Globespan Telecommunications, LLC v. 65 Broadway, LLC., 2007 NY Slip Op 33353(U) (N.Y. Sup. Ct. 10/18/2007)
| Decision Date | 18 October 2007 |
| Docket Number | Motion Seq. No. 1.,0601045/2006. |
| Citation | 2007 NY Slip Op 33353 |
| Parties | GLOBESPAN TELECOMMUNICATIONS, LLC, Plaintiff, v. 65 BROADWAY, LLC, MARSAR WEST, LLC, and DONNELLY MECHANICAL CORPORATION, AM PROPERTY HOLDING CORPORATION, Defendants. |
| Court | New York Supreme Court |
In this negligence action, plaintiff Globespan Telecommunications, LLC ("Globespan") seeks to recover $761,019 for damaged telecommunications equipment and $190,000 in lost income, allegedly caused by defendants' failure to properly maintain their premises. Defendants 65 Broadway, LLC ("65 Broadway"), Marsar West, LLC ("Marsar"), and AM Property Holding Corporation ("AM Property") (hereinafter collectively referred to as "Landlord") now move for summary judgment.
Landlord alleges that: (1) plaintiff lacked legal existence and good standing at the commencement of this action, and thus, had no legal capacity to sue; and (2) plaintiff was not entitled to any benefits under the original lease agreement since there was no valid assignment between nonparty Globecom, the tenant-signatory on the lease, and plaintiff Globespan. In support of its motion, Landlord submits an affirmation of counsel; plaintiff's amended verified complaint; an amended verified answer; a copy of the lease agreement; plaintiffs 1065 Partnership Tax Form; defendants' reply affirmation to plaintiff's opposition, an excerpted examination before trial of Globespan President Michael Hoffman; and an excerpted deposition of AM Property Vice President Paul Wasserman.
Plaintiff opposes the motion, contending that: (1) it has legal capacity to maintain this action; and (2) Landlord waived its right to object to Globespan's tenancy by accepting plaintiff's rent checks. In support of its opposition, plaintiff submits an affirmation of counsel and the following documents: an affidavit by plaintiff Hoffman; Globespan's Partnership Tax Form 1065; a copy of the lease agreement; copies of 30 rent checks paid to and endorsed by Landlord; a 2002 rent correspondence letter between Globespan and Landlord; plaintiff's summons and amended verified complaint; an amended verified answer; defendants' bill of particulars, an excerpted deposition of defendant Wasserman; an excerpted deposition of 65 Broadway Chief Engineer Mark Faith; an excerpted examination before trial of plaintiff Hoffman; and an excerpted deposition of Globespan Vice President Charles Young.
The evidence submitted by both parties focuses on plaintiff's legal standing and the validity of the lease assignment. The parties fail to acknowledge that a landlord-tenant relationship is not a requisite element for awarding damages to plaintiff in a negligence claim. Regardless of Globespan's tenancy status, Landlord had a common-law duty to maintain its premises in a reasonably safe condition. Rivera v. Nelson, 7 N.Y.3d 530, 533 (2006); Putnam v. Stout, 38 N.Y.2d 607, 611 (1976).
On July 8, 1999, 65 Broadway's agent, AM Property, and nonparty Globecom entered into a lease agreement ("Lease") for space on the fourth floor of the building owned by 65 Broadway and Marsar. Globecom occupied the leased space until January 2001, at which point, Globespan moved into the space. From 2001 until 2003, Globespan made rent payments to AM Property, using checks bearing its name, "Globespan Telecommunications LLC." AM Property endorsed and accepted 30 months of these rent checks. There is no evidence in the record that AM Property consented, in writing, to Globespan's tenancy as required by the Lease. Globespan alleges that prior to the flooding, Donnelly Mechanical Corporation ("Donnelly") installed an air conditioning unit in the ceiling of the Globespan space pursuant to Landlord's instruction. On January 10, 2004, a pipe burst in the subject office space, damaging Globespan's telecommunications equipment. Plaintiff brought suit against defendants alleging negligence in the air conditioner's installation; issue was thereafter joined.
