South St. Seaport v Ry-Allie Candy Corp.

[*1] South St. Seaport v Ry-Allie Candy Corp. 2006 NY Slip Op 52451(U) [14 Misc 3d 1208(A)] Decided on September 28, 2006 Civil Court Of The City Of New York, New York County Jaffe, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 September 28, 2006
Civil Court of the City of New York, New York County

South Street Seaport, a Limited Partnership, Petitioner,

against

Ry-Allie Candy Corp. d/b/a Nutcracker Sweets, Respondent.



53462/06



For petitioner:

Clifford M. Solomon, Esq.

Solomon & Tanenbaum, P.C.

707 Westchester Avenue

White Plains, NY 10604

For respondent:

William J. Neville, Esq.

Mitofsky Shapiro Neville & Hazen LLP

341 West 38th St., 9th Floor

New York, NY 10018

Barbara Jaffe, J.

By notice of motion dated June 13, 2006, petitioner moves for an order granting it summary judgment and awarding it a final judgment of possession against respondent and issuance of a warrant of eviction, dismissing respondent's affirmative defenses, and directing a hearing on attorney fees. In a short form order sent to the parties on September 21, 2006, I granted petitioner's motion for the following reasons.

I. BACKGROUND

Petitioner is a limited partnership organized pursuant to the laws of the State of Maryland, and Seaport Marketplace LLC (Marketplace) is a general partner of it. (Affidavit of Jay Pearly, dated June 13, 2006 [Pearly Affid.]). It is authorized to do business in the State of New York. (Pearly Affid., Exh. 6). While an entity called the South Street Seaport Corporation held the lease to the premises as of 1981, that entity leased the premises to Marketplace in 1983, [*2]and Marketplace entered into a sublease with petitioner for the premises in 1983. (Id., Exh. 8).

On April 5, 1993 petitioner and respondent entered into a lease for the premises described as Space 3060 in the Pier 17 building, 89 South Street at the South Street Seaport (Seaport). (Id., Exh. 9). The commencement date of the lease was March 1, 1994, unless respondent opened its store earlier, and the termination date was February 29, 2004. (Id.). The lease was amended four times, with the fourth amendment extending the lease term from March 1, 2004 to December 31, 2005. (Id.). Section 20.14 of the lease, entitled "No Modification," provides that the lease may only be modified by a writing signed by the party against whom the modification is enforceable. (Id.).

Jay Pearly, associate general partner of Marketplace, denies that an understanding was reached between the parties to extend or renew the lease, or that petitioner ever agreed to or wanted respondent to remain in the premises after December 31, 2005. (Pearly Affid., ¶ 17).

On January 26, 2006 petitioner commenced the instant holdover proceeding against respondent by service of a notice of petition and petition. In the petition it is alleged that the parties' lease expired on December 31, 2005 and that respondent has remained in possession of the premises despite the expiration of the lease. The affidavit of service of the notice of petition and petition reflects that petitioner served respondent on January 26, 2006 by delivering copies of the papers to Lydia Soto, identified as the manager of respondent, and by mailing copies to respondent on January 27, 2006.

By answer dated February 6, 2006, respondent asserted a general denial, affirmative defenses, and counterclaims. (Pearly Affid., Exh. 2). By reply dated February 27, 2006, petitioner denied respondent's allegations in its answer and asserted affirmative defenses. (Pearly Affid., Exh. 4).

By orders dated June 22, 2006 and September 11, 2006, another judge of this court struck respondent's first, second, third, and fifth counterclaims, and severed the fourth. By order dated August 22, 2006, I denied respondent's pre-answer motion to dismiss the petition, rejecting its assertions that the petition and verification are defective and that a predicate notice was required.

II. ANALYSIS

Summary judgment may be granted upon a prima facie showing of entitlement to

judgment as a matter of law, through admissible evidence sufficient to eliminate material issues of fact. (CPLR 3212[b]; Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]; Winegrad v New York Univ. Med. Center, 64 NY2d 851, 853 [1985]). Failure to make such a prima facie showing requires a denial of the motion, regardless of the sufficiency of the opposing papers. (Winegrad, 64 NY2d at 853).

When the party seeking summary judgment demonstrates entitlement to judgment the burden shifts to the opponent to "rebut that prima facie showing" (Bethlehem Steel Corp. v Solow, 51 NY2d 870, 872 [1980]), by producing "evidentiary proof in admissible form sufficient to require a trial of material questions of fact." (GTF Mktg. v Colonial Aluminum Sales, 66 NY2d 965, 968 [1985]; Zuckerman v City of New York, 49 NY2d 557, 562 [1980]). In opposing such a motion, the party must "lay bare" its evidentiary proof. (Silberstein, Awad & Miklos, P.C. v Carson, 304 AD2d 817, 818 [2d Dept 2003]). Conclusory allegations are insufficient to defeat the motion. (Zuckerman, 49 NY2d at 562).

