402 W. 38th St. Corp. v 485-497 Ninth Ave. Partners, LLC

[*1] 402 W. 38th St. Corp. v 485-497 Ninth Ave. Partners, LLC 2007 NY Slip Op 51654(U) [16 Misc 3d 1131(A)] Decided on August 28, 2007 Supreme Court, New York County Gische, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 August 28, 2007
Supreme Court, New York County

402 West 38th Street Corp., Plaintiff,

against

485-497 Ninth Avenue Partners, LLC, Defendant.



485-497 Ninth Ave. Partners, LLC, Plaintiff,

against

402 West 38th Street Corp., Defendant.



001196/07



Plaintiff's counsel is HERRICK & FEINSTEIN, 2 PARK AVENUE, NEW YORK, NEW YORK, 10016

Tel: 212 592-1400

Defendant's counsel is CASTRO & KARTEN, 444 MADISON AVENUE, NEW YORK, NEW YORK, 10022

Tel: 212 826-3800

Judith J. Gische, J.

Plaintiff, 402 West 38th Street Corp. ("402 West") commenced an action (index # 600119/07) seeking declaratory and injunctive relief, as well as money damages, in connection with an agreement, known as a Zoning Lot and Development Agreement ("ZLDA"), made with defendant 485-497 Ninth Avenue Partners, LLC ("485 Ninth"). 485 Ninth commenced its own separate action (index # 100674/07) for declaratory relief regarding the parties' obligations under the ZLDA.[FN1] Justice Karla Moskowitz severed the causes of action for declaratory and injunctive relief for expedited trial. A joint bench trial was held before this court on each of the parties' claims for declaratory relief and 402 West's claim for injunctive relief on May 15, June 13, June 15, June 22 and June 25 of 2007. The complaints are, for the most part, mirror images of one [*2]another, each seeking to have the court adjudicate the parties' rights and obligations under the same provisions of the ZLDA in connection with 402 West's efforts to develop a major real estate project on its portion of a zoning lot in which both parties have certain ownership interests ("combined zoning lot"). The disputes center on 402 West's rights, if any, to compel a zoning lot merger with a contiguous lot and whether the proposed project complies with the ZLDA setback provisions and/or 485 Ninth's retained easement under the ZLDA. Post trial Memoranda of Law were submitted on July 20, 2007. Additional submissions were completed on July 31, 2007.[FN2]

Based upon the credible evidence adduced at trial, the court makes the following findings of fact and conclusions of law:

402 West is a corporation. Prior to June 1996, 402 West owned a large parcel of real estate in Manhattan bounded by 37th Street to the South, 38th Street to the North, Ninth Avenue to the East and the entrance to the Lincoln Tunnel on the West (the "parcel"). At that time, the principal and sole shareholder of 402 West was Martin Fine. The property was improved with seven existing multi-family residential buildings on lots 32, 33, 34, 35, 36, 37 and 38 ("Lots 32-38"). The buildings had 54 residential units and additional commercial spaces on the ground floors. They were all severely dilapidated and in dangerous condition, with many outstanding building and housing code violations. 402 West had previously filed for bankruptcy.

In June 1996, in a transaction approved by the Bankruptcy Court, 485 Ninth purchased lots 32-38 with the seven existing buildings. The parcel remained one combined zoning lot both before and after the sale. 402 West retained, for itself, the remainder of the parcel, along with the vast majority of the development rights that applied to the combined zoning lot. The ZLDA was agreed to as part of the sale. In general, the ZLDA permits 485 Ninth to use and improve the structures on lots 32-38, provided they will not be built any taller than they were at that time of purchase and do not utilize excess rights or unused floor area available to the entire combined [*3]zoning lot. In effect the ZLDA permits 485 Ninth to gut rehabilitate all of the existing buildings and continue their use as mixed commercial/residential properties. The ZLDA also contemplates that 402 West will be able to develop the remainder of the parcel to the fullest extent possible.

