Garry v. Ryan & Henderson, P.C.

• Decision Date: 29 June 2016
• Citation: Garry v. Ryan & Henderson, P.C., 53 Misc.3d 200, 36 N.Y.S.3d 364, 2016 N.Y. Slip Op. 26210 (N.Y. Dist. Ct. 2016)
• Parties: William J. GARRY, as Receiver of rents and profits in the foreclosure action relating to the property known as One Old Country Road, Carle Place, New York, Petitioner(s) v. RYAN & HENDERSON, P.C., a/k/a Helwig, Henderson, Ryan, Lamagna & Spinola, LLP, ABC Corp., Respondent(s).
• Court: New York District Court

53 Misc.3d 200

36 N.Y.S.3d 364

2016 N.Y. Slip Op. 26210

William J. GARRY, as Receiver of rents and profits in the foreclosure action relating to the property known as One Old Country Road, Carle Place, New York, Petitioner(s)

v.RYAN & HENDERSON, P.C., a/k/a Helwig, Henderson, Ryan, Lamagna & Spinola, LLP, ABC Corp., Respondent(s).

District Court, Nassau County, New York. First District.

June 29, 2016.

Forchelli, Curto, Deegan, Schwartz, Mineo & Terrana, LLP, Uniondale, for Petitioner.

Law Office of Michael M. Premisler, Esq., Carle Place, for Respondent.

SCOTT FAIRGRIEVE, J.

Petitioner moves for summary judgment in favor of Petitioner against Respondent for the sum of $415,932.30, and to dismiss Respondent's counterclaims.

Petitioner commenced this nonpayment proceeding against Respondent to recover the sum of $281,810.59, and possession of the premises located at One Old Country Road, Suite 428, Carle Place, New York (hereinafter referred to as Premises).

Respondent filed the Verified Answer, dated April 16, 2015. Respondent admits the allegations of paragraph 2 that it entered into a lease with Treeline Inc. (owner's predecessor), wherein Respondent agreed to pay monthly rent of $15,019.50.

Respondent denies the allegations contained in the Rider to the Verified Answer by asserting lack of knowledge or information sufficient to form a belief to the following:

1(a) CLK/HP, One Old Country LLC and HLP Old Country TIC LLC is the owner of the Premises.

1(b) BACM 2005–6 foreclosed on the property.

1(c) William J. Garry was appointed Receiver of the Property on September 17, 2012.

1(d) Receiver filed his oath and bond on December 13, 2013.

1(e) Property Manager is John Proscia of Colliers International.

The Answer contains numerous affirmative defenses (paragraph lettering does not follow manner set forth in Answer):

(a) Actual Partial Eviction

(b) Constructive Eviction

(c) Respondent has been barred and excluded from the Parking Lot

(d) Failure of Consideration

(e) Petitioner and its predecessors failed to take reasonable action to prevent damage to the Premises (parking garage) which has resulted in the improper and illegal actual or partial eviction

(f) The obligation to pay rent terminated when the Town of North Hempstead ordered the closing of the parking lot. In the alternative, Respondent is entitled to a rent abatement

(g) Statute of Frauds, Equitable Estoppel and Unclean Hands

(h) The parking garage was closed by the order of the Town of North Hempstead in March of 2014. The Receiver was appointed on September 17, 2012. Petitioner waited 15 months before assuming his duties on December 23, 2013. Petitioner thereby delayed performing his duties upon his appointment for 15 months. During this period, Petitioner could have collected almost $10,000,000 in rent which could have been used to repair and/or complete emergency repairs to the parking garage. This course of conduct may have caused the Town not to close the garage and Respondent may not have been barred and excluded from the parking garage (part of the Demised Premises).

Respondent also asserts a counterclaim and additional Affirmative Defenses. Numerous facts (allegations) are set forth as follows (paragraph lettering does not follow the numbering of same in the Verified Answer):

(a) Respondent leased the premises from Treeline Management Corp. (b) Treeline sold the premises to HLP Old Country TIC LLC, CLK/LP One Old Country Rd LLC (CLK).

(c) The Lease was amended on November 25, 2009, to set the termination date of the Lease for October 31, 2016.

(d) Respondent had ample parking with reserved spaces for 2 senior partners (Article 13 of Lease).

(e) The parking provided by the 3 story garage is part of the Demised Premises and is appurtenant thereto.

(f) Respondent employs 14 lawyers, 1 paralegal, 4 secretaries, 1 calendar clerk, 1 billing clerk, 1 bookkeeper, 1 title clerk and 1 intern, for a total of 21 employees.

(g) Respondent states the following about the closing of the parking garage and the parking situation presently:

“Forty–Fourth: On March 28, 2014, at 2:00 p.m., Petitioner closed the entire parking lot and advised all tenants that they needed to vacate the parking lot by 6:00 p.m., that evening. Thereafter, Petitioner barricaded the entrances to the parking garage and placed security guards at all entrances and exits thereby physically excluding all tenants from this portion of the Demised Premises. This exclusion from a portion of the demised premises continues through today.

