Ray & W Cut Inc. v 240 W. 37 LLC

[*1] Ray & W Cut Inc. v 240 W. 37 LLC 2008 NY Slip Op 52583(U) [22 Misc 3d 1103(A)] Decided on December 22, 2008 Supreme Court, New York County Madden, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 December 22, 2008
Supreme Court, New York County

Ray & W Cut Inc., Plaintiff,

against

240 West 37 LLC, Defendant.



111411/07

Joan A. Madden, J.

In this commercial landlord and tenant action, defendant landlord moves for an order pursuant to CPLR 2221(d) granting leave to reargue the portion of this court's Interim Order dated March 6, 2008, granting plaintiff's motion for a preliminary injunction to the extent of "setting this matter down for an evidentiary hearing as to the issues of 24 hour access and the operation of the elevators."[FN1] Additionally, defendant moves for an order pursuant to CPLR 3212 granting summary judgment dismissing the amended complaint in its entirety.

"A motion for reargument, addressed to the discretion of the court, is designed to afford a party an opportunity to establish that the court overlooked or misapprehended the relevant facts, or misapplied any controlling principle of law." Foley v. Roche, 68 AD2d 558, 567 (1st Dept 1979). Reargument is not intended "to serve as a vehicle to permit the unsuccessful party to argue once again the very questions previously decided . . . [or] to provide a party an opportunity to advance arguments different from those tendered on the original application." Id at 567-568.Applying this standard, reargument is not warranted, as defendant fails to [*2]establish that the court overlooked or misapprehended the facts or misapplied the law, in directing a hearing on plaintiff's motion for a preliminary injunction.

In accordance with CPLR 6301, the court directed a hearing on plaintiff's motion for a preliminary injunction and the issues of 24-hour access and elevator service.[FN2] Basically, plaintiff asserts that it is seeking to preserve the status quo as it existed under the prior landlord/owner of the building, where the tenants were allowed 24-hour access and had adequate elevator service. Plaintiff alleges that shortly after defendant purchased the building, it took actions to empty the building by commencing summary eviction proceedings against "virtually all of the tenants."[FN3]

Plaintiff also alleges that defendant sharply reduced the hours of access to the building, instituted new and inconvenient security procedures for gaining entry into the building, and has not provided passenger and freight elevator service, all of which have adversely affected plaintiff's ability to conduct its garment manufacturing business.

Specifically, on October 19, 2007, defendant advised the tenants that "[c]ommencing on October 22, 2007, access to the building for Tenants, their guests, employees, invitees, licensees, vendors, etc. shall be restricted to business days from 8:00 a.m. to 6:00 p.m. and Saturdays from 8:00 a.m. to 1:00 p.m. only." Plaintiff's president submitted an affidavit that he "and other garment business tenants would not have leased space in this building if it were not a 24 hour building." As to the issue of elevator service, plaintiff alleged that since defendant acquired the building, "rarely has a week gone by without at least one of the elevators being out of service," and "[s]ome days, both elevators are out of service for hours."[FN4] Plaintiff submitted information complied by a tenant, that during the period from January 11, 2008 to February 5, 2008, one or both elevators were out of service either all day or a substantial portion of a day, on ten separate days. Plaintiff asserted that if the court directed a hearing, defendant should be directed to produce a witness from its elevator service company, to "determine whether those outages are intentional."

Based on the foregoing, the court previously determined that a hearing was necessary to resolve plaintiff's motion for a preliminary injunction, as plaintiff was entitled to an opportunity to establish the likelihood of its success on the merits of its claims for breach of the lease, based [*3]on defendant's alleged failure to provide 24-hour access and adequate elevator service.

In seeking reargument, defendant contends that plaintiff's motion for a preliminary injunction should have been denied without a hearing, as the parties' lease "clearly and unambiguously allows Landlord to restrict access to the Building to certain delineated hours," and plaintiff is "unable, as a matter of law, to introduce any evidence showing that Defendant has waived' its right to enforce the Leases' access provisions after it notified tenants of its decision to enforce the governing provisions." Defendant's contentions are not persuasive.