Insofar as directly pertinent to the parties' present disputes the ZLDA provides:

"¶19.(E) If owner 2 shall from time to time wish to add other premises to the Combined Zoning Lot, or incorporate additional unused excess floor area or other unused development rights attributable to other premises which comply with the requirements of contiguity set forth in the definition of Zoning Lot in the Resolution, then First Land, Second Land and such other premises or Ancillary Land may be combined into one zoning lot for the purposes of the Resolution" ("zoning lot merger provision").

***

"¶6. With respect to any construction adjacent to that portion of the first Property at 497-499 Ninth Avenue, Owner 2 shall set back any construction on Second Property a minimum of three (3) feet from the North Wall of 497-499 Ninth Avenue. Owner 1 shall be authorized to install lot line windows on the north wall of 497-499 Ninth avenue" ("setback provision").

***

"¶21. Owner 1 shall have an easement and right of way as and over Second Property for continued use of passage as the same now exists for egress from the First Building as a secondary means of egress for fire and building Code requirements to repair and maintain fire escapes" ("easement provision").

Between 1996 and the present, 485 Ninth gut rehabilitated only two of the buildings (on lots 36 and 37) and relocated all of the existing tenants into them. The other five buildings are sparsely tenanted with employees of 485 Ninth. It still intends to gut rehabilitate the remaining buildings, when it can secure appropriate financing.

In 2005, certain investors ("new investors") purchased the stock of 402 West from Martin Fine, with the approval of the bankruptcy court. They paid in excess of seven million dollars and assumed the corporate liabilities. Since in or around November 2005, the new investors have been involved in negotiations with the Port Authority ("PA") to embark on a major real estate development project that contemplates using both those portions of the parcel still available to 402 West and the adjoining PA real estate to build four modern luxury multi-residential dwellings with attendant public parks. As currently envisioned, the project in principal calls for building supports over the Lincoln Tunnel entrance on which two of the buildings will be built. Two smaller buildings are intended to be built on 402 West's portion of the parcel. There will be a public park that sits primarily on the PA property, but will also take in a portion of the parcel as well.

There is no existing agreement between the new investors, and/or 402 West and the PA. No plans have been filed with the Buildings Department. 402 West has made certain [*4]preliminary investments in the project, however, already amounting to millions of dollars. They represent that if the project is realized as they envision it, it will be valued at between $500 and $600 million dollars. In connection with the joint development of their portion of the parcel and the PA property, 402 West claims that it needs to merge the 402 West zoning lot with the PA zoning lot. They believe that they have the right to do this under the ZLDA. Consequently, in November 2006, 402 West forwarded a document entitled Declaration of Zoning Lot Restrictions ("Declaration") for 485 Ninth's signature and acknowledgment of the merger. The Declaration was never signed. Mr. Israeli, 485 Ninth's principal, confirmed during trial that he will not sign it because he believes he is not required to under the ZLDA.

402 West retained architects who rendered both schematics of the proposed buildings and a "footprint" of how the two proposed smaller buildings would sit on the parcel. In addition, it claims to have also sought and obtained building department pre-approval for a design that would leave a three foot alley between 485 Ninth's northern most building located on lot 38 ("North 38 building") and their proposed building, but would otherwise have a thin wall with a door to the alley on Ninth Avenue, to fulfill a Zoning Resolution requirement of continuous building frontage on Ninth Avenue.

1. Actual Controversy

At the conclusion of 402 West's case, 485 Ninth Avenue moved to dismiss 402 West's complaint, claiming that the court did not have an actual controversy before it. 485 Ninth relied upon the absence of building plans for the project and the fact that 402 West had no actual agreement with the PA to undertake the project. It argues that 402 West does not even have the PA's agreement to the zoning lot merger.

