Metered Appliances, Inc. v Lafayette Ct. Apt. Corp.

[*1] Metered Appliances, Inc. v Lafayette Ct. Apt. Corp. 2012 NY Slip Op 51038(U) Decided on June 11, 2012 Supreme Court, Kings County Demarest, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 June 13, 2012
Supreme Court, Kings County

Metered Appliances, Inc., Plaintiff,

against

Lafayette Court Apartment Corp. and Service Directions, Inc.,, Defendants.



18794/11



Attorney for Plaintiff:

Evan R. Shusterman, Esq.

Heller, Horowitz & Feit, P.C.

292 Madison Avenue

New York, NY 10017

Attorneys for Defendant:

Marcia E. Fokas, Esq.

370 Lexington Avenue, 24th Floor

New York, NY 10017

Paul G. Burns, Esq.

Levin & Glasser, P.C.

420 Lexington Avenue, Suite 805

New York, NY 10170

Carolyn E. Demarest, J.

The following papers numbered 1 to 13 read on this motion:Papers Numbered

Notice of Motion / Statement of Material Facts, Supporting Affidavits, Attorney Affirmation in Support, Memorandum of Law, Affidavit of Service1—6 [*2]

Opposing Affidavit, Memorandum of Law, Counterstatement of Material Facts, Affidavits of Service7—9

Reply Affirmation, Memorandum of Law, Affidavit of Service10—12

Surreply Memorandum of Law13

Defendants Lafayette Court Apartment Corp. ("Lafayette") and Service Directions, Inc. ("SDI") move for summary judgment dismissing the second and fourth causes of action in plaintiff Metered Appliances, Inc.'s ("Metered") complaint, seeking, respectively, specific performance of a lease purportedly accepted pursuant to plaintiff's right of first refusal and damages for SDI's allegedly tortious interference with plaintiff's lease agreement and prospective economic relations with Lafayette. Notwithstanding plaintiff's insistence that defendants negotiated in bad faith in order to deprive plaintiff of its contractual right, defendants contend that plaintiffs declined to match a bona fide offer for a new lease. Defendants also argue that plaintiff's right of first refusal is an unreasonable restraint on the alienation of Lafayette's property and is thus unenforceable. Defendants further argue that, because there was no breach of contract, and because plaintiff provides no evidence that SDI engaged in any wrongful conduct, SDI is not liable for tortious interference. Moreover, while plaintiff contends that discovery is necessary to determine the intentions of defendants in negotiating the new lease, defendants counter that plaintiff has not made an evidentiary showing that discovery would yield evidence sufficient to delay summary judgment.

BACKGROUND

On December 24, 2002, Lafayette entered into a lease agreement with H2O Laundry Services, Inc., a corporation for which plaintiff is successor-in-interest (the "Original Lease"), for the laundry room at 141-145 Lafayette Avenue, Brooklyn, New York (the "Premises"). Under the Original Lease, plaintiff provided and serviced coin-operated laundry machines for residents of Lafayette's condominium complex and paid a fixed monthly rent of $80. The Original Lease had a term of seven years and provided that the lease "shall continue from year to year after its expiration unless either party shall give notice of its intention not to renew by certified mail, return receipt requested, not less than sixty (60) days prior to the expiration date." The Original Lease further provided that "[a]t the expiration of this lease or any renewal, [Metered] shall have the right of first refusal to meet any bonafide [sic] bid to lease the laundry room(s) and/or provide coin-metered laundry equipment services to the premises."