Even though the lease contains non-waiver and merger clauses, plaintiff relies on the course of dealings between the parties in asserting that the prior landlord permitted 24-hour access and provided adequate elevator service. It is well settled that parties to a lease may waive a non-waiver clause where the reasonable expectations of both parties under the lease have been modified by subsequent actions of the parties. See e.g., TSS-Seedman's, Inc. v. Elota Realty Co., 72 NY2d 1024, 1027 (1988) (notwithstanding lease nonwaiver clause, landlord's acceptance of rent waived tenant's default in payment of rent, and lease remained in effect); Kenyon & Kenyon v. Logany, LLC, 33 AD3d 538, 539 (1st Dept 2006) (despite lease nonwaiver clause, landlord waived its right to insist on written notice from tenant exercising its option to lease additional space, by not insisting on such notice for nearly 10 months after receiving tenant's oral notification and acting as if it had accepted the tenant's oral exercise of the option); Simon & Son Upholstery, Inc. v. 601 West Associates, LLC, 268 AD2d 359, 360 (1st Dept 2000) (landlord waived nonwaiver and merger clauses and right to object to photography studio, where prior landlord was fully apprised and involved in the photography studio modifications, including approving the renovations, providing tenant parking, accepting payments for the photography studio tenant, and using the premises in a sales brochure); Lee v. Wright, 108 AD2d 678, 680 (1st Dept 1985) (parties may waive a non-waiver clause and issue of fact existed as to whether landlord's acceptance or rent for a four-year period, without any effort to terminate the tenancy, waived landlord's right to object to tenant's continued occupancy).

As stated above, plaintiff alleges that the prior landlord provided the tenants with 24-hour access and adequate elevator service. At a minimum, such allegations are sufficient to raise issues for an evidentiary hearing as to whether "sufficient indicia that the reasonable expectations of the parties under the original lease were supplanted by subsequent actions." Simon & Son Upholstery, Inc. v. 601 West Associates, LLC, supra at 36. The decision in Simon & Son Upholstery, Inc. v. 601 West Associates, LLC, is particularly instructive. In that case, just as here, the tenant leased the premises from the prior owner, who sold the building. Relying on the nonwaiver and merger clauses in the lease, the new owner/landlord argued that the lease prohibited the tenant's use of the premises as a photography studio, and refused to provide after hours elevator service for the photography studio. Rejecting that argument, the First Department held that "[w]hile no explicit consent can be found in the record, it is clear from the course of dealings between the parties that the [prior] landlord consented to the use of the premises for a studio." The First Department concluded that "[s]ince we find that the prior landlord had consented to use of the part of the premises for a photography studio, and since the record indicates that the new landlord . . . was aware of the ensuing partial conversion, plaintiffs are entitled to a limited [preliminary] injunction" directing the landlord to provide elevator service after normal business hours. Id at 360.Based on that authority, the instant plaintiff is [*4]entitled to a hearing on its motion for a preliminary injunction, where it will have an opportunity to

demonstrate a course of dealings with the prior landlord, in which the prior landlord consented to provide 24-hour access and adequate elevator service.

Contrary to defendant's assertion, neither the parol evidence rule nor the statute of frauds precludes plaintiff from relying on an oral modification to the lease, as an oral modification can be exempt from the statute of frauds where partial performance is unequivocally referable to the claimed oral modification. See Rose v. Spa Realty Associates, 42 NY2d 338 (1977); Travis v. Fallani & Cohn, 292 AD2d 242, 244 (1st Dept 2002).

Turning to defendant's motion for summary judgment dismissing the amended complaint, the motion is granted in part and denied in part.

The amended complaint seek declaratory and injunctive relief, and damages based on the following causes of action: 1) a first cause of action for a declaratory judgment that defendant's notice of default dated August 9, 2007 is defective and plaintiff is not in default under the lease; 2) a second cause of action for a permanent injunction enjoining defendant and its agents from terminating or canceling plaintiff's lease, from interfering with plaintiff's right of possession, and from commencing any summary or other proceeding to terminate or cancel the lease; 3) a third cause of action for damages for tortious interference with the lease, alleging that "[s]ince the time that the defendant took title to the subject building, the defendant has engaged in a course of conduct designed to cause plaintiff to vacate its premises"[FN5]; 4) a fourth cause of action for breach [*5]of plaintiff's right to quiet enjoyment of the lease; 5) a fifth cause of action for violation of plaintiff's privacy, and the privacy of plaintiff's employees and guests; 6) a sixth cause of action for breach of the lease, based on defendant's failure to provide elevator service and failure to operate and maintain the elevators; 7) a seventh cause of action for an injunction "enjoining defendant from engaging in any conduct the same or similar to that described in paragraph 20 of the within complaint" (as noted above, paragraph 20 lists 15 separate actions constituting the alleged tortious interference); and 8) an eight cause of action for attorney's fees pursuant to paragraph 47 of the lease.

Defendant is entitled to summary judgment dismissing the third cause of action for tortious interference with the lease and the fifth cause of action for violation of privacy.

The elements of a claim for tortious interference with contract are: (1) the existence of a valid contract between plaintiff and a third party; (2) defendant's knowledge of that contract; (3) defendant's intentional procuring of the breach of the contract; and (4) resulting damages. See Foster v. Churchill, 87 NY2d 744, 749-750 (1996); William Kaufman Organization, Ltd v.

