C.N. Fulton Deli, Inc. v Beway Realty LLC

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C.N. Fulton Deli, Inc. v Beway Realty LLC 2004 NY Slip Op 30381(U) September 24, 2004 Supreme Court, New York County Docket Number: 102123/04 Judge: Harold B. Beeler 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 YpRK: IAS PART 9 ----------------------------~---------------------------------~----){ C.N. FULTON DELI, INC., Plaintiff, Index No. 102123/04 • I - agamst1- I ! \ BEWAY REALTY LLC, II I Defendant. ----------------------------~--------------------------------------){ F1Leo Der 1J 2004 .. ~~O!il( BEELER, J.: Plaintiff tenant operates a delicatessen and fast food restaurant on part . .. o~ ~oor I in a building owned by defendant. Plaintiff alleges that defendant landlord is interfering with its I business and attempting ;to force it out of the building. Defendant landlord makes a pre-answer II motion to dismiss the cohiplaint. I Plaintiffs prededessor-in-interest operated the same business as plaintiff. According to the landlord, when the lefse (Lease) was about to expire iJi 2002, the predecessor-in-interest wanted to extend the te1. The landlord explained to the predecessor that it planned to renovate the entire building, "a mammoth construction project which would cause a tremendous disruption in business in ~e Building" (Koeppel Affidavit [Aff.], ~ 4). The landlord planned to I ! add floor space to the building by filling in the main courtyard. The landlord alleges that the predecessor-in-interest aI\ to assume the risk that the renovation would disrupt its business in eed exchange for a reduced re t. i I The predecessor-in-interest and the landlord entered into a Lease Extension and Modification Agreement r e Extension), whi:h extended the term to February 28, 2007. The cxI7---- [* 2] Lease provides that th1 tenant "understands and acknowledges that Owner is performing a building-wide renovation of tae Building ... and that the annual rents set forth hereinabove contemplate the work to be performed and the possible disturbance to Tenant's business. Theri~ shall be no abatement of rent or additional rent as a result of inconvenience, noise or disturbance caused by any work to be performed by Owner as part ~f this renovation" I (Lease, ~ 5). Subsequently, plaintiff purchased the business. On December 5, 2002, plaintiff and the predecessor-in-interest, with the landlord's consent, entered into an Assignment and Assumption of Lease, whereby plailtiff assumed the Lease and agreed to be bound by its tenns. On November 18, 2003, the workers who were performing the renovations broke the gas line in the building, and the gas supplier turned off the gas. Gas was not restored until December 26, 2003, according to plaintiff, or January 27, 2004, according to defendant. Without gas, I '1 plaintiff alleges, the res~urant could not operate and was forced to temporarily close, losing a I great deal of revenue. 1 I When the gas lint broke, plaintiff allegedly learned for the first time that defendant had not obtained the gas pe,it needed to use the stove in the restaurant. Plaintiff alleges that when it assumed the Lease, defendant knew that the building did not have the gas permit and I intentionally withheld thit information. Plaintiff alleges that it would not have assumed the r Lease if it had known thr the premises had no gas permit. Defendant claims that the Lease assi~s the respo~sibil'.ty repaired the gas hne w1 obtaining th~ gas pe~it to th~ tenan~. According to defendant, it · one w~ek of its breaking, and unmed1ately thereafter asked the supplier to restore the gas The supplier initially refused, allegedly because plaintiff did not have 2 [* 3] a gas permit. I, The parties are!also engaged in a dispute over plaintiffs ventilation system. The stove in the restaurant is conne9ted to a vent which emits hot air and fumes into a courtyard between the I building and adjacent buildings. Plaintiff alleges that, on January 7, 2004, it met with I I defendant's manager, Who informed them that the ventilation system would be disabled during \ the renovation. Plaintiff told the manager that it would be willing to invest money in the building I to pay for a new ventil1~on system, in exchange for an extension of the lease tenn. Allegedly, . the manager promised o consider this request, and also agreed to waive the December 2003 rent ~ime and give plaintiff more On February 2, to pay the January 2004 rent. ~004, the manager allegedly told plaintiff that the newly renovated building would have no ~lace for the restaurant . The manager said that a new ventilation system would be installed and ~ould not be linked to the restaurant. 