Bakakos v. Kakouros
| Decision Date | 24 June 2011 |
| Docket Number | Index No. 103855/2010 |
| Parties | CONSTANTINE BAKAKOS, LISA WU, and SYMPHONIA RESTAURANT, INC., Plaintiffs v. KIRIAKOS KAKOUROS, Defendant |
| Court | New York Supreme Court |
DECISION AND ORDER
I. BACKGROUND
Plaintiffs sue to recover damages based on claims arising from a commercial lease dated March 22, 2007, between defendant owner of the leased premises and the tenants, plaintiff Bakakos and nonparty Dimitrios Skretas, who assigned his interest in the premises to plaintiff Wu. Bakakos operated a restaurant on the premises through plaintiff Symphonia Restaurant, Inc. Defendant moves to dismiss plaintiffs' complaint on the grounds that it fails to state a claim. C.P.L.R. § 3211(a)(7). The court grants defendant's motion to the extent set forth and for the reasons explained below.
II. APPLICABLE STANDARD
Upon defendant's motion to dismiss claims pursuant to C.P.L.R. § 3211(a)(7), the court may not rely on facts alleged by defendant to defeat the claims unless the evidence demonstrates the absence of any significant dispute regarding those facts and completely negates the allegations against defendant. Lawrencev. Graubard Miller, 11 N.Y.3d 588, 595 (2008); Goshen v. Mutual Life Ins. Co. of N.Y., 98 N.Y.2d 314, 326 (2002); Leon v. Martinez, 84 N.Y.2d 83, 87-88 (1994); Yoshiharu Igarashi v. Shohaku Higashi, 289 A.D.2d. 128 (1st Dep't 2001). The court must accept the complaint's allegations as true, liberally construe them, and draw all reasonable inferences in plaintiffs' favor. Nonnon v. Citv of New York, 9 N.Y.3d 825, 827 (2007); Goshen v. Mutual Life Ins. Co. of N.Y., 98 N.Y.2d at 326; Harris v. IG Greenpoint Corp., 72 A.D.3d 608, 609 (1st Dep't 2010); Vig v. New York Hairspray Co., L.P., 67 A.D.3d 140, 144-45 (1st Dep't 2009). In short, the court may dismiss a claim based on C.P.L.R. § 3211(a)(7) only if the allegations completely fail to state a claim. Leon v. Martinez, 84 N.Y.2d at 88; Harris v. IG Greenpoint Corp., 72 A.D.3d at 609; Frank v. DaimlerChrysler Corp., 292 A.D.2d 118, 121 (1st Dep't 2002); Scott v. Bell Atl. Corp., 282 A.D.2d 180, 183 (1st Dep't 2001).
III. DEFENDANT'S MOTION TO DISMISS EACH OF PLAINTIFFS' CLAIMS
Defendant contends that the parties contemplated a lease of only the first floor, as expressly stated in the lease. Plaintiffs, on the other hand, maintain that the parties intended the lease to include the basement as well. The complaint alleges that plaintiffs used the basement for food preparation, storage, and office space with defendant's knowledge, but that defendant installed locks preventing entry to the basement in November 2007 and further locked the door to the basement storage and office area in September 2008. Once defendant barred access to thebasement, he obstructed plaintiffs' restaurant operations so as to cause their abandonment of the premises in December 2008.
To establish breach of a contract, plaintiffs must show a contract, that plaintiffs performed and defendant breached it, and that defendant's breach caused plaintiffs to sustain damages. Harris v. Seward Park Hons. Corp., 79 A.D.3d 425, 426 (1st Dep't 2010). See Tutora v. Siegel, 40 A.D.3d 227, 228 (1st Dep't 2007). Plaintiffs must plead the specific terms Of the agreement that defendant breached. Marino v. Vunk, 39 A.D.3d 339, 340 (1st Dep't 2007); Giant Group v. Arthur Andersen LLP, 2 A.D.3d 189, 190 (1st Dep't 2003); Kraus v. Visa Intl. Serv. Assn., 304 A.D.2d 408 (1st Dep't 2003).
Plaintiffs, however, maintain that the lease, executed only by defendant as well as by Bakakos and Skretas, is invalid, because defendant owned the premises as a tenant in common with Anna Kakouros, and is unenforceable except for terms Bakakos consented to and ratified, "by accepted performance," and through agreements before and after the lease. Aff. in Opp'n of Jacob Rabinowitz Ex. A ¶ 29. The lease's invalidity is merely a defense to its enforcement, not a basis for its breach. In any event, since plaintiffs allege that they paid the security deposit and one month's rent pursuant to the lease, they are estopped from raising its invalidity. Townhouse Co. v. Williams, 307 A.D.2d 223, 224 (1st Dep't 2003); Storico Dev., LLC v. Batlle, 9 A.D.3d 908, 909 (4th Dep't 2004).
Without identifying the terms Bakakos consented to or ratified, plaintiffs contend that defendant breached the lease by prohibiting plaintiffs' use of the basement, failing to give formal consent to Skretas's assignment of his lease interest to plaintiff Wu, failing to repair the premises, and interfering with their quiet enjoyment. Plaintiffs further claim that defendant failed to turn over personal property of plaintiffs according to a court order, but nowhere present or describe the order.