CPLR § 3001 permits this court to render a declaratory judgment regarding the rights and legal relations of parties where there is an actual and otherwise justiciable controversy before it.A request for a declaratory judgment is ordinarily premature where a future event affecting the obligations of the contracting parties is contemplated, yet uncertain of occurrence and beyond the parties' control. Such relief is available, however, where the likelihood that a contingent event will occur is great and the declaration will have the immediate and practical effect of influencing the parties' current conduct. Remsen Apartments, Inc. v. Nayman, 89 AD2d 1014 (2nd dept 1982) affd. 58 NY2d 1083 (1983); Butler v. Goldberg, 40 AD3d 333 (1st dept. 2007); 40-56 Tenth Avenue, LLC v. 450 West 14th St. Corp., 22 AD3d 416 (1st dept. 2005).

At bar, the court concludes that the parties have a real controversy. The ZLDA contemplates 402 West's future development of its portion of the parcel. Although 402 West does not have a fully developed project which includes filed plans with the building department, it is clear that it has already expended considerable funds, hired professionals to develop schematics and engaged in substantial negotiations with the PA toward a goal of development. It has expressed its desire to develop the parcel to its maximum capacity and it is also clear that 485 Ninth believes that the project, as presently envisioned, will violate its rights under the ZLDA. 402 West does not want to proceed further with the project without knowing that it is in conformance with the law. While the outcome of the parties' present disputes will not entirely prohibit development of the parcel, it will seriously affect the scope of the project, including the size of the buildings that can be erected on the parcel. Since the outcome of these court proceedings will have an immediate and practical effect of influencing the parties' conduct, the [*5]matters in dispute are real and can be adjudicated at this time. 40-56 Tenth Ave. LLC v. 450 West 14th St. Corp., supra.

The court rejects 485 Ninth's specific argument that in order for there to be an actual controversy with respect to the merger of the zoning lots, 402 West must show, at a minimum, that the PA has already consented to the merger. Without such consent 485 Ninth argues that there is no zoning lot merger to compel. Likewise it rejects the argument that an actual enforceable development agreement with the PA is necessary for this action to proceed.

The operative question with respect to whether there is a real controversy is whether the court's decision will affect 402 West's behavior. The court finds that the answer is clearly yes. In this regard the court credits Mr. Dickey's (402 West's representative) testimony that 402 West's negotiations with the PA have progressed to a point where the zoning lot merger is a crucial part of any deal. 402 West's ability to bring its consent to the merger necessarily impacts ongoing negotiations with the PA and the scope of the development undertaken on either or both zoning lots.

2. Extrinsic evidence

At the commencement of the trial, 402 West made a motion in liminie to exclude any extrinsic evidence concerning the intent of the parties in connection with the interpretation of the ZLDA. The court reserved decision on the motion to permit the bench trial to begin expeditiously. In the interim, the court permitted extrinsic evidence, with the proviso that depending upon the ruling on the motion in liminie, such evidence may need to be stricken from the record. Accordingly, the issue of extrinsic evidence is a threshold issue that must be decided by this court before the merits of the parties' disputes are reached.

Two fundamental principles of contract construction are that: [1] agreements are to be construed in accordance with the parties intent; and [2] the best evidence of what the parties intend is what they provide in their writing. Greenfield v. Phillies Records, 98 NY2d 562 (2002); Van Kipnis v. Van Kipnis, __ AD3d ___ (1st dept. 2007); 2007 Slip Op 06074. A written agreement that is complete, clear and unambiguous on its face, must be enforced according to the plain meaning of its terms.

Extrinsic evidence of what the parties really intended is generally inadmissible and will be considered only if the agreement is found to be ambiguous. WWW Assoc. V. Giancontieri, 77 NY2d 162 (1990). It may then be offered to clarify the ambiguities. Cole v. Macklowe, 40 AD3d 396 (1st dept. 2007). It may not be used to create an ambiguity that otherwise does not exist. Before looking to evidence of what was in the parties' minds, a court must give due weight to what is in the contract itself. WWW Assoc. v. Giancontieri, supra; Van Kipnis v. Van Kipnis, supra.

