American Stevedoring, Inc. v Red Hook Container Term., LLC
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American Stevedoring, Inc. v Red Hook Container Term., LLC 2017 NY Slip Op 32602(U) December 13, 2017 Supreme Court, New York County Docket Number: 651472/2012 Judge: O. Peter Sherwood Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [*FILED: NEW YORK COUNTY CLERK 12/15/2017 04:09 PM 1] NYSCEF DOC. NO. 1107 INDEX NO. 651472/2012 RECEIVED NYSCEF: 12/15/2017 SLPRE'VIE COURT OF THE STATE OF NEW YORK COliNTV OF NEW YORK: COMMERCIAL DIVISION PART 49 -------------------------------------------X :\i\lERICAN STEVEDORING, INC, Plaintiff, DECISION AND ORDER Index No. 651472/2012 Motion Seq. Nos. 020-022 - against - RED HOOK CONTAINER TERMINAL, LLC. and PORT AUTHORITY OF NEW YORK AND NEW JERSEY, Defendants. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - -- -X 0. PETER SHERWOOD, .J.: I. BACKGROUND' These three motions concern the two remaining claims of plaintiff American Stevedoring Inc. (ASI) arising from the failure of defendant Red Hook Container Terminal, LLC (Red Hook) to return hca-vy stevedoring equipment (the Equipment) following expiration of an equipment lease agreement bet\vcen ASJ and Red Book dated September 26, 2011 (the Lease), the failure of Red Hook lo obtain proper insurance coverage for the Equipment and the failure to properly maintain and safeguard the Equipment against. damage in Hurricane Sandy. ln motion sequence 020, ASI mo\ cs for summary judgment on its first and tenth causes of action~ for breach of contract (failure to rel um the Equipment, safeguard it and maintain proper insurance) and breach of a so-ordered stipulation dated, May 2. 2012, (failing to secure and safoguard the Equipment), respectively. In motion sequence numbers 021 and 022, Red Hook and defendant, the Port Authority of New York and Ne\\ Jersey (the Port Authority), respectively seek summary judgment dismissing the case. ' By Order, dat..:d_ July 12. 201.7 i.lnd Decemhcr 13, 20 17, the property damage and insurance coverage causes of action severed. assigned a new index number (452887/2017). and the parties directed to file new plcadinos (see 'JYSCEF Doc. No. I !05). "' \\LTC 2 of 24 [*FILED: NEW YORK COUNTY CLERK 12/15/2017 04:09 PM 2] NYSCEF DOC. NO. 1107 H. INDEX NO. 651472/2012 RECEIVED NYSCEF: 12/15/2017 FACTS AS I lcaseJ the Brooklyn :r·vfarinc Terminal (an ·'intem1odal freight transport maritime facility'' \\hich includes a container terminal in Brooklyn, New York and a saieilite facility in Port Newark, l\ew Jersey) (the Terminal) from the Port Authority where ASI provided stevedoring services from 19cr1 to ab(iut September 2011. The relationship devolved into litigation and resulted in a settlement agreement that required ASI to vacate the facility. At the time of the settlement, the Port Authority and Red Hook entered into an ·'Operating Agreement" pursuant to which Red l look would manage the Terminal and provide the stevedoring services needed to keep marine commerce flowing (see >JYSCEF Doc. No. l 031 ). One aspect of the settlement agreement called for ASI to lease some of its stcYe<foring equipment to Red Hook pursuant to a separate agreement (the Lease). J\SI claims that. whik the Porl Authority is not a signatory to the Lease, the Port Authority is a principal of Red Hook, controls it, and is the real party in interest ASI argues that the Port Authority negotiated the Lease. supervised Red Hook's performance, gets notices and must consent to all significant matters. ASI also claims that it \\as understood the Port Authority was going to make Red Hook's payments pursuant to the Lease. The Port Authority claims Red Hook acts independently. The Lease was set to expire on March 31, 2012. As relevant here, the Lease provides that "[a ]t the conclusion of the Lease Term, [Red Hook] shall: return the Equipment to lASI] to a location spccifieJ by [ASIJ, not more than 20 miles from the Red Hook Container Terminal." The Lease alsn required Red Hook to obtain a $10 million insurance policy to cover loss or damage to the Fquipment. \Vith Red I look and ASI both named as insureds. The Lease also provided that Red Hook would shoulder the risk of loss to the Equipment for any reason. The parties dispute whether Red l luok obtained the required insurance coverage. !\s the Lease neared its termination, ASJ told Red I look that it needed to inspect the Equipment and the p:.irties needed to address the issue of removal of the Equipment. On March 27, 2012, ASI proposed moving the Equipment to a location at the intersection of McCarter Highway & Murray Street in Newark. New Jersey (the First Location). Red Hook objected, claiming it was more than 20 miles by road from the Brooklyn Marine Terminal. Subsequently, Red Hook added that the pruposcd location was unsuitable and \.vould expose the Equipment to risk of the1l and damage. Red Hook demanded that ASI designate another site or start paying storage charges. ASI disputes that 2 3 of 24 [*FILED: NEW YORK COUNTY CLERK 12/15/2017 04:09 PM 3] NYSCEF DOC. NO. 1107 INDEX NO. 651472/2012 RECEIVED NYSCEF: 12/15/2017 Red Honk has the authority to demand storage charges. AST later withdrew its designation of this site and. \lD April 13, designated a second location for the delivery of the Equipment at 319 Tonne lie A \e .. ferse~ City. New Jersey (the Second Location). Red Hook objected to this location as well. AS J then Ji kd suit in this court on May 1. 2012. ,\t a \fay 2, 2012. hearing, AS! and Red Hook entered into a so-ordered stipulation (the Stipulation) (ASI Exhibit L, NYSCEF Doc. No. 982). in which the parties agreed that Red Hook will (1) refrain from using the Equipment; (2) maintain and safeguard the Equipment usmg commercially reasonable means; and (3) continue lo maintain insurance on the Equipment. After the hearing. ASI and Red Hook inspected the Second Location, but Red Hook disputes whether it agreed the Location was acceptable. Nonetheless, Red Hook made arrangements for delivery to the Second Location. On May 14, 2012. l\.1ichael Stamatis, of Red Hook, spoke with Mark Meltser, O\\ner of the Second I .ocation. According to Red Hook, Mcltser instructed Stomatis not to deliver the l·.quipment to his property. On May 21, Red Hook's counsel, Eugene D'Ablemont ID' Ablemont) asked Mdtser's counsel to tell the court that ASI docs not have permission to use the property for receipt of the Equipment. The parties dispute whether Meltscr had a prior agreement with ASL which he then abandoned, and whether Meltser was pressured by Red Hook to walk away. On \fay 23, 2012. the court directed Red Hook and ASI to designate a new location and proceed with the delivery within seven days (NYSCEF Doc. No. 345, at 13-15). On June 6, 2012, ASI designated a new site located at 318 Port Street Newark, New Jersey (the Third I ,ocation). The site is owned by the Port Authority, but this fact \Vas not disclosed to the court at that time. ASI claims International Motor Freight (IMF) was then the lawful occupant of the site. Although not asserted until alter llurricane Sandy hit New York 2, Red Hook now claims IMF merely had a right of entry license. a view dcfrn<lant the Port Authority shares. By letter, dated October 10, 2012 (NYSCEF Doc. ~o. 989), Lou Grato, a principal of IMF, confirmed his consent to delivery of the Equipment to the Third Location. Red Hook disputes whether Grato had the authority to give consent. In any C\ ent. on .lune 13, 2012, counsel for ASI advised the court that it was still attempting to ''paper the 2 ScL'. e g NYSCIT Doc. Nu. 99!, D' Abkmont letter, dated October 31, 2013, in response to Hiller letter, dated Octubcr l ::. 