After the expiration of the initial term, Metered and Lafayette continued the Original Lease for two years, until, on October 6, 2010, Lafayette's Board President informed Metered, by certified mail, return receipt requested, of its intention to end the lease as of December 24, 2010. In late September of 2010, Lafayette had begun negotiations for a new lease agreement with SDI, which provides "smart card" laundry systems, whereby residents can operate the machines with pre-paid cards and receive instant refunds in the event of malfunction, and 24-hour, seven day per week service, which, SDI states, many laundry equipment companies do not offer. While a draft written agreement, dated November 9, 2010 (the "November 9 Lease"), was prepared, such agreement was never executed. On or about December 7, 2010, "in accordance with [its] rights under the [Original] Lease," Lafayette presented to plaintiff the unexecuted November 9 Lease, which plaintiff rejected [*3]because "it was not bona fide and not a legitimate offer."[FN1] Although Lafayette had terminated the Original Lease, effective December 24, 2010, under the terms of that lease, plaintiff remained in possession of the Premises after the expiration of its second renewal.

In April of 2011, Lafayette once again opened negotiations with SDI. Lafayette states that, by this time, it "was very dissatisfied with the services provided by Metered," and made clear that it wanted a lease that would not renew automatically and could be terminated prior to its expiration. On May 9, 2011, Lafayette and SDI finalized the terms of a lease agreement (the "May 9 Lease"), which provides, at the last sentence of Paragraph 12, that "[e]ither party may cancel this agreement at anytime [sic] and the Lessor shall reimburse the Lessee for the cost of the removal of all laundry equipment and any improvements" made to the Premises (the "Termination Clause").[FN2]

The May 9 Lease has a one-year initial term, which will not automatically renew, but which may be extended, by written agreement of both parties, for a period of seven years. By letter dated June 28, 2011, after both defendants had executed the lease agreement, Lafayette presented plaintiff with the May 9 Lease and asked whether it would match the terms of the offer pursuant to its preemptive right. Plaintiff claims that, upon reading the Termination Clause, it "immediately recognized that [the May 9 Lease] was concocted to usurp [its] bargained-for right of first refusal." In its response letter, dated July 25, 2011, plaintiff informed Lafayette that the Termination Clause renders the May 9 Lease illusory, as it would allow Lafayette to end its relationship with plaintiff immediately after signing the agreement, but that it assented to the terms of the May 9 Lease if the Termination Clause was omitted. On or about August 2, 2011, Lafayette sent a letter to plaintiff stating that, because plaintiff would not comply with all the terms of the May 9 Lease, it was moving forward on its lease agreement with SDI.

Plaintiff asserts that, notwithstanding the unconditional language of the Termination Clause, Lafayette made a tacit agreement with SDI, under which each party would only terminate the lease for good cause within the first year, so that defendants could circumvent plaintiff's right of first refusal under the Original Lease. Although it provides no direct evidence to support this conclusion, plaintiff argues that, because "virtually all leases call for the installation of new machines," a lease that could be terminated immediately without reasonable actual cause would not make "business sense" for a laundry services company, as it would render the used machines useless upon termination. From this premise, plaintiff reasons that discovery would yield documentary evidence demonstrating that defendants colluded with each other with the express intent to deprive Metered of its right of first refusal under the Original Lease. Plaintiff insists that, because the Termination Clause is not a legitimate, bona fide lease provision, its acceptance of the terms of the May 9 Lease [*4]without that provision constituted an effective exercise of its right of first refusal, thereby creating a "new lease" between itself and Lafayette. In opposition to plaintiff's assertions, SDI states that it agreed to the May 9 Lease because it believed that Lafayette would be satisfied with its superior service. SDI also provided copies of lease agreements that it has with other lessors that have a similar provision allowing either party to terminate the lease prior to its expiration.[FN3]

On August 16, 2011, plaintiff initiated this action, alleging that Lafayette, at the persuasion of SDI, had breached the Original Lease and then engaged in self help to evict plaintiff from the Premises. The first cause of action seeks damages for breach of the May 9 Lease, which plaintiff claims it accepted pursuant to its right of first refusal. The second cause of action demands specific performance of the May 9 Lease in favor of plaintiff, with the exception of the Termination Clause. The third cause of action alleges that Lafayette illegally entered and locked plaintiff out of the Premises in violation of RPAPL 853. The fourth cause of action alleges that SDI tortiously interfered with plaintiff's contractual and economic relationship with Lafayette.

