151 Mulberry St. Corp. v Italian Am. Museum
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151 Mulberry St. Corp. v Italian Am. Museum 2013 NY Slip Op 30300(U) January 22, 2013 Sup Ct, New York County Docket Number: 651017/10 Judge: Barbara R. Kapnick 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. [*FILED: NEW YORK COUNTY CLERK 01/23/2013 1] INDEX NO. 651017/2010 NYSCEF DOC. NO. 106 RECEIVED NYSCEF: 01/23/2013 SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PART~ PRESENT: Justice Index Number: 651017/2010 151 MULBERRY STREET CORP. INDEX NO. _ _ _ __ VS. MonONDATE _ _ __ ITALIAN AMERICAN MUSEUM, SEQUENCE NUMBER: 004 MonON SEQ. NO. _ __ DISMISS DEFENSE The following papers, numbered 1 to _ _ , were read on this motion to/for _ _ _ _ _ _ _ _ _ _ _ _ __ I No(s)._ _ _ _ __ I No(s). _ _ _ _ __ I No(s). _ _ _ _ __ Notice of Motion/Order to Show Cause - Affidavits - Exhibits Answering Affidavits - Exhibits _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ Replying Affidavits _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ Upon the foregoing papers, it is ordered that this motion is w (,) t= en ..., ;:, r.: g :':10TION IS DECtD5D Ii\! ACCORDP NC ~ ,_ 'Mn-o., 1;;. . \ i !\CCOrvl?p.NV1~\!G iijiEiViO::lAi~DUM Dt:,CIS!O~ c W 0:: 0:: w ~ w 0:: " ~- ~~ ~ z ;:'0 ~ en I- oCt (,) w W 0:: W z 5;(!) 0:: - en ~ - 0 en ~ W ~ oCt 0 (,) ~ Z W :I: o o :E t= I- 0:: 0 ~ fI!f!--G .J.S.C. ~... ..,.~ ~'f·'·~··-,.m~ '. "' .. ~ "", ~. ;~ :..~. ',t ~ .... _:o:~. ,,. ~ ~ _".;, ..." "0." ' ¢ ¢ ¢ ' - . w .," .. _ ....... ~ 1. CHECK ONE: ..................................................................... 0 CASE DISPOSED 2. CHECK AS APPROPRIATE: ........................... MOTION IS: 0 GRANTED 0 3. CHECK IF APPROPRIATE: ...............................................~SEnLE ORDER [J DO NOT POST It!,.. ~ NON.FINAt"bisPOSITION DENIED .~ GRANTED IN PART = OTHER o SUBMIT ORDER o FIDUCI .\RY APPOINTMENT C REFERENCE [* 2] SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: IA PART 39 _______________________________________ x 151 MULBERRY STREET CORP. d/b/a IL PALAZZO, DECISION Index No. 651017/10 Motions Seq. No. 004 Plaintiff, -againstITALIAN AMERICAN MUSEUM, ITALIAN AMERICAN MUSEUM REAL ESTATE HOLDINGS, LLC,JEROME G. STABILE III REALTY LLC f/k/a STABILE BROTHERS, LLC, JOSEPH V. SCELSA, RONALD MANNINO and MICHAEL RICATTO, Defendants. ---------------------------------------x ITALIAN AMERICAN MUSEUM, Petitioner-Landlord, -against151 MULBERRY STREET CORP. d/b/a IL PALAZZO, Respondent-Tenant, ABC CORP. and XYZ INC., Respondents-Undertenants. ---------------------------------------x BARBARA R. KAPNICK, J.: The following facts are taken from defendants' Statement of Material Facts, unless otherwise noted. Plaintiff 151 Mulberry Street Corp. Mulberry" or "plaintiff") the ground floor and d/b/a 11 Palazzo ("151 is the former month-to-month tenant of second story 1 store and basements of 151 [* 3] Mulberry Street, New York, New York and 185 Grand Street, 187 Grand Street, 189 Grand Street (the "Premises"). Defendant Italian American Museum profi t institution and museum, American (the "Museum") located at Museum Real is a non- 155 Mulberry Street. Defendant Italian ("IAMREH") is the owner of the buildings located at and commonly known as 151 Mulberry Street and 185, (collectively the "Buildings"). Estate Holdings, LLC 187 and 189 Grand St reet The Museum, at all relevant times, was and is the net lessee of the Buildings, having entered into a net lease with IAMREH for the Buildings in or around January 2009 (the "Net Lease"). According to the Museum, plaintiff stopped paying rent after the Museum became the net lessee of the Buildings. subsequently commenced a proceeding in Civil non-payment Court, both of proceeding which The Museum and a were holdover dismissed on procedural grounds. On or about March 31, 2010, plaintiff was served with a Thirty (30) Day Notice of Termination. The Notice of Termination notified plaintiff that the Museum elected to terminate plaintiff's monthto-month tenancy, and that unless it vacated the Premises on April 30, 2010, the day on which the month-to-month tenancy expired, 2 [* 4] defendant would commence summary proceedings to remove plaintiff Despite this Notice and the expiration of the from the Premises. month-to-month tenancy on April 30, 2010, plaintiff failed to vacate the Premises. The Museum then commenced another holdover proceeding "Second Holdover Proceeding"), (the which plaintiff moved to dismiss. The motion was denied by Decision/Order of the Hon. Arlene P. Bluth dated June 9, 2010. 1 Plaintiff then commenced the instant action and simultaneously filed a Notice of Pende~cy against the Building. By Decision/Order dated November 19, 2010, this Court granted plaintiff's motion to consolidate the Second Holdover Proceeding with the instant action. All of the defendants herein moved to dismiss all but one of plaintiff's causes of action (the fourth cause of action for unjust enrichment) in the Amended Complaint. 