Zee N Kay Mgt., LLC v Metropolitan Transp. Auth.

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Zee N Kay Mgt., LLC v Metropolitan Transp. Auth. 2020 NY Slip Op 34316(U) December 22, 2020 Supreme Court, New York County Docket Number: 657258/2019 Judge: O. Peter Sherwood 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] NEW YORK COUNTY CLERK 12/23/2020 04:52 PM NYSCEF DOC. NO. 61 INDEX NO. 657258/2019 RECEIVED NYSCEF: 12/23/2020 SUPREME COU 1 T OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: I HON. 0. PETER SHERWOOD PART IAS MOTION 49EFM Justice ---------------X ZEE N KAY MANAGEMENT, LLC, INDEX NO. MOTION DATE Plaintiffl 657258/2019 0712812020 MOTION SEQ. NO. 001 - vMETROPOLITAN TRANSPORTATION J UTHORITY, LONG ISLAND RAIL ROAD COMPANY DECISION + ORDER ON MOTION Detendrt. ------------------------------------------------r------------------X The following e-filed documents. listed byl NYSCEF document number (Motion 001) 15, 16, 17, 18, 19, 20, 21 , 22, 23,24, 25,26, 27, 28, 29, 30, 31, 32, 33, 34, 38, 39, 40, 45, 46, 47, 48, 49, 50, 51, 52, 54, 55 were read on this motion to/for DISMISS This action relates to certain bujldings on the Lefferts Boulevard bridge in Kew Gardens, Queens (the Buildings). The BuildingJ are owned by the defendant Long Island Railroad Company (LIRR). Plaintiff Zee N Ka1 (ZNK) claims it entered into a license agreement with LIRR giving %.NK the right to manage and sub-license the shops in the Buildings and that LIRR was required to repair the exterior r~ r ails and undersides of the Bui Id ings. Plaintiff alleges LIRR and defendant Metropolitan 1 ransportat1on Authority (MTA) tried to force ZNK to make the required repair, instead and termin~ted ZNK 's lease when ZNK refused to do so. ZNK asserts claims for breach of contract, n~gligcncc, fraud , and tortious interference with a contract. Defendants fi led an answer (Nf SCEF Doc. No. I 0) and subsequently an Amended Answer and Counterclaims (Counterclt ms, NYSCEf Doc. No. 14), which included counterclaims by LIRR. Plaintiff now moves to dismiss the counterclaims. Accordingly, these facts arc taken from the Amended Ans ·er and Counterclaims and they are assumed to be true. On March 12. 20 10, ZNK and ClRR entered into an agreement by which the plaintiff was required to "manage. maintain and rep~ir the Licensed Location" and would be '"exclusively responsible for all repair and improve, ents to the Buildings" (Counterclaims, ~ 192). Plaintiff failed to make required repairs. On September 13, 20 18, LI RR provided ZNK with a Notice of Default listing monetary and non-mon~tary defaults, including defaults related to repairs. (id. , ilil Motion No. 001 1 of 5 [*FILED: 2] NEW YORK COUNTY CLERK 12/23/2020 04:52 PM NYSCEF DOC. NO. 61 INDEX NO. 657258/2019 RECEIVED NYSCEF: 12/23/2020 196-97). LIRR also asserts a second counterclaim for unpaid rent and additional rent incurred I between August 2019 and November 2019 (id., 207-09). First Counterclaim- Breach of Contract, Failure to Make Repairs On a motion to dismiss a plaintiffs claim pursuant to CPLR § 32 I l (a) (7) for failure to state a cause of action. the court is not called upon to determine the truth of the allegations (see, Campaign.for Fiscal liquity v State, 86 NY2d 307, 3 17 [ 1995 J; 219 Broadway Corp. v Alexander's, Inc., 46 NY2d 506, 509 [ 979]). R<1ther, the court is required to "afford the pleadings a liberal construction, take l e allegations of the compl<1int as true and provide plaintiff the benefit of every possible inference citation omitted]. Whether a plaintiff can ultimately establish its allegations is not part oft e calculus in determin ing a mo tion to dismiss" (EBC I v. Goldman, Sachs & Co., 5 N.Y.3d 1 L ~9 (2005]). The court's role is limited to determining whether the pleading states a cause of !ction. not whether there is evidentiary support to establish a meritorious cause of action (see. GuJgenheimer v. Ginzhurg, 43 N.Y.2d 268, 275 [1977]; Sokol v. Leader, 74A.D.3d1180. 