On September 7, 2011 plaintiff moved, by order to show cause, for an order preliminarily enjoining Lafayette from "[n]ot recognizing the lease matched by Metered on July 26, 2011," terminating such lease with plaintiff, evicting plaintiff, removing plaintiff's machines, permitting a competitor to enter the Premises to operate laundry equipment, or preventing plaintiff from operating its laundry equipment at the Premises. The Court granted plaintiff a temporary restraining order pending determination of the motion but, on October 5, 2011, denied plaintiff's motion for injunctive relief upon a finding that the Termination Clause "has been demonstrated to be a legitimate, negotiated term of that lease to which plaintiff will not agree."

On March 28, 2012, defendants jointly moved, pursuant to CPLR 3212, for summary judgment dismissing plaintiff's second and fourth causes of action, seeking specific performance and damages for tortious interference, respectively. Defendants contend that the Termination Clause is a legitimate term of the May 9 Lease and, as plaintiff failed to agree to such term, Lafayette neither breached the Original Lease, nor entered into the May 9 Lease with plaintiff. Defendants further claim that, without a breach of contract by Lafayette or evidence of wrongful conduct by SDI, plaintiff may not sustain a cause of action for tortious interference. Moreover, defendants argue that, even if the Court finds that the May 9 Lease was not a bona fide offer, the right of first refusal in the Original Lease is an "unenforceable and unreasonable restraint on the alienation of Lafayette's property."

In opposition to defendants' motion, plaintiff argues that the Court's previous finding that the Termination Clause is legitimate does not preclude an alternative holding, as the denial of a preliminary injunction is not a conclusive ruling on the merits.[FN4] Plaintiff also argues that, because [*5]Lafayette expressly asked plaintiff if it would be exercising its right of first refusal, it should be estopped from asserting that such right is an unreasonable restraint on alienation and that, should the Court find that there was no breach of contract, plaintiff has made a prima facie case of tortious interference with a prospective business relationship against SDI. Moreover, because plaintiff has sent defendants several discovery requests and received no response, and because any evidence of bad faith negotiations would be in defendants' sole possession, plaintiff argues that discovery is necessary to make a full determination of the merits of its second and fourth causes of action. Defendants contend that because plaintiff sets forth no evidentiary basis for its need for discovery, its allegations of collusion are merely speculative and should not delay summary judgment.

Responding to plaintiff's suggestion, in its memorandum of law in opposition to the instant motion, that defendants implicitly admitted, by moving only for partial summary judgment, that there are triable issues of fact with respect to plaintiff's first and third causes of action, defendants also have requested summary judgment dismissing the remainder of plaintiffs' complaint. Because this request was first included in defendants' reply memorandum of law and plaintiff did not have a chance to address defendants' arguments, on May 21, 2012, the Court gave counsel notice of its intention to consider defendants' request and instructed that plaintiff had 10 days to respond. On May 31, 2012, plaintiff submitted a surreply memorandum of law, in which it did not provide evidence to counter defendants' claims, but once again argued that summary judgment would be premature at this stage of the litigation because the parties have not conducted any discovery.