Forty–Fifth: In order to provide parking, Petitioner leased a portion of a parking lot, in a shopping center, approximately three miles east of the building, on Old Country Road and provided busing for all tenants, their staff, and employees. Limited valet parking was provided at the building for some tenants, some employees, and visitors.

Forty–Sixth: On or about June 1, 2014, Petitioner obtained limited use of the parking garage, for a limited number of tenants, valet only. Most tenants, their staff, and employees still had to and continue to use the buses from the offsite parking to get to and from the office.

Forty–Seventh: From March 28, 2014 to on or about June 1, 2014, all tenants were required to use the offsite parking and take the bus. Depending upon the time of day, traffic on Old Country Road, and waiting time, this bus ride could take anywhere from 20 to 40 minutes.

Forty–Eighth: After June 1, 2014, limited parking was made available, onsite, by valet only, for some percentage of the total number of people working at the Building. Respondent was allocated only ten (10) parking places for its staff of 21 employees. The balance had to continue to take the bus and continue to take the bus today.

Forty–Ninth: The valet parking has not alleviated all the problems. At some times, the delay with the valet parking can be worse than the time it takes to take a bus. Depending on the time of arrival, there is a line out the entrance of the Building, eastward up Old Country Road. Between 8:30 and 10 00 in the morning, it can take as much as one half hour to get onto the building site and to reach the valets. Leaving the building, between four and six, can be worse. Often, there are 12–15 or more people waiting for their car. The valet leaves at 7:30 p.m. in the evening. If you work late, as attorneys are generally required to do, you must leave your office, collect your car, park in an available space, if any, and then return to your office.”

(h) The loss of the parking spaces has greatly impacted the daily operations of Respondent to conduct business.

(I) These circumstances create grounds for an actual partial eviction or constructive eviction.

(j) The closing of the parking garage and the failure to provide onsite parking constitutes a breach of contract.

(k) Respondent claims damages in excess of $500,000.

(l ) The obligation to pay rent has been suspended.

Petitioner responded with a Verified Reply to Counterclaims, dated April 27, 2015. The Reply denies the allegations set forth in the Answer of Respondent; except that it admits that the premises has a parking structure and admits that valet parking was instituted and that it provided shuttle services to and from the Fortunoff's parking lot.

Numerous Affirmative Defenses were asserted in the Reply (paragraph lettering does not follow manner set forth in Reply):

(a) The Parking Garage is not part of the Demised Premises.

(b) The Lease allows repairs and/or improvements to the parking garage without abatement of rent.

(c) Respondent's counterclaims are barred by the Lease.

(d) Counterclaims are barred by the doctrine of waiver and doctrine of estoppel.

(e) Respondents have use of the parking garage through a valet system.

(f) Petitioner did not wrongfully oust the tenant.

(g) The parking garage was closed pursuant to governmental orders.

(h) Respondent currently occupies the premises.

In support of the Motion for Summary Judgment, Petitioner submits the Affidavit of William J. Garry, sworn to November 11, 2015. Petitioner was appointed Receiver on September 17, 2012, and filed his oath and bond on December 28, 2013.

Petitioner delayed 15 months in qualifying because the Lender and Owner/Landlord requested this action because they tried to negotiate a settlement but this failed.

Petitioner immediately qualified as Receiver once he was notified that the settlement negotiations had failed. A Notice to Attorn dated December 23, 2013 was served upon all tenants including Respondent.

Petitioner states that the Premises was constructed in 1969 and has 315,000 square feet of office and accessory retail space. The building has a parking garage connected to the building by an underground walkway.

The Town of North Hempstead closed the parking garage on or about March 28, 2014 due to unsafe conditions. Thereafter, Petitioner arranged for the tenants to park offsite at Fortunoff and provided shuttle transportation to and from the offsite location.

Certain repairs were made to the parking garage (under the direction of the Town) which allowed the parking structure to be reopened in May of 2014; the upper deck remains closed.

Valet service was set up for parking at the Property for safety reasons. Respondent received 12 parking passes even though Respondent is only entitled to 2 reserved spots.

Petitioner (Receiver) counters as follows to the Respondent's arguments that he failed to act properly with respect to repairing the parking garage:

“17. First, as mentioned above, there was no delay as the Lender and Landlord requested that I refrain from qualifying while said parties attempted to negotiate a resolution to the foreclosure lawsuit. Secondly, the issues relating to the Parking Garage began long before I was appointed Receiver. Moreover, had I qualified at an earlier date and collected the monies during the period in question, the funds collected would not have covered the cost of the repairs of the Parking Garage, which is over $8 million dollars! Lastly, the

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