In deciding the motion, the court must draw all reasonable inferences in favor of the [*3]

non-moving party and must not decide credibility issues. (Dauman Displays, Inc. v Masturzo, 168 AD2d 204 [1st Dept 1990], lv denied 77 NY2d 939 [1991]). As summary judgment is a drastic remedy which deprives a party of being heard, it should not be granted where there is any doubt as to the existence of a triable issue of fact (Chemical Bank v West 95th Street Development Corp., 161 AD2d 218 [1st Dept 1990], or where the issue is even arguable or debatable. (Stone v Goodman, 8 NY2d 8 [1960]).

Pursuant to RPAPL 711(1), a special proceeding may be maintained against a tenant on the ground that the tenant continues in possession of any portion of the premises after the expiration of the term without the landlord's permission.

I first find that petitioner has established, prima facie, its entitlement to a judgment of possession based on its submission of proof demonstrating that it is the landlord of the premises, that respondent is the tenant of the premises, that respondent's lease expired on December 31, 2005, and that respondent has continued in possession of the premises without permission. The affirmation of petitioner's counsel constitutes a proper evidentiary foundation for the admission in evidence of the various documents attached thereto. (Zuckerman, 49 NY2d at 562 [attorney affirmation may serve as vehicle for introduction of documentary evidence in support of summary judgment motion]). The credibility of petitioner's affiants is irrelevant absent any indication that they advanced patently false assertions. (See Glick & Dolleck, Inc. v Tri-Pac Export Corp., 22 NY2d 439 [1968] [court may not weigh credibility of affiants on summary judgment motion unless it clearly appears that issues are feigned]). Finally, respondent has failed to rebut any of petitioner's proof by admissible documentary evidence.

As respondent advances no triable issue of fact as to the form of the petition and the verification in affirmative defenses five, seven and ten which requires analysis beyond that set forth in my August 22 decision, they are dismissed. Additionally, the first, second, third, and fifth counterclaims (corresponding to the eighth, ninth, thirteenth, fourteenth, and fifteenth affirmative defenses) were stricken and the fourth counterclaim was severed, and thus need not be addressed. Finally, as respondent does not oppose petitioner's motion to dismiss the third, eleventh, twelfth, nineteenth, twentieth, and twenty-third affirmative defenses, they are dismissed. I thus address the remaining affirmative defenses.

A.Description of premises

(first and fourth affirmative defenses)

Petitioner contends that these affirmative defenses are meritless because the petition sets forth the description of the premises by reference to the attached schedule A, and as that schedule is attached to the parties' lease, the description in the petition is proper. Respondent argues that petitioner's interest in the premises as detailed in the documents should have been set forth in the petition.

RPAPL 741(3) requires that every petition contain a description of the premises from which a tenant's removal is sought. Here, the petition contains a description of the premises as "space 3060 located in the Pier 17 building, 89 South Street . . . as is shown in Schedule A annexed hereto." Schedule A contains a plan of the third floor level of the South Street Seaport Pier Building, with a handwritten notation reflecting respondent's location along with the note "700 S.F." In the parties' lease, the premises are defined as "tenant's portion of landlord's [*4]building shown on Schedule A' having the following Area: 700 square feet" and annexed to the lease is the same plan, Schedule A. I thus find that the lease and the petition include the same description of the premises which is sufficiently particular. Consequently, respondent has failed to raise a triable issue of fact as to the sufficiency of the description of the premises in the petition.

B.Petitioner's standing

(second affirmative defense)

Petitioner asserts that it has sufficiently demonstrated its leasehold interest in the premises. Respondent argues that petitioner's supporting documentary evidence is inadmissible.

Every petition must set forth the interest of the petitioner in the premises from which a tenant's removal is sought. (RPAPL 741[1]). Here, petitioner alleges in the petition that it is the landlord of the premises and the supporting documents are admissible certified copies of public records. (CPLR 4540[a] [copy certified as correct by officer or deputy of officer having legal custody of official record . . . is prima facie evidence of such record]). Respondent has thus failed to raise a triable issue of fact as to petitioner's standing.

C.Pleading defects

(fourth affirmative defense)

Petitioner maintains that respondent's allegations that the pleading fails to state a cause of action because it does not accurately describe the premises, is ambiguous and equivocal, and misstates the landlord-tenant relationship, are duplicative of the first and second affirmative defenses and are fatally conclusory and/or equivocal. I agree and find that respondent has failed to raise a triable issue of fact as to the sufficiency of the pleading.