11 The landlord cla~ms that plaintiff or its predecessor installed the ventilation system in I violation of the Lease. l11e landlord claims that it discovered the existence of the vent while doing the renovations. ~e tenant replies that the vent has long been in the building, that it was used by the predecessor tho could not have operated the stove without a vent, and that the landlord has long known Iof the vent. · I Plaintiff further apeges that the telephone services in the building have often been disrupted by defendant's bonstruction. Each time this happens, plaintiff loses business because people cannot call it tote orders. On February 5, 2004, defendant served a three-day notice on plaintiff. The notice demanded that plaintiff p y the rent due from December 2003 through February 2004, and that, if 3 [* 4] I. the rent was not paid before February 11, 2004, plaintiff should surrender the premises or I defendant would commence a summary proceeding. Plaintiff explair~s that it did not pay the rent because its business was closed as a result of defendant's negligence [and failure to comply with the Lease. Also, defendant allegedly promised to forgive the rent for ~ecember 2003. Plaintiff commenced this .action, asserting causes of action for a permanent injunction, a Yellowstone injunction, specific performance of the Lease, I . breach of contract, breth of the covenant of quiet enjoyment, fraudulent inducement, violation of General Business LaI § 349, and negligent misrepresentation. Defendant mov s for dismissal, pursuit to CPLR 3211 (a) (1) and (7). On a Section (a) 1 (7) motion to dismiss for failure to state a cause of action, the movant must demonstrate that the I . complaint states no grotd for liability, despite being presumed to be true and regarded in the light most favorable to the plaintiff (Leon v Martinez, 84 NY2d 83, 87 [1994] ). On such a I motion, the court does riot assess the complaint's merits, but merely determines whether it states the elements of a legall1 cognizable cause of action (P. T. Bank Cent. Asia v ABN AMRO Bank N. V., 301 AD2d 373, 37 [I51 Dept 2003]). A Section (a) (1) motion to dismiss on the basis of documentary evidence ill not succeed unless the evidence is "such that it resolves all factual issues as a matter of law, and conclusively disposes of the plaintiff's claim" (Scadura v I Robillard, 256 AD2d 56' 567 [2d Dept 1998]). 1 , First Cause of A tion for a Permanent Injunction and Second Cause of Action for a Yellowstone Injunction The first cause o action seeks a permanent injunction ordering defendant to comply with the terms of the Lease, in luding keeping the ventilation system connected to the premises. The 4 [* 5] I second cause of action 'seeks a Yellowstone injunction pending a determination that plaintiff was I I entitled to withhold ren\t because of defendant's misconduct, and because defendant agreed to I forgive some rent. Previously, the 1·ourt denied plaintiffs motion for a preliminary injunction and a Yellowstone injunction. In response to that motion, defendant submitted an affidavit stating that it had no intention of di~mantling plaintiffs vent because the vent does not physically enter the I courtyard which the lanIDord plans to fill in. Injunctive relief is appropriate where there is a strong likelihood of fu+ wrongdoing (see Lex Tenants Corp. v Gramercy N. Assoc., 288 AD2d 48, 49 [1st Dept 200 I]; <{reenfield v Schultz, 251 AD2d 67, 67-68 [1st Dept 1998]), which did not I exist at the time ofplainrff's motion. The court denied the motion in a decision dated February 26, 2004, stating that th~ ventilation issue was moot. The decision also stated that the underlying dispute concerned the nonpayment of rent, I I which might give rise to a summary nonpayment proceeding, during which plaintiff would have 1 !: an opportunity to cure ~y default for nonpayment and save its tenancy. Therefore, a I Yellowstone injunction ")as not required. A Yellowstone injunction temporarily stays a i threatened termination oi the Lease and gives the tenant time to cure the reason for the eviction or time to prove that the ~eason has no merit (see 225 East 36th St. Garage Corp. v 221East36th Owners Corp., 211 AD2~ 420, 421 [l" Dept 1995); Lexington Ave. & 42"' St. Corp. v 380 Lexchamp Operating, InJ 205 AD2d 421, 423 [I'' Dept 1994)). Where the tenant's alleged default is based on nonpa ent of rent, however, Yellowstone relief is not available, as nonpayment proceedings fford tenants opportunities to cure the default and preserve the lease (Hollymount Corp. v Mo rn Business Assoc., Inc., 140 AD2d 410, 411 [2d Dept 1988]; 5 [* 6] • Parksouth Dental Grorp, P. C. v East River Realty, 122 AD2d 708, 709 [l '' Dept 1986)). In the instant motion papers, defendant again emphasizes that the courtyard into which the vent emits is not th~ one planned to be built over, and