Group, 66 NY2d 878, 880-881 [1985]).
Since there are issues of fact with respect to whether plaintiff has been in compliance with its obligations under the lease, the branch of its motion for summary judgment on its third cause of action is denied.
Defendant's cross motion to cancel the notice of pendency and for an award of costs, attorneys fees and sanctions on the ground that plaintiff's action does not entitle plaintiff the benefit of a notice of pendency is denied. "The usual object of filing a notice of lis pendens is to protect some right, title or interest claimed by a plaintiff in the lands of a defendant which might be lost under the recording acts in event of a transfer of the subject property by [*4]the defendant to a purchaser for value and without notice of the claim" (Braunston v Anchorage Woods, Inc., 10 NY2d 302, 305 [1961]). Such need for protection is evident in the case at bar. The relief immediately sought by plaintiff on this application, to compel defendant to execute a memorandum of lease, is intended to protect a contractual right of plaintiff to purchase the property, which would otherwise be lost if the property were sold to a bona fide purchaser without notice of the terms of the lease. In light of the finding that a notice of pendency is proper, that branch of defendant's motion for sanctions, attorneys' fees and costs is denied.
The foregoing constitutes the decision and order of the court.
E N T E R,
J. S. C.
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