D. Waiver, estoppel, unclean hands, laches

(sixth affirmative defense)

Petitioner asserts that the allegations set forth by respondent in this affirmative defense are fatally conclusory and in any event, meritless as the lease expired on December 31, 2005 and petitioner commenced the instant proceeding weeks later without having received or accepted any rent from respondent. Respondent argues that petitioner acted with unclean hands and in bad faith in managing Seaport by failing to maintain an escalator, the air conditioning, the elevators, and the bathrooms, denying access to the picnic area, posting the wrong hours of operation for the Seaport, and failing to fix ceiling leaks. Respondent thus contends that petitioner's conduct in these regards estops it from evicting respondent.

In its answer, respondent offered no factual allegations in support of this defense. (See Glenesk v Guidance Realty Corp., 36 AD2d 852, 853 [2d Dept 1971] [defenses that merely plead conclusions of law without supporting facts are insufficiently pleaded]). Moreover, these allegations underlie respondent's affirmative defense of breach of the warranty of habitability, [*5]which defense was previously dismissed. Finally, laches does not constitute a defense to a summary proceeding. (UBO Realty Corp. v Fulton, NYLJ, Sept. 8, 1993, at 21, col 1 [App Term, 1st Dept]; 501 Seventh Ave. Assoc. v 501 Seventh Ave. Bake Corp., 2002 WL 31065240, 2002 NY Slip Op 50362[U] [Civ Ct, New York County]). For these reasons, respondent has failed to raise a triable issue of fact as to these affirmative defenses.

E. Accord and satisfaction, payment, release, statute of frauds

(sixteenth affirmative defense)

Petitioner asserts that respondent's allegations supporting this affirmative defense are fatally conclusory (Glenesk, 36 AD2d at 853), and in any event, as petitioner does not seek any rent or use and occupancy in this proceeding, the allegations do not constitute proper defenses to a holdover claim for possession only. I agree. Thus, respondent has failed to raise a triable issue of fact as to this affirmative defense.

F. Personal jurisdiction

(seventeenth affirmative defense)

Petitioner contends that the affidavit of service of the notice of petition and petition establishes that proper service was made. Respondent argues that it was not properly served with the notice of petition and petition as Lydia Soto is only an employee and is not authorized pursuant to CPLR 311 to accept service on its behalf. It also alleges that petitioner knew of an alternate address for respondent and did not attempt to serve it there.

According to respondent's president, Steve Sobel, Soto is employed at the premises, but is not authorized to accept service on respondent's behalf. (Affidavit of Steve Sobel, dated July 20, 2006 [Sobel Affid.]). According to Soto, she is employed by respondent to sell and replenish candy, and is not an officer, director, managing agent or general agent, cashier or assistant cashier of respondent. (Affidavit of Lydia Soto, July 20, 2006 [Soto Affid.]). She states that on or about the afternoon of January 26, 2006, she was at respondent's store when a man came into the store and tried to give her papers. When she declined to accept them, he asked for her name but did not ask if she worked at the premises or if she was authorized to accept papers on respondent's behalf. (Id.).

Pursuant to RPAPL 735(1), substitute service of the notice of petition and petition is accomplished by delivering them to and leaving them personally with a person of suitable age and discretion who resides or is employed at the property sought to be recovered. The burden of proving jurisdiction rests upon the party asserting it. (Rox Riv 83 Partners v Ettinger, 276 AD2d 782, 783 [2d Dept 2000]). An affidavit of service is ordinarily sufficient to satisfy that burden. (Id.). In order to challenge service, the party must at least submit a sworn denial of receipt and raise an issue of fact. (Empire Ntl. Bank v Judal Construction of NY, Inc.,[2d Dept 1978]; Fed. Ntl. Mortgage Assn. v Rick Mar Constr. Corp., 138 Misc 2d 316, 322 [Sup Ct, Kings County 1988]). [*6]

Respondent concedes that Soto was an employee at the premises sought to be recovered, and does not deny that the pleadings were mailed to its addresses. Petitioner thus properly effectuated substitute service upon respondent pursuant to RPAPL § 735. There is no requirement that a notice of petition and petition be served only by personal service and in compliance with CPLR 311. (See City of NY v Wall St. Racquet Club, Inc., 136 Misc 2d 405 [Civ Ct, New York County 1987] [service on corporation in summary proceeding sufficient pursuant to RPAPL § 735 without regard to personal service pursuant to CPLR 311]). Respondent has also failed to offer any evidence that petitioner had any knowledge of respondent's owner's other address at Seaport. Respondent has thus failed to raise a triable issue of fact as to this affirmative defense.