Graham & James LLP, 269 AD2d 171, 173 (1st Dept 2000). Plaintiff's tortious interference claim fails as matter of law. Plaintiff's claim is based solely on its lease with defendant and does not allege the existence of any contract with a third-party. See Buller v. Giorno, 28 AD3d 258 (1st Dept 2006); Koret, Inc. v. Christian Dior, S.A., 161 AD2d 156 (1st Dept), app den 76 NY2d 714 (1990). Thus, the third cause of action is dismissed.

The fourth cause of action for violation of plaintiff's privacy and the privacy of plaintiff's employees is without merit. New York does not recognize a common law right to privacy, and the only right to judicial relief for invasion of privacy is a limited statutory right under sections 50 and 51 of the Civil Rights Law, which are not applicable to the facts in this case.[FN6] See Arrington v. New York Times Co., 55 NY2d 433 (1982), cert den 459 US 1146 (1983); Cohen v. Hallmark Cards, Inc., 45 NY2d 493, 497 (1978); Wojtowicz v. Delacorte Press, 43 NY2d 858 (1978). Thus, the fourth cause of action is dismissed.

The balance of defendant's motion for summary judgment is denied. The first and second causes of action for a declaratory judgment and an injunction, relate to the original relief sought when plaintiff commenced this action by moving for a Yellowstone injunction staying defendant's notice of default that plaintiff subleased and renovated the premises without the [*6]landlord's prior written approval. Plaintiff's motion for a Yellowstone injunction was granted, and the issues underlying the default notice still need to be resolved, while the Yellowstone injunction remains in place.

In the fourth cause of action, plaintiff asserts a claim for breach of the covenant of quiet enjoyment, which requires an actual or constructive eviction. Jacobs v. 200 East 36th Owners Corp., 281 AD2d 281 (1st Dept 2001). Plaintiff's allegations as to the reduction in hours of access to the building and the withholding of elevator service, arguably support a partial actual eviction. See Barash v. Pennsylvania Terminal Real Estate Corp., 26 NY2d 77, 83 (1970) (citing Lawrence v. Edwin A. Denham Co., 58 Misc 543 (App Term 1908) [actual partial eviction where tenant had unrestricted right to enter building at any hour of the day, and landlord barred tenant from entering the building at certain times]); Union City Union Suit Co., Ltd. v. Miller, 162 AD2d 101 (1st Dept 1990), app den 77 NY2d 804 (1991) (landlord's removal of freight elevator which was absolutely essential to tenant's beneficial enjoyment of the premises, constituted an actual partial eviction); Rasch, 2 New York Landlord & Tenant, §28.15 (4th Ed); but see Cut-Outs, Inc. v. Man Yun Real Estate Corp., 286 AD2d 258 (1st Dept 2001), lv app den 100 NY2d 507 (2003) (landlord's interference with ingress and egress to building did not result in a partial actual eviction, where tenant did not contend that it was deprived of access, but only that access was slower, less convenient and less pleasant); Graubard, Mollen, Horowitz, Pomeranz & Shapiro v. 600 Third Avenue Assocs, 240 AD2d 161 (1st Dept 1997) (no actual partial eviction where the landlord's reduction in elevator service never resulted in denial of access). Thus, the fourth cause of action shall stand.

The sixth cause of action for breach of the lease based on the reduction in elevator service, shall stand. The amended complaint alleges that "[p]ursuant to the express terms of the lease, the defendant is required to provide both passenger and [freight] elevator services to plaintiff." As noted above, plaintiff alleges that since defendant acquired the building, one or

both elevators have been out of service on a weekly basis, and the frequency of such outages suggests they may be intentional.

The seventh cause of action seeks an injunction "enjoining defendant from engaging in any conduct the same or similar to that described in paragraph 20 of the within complaint." Paragraph 20 is part of the third cause of action for tortious interference with the lease, which is being dismissed. However, the allegations in paragraph 20 shall stand to the extent they support a claim for breach of the parties' lease. For example, as noted above, the court has directed a hearing on plaintiff's motion for a preliminary injunction so that plaintiff can establish the likelihood of its success on the merits of its claim for breach of lease based on defendant's alleged failure to provide 24-hour access. Plaintiff's allegations as to the 24-hour access issue are contained in paragraph 20 of the amended complaint, which states, inter alia, that defendant "chang[ed] the hours of access in the building from 24-hour access, as it has been since the inception of plaintiff's lease, to extremely limited access of only ten hours Monday through Friday, and four hours on Saturday." Thus, the seventh cause of action shall stand only to the extent the allegations in paragraph 20 can be construed to support a claim for a breach of the parties' lease. [*7]

The eighth cause of action seeks attorney's fees "pursuant to paragraph 47' of the lease, if plaintiff is the prevailing party in this action." Paragraph 47 of the Rider to the lease gives both plaintiff and defendant the right to reasonable attorney's fees as the "successful party" to "any action or proceeding against the other in connection with this Lease." Thus, the eighth cause of action shall stand.