While at the outset 402 West contended that none of the disputed ZLDA provisions were ambiguous, during trial it conceded that the easement provision was, in fact, ambiguous. Such provision describes the easement only as being that which was in existence at the time the ZLDA was executed. Without extrinsic evidence of the nature and extent of the existing easement at the time the ZLDA was executed, there is no basis for the court to determine the location of the easement. Thus, the court will consider extrinsic evidence regarding the interpretation of this ZLDA provision.The court, however, holds that neither the zoning lot merger provision nor the set back provision are ambiguous on their face. Thus, the extrinsic evidence on what the [*6]parties intended by such provisions when they negotiated or executed the ZLDA will not be considered by the court in connection with their interpretation. Such evidence is stricken from the record.

3. Zoning merger

The court finds that 485 Ninth has violated the ZLDA by failing to sign the Declaration. The court further finds that, as a consequence, and in accordance with the ZLDA, 402 West may utilize its power of attorney and execute such document on behalf of 485 Ninth.

The clear language of the ZLDA gives 402 West the right, as it chooses, to compel a zoning lot merger with an adjoining lot, meeting certain criteria of contiguity, etc. There is no dispute that the PA lot meets the required criteria. The court rejects 485 Ninth's argument that the right to join the zoning lots under the ZLDA is subject to its consent. There is no express language that makes such merger subject to 485 Ninth's consent. Nor is such a reading of the ZLDA implied by its language. In fact the ZLDA language implies just the opposite, that no consent is needed for the zoning lot merger.

The interpretation advocated by 485 Ninth would render the provision meaningless. In the absence of any provision dispensing with consent to a zoning lot merger, 485 Ninth's consent as co-owner of the combined zoning lot would clearly be required. Contract provisions are to be interpreted in a manner that gives fair meaning to all of the language employed and leaves no provision without force or effect. God's Battalion of Prayer Pentacostal Church, Inc. v. Miele Associates, LLP, 6 NY3d 371 (2006); Travelers Indemnity Co. v. Commerce and Industry Ins. Co. of Canada, 36 AD3d 1121 (3rd dept. 2007); American Express Bank Ltd. v. Uniroyal. Inc., 164 AD2d 275 (1st dept. 1990). Therefore, the applicable provision is construed to mean that no consent is required from 485 Ninth as a prerequisite to a zoning lot merger.

The difference in the use of other language in other provisions of the ZLDA does not require that the contract provisions at issue be given a meaning other than that which the clear words import. The use of the word "may" does not confer discretion upon 485 Ninth to withhold consent to a zoning lot merger. It is referable to 402 West's discretion to add other premises or development rights to the parcel as it so chooses.

495 Ninth additionally argues that the ZLDA provisions, which prohibit 402 West from interfering with its rights or those of its tenants, bar the proposed zoning lot merger. This court disagrees. The merger per se does not adversely affect 485 Ninth's rights or those of its tenants. Although 485 Ninth speculates that the actual development may have an adverse affect, consent to the zoning lot merger is not the same thing as consent to the planned development. There is not enough information about the actual development for either 485 Ninth or the court to determine whether it will interfere with or adversely affect the rights of 485 Ninth or its tenants in violation of the ZLDA. The court's determination that 402 West can merge the zoning lots is nothing more than that and it is without prejudice to any rights 485 Ninth may have to object to the actual development either under the ZLDA or at law.

Paragraph 4D of the ZLDA gives 402 West the general right to execute documents on 485 Ninths' behalf to effectuate the purposes of the ZLDA in the event that 485 Ninth fails to honor its obligations. Such provision gives 485 Ninth the right to ten (10) days advance Notice before such power of attorney is exercised. Consequently, the court gives 485 Ninth ten (10) days after service upon it of a copy of this Decision and Order with Notice of Entry to execute [*7]the Declaration. In the event no such declaration is executed and returned to 402 West, then 402 West may utilize its power of attorney to sign such document on 485 Ninth's behalf.

