Staten Is. Univ. Hosp. v Sarkis

[*1] Staten Is. Univ. Hosp. v Sarkis 2006 NY Slip Op 51321(U) [12 Misc 3d 1180(A)] Decided on May 10, 2006 Supreme Court, Richmond County Maltese, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on May 10, 2006
Supreme Court, Richmond County

Staten Island University Hospital, Plaintiff,

against

Eshmail M. Sarkis, d/b/a Eshmail M. Sarkis, M.D., P.C., Defendant.



102008/05

Joseph J. Maltese, J.

Defendant's motion to dismiss the complaint for failure to state a cause of action, which was converted into a motion for summary judgment (see CPLR 3211[c]) by Order of this Court dated December 26, 2005, is granted and the complaint is dismissed.

Plaintiff STATEN ISLAND UNIVERSITY HOSPITAL (hereinafter the HOSPITAL) commenced this declaratory judgment action seeking, inter alia, specific performance of a June 30, 1997 agreement between itself and defendant ESHMAIL M. SARKIS, d/b/a ESHMAIL M. SARKIS, M.D., P.C. (hereinafter DR. SARKIS) pertaining to the donation of a certain building located at 401 Seaview Avenue, Staten Island, New York. As therein provided, the HOSPITAL agreed, inter alia, to lease the building from DR. SARKIS for a period of eight years, at the end of which term DR. SARKIS agreed to donate the building to the HOSPITAL. The agreement further provided that a formal lease would be prepared following the execution of the letter-agreement, and such a document was actually signed in December 1997. It is uncontroverted that said lease, which runs 35-pages, makes no mention of the doctor's purported obligation to donate the premises to the HOSPITAL at the expiration of the lease term.

According to DR. SARKIS, the letter-agreement which the HOSPITAL is seeking to enforce is merely a "letter of intent" executed by himself and the HOSPITAL in June 1997, and was superseded by the 35-page, fully-integrated eight-year commercial lease which they signed [*2]approximately six months later. DR. SARKIS contends that this lease, which contains a merger clause, expressly supersedes all prior agreements between the parties, including the so-called letter of intent, and is the sole document governing the parties' relationship with respect to the premises. Accordingly, it is claimed that any promise or agreement that was not incorporated into the ensuing lease is unenforceable, and that the omission therefrom of any reference to the donation of the property shows that it was no longer intended.

In support, DR. SARKIS points to numerous terms in the lease itself which are inconsistent with any such donative intent, e.g., a "surrender" clause which expressly states that the "lessee shall surrender to the lessor the premises" at the end of the lease (Article XXV). As is pertinent, the lease also provides that DR. SARKIS may re-lease, sell or re-enter the premises under certain circumstances, all of which are said to be inconsistent with any undertaking to "give" the property to the HOSPITAL when the lease expires.

In the alternative, DR. SARKIS argues that the alleged donation is ineffective as a matter of law since the letter of intent does not provide for a "present" transfer of the property. In fact, the June 1997 agreement specifically provides that the donation will occur only at the end of the lease. This language is claimed to demonstrate that the doctor did not have the requisite present intent to donate the property when the letter-agreement was signed. DR. SARKIS further maintains that the alleged agreement fails under New York law, which is claimed to require the delivery of an executed deed in order to effectively convey real property, even as a donation.

According to DR. SARKIS, the interim effect of the letter of intent is also demonstrated by its omission of many essential terms, which would have been incorporated, if intended, in the more formal agreement expressly contemplated by the parties, i.e., the subsequent lease. For example, the letter of intent is silent as to whether the intended donation would be that of the building alone, or both the building and the land on which it is located. As it is now, the letter of intent refers only to the donation of the "medical building", while the HOSPITAL claims that the intended donation was to encompass both the land and the medical building. Such uncertainty is claimed to render the June agreement unenforceable per se.

Finally, DR. SARKIS contends that the lack of a definitive writing delineating the extent of the intended conveyance renders the HOSPITAL's alternative claim of promissory estoppel similarly unavailing, as does the HOSPITAL's failure to establish that it (1) reasonably relied on the alleged donation in executing the formal lease, or (2) suffered any irreparable injury as a result. Rather, it is claimed that the HOSPITAL has reaped the full benefit of its lease.

