Marcial v Central Park N. Parking Sys., Inc.

[*1] Marcial v Central Park N. Parking Sys., Inc. 2011 NY Slip Op 50340(U) Decided on January 26, 2011 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 January 26, 2011
Supreme Court, New York County

Jose Marcial, Plaintiff,

against

Central Park North Parking Systems, Inc. and Willie Mae Scott, Defendants.



602208/05

 

Gregory L. Reid, Esq. for plaintiff

Reid Rodriguez & Rouse, LLP

1285 Ave of Americas, Suite 3513

NY NY 10019

212-554-4417

Joan A. Madden, J.

In this action for damages for breach of a commercial lease, plaintiff tenant moves for an order pursuant to CPLR 3212 granting summary judgment. Defendants oppose the motion and cross-move for summary judgment dismissing the complaint.

The following facts are not disputed unless otherwise noted. On July 1, 1994, plaintiff Jose Marcial as "Tenant" executed a 10-year written lease with defendant Central Park North Parking Systems, Inc. (Central Park), as "Owner and/or Landlord." for store premises located at 1-7 St. Nicholas Avenue, New York, New York (a/k/a 100 West 111th Street) (the "premises" or "subject premises"). The lease permitted plaintiff to "use and occupy the premises for a grocery store, supermarket, deli." In the lease as executed, Paragraph 73 was crossed out. Paragraph 73 would have given defendant landlord the right to terminate the lease on nine months' prior written notice "if Landlord intends to demolish the Demised Premises or the Building of which the Demised Premises are a part or any portion thereof." It is not disputed that plaintiff used the premises to operate his business known as Joe & Joe Deli. On May 6, 1997, the landlord executed a letter agreement extending "the tenant's Jose Marcial, lease an additional 10 years with no increase in rent during that time period." Plaintiff alleges that on or about that same day, he paid the landlord $20,000.

Plaintiff asserts that in or about September 2004, he received a letter from the landlord dated August 31, 2004, advising that "the Owner of the premises has elected to terminate the Master Lease between S.H. Central Park North Family Limited Partnership ( Landlord'), and [*2]Central Park North Parking Systems, Inc. ( Tenant') due to the fact that the Building will be demolished. Accordingly we are advising you that your lease too will be terminated on May 13, 2005. Kindly arrange to vacate your premises on or before that day." Plaintiff alleges that based on the lease, Central Park had represented itself as the owner of the premises, when in fact Central Park was a net lessee pursuant to a master lease with the owner, Sylvia Habib, dated January 1, 1994.Article 44 of the master lease is entitled "Demolition of Demised Premises," and gives the owner the right to terminate the lease on nine months' prior written notice of the an intent to "demolish or gut the Leased Premises" or "undertake substantial structural renovation of the Leased Premises."

It is not disputed that in December 2004, the City of New York commenced a nuisance abatement proceeding against Sylvia Habib and fictitiously unknown parties intended to include "the owners, lessees, operators or occupants of the ground floor storefront, known as Joe & Joe Deli,' located at 100 W. 111th Street, New York, New York" (City of New York v. Sylvia Habiib, Index No. 404174/04, Supreme Court, New York County, Hon. Marilyn Shafer). That proceeding sought to enjoin a public nuisance at the premises, consisting of an alleged illegal gambling operation. Three defendants appeared, each by separate counsel, Joe & Joe Deli, Central Park North Parking Systems, Inc. and Athena CPN, LLC.