1 According to defendants, plaintiff interposed an answer containing an "unauthorized" third-party complaint in contravention of the CPLR, a request for a declaratory judgment and frivolous counterclaims. Defendant then moved to dismiss plaintiff's affirmative defenses, to sever the counterclaims and third-party claims and for partial summary judgment. 3 [* 5] By Decision/Order dated September 12, 2011, this Court granted the motion to dismiss all causes of action except the third cause of action for money had and received and the fourth cause of action for unjust enrichment, both of which are asserted only against the Museum, and neither of which concern possession of or title to the Premises. 2 The Museum thereafter served its Verified Answer to plaintiff's Amended Complaint which contained several affirmative defenses and a counterclaim for possession of the Premises based upon the termination of plaintiff's month-to-month tenancy.3 Plaintiff then served a "Reply to Counterclaim," which asserts an affirmative defense claimi~g that plaintiff's tenancy of the Premises continues because a proper Notice of Termination of the month-to-month tenancy was never served. The Museum now moves for an order: (1) pursuant to affirmative CPLR defense 3211 (b) , in its striking reply to plaintiff's the Museum's counterclaim; 2 That decision was affirmed by the Appellate Division, First Department on January 3, 2013 (2013 WL 28269) 3 This claim was also asserted in the petition in the Second Holdover Proceeding. 4 [* 6] (2) pursuant to CPLR 3212, granting the Museum summary judgment against plaintiff on its first counterclaim in its Verified Answer; (3) granting defendant the to Museum a writ possession of of the assistance subj ect to restore premises and directing the New York County Sheriff or New York City Marshall to remove and eject plaintiff therefrom; or, in the alternative, granting the Museum a final judgment of possession of the Premises with the issuance of a warrant of eviction forthwith to remove plaintiff therefrom; (4) granting the Museum a judgment for any and all rent and use and occupancy arrears and setting the matter down for a hearing on the fair value of use and occupancy for the Premises; 4 and (5) cancelling the Notice of Pendency filed by plaintiff in this matter and directing the County Clerk of New York County to vacate and cancel the Notice of Pendency as of record. 5 Plaintiff is currently paying $10,000.00 per month in use and occupancy for the Premises. Defendant contends the fair market value of the premises is actually $30,000.00 per month. The Court notes that the Museum has moved by Order to Show Cause (motion sequence 006) to modify the amount of use and occupancy being paid, which motion is currently returnable on February 14, 2013. 4 5 This issue is now moot, having been granted without opposition by Order of this Court dated October 23, 2012. 5 [* 7] Plaintiff cross-moves for an order granting it leave to file an Amended Reply to Counterclaim, in the form annexed to the CrossMotion as Exhibit B.6 DISCUSSION The Museum first that argues plaintiff's affirmative defense/reply to the Museum's counterclaim for possession, which states that "[n]o proper Notice of Termination was ever served on Plaintiff[,]" must be·dismissed because it is fatally conclusory and lacks merit, and because it was waived when not raised either in 151 Mulberry's pre-answer motion to dismiss the Petition in the Second Holdover Proceeding or its Answer to the Second Holdover Proceeding. The Museum reasons that by not raising the issue of service, plaintiff effectively consented to personal jurisdiction in the Second Holdover Proceeding and cannot now assert that it was never properly served with a Notice of Termination. 7 In any event, the Museum contends that the Notice of Termination was properly served on plaintiff's manager and is effective. 6 The Court notes that the Proposed Amended Reply to Counterclaim asserts proposed defenses that mirror the arguments it asserts in opposition to the instant motion. 7 The Museum also argues that plaintiff effectively waived any service and/or personal jurisdiction issues and consented to the personal jurisdiction of this Court when it asserted unrelated counterclaims in the Second Holdover Proceeding and sought to remove the Second Holdover Proceeding from Civil Court and consolidate it with this action it had commenced in Supreme Court. 6 [* 8] Plaintiff argues that the Affidavit of Service of the Thirty Day Notice of Termination states that it was served on 151 Mulberry Street Corp d/b/a 11 Palazzo Restaurant on March 31, personally leaving a copy with "Juan Czea, manager." 