DISCUSSION

Defendants move, pursuant to CPLR 3212, for summary judgment dismissing plaintiff's second cause of action, for specific performance compelling Lafayette to recognize plaintiff's acceptance of the May 9 Lease with the exception of the termination clause, and fourth cause of action, alleging SDI's purported tortious interference with the Original Lease and plaintiff's prospective economic relationship with Lafayette. Upon a motion for summary judgment, the movant has the initial burden to "establish his cause of action or defense sufficiently to warrant the court as a matter of law in directing judgment' in his favor" by providing "evidentiary proof in admissible form" (Friends of Animals, Inc. v Associated Fur Mfrs., Inc., 46 NY2d 1065, 1067 [1979], quoting CPLR 3212 [b]; see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]). Once a party establishes that it is entitled to judgement as a matter of law, the burden shifts to the opposing party to "show facts sufficient to require a trial of any issue of fact" (CPLR 3212 [b]; see Friends of Animals, 46 NY2d at 1067). A party contesting summary judgment "must produce evidentiary proof in admissible form . . . or must demonstrate acceptable excuse for his failure to meet the requirement of tender in admissible form" and cannot rely on "mere conclusions, expressions of hope or unsubstantiated allegations or assertions" (Zuckerman v City of New York, 49 NY2d 557, 562 [1980]).

Defendants present evidence that Lafayette offered the May 9 Lease to plaintiff, pursuant to its right of first refusal, and argue that, because plaintiff failed to accept all of the terms of the offer, no new contract was formed between Lafayette and plaintiff and, accordingly, plaintiff is not entitled to specific performance. "Specific performance may be awarded only where there is a valid existing contract for which to compel performance" (Roland v Benson, 30 AD3d 398, 399 [2d Dept 2006]; [*6]see Jacobowitz v Leak, 19 AD3d 453, 455 [2d Dept 2005]). Plaintiff contends that it accepted the May 9 Lease, even though it rejected the Termination Clause, because such clause would render the entire lease illusory and was thus not a bona fide offer. Contrary to plaintiff's argument, New York courts will enforce an "unqualified right to terminate a contract on notice pursuant to an unconditional termination clause without court inquiry into whether the termination was activated by an ulterior motive" (Watermelons Plus, Inc. v New York City Dept. of Educ., 76 AD3d 973, 974 [2d Dept 2010], quoting A.J. Temple Marble & Tile, Inc. v Long Is. R.R., 256 AD2d 526 [2d Dept 1998]; see Abacus v Datagence, Inc., 66 AD3d 552, 553 [1st Dept 2009]); Hercules Coinomatic Corp. v 320 E. 54th St. Condominium Assoc., Sup Ct, Nassau County, July 27, 1994, Roberto, J., index No. 17806/94 [dismissing an action for specific performance of a lease of a laundry room, pursuant to a right of first refusal, on the grounds that plaintiff refused to accept a 30-day termination clause in the proposed lease]). Therefore, the Termination Clause did not render the May 9 Lease illusory on its face, but is presumed to be a legitimate term negotiated between two business entities in their own best interest. The fact that plaintiff finds such provision not to be economically feasible does not render the Termination Clause unlawful or unenforceable so as to give plaintiff an actionable claim.

By the terms of the Original Lease, Lafayette was required to grant plaintiff an opportunity to match the terms of any bona fide third-party offer to lease the Premises. However, "the right of first refusal may be extinguished where the offer is declined by the holder, or where the third-party offer is not matched" (Yedell Trust I v API Westchester Assoc., 227 AD2d 471, 472 [2d Dept 1996] [internal citation omitted]; see Story v Wood, 166 AD2d 124, 129 [3d Dept 1991]; Lester's Activewear, Inc. v Combine Distrib., Inc., 27 Misc 3d 1204[A], 2010 NY Slip Op 50539[U], *3 [Sup Ct, Kings County 2010]). Because the Termination Clause is a valid and enforceable term, plaintiff relinquished its right of first refusal by rejecting such term of a bona fide offer, leaving Lafayette free to move forward on its lease with SDI (see Story, 166 AD2d at 129).