On February 25, 2005, the parties by counsel executed a Stipulation of Settlement, in which "[d]efendant Joe & Joe Deli, the subtenant and owner of the business operating at the subject premises, consents to the entry of a judgment directing that the subject premises shall be operated solely as a legitimate grocery store and . . . shall not be used to conduct illegal gambling activity in violation of Article 225 of the New York State Penal Law."[FN1] The stipulation also provided that defendant "Joe & Joe Deli, in the interests of settlement, consents to the entry of a judgment directing that it, its agents, assigns, employees, and/or representatives be permanently and perpetually enjoined from conducting, maintaining, and/or operating the subject premises, or any part thereof, for illegal gambling, and/or permitting any of the same in violation of Article 225 of the New York State Penal Law." The stipulation further provided that "defendant Joe & Joe Deli shall be liable to the Plaintiff, the City of New York, for civil penalties in the amount of Twelve Thousand Five Hundred Dollars ($12,500.00)," with $5,000 payable on or before February 18, 2005, $5,000 payable within 30 days of the execution of the stipulation, and $2,500 payable within 60 days of the execution of the stipulation. Paragraph 15 of the stipulation provided that "[d]efendant Joe & Joe Deli consents to surrender its lease to the landlord and vacate the subject premises on or before May 13, 2005."

On March 10, 2005, Judge Schafer signed a Consent Judgment pursuant to the "So-Ordered Stipulation of Settlement dated March 10, 2005," which, inter alia, "Ordered, Adjudged [*3]and Decreed, that Defendant Jose Marcial, d/b/a Joe & Joe Deli, consents to surrender its lease to the landlord and vacate the premises on or before May 13, 2005."

Joe & Joe Deli subsequently moved by order to show cause to vacate or modify the Stipulation of Settlement, to the extent of reducing its payment to the City to $5,000, and deleting the clause requiring it to surrender the lease and vacate the premises. Jose Marcial submitted an affidavit in support of the order to show cause, stating that he "had authorized my previous attorney S. Michael Weisberg, Esq. to resolve the case on terms that would require a financial settlement," but did not authorize Mr. Weisberg "to agree to the surrender of my lease, the closing of Joe & Joe Deli, or the payment to the City of New York of an amount in excess of $5,000."

On May 16, 2005, the order to show cause was resolved by a so-ordered stipulation in open court before Judge Shafer. The record includes a copy of the transcript which shows that Jose Marcial agreed to withdraw his order to show cause with prejudice, and the parties agreed to modify the Stipulation of Settlement to the extent that the City "waives the payment of the second and third payments of $5,000 and $2,500 respectively under the stipulation of settlement and consent judgment," and "Jose Marcial, Carmen Torres, Joe & Joe Deli and all persons affiliated in any way with the business known as Joe & Joe Deli reaffirm that the sublease between Central Park North Parking Systems, Inc. and Jose Marcial is terminated effective retroactively May 13, 2005. No further business activities of any kind shall be conducted by Jose Marcial, Carmen Torres, Joe & Joe Deli or any person affiliated in any way with the business known as Joe & Joe Deli from the subject premises" (emphasis added). The modification also granted Jose Marcial, Carmen Torres and Joe & Joe Deli "a limited license to enter the premises for the sole purpose of removing therefrom all equipment, fixtures and other personal property."[FN2]On June 21, 2005, plaintiff commenced the instant action against the landlord Central Park and its "president" Willie Mae Scott. The complaint asserts three causes of action for breach of the lease, fraudulent misrepresentation and negligent misrepresentation, each of which seeks damages in excess of $800,000; the complaint also seeks punitive damages in excess of $1 million. The first cause of action alleges defendants breached their promise that "plaintiff may peacefully and quietly enjoy the premises,'" defendants breached their promise to extend the lease for an additional 10 years, and defendants breached their promise "to make inapplicable paragraph 73 of the Lease," which gave the landlord the right to terminate the lease on nine month's written notice if it intended to demolish the building. The second cause of action alleges the lease misrepresented that defendant Central Park was the owner of the property, that defendants made that representation "for the purpose of inducing" plaintiff's reliance, that plaintiff justifiably relied on the representation, and as a result plaintiff has been damaged. The third cause of action alleges defendants "did not exercise reasonable care to prevent harm to plaintiff in making false statements and failing to inform plaintiff of material facts," and as a result plaintiff has been damaged.

