LKE Catering, Inc. v Legacy Yards Tenant LLC

Annotate this Case
Download PDF
LKE Catering, Inc. v Legacy Yards Tenant LLC 2016 NY Slip Op 32004(U) October 19, 2016 Supreme Court, New York County Docket Number: 651041/2016 Judge: Anil C. Singh Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. [* 1] SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: PART 45 ---------------------------------------------------------------1--------x LKE Catering, Inc., Index No. 651041/2016 Plaintiff, DECISION AND ORDER Motion Sequence No. 001 -againstLegacy Yards Tenant LLC, Defendant. ---------------------------------------------------------------~--------x HON. ANIL C. SINGH: In this action for breach of contract a~d breach of implied covenant of good faith and fair dealing, defendant Legac) Yards Tenant LLC ("Legacy" or I "Licensor") moves to dismiss the complaint. Plaintiff LKE Catering ("LKE" or I I "Licensee") opposes. J On August 1, 2013, defendant Legac~ entered into a Food Service License Agreement (the "Agreement") with plaintiffLKE. In its complaint, plaintiff alleges that ,defendant breached the Agreement by (1) limiting plaintiff to providing food and peverages to Tower C; (2) prohibiting ·I 11 plaintiff from operating at the Project Site 1 for months by failing to move the trailer i to the License Area and by relocating the: trailer multiple times; (3) failing to provide utilities including propane gas; (4) railing to provide LKE with a serving !i 1 All capitalized terms are defined in the Agreement. 1 2 of 13 [* 2] kiosk; (5) failing to provide two parking spaces near the License Area for plaintiffs use; and (5) permitting unauthor~rzed vendors to operate at the Project !I Site in violation of the Agreement. 11 11 I'I Analysis Standard for a motion to dismiss On a motion to dismiss based on the ground that the defenses are founded upon documentary evidence pursuant to CPLR 321 l(a)(l), the evidence must be unambiguous, authentic, and undeniable. Sde, Fountanetta v. Doe, 73 A.D.3d 78 i (2d Dept 2010). Dismissal is warranted : only if the documentary evidence submitted "utterly refutes plaintiffs faetual allegations, and conclusively i establishes a defense to the asserted claims [as a matter of law." See, Amsterdam i Hosp. Group, LLC v Marshall-Alan Assoc.Jinc., 120 A.D. 3d 431, 433 (1st Dept I 2014). Alternatively, "documentary evidehce [must] utterly refute plaintiffs Ii :: jj factual allegations, conclusively establishing a defense as a matter of law." See, Goshen v. Mutual Life Ins. Co. of New York, 98 N.Y.2d 314, 326 (2002). On a motion to dismiss a complaint .for failure to state a cause of action pursuant to CPLR 321 l(a)(7), all factual allegations must be accepted as true, the complaint must be construed in the light most favorable to plaintiffs, and plaintiffs ! must be given the benefit of all reasonable inferences. Allianz Underwriters Ins. 2 3 of 13 [* 3] I Co. v. Landmark Ins. Co., 13 A.D.3d 172, 174 (1st Dept 2004). The court i ~ determines only whether the facts as alleged ljfit within any cognizable legal theory. !I Leon v. Martinez, 84 N.Y.2d 83, 87-88 (1994). The court must deny a motion to dismiss, "if, from the pleading's four com~rs, factual allegations are discerned !i which, taken together, manifest any cause of action cognizable at law." 511 West 232nct Owners Corp. V; Jennifer Realty Co., 98 N.Y.2d 144, 152 (2002). "[N]evertheless, allegations consisting of bare legal conclusions, as well as factual claims .either inherently incredibl1e or contradicted by documentary I ' . . evidence, are not entitled to such consideradon." Quatrochi v. Citibank, N.A., 210 A.D.2d 53, 53 (1st Dept 1994) (internal citatfon omitted). First Cause of Action for Breach of Contratt Scope of the License , There is no dispute among the partiJ that the Project Site is not limited to ~ Tower C but encompasses the whole Basten} Rail Yards. 2 There is also no dispute that the license runs through December 31:, 2018 as stated in Section 9 of the Agreement. 