BKNY 1, Inc. v 132 Capulet Holdings, LLC

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BKNY 1, Inc. v 132 Capulet Holdings, LLC 2020 NY Slip Op 33144(U) September 23, 2020 Supreme Court, Kings County Docket Number: 508647/16 Judge: Lawrence S. Knipel Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [*FILED: 1] KINGS COUNTY CLERK 09/25/2020 03:12 PM INDEX NO. 508647/2016 NYSCEF DOC. NO. 571 RECEIVED NYSCEF: 09/25/2020 At ai1 IAS Term, Co1nm Part 4 of tl1e Supren1e Court of the State.of New York, 11eld in and for the Co-qnty of Kings, at the CourtholJ,se, at Civic Center, Brookl)m, New York, on the 23rd day of September, 2020. PRES ENT: HON. LAWRENCE KNIPEL, .Tt1stice. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -X BKNYl, INC., d/b/a 132 LOUNGE, Plaintiff, DECISION AND ORDER Index No. 508647/16 - against - 132 CAPULET HOLDINGS, LLC, Mot. Seq. No. 16 Defe11dant. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -X NYSCEF#: The following e-filed papers read herein: Notice ofMotio11, Affidavits (Affirmatio11s), and Exhibits A n n e x e d - - - - - - - - - - - - Opposing Affidavits (Affirmations) and Exl1ibits Annexed.~ Reply Affidavits (Affirmations) _ _ _ _ _ _ _ __ 547-557 558-562 566-567 In this action for a Yellowstone injunction and other relief, defendant 132 Capulet Holdings, LLC (defendant), moves for: (I) leave, pursuant to CPLR 2221 (d), to reargue its prior motion for, among other things, partial surrunary judgment on its affirmative defenses and counterclaims, and, upon reargument, granting that branch of its prior motion; and/or· (2) an order vacating the Yellowstone injunction entered in favor ofplaintiffBKNYl, Inc., d/b/a 132 Lounge (plaintiff), on the grounds that the latter has failed to pay rent for the months of April and May 2020; and/or (3) "[a]lternatively setting this matter down for trial on a date certain"; and/or (4) reimbursement of costs, expenses, and attorneys' fees incurred by defendant in making this motion. Plaintiff opposes the motion. 1 of 5 [*FILED: 2] KINGS COUNTY CLERK 09/25/2020 03:12 PM NYSCEF DOC. NO. 571 INDEX NO. 508647/2016 RECEIVED NYSCEF: 09/25/2020 (I) The initiaf branch of defendant's inotion which is for leave to reargue its prior motion for partial summary judgment on its affirmative defenses and counterclaims is denied. The record reflects that the legal and factual issues underlying defendant's affirmative defenses and counterclaims are scheduled to be tried in or about November 2020 by a Civil Court Judge presiding over the holdover proceeding commenced by defendant against plaintiff in the Housing Part of the Kings County Civil Court (see 132 Capulet Holdings, LLC v BKNYJ, Inc., dlbla I 32 Lounge, index No. LT-79902-19-KI) (the holdover proceeding).' There is a "strong preference for resolving landlord-tenant disputes in Civil Court due to its unique ability to resolve such issues" ( 44-46 W: 65'" Apt. Corp. v Stvan, 3 AD3d 440, 441 [1st Dept 2004]). The interests of judicial economy, fairness, and consistency are better served by deterring to the Civil Court's upcoming hearing and determination in the holdover proceeding. (2) The Yellowstone injunction has been predicated on plaintiffs representation 1nade on the record ofthe hearing that it has paid, and will continue paying, rent. 2 It is undisputed that plaintiff has failed to pay rent for the months of April and May 2020. 3 The mandatory 1 See Affidavit of Nasser Ghorchian (plaintiffs president), dated July 26, 2020 (NYSCEF #559) (Plaintiffs Affidavit),~~ 1-3; Amended Petition with attachments. filed in the holdover proceeding (NYSCEF #562). 2 See Order, dated Aug. 5, 2016 (NYSCEF #41), incorporating Transcript of Hearing, held on Aug. 5, 2016 (NYSCEF #42), at page 89, lines 19-21 (statement of plaintiffs counsel: "Rent is being paid and we'll continue to pay rent as we always have to the owners of the building."). 3 See Plaintiff's Affidavit, if 16. 