2012 (NYSCEF Doc. No. 990) providing a copy ofGralo letter consenting to delivery of Equipment at I hird Location. ., _) 4 of 24 [*FILED: NEW YORK COUNTY CLERK 12/15/2017 04:09 PM 4] NYSCEF DOC. NO. 1107 INDEX NO. 651472/2012 RECEIVED NYSCEF: 12/15/2017 transaction .. b; obtaining '·a licensing agreement of some sort" that would allow ASI to use the 318 Port Street property (NYSCEf Doc. No. 39 at 3 ). As of the time of the parties' next court appearance on J unc 2:". 20l1. ASI had not received a license. Given the L:ick of clarity Jor handling removal of the Equipment, the court specified a protocol that required (a) ASI to provide Red I look with a writing from ASl's cow1scl or the owner of the propcrt;.. confirming that ASl had the consent of the owner or other authorized person to deliver the Equipment on the property: (b) AS! to inspect the Equipment and provide Red Hook with an inspection report: (c) Red I look to make the repairs disclosed therein; and (d) after completion of those steps. delivery of the Equipment to the designated location (see NYSCEF Doc. No. 345, transcript at 39-48). ASI contends Hvff had a right to authoriLe dclivel)' of the Equipment to the Third Location and that the Pu11 Authority interfered with the delivery by trying to get IMF to deny its consent. The Port Authority claims it did not have any substantive involvement in the return process after the end of the Lease term. ASI slates it repeatedly demanded delivery of the Equipment to the Third Location, but Red Hook did not comply. Red Hook disputes this claim and states that no written pem1ission meeting the requirements or the protocol was ever received. It asserts that the letter of authoriz,ation, dated o,:toher IO, 2012, \Vas a "sham," as IMF did not own the property or lease it before April 16, 2014 !see Red Hook Memo, p. 7, NYSCEF Doc.1\o. 1017, at 7). Red Hook claims IMF had only a limited right or entry to make repairs and improvements while IMF and the Port Authority contemplated a potcnti,11 leasc of the property. ASI argues that IMF already had a lease, and the license was to give 1ha1 kasc effect. Red Hook presents an email it received from a Port Authority official dated Decemhcr 11. 2012, which states that IMF did not have authority to pennit AS! or any third party to use the property. In an affidavit dated July 27, 2017, in rnnncction with ASI's motion, Grato states that IMF gave its consent to delivery of lhe Equipment at the Third Location (NYSCEF Doc. No. 970). He states that as parl of IMF's transaction with ASI. IMF would have enjoyed full use and control of the Fquirment as part of lMF's business activities (id, ir 16). 4 5 of 24 Orato also states that the Port Authority [*FILED: NEW YORK COUNTY CLERK 12/15/2017 04:09 PM 5] NYSCEF DOC. NO. 1107 INDEX NO. 651472/2012 RECEIVED NYSCEF: 12/15/2017 never advised him that JMF was not authorized to use the Third Location for general commercial Jl'ti' ity such as delivery or the Equipment for its control, use and/or rental and if it had, IMF would ha\ e had the ability to accept the Equipment at its 120 Taylor Street facility (id,~ 13). The fa1uipment had not been moved from Red Hook's facility when Hurricane Sandy made landfall in New York on October 29, 2012. The parties dispute how much the Equipment was damaged from the storm, with ASI claiming the Equipment was a t-0tal loss, and Red Hook claiming the estimatt:d cost to repair the damage was $200,000, leaving the Equipment valued at $1.2 million (Red 1 loo~ 19-a Stmt. N YSCEF Doc. No. l 016, ii 40). ASI valued the Equipment at $10 million. !he parties continued to discuss delivery of the Equipment after Hurricane Sandy but no agreement \vac; rcachc-J. The parties also dispute whether Red Hook again offered to deliver the Equipment at a December l 2, 2012. conference before the court. The parties dispute whether the Lease allowed ASI to refuse tu accept ddiwry of the Equipment while it \vas in damaged condition (see ASI 19-a Counter Strnt. );"YSCEF Doc. No. 1046 ~; ~ 38-39). Further, while independent aqjusters found the value of the Equipment to have decreased from $1.6 M to $1.4 M, ASI points to the Lease, which states that if Equipment is .. damaged beyond repair,'' Red Hook is required to pay ASI "an amount equal to the insured value of such item" (id, i! 39). The parties also disagree as to whether Red Ilook used the Equipment after the end of the Lease, and \vhetlr:r any mca<>ures were taken to protect tht: Equipment (id. v, ~· If' 48-49). Finally, Red Hook and ASI dispute whether ASI owes Red Hook storage fees, bi ch Red Hook now calculates as totaling $2,830,500. Hi. ARGUMENTS A. Motion 20 - ASI's Motion for Summary Judgment 1. ASI's Arguments in Support In its motion for summary judgment. ASI asserts breach of the Lease, specifically failure to return the Equipment, failure to obtain the required insurance, and failure to maintain and safeguard !he E4uipment. It also asserts breach of the !\'fay 2, 2012 stipulation. On .lune 6, 2012, ASI's counsel Michael lliller (Hiller) provided Red Hook's counsel, Eugene lJ'Ahlcmont (D'Ablemont), with the address of the Third Location (see NYSCEF Doc. No. 5 6 of 24 [*FILED: NEW YORK COUNTY CLERK 12/15/2017 04:09 PM 6] NYSCEF DOC. NO. 1107 INDEX NO. 651472/2012 RECEIVED NYSCEF: 12/15/2017 985 ). Given the experience of the rcfosal of the o\\ncr of the Second Location to accept delivery, at the June 25. 2012 couit appearance, Red Hook raised the issue of wanting ·written consent for delin:ry to <my designated site. Consistent with the courts' protocoL ASI ordered an inspection of the Equipment. The report or the inspection conducted by CargoTcc was delivered to Red Hook on September 17, 2012 (J\YSCTF Doc. No. 1012). By letter dated October 3, 2012, D'Ablemont requested written authorization for delivery to the Third Location (NYSCEF Doc. No. 987). The Grato letter of authori1ation \'<as provided on October 12. 2012 (NYSCEF Doc. No. 990). Red Hook failed to raise ::tn) issu,'.s about the use of the Third Location at that time. Hurricane Sandy hit on October 29, 2012. Cuunscl for Red Hook stated, in an October 31, 2012, letter, and again at a hearing on December 12. 2012, that it was about to load the tmcks to deliver the Equipment to the Third Location (20 Memo al 2J. Had there been any issue with the Third Location, !Mr had another nearby sit..: \\here it was ready and wilting to accept delivery ofthe Equipment, 120 Tyler Street, Newark (id at 14. citing Grato Alf,~ 13). In his Octebcr 31 and December 11, 2012, letters (NYSCEF Docs. No. 991 and 992), D'Ablcmont conveyed Red Hook's intention to make certain repairs and to then "prepare the equipment for delivery. and complete delivery'> (id 991) and that Red Hook '"remains ready. willing and able to delivery lo 318 Port Street those items oflcased equipment" (id 9':12 ). Red l look only raised the defense that delivery to the Third Location would be illegal in its 2014 cross motion for summary judgment. ASI states there is no issue of fact as.to whether Red Hook risked a trespass claim by the Port .