F.S. Assoc., Inc. v Jandi Realty, LLC

[*1] F.S. Assoc., Inc. v Jandi Realty, LLC 2006 NY Slip Op 52408(U) [14 Misc 3d 1204(A)] Decided on December 19, 2006 Civil Court Of The City Of New York, Kings County Bluth, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on December 19, 2006
Civil Court of the City of New York, Kings County

F.S. Associates, Inc., Plaintiff,

against

Jandi Realty, LLC, Defendant.



120183/06



For Plaintiff: King & King, LLP

Long Island City, NY

For Defendant: Law Offices of Mark A. Chapman, LLC

New York, NY

Arlene P. Bluth, J.

Plaintiff herein is a commercial tenant of defendant. Plaintiff leases the ground floor of a building at 1815-1817 Avenue U in Brooklyn where it operates a Dunkin Donuts and Baskin Robbins Ice Cream store. Both parties were represented by counsel when they negotiated and signed the 20-year lease, and both are represented in this case. At issue in this lawsuit is the amount of real estate taxes that plaintiff is responsible for specifically, what constitutes plaintiff's "proportionate share" of the annual real estate tax increases for the property. The plaintiff alleges that it is only responsible for 50% of the increase over the base year and the defendant alleges that the plaintiff is responsible for 100% of the increase. It is undisputed that plaintiff has paid 100% of said tax increase each year since the commencement of the lease on October 9, 2002.

The complaint contains three causes of action: The first alleges that since the commencement of the lease, plaintiff has paid double of what it owed in taxes, thereby unjustly enriching defendant, and seeks a refund of the alleged overpayment; the second alleges breach of contract and likewise seeks a refund; and the third seeks "a declaration that pursuant to the Lease and rider tenant's real estate tax responsibility is limited to its proportionate share of the building's real estate tax, and does not obligate it to pay all of the increases for the entire building, including space not rented by the tenant plaintiff."

Defendant now brings this pre-answer motion to dismiss plaintiff's complaint. Defendant puts forward several grounds for relief. First, defendant seeks dismissal under CPLR Section [*2]3211(a)(1) based upon documentary evidence, to wit, the parties' lease and the rider thereto (collectively "the lease"). Defendant contends that the lease clearly provides that plaintiff would pay 100% of the real estate tax increases for the property. Accordingly, defendant asserts that there has been no overpayment. Second, defendant seeks dismissal under Section 3211(a)(1) of the third cause of action which defendant describes as "seeking declaratory' relief and/or reformation" on the ground that this Court lacks the jurisdiction to grant such relief. Third, defendant seeks dismissal under Section 3211(a)(7) of the second and third causes of action for failure to state a cause of action. For the following reasons, this Court grants the motion and dismisses the complaint.

"To succeed on a motion to dismiss pursuant to CPLR 3211(a)(1), the documentary evidence that forms the basis of the defense must be such that it resolves all factual issues as a matter of law, and conclusively disposes of the plaintiff's claim." Martin v New York Hosp. Med. Center of Queens, - NYS2d -, 2006 NY Slip Op 08747 [2d Dept]. On a motion to dismiss a complaint pursuant to CPLR 3211(a)(7), the complaint is afforded a liberal construction . . . [The plaintiff is given] the benefit of every possible favorable inference. . . . However, dismissal is warranted if documentary evidence conclusively establishes a defense to the asserted claims as a matter of law."Ercole v McGay, 2006 NY Slip Op 52321(U) [App Term, 9th & 10th Jud Dists].

Defendant-landlord points to Article 47 of the lease rider to support its motion for dismissal based upon documentary evidence. That provision is entitled "Escalation for Increases in Real Estate Taxes." It sets the year beginning July 1, 2003 and ending on June 30, 2004 as the base tax year on the basis of which the increases in all succeeding years would be calculated. (Art. 47(A)(3)). It further provides that plaintiff-tenant must pay as additional rent its proportionate share of any increases above the base tax. (Art. 47(B)). What is the tenant's proportionate share? Article 47(A)(4) reads as follows: "Tenant's Proportionate Share" shall be deemed to be and may be expressed as a percentage, i.e., 100%.

Defendant-landlord contends that the above-quoted provision can mean only one thing: that the proportionate share of plaintiff-tenant is 100% of any tax increase; in other words, that plaintiff is obligated to pay the entire amount of the increases above the base tax for every year of the lease's 20-year term. At first glance, defendant's contention seems strained. The quoted provision is confusing and poorly drafted. Viewed in isolation, it does not appear to conclusively establish that plaintiff's proportionate share of the tax escalations is 100%. Rather, it seems to use the figure 100% merely as an example. Upon further consideration, however, the Court must agree with defendant that the documentary evidence "conclusively disposes of the plaintiff's claim." Martin, supra .

In support of the motion, defendant submits the affidavit of one of its members, Michael Krasne, who states that Article 47 "was specifically agreed to at the commencement of the lease term." Mr. Krasne, who was present at the closing, asserts that plaintiff's then-counsel explained the provisions of Article 47 (as well as other lease provisions) to plaintiff's representatives at the [*3]closing. He further states that plaintiff is the sole commercial tenant of the building, and that defendant "would never have agreed to have put a tenant into the sole commercial premises for the building for such a lengthy lease term without assurance that the tenant was responsible for all real estate tax escalations above the base tax year." In addition, defendant submits the affidavit of Robert L. Krasnow, an attorney who represented defendant during the lease negotiation process and at whose office the lease was signed. Mr. Krasnow echoes Mr. Krasne's account that plaintiff's then-counsel explained the relevant lease provisions to plaintiff's representatives.

