Genovese Drug Stores, Inc. v Treeco Ctrs. Ltd. Partnership
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Genovese Drug Stores, Inc. v Treeco Ctrs. Ltd. Partnership 2011 NY Slip Op 32207(U) August 5, 2011 Supreme Court, Nassau County Docket Number: 601004/10 Judge: Ute W. Lally Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. [* 1] SHORT FORM ORDER SUPREME COURT - STATE OF NEW YORK COUNTY OF NASSAU - PART 3 Present: HON. UTE WOLFF LALLY Justice GENOVESE DRUG STORES, INC. MpD Motion Sequence #1 Submitted May 31, 2011 Plaintiff -against- INDEX NO: 601004/10 TREECO CENTERS LIMITED PARTNERSHIP Defendant. The following papers were read on this motion to dismiss: Notice of Motion and Affs.................................................................. 1-4 Affs inS u pport.................................................................................. . 5&6 Law................................................... 1"1..................... Memoranda of Upon the foregoing papers , it is ordered that this motion by the defendant Treeco Centers Limited Partners for an order pursuant to CPR 3211 (a)1. and 5. dismissing the plaintiff' s complaint , is disposed of as follows: In June of 1982 , the plaintiff Genovese Drug Stores , Inc. ("Genovese ) as tenant entered into a 20- year , commercial lease with then landlord Woodbury Holding Company Woodbury ). Among other provisions, the lease required Genovese to pay a 13. 75% pro rata share of the real estate taxes/assessments levied on the portion of the shopping center then owned by the landlord, which as defined by the lease , amounted to some 120 000 square feet. [* 2] During the pendency of the lease Genovese paid its pro rata share of the real estate taxes due as demanded in annual tax invoices prepared by Woodbury, and then later by Woodbury s successor , the defendant herein , Treeco Centers Limited Partners Treeco ). The foregoing invoices, to which underlying tax bils were annexed, generally contain a column of figures inter alia listing, the total adjusted taxes for the shopping center for a given tax year , to which the contract stipulated 13. 75% pro rata was then applied. The invoices then compute Genovese s total tax obligation for that particular year together , as well as an adjusted , monthly tax payment amount. Between 1998 and 2010 , Genovese paid its pro rata share of the taxes , as calculated in the annual real estate tax invoices. Genovese herein claims that at some point in early 2010 , it discovered after performing an audit that the real estate tax amounts paid by other Genovese stores on Long Island were considerably less than the amounts which were being requested Treeco. Genovese thereafter made inquiries with Treeco relating to its pro rata by tax payments and ultimately ascertained that: (1) Treeco had apparently acquired additional or adjacent properties which increased the square footage of the shopping center; and (2) that Treeco , in computing the which , in effect , included in the pro rata pro rata taxes due , had allegedly utilized a tax " denominator tax ratio , square footage (and thus tax amounts) attributable to these additionally acquired properties. According to Genovese , neither the tax bills presented by Treeco as backup for its year-end statements (which apparently identified certain tax lots different from those referenced in the lease), nor any other documents or statements provided by Treeco [* 3] suggested that Treeco had acquired any additional portions of the subject shopping center beyond that which it owned at the inception of the lease. In response to Genovese s inquiries , Treeco initially agreed that its tax invoices for 2009 (and tax escrow payments for 201 0), overcharged Genovese for its pro rata tax share resulting in a $58 009.41 credit. A dispute arose , however , when a few months later Genovese claimed that it had been consistently overcharged since 2004 , and that a far larger refund of approximately $541 772. 79 was now due and owing. More particularly, and in response to Genovese s demand letters , Treeco s Chief Financial Officer , Robert Adler , not only rejected Genovese s new refund claims, but also advised that Treeco had only recently re-examined it records and now concluded that Treeco was not , in fact , entitled to the previously offered $58, 009.41 refund. Adler further asserted that Genovese was in default under the terms of the lease since tax , rents and common areas charges of some $102 341.40 were then allegedly outstanding. Genovese asserts that it later paid the amounts demanded by Treeco , but only under protest and upon a full reservation of rights. By summons and complaint dated February of 2011 , Genovese commenced the within action as against Treeco to recover the refund amounts allegedly due. Genovese complaint contains three causes of action , the first , sounding in breach of contract , the second , sounding in breach of the duty of good faith and fair dealing, and the third which demands declaratory relief to the effect that pro rata inter alia that Genovese is obligated to make payments based only upon the buildings and improvements which existed at the time the lease was executed and that , Genovese has no contractual duty to pay taxes [* 4] attributable