·\uthority. had it attempted delivery of the Equipment to the Third Location (20 Memo at 17). The Port Au1hority is Red Hook's principal, and chose Red Hook as the new port operator. IMF, in pc3ceful possession of the Third Location. ga\e permission for delivery of the Equipment. There is no ev1uencc that Red Hook even suspected. let :ilone knew that its presence at the Third Location would be unauthorized. as required by the standard for criminal trespass (id. at 18, citing Penal Law ~ l 40.05 ). Herc, Red Hook had permission from an entity with authority to occupy the location. In the Lease, Red ! look agreed to, "at its own cost and expense, [ ] keep and maintain the Equipment in the same or, at the Lessee· s option, better, condition as or than ... reflected in the b.quipmem Inspcction Report . . . except for normal wear and tear, and shall furnish all parts, 6 7 of 24 [*FILED: NEW YORK COUNTY CLERK 12/15/2017 04:09 PM 7] NYSCEF DOC. NO. 1107 INDEX NO. 651472/2012 RECEIVED NYSCEF: 12/15/2017 mechanisms. devices and servicing required therefor ... [Red Hook] hereby assumes all risk ofloss, damage or destruction for whatever reason to the Equipment" (Lease, iJ4. l ). Further, "[f]rom the date uf the delivery of rhc Equipment to [Red I look j, [Red J look] hereby assumes and shall bear the entire risk of loss for then. damage, destruction or other injury to the Equipment from any and every cause \vhatsocver" (id ~ 4.2). ASI argues there is no issue of material fact that Red Hook failed to keep and maintain the Equipment as required by the Lease and the Stipulation (ASI Exhibit L, NYSCEF Doc. No. 982, 11! 2). It i~ undisputed that damage to the Equipment occurred from Hurricane Sandy while the Lquipmcnt was in Red Hook's possession. The Equipment was not properly secured and maintained during the hunicane. As the post-Sandy Cargotec equipment survey dated Decembt:r 6, 20 I 2, shov,e<l. most. if not all, of the Equipment would have lo be replaced (see ASI Exhibit AA, NYSCEF Doc. "Jo 997). Accordingly, Red Hook should be held responsible (ASI Memo at 21, NYSCEF Doc. J\:o. 966). ASI also asserts that it is undisputed that Red Hook failed to obtain the required insurance. Section 4.3 of the Lease required Red Hook to '"obtain and maintain ... (as primary insurance for Lessor and Lessee). commercial property damage insurance and insurance against loss or damage to the l·quipment ... in the amount of $10,000,000 .... Each insurance policy will name Lessee as an insured and Lessor as an additional insured arid loss payee thereof." However, Red Hook did not obtain a dedicated policy for the Equipment. but only a policy to cover the interests and equipment of a variety of parties. There were many entities competing for the same coverage limits (id., at 22, citing Certificate of Insurance, attached as ASI Exhibit W). The failure to obtain the proper insurance. as required by the Lease, is a breach of the Lease, regardless of whether there is a $5 mi Ilion tlood sub-limit, as claimed by the insurt'rSeneca (id, at 23). Finally, ASJ argues that, as far as Red 1lookcounterdaims for storage foes in the amount of S 1.500/day, it is not entitled to any relief, as Red Hook is in breach of the Lease. In any event, there is no provision in the Lease entitling Red Hook to storage fees (id, at 24). Nor is there a statutory hasis for the counterclaim (id. at 25). 7 8 of 24 [*FILED: NEW YORK COUNTY CLERK 12/15/2017 04:09 PM 8] NYSCEF DOC. NO. 1107 INDEX NO. 651472/2012 RECEIVED NYSCEF: 12/15/2017 2. Red Hook's Arguments in Opposition 3 Red Hook claims ASI proposed poor transfor locations that risked exposing the Equipment, 1.\hich was already old and damaged, to being stolen or damaged farther. Accordingly, ASI could nut irn okc the damages clause of the Lease to force Red Hook to pay for repairs or new Equipment (Red l ll)ok Opp at 2. NYSCEf Doc. No. 1070). Red I look argues that, as ASI \Vithdrcw the First and Second Locations, any claim based on !~1ilure to dcliwr to either is immaterial. Delivery at the Third Location was impossible, as IMF only had a Right of Entry License and was not the occupant of that property, despite ASI's rerrcscntations to the court that IMF was the proprietor there. In 2012-13, IMF and the Port Authority were negotiating a lease. IMF had a right to enter the Third Location during this period lo inspect :md prepare the site. It did not have a lease until April 16, 2014 (id. at 7, citing IMf Right of Entry License, ASI Exhibit CC, NYSCEF Doc. No. 999). Thus, IMF was only authorized to use a portiDn of the Third Location, and had authority to make repairs and improvements to a building nn site (Right of Entry License at NYSCEF Doc. No. 999). The rights granted in the Right of Entry could not he assigned, or transferred without leave of the Po1t Authority (id. at~ 12[d]). Red Hook argues IMF and ASI misled the court about IMF's status with regard to the Third Locatiun (Red Hook Opp at 8, NYSCEF Doc. No. 1070). As far as Grato states that IMF's lease allows !\ff to use the property in this way, there was no lease in place at that time. The Right of Lntry License limits IM F's use of the property (id at 9-10). As far as ASI claims the 120 Tyler Street site could have been used as an alternative, it was never designated as a delivery location, and should not be considered no\v (id). Red Hook contends that the other fact affidavits, provided by Keith Catucci and h'1att Yates of ASI, mischaracterize the Right of Entry and the Lease. Red Hook contends it had no obligatio:t to attempt delivery to the Third Location, since de Ii\ cry there was unauthorized and the Appellate Division stated that there was no obligation to deliver to an unauthorized site and risk being a trespasser (id. at 11). The court did not require such ~ Recause Red l loo.k .makes the same arguments in its motion for summary judgment (motion sequence no. 02 l) and in ('ppo<;1t10n to AS! s motion, both are discussed here. its 8 9 of 24 [*FILED: NEW YORK COUNTY CLERK 12/15/2017 04:09 PM 9] NYSCEF DOC. NO. 1107 INDEX NO. 651472/2012 RECEIVED NYSCEF: 12/15/2017 an attempt during the June 25, 2012, conference (id at 12, citing Order dated Feb. 23, 2017, attached a:; i\Sl Exhibit JJ, NYSCEF Doc. No. 1006 f·'thc court did not order delivc:ry of [all of the Equipment] without any assurance that plaintiff had a legal right to use the designated delivery site'']). IMF's letter dated October 10, 2012, \vas not a proper authorization for ASl to use the Third Location for the transfer (Red llook Opp, NYSCEF Doc. No. 1070, at 4-6). Red Hook also argues that ASI's claim of being deprived of the Equipment is without merit, as rhc Equipment was old and hard-used, and there was no market in the area for this type of equipment. Red I look made several cff<.ffts to return the Equipment or to get ASI to pick it up (id., at l 3 ). Red Hook repeatedly offered to return »he Equipment to the Third Location as soon as it reccin:J the required authorization (id. at I 4 ). l)pon receipt of the October 10 and October 12, 2012, letters from ASI and IMF, Red Hook prepared to deliver the Equipment (id at 14-15). Red Hook contends that the only reason delivery was not made on November 7, 2012, is because AST refused to accept Equipment it said had been totally destroyed by Hurricane Sandy and could not be moved, contrary lo the opinion