G. Representations and oral renewal

(eighteenth and twenty-second affirmative defenses)

Petitioner denies respondent's claim that it orally promised to extend the lease and argues that the claim is otherwise barred by the no-modification provision of the lease and the statute of frauds. Respondent contends that petitioner renewed the lease by orally promising, after September 11, 2001, to extend the lease and that it detrimentally relied on the promise and partly performed it. Because of its part performance and detrimental reliance, respondent argues that a formal writing is not required under General Obligations Law § 5-703, and that the statute of frauds does not apply. Moreover, it notes that a contractual prohibition against oral modifications may itself be waived.

Sobel states that at a meeting held on November 2001 and prior to the expiration of the lease, petitioner agreed to extend the lease for an additional ten-year term. Sobel alleges that in reliance on petitioner's promise, he acted to respondent's detriment by staying open despite the business conditions that existed after September 11, 2001, by personally assuming respondent's rent debt, by borrowing on his credit cards to pay money owed to petitioner by respondent, and by improving and enlarging respondent's store at the premises.

Pursuant to General Obligations Law § 15-301, "[a] written agreement or other written instrument which contains a provision to the effect that it cannot be changed orally, cannot be changed by an executory agreement unless such executory agreement is in writing and signed by the party against whom enforcement of the change is sought or by his agent." (See also General Obligations Law § 5-703[2] [deeming void any lease of a duration longer that one year unless in writing, subscribed by party to be charged or lawful agent]). However, where an oral modification of a lease is partially performed and the acts taken in detrimental reliance upon it are "unequivocally referable" to it, the oral agreement will be enforced. (Rose v Spa Realty Assoc., 42 NY2d 338, 343 [1977]; Richardson & Lucas, Inc. v New York Athletic Club of the City of New York, 304 AD2d 462, 463 [1st Dept 2003]). To be unequivocally referable to the oral agreement, the conduct must be "inconsistent with any other explanation." (Richardson & Lucas, 304 AD2d at 463; Joseph P. Day Realty Corp. v Jeffrey Lawrence Assoc., Inc., 270 AD2d 140, 141 [1st Dept 2000]). [*7]

Although petitioner does not deny having met with respondent in November 2001, it denies having agreed to a lease renewal, relying on the lease's prohibition against oral modifications of its terms, and denies having waived the prohibition. Consequently, it must be determined if respondent partly performed pursuant to the alleged oral renewal and, if so, whether the performance is unequivocally referable to the renewal.

Even if Sobel personally assumed respondent's rent debt solely in reliance on an oral agreement to renew the lease, there is no evidence that petitioner knew it as there may exist a variety of reasons for a principal to assume such debts. I thus find that Sobel's assumption of the debt and use of his credit cards to satisfy the debt is not unequivocably referable to the alleged renewal. (Cf Joseph P. Day Realty Corp., 270 AD2d at 142 [tenant's payment of rent not unequivocably referable to claimed modification as lease obligated tenant to pay rent]).

The post-September 11 improvements are also not unequivocably referable to a lease renewal as three years remained on its lease at that time and respondent does not allege that it would have suspended its work absent a renewal. As it was in respondent's interest to effect improvements for the sake of its business regardless of whether the lease would be renewed at a future date, I find that the improvements do not unequivocally refer to the purported renewal. (Cf Tierney v Capricorn Investors, L.P., 189 AD2d 629 [1st Dept 1993], lv denied 81 NY2d 710 [plaintiff's continuing performance pursuant to employment agreement is equally consistent with desire to continue to earn compensation as it is with alleged oral modification]). Absent any evidence apart from the alleged part performance, respondent has alleged no facts in support of its waiver defense.

Finally, respondent has not resolved the apparent inconsistency between its allegation that the lease was extended for a ten-year term in 2001, and its allegation that it accepted a one-year extension of the lease in 2004. For all of theses reasons, respondent has failed to raise a triable issue of fact as to this affirmative defense.

H. Prematurity of proceeding

(twenty-first affirmative defense)

Petitioner asserts that respondent's tenancy expired by its terms before it commenced the instant proceeding. Respondent contends that the lease has not expired as petitioner orally extended it.

Petitioner denies that it agreed to renew respondent's lease and there is no evidence that the lease was renewed. As the lease expired on its terms, and respondent refused to vacate the premises despite the expiration, petitioner was entitled to commence the instant summary proceeding. Thus, as the action is not premature, respondent has thus failed to raise a triable issue of fact as to this affirmative defense.

III. CONCLUSION

Accordingly, petitioner has established its entitlement to summary judgment as per my previous order. A hearing on petitioner's claim for attorney fees was previously scheduled to be [*8]held on October 23, 2006, at 9:30 a.m., in Part 52, room 1166, 111 Centre Street, New York, New York.

This constitutes the decision and order of the court.

_______________________________

Barbara Jaffe, JCC

DATED:September 28, 2006

New York, New York