Arnot Realty Corp. v. New York Telephone Co.

• Decision Date: 11 December 1997
• Citation: Arnot Realty Corp. v. New York Telephone Co., 665 N.Y.S.2d 478, 245 A.D.2d 780 (N.Y. App. Div. 1997)
• Parties: , 1997 N.Y. Slip Op. 10,843 ARNOT REALTY CORPORATION, Appellant-Respondent, v. NEW YORK TELEPHONE COMPANY, Respondent-Appellant.
• Court: New York Supreme Court — Appellate Division

Page 478

665 N.Y.S.2d 478

245 A.D.2d 780, 1997 N.Y. Slip Op. 10,843

ARNOT REALTY CORPORATION, Appellant-Respondent, v. NEW YORK TELEPHONE COMPANY, Respondent-Appellant.

Supreme Court, Appellate Division Third Department.

Dec. 11, 1997.

As Modified Feb. 19, 1998.

Sayles, Evans, Brayton, Palmer & Tifft (Edward B. Hoffman, of counsel), Elmira, for appellant-respondent.

Hinman, Howard & Kattell (Paul T. Sheppard, of counsel), Binghamton, for respondent-appellant.

Before MIKOLL, J.P., and MERCURE, CREW, WHITE and YESAWICH, JJ.

MIKOLL, Justice Presiding.

Cross appeals from an order of the Supreme Court (Ellison, J.), entered March 31, 1997 in Chemung County, which partially granted defendant's motion for summary judgment dismissing the third cause of action in the complaint and granted plaintiff partial summary judgment on the remaining causes of action on the issue of liability.

In 1970, the parties entered into an agreement providing for the construction of a building by plaintiff, with plans and specifications to be approved by defendant, and the subsequent lease of the building by defendant for a 15-year term with options to extend. An amendment to the lease, executed one year later, provided for defendant to assume what would otherwise have been plaintiff's responsibility "to make all necessary structural and roof repairs and replacements in, to and of the demised premises", in exchange for a 7.15%, annual reduction in rent.

Defendant occupied the premises from October 1, 1971 until September 30, 1993. In March 1993, plaintiff had the leased premises inspected in order to ascertain the presence of asbestos material therein. This inspection determined the existence of asbestos in spray-on insulation on the ceilings of the first and second floors of the building, which had been applied as a fireproofing measure in accordance with construction standards prevalent at the time of the building's construction in 1970. The inspection further found approximately 25% physical damage, or delamination in the spray-on insulation, which was "general in nature throughout the entire building".

Plaintiff thereupon called upon defendant to remedy the situation, citing defendant's responsibility for keeping the building in good repair and condition and in compliance with all governmental rules and regulations, and also citing defendant's assumption of the owner's responsibility for structural repairs. Defendant refused plaintiff's demand, citing article 30 of the lease, calling for surrender of the leased premises in the same condition as upon delivery, "reasonable wear and tear" excepted, and further contending that asbestos removal was not within the purview of the structural repairs or replacements for which it assumed responsibility. This litigation ensued.

Plaintiff's first cause of action sought damages for defendant's breach of its lease covenant to remove fixtures and alterations to the premises at the expiration of the lease if requested by plaintiff to do so. Plaintiff's second and fourth causes of action related to the presence of loose asbestos throughout the building on the interior topside of suspended ceiling tiles, contending that defendant is responsible therefor upon two grounds. The first ground was based upon defendant's lease covenant to tender the premises to plaintiff at the conclusion of the lease in a "broom clean" condition; the second was under the theory that by undertaking responsibility for "all necessary structural and roof repairs and replacements" in the premises, defendant obligated itself for the necessary asbestos removal. In its third cause of action, plaintiff sought damages in the form of rent from defendant, alleging that defendant's breach of the other covenants of the lease rendered it a holdover tenant and liable for rent as such.

Following discovery, defendant moved for summary judgment dismissing the complaint; plaintiff opposed the motion but did not cross-move. Supreme Court granted defendant's motion on the third cause of action and upon its own review of the record, granted partial summary judgment to plaintiff on the question of liability with respect to the first, second and fourth causes of action. Both parties appeal.

We conclude that Supreme Court properly granted summary judgment as to the first and third causes of action, but improperly did so with respect to the second and fourth causes of action. The order must be modified accordingly.

Defendant contends on this appeal that Supreme Court erred in granting summary judgment on...