Accordingly, it is hereby

ORDERED that defendant's motion for leave to reargue is denied; and it is further

ORDERED that defendant's motion for summary judgment is granted only to the extent of severing and dismissing the third and fifth causes of action, and the motion is denied as to the first, second, fourth, sixth, seventh and eighth causes of action; and it is further

ORDERED that the parties are directed to appear for a preliminary conference on January 8, 2009 at 9:30 a.m., in Part 11, Room 351, 60 Centre Street; and it is further

ORDERED that the parties are directed to appear for the hearing on plaintiff's motion for a preliminary injunction on January, 2009 at 9:30 a.m.

DATED: December 22, 2008ENTER:

/s

______________________

J.S.C. Footnotes

Footnote 1:The court previously issued a Yellowstone injunction in a decision and order dated January 23, 2008, which stayed the period for plaintiff to cure the alleged defaults in defendant's August 9, 2007 notice of default, i.e subletting and renovating the premises without the landlord's prior written approval.

The court is simultaneously considering a related action by seven other tenants in the same building, Triple Fashion Corp. v. 240 West 27 LLC, Index No. 115823/07. The plaintiffs in that action did not seek Yellowstone relief. However, the plaintiffs in the two actions are represented by the same counsel and are moving for identical preliminary injunctions. The court directed a joint hearing the motions, but plaintiffs consented to stay the hearings in light of defendant's identical motions for reargument and summary judgment.

Footnote 2:On November 7, 2007, the court signed plaintiff's order to show cause and issued a temporary restraining order that "plaintiff and its employees shall have reasonably immediate access based on passes issued as of this date, and a method shall be established so that any additional employees or others entitled to access plaintiff's premises shall be issued passes within a reasonable time of application" and "plaintiff and its employees shall have access to the premises till 7 p.m. on weekdays."

Footnote 3:According to plaintiff, two tenants, in addition to plaintiff in the instant action, commenced actions of their own against defendant in Supreme Court for Yellowstone injunctions, and defendant commenced approximately 12 separate summary proceedings against other tenants in Civil Court, seeking to evict them.

Footnote 4:The issue of elevator service is specifically addressed in plaintiff's supplemental motion papers.

Footnote 5:The third cause of action (paragraph 20 of the amended complaint) lists the following specific actions that defendant has allegedly engaged in:

a) instituting frivolous lawsuits for de minimis breaches of other tenants' long term leases; b) removing the locks to the entrance door of the subject building and allowing strangers and vagrants access to said building; c) shutting down the passenger and freight elevators preventing access to plaintiff's premises; d) failing to properly repair the passenger and freight elevators, preventing access to the plaintiff's premises; e) alleging a non-existent police operation as a basis for instituting unnecessary restrictive access policies; f) instituting a policy requiring building identification cards on virtually no notice, causing substantial and unreasonable delays in the plaintiff gaining access to its own premises; g) threatening to refuse to issue building identification cards without pay stubs for plaintiff's employees; h) requiring new building identification cards two weeks after issuing the first building identification cards, again causing substantial and necessary delays in the plaintiff gaining access to its premises; i) requiring that plaintiff and its employees permit their personal identification cards to be copied before permitting access; j) refusing to allow access to guests and visitors of the plaintiff unless they show identification and permit it to be copied, even if the plaintiff identify [sic] the guests/visitors, and request that they be given access; k) hiring individuals to act as building security' who are rue and offensive, and treat plaintiff, its guests and customers in a manner so as to discourage or prevent access to the subject building and the conduct of business; l ) hiring individuals who are rude and offensive and illegally enter the premises of the plaintiff; m) retaining employees and independent contractors who intimidate, plaintiff, its guests, customers and visitors; n) changing the hours of access in the building from 24 hour access, as it has been since the inception of plaintiff's lease, to extremely limited access of only ten hours Monday through Friday, and four hours on Saturdays; and o) threatening plaintiff and its employees with arrest if they remain in their respective premises after 7:00 p.m., despite the fact that past and common practice for the entire period for all of the tenants was to permit 24-hour access to the subject building.

Footnote 6: Civil Rights Law §50 prohibits the use for "advertising purposes or the purposes of trade . . . the name, portrait or picture of any living person without having first obtained the written consent of such person." The violation of section 50 is a misdemeanor, and section 51 makes a violation of section 50 actionable in a civil suit for equitable relief and damages.