Although plaintiff is correct in its argument that a lease offer is not bona fide where the sole purpose is to wrest a right of first refusal from the current leaseholder (see id. at 128 [stating that, in the absence of parole evidence of the parties' intent, a "good faith offer" is "(1) a genuine outside offer rather than one contrived in concert with the seller solely for the purpose of extracting a more favorable purchase price from the holder of the right of first refusal . . . and (2) an offer which the seller honestly is willing to accept"]), plaintiff is merely speculating that the May 9 lease was the result of collusion between SDI and Lafayette and provides no evidence whatsoever of the tacit agreement that it alleges. While plaintiff reasons that, with the Termination Clause, the May 9 Lease would not be worthwhile for a laundry services company, in that it would involve the risk that the lessee is left with used machines that cannot be installed elsewhere, SDI asserts that it is willing to take such risk because it is confident that Lafayette will be pleased with its superior service and thus will not cancel the lease prior to its expiration. SDI even provided copies of lease agreements with other buildings to show that it has previously agreed to termination clauses similar to the one in the May 9 Lease. Moreover, Lafayette states that it wanted an unconditional termination clause because it was increasingly dissatisfied with plaintiff's service and did not want to be bound by another lease for a significant period of time. Contrary to plaintiff's allegation that defendant SDI induced Lafayette to breach an agreement with plaintiff, Lafayette states that it initiated negotiations with SDI. Plaintiff offers no evidence to counter any of these claims. Moreover, even if, as plaintiff [*7]suggests, defendants tacitly agreed not to terminate the lease within the first year, the duly executed written contract is enforceable in accordance with its unambiguous terms.

Plaintiff also argues that any evidence of bad faith or collusion would be in the sole custody of defendants and that, accordingly, the Court should deny summary judgment until it has had an opportunity to conduct discovery into the negotiations between the two defendants. Under CPLR 3212 (f), the court may deny or delay summary judgment if "it appear[s] from affidavits submitted in opposition to the motion that facts essential to justify opposition may exist but cannot then be stated." However, the party opposing the motion cannot merely speculate that there is evidence supporting its allegations but must "demonstrate that additional discovery might lead to relevant evidence which would have defeated any branch of the defendants' motion" (Freiman v JM Motor Holdings NR 125-139, LLC, 82 AD3d 1154, 1156 [2d Dept 2011]; see Bailey v New York City Tr. Auth., 270 AD2d 156, 157 [1st Dept 2000]; Dempaire v City of New York,61 AD3d 816, 817 [2d Dept 2009]; see also Auerbach v Bennett, 47 NY2d 619, 636 [1979]). In the case at bar, plaintiff presents no evidentiary basis to conclude that defendants intended to use the May 9 Lease as a way to circumvent plaintiff's right of first refusal or that defendants had a tacit agreement to ignore the Termination Clause. Plaintiff's reasoning that, without such collusion, SDI would not have agreed to the May 9 Lease is mere conjecture and is thus insufficient to delay or defeat summary judgment (see Zuckerman, 49 NY2d at 562; Freiman, 82 AD3d at 1156). Therefore, because defendants have demonstrated that the May 9 Lease was a bona fide offer, which plaintiff failed to fully accept, plaintiff's second cause of action, for specific performance of the May 9 Lease in favor of Metered, is dismissed as meritless.[FN5] [*8]

Defendants further seek summary judgment on plaintiff's fourth cause of action, for tortious interference against SDI. "Tortious interference with contract requires the existence of a valid contract between the plaintiff and a third party, defendant's knowledge of that contract, defendant's intentional procurement of the third-party's breach of the contract without justification, actual breach of the contract, and damages resulting therefrom" (Lama Holding Co. v Smith Barney Inc., 88 NY2d 413, 424 [1996]; see White Plains Coat & Apron Co., Inc. v Cintas Corp., 8 NY3d 422, 426 [2007]). Defendants have already demonstrated that Lafayette presented a bona fide offer to plaintiff so that it could match the terms pursuant to its right of first refusal and that plaintiff failed to accept the terms in full. Accordingly, no new contract was formed between Lafayette and plaintiff and Lafayette did not breach the Original Lease by entering into a contract with SDI. SDI is therefore not liable for tortious interference with an existing contract.