to any improvements made , or portions of the shopping center acquired subsequent to the execution of the lease. The defendant Treeco prior to interposing an answer , and pre-joinder of issue moves to dismiss , pursuant to CPLR 3211(a) 1. and 5. claiming that Genovese s claims are time- barred by the six- year limitations period applicable to breach of contract actions as prescribed by CPLR 213. In support of its claims , Treeco argues that it provided notice of the tax amounts due pursuant to the Lease , through its annual invoices or notices which according to Treeco , calculated the amounts due in precisely the same fashion " since at least 1998" , and that Genovese voluntarily paid the amounts requested America , Inc. v Fifth Copeland Associates, Landlord & Tenant Ave. P. 58/59 Acquisiton C. v Goodstein Bros. (Citcorp North Company, LLC, Goldman 70 AD3d 408; & Co. Inc. 268 AD2d 370; 74 NY Jur 2d, 9352). Voluntary payments Moreover , Adler claims that since 1998 , no relevant changes have been made to the shopping center assessing the pro rata , at least none which would have affected the lease formula for taxes due. In light of the foregoing facts , and relying on Associates , P. C. v Goodstein Bros. & Co. Inc. , (supra), inter alia Goldman Copeland Treeco contends in substance that where a tenant agrees to pay a landlord so-called real estate tax escalation charges, any cause of action for a miscalculation or overpayment accrues when the tenant first receives notice of the tax computation and makes a voluntary payment pursuant thereto and not when the tenant later discovers the miscalculation or overpayment , provided that: (1) the tax formula used by the landlord has remained constant; and (2) the tenant was given [* 5] notice of the method used to calculate the taxes demanded and/or possessed all the information it needed to meaningfully challenge the accuracy of the landlord' s (Goldman Copeland Associates, P. C. v Goodstein Bros. & Co. Inc. , supra 268 AD2d at 371; see also, Citicorp North America , Inc. v Fifth Ave. Acquisition Company, LLC 58/59 Frankel supra; Kramer Levin Naftalis notices , LLP v Metropolian 919 3rd Av , LLC, 6 Misc. 796, 800 (Supreme Court, New York County 2004)). Treeco argues that since its notices were consistent with the foregoing requirements and because voluntary payments were thereafter made , the Genovese claims accrued in 1998 , thereby requiring dismissal of the plaintiffs complaint (CPLR 213 see , Citicorp North America Wiliam Co. v Aetna Ins. , Inc. v Fifth Ave. 58/59 Acquisiton Company, LLC, supra; 100 Co. , 163 AD2d 170 cf. , J. 635 F. Supp. 2d 126 131 (N. C. Co., Penney Corp. v Carousel Ctr. Y. 2008)). In opposing the application , the plaintiff contends inter alia that the general rule with respect to annual and/or installment type payment is that " when a contract provides for the payment of money in installments , such as interest installments , the Statute of Limitations runs on each installment from the date it becomes due (Vigilant Ins. Co. America v Housing Authority of City of EI Paso, Tex. 87 NY2d 36 , 45; Phoenix Acquisiton Corp. vCampcore , Inc. 81 NY2d 138 143; Cadlerock, L.L.C. vRenner v Ach 56 AD3d 457 see also , Walton v Eastern Analytical Labs, Yeshiva University Development Foundation, Inc. v Consultants AI?2d 525 , 527 cf. , Chiu v Stores Realty Corp. Bond Street Realty, Inc. Supp. 79 AD3d 416; , 2009 WL 4333652 , at 6 (S. Sce 72 AD 3d 454; Inc. 246 AD2d 532; Designers, Inc. , 60 Carvel v Franchise Y. 2009)). [* 6] The plaintiff further contends that: (1) the lease contains a non-waiver clause relating to lease violations; and (2) that in any event , and at this pre- discovery juncture of the action , the record does not establish as a matter of law that it was in possession of " all the information it needed to meaningfully challenge the accuracy " of Treeco s invoices for the purposes of applying the Ctr. Co. supra). Goldman holding (J. C. annual Penney Corp. v Carousel The Court agrees. On a motion to dismiss on statute of limitations grounds , a movant bears the initial burden of establishing prima facie Shatz 273 AD2d 219, 220; see also, Kennedy v Fischer 78 AD 3d 1016 , 1017; New York Med. Coli. 25 AD 3d 686 , 687; v Cicola 297 AD2d 620 , 621). To make a inter alia (Savarese v that the time in which to sue has expired Rosenfeld v Schlecker 5 AD3d 461 prima facie Gravel showing, a movant must establish when the petitioner s causes of action accrued" (In re Schwartz 44 AD 3d 779 see also, Cottone v Selective Surfaces, Inc. 68 AD 3d 1038 , 1040). Where a showing has been made , 462; Swift v prima facie the opposing party must then set forth " evidentiary facts establishing that the case falls within an exception to the Statute of Limitations (Savarese v Shatz, supra at 220). Notably, " (a) CPLR 3211 (a)(1) motion to dismiss based on documentary evidence may be appropriately granted " only where the documentary evidence utterly refutes plaintiffs factual allegations , conclusively establishing a defense as a (Goshen v Mutual Life Ins. Partners Co. , L.P. v State Street Bank and Trust of N. Y. 98 NY2d 314 , 326; see also Co. , 5 NY3d 582 , 591). AG matter of law Capital Funding ," [* 7] In Goldman the First Department held that