2 WHEREAS, Licensor intends to develop and a construct commercial office building (known as "Tower C"), located at the northwest corner of West 30th Street and 10th Avenue which is on a portion of the property known as the Eastern Rail Yard Section of the John D. Caemmerer West Side Yard in New York, New York, which property Licensor ground leases from the Metropolitan Transportation Authority ("MT A"), a4d adjacent thereto the Long Island Railroad Company ("LIRR") a subsidiary of MTA, uses and operates a commuter railroad and maintenance facility in connection with the opei,ation of the Long Island Railroad system (collectively, the "Project Site"); : 3 4 of 13 [* 4] However, defendant contends that while the scope of the exclusive license i 1: provided that plaintiff would be the exclusive food and beverage service provider II II on the Project Site, the services that plaintiff is permitted to perform under the II Agreement is limited to Tower C. Defendant relies on the second and third II paragraph of the Whereas clause in the Agreement which states that, WHEREAS, Licensor, in furtherance of the construction of Tower C, has retained the services of certain contractors, subcontractors, consultants and other construction workers, employees and professionals (collectively, the "Workers"); 1 I ,1 I :i WHEREAS, Licensor desires to make food and beverages available for purchase by Workers at the Project Site, and Licensee desires to access the Project Site in order to sell such food and beverages (the "Services") I Defendant argues that as stated in the secoqd clause the Workers that were to be :i serviced were retained "in furtherance of the ''construction of Tower C". I• '! " A close reading of the Whereas ClausJ in its entirety shows that the Whereas II clause is, at best, ambiguous as to whetµer the Agreement limits plaintiff's ~ . :1 performance of services to Tower C. It is c~ear that the third clause contemplates that the plaintiff desires to access the ·Project Site, not only Tower C, to sell food and beverages. Moreover, the rest of the Agreement refers to the Project Site or to Services and not to Workers. See e.g., Sectioh 6 and Section 8(i). ! Section 8 of the Agreement also provides that the "Licensor (defendant) 1 warrants that Licensee (plaintiff) shall be the: exclusive food and beverage provider 4 5 of 13 [* 5] on the Project Site during the term of the Agreement". Correspondingly, Section 9 'I of the Agreement provides that, "The term o~ this Agreement shall expire upon the earlier of: (a) termination pursuant to paraglph "1 O" below; or (b) December 31, 2018." There is no provision in the AgreemLt that limits plaintiff to selling food II and beverage only at Tower C. Accordingly, the Agreement does not limit the plaintiff to providing their food and beverage service to Tower C workers. Trailer In its Complaint, plaintiff also aVeges that defendant breached the Agreement by failing to move plaintiffs trai,ler to the License Area and relocating the trailer in September 2014, March 2015, August 2015 and October 2015, II II forcing plaintiff to cease operations at the Pr6ject Site. l Plaintiffs claim that defendant failed to move the plaintiffs trailer to the I :i License Area for approximately six months withstands scrutiny. Plaintiff alleges that the trailer was delivered to the Project Site on or around January 2014 but the trailer was only moved to the License Area on or around June 2014. Section 8(ii) of the Agreement states that defendant "shall provide adequate space within the :1 'I License Area to accommodate Licensee's tzjailer." Defendant's argument that the '! I Agreement does not provide a date certain w;ithin which defendant was required to 5 6 of 13 . [* 6] ' ' ·'' servi~es permit plaintiff to commence its is .4navailing. In Savasta v 470 Newport ' . i Assoc., 82 NY2d 763, 765 (1993), the court held that "[w]hen a contract does not 1\ specify time of performance, the law implies:,, a reasonable time." The court further held that, "what constitutes a reasonable time for performance depends upon the facts and circumstances of the particular ca$e." Id. In Savasta, the court held that ,, the limited partners' 22-month delay in invoking the termination provision of a 1\ ,1 partnership agreement was unreasonable. The court reasoned that the limited partners took advantage of the termination provision only after accepting the ,, benefit of the agreement for 22 months. See: also, Zev v. Merman, 73 N.Y.2d 781 (1988) ("Included within a court's determination of reasonableness are the nature •I and object of the contract, the previous conduct of the parties, the presence or ! ' 11 absence of good faith, the experience of the 'parties and the possibility of prejudice 'I or hardship to either one, as well as the specific number of days provided for performance"); Weksler v Weksler, 140 AD3,d 491, 492 (1st Dept 2016) (same). ,,' ' II Here, a 6-month delay in moving the plaintiff's trailer to the License Area is unreasonable as it prevented plaintiff from operating for those 6 months. The ·I Agreement was effective September 1, 2013·. See, Section 9. Plaintiff provided the " trailer by January 2014. Defendant has no~ proffered reasons as to the delay in providing adequate space for the trailer in:; the License Area but has now, after ,,' I attempting to move the trailer to Tower 6 7 of 13 ~, alleged for the first time that the [* 7] i i ,, i Agreement is limited to Tower C. This is iitot what plaintiff bargained for in the 11 Agreement. Defendant's contends that it has sol cl discretion to relocate the trailers. It I cites to Section 2 of the Agreement, whith states ,in part that plaintiff "shall I 'I ,1 perform the Services exclusively in a designated area at the Project Site to be I 'I determined by [defendant] in its sole discretibn" and Section 4, which states in part :1 ! that, "[plaintiff] shall perform the Services !only on dates and times specified by . ,, ;i [defendant]". d I I I :1 However, when Sections 2 and 4 ate read in their entirety, defendant's i 'I ,I contention is without merit. Section 2 also st~tes that "the License Area, may, upon I i I five (5) calendar days prior written notice to: Licensee by Licensor, be relocated at ,I any time." Section 4 defines the times that: plaintiff will be able to perform the I :I Services as "Designated Times". The sectifn further states that the "Designated i Times" are "Monday - Friday from 5 :OOa.m. to 3 :OOp.m" and that "[t]he :! i Designated Times, may, upon five (5) c*lendar days prior written notice to '! ,, Licensee from Licensor, be changed at any t~me." Defendant's argument that it had ,! sole discretion to relocate the trailer is misle~ding. The Agreement provided that to i l .i relocate the trailer or to change the Designated Times, defendant had to give prior ,, I 'I notice. Defendant does not allege that it gav¢ prior notice. Hence, at this pleading ! :! stage, the court accepts plaintiffs allegatidns that the Agreement was breached ' 7 8 of 13 [* 8] when its trailer was relocated in September;2014, March 2015, August 2015 and i October 2015, forcing it to be unable to perform the Services under the Agreement. I I I Defendant's motion to dismiss pl~intiffs ! claim for failing to move plaintiffs trailer to the License Area and reldcating the trailer is denied. Propane gas I I Defendant argues that it was unable .to provide plaintiff with propane gas i ' because plaintiff failed to satisfy the conditiqn precedent of obtaining the necessary permit. Defendant adduces to an email fr<i>m plaintiffs counsel to defendant's I ' I counsel in which plaintiffs counsel request' that the trailer be re-located as it had been unable to obtain a permit. Subject to the standards of dismissal pursuant to CPLR 321 l(a)(l), the letter ! i is not sufficient documentary evidence to dismiss plaintiffs claim. In particular, ! . I I the letter does not conclusively establish ai defense to the asserted claims. See, I ' Amsterdam Hospitality, 120 A.D.3d 431 : (Pt Dept 2014). Section 5 of the I I I Agreement states in relevant part that "LiceQsee shall, at its sole cost and expense, I obtain any and all federal, state and local ap~rovals, permits and licenses necessary for the performance of the Services, includink but not limited to a permit to operate I I I kitchens and a food handler's license." Nfeanwhile, Section 8(iii) states that, I ,I "Licensor shall provide and maintain at no cpst to Licensee all electricity, propane :: 8 9 of 13 [* 9] gas and portable water necessary for Licensee's performance of the Services, as ' I well as all necessary utility hook-ups, kios* fit-outs and walkway roofing in the I Ii License Area." i I I Plaintiffs argument that the requirem!ent as set forth in S~ction 5 does not .1 include obtaining a permit for propane gas {~ unavailing. The section clearly states I :! that the onus to obtain "any and all federal, ~tates i and local approvals, permits and I licenses" falls on