that the renovation will not interfere I with the vent (Koeppel\Aff., iJ ~ 7, 10). Defendant asserts that the court's previous decision I establishes the law of ,e case and requires the dismissal of plaintiff's causes of action for the injunctions. However, denials of preliminary injunctive relief lack preclusive effect (J. A. 1 Preston Corp. v. Fabrittion Enter., Inc., 68 NY2d 397, 402 [1986]; Indosuez Intl. Fin., B. V. v National Reserve Bank;\ 304 AD2d 429, 430 [ l" Dept 2003 ]). The fact that plaintiff was not entitled to a preliminacyt injunction does not mean that it may not be entitled to a permanent injunction. Although defendant states that the renovation will not interfere with the vent, it is silent 1 regarding whether the v~nt will exist after the renovation. The Lease states that the tenant shall use the premises for a rettaurant (Lease, 'U 2), and plaintiff alleges that it leased the premises with the understanding that it rould prepare hot food. The landlord points out that the Lease says nothing about ventilatio . However, for a landlord to agree that a tenant shall operate a restaurant, presumably ·th a stove, and to then contend that the tenant has no right to ventilation is not reasonable. Given the landlord's argument that the Lease does not require it to supply ventilation forthe stove td that the installation of the vent violated the Lease, the court cannot now determine that an in1unction regarding the vent may never be appropriate. The court finds i that a cause of action for pennanent injunction to prevent the landlord from removing the vent has been sufficiently stated. The second cause faction, for a Yellowstone injunction is dismissed as unnecessary. If 6 [* 7] plaintiff later determiner that one is needed, it can move for it without the cause of action. Third Cause ofiAction for Specific Performance of the Lease Claiming that the Lease obligates defendant to obtain a permit to use gas on the premises I I and to maintain a ventilation system, plaintiff seeks the appropriate specific performance. Plaintiff has established that specific performance may be appropriate regarding the vent. Respecting the gas perm'.it, defendant points to the part of the Lease that provides that the tenant, I I at its sole expense, shall Icomply with all laws, directions, and regulations of all government departments "which shall impose any violation, order or duty upon Owner or Tenant with respect l to the demised premisesr (Lease, ii 6). Generally, the owner of a building is obligated to comply with all laws affecting t~e property (Josam Assoc. v General Bowling Corp., 135 AD2d 502, 503 [2d Dept 1987]; Bush rJnn. Assocs. v Federated Dept. Stores, 73 AD2d 943, 944 [2d Dept l 1980]). Whether this particular burden is placed on the tenant or landlord is not here indicated. I If the court eventually determines that the law places the burden on the landlord, there arises a i question as to whether it can be shifted to the tenant. As the clause does not unambiguously provide that the tenant is responsible for the gas permit, this cause of action will not be dismissed. I Fourth Cause o~Action for Breach of Contract and Fifth Cause of Action for Breach of the Covenant of Quiet Enjoyment Plaintiff alleges t t the telephone disruptions, lack of gas, and the other inconveniences and disruptions caused b[ the renovation constitute breaches of the Lease and of the covenant of quiet enjoyment. Plainti argues that although the exculpatory provision in the Lease speaks of a building-wide renovatio it does not reveal the scope of the renovations. Plaintiff alleges that it 7 [* 8] did not bargain for the \extent of inconvenencies that it experienced. I Plaintiff shoul4 have known that there would be dirt and noise and some annoyance and inconvenience because\ of the renovations. On the other hand, a landlord has a duty to use I reasonable efforts to minimize interference with the tenant's use and occupancy while renovating. I Whether the landlord ejrceeded its rights under the Lease is a question of fact. If the landlord did I so, plaintiff may be entitled to compensation, notwithstanding the exculpatory clause permitting I renovations (Bijan Desikr,er for Men, Inc. v St. Regis Sheraton Corp., 142 Misc 2d 175, 179 (Sup Ct, NY County], af d 150 AD2d 244 (1" Dept 1989]). Plaintiff has a cause ~faction for I breach of contract. \' To establish a br ach of the covenant of quiet enjoyment, a tenant. must show either an actual or constructive eviction (Witherbee Court Assoc. v Greene, 7 AD3d 699, 702 [2d Dept l 2004]). The landlord cat,ses an actual eviction by preventing the tenant from having physical l possession of the leased premises (Barash v Pennsylvania Term. Real Estate Corp., 26 NY2d 77, I I 82-83 [ 1970]). Construcre