Alternatively, plaintiff argues that it has a valid cause of action for tortious interference with a prospective economic relationship. "While New York law recognizes the tort of interference with both prospective and existing contracts, greater protection is accorded an interest in an existing contract . . . than to the less substantive, more speculative interest in a prospective relationship'" (White Plains Coat & Apron, 8 NY3d at 425-26, quoting Guard-Life Corp. v S. Parker Hardware Mfg. Corp., 50 NY2d 183, 191 [1980]). To establish a claim for tortious interference with a prospective agreement, "a plaintiff must demonstrate that the defendant's interference with its prospective business relations was accomplished by wrongful means' or that defendant acted for the sole purpose of harming the plaintiff" (Snyder v Sony Music Entertainment, 252 AD2d 294, 299-300 [1st Dept 1999]). In this context, " [w]rongful means' include physical violence, fraud or misrepresentation, civil suits and criminal prosecutions, and some degrees of economic pressure; they do not, however, include persuasion alone although it is knowingly directed at interference with the contract" (Guard-Life Corp., 50 NY2d at 191). Here, plaintiff cites to no actual activity whereby SDI's behavior amounted to such "wrongful means." In fact, Lafayette contends that it initiated the negotiations with SDI and that SDI apparently delayed concluding any agreement until the Original Lease had actually terminated. As previously addressed, to delay summary judgment, a party must make an evidentiary showing that discovery could lead to material evidence (see Freiman, 82 AD3d at 1156). Plaintiff provides no evidence indicating that SDI, and not Lafayette, initially proposed the Termination Clause (and, in fact, Lafayette asserts that it was the party that requested such clause), and no evidence suggesting that SDI acted with any degree of malice or with the sole purpose of harming plaintiff. Therefore, plaintiff's fourth cause of action is dismissed. As this is plaintiff's only claim against SDI, plaintiff's complaint is dismissed as against SDI.

Lafayette further seeks summary judgment dismissing plaintiff's first cause of action, for breach of the May 9 Lease, and third cause of action, for violation of RPAPL 853. As the Court has determined that plaintiff never agreed to the terms of the May 9 Lease and thus failed to exercise its right of first refusal, Lafayette could not have breached such lease (see JP Morgan Chase v J.H. Elec. of New York, Inc., 69 AD3d 802, 803 [2d Dept 2010] ["[T]he essential elements of a cause of action to recover damages for breach of contract [include] the existence of a contract."]). Accordingly, plaintiff's first cause of action is dismissed.

Under RPAPL 853, a tenant "is entitled to recover treble damages" where it "is disseized, [*9]ejected, or put out of real property in a forcible or unlawful manner." Plaintiff states that "beginning in or around Fall 2010, and continuing at least through December 24, 2010, . . . Lafayette decided to use self help, locked Metered out of the Premises and unilaterally terminated Metered's rights under the lease." Defendants do not provide any evidence to contest this statement but merely assert that plaintiff's third cause of action should be dismissed to the extent that it relies upon an alleged breach of contract. However, absent an express lease provision granting the landlord permission to reenter the premises upon default or termination, which was not included in the Original Lease,[FN6] a landlord may not resort to self help (cf. Bozewicz v Nash Metalware Co., Inc., 284 AD2d 288, 288 [2d Dept 2001]; Sol De Ibiza, LLC v Panjo Realty, Inc., 29 Misc 3d 72, 75 [App Term, 1st Dept 2010]). Under the circumstances presented, Lafayette's actions could give rise to damages pursuant to RPAPL 853, even if plaintiff's lease had already been terminated, since plaintiff remained in possession of the Premises (see Clinkscale v Sampson,48 AD3d 730, 731 [2d Dept 2008]; Moran v Orth, 36 AD3d 771, 773 [2d Dept 2007]). Because there is a triable issue of fact with respect to plaintiff's third cause of action, defendants' request that it be dismissed is denied.