Plaintiff is now moving for summary judgment on all causes of action, and to strike [*4]defendants' answer. Defendants oppose the motion and cross-move for summary judgment dismissing the complaint. Defendants argue that Willie Mae Scott is an improper party, since she was acting in her capacity as an agent for a disclosed principal. Defendants also rely on the modified stipulation of settlement in the nuisance abatement proceeding, which raises a threshold issue of judicial estoppel or estoppel against inconsistent positions.

Generally, the doctrine of judicial estoppel or estoppel against inconsistent positions "precludes a party who assumed a position in a prior legal proceeding and secured a judgment in his or her favor, from assuming a contrary position in another action simply because his or her interests have changed." Gale P. Elson, P.C. v. Dubois, 18 AD3d 301, 303 (1st Dept 2005). To the extent judicial estoppel has been applied to court or other rulings that are not denominated judgments, it still must be shown that decisive relief was obtained through taking the prior inconsistent position. See D & L Holdings, LLC v. RGC Goldman, LLC, 287 AD2d 65, 72 (1st Dept 2001), lv app den 97 NY2d 611 (2002); All Terrain Properties, Inc. v. Hoy, 265 AD2d 87, 93-94 (1st Dept 2000). In other words, courts have applied estoppel based on an inconsistent position in another action or proceeding where it can be shown that the party taking the inconsistent position benefitted from the position in the other action or proceeding. See Bianchi v. New York City Department of Housing & Community Renewal, 5 AD3d 303 (1st Dept), lv app den 3 NY3d 601 (2004).

In the instant action, plaintiff asserts three causes of action for damages, claiming defendants breached the provisions in the lease and the lease extension agreement that gave him the right to "peacefully and quietly enjoy" the premises until 2014, defendants wrongfully terminated the lease pursuant to a lease provision that had been crossed out, and defendants fraudulently and negligently misrepresented in the lease that Central Park owned the premises.Those claims which rely on a viable and enforceable lease, are inconsistent with plaintiff's position in the nuisance abatement proceeding, where plaintiff not only agreed to vacate the premises and surrender the lease, but also agreed that the lease was terminated as of May 13, 2005. Plaintiff cannot rely on the continuing validity of the lease and assert that he is entitled to the rights and benefits under the lease, after having agreed in the so-order stipulation that the lease terminated. Moreover, it cannot be disputed that plaintiff benefitted from his position in the nuisance abatement proceeding. Pursuant to the modified so-ordered stipulation of settlement, plaintiff relinquished all interest in the premises in exchange for his receiving a $15,000 payment from the new owner, a $7,500 reduction in the fine he was required to pay the City, and limited access to facilitate his vacating the premises.

Under these circumstances, plaintiff is judicially estopped from maintaining a contradictory position in this action, and defendant is entitled to summary judgment dismissing the complaint. In light of this determination, the court need not consider whether Willie Mae Scott is an improper party-defendant.

Accordingly, it is

ORDERED that the plaintiff's motion for summary judgment is denied; and it is further

ORDERED that defendants' cross-motion for summary judgment is granted and the complaint is dismissed in its entirety, and the Clerk is directed to enter judgment accordingly, with costs and disbursements as taxed by the Clerk upon submission of an appropriate bill of costs. [*5]

DATED: January 26, 2011ENTER:

___________________________

J.S.C. Footnotes

Footnote 1:Both the Stipulation and the Consent Judgment provided for the substitution of "[d]efendant Jose Marcial, d/b/a Joe & Joe Deli, the subtenant and owner of the business operating at the subject premises," in place of defendants "John Doe" and "Jane Doe," the substitution of "[d]efendant Athena CPN, LLC, the new owner of the real property which is the subject of this action," in place of defendant Sylvia Habib, and the addition of "Central Park North Parking Systems, Inc., the tenant under a Master Lease for all retail space in the building," as a party-defendant.

Footnote 2:The March 10, 2005 Consent Judgment was filed on July 22, 2005, with the following handwritten statement added to the last page: "7/22/05 Judgment modified pursuant to a so ordered stipulation in open court on 5/16/05 filed 7/22/05."