or independent adjustors (id. at 15-16). Red I look continued to offer to deliver the Equipment iL\S! could provide an authorization from the Port Authority (id. at 16). ASI was not cooperative with any of Red I Iook's proposed solutions. '\Vhile there may have been no risk of criminal trespass, based on the lack of knowledge that Red Hook· s presence at the Third Location was unauthorized, Red Hook was entitled to avoid liahility f(Jr civil trespass. A civil trespass claim ·does not require an intent to produce the damaging ac consequences, merely intent to perfom1 the that produces the unlawful invasion'' (id, at 17, quoting Berenger v 261 JY. LLC. 93 AD3d I 75, 18 J [ l st Dept 2012]). Red l look further denies that it is an agent of the Port Authority (id., at 18). Red I fook contends that ASI breached the Lease, and that the storage foes, while not spccifiL«:tlly mentioned in the Lease, are a measure of Red Hook's damages (id.). Red Hook has storeJ the Equipment at its facility for more than five years, was unable to lease that portion of the property. and incurred storage expenses (id at 18-19). Further, Red Hook informed ASI it would start charging storage fees on April 9, 2012 (id at 20, citing Brayman letter to Catucci dated April 9. 20 l 2. ~YSCEF Doc. l\io. 368). ASI admitted that it could not afford to store the Equipment while 9 10 of 24 [*FILED: NEW YORK COUNTY CLERK 12/15/2017 04:09 PM 10] NYSCEF DOC. NO. 1107 INDEX NO. 651472/2012 RECEIVED NYSCEF: 12/15/2017 repairs \vcre made. and is attempting to shin that cost onto Red Hook (Red Hook Opp at 20, citing Tr;inscript of December 12, 2012. conference, NYSCEF Doc. No. 359, at 8:3-19). Red Hook also argues it properly safeguarded the Equipment (Red Hook Opp NYSCEF Doc. Nu. l IJ70. at 20). J\t the time of Hurricane Sandy, the Lease was no longer in effect, nor was the unconditional promise to safoguard the Equipment in section 4.1 of the Lease (id at 21 ). :\ccordingly, Red I look had no obligations regarding the Equipment. As of May 2, 2012, the Stipulation defined Red Hook's obligations. requiring Red Hook to use commercially reasonable means and methods. No evidence has been presented suggesting that Red Hook did not do so (;d ). To the co11lrary, Red I look has presented deposition testimony that it placed the Equipment as far from the water's edge as possible, laid out sandbags, and secured it in the same way Red Hook Sl'curcd its other equipment (id at 22). As to the issue of insurance, section 4 3 of the Lease does not require a dedicated insurance policy CO\ering ASrs equipment only (id at 23). The Equipment was insured, along with other eyuipment, by an insurance policy for$ I 0 million. There is no evidence AS I's status as a loss payee as opposed to as an additional insured had an 3dverse effect on ASI, and any claim ASl had to a particular type of insurance under the Lease ended when the Lease ended on March 3 I, 2012 (id. at .:'.4L Any obligation to insure the Equipment pursuant to the court-ordered Stipulation ended when the order to show cause was resolved on June 25, 2012 (id). Red Hook argues that, at the outside its obligation tu provide insurance ended on October 12, 2012, when ASI provided what Red Hook calls a ··bogus letter of authorization from a bogus proprietor" (id at 25). All of these dates are be for\? l l urricane Sandy made landfall in New York, and there is no allegation that the Equipment was damaged before then, making it impossible to sustain a claim for breach of contract. 3. The Port Authority's Arguments in Opposition ASI did not move for summary judgmert against the Port Authority, but maintains that as the principal of Red I look, the Port Authority is liable for damage to the Equipment (see ASI 19-a Strnt. \.JYSCEF Doc. No. l 027, ii 27). The Port Authority filed papers in opposition (PA Opp, N YSCE-_F Doc. No. l 080) to emphasize that Red Hook was not its agent, that IMF was not an on.:upant of the Third Location with the right to use that property for the transfer of the Equipment IO 11 of 24 [*FILED: NEW YORK COUNTY CLERK 12/15/2017 04:09 PM 11] NYSCEF DOC. NO. 1107 INDEX NO. 651472/2012 RECEIVED NYSCEF: 12/15/2017 (P.\ Opp at 2). and that ASI never satisfied the return Protocol specified by the court on June 25, 2012. fhc Port Authority argues that in the fall of 2012, IMF had access to the Third Location only tu make repairs and certain improvements to one of the buildings on the site (id.)- The Right of Fntry I icense <lid not give IMF authority to permit AS[ to use it for the transfer (id at 5). The Port Authority cites the merger clause in the Right of Entry License which states that the entire agreement bd\\CCn ! \i1F and the Port Authority is in that agreement, and prohibits oral modification. Acrnr<lingly, any verbal permission Grato claims to have received is unenforceable (id., citing Right of Fntry License. section 121 c ]). Any claim to the contrary in the Grato affidavit is a self-serving sham. and 1.'.annol create a genuine issue of disputed fact, as it ignores and contradicts the terms of the Liccn:~e (id at 6). ASI's claim that Grato told Lombardi (of the Pm1 Authority) on or about Fchruary 8. 2013, that IMF was interested in storing the Equipment at the Third Location is belied by L()mbardi's email the same day. which notes that IMF did not yet have a lease for the Third Location. and would not for some time (id., citing Lomhardi e-mail dated February 8, 2013, NYSCEF Doc. No. 1005). Finally, Wayne Rakoski, the Port Authority's Assistant Manager for Port I.casing. provided an affidavit in \vhich he confirms that IMF had no right to use the Third Location for the transfer. and that he told Red Hook as much on December 11, 2012 (see Rakoski An: attached ~is [xhibit A to Geraghty Aft: NYSCEF Doc. No. 1082, paragraphs 8-9). Accordingly, IMP had no legal right to give anyone permission to deliver the Equipment to the Third Site in October of 2012 (PA. Opp N YSCEF Dnc. No. l 080, al 7). AS! ~as failed to demonstrate it had a legal right to use the Third Location. To the contrary, Red Hook :ms shown /\SI did not have that right. 4. ASl's Reply In its reply, ASI maintains that the motion should be granted because it had pennission of the Third Lucation's tenant, IMF, and Red Hook could not have been exposed to liability for trespass, since the owner of the property was Red Hook's ptincipal, the Port Authority, and the Port Authority never raised an objection (ASI Reply Memo r\YSCEF Doc_ No. 1096, at I). ASI relies on the Grata aifoJa\ it as evidence of IMF's right to use the Third Property for the transfer, and that neither Red Hook nor the Port Authority objected to that plan (id. at 2. citing Grato aff ). The Right of Entry l .icense \\Ould not haYc prohibited this plan, and IMF was already using and storing its heavy 12 of 24 [*FILED: NEW YORK COUNTY CLERK 12/15/2017 04:09 PM 12] NYSCEF DOC. NO. 1107 INDEX NO. 651472/2012 RECEIVED NYSCEF: 12/15/2017 equipment at the Third Location (id. at 2-3 ). The License gave IMF the right to use the whole eight acres of property, with the Port Authority reserving a right of re-entry, suggesting Il\/JF had control of the \vhole site (id. at 4, citing License at~ I [b]). IMF also indemnified the Port Authority for all risl-s of Jamage to property arising from IMF's use of the site (id. at 5, citing License, if 7[a]). Regardless of whether IMF had a license or a lease, IMF had the right to use the property for the tran<>ler, and there could have been no 1iabifity for either criminal or civil trespass (see id at 6, quoting Sr Matthe11• Church olChrist Disciples oj'Lnrisz, Inc. v Creech, 196 Misc 2d 843, 858 [Sup Ct, Kings County, 2003 J ["·[!Jiability for ciYil lre.spass requires the fact-finder to consider whether the person. without justification or pcm1ission, either intentionally entered upon another's property, or. if cnt1) was permitted, that the person refosed to leave after permission to remain ha[ d] been \YithdraY\n"][intemal quotations omitted]). As IMF invited Red Hook, there could be no trespass (!