CONCLUSION

Defendants' motion is granted to the extent that plaintiff's first, second, and fourth causes of action are dismissed. Plaintiff's complaint is dismissed in its entirety as against SDI. Lafayette's request that the Court also grant summary judgment dismissing plaintiff's third cause of action, for violation of RPAPL 853, is denied.

Discovery is to proceed on Lafayette's alleged violation of RPAPL 853. Counsel shall appear for a compliance conference on July 25, 2012.

This constitutes the decision and order of the Court.

E N T E R :

__________________________________

HON. CAROLYN E. DEMAREST, J.S.C. Footnotes

Footnote 1: The November 9 draft lease did not contain the provision that defendants later added to the end of Paragraph 12, granting either party the right to cancel the one-year lease at any time, and which plaintiff now claims is the reason it cannot accept the terms of the lease, dated May 9, 2011, also claimed not to be "legitimate or bona fide," although fully executed by both parties.

Footnote 2: As plaintiff concedes, the May 9 Lease was the result of Lafayette's attempt to "reformulate its offer to SDI with more legitimate and concretized terms." As stated in the cover letter, dated June 28, 2011, from Board Member Alexandra Loxton, the "new agreement" had been prepared in response to plaintiff's "earlier concerns."

Footnote 3: Similar to the May 9 Lease herein, which provides for reimbursement to the lessee for the cost of removal of its laundry equipment, the lease agreement between SDI and Concorde Avenue Associates, L.P., attached to the affidavit of Stephen Jagde at exhibit 4, provides that "[a]s a condition of termination, the Lessor shall purchase the installed equipment."

Footnote 4: In their reply, defendants clarify that they do not argue that the Court's finding in the October 5, 2012 order has any preclusive effect. Instead, defendants assert that the termination clause in the May 9 Lease is a legitimate term that plaintiff needed to accept to exercise its right of first refusal.

Footnote 5: Defendants also argue that the right of first refusal in the Original Lease is unenforceable because it contains no time restriction and thus constitutes an unreasonable restraint on alienation of the Premises, relying on Inwood Park Apts., Inc. v Coinmatch Indus. Co. (22 AD3d 350 [1st Dept 2005]). In Inwood Park, the lessee held a right of first refusal that it could exercise upon expiration or termination of the lease but that also "continue[d] in effect until such time as Lessor has received a bona fide bid or offer" (6 Misc 3d 246, 267 [Sup Ct, NY County 2004]). The Supreme Court held, and the Appellate Division affirmed, that the provision constituted an unreasonable restraint on alienation of the lessor's property specifically because of this language, which rendered the right of first refusal "not appurtenant to the lease as it can be exercised at any time after the term of the lease is concluded" (id. at 254; see 22AD3d at 350 ["[T]hat right under the subject lease, if not exercised by defendant prior to the lease's expiration, may be exercised indefinitely thereafter and without limitation as to the time within which exercise is accomplished."]). Although defendants assert that plaintiff's right of first refusal in the Original Lease is "virtually identical" to that in Inwood Park, the instant provision may be exercised only "[a]t the expiration of this lease or any renewal" and lacks the additional language extending the preemptive right beyond plaintiff's tenancy. Here, plaintiff's lease had been terminated prior to the proffer of the May 9 Lease. However, Lafayette's original proffer of the November 9 Lease occurred prior to termination and plaintiff remained in possession of the Premises as a holdover at the time the May 9 Lease was rejected. Plaintiff's right of first refusal was expressly recognized by Lafayette and cannot now be deemed to be unenforceable solely because it was exercised beyond the lease term due to Lafayette's delay in providing a viable alternative proposal prior to termination.

Footnote 6: To the contrary, Paragraph 8 of the Original Lease provides that, in the event of default, other than for plaintiff's failure to pay rent, "the Lessor agrees not to deny the Lessee access to the Premises . . . until such time as the claimed default has been finally adjudicated by a Court of Law."