873 Third Avenue Corp. v. Madison Associates

• Decision Date: 03 March 1977
• Citation: 873 Third Avenue Corp. v. Madison Associates, 391 N.Y.S.2d 1007, 56 A.D.2d 748 (N.Y. App. Div. 1977)
• Parties: 873 THIRD AVENUE CORP., Plaintiff-Respondent, v. MADISON ASSOCIATES, Defendant-Appellant. MADISON ASSOCIATES, Petitioner-Appellant, v. 873 THIRD AVENUE CORP., Respondent-Respondent.
• Court: New York Supreme Court — Appellate Division

Page 1007

391 N.Y.S.2d 1007

56 A.D.2d 748

873 THIRD AVENUE CORP., Plaintiff-Respondent, v. MADISON ASSOCIATES, Defendant-Appellant.

MADISON ASSOCIATES, Petitioner-Appellant, v. 873 THIRD AVENUE CORP., Respondent-Respondent.

Supreme Court of New York, Appellate Division First Department.

March 3, 1977.

C. S. Koerner, New York City, for 873 Third Ave. Corp.

P. H. Schaeffer, New York City, for Madison Associates.

Order, Supreme Court New York County (Stecher, J.), entered September 9, 1976, in the above-entitled declaratory judgment action, staying proceedings in a pending appraisal, pending determination of the action for declaratory judgment, is affirmed without costs and without disbursements for the reasons stated by Stecher, J. at Special Term. Order, Supreme Court, New York County (Stecher, J.), entered July 26, 1976, in the above-entitled appraisal proceeding denying specific enforcement of appraisal agreement, is affirmed, without costs and without disbursements, for the reasons stated by Stecher, J. at Special Term in the declaratory judgment action. As the same issue--the right of landlord Madison Associates to an appraisal under the terms of the lease--is involved in and determinative of both the declaratory judgment action and the appraisal proceeding, it would appear desirable to have a joint trial.

All concur, except MURPHY, J., who dissents in the following memorandum:

MURPHY, J., dissenting.

873 Third Avenue Corp. is the net lessee and Madison Associates is the net lessor of the subject premises. To the extent here relevant, paragraph XXXIX of the lease provides as follows: '. . . and at the end of the second seven year term hereof, the rental for the third seven year period shall be $21,000.00 per annum, or six per centum (6%) of the appraised value of the land per annum, as determined by appraisal and/or by arbitration, if necessary, set forth in Paragraph XXX of this lease, whichever is greater . . .'. Paragraph XXX provides, inter alia, for the arbitration of all disputes including any dispute over the appraised value of the land. The second seven-year period, alluded to in paragraph XXXIX of the lease, expired on April 30, 1973. On October 19, 1973, the lessor sent written notice of arbitration to the lessee; that letter also indicated that James G. Peel was being appointed as the lessor's appraiser in the arbitration. On November 2, 1973, the lessee advised the lessor that Jerome Block was being appointed as its appraiser. On March 31, 1976, the lessor informed the lessee that John McCormick was replacing Peel as its appraiser. Thereafter, the lessee brought an action for judgment declaring that the lessor had abandoned the arbitration and was not entitled to any rent increase. Subsequently, the lessor brought on a petition pursuant to CPLR § 7601 seeking to compel the lessee to arbitrate. The lower court stayed the arbitration pending a determination of the lessee's application for declaratory judgment determining the rights, duties, obligations, validity and interpretation of Article XXXIX of the lease. Section 7601 of the CPLR provides that a special proceeding may be commenced to specifically enforce an agreement that a question of valuation, appraisal or other issue or controversy be determined by a person named or to be selected. In view of this mandate contained in CPLR § 7601, the lessee should have sought relief in a special proceeding rather than in a plenary action for declaratory judgment. The lessee's action should be treated as a special proceeding to stay the arbitration. With regard to the merits of the appeal, the lessee maintained that the arbitration, as originally commenced in October of 1973, was untimely...