In addition to making claims based on the lease, plaintiffs contend that defendant breached oral agreements allowing the tenants access to the basement and waiving rent for September 2007 if they could not open the restaurant in three months. The lease provisions merging all agreements and prohibiting oral modification bar these claims. N.Y. Gen. Oblig. Law § 15-301(1); Rose v. Spa Realty Assoc., 42 N.Y.2d 338, 343 (1977); Eujoy Realty Corp. v. Van Wagner Communications, LLC, 73 A.D.3d 546, 548 (1st Dep't 2010); Teri-Nichols Inst. Food Merchants, LLC v. Elk Horn Holding Corp., 64 A.D.3d 424 (1st Dep't 2009); Richardson & Lucas, Inc. v. New York Athletic Club of City of N.Y., 304 A.D.2d 462, 463 (1st Dep't 2003).
While partial performance or promissory estoppel unequivocally referable to the new agreement may overcome the bar against oral modification, Rose v. Spa Realty Assoc., 42 N.Y.2d at 343-44; Richardson & Lucas, Inc. v. New York Athletic Club of City of N.Y., 304 A.D.2d at 463, plaintiffs do not claim an oralmodification that included the basement in the leasehold, but instead insist that the lease so provides. The undisputed express terms of the lease, bolstered by its merger provision, preclude such an interpretation. Pludeman v. Northern Leasing Sys., Inc., 74 A.D.3d 420, 424 (1st Dep't 2010); Clark Constr. Corp. v. BLF Realty Holding Co., 28 A.D.3d 367, 368 (1st Dep't 2006); Gottlieb v. Newton, 253 A.D.2d 383, 384 (1st Dep't 1998).
Plaintiffs' contention that defendant unreasonably withheld consent to assign the lease to Wu, in violation of the second rider, states a claim for breach of that contractual provision, because plaintiffs allege that defendant was aware of Wu and Symphonia Restaurant and acquiesced in their conducting restaurant operations. Neither Wu nor Symphonia Restaurant may claim, however, that defendant unreasonably withheld permission for Skretas to assign the lease because these plaintiffs are not parties to the lease. 85 Fifth Ave. 4th Floor, LLC v. I.A. Selig, LLC, 45 A.D.3d 349 (1st Dep't 2007).
Finally, plaintiffs claim defendant breached the lease by: (1) refusing rent checks from Symphonia Restaurant, (2) failing to cooperate with the State Liquor Authority regarding Bakakos's application for a liquor license, (3) violating the certificate of occupancy, and (4) retaining his security deposit. Plaintiffs neither identify the lease provision these acts or omissions breached, nor indicate they breached an oral agreement.
In fact, no lease provision requires defendant to accept rent checks from a nonparty to the lease, to cooperate withplaintiffs' attempt to obtain a liquor license, or to comply with the certificate of occupancy. The landlord specifically "does not warrant that any governmental license or permit which may be required for the business to be carried in the demised Premises will be granted." Rabinowitz Aff. Ex. A, Rider, art. VII, § C. More broadly, he makes no representations regarding "the physical condition of the building, . . . the demised premises, the rents, leases, expenses of operation, or any other matter or thing affecting or related to the demised premises." Id. Ex. A, Lease ¶ 20.
Defendant's duties to return the security deposit at the end of the lease term and to allow quiet enjoyment of the premises depend on the tenants' compliance with the lease. Id. ¶¶ 22, 31. While plaintiffs allege payment of the security deposit and one month's rent, they also admit they voluntarily abandoned the premises in December 2008, before the lease's expiration. They attribute their departure to constructive eviction, but due to defendant having barred their use of the basement. Thus, even though plaintiffs allege eviction, whether actual or constructive, to plead breach of the covenant of quiet enjoyment, the lease permitted defendant to bar plaintiffs' use of the basement. Duane Reade v. Reva Holding Corp., 30 A.D.3d 229, 237 (1st Dep't 2006). See NYC Goetz Realty Corp. v. Martha Graham Ctr. of Contemporary Dance, 39 A.D.3d 356 (1st Dep't 2007). Therefore defendant's exclusion of plaintiffs from an area not leased to them, just as his other actions permitted by the lease,such as refusing Symphonia Restaurant's checks and failing to cooperate with the liquor license application or comply with the certificate of occupancy, did not breach the covenant of quiet enjoyment. Parker v. Marglin, 56 A.D.3d 374 (1st Dep't 2008); Jackson v. Westminster House Owners Inc., 24 A.D.3d 249, 250 (1st Dep't 2005); Caldwell v. American Package Co., Inc., 57 A.D.3d 15, 26 (2d Dep't 2008). See Ghadamian v. Channing, 295 A.D.2d 127, 129 (1st Dep't 2002).
Although at oral argument plaintiffs urged that their exclusion from the basement prevented access to the first floor through the basement by their employees or for deliveries, neither the complaint nor any affidavit contains such an allegation. Nor have plaintiffs explained why access through the basement, rather than directly to the first floor, was necessary.
Plaintiffs' failure to demonstrate their compliance with the lease, particularly payment of rent until their...
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