1009 Second Ave. Associates v. New York City Off-Track Betting Corp.

• Decision Date: 03 March 1998
• Docket Number: OFF-TRACK
• Citation: 248 A.D.2d 106,669 N.Y.S.2d 540
• Parties: , 1998 N.Y. Slip Op. 1762 1009 SECOND AVENUE ASSOCIATES, Plaintiff-Respondent, v. NEW YORK CITYBETTING CORPORATION, Defendant-Appellant.
• Court: New York Supreme Court — Appellate Division

Page 540

669 N.Y.S.2d 540

248 A.D.2d 106, 1998 N.Y. Slip Op. 1762

1009 SECOND AVENUE ASSOCIATES, Plaintiff-Respondent, v. NEW YORK CITY OFF-TRACK BETTING CORPORATION, Defendant-Appellant.

Supreme Court, Appellate Division First Department.

March 3, 1998.

Myles Harlow Kahn, for plaintiff-respondent.

Kathleen Alberton, for defendant-appellant.

Before ELLERIN, J.P., and NARDELLI, WALLACH and RUBIN, JJ.

MEMORANDUM DECISION.

Order, Supreme Court, New York County (Louis York, J.), entered October 31, 1996, which, inter alia, denied defendant's cross-motion for summary judgment dismissing plaintiff's claims for damages other than use and occupation for the holdover period, unanimously reversed, to the extent appealed from as limited by the briefs, on the law, without costs, and the motion granted.

Pursuant to an agreement dated November 16, 1984, the parties entered into a ten-year lease commencing February 1, 1985 and ending January 31, 1995. Allegedly because of pending litigation involving its new location, defendant Off-Track Betting Corporation (OTB) held over beyond the expiration of the lease term. In a letter dated March 3, 1995, landlord's attorney informed the Corporation Counsel of his client's need to perform renovation work prior to reletting the space and stated that a summary proceeding to recover possession of the premises had been commenced. A second letter dated March 13, 1995 states that "a prospective tenant * * * wants to open for business on September 1, 1995. In order for this tenant to open for business, the tenant will require approximately six months of reconstruction of the building to accommodate its use. This will require my client to have possession of the demised premises immediately." The letter goes on to state, "If your client remains in possession until June 30, 1995, this means that my client could potentially lose a tenant who will be paying my client approximately $500,000 in annual rent." The record contains no further correspondence concerning the prospective tenant, identified in the complaint as Michel Mosallem, and there is no indication that OTB was ever notified that Mosallem had signed a lease for the premises.

The record does not disclose the outcome of the summary proceeding. However, counsel for plaintiff informed Supreme Court at oral argument of the motion that defendant had "moved to remove it to this court after we started this action." In any event, it does not appear that a judgment of possession had been obtained at the time OTB formally surrendered possession of the premises, by hand-delivered letter to plaintiff, on the aforementioned June 30, 1995.

Insofar as pertinent to this appeal, the amended verified complaint alleges, as a first cause of action, that because OTB failed to vacate the premises in a timely manner, plaintiff was prevented from delivering possession of the premises to Michel Mosallem, with the result that plaintiff lost $400,000 in annual rent. In its answer verified August 10, 1995, OTB contends, by way of counterclaim, that sums paid to plaintiff without prejudice on account of the agency's continued possession of the premises exceed the fair market rental value. By notice of motion dated April 1, 1996, plaintiff sought summary judgment and immediate trial on the issue of damages pursuant to CPLR 3212(c). No proof of the asserted tenancy was submitted with plaintiff's summary judgment motion. Defendant cross-moved for partial summary judgment dismissing the first cause of action for breach of contract, which seeks damages in the amount of $3.5 million, and for an order compelling discovery. In support of its cross motion, defendant's papers state that "OTB sought discovery in November 1995 on, among other matters, the alleged Mosallem transaction". In response, plaintiff submitted a copy of the Mosallem lease with its reply papers. Dated March 15, 1995, the lease provides that plaintiff will deliver possession of the premises by April 1, 1995 for a ten-year term ending March 31, 2005.

It is plaintiff's theory that OTB knew of its immediate need for possession of the demised premises and, therefore, should be held liable for damages resulting from the loss of its lease with Michel Mosallem. Defendant responds that the lease imposes no such liability and, in any event, the consequential damages sought by plaintiff were not within the contemplation of the parties at the time they entered into the lease agreement (November 16, 1984). In the order subject to appeal, Supreme Court denied OTB's cross motion, holding that "even if consequential damages are not foreseeable at the time of the contract, they are recoverable if foreseeable at the time of the holdover."

"Lease interpretation is subject to the same rules of construction as are applicable to other agreements (Backer Mgt. Corp. v. Acme Quilting Co., 46 N.Y.2d 211, 217, 413 N.Y.S.2d 135, 385 N.E.2d 1062). The parties' intention should be determined from the language employed, and where the language is clear and unambiguous, interpretation is a matter of law to be determined solely by the court (Hartford Acc. & Indem. Co. v. Wesolowski, 33 N.Y.2d 169, 171-172, 350 N.Y.S.2d 895, 305 N.E.2d 907; Bethlehem Steel Corp. v. Turner Constr. Co., 2 N.Y.2d 456, 161 N.Y.S.2d 90, 141 N.E.2d 590). In such circumstances resort cannot be had to extrinsic evidence to contradict the express terms of the writing (Brainard v. New York Cent. R.R. Co., 242 N.Y. 125, 151 N.E. 152)" (Matter of Cale Dev. Co. v. Conciliation and Appeals Bd., 94 A.D.2d 229, 234, 463 N.Y.S.2d 814, affd. 61 N.Y.2d 976, 475 N.Y.S.2d 278, 463 N.E.2d 619)...