2010 by Additional copies were also mailed to Annette Sabatino, plaintiff's President, and to plaintiff's counsel. According to the affidavit of Ms. Sabatino, at no time was there ever an officer, director, cashier, manager or anyone authorized to accept service of papers on behalf of 151 Mulberry Street Corp. named Juan Czea. With respect to the waiver argument, plaintiff contends that its defense to defendant's counterclaim for possession was not waived because the Counterclaim in the Answer served on September 20, 2011 was not "identical" or "verbatim" to the one previously pled in the Civil Court Petition, although it is, in all material respects, the same. Real Property Law ("RPL") § 232-a ("Notice to terminate monthly tenancy or.tenancy from month to month in the city of New York") provides that a notice to terminate must be served" . . . in the same manner in which a notice of petition proceedings is now allowed to be served by law . Real Property Actions and Proceedings Law 7 in summary " ("RPAPL") § 735 [* 9] governs the service of a notice of petition in summary proceedings, and provides in relevant part: 1. Service of the notice of petition and petition shall be made by personally delivering them to the respondent, or by deli vering to and leaving personally with a person of sui table age and discretion who resides or is employed at the property sought to be recovered, a copy of the notice of petition and petition, if upon reasonable application admittance can be obtained and such person found who will receive it; and in addition, within one day after such delivering to such suitable person by mailing to the respondent both by registered or certified mail and by regular first class mail, (emphasis added) It is well settled that [t]he RPAPL substitute service provision reflects the legislative determination that due process notice requirements for service on a corporation in an eviction proceeding are satisfied by service on an ordinary employee, as opposed to a CPLR 311 (1) corporate representa ti ve, who is of "sui table age and discretion." Notwithstanding this general legislative determination, when a particular service is challenged, a court must evaluate the validity of that service under the constitutional standard of whether the service "is one 'reasonably calculated, under all the circumstances, to apprise [the] interested part[y] of the pendency of the action.'" Thus, in determining the validity of substitute service on a respondent under RPAPL 735, the test is whether the delivery of the papers to the given employee, "objectively viewed, is calculated to adequately and fairly apprise the respondent of an impending lawsuit." 8 [* 10] Manhattan Embassy Co. 980 (1995) v. Embassy Parking Corp., 164 Misc.2d 977, (internal citations omitted). According to the Affidavit of Service, the Thirty Day Notice of Termination was served upon plaintiff "by gaining admittance to said property and delivering to and leaving a true copy thereof for each respondent by personally leaving with Juan Czea, manager[,] a person of suitable age and discretion, who was willing to receive same and employed at said property[.]" to the Plaintiff's sole objection service upon Juan Czea rests on the assertion that there was never an officer, director, cashier or manager of 151 Mulberry Street Corp. by that name, nor was there anyone by that name who was authorized by the corporation to accept service on its behalf. (Sabatino Aff. ~ 5.) This obj ection is insufficient to inval ida te service. "In order to qualify as a person of suitable age and discretion, the employee who is served need not be a corporate official or an agent authorized by the corporation to accept service." Embassy, 164 Misc.2d at 981 (emphasis added). not dispute that Mr. Manhattan Here, plaintiffs do Czea was an employee of sui table age and discretion, and, therefore, substituted service upon him, pursuant to RPAPL 735, was not improper. Moreover, it is clear from the fact that plaintiff answered the Second Holdover Proceeding that it 9 --------- [* 11] was apprised of the pendency of the action. With respect to the Notice of Termination, the only remaining issue is whether the Museum was entitled to serve a Notice of Termination on March 31, 2010, when a lease executed by the parties on or about December 17, 2009 (the "Proposed Lease U was awaiting ) Bank approval when the Notice of Termination was served. However, this Court has already found, in its Decision/Order dated September 12, 2011, which was affirmed by the Appellate Division at 2013 WL 282269 (Jan. unenforceable. 3, Therefore, 2013), that plaintiff's the Proposed argument AD3d Lease that it is bars service of the Notice of Termination is without merit. Accordingly, affirmative the defense, Museum's as pled in motion its to Reply strike to plaintiff's Counterclaim, is granted and plaintiff's cross-motion for leave to serve and file an Amended Reply to Counterclaim is denied. As a result, the Museum is first entitled to summary judgment on its possession, pled in its Verified Answer. counterclaim for Defendants shall settle an order providing for a writ of assistance to restore defendant to possession or a final judgment of possession. The issue of the amount due for use and occupancy, if any, shall be dealt with by this Court in conjunction with the hearing 10 [* 12] already scheduled on February 14, 2013 on motion seq. no. 006. This constitutes the decision of this Court. Dated: January d:J- ' 2013 ~. KAPNICK J.B.C. aARSARA R. KAPN1CB\ J.S.C. 11
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