4. Setback requirements

The applicable ZLDA provision requires that "any construction" adjacent to the North 38 building be set back at least three feet. It is undisputed that the Zoning Resolution mandates that any construction along Ninth Avenue be contiguous with the adjoining structures fronting Ninth Avenue. NYC Zoning Resolution §23-633(a)(3). 402 West proposes to satisfy these two requirements by building a "false wall" of two to four inches in depth, with a door, behind which would be a three foot wide alley running the along side 485 Ninth's North 38 building. The false wall would extend up to the height of 495 Ninth's North 38 building. 402 West seeks a declaration that such false wall does not violate the ZLDA. In addition, 402 West seeks a declaration that its intention to cantilever its proposed building over the three foot alley, starting at a height three feet above 485 Ninth's North 38 building does not violate the ZLDA. 485 Ninth seeks a declaration that the wall and the cantilevered part of the proposed building do violate the ZLDA.

Collaterally, the parties have a dispute about whether 402 West obtained a pre-approval for the false wall from the Department of Buildings. This dispute is a red herring. The parties' rights emanate entirely from the ZLDA. On this issue, the ZLDA makes no reference to satisfying any Department of Building requirements. In fact nowhere in the ZLDA is there any reference to what impact, if any, the contiguity requirements of the Zoning Resolution have on the respective development rights of the parties. Whatever may or may not be acceptable to the Department of Buildings to satisfy contiguity requirements is not germane to the ZLDA set back requirements.

The ZLDA clearly prohibits any construction within three feet of the North 38 building. Although 402 West calls the proposed structure a "false wall," it is indeed a real wall and certainly "construction" as that term is plainly used and understood in the ZLDA. The wall, no matter how thin or inconspicuous 402 West believes it to be and no matter how minusculely 402 West argues it impinges upon 485 Ninth's property, is still a prohibited construction within three feet of 485 Ninth's North 38 building.

402 West's argument, that its design is consistent with the overall intent of the ZLDA which allows it to develop its portion of the parcel to the greatest extent possible, does not support a different interpretation. Whatever the overall intent of the ZLDA, its specific provisions which confer rights to 485 Ninth must also be given effect. Here the more specific right of a three foot setback given to 485 Ninth takes precedence over 402 West's more general rights to develop the parcel. Isaacs v. Westchester Wood Works, Inc., 278 AD2d 184 (1st dept. 2000).

The proposed cantilever which only begins three feet above the roof line of the North 38 building does not specifically violate the ZLDA setback rule. Such ZLDA provision, however, also refers to 485 Ninth's separate right to lot line windows in the North 38 building. In this regard, and contrary to 402 West's position, the right to lot line windows carries with it all rights that make the use of such windows legal. Ciocca-Lombardi Wine Co. Inc. v. Fucini, 204 AD 392 (1st dept. 1923).

The court rejects 485 Ninth's argument that the setback provision reference to "lot line" [*8]windows refers to zoning lot line windows and its consequent conclusion that since the North 38 building sits in the middle of the zoning lot, it could never have zoning lot windows. The term lot line windows as used in the ZLDA are afforded their plain meaning. The North 38 building sits on a particular lot. Thus the ZLDA reference to "lot line windows" is nothing more than the right of 485 Ninth to have windows that sit on or above the line of the lot that the building sits on, to wit: lot 38.

485 Ninth argues that the right to lot line windows necessarily carries with it the right to light and air and that the proposed cantilever will interfere with those rights.