even though a tenant wage escalation payment may have been due periodically, the statute of limitations still barred all the tenant's overpayment claims , even those based on alleged overpayments made within six years of the date when the tenant commenced its action. This was proper , the Court reasoned , because the defendanUlandlord had consistently utilized the same computational formula in its annual biling statements for a period dating back some years prior to the commencement of the action. The Court concluded that based on these facts , the tenant's cause of action accrued when the wage statements were originally issued , some 12 years earlier , since at that point , the plaintiff " had all the information it (Goldman Copeland Associates needed to contest the amounts sought" by the landlord C. v Goodstein Bros. Metropolitan 919 & Co. Inc. , supra 3rd Ave. , LLC , supra Kramer Levin Naftalis at 371; 6 Misc. 3d v Housing Authority of City of EI Paso, Tex. , Frankel, LLP v at 800 cf. , Vigilant Ins. Co. of America supra). With these principles in mind , and construing the facts as alleged in the complaint (Cottone v Selective Surfaces, Inc. , supra; Cimino in the light most favorable to the plaintiff v Dembeck 61 AD3d 802), the Court agrees that Treeco has failed to establish entitlement to dismissal of the complaint at this pre-answer CPLR 3211 motion stage " of the proceedings (J. C. Penney Corp. , generally, Howish v Perrotta AD3d Inc. v Carousel Center , 923 NYS2d 903; Co. L.P. , supra; see Kennedy v Fischer, supra at 1 017). More specifically, while Treeco s real estate tax invoices were facially uniform in the computational methodology utilized , the plaintiff' s claim is not that the basic formula [* 8] employed by Treeco was necessarily incorrect; rather , the plaintiff argues in sum that the data utilized in making those calculations was erroneous and that it lacked constructive notice of the error and/or could not have discovered them upon the exercise of due (J.C. Penney Corp. , Inc. v Carousel Center diligence Co. L.P. , supra at 133). The plaintiff has asserted in this respect , and the record confirms , that the tax invoices: (1) do not describe or depict the scope and size of the shopping center for each relevant tax year; (2) omit reference to whether , in fact , the shopping center as it existed when the lease was executed had been altered; and (3) contain no facts which would indicate that the net or adjusted taxes for any given year actually included tax amounts attributable to properties not part of the shopping center when the lease was originally executed. Notably, Treeco s submissions do not establish how Genovese would have known , based on the information contained in the invoices , that the taxes were not being computed in accord with what Genovese has alleged was the proper methodology for doing so , as prescribed by the parties ' lease. It also bears noting that Treeco has not claimed that the plaintiff' s interpretation of the lease is substantively incorrect; nor does it dispute that it was including tax amounts attributable to post- lease property acquisitions in the invoices provided. Indeed , Treeco originally agreed to refund the plaintiff some $58 000. , and only withdrew the refund offer after Genovese claimed entitlement to a far greater sum. In sum , and upon the pre- discovery record presented , whether a reasonable person in the exercise of due diligence should have suspected that Treeco s calculations were improper as alleged in the complaint , cannot be summarily resolved as a matter of ," [* 9] law (see , J. C. Penney Corp. , Inc. v. Carousel Center Co. L.P. , supra at 132). Notably, it is settled that the resolution of disputed factual issues is generally inappropriate on a motion to dismiss However , (Sargiss v Magarell 12 NY3d 527 , 531). that branch of Treeco s motion which seeks to dismiss the third declaratory judgment cause of action should be granted. It is well settled that " (a) Gause of action for a declaratory judgment is unnecessary and inappropriate " where , as here the plaintiff has an adequate, alternative remedy in another form of action , such as breach of (Apple Records, Inc. v Capitol Records, Inc. 137 AD2d 50 , 54 see also , James contract" v Alderton Dock Yards 256 NY 298 , 305- 306; Niagara Falls Water Bd. v City of Niagara Falls, Inc. v State 296 AD2d 852 , 855; 83 AD3d 1553 , 1555; Burgdorf v Kasper, 64 AD 3d 1142 , 1144; Main Evaluations Watson v Sony Music Entertainment, Inc. 282 AD2d 222 223). The Court has considered the Treeco s remaining contentions and concludes that they are lacking in merit. So much of this motion by the defendant for an order pursuant to CPR 3211 (a)1. and 5. , dismissing the plaintiff' s complaint is granted to the extent that the declaratory judgment cause of action is dismissed , and the remainder of this motion is otherwise denied. Dated: U&nw 1\ \J h.'-v,: Iq UTE WOLF ENTERED UG 0 9 2011 NASSAU COUNTY COUNTY CLERK' S OFFICE [* 10] TO: Herrick , Feinstein LLP Attorneys for Plaintiff 2 Park Avenue New York , NY 10016 Wachtel & Masyr , LLP Attorneys for Defendant 885 Second Avenue , New York , NY 10017 genovese-treeco, #1/dismiss 4t Floor
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