904 N.Y.S\2d 153 [2d Dept 2010]). To sustain a breach of contract cause of action. plaintiff must show: (I) an agreement; (2) plaintiffs performance; (3) defendant's breach of that agreement; and (4) damages (see Furia v Furia, I l 6 AD2d 694, 695 L2d Dept 1986]). The first counterclaim fails, according to plaintiff, because LIRR has not alleged damagef. While LIRR claims damages to be determined at trial, no facts support the existence of damages (Memo, NYSCEF Doc. No. 16 at 12). There are no 1 allegations that LI RR or MTA made rt pairs or incurred costs fix ing the Buildings. If the defendants rely on a possible intent to ake future repairs, potential future expenses related to those fu ture repairs cannot sustain a b l ach of contract claim (id. at 13, citing Vista Food Exch. , Inc. v Bene.fitMall. --Misc 3d--, 20 14 ~ y Slip Op 3149 1[U) [Sup Ct. NY County 2014]). Defendants contend the first c1unterclaim should survive because they suffered injury as a result ofZNK's failure to make requ·rcd repairs under the license (Opp, NYSCEF Doc. No. 45, at 4-5). ZNK's failure to make required repairs resulted in damage to the Buildings. and defendants are entitled to compensation for that injury. regardless of whether defendants then made the repairs (id. at 5). Defendants' failure to specify their damages or detail their proof is not fatal to the claim at this early stage (id. at 5-6). ZNK replies that the defendanJs' position is based on cases involving a landlord-tenant relationshi p, which did not exist here, s this agreement explicitly disclaims a landlord-tenant 657258/2019 ZEE N KAY MANAGEMENT, LLC vs. METROPOLITAN TRANSPORTATION Motion No. 001 2 of 5 Page 2 of 5 [*FILED: 3] NEW YORK COUNTY CLERK 12/23/2020 04:52 PM NYSCEF DOC. NO. 61 INDEX NO. 657258/2019 RECEIVED NYSCEF: 12/23/2020 relationship (Reply, NYSCEF Doc. No. 54, at 1-3). Accordingly, defendants' damages for injury to the Buildings would be the ac al cost lo do the work plaintiff allegedly should have done (id. at 4). Defendants have not alleged the value of the Buildings decreased as a result of ZNK's alleged failures. As far as plaintiff contends this1countcrclaim fails for lack of damages, plaintiff relies on Vista Food Exch. , Inc. v Benefitmall, 20 14 N.Y. Slip Op. 3149 1lUl jN.Y. Sup Ct, New York County 20 141, ~ffd, 2016 N.Y. Slip oJ. 02923 [1st Dept 20161, which noted that an allegation of the possibility of future damages, ther , the "prospect of possibly having to pay taxes twice," is insuffi cient to show damages. I lcre. d fendants have all eged damage to the Buildings from ZNK's breach of its o bligations to ma e repairs. While the amount of the damages, or the cost to repair the inj ury to the Buildings, may be uncertain, "when it is certain that damages have been caused by a breach of contract, and th only uncertainty is as to their amount, there can rarely be good reason fo r refusing, on account of such uncertainty, any damages whatever for the breach. A person violating his contract should not be permilled entirely to escape liability because the I amount of the damage which he has caused is uncertain" Randall-Smith, Inc. v 43rd St. Es/ales Corp., 17 NY2d 99, I 06 (1966) quoting Wakeman v Wheeler & Wilson Mfg. Co.• 101NY205, 209 ( l 886). Defendants have alleged an injury in the form of damage to the Buildings, although the amount of the injury is uncertain. kccordingly, this claim survives. Second Counterclaim- Breach of Co tract, Unpaid Compensation ZN K seeks dismissal of these ond counterclaim pursuant to CPLR 321 l(a)(l), based on documentary evidence, or to limit that claim to the extent LlRR seeks more than $8,524.25. To succeed o n a motion to dismiss pursuant to C PLR § 32 11 (a) ( I), the documentary evidence submitted that forms the basis of the defense must resolve all factual issues and I definitively dispose of the plaint iff's claims (see 5 I I W. 232"d Owners Corp. v Jennifer Realty j Co., 98 NY2d 144. 152 [20021; Blonder & Co., Inc. v Citibank. NA., 28 AD3d 180, 182 [151 Dept 20061). A motion to dismiss pursuant to CPLR § 3211 (a) ( l ) "may be appropriately granted only where the documentary evidence utterly refutes plaintiff's factual allegations, conclusively establishing a defense asla matter of law" (McCully v. Jersey Parlners, Inc. , 60 AD3d 562. 