\SI Reply Memo at 6, NYSCEF Doc. '.\Jo. I 080). Nor is it possible to believe the Port Authority would sue Red I look for trespass, due to their relationship, and the Port Authority would have been indemnified by IMF. at any rate. While the agreement between IMF and the Port Authority was ca!kJ a license, the substance of the agreement was more aptly described as a lease, as it gave IMF ri~dits greater than those of a license holder (id. at 7-8). Further, it is undisputed that the Port Authority never voiced to IMF any objection to the Third Location for the transfer, communicating its objection lo Red Hook only after l lurricane Sandy (id at 8). Lombardi, the Port Authority Deputy Director of Port Commerce, sent D 'Ablemont an e-mail on February 8, 2013, indicating that the Port .\uthority \\as •·attempting to confinn that IMF was no longer interested" (NYSCEF Doc. No. I 105), indicating the Port Authority had not objected to that use of the Third Location (ASI Reply Memo at 8. \f'r'SCEF Doc. \lo. 1080). The e-mail contradicts the e-mail from Rakoski, a subordinate of Lombardi. sent to Red Hook in December 2012 (id). As far as Red Hook argues that there is no market for the Equipment, leaving it without Yalue. Red Hook had just leased the Equipment for 6 months. paying ASJ over a million dollars (id ;it 10). Accordingly, the value of the Equipment (as Red Hook was required to return it in at least as good condition as it \'Vas received) was at least the $175,000/rnonth Red Hook was paying (id.). AS! also argues Red Hook's lack of action to return the Equipment is a breach oflhe covenant or guud faith anJ fair dealing (id). Nor did the Stipulation change the terms of the Lea<>c or the 12 13 of 24 [*FILED: NEW YORK COUNTY CLERK 12/15/2017 04:09 PM 13] NYSCEF DOC. NO. 1107 INDEX NO. 651472/2012 RECEIVED NYSCEF: 12/15/2017 panics· obligations under it. including Red Hook's obligations to return the Equipment and to sakguarJ it (id at 10-11 ). Further, according to Red Hook's witness, Anthony Gambale, no repairs \\ere made to the Equipment and no measures were taken to safeguard the Equipment, even though ReJ I look \\as expecting Hurricane Sandy (see id at 11, see also Deposition of Anthony Gambale, NYSCEF Doc. No 1024). As to Red Hook's claim for storage frcs. any damage suffered by Red Hook arising from having to store the Equirment is the result of its mvn malfeasance. Red Hook should not be rewarded for it (id. at 12). B. i\fotion 22 - Port Authority Motion for Summary .Judgment l. Port Authority's Arguments in Support In its statement of undisputed material facts on this motion, the Port Authority states that it leased the Brooklyn Marine Terminal property to Red Hook, and that Red Hook was solely responsible for the activities at that site, that the Port Authority was not a party to the Lease, that Rt::·d Hook was solely responsible under the Lease, that the Port Authority had no control over Red I Io(_)k 's activities. that the Port Authority was not a party to the so-ordered Stipulation, that Red I look Jctcd without the Port Authority's direction, and that Red Hook was not authorized to act on behalf 0f ur bind the Port Authority (see NYSCEF Doc. No. !032). In support of its contentions, the Po1i 1\uthority cites provisions of its Operating Agreement and transcripts of proceedings before the court. AS! denies these statements, except for acknowledging that the Port Authority was not a r~n:. to the Stipulation. Otherwise, ASI contends that Red Hook was a subsidiary of the Port Authomy. that the Port Authority had authority over it, supervised it, was responsible for making payment~ under the Lease, and had suhstantial control over Red Hook (see NYSCEF Doc. No. I 068). The Pon Authority argues, first. that ASl's first and tenth causes of action shouid be dismissed because Red I look did not breach the Lease, for the reasons discussed above. Further, the Ori:rnting Agreement between the P011 Authority and Red Hook expressly disclaims making Red Hot1k a representative of the Port Authority (see PA Memo at 4, citing Operating Agreement, section 30[g ]. :-IYSCfT Doc. No. 1029). t3 14 of 24 [*FILED: NEW YORK COUNTY CLERK 12/15/2017 04:09 PM 14] NYSCEF DOC. NO. 1107 INDEX NO. 651472/2012 RECEIVED NYSCEF: 12/15/2017 The Port Authority contends that the first claim, for breach of contract, is not actually aimed zit the Port 1\uthority. as the Port Authority is not named in that claim, and, if it was, ASI appears to ha\ c ;1bandoncd it, as /\SJ did not move for summary judgment against the Port Authority. Also, :\SI makes no mention of any claims against the Port Authority in its December 14, 2016, Note of Issue (PA rvkmo NYSCEF Doc. No. I 029. at 6-7). Nor were any claims againsl the Port Authority mentioned in AS I's motion to vacate the Note of Issue. Additionally, the Port Authority argues that, once AS! declared all of the Equipment destroyed and refused delivery of the Equipment, it can no longer cb1m breach of the Lease (id at 12). RcgJn.ling the Tenth Cause of Action. Red Hook has not breached the court ordered Stipulation. Also, the Trutneff affidavit and the Port Authority/Red Hook Operating Agreement shovvs Red Hook was an independent contractor, had authority to act independently in handling the Terminal and \Vas not authorized to bind the Port Authority (id at 16). 2. ASl's Arguments in Opposition AS f responds that the Port Authority was involved, as the Port Authority required ASl to lea::>c the Lquipment to Red Hook as part of the ~cttlement agreement (ASI Opp at 1, NYSCEF Doc. No. 1069) An "Execution Version" of the Lease was attached to the settlement agreement ( '\.JYSCEF Doc. No. 456 ). The Lease was signed in accordance with the terms of the settlement agreement (AST Opp. NYSCEF Doc. No. 1069, at l-2). Dennis Lombardi, Deputy Director of Port Commerce, testified that Red I look operated the Terminal on the Port Authority's behalf (id., quntin!,( Lombardi Aff at 280). Further, the Port Authority \Vas entitled to legal notices pursuant to the Lease, and the Port Authority had negotiated and drafted the terms of the Lease (id, citing 11raym~m Tr;.mscript at 41). Additionally, as Red llook was a new entity with no assets, the Port /\uthority was to be responsible fix payments under the Lease (id., citing Brayman Transcript at 201) The Operating Agreement also indicates a dose relationship between the Port Authority and Red I look, including that Red Hook was not charged an operating fee, the Port Authority paid Red ~ Hook's permitted expenses, and the Port Authority had a right of approval over Red Hook's high k\'cl hiring and salaries (id citing Operating Agreement, section 3[dl). Representativc:s of the Port Authority \\ere also involved in evaluating and rejecting the different return sites. 