The Lease and its supplemented rider agreement ("Rider") were signed by Wasserman and two Globecom representatives, Secretary and Treasurer Young and President Lawrence Nadel. Both documents contain maintenance and repair provisions and explicit non-assignment and non-waiver clauses.
Plaintiff contends that defendants' negligence in maintaining the subject premises in a reasonably safe condition caused a pipe to burst, flooding the premises and damaging plaintiff's equipment. Defendants argue that plaintiff lacks the legal capacity to bring this action since plaintiff's business was dissolved at the commencement of this suit. Plaintiff opposes, contending that this defense was not raised in defendants' answer, and therefore, was waived.
Plaintiff also argues that defendants waived any right to object to Globespan's tenancy by accepting plaintiffs rent checks with knowledge of plaintiffs occupancy. Defendants deny any such waiver, stating that no valid tenancy materialized because Landlord did not consent to a valid assignment in writing, as required by the Lease. Furthermore, the Lease contains unambiguous non-assignment and non-waiver clauses which the court must review with deference.
A party moving for summary judgment must make a prima facie showing of entitlement to judgment as a matter of law by tendering sufficient evidence to demonstrate the absence of any material issues of fact. Zuckerman v. City of N.Y., 49 N.Y.2d 557, 562 (1980). Once movant has made the requisite showing, the burden shifts to the nonmoving party to produce evidentiary proof in admissible form sufficient to establish the existence of a triable issue of material fact. Giuffrida v. Citibank Corp., 100 N.Y.2d 72, 81 (2003). Additionally, when determining a motion for summary judgment based upon a written contract, "the construction of an unambiguous contract is for the court to pass on, and circumstances extrinsic to the agreement or varying interpretations of the contract provisions will not be considered when the intention of the parties can be gathered from the instrument itself." Yanuck v. Paston & Sons Agency, 209 A.D.2d 207, 208 (1st Dept. 1994).
The parties' disputes over plaintiffs legal capacity and valid assignment are analyzed but are ultimately immaterial to establishing liability in a negligence claim. Restatement 2nd of Property (Landlord Tenant) Part 6 (). See also Warren's Negligence in N.Y. Courts § 3.07 ().
Pursuant to CPLR § 3211(e), a defense based upon no legal capacity to sue is waived unless raised in motion before or in responsive pleading. Wells Fargo Bank Minn. v. Mastropaolo, 42 A.D.3d 239 (2nd Dept. 2007) (). Moreover, dissolved corporations may maintain or defend actions in the courts and "may continue to function for the purpose of winding up the affairs of the corporation in the same manner as if the dissolution had not taken place." Business Corporation Law § 1006(a); See also Metered Appliances v. 75 Owners Corp., 225 A.D.2d. 338 (1st Dept. 1996) (). Therefore, plaintiff has standing to bring this suit and Landlord, in failing to raise this defense in its answer or pre-answer motion, waived its right to such a defense. CPLR § 3211(e).
Although the complaint alleges negligence, defendants' argument focuses on the validity of the lease agreement, which, for purposes of the negligence analysis is irrelevant (as discussed below). In any event, because defendants are correct in their argument that no valid lease assignment existed here, the court includes a brief discussion of the relevant law on this issue.
It has been consistently held that courts must interpret a contract so as to give meaning to all of its terms and avoid "an interpretation that would leave contractual clauses meaningless." Two Guys from Harrison-N.Y. v. S.F.R. Realty Assoc., 63 N.Y.2d 396, 403 (1984); See also Mionis v. Bank of Julius Baer & Co., 301 A.D.2d 104, 109 (1st Dept. 2002); Helmsey-Spear, Inc. v. New York Blood Ctr., 257 A.D.2d 64, 69 (1st Dept. 1999). Provision #11 of the Lease and #15 of the Rider explicitly require "prior written consent of the Owner" for an assignment to be valid. No such written consent of assignment is shown in the record. Furthermore, when plaintiff approached Wasserman to amend the lease, Wasserman stated that he would not change the lease name without plaintiff's proper financial documents, which plaintiff failed to tender. Wasserman Tr. 39-40.
The Lease and Rider also contain three specific clauses that