562 11 51 Dept. 2009]). The facts as alleged in the complaint are regarded as true, and the plaintilT is afforded the benefit of very favorab le inference (see Leon v Martinez, 84 NY2d 83, 87-88 ll 994J). A ll egations consis~ing of bare legal conclusions as well as factual claims 65726812019 ZEE N KAY MANAGEMENT, LJ Motion No. 001 "· METROPOLITAN TRANSPORTATION 3 of 5 Page 3 of5 [*FILED: 4] NEW YORK COUNTY CLERK 12/23/2020 04:52 PM NYSCEF DOC. NO. 61 INDEX NO. 657258/2019 RECEIVED NYSCEF: 12/23/2020 fl atly contradicted by documentary evidence are not entitled to any such consideration (see e.g. Nisari v Ramjohn, 85 AD3d 987, 989 [2nd Dept 201 I]). CPLR § 321 1 (a) (1) does not explicitly define '·documentary evidence.'· As used in t his statutory provision, ,.. documentary evidence· is a ·fuzzy term ' . and what is documentary evidence for one purpose. might not be documentary evidence for another.. (Fonlanetta v John Doe 1, 73 A03d 78, 84 [2nd Dept 20 I~]). ·'[T lo be considered ' documentary,' evidence must be unambiguous and of undisputed authe+ city" (id. at 86, citing Siegel, Practi ce Commentaries, McKinney's Cons. Laws of N.Y. , Book 713, CPLR 32 11 :JO, at 2 1-22). Typically that means "judicial records, as well as documents! reflecting out-of-court transactions such as mortgages, deeds, contracts, and a ny other papers, the contents of which arc 'essentially undeniable,' " (id. at 84-85). Here, the proposed document, ry evidence is the email chain between counsel regarding the security deposit check (Email Chain, NYSCEF Doc. No. 20). ZN K argues the second cla im fils, or should be limited, because most of the damages sought arc set off by ZN K's security deposit of $46,779, and defendants have previously acknowledged the olTset meant plaintiff owed only $9,576. 19 (Memo at 13). Further, $ 1,051 .94 should also be deductc::<l from any claim. as lhe security deposit accumulated that much in interest while it was held by defendants (id.). Plaintiff argues the second counterclaim is thus I based on knowingly false and misleading allegations and asks the counterclai m be dismissed pursuant to 22 N YC RR 130-1 . l (c). AfIternativcly, this court shou ld deduct the amount of the security deposit and the interest from Defend ants contend that ZN the amount sought by defendants. K} security deposit has not been app Iicd to amounts unpaid by plaintiff (id. at 7). They concede tT bank holding Z.NK's deposit sent the MTA a check for $46,799.00, but that c heck has not been deposited, so the fu nds remain in the bank (id.). Plaintiff presents no evidence that conclusivelyl di sposes of the clai m by demonstrating the security deposit has been appl ied to amounts ored. Even if those monies had been deposited by the MTA, plaintiff admits there would still be an amount outstanding on the unpaid compensation. Further, defendants claim they are entitled to use the security deposit to offset their damages resulti ng from ZN K · s fai lure to make repairs (id. at 8). As to the interest on the security deposit, New York law allows a landlord to keep up to 1% interest on a security deposit as an administrative fee (id. at 8-9). 657258/2019 ZEE N KAY MANAGEMENT, LLC vs. METROPOLITAN TRANSPORTATION Motion No. 001 4 of 5 Page 4 of 5 [*FILED: 5] NEW YORK COUNTY CLERK 12/23/2020 04:52 PM NYSCEF DOC. NO. 61 INDEX NO. 657258/2019 RECEIVED NYSCEF: 12/23/2020 It is undisputed that defendants have received a check for the amount of the security deposit. However, the Emai l Chain doks not qualify as documentary evidence which conclusively establ ishes ZNK 's defense as a matter of law. While one communication from defendants' attorney Ricardo Oquendo stated "we have reviewed the applicable tenant lease/sublicense and it does allow ZNK to offset rent arrears against their security deposit" (Email Chain at 5), the email chain do,s not dispositivcly resolve the question of how the security deposit funds were or should tie applied. This portion of the motion is also denied. Accordingly, it is hereby ORDERED that the motion to ismiss the counterclaims is DENIED. V .? 1212212020 DATE CHECK ONE: APPLICATION: CHECK IF APPROPRIATE: 0. ~ CASE DISPOSED GRANTED 0 NON·FINAL DISPOSITION DENIED GRANTED IN PART SETTLE ORDER SUBMIT ORDER INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT 657258/2019 ZEE N KAY MANAGEMENT, LLC vs. METROPOLITAN TRANSPORTATION Motion No. 001 5 of 5 D OTHER D REFERENCE Page 5 of 5

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