14 15 of 24 [*FILED: NEW YORK COUNTY CLERK 12/15/2017 04:09 PM 15] NYSCEF DOC. NO. 1107 INDEX NO. 651472/2012 RECEIVED NYSCEF: 12/15/2017 A'.)1 denies it dropped its breach of the Lease claims against the Port Authority (id. at 16), ;ind :1r~'.lll'" that as Red I look was acting as the Port Authority's agent, the Port Authority can be held rc~punsible for Red IJook's breaches, and the Port Authority's motion should be denied. v. !'' 1' DISCUSSION A. Summary Judgment Standard The standards for summary judgment are \veil settled. Summary judgment is a drastic remedy which will be granted only when the party seeking summary judgment has established that there arc no triable issues of fact (see CPLR 3212 Lb]; Alvarez v Prospect llo.\77., 68 NY2d 329 l l 9861: Sillman v Twentic>th Cen!WJ'-Fox Film Corporation 3 NY2d 395 [19571). To prevail, the 1x:irt) seeking summary judgment must make a prima facie showing of entitlement to judgment as a mutter of !aw tendering cvidentiary proof in admissible form, which may include deposition transcriph and other proof annexed to an attorney's aJ1irmation (see Alvarez supra; Olan v Farrell Lines. 6.+ NY2d 1092 fl985]: Zuckerman i· City ofNew York, 49 NY2d 557 f1980]). Absent a -;ufficient showing, the court should deny the motion without regard to the strength of the opposing papers (.1ce Winegrad v New York Univ. ;vied. Ctr.. 64 NY2d 851 [1985]). Once the initial showing has been made, the burden shifts to the party opposing the motion fi.Jr summary judgment to rebut the prima facic showing by producing evidcntiary proof in admissible form sufficient to require a trial of material issues of fact (see Kaufman i· Silver. 90 NY2d 20-1. :208 f 1997]). Although the court must carefully scrutinize the motion papers in a light most frl\ ornhlc to the party opposing the motion and :nust give that party the benefit of every favorable infrrencc (see Negri v Stop & Shop, 65 N Y2d 625 [1985 J) and summary judgment should be denied \vhere there is any doubt as to the existence or u triable issue offact (see Rotuba Extruders, v Ceppos, 46 !\ Y2J .2:23, 231 [ 1978]), bald, conclusory assertions or speculation and "[aJ shadowy semblance of an issue·· are insufficient to dcteat a summary judgment motion (5i'..J Capalin Assoc. v Globe Aflf!;. Corp .. 34 NY2d 338. 34 l [1974]; see Zuckerman v City of.Yew York, supra; Ehrlich v American .\fo11i11J!.cr Greenhouse Mfg. Corp., 26 NY2d 255, 259 [1970]). Lastly, "[a] motion for summary judgment should not be granted where the facts are in dispute. where conflicting inferences may be drawn from the evidence, or where there are issues of 15 16 of 24 [*FILED: NEW YORK COUNTY CLERK 12/15/2017 04:09 PM 16] NYSCEF DOC. NO. 1107 INDEX NO. 651472/2012 RECEIVED NYSCEF: 12/15/2017 creJ1bility" (Rui= v Griffin, 71 AD3d l 112 (2d Dept 2010]. quoting .Scott v Long Is. Power Auth., 2q4 AD::'.d 348 [2d Dept 2002]). B. First Cause of Action- Breach of the Lease against }{ed Hook To sustain a breach of contract cause of action, plaintiff must show: ( 1) an agreement; (2) p!ailltiffs performance; (3) defendant's breach of that agreement; and (4) damages (see Furia v Furia. 116 AD2d 694. 695 [2d Depl 1986 J). '·The fundamental rule of contract interpretation is that agreements are construed in accord \Vith the parties' intenL ... and '[t]hc best evidence of what parti1..'S to a written agreement intend is what they say in their writing' . __ . Thus, a written agreement that is ckar and unambiguous on its face must be enforced according to the plain terms, and extrinsic e\ idrnce of the parties' intent may be considered only if the agreement is ambiguous [internal citations omittcdf' (Riverside South Planning Corp. v CRP!Ettell Riverside LP, 60 AD3d 61, 66 [ l ~t Dept 2008j, a/Id l 3 NY3d 398 [20091). \Vhether a contract is ambiguous presents a question of b\\ for resolution by the courts (id. at 67). Courts should adopt an interpretation of a contract which gives meaning t.o every provision of the contract, \Vith no provision left without force and effect (see R \ f 1../ FK Corp. v Bank One Trust Co .. NA. 37 AD3d 272 [1st Dept 20071). It is undisputed that Red Hook leased the Equipment from ASI, that AS! provided the Equipment in ··as is'" condition and Red Hook accepted it as ·'satisfactory" (Lease § I. l, NYSCEF Doc. No. 972). that the Equipment was not relurncd to ASI ·'in the same or... better condition. _ . except for normal wear and te3r'' at the end of the Lease (id, *4.1) due to a dispute over terms for returning the Equi pmcnl and its condition. and that the Equipment remains in the custody of Red Hook in damaged conJition. l he Lease provides that at the end of the lease term, ReJ Hook shall "return the Equipment to Lessor to a location specified by Lessor, not more than 20 miles from the Red Hook Container Terminal" (id at § 6. I). Red Hook did not return the Equipment and unless excused from this ohlig;ition. ASI's motion must be granted and Red Hook's denied. Initially, Red Hook resisted transporting th...: Equipment to any designated location in Newark, \iew .lcrsey because such location wa<> more tha11 20 miles away by road (NYSCEF Doc. No. 306, rranscript of \fay 4. 2014 at 48). In a Decision and Order dated January I 3, 2015, the court held that under ~ 6.1 of the Lease. Red Hook is required to assume the cost of delivery to any proper 16 17 of 24 [*FILED: NEW YORK COUNTY CLERK 12/15/2017 04:09 PM 17] NYSCEF DOC. NO. 1107 INDEX NO. 651472/2012 RECEIVED NYSCEF: 12/15/2017 l1xati0n within a 20-mile radius of the Brooklyn Marine Terminal. Driving distance between the l\\O locations is not relevant (see NYSCEf Doc. No. 424, at 7). :\s to the locations designated for delivery of the Equjpment, Red Hook objected that the first Locali\)n was improper. When ASl proposed the Second Location, Red Hook objected because ASI had not shown it had permission of the property owner to enter onto the designated land and deliver the Equipment (sec hi, at 3). AST v.:ithdn::\v this designation after the property owner stated he v.oukl not :tccept delivery. ASI protest that Red Hook improperly procured the objection. As discussed above. on June 25, 2012. the court fixed a protocol for inspection and repair of the Equipment prior to delivery as called for in the Lease (see NYSCEF Doc. No. 996, Transcript at 3949 ). The protocol also set a pre-condition to delivery requiring ASI to provide evidence of permission to enter onto !he land and deliver the Equipment to be provided by the owner of the land or other authorized person (see id.). The cow1 deemed a written representation of such permission by counsel for ASI sufficient to satisfy the precondition. Over the ncx1 four months, the parties inspected the Equipment, determined what repairs were needed and prepared for transfer of the Equipment to the Third Location, consistent with the terms of the protocol. On September 17, 2012. R.cd Hook received an inspection report prepared by Cargotce concerning the condition of the Equipment and the needed repairs (see NYSCEf Doc. No. l 0 l 2 l. On Ocrobcr 3, 2012, counsel for Red Hook wrote to Hiller on behalf of ASI asserting that the report confirmed no repairs were needed (NYSCEF Doc. No. 347). On October 9, 2012, ASI ga\c Red Hook a list of items requiring repair and noting "lw]e are advised by Cargolech (sic) that nnly the first two items ... represent anything significant in terms of repair resources'' (NYSCEF Doc. J\o. 988 ). By Jetter dated October 12. 