AOM 1703 Lexington Ave. LLC v. Malik, 2006 NY Slip Op 51788(U) (N.Y. Sup. Ct. 8/16/2006)
| Decision Date | 16 August 2006 |
| Docket Number | 115718/05. |
| Citation | 2006 NY Slip Op 51788(U) |
| Parties | AOM 1703 LEXINGTON AVENUE LLC ET AL., Plaintiffs, v. AKBAR MALIK, Defendant. |
| Court | New York Supreme Court |
In this action, plaintiffs, as tenants, claim that the defendant, as landlord, breached two written net lease agreements which they entered into on September 8, 2005 with respect to properties located at 215 East 118th Street and 1703 Lexington Avenue in Manhattan. The leases give plaintiffs a right of first refusal and the option to purchase the properties three years after the leases are in effect. The complaint alleges that the plaintiffs took possession of the properties on October 1, 2005 and paid the first month's rent, which the defendant accepted. According to the complaint, at a meeting between parties on or about October 4, 2005, the defendant repudiated the leases, rejecting plaintiffs' right to purchase the two properties. The complaint alleges that the defendant thereafter evicted the plaintiffs from the two properties by, inter alia, forbidding them from entering the premises, changing the locks and directing the buildings' tenants not to pay rent to the plaintiffs. The complaint also alleges that the defendant made various defamatory statements about the plaintiffs. The complaint asserts causes of action for breach of contract and for libel and slander. It seeks declaratory, injunctive and monetary relief.
In March, 2006, subsequent to the commencement of this action, there was a fire at the 118th Street building which caused substantial damage to the property and made the premises uninhabitable. Under the leases, if the premises are damaged by fire, it is the plaintiffs who are obligated to repair the damage. The leases also provide that all insurance monies recovered by the landlord on account of such damage shall be applied to the payment of the restoration and shall be paid out from time to time, upon the plaintiffs' written request, as the restoration progresses.
The plaintiffs have now moved, by order to show cause, for a preliminary injunction which would restrain the defendant from dissipating any of the insurance proceeds she receives on account of the fire. They also seek an order compelling her to provide them with information and documents relating to the fire and to her casualty insurance policy for the 118th Street property. On May 31, 2006, the parties signed a stipulation in which the defendant agreed that pending the determination of this motion, she will not disburse any insurance funds resulting from the fire and that, upon receipt, will safeguard any such proceeds.
It is well settled that in order to obtain a preliminary injunction, the movant has the burden of demonstrating (1) a likelihood of ultimate success on the merits, (2) irreparable injury if the requested provisional relief is withheld and (3) a balance of the equities in its favor. See Aetna Ins. Co. v. Capasso, 75 NY2d 860, 862 (1990).
As to the first prong of this test, the court finds that plaintiffs are likely to succeed on the merits of their breach of contract claim. Defendant does not deny that she signed the two leases at issue and that she did so while represented by counsel. In opposing the motion, she and her counsel nevertheless claim that they never intended to give the plaintiffs an option to purchase the property and never agreed during the parties' negotiations to do so. She and counsel contend that they never read the final drafts which she signed because they were assured by one of plaintiffs' principals that the final drafts only reflected revisions to which they had previously agreed.
It is well settled that a party who signs a document is conclusively bound by its terms absent a valid excuse for having failed to read it. See Arnav Industries, Inc. Retirement Trust v. Brown, Raysman, Millstein, Felder & Steiner, LLP, 96 NY2d 300, 304 (2001); Gillman v. Chase Manhattan Bank, 73 NY2d 1, 11 (1988); Maines Paper and Food Service, Inc. v. Adel, 256 AD2d 760, 761 (3rd Dept 1998). Given the financial magnitude of the transactions and the fact that defendant and her counsel were told, as they now claim, that the final draft contained some revisions, it was clearly incumbent upon them to at least review the two leases before she signed them. Neither the defendant nor her counsel has suggested that the plaintiffs discouraged them from doing so. Under the circumstances, their alleged failure to read the leases before signing them and, indeed, before the parties met again a month later in early October, 2005, would amount to gross negligence. See Gillman v. Chase Manhattan Bank, 73 NY2d at 11. The court is thus not persuaded that the defendant is likely to establish that she had a valid excuse for having failed to read the leases which she signed.
As to irreparable injury, the plaintiffs argue that if the defendant dissipates the insurance proceeds she receives on the claim she filed with respect to the fire at the 118th Street property, the value of the...
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