In opposition, the HOSPITAL contends that the June 1997 agreement to convey the subject premises is a separate and binding agreement, and is legally enforceable notwithstanding the terms of the subsequent lease. First, the HOSPITAL argues that DR. SARKIS has mis-characterized the agreement as a letter of intent, since the document recites that it is a "binding agreement". According to the HOSPITAL, this agreement and the subsequent lease were always intended to remain separate, and the terms of the lease were never intended to embody the entire relationship between the parties with respect to the premises. Thus, the HOSPITAL's performance under the lease is claimed to be only one of the elements required by the June agreement which prompted its execution. For its part, the HOSPITAL claims to have performed all of its obligations under both the agreements.

As to the merger clause contained within the lease, the HOSPITAL contends that is [*3]ineffective to abrogate the June 1997 agreement, since it covers only one discrete aspect of the parties' relationship, i.e., that of landlord and tenant. According to the HOSPITAL, the merger clause was intended solely to avoid any confusion that might arise out of the negotiations which preceded its execution. In this regard, the HOSPITAL contends that the June 1997 agreement (1) stands alone, (2) is separately enforceable, and (3) does not conflict with the terms of the lease, which is silent on the donation issue only because it was never intended to govern it. In addition, the HOSPITAL argues that so much of the lease as requires it to return the premises to DR. SARKIS was merely intended to signal the end of its tenure as tenant before assuming its contemplated status as the donee-owner.

In the alternative, the HOSPITAL contends that even if the June 1997 agreement is found to be unenforceable, the HOSPITAL has pleaded valid claims of equitable and/or promissory estoppel. According to the HOSPITAL, it reasonably and foreseeably relied upon the doctor's promise to donate the property when executing the eight-year lease, and it is now being denied the benefit of its bargain. Accordingly, the HOSPITAL contends that DR. SARKIS should be estopped from taking advantage of a situation which he wrongfully created. In this vein, the HOSPITAL argues that the failure of DR. SARKIS to inform it that he would not fulfill his obligation under the June 1997 agreement until the lease had expired precludes him from denying its enforceability. Moreover, the HOSPITAL claims that the doctor's promise is enforceable as a pledge to a charitable organization upon which the latter justifiably relied to its detriment when it obligated itself to pay more than one million dollars in rent over the eight-year term of the lease.

Finally, the HOSPITAL contends that since its cause of action for money damages has not been challenged, at least one of its claims remains viable. Alternatively, the HOSPITAL requests leave to replead to correct any perceived deficiencies in the complaint, and to add a cause of action for unjust enrichment.

The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law by tendering sufficient evidence to eliminate any material issues of fact from the case (see Sillman v. Twentieth Century-Fox Film Corp., 3 NY2d 395). Once this showing has been made, the burden shifts to the party opposing the motion to produce admissible evidence sufficient to establish material issues of fact requiring a trial (see Zuckerman v. City of New York, 49 NY2d 557, 562). Accordingly, "mere conclusions, expressions of hope or unsubstantiated allegations or assertions [will be deemed] insufficient" (Zuckerman v. City of New York, 49 NY2d at 562).

It is well established that "the interpretation of a contract is a question of law for the court," and is properly considered in the context of a summary judgment motion (see National Union Fire Ins. Co. v. Christopher Assoc., 257 AD2d 1, 11). Moreover, one of the fundamental principles of contract interpretation is that the intent of the parties as revealed by the language which they have chosen is given controlling weight (see Slatt v. Slatt, 64 NY2d 966, 967 [1985]). In this context, the court must consider the contract as a whole, since as some of its provisions may operate to modify, explain or limit the otherwise apparent meaning of others. As the Court of Appeals has noted, where the intent of the parties may be discerned from within the four corners of the agreement, it is that intent which must be given effect (id.). Thus, a court may not fashion a new contract under the guise of construction (id.), but is enjoined to achieve "a [*4]practical interpretation of the expressions of the parties to the end that there be a realization of [their] reasonable expectations" (Sutton v. East Riv Sav Bank, 55 NY2d 550, 555 [citations and internal quotation marks omitted]). Accordingly, a contract should be read to give effect to "any promise which a reasonable person in the position of the promisee would be justified in understanding" from its terms (id.).