2012, Hiller provided the Grato consent letter !o D'Ablernont. Hiller also requested that the repairs be made and the Equipment transported to the I hirJ Location (sec NYSCEF Doc. No. 990). As the Port Authority states in its Memorandum of Law in Opposition to AS l's motion for summary judgment, at that point, Red Hook had "no reason to belic\e it could not rely on the LGrato1 letter" (NYSCEF Doe. No. 1080, at 4). Red Hook was required lo make the necessary repairs and deliver the Equipment to 318 Port Street, absent objection as to the authenticity of the letter of authorization. Red I look states it made preparations for delivery, but it had made no repairs as of October 29. 2012, when Hurricane Sandy made landfall in Nc\V '{urk. or at anytime since. 17 18 of 24 [*FILED: NEW YORK COUNTY CLERK 12/15/2017 04:09 PM 18] NYSCEF DOC. NO. 1107 INDEX NO. 651472/2012 RECEIVED NYSCEF: 12/15/2017 By letter dated October 3 L 2012. counsel for Red Hook responded to the ASI October 12, 2012, Jetter_ agreeing to make certain repairs and refusing others. Red Hook's counsel also stated that if the parties reach agreement as to the repairs, Red Hook would then deliver the Equipment (see NYSCEF Doc. N~). 991 ). AS! refused to accept the Equipment, asserting it was a "total loss'' as a result tlf dJmage caused hy Hurricane Sandy (see Marotta Affm NYSCEF Doc. No. 967, iJ 89). Red Hook acknowledges there was damage to the electrical components of the Equipment, which required repairs valued at approximately $200,000 (see Red Hook 19-a Stmt, NYSCEF Doc. No. J 07 l. E 66). The sufficiency of the evidence of authority to permit delivery of the Equipment to 318 Port Street in Och)ber 20 l 2 became disputed after the hurricane. There arc now issues or fact as to the scope of l\1F·s authority at the time to accept delivery for the use then intended by IMF. Under the terms of the Right of Entry License as it existed in the summer/fall of 2012, IMF had only "permission to enter upon, use and occupy the Site for the purpose of performing the \\/ork, and for no other purpose v-.fo1tsoevd' (License at p. L >lYSCEF Doc. No. 999). The "'\\1ork" is narrowly ddlned as Conduct[ing] inspections on the Property, including without limitation, the right to enter an !identified] Building ... and associated open area ... for the purpose of performing necessary rep::iirs and improvements to [thel Building (id). The License also states unequivocally that l t !he License shall not assign, sell or transfer the License or any of the rights granted hereunder without the prior written approval of the Port Authority . . . and any such assignment, transfer or sale without such prior written approval shall be void as to the Port Authority (id§ 12 fd]). '\Jothing in this language prohibits IMF from maintaining moving equipment for its use in connection with the authorized work it was conducting at the site. The Grato Jetter of October 10, 2012, confirms '·that the ASI port equipment ... will b received as part ?four joint project ... " (emphasis 1 : added) (NYSCEF Doc. No. 989). W'hcther IM 1· was authorized to conduct the "joint project" from 3 i 8 Port Strcel is a question of fact that cannot be resolved on this motion. F vcn i r Hvff lacked authority to receive the Equipment at 318 Port Street, it was willing to do so al 120 Tyler Street, the base of its operations during the relevant time period. Howev~r, by 18 19 of 24 [*FILED: NEW YORK COUNTY CLERK 12/15/2017 04:09 PM 19] NYSCEF DOC. NO. 1107 INDEX NO. 651472/2012 RECEIVED NYSCEF: 12/15/2017 the time the issue of which of the two locatfrq1s was more appropriate for ddivery ripened, the Equipment had been damaged by I Iurricanc Sandy and AS l's position that the Equipment was a "tPlal !(ls<" many have rendered the issue academic. In an affidavit dated July 27, 2017, Grato states that in September and October 2012, IMF was already conducting various operations at 318 Port Street \\ ith Port Authority's knowledge and that"/ i]f at any time the [Port AuthorityJ advised [him] that L\11- \\as not authorized to use IMF PORT STREET for general commercial activity ... IMF mlulJ ha\e had, at its discretion, the ability to use other property for the purpose of the commercial transaction ,,,.ith ASf .... including the property at 120 Tyler Street" (Grato Aff d NYSCEF Doc. Ne. 970. 0 1>). Red Hook's ::issertion that the 120 Tyler Street alternative should not be considered as that site \Vas not designated must be rejected, as the need to designate an alternative IMF site did 1wt arise until 2013 after Red Hook's counsel questioned whether 318 Port Street constituted an authorized location (see NYSCEF Doc. No. 1005). \Vhether, i.n October 2012, ASJ needed to find an allem:Jli\ e location controlled by IMF for delivery of the Equipment and whether delivery to that site wa~ kasible, arc questions of fact to be addressed at a trial. C Tenth Cause of Action- Breach of the Stipulation in the Tenth Cause of Action, ASI alleges Red Hook (and thus its alleged principal, the Port 1 Authori1yr breached its ob!igations under the Stipulation by failing to "secure and safeguard the Equipment, using commercially reasonable means and methods pending resolution of the Order to Shet\\ Cause"' (Stipulation, NYSCEF Doc. No. l 2 ~! 2). The Stipulation had the eflect ofeliminating 5 an: doubt as tu Red l look· s continuing obligation to "secure and safeguard the Equipment" while in its custody, even past the expiration date o{' the Lease. Red Hook claims to have moved the Fquipment away from the waterline and protected it with sandbags prior to the hurricane. ASI disputes this. and contends Red Hook did nothing to protect the Equipment (citing the Marotta attorney aflin11ation vvhich cites the Gambale deposition testimony, but without citing a particular page). F\en if what Red I look did lo protect the Equipment was undisputed, neither party has e>tablished whether or nol the actions taken were ·'commercially reasonable means and methods". c\ccnrdingly, summary judgment is denied on this claim, for breach of the Stipulation 4 The Port Authority is not a party to the Stipulation (_1.:e NYSCEF Doc. No. 12). ' ! he i11jw1c;ion bnrring use of the Equipment whik in possession of Red Hook was in effect on October 29, 2012, and thae~Jle~. 19 20 of 24 [*FILED: NEW YORK COUNTY CLERK 12/15/2017 04:09 PM 20] NYSCEF DOC. NO. 1107 INDEX NO. 651472/2012 RECEIVED NYSCEF: 12/15/2017 D. Claims against the Port Authority A.s the breach of contract claims against Red Hook survive, the Port Authority's liability must ~dso be considered. The Port Authority is not named in the First Cause of Action of the Second Arnemkd Complaint. J lowever, in the Tenth Cause of Action, ASI alleges that ''[a]s Red Hook's principle Isic L the Port Authority is responsible for the acts and omissions of Red Hook, acting within the scope of its agency and/or authority"' (Second Amended Complaint, NYSCEF Doc. No. I OnO ~; 229 J. ASI contends that while the Purt Authority did not sign the Lease, it is the real party in inter...·st, and so should be held liable. Jt is "the genera! rule that a principal is liable on contracts entered into on its behalf by an authorized ::i.gcnf" (Key In!i:rn. A-flg. Inc. v :\torse/Diesel, Inc .. 