2 2 of 5 [*FILED: 3] KINGS COUNTY CLERK 09/25/2020 03:12 PM NYSCEF DOC. NO. 571 INDEX NO. 508647/2016 RECEIVED NYSCEF: 09/25/2020 closure of plaintiffs restaurant business during those months by Executive Order No. 202.3 as cited by plaintiff, did not relieve it of its contractual obligation to pay rent. Plaintiff has failed to cite- and the Court's own review has not uncovered - any provision of the lease excusing it from timely and fully paying its rent during (and notwithstanding) the state1nandated closure of its business. The common-h1w doctrine of frustration of purpose is inapplicable under the circumstances. "[T]o invoke the doctrine of frustration of purpose, the frustrated purpose must be so completely the basis of the contract that, as both parties understood, without it, the transaction would have made little sense" (Warner v Kaplan, 71 AD3d l, 6 [Isl Dept 2009] [internal quotation marks omitted], Iv denied 14 NY3d 706 [2010]). "The doctrine applies when a change in circumstances makes one party's performance virttiallyworthless to the other, frustrating [its] purpose in making the contract" (PPF Safeguard, LLC v BCR Safeguard Holding, LLC, 85 AD3d 506, 508 [!st Dept 2011] [internal citations omitted]). Example·s include a situation where the tenant was unable to use the pre1nises as a restaurant until a public sewer was completed approximately three years after the lease had been executed (see Center for Specialty Care v CSC Acquisition I, LLC, 185 AD3d 34, 42 [!st Dept 2020] [citation omitted]). On the other hand, "impossibility occasioned by financial hardship does not excuse performance of a contract" (Urban Archaeology Ltd. v 207 E. 57"' St. LLC, 68 AD3d 562, 562 [!st Dept 2009]). Inasmuch as the initial term of the lease, as amended by the March2012 rider, is for approximately nine years (Nov. 2012 to Sept. 2021), a temporary closure of plaintiffs business for two months (April and May 2020) in the penultimate year of its initial term could not have- frustrated its overall purpose. 3 3 of 5 [*FILED: 4] KINGS COUNTY CLERK 09/25/2020 03:12 PM NYSCEF DOC. NO. 571 INDEX NO. 508647/2016 RECEIVED NYSCEF: 09/25/2020 Nor is the doctrine of impossibility of performance available to plaintiff in this case. "Generally, once a party to a contract has made a promise, that party must perform or respond in da1nages for its failure, even when unforeseen circu1nstances 1nake performance burdensome" (Ke/ Kim Corp. v Central Markets, Inc., 70 NY2d 900, 902 [1987]). "[A]bsent an express contingency clause i11 the agreement allowing a party to escape performance under certain specified circun1stances, compliance is required'' (Stasyszyn v Sutton E. Assoc., 161 AD2d 269, 271 [!st Dept 1990]). Nothing in the lease at issue permits termination or suspension of plaintiffs obligation to pay rent in the event of the issuance of a governmental order restricting the use oftl1e leased premises (see Casteel USA v V.C. Vitanza Sons, Inc., 170 AD2d 568, 569 [2d Dept 1991]). To the contrary, the lease specifically provides that plaintiffs obligation to pay rent "shall in no wise be affected, impaired or excused because Owner is unable to fulfill any of its obligations under this lease ... by reason of ... government preemption or restrictions" (Lease [NYSCEF #24], 1) 26), which is the case here. 4 Accordingly, the branch of defendant's 1notion for an order vacating the Yellowstone injunction on account of plaintiffs failure to pay rent for the months of April and May 2020 is granted to the extent set forth in the decretal paragraphs below. The alternative branches of defendant's motion are either academic or without merit. 4 Notably, neither plaintiffs president nor plaintiffs counsel has demonstrated, via any co1npetent evidence, such as plaintiffs financial documentation or an affidavit by its accountant with supporting evidence, that plaintiff was (and still is) unable to pay the April and May 2020 rent (accord 538 Morgan Ave. Props. LLCv 538 Morgan Realty LLC, 2020 NY Slip Op 32780[U], *IO [Sup Ct, Kings County 2020]). 4 4 of 5 [*FILED: 5] KINGS COUNTY CLERK 09/25/2020 03:12 PM NYSCEF DOC. NO. 571 INDEX NO. 508647/2016 RECEIVED NYSCEF: 09/25/2020 Conclusion Accordingly, it is ORDERED that defendant's motion is granted to the extent that (!) plaintiff is directed to pay to defendant the April and May 2020 base rent ($10,927 per month as set forth in the Rent Rider) within 30 days after electronic service of this decision and order with notice of entry on its counsel by defendant's counsel; and (2) if plaintiff fails to pay such rent on time and in full, defendant may, if it be so advised, renew its request for the vacature of the Yellowstone injunction upon further order of the Court; and the remainder of its motion is denied; and it is further ORDERED that defendant's counsel is directed to electronically serve a copy of this decision and order with notice of entry on plaintiffs counsel and to electronically file an affidavit of service thereof with the Kings County Clerk. This constitutes the decision and order of the Court. ENTE-,R ,/ i /' // ~c ;::: J. . c. Justice Lawrence Knipel 5 5 of 5

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