eviction occurs when the landlord does not physically exclude the tenant, but "the landlord'! wrongful acts substantially and materially deprive the tenant of the beneficial use and enjoy1rnt of the premises" (id. at 83). The tenant must abandon possession in order to claim that there ·as a constructive eviction (id.). Plaintiff alleges th t the restaurant was closed when the gas was turned off. A temporary closure of business can co stitute the abandonment needed to establish constructive eviction (see Manhattan Mansions v M e's Pizza, 149 Misc 2d 43, 47 [Civ Ct, NY County 1990] [repeated need to close the shop hel a constructive abandonment of the premises]). Therefore, plaintiff has a cause of action for b ach of the covenant of quiet enjoyment. 8 [* 9] I. I Sixth Cause of 1~ction for Fraudulent Inducement and Eighth Cause of Action for Negligent Misrepresen~ation Plaintiff alleges 1hat the landlord :fraudulently induced it to enter into the Lease by failing I I to disclose that it had not secured the gas permit required for operation of a stove on the i I, I premises. To establish ie former, plaintiff must prove Con Ed's misrepresentation of a material fact to plaintiff, with knlwledge, deception, and consequent injury (United Safety ofAm., Inc. v Consolidated Edison Co. ofNew York, Inc., 213 AD2d 283, 285 [15' Dept 1995]). Where the defendant has a duty to disclose material facts, fraud may be predicated on concealment (P.T. Bank rnt. Asia, 301 AD2d at 376) or on silence (Mobil Oil Corp. vJoshi, 202 AD2d 318, 318 [I" lept 1994]). A viable claim ofnegligent misrepresentation requires allegations of a confiden,al or special relationship between the parties (Kimmell v Schaefer, 89 NY2d 257, 263-265 [199~]). "[L]iability for negligent misrepresentation has been imposed only on those persons who possess unique or specialized expertise, or who are in a special position of I I confidence and trust with \the injured party such that reliance on the negligent misrepresentation is justified" (id. at 263). i Jr addition, the circumstances constituting the fraud must be stated in detail, and will be dismisJed if they are not supported by "specific and detailed allegations of fact in the pleadings" (CPLR 1016 [b]; Callas v Eisenberg, 192 AD2d 349, 350 [!st Dept 1993)). Plaintiff does not allege any details regarding the alleged fraud, or that it had any contact at all with defendant befoJf assuming the Lease. Nor is there anything here to support the existence of a special relat onship or a duty to speak on defendant's part. Even ifthe responsibility of obtaining a gas permit belonged to defendant, plaintiff has no cause of action for fraud or negligent misrepr sentation. 9 [* 10] . \ Seventh Cause pf Action for Violation of General Business Law § 349 ! Plaintiff alleges '.that defendant's failure to speak of the lack of a gas permit is actionable I under Section 349 (a) of the General Business Law, which encompasses deceptive acts or I practices in the conduct ';of any business, or in the furnishing of any service. The statute governs consumer-oriented condhct and, on its face, applies to virtually all economic activity (Karlin v ! 1 !VF America, 93 NY2d 282, 290 [1999]). Although the statute is designed to aid consumers, it I also applies to disputes Between businesses, albeit with severe limitations (Cruz v NYNEX Info. I Resources, 263 AD2d 285, 290 [151 Dept2000]). To establish liability under the statute, a I plaintiff must prove that '~e challenged act or practice was consumer-oriented, that it was 1 materially misleading, arid that plaintiff was injured as result thereof (Oswego Laborers' Local I 214 Pension Fund v Mar?ne Midland Bank, N.A., 85 NY2d 20, 25 (1995]). A consumer-oriented I action has a broad impact: on consumers at large, not just on the complainer (id.). Private ! I contract disputes, unique '~o the parties, for example, do not fall within the ambit of the statute I ! ! (id.). I Here, plaintiff dods not allege that defendant's actions affected anyone except itself. It fails, therefore, to state a \ause of action under General Business Law § 349. This cause of action is dismissed. To conclude,' it is ORDERED that d fondant's motion to dismiss the complaint is granted as to the second, sixth, seventh, and eighth auses of action and is otherwise denied; and it is further ORDERED that d fondant is to serve an answer to the complaint within 10 days after service of a copy of this o der with notice of entry; and it is further 10 . [* 11] (. 1 ORDERED that cl Preliminary Conference shall be held on Tuesday, November 9, 2004 at 2;00 PM in Room 304:, 71 Thomas Street. DATED: Septembtrr 24, 2004 HAROLD B. BEELER, J.S.C. HAROLD BEELER J.S.C. 11 '-..' ..

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