Here, upon a reading of the June 1997 agreement as whole, it is the opinion of this Court that the language employed by the parties specifically contemplated the execution of a "formal net lease", which was supposed to have been prepared "within 14 days"(Defendant's Exhibit B, para 3). In this regard, it is not without significance that the promise to donate the medical building appears only in the paragraph calling for the preparation of a formal lease, and that the donative aspect of the June agreement is the only part thereof that is not addressed in the lease finally executed in December. Moreover, said lease contains an unequivocal "general merger clause" providing that all prior "understandings, terms or conditions" agreed by and between the respective parties "are deemed merged in the Lease," and that neither party "has relied upon any representation, express or implied, not contained [there]in." In addition, the lease contains numerous other terms and conditions relative to the HOSPITAL's surrender of the premises (whether by reason of expiration or default) that are clearly inconsistent with any intention or obligation to donate the premises to the HOSPITAL. Viewed in this fashion, both documents, addressing to the same subject, must fairly and reasonably be read to form a single agreement, the terms of which the parties unambiguously contemplated would be merged into the December lease. Accordingly, in the absence of any language in that lease even remotely obligating DR. SARKIS to donate premises to the HOSPITAL, there is no surviving donative provision for the Court to enforce. The mere assertion by one party to a contract that [the] language means something to it when it is otherwise clear and unequivocal when read in context in insufficient, standing alone, to raise a triable issue of fact (see National Union Fire Ins Co. v. Christopher Assoc., 257 AD2d at 11). Certainly, had these sophisticated parties intended that the obligation to donate the premises survive the execution of the formal lease, they would have expressly provided therefor.

With respect to the HOSPITAL's claim of equitable or promissory estoppel, it is the opinion of this Court that plaintiff has submitted no proof demonstrating that it reasonably and foreseeably relied upon the alleged promise to donate the premises in entering into the lease with DR. SARKIS, or that it has sustained any injury as a result thereof. In fact, the HOSPITAL has failed to show that it did not receive the benefit of its bargain, that it could or would have leased elsewhere or on different or better terms if there was no promise of a donation; or that it detrimentally changed its position in reliance upon the anticipated donation. The same is true for any claim of injury arising out of the doctor's failure to explicitly proclaim his apparent change of heart before the HOSPITAL signed the eight-year lease. Rather, the proof submitted, e.g., the copy of the June 1997 agreement and the subsequent lease, unambiguously indicates that the doctor ultimately did not agree to donate the premises at the end of the lease, and any present attempt by the HOSPITAL to recast the parties' intentions by reference to extrinsic evidence must be disregarded (see e.g. Bethlehem Steel Co. v. Turner Constr. Co., 2 NY2d 456, 460). As for the HOSPITAL's claim that the "promise" of a donation is enforceable as a charitable pledge, it is sufficient to note the HOSPITAL has failed to adduce any evidence that it [*5]incurred any liability or suffered a detriment based on the purported pledge, and the mere fact that it paid rent to DR. SARKIS pursuant to the terms of the lease, does not, by itself, support any such claim.[FN1]

Finally, with respect to the HOSPITAL's argument that it retains a viable cause of action for money damages predicated on breach of contract, it must be noted that it has already been determined in the context of its cause of action for specific performance that DR. SARKIS is not in breach of the parties' agreement as merged into the December lease. Accordingly, the HOSPITAL's alternative cause of action for money damages based on the doctor's alleged breach of that same contract must also be dismissed.

The HOSPITAL having failed to offer any evidence raising a material issue of fact in opposition to the doctor's prima facie showing in support of dismissal (see Prudential Wykagl/Rittenberg Realty v. Calabria-Maher, 1 AD3d 422), his motion for summary judgment is granted (see Zuckerman v. City of New York, 49 NY2d at 562).

On this basis, the Court need not consider any further issue.

Accordingly, it is hereby:

ORDERED that the motion for summary judgment by defendant ESHMAIL M. SARKIS, d/b/a ESHMAIL M. SARKIS, M.D., P.C. is granted, and the complaint is dismissed; and it is further

ORDERED that the Clerk enter judgment accordingly.

E N T E R,

____________

Dated: May 10,2006 J.S.C. Footnotes

Footnote 1: By a parity of reasoning, plaintiff's request for leave to amend the complaint to assert a cause of action for unjust enrichment is without support on the present state of the record (see generally Unclaimed Prop. Recovery Serv. v. Chase Manhattan Bank, 25 AD3d 688; Sergeants Benevolent Assn Annuity Fund v. Renck, 19 AD3d 107).