In general, an adjoining landowner has no easement for light and ventilation absent an express written agreement. Chatsworth Realty 344 LLC v. Hudson Waterfront Company A LLC, 309 AD2d 567 (1st dept. 2003).The ZLDA provides no express right to 485 Ninth for light and ventilation in the three foot setback.[FN3] The government may, however, exercise its police power to impose limitations on a deprivation of light and air based upon public health and welfare. Chatsworth Realty 344 LLC v. Hudson Waterfront Company A LLC, 2003 WL 1085888 (NY Co. Supreme Ct.)(nor) affd. 309 AD2d 567 (1st dept. 2003). Consequently, there are New York City Administrative Code provisions that expressly deal with light and ventilation requirements for residential tenants. NYC Administrative Code §§ 27-732 et. seq.A landlord's failure to provide legal light and ventilation may be the basis for a claim of breach of warranty of habitability. Sutton Fifty-Six Co. v. Fridecky, 93 AD2d 720 (1st dept 1983). Paragraph 3F of the ZLDA expressly provides that any development by 402 West will not unreasonably interfere with the rights of 485 Ninth or its tenants to use its property.

These ZLDA provisions, when read together, mean that to the extent the lot line windows were used in satisfaction of 485 Ninth's obligation to provide light and ventilation to apartments in the North 38 building, 402 West's building's cantilever cannot interfere with that obligation. In this regard, the fact that the apartments are presently untenanted and that the windows are covered with an advertisement is not relevant. As much as the ZLDA contemplates 402 West developing it portion of the parcel, it also contemplates 485 Ninth rehabilitating its buildings and restoring them to their original residential/commercial use. Thus, to the extent that the North 38 building lot line windows were used to satisfy legal light and ventilation requirements in the existing apartments, they must continue to fulfill those requirements.

Notwithstanding the parties' relative rights under the ZLDA, there is insufficient evidence in this record for the court to make a declaration one way or the other about whether the proposed cantilever will adversely affect the 485 Ninth's right to legal lot line windows. 402 West has failed to provide any evidence whatsoever that the proposed cantilever does not interfere with 485 Ninth's right to maintain legal lot line windows on the North wall of the North 38 building. 485 Ninth likewise failed to provide sufficient evidence about the requirements for such windows to be legal. Although there was some evidence about the use of the rooms in which the windows sat, the evidence was not specific enough as to each window and each apartment. There was no evidence about the configuration of each of the relevant apartments, which would further impact on whether the windows would still be legal if a cantilever were built. For [*9]example, there was no evidence about other sources of light and ventilation that may or may not have been available in each affected apartment. Chatsworth Realty 344 LLC v. Hudson Waterfront Company A LLC, 2003 WL 1085888 (NY Co. Supreme Ct.)(nor) affd. 309 AD2d 567 (1st dept. 2003), supra.

In this regard the court finds that neither party has sustained their burden of proof with respect to whether the proposed cantilever violates or does not violate the parties' respective rights under the ZLDA. Consequently, neither party is entitled to any declaratory relief from the court on this issue.

5. Easement

Paragraph 21 of the ZLDA gives 485 Ninth an easement and right of way over 402 West's portion of the parcel as a secondary means of egress for fire and Building Code requirements to repair and maintain fire escapes. The easement given was the one in effect at the time the ZLDA was executed in 1996.

The court has already held that extrinsic evidence is necessary to determine the location and extent of the easement. Extrinsic evidence can consist of information regarding the parties' actions relevant to their intent at the time the contract was signed, as well as after-occurring conduct demonstrating how the parties actually interpreted the provision. Alternatives Federal Credit Union v. Olbios, LLC, 14 AD3d 779 (3rd dept. 2005).

The only extrinsic evidence describing the easement was the testimony of Mr. Israeli and Mr. Hodge, the property caretaker. The court rejects any effort by 402 West to rely upon the hearsay statements made by Mr. Fine to Mr. Dicky concerning the location of such easement. The testimony indicates that the easement runs along the back of 485 Ninth's buildings and out through the existing gate doors onto either 37th and/or 38th streets. Less clear from the testimony is whether each gate was intended as egress for all or only some of the buildings and/or whether the easement required access through both gates at the same time. Significant, however, is the fact that the ZLDA sets out the intended purpose of the easement, which is fire safety and Code compliance.