In opposition, plaintiff submits a cursory affidavit from Mohammad A. Sandu, an "office" (sic) of plaintiff. Mr. Sandu states: "I do not agree with what Mr. Krasne sets for (sic) as fact. First, plaintiff is not the only commercial tenant in the subject building. There are other commercial tenants that rent office space on the second floor." Mr. Sandu further asserts that at the lease signing, there was no discussion regarding the real estate tax escalations. Notably, however, he fails to state whether there were discussions with plaintiff's attorney or with anyone on behalf of defendant before the lease signing. Plaintiff's argument, as set forth by its counsel, is that the 100% figure referred to in Article 47(A)(4) ("i.e., 100%") is merely illustrative, and that the tenant's proportionate share of the taxes must correlate to the percentage of space tenant actually occupies in the building.

There are several reasons why defendant's motion is meritorious. First, Article 47(A)(4) is not the sum total of the parties' agreement but is just one sentence in a lengthy contract. A single clause in a contract cannot be read in a vacuum, but must be viewed in the context of the entire agreement. See Analisa Salon, Ltd. v Elide Properties, L.L.C., 30 AD3d 448, 448-49, 818 NYS2d 130 [2d Dept 2006]. Plaintiff assumes that its proportionate share of the taxes must be based upon the percentage of space it occupies in the building as compared with other commercial tenants. Although the parties give conflicting statements about the presence of other commercial tenants in the building, that fact is immaterial to interpreting this commercial lease negotiated and signed by these represented parties. Nowhere does the lease state what percentage of the commercial space in the building plaintiff's lease covers, let alone link plaintiff's proportionate share of the taxes to that percentage. And nowhere in the lease is any other formula or percentage set forth. In fact, without extraneous evidence, one cannot ascertain whether this premises is part of a two-story building or a twenty-two story building. There is no mention of it because it is immaterial to the agreement these parties made. The reference to 100% in Article 47(A)(4) is the only reference to the amount of plaintiff's proportionate share and it refers only to the proportionate share of real estate tax increases. Perhaps there is another tenant, perhaps not, or perhaps defendant rents out the remaining space to a favorite relative. Regardless, plaintiff's assumption that the existence of other tenants would affect its proportionate share of liability for real estate tax increases is just that an assumption. And it is not supported by any provision of the lease.

Second, for the four years since the inception of the lease, plaintiff has paid 100% of the real estate tax escalations without complaint until, of course, the filing of this lawsuit. That course of conduct supports defendant's assertion that the provision was negotiated and [*4]specifically agreed to by plaintiff.

Finally, and perhaps most interestingly, plaintiff's argument, that "i.e." was merely meant to introduce an example of a percentage, is based on an inaccurate definition of "i.e." The term is an abbreviation of the Latin "id est," which means "that is" or "that is to say" (Black's Law Dictionary 672 [5th ed 1979]). Quite simply, the term "i.e." is not interchangeable with "e.g.," which stands for the Latin "exempli gratia," meaning "for example." (id. at 462; see also definitions online at www.law.com, www.merriam-webster.com which warn against such confusion). "The words and phrases used in an agreement must be given their plain meaning so as to define the rights of the parties (see, Laba v. Carey, 29 NY2d 302, 327 NYS2d 613, 277 NE2d 641; Levine v. Shell Oil Co., 28 NY2d 205, 321 NYS2d 81, 269 NE2d 799), and in this regard, it is common practice for the courts of this State to refer to the dictionary to determine the plain and ordinary meaning of words to a contract (see, Allied Chem. Corp. v. Alpha Portland Inds., 58 AD2d 975, 397 NYS2d 480)." Mazzola v County of Suffolk,143 AD2d 734, 735, 533 NYS2d 297 [2d Dept 1988] (defining "condemned" and "condemnation"). See also Marcor Remediation, Inc. v Broome County, 12 Misc 3d 1183(A) [Sup Ct, Broome County 2006] (defining "to propose"); In re Camac, 2 Misc 3d 894, 898, 772 NYS2d 792 [Sur Ct, Bronx County 2004] (defining "willingness").

For these reasons, the Court finds that the plain language of the lease belies plaintiff's claim that it has overpaid and is entitled to a refund. Rather, by its terms the lease obligates plaintiff to pay 100% of the real estate tax escalations. Thus, plaintiff's first cause of action must be dismissed pursuant to CPLR Section 3211(a)(1). In light of this finding, the Court concludes that plaintiff has also failed to state a claim for breach of contract against defendant. Therefore, the second cause of action must be dismissed. Finally, this Court lacks jurisdiction to issue a declaratory judgment where, as here, the amount in controversy exceeds $25,000; thus, the third cause of action must also be dismissed. See H.R. Neumann Assocs. v New Eagle, Inc., 6 Misc 3d 1027(A), *5 [Civ Ct, Kings County 2005] (quoting Wilen v Harridge House Assocs., 94 AD2d 123, 125, 463 NYS2d 453 [1st Dept 1983].

Contrary to defendant's contention, plaintiff's complaint does not explicitly seek reformation. To the extent such relief is sought implicitly, this Court lacks jurisdiction to grant it in this case. See Civil Court Act § 213. However, if the facts so warrant, plaintiff is free to pursue that cause of action in Supreme Court. Accordingly, defendant's motion is granted, and the complaint is hereby dismissed.

This is the Decision and Order of the Court.

Arlene P. Bluth

Judge, Civil Court [*5]