225 Fifth Ave. Retail LLC v. 225 5th, LLC

• Decision Date: 09 November 2010
• Citation: 915 N.Y.S.2d 1,78 A.D.3d 440
• Parties: 225 FIFTH AVENUE RETAIL LLC, Plaintiff-Respondent, v. 225 5TH, LLC, et al., Defendants-Appellants.
• Court: New York Supreme Court — Appellate Division

915 N.Y.S.2d 1

78 A.D.3d 440

225 FIFTH AVENUE RETAIL LLC, Plaintiff-Respondent,

v.225 5TH, LLC, et al., Defendants-Appellants.

Supreme Court, Appellate Division, First Department, New York.

Nov. 9, 2010.

Cohen Tauber Spievack & Wagner P.C., New York (Stephen Wagner of counsel), for appellants.

Shaw & Associates, New York (Martin Shaw of counsel), for respondent.

GONZALEZ, P.J., SAXE, NARDELLI, RICHTER, ROMÁN, JJ.

Order, Supreme Court, New York County (Bernard J. Fried, J.), entered July 20, 2009, which, granted plaintiff summaryjudgment on liability on the first, fourth and fifth causes of action and denied defendants' cross motion for partial summary judgment, unanimously affirmed, with costs.

This action involves the sale of a commercial condominium unit in a Manhattan building owned by defendant 225 5th, its sponsor. Plaintiff alleges that 225 5th breached its obligation to complete work on an aluminum kitchen flue by the date required, entitling it to recover liquidated damages from 225 5th and its guarantors, defendants El-Ad Group and Industrial Buildings.

In connection with the sale, plaintiff and 225 5th entered into a License Agreement in November 2006, describing certain work to be performed as "Vanilla Box Work," which, if not substantially completed by the date specified, would entitle plaintiff to liquidated damages of $7,000 per day for each day the work was not completed. The agreement provided that substantial completion would be determined by thearchitect, Gardiner & Theobold, whose determination would be binding.

On the same day these parties executed the License Agreement, they also executed a side agreement by letter, identifying four items of the Vanilla Box Work-the "Punch List Items"-that had not yet been completed, to which the liquidated damages provision of the License Agreement would not apply. The letter agreement contained 225 5th's representation that the kitchen exhaust flue "has been completed, is in working order, and is code compliant and available to service any restaurant operation." It further provided that "if such representation and warranty ... shall be false in any material aspect, then such item of Vanilla Box Work shall be deemed to have ... not yet been completed as of the closing date under the Purchase Agreement." The letter agreement concluded with the parties' expressed reservation of their rights under the License Agreement.

The letter agreement's language is clear and unambiguous, declaring the subject...