The policy of the law of easements is to favor the free and unobstructed use of realty by its owner. Any covenants restricting the use of property are strictly construed against those seeking to enforce them. Lafayette Auvergne Corp. v. 10243 Mgt. Corp., 35 NY2d 834 (1974). While the parties' failure to adequately describe an easement in a written document does not preclude the granting of an easement (Clemens v. Schultz, 200 AD2d 11 [4th dept. 1994]), the location of an easement by the court should still be consistent with the parties' intent and relative rights. Mosher v. Hart, 157 AD2d 931 (3rd dept. 1990).

402 West seeks a declaration that the proposed three foot alleyway depicted on its schematic in its exhibit 4 complies with the easement provision of the ZLDA. In the alternative, 402 West seeks to have this court direct the placement of an easement that would be in compliance with the ZLDA. 485 Ninth seeks a declaration that the easement is located along the entire back alley and through both gates.

The court finds that the three foot alley proposed by 402 West does not comply with the easement provisions of the ZLDA. At a minimum, the proposed easement does provide for a secondary egress for 485 Ninth s buildings located on lots 32, 33, 34 and 35. The evidence demonstrates, without question, that the fire escapes on each of the buildings on such lots were [*10]located in the rear. There is no ascertainable access whatsoever to the back of those buildings over 402 West's portion of the parcels that permits repair and maintenance of those fire escapes.

Significantly, this ZLDA provision makes express reference to Building Code requirements for fire safety. There was no evidence, expert or otherwise, that the proposed three foot alley complies with such code. There was no evidence of any pre-approval by the Department of Buildings that such proposed easement satisfies Code requirements for fire safety.

402 West's alternative request that the court fashion a compliant easement

if it is does not find its proposal satisfactory, is also rejected. 485 Ninth argues that such relief is not available because it was not requested in the original complaint. Certainly this is one basis to deny the new relief requested, but even if such relief had been requested, it would still be rejected by the court. There is simply insufficient evidence in the record from which the court could fashion an easement that would satisfy the ZLDA, Building Code requirements and 402 West's present plan of development.

The court also refuses 485 Ninth's request for the court to pinpoint the locations of the easement. Currently, 485 Ninth has the right to use the easement on the property as it remains undeveloped. There is no reason to fix the specific location at this time. 402 West has the right to develop its portion of the parcel, provided that it accommodates the easement and its intended use. Since the court believes the current proposal does not adequately account for the easement, there is no longer any controversy between the parties unless and until a new proposal is to be considered.

Conclusion

In accordance with this decision, the court finds that 402 West is entitled to a declaration on its first cause of action that under the ZLDA it may merge the parcel with the PA zoning lot and that 485 Ninth is either to sign the Declaration regarding such merger, or failing that, 402 West may sign such Declaration on 485 Ninth's behalf pursuant to its power of attorney. 402 West is not otherwise entitled to any further declaratory relief.

The court also finds that 402 West is not entitled to a permanent injunction against 485 Ninth prohibiting continued future breach of the ZLDA. The declaratory relief afforded to 402 West on its first cause of action provides a full and adequate remedy. Back to Health Family Chiropractic Office, P.C. v. Murphy, 261 AD2d 494 (2nd Dept 1999); Picotte Realty v Gallery of Homes, 66 AD2d 978 (3rd Dept 1978).

On 485 Ninth's complaint, the first cause of action seeks a declaration that the proposed project violated paragraphs 6 and 21 of the ZLDA. The court finds that 485 Ninth is entitled to a declaration only to the extent that the proposed wall on Ninth Avenue violates its rights under ZLDA paragraph 6 because it constitutes construction within three feet of the north wall of its building located at 497-499 Ninth Avenue. 485 Ninth is not otherwise entitled to any further declaratory relief on its first cause of action.

The court further finds that 485 Ninth is not entitled to any relief it seeks on its second cause of action related to paragraph 19 of the ZLDA and the parties' rights regarding the merger of zoning lots.