plaintiff. However, the ~etter adduced by defendant does not utterly refute plaintiffs claim. In particu]iar, the letter does not conclusively i !: establish that a permit was necessary. Mor~over, plaintiff has argued that it was i I prevented from obtaining a permit because its trailer was relocated to Tower A, in ! breach of the Agreement. i i ,j Defendant's motion to dismiss plaintiffs claim for failure to provide ! propane gas is denied. Serving kiosk Defendant submits a rental order for a retail kitchen trailer as proof that they 1 I ! provided a serving kiosk, as agreed upon:j in Section 8(ii) of the Agreement. I II :l However, it is disputable that a retail kitch;en trailer is a serving kiosk. In fact, plaintiff argues that it is not similar. Accor~ingly, defendant's evidence does not 9 10 of 13 [* 10] 'I ,I . I ,,I I ,• i meet the standard for dismissal on a CPLR 32ll(a)(l) claim and cannot be I dismissed. Parking Spaces I ,, Similarly, defendant proffers an erhail exchange between defendant's I I representative, Brian deLahunta, and plaiftiffs representative, Maria Pacilla, I where Mr. deLahunta offers to reimburse plhintiff for the two parking spaces and ! I 'i Ms. Pacilla accepts the offer. However, odce again, there is no uncontroverted I 'I evidence that such reimbursement was tendhed and therefore, without more, the I " email exchange does not conclusively I establ~sh a defense to the asserted claims, as ! warranted on a 321 l(a)(l) motion. Accordingly, defendant's motion to dismiss the claim regarding its alleged failure to provide parking spaces is denied. Unauthorized Vendors i ,j Finally, plaintiff avers in its complaint that defendant breached the ! Agreement by permitting unauthorized vendors to sell food and beverage on the :I ,, 'I Project Site. The Agreement provides in Sec~ion 8(i) that the "Licensee shall be the i ,J i exclusive food and beverage provider on tqe Project Site during the term of the 'I 'i Agreement." Accepting plaintiffs factual aJlegations as true, and construing the 'I i 10 11 of 13 [* 11] ' I 'I :1 complaint in the light most favorable to I p~aintiff, the court cannot dismiss this ,I allegation at this stage. I 'I 'i Accordingly, defendant's motion 'I to dismiss the claim regarding I unauthorized vendors on the Project Site is d~nied. ! Second Cause of action for breach of imdlied covenant of good faith and fair / dealing 'I I A covenant of good faith and fair dealing is implied in every contract. I . I Zurakov v Register.Com, Inc., 304 AD2d l 7p, 178 (1st Dept 2003]). A party to a i I contract breaches this covenant by "act[ing] :lin a manner that, although not I I expressly forbidden by any contractual provision, would deprive the other party of t the right to receive the benefits under their agreement." Id. ,i New York courts have repeatedly held: that a claim for breach of the :I " covenant of good faith and fair dealing will ~e dismissed as redundant when the conduct constituting the breach is also a violation of the express terms of the :1 contract. See e.g., New York Univ. v Cont. I~s. Co., 87 NY2d 308, 320 (1995), Engelhard Corp. v Research Corp., 268 AD2p 358, 358-59 (1st Dept 2000). :1 Here, the conduct that plaintiff seeks tb argue is a breach of good faith and I i I fair dealing is also a violation of the express terms of the Agreement. For example, i I plaintiff argues that while defendant has the $ole discretion to determine the I I 11 12 of 13 [* 12] Therefore, defendant's motion to dismiss the second cause of action for breach of the implied covenant of good faith and fait dealing is granted Accordingly, it is hereby I I ORDERED that for all the reasons Jet forth above, defendant's motion to 11 ,1 dismiss plaintiff complaint for breach of th~ Food License Service Agreement is denied; and it is further ORDERED 'that defendant's motiotj to dismiss plaintiffs complaint for breach of the implied covenant of good faith and fair dealing is granted; and it is further ORDERED that defendant shall answer the complaint within thirty days of today; and it is further ORDERED that the parties shall appe1~r for a conference in Part 45 60 Centre ~ ' Street, Rm. 218 on December 1, 2016 at 2:30 pm. 11 I! ·I ii ,, Date: October 19, 2016 New York, New York 12 13 of 13 QQ ~n~. Singh

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.