142 A02d 448, 453-54 [2d Oept ] t)88] [imcrna! quolations and additions omittedj) Further it is also a "general rule that" a subsidiary may becume an agent for the corporation which controls it" (id.[ inlernai quotation omifledj). ASI asserts that the Port Authority negotiated the Lease, was responsible for paying the monthly fee, and generally controlled Red I look. ASI points to the fact that the Lease is called for in the Settlement Agreement and the form of the Lease is attached thereto. I lowever, the Port Authority is not a party to the Lease and AS I has offered no admissible evidence sufficient to raise an issue of fact suggesting th:1t Red Hook entered into the Lease on behali. of the Port Authority. To the contrary, the record re\ eals th::it the Port Authority has no agency relationship with Red I look, as the aflidavit of Jon Trutncff (icncral Manager of the New York Marine Terminals in the Port Department, attests. lrntncff states that Red Hook is a private company, not affiliated with the Port Authority, let alone its agent (lrutncff Aff NYSCEF Doc. No. 1030. -I 8). Trutncff notes, among other things, that the Operating Agreement bet\\•een Red Hook and the Port Authority disclaims any agency relationship (id ~ 11 )", and that Red ! look \Vas responsible for its own obligations under the Stipulation (id iJ 14). There king no evidence raising a triable issue of fact to support the claim that Red Hook is an agent The Orenting Agreement between the Port Authority and Red Hook that authorizes Red Hook to operate the Brooklyn \fanne Terrn1m1! and§ 30 (g) thereof states expressly that f, {g l This Agreement does not render the Operator the agent or representative of the Port Authority for any ruqwse whatsoever. Neither a partnership nor any joint venture is hereby created, notwithstanding the fact th<i! the parties an: sharing th.: Excess Revenue:; from th..:: operations oftbe Terminal Space hereunder. 20 21 of 24 [*FILED: NEW YORK COUNTY CLERK 12/15/2017 04:09 PM 21] NYSCEF DOC. NO. 1107 INDEX NO. 651472/2012 RECEIVED NYSCEF: 12/15/2017 of the Port Authority and thereby rendering the Port Authority liable for Red Hook's alleged breach of contract. the claim against the Port Authority shall be dismissed. f:. Storage Fees Claim As lo Red Honk's claim for fees for storage of the Equipment, no repairs were made to the Equipment as of October 29, 2012, the date I Jurricane Sandy made landfall in New York City. It is undisputed that the hurricane caused damage to the Equipment but the parties dispute the extent thereof. The Lease does not specify how long after termination Red Hook was obligated to retain possession of the Equipment hut the Lease. as well as the protocol, provide for Red Hook to inspect and repair of the Equipment prior to delivery That work was not done. Nevertheless, Red Hook seeks to recover storage fees. This portion of the motion is denied, as there has been no determination as to \Vhcthcr Red I look"s failure to make repairs and deliver the Equipment should be excused. V. CONCLUSIONS l he motion for summary judgment of ASI against Red Hook (motion sequence number 020) is granted in part and othenvisc denied. The motion for summary judgment of Red Hook against ASI (motion sequence numhcr 021) on its breach of contract claims is denied insofar as it concerns the re J"usal of Red 1look to transport the Equipment at its expense to a location designated by ASf. The motion of the Port Authority for summary judgment (motion sequence number 22) is granted. The Lease requires Red I look ''at its O\\ n \.'.ost and expense ... Ito I keep and maintain the Equipm;.;nt in the same or, at Lessee's option. better, condition as or than . . . reflected in the l::quirmcnt Inspection Report.'' The Lease also provides that Red IIook "hereby assumes and shall bear the entire risk of loss for theft, damage, destruction or other injury to the Equipment from any and eYer) cause whatsoever'" (NYSCEF Doc. No. 972,, 4.1). Whether Red Hook may be excused from these obligations due to an alleged failure of ASI to designate a proper site for delivery of the L-:quiprnenL must await trial. The motion of ASI shall be gr::mtcd to the extent Red Hook failed to maintain or repair the Equirment as reyuired by the Lease. A trial will be held to determine the extent of damage to the Equipment as reflected in inspection reports prepared at or after expiration of the Lease, the extent of damage to the Equipment resulting from the hurricane and the rcasonab!t:ncss of the measures taken to protect it. 21 22 of 24 [*FILED: NEW YORK COUNTY CLERK 12/15/2017 04:09 PM 22] NYSCEF DOC. NO. 1107 INDEX NO. 651472/2012 RECEIVED NYSCEF: 12/15/2017 Jn addition, a trial will be required to determine l) whether or not Red Hook breached §§ 4.1 through 4 J and/or 6.1 of the Lease or whether it is excused from one or more of the obligations assumed thereunder: 2) whether or not the parties complied with the terms of the protocol; 3) vvhether Red Hllok is entitled to recover storage fees: and 4) entitlement to attorney fees and costs. As lo that branch of ASI's motion relating to its claim for breach of contract arising from the Lease provision requiring Red Hook to .. obtain and maintain ... (as primary insurance for Lessor and r,essee }. commercial property damage insurance and insurance against loss or damage to the Equipment ... in the amount of $10.000,000 to cover loss to the Equipment" (id.), the motion is denied as academic. Under § 4.1 of the Lease, Red Hook is directly responsible for all of the losses also covered by the insurance it \·Vas obligated to procure and any failure to procure it neither adds to nor detracts from that obligation. In any event, whether Red Hook had adequate insurance is a subject of separate litigation. It is hereby ORDERED that the motion for summary judgment of plaintiff American Stevedoring Inc., against defendant Red Hook Container Terminal, LLC (motion sequence number 020), is granted to the extent damages shall be awarded for the cost of repairs to the Equipment arising from injury thereto save normal wear and tear and is otherwise denied~ and it is further OJU)ERED that the motion for summary judgment of the defendant Red Hook Container Tcrmin;il LLC against plaintiff American Stevedoring, Inc. (motion sequence number 021) for storage fees is denied; and it is further ORDERED (hat the motion for summary judgment of defendant Port Authority of New York and Ne\\ Jersey against plaintiff American Stevedoring, Inc. (motion sequence number 022) is granted and the complaint is dismissed in its entirety as to said defendant, vvith costs and disbursements to said defendant against said plaintiff as taxed by the Clerk of the Court, upon submission of a proper bill of costs and the Clerk is directed to enter judgment accordingly in favor of said defendant; and it is further 22 23 of 24 [*FILED: NEW YORK COUNTY CLERK 12/15/2017 04:09 PM 23] NYSCEF DOC. NO. 1107 INDEX NO. 651472/2012 RECEIVED NYSCEF: 12/15/2017 ORDERED that AS! and Red I fook shall appear at a pretrial conforcncc on January 23, 2018 at ~oon. Part 49, Room 252, 60 Centre StreeL New York, New York. This constitutes the decision and order of the court. DATED; December 13, 2017 24 of 24
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