Order

In accordance herewith it is hereby: [*11]

ORDERED that 402 West 38th Street Corp. is granted judgment against 485-497 Ninth Ave. Partners, LLC on its first cause of action only to the extent of declaring that:

[1] under the Zoning Lot and Development Agreement it is entitled to merge the Combined Zoning Lot, as defined in the Zoning Lot and Development Agreement, with the Port Authority Zoning Lot without the prior consent of 485-497 Ninth Ave. Partners, LLC; and

[2] 485-497 Ninth Ave. Partners LLC is given ten (10) days, from the service upon it of a copy of this Decision and Order with Notice of Entry, to sign the Declaration of Zoning Lot Restrictions on its own behalf and return it to 403 West 38th Street Corp.; and

[3] in the event 485-497 Ninth Ave. Partners, LLC fails to sign and return the Declaration of Zoning Lot Restrictions on its own behalf within the 10 day period provided, then 402 West 38th Street Corp. may use the power of attorney granted to it in the Zoning Lot and Development Agreement to sign the Declaration of Zoning Lot Restrictions on behalf of 485-497 Ninth Ave. Partners, LLC; and it is further

ORDERED that 402 West 38th Street Corp.'s first cause of action for declaratory judgment is otherwise denied and dismissed; and it is further

ORDERED that 402 West 38th Street Corp.'s second cause of action for a preliminary injunction is denied and dismissed in its entirety; and it is further

ORDERED 485-497 Ninth Ave. Partners, LLC is granted judgment against 402 West 38th Street Corp. on its first cause of action only to the extent of declaring that 402 West 38th Street Corp.'s proposed construction of a wall contiguous with the building known as 497-499 Ninth Avenue in Manhattan violates paragraph 6 of the Zoning Lot and Development Agreement; and it is further

ORDERED that 485-497 Ninth Ave. Partners, LLC's first cause of action for declaratory judgment is otherwise denied and dismissed; and it is further

ORDERED that 485-497 Ninth Ave. Partners, LLC's second cause of action for declaratory judgment is denied and dismissed in its entirety; and it is further

ORDERED that the first and second causes of action in each of the parties complaints are hereby severed and the Clerk of the Court is hereby directed to enter judgment in accordance herewith; and it is further

ORDERED that 402 West 38th Street Corp.'s third cause of action for money damages is hereby scheduled for a conference before this court on September 27th , 2007 at 9:30 a.m.; and it is further

ORDERED that this constitutes the court's decision and order after trial and that any requested relief not expressly granted herein is denied.

Dated: New York, New York

August 28, 2007

_________________

J.G. J.S.C. Footnotes

Footnote 1: These matters were originally separately commenced. JHO Gammerman directed that 485 Ninth's complaint be dismissed and that the claims therein be considered as counterclaims. The parties with the approval of this court later agreed to reinstate 485 Ninth's complaint and that the two matters be jointly tried.

Footnote 2: 485 Ninth submitted a post brief letter (dated July 25, 2007) which was responded to by 402 West (letter dated July 30, 2007), which was in turn replied to by 485 Ninth (letter dated July 31, 2007). To the extent 485 Ninth requests oral argument on the issues raised in the Memoranda of Law, the court denies such request. The positions of the parties are adequately set forth in their post trial submissions.

485 Ninth also objects to Appendix A to 402 West's Memoranda of Law because it dehors the record. 402 West argues that it is only a demonstrative aid, gleaned from evidence in the record. To the extent that Appendix A quantifies the extent to which the proposed development project will be affected by 485 Ninth's interpretation of the ZLDA, it contains information not otherwise developed in the record. There were no such numbers put in evidence, nor was the raw data from which to make such mathematical calculations put in evidence. Appendix A will not, therefore be considered by the court.

485 Ninth also objects to 402 West's request that this court fix an easement in dispute in this action. These arguments on this issue are considered later in the body of this decision.

Footnote 3:This stands in distinction to ZLDA ¶ 1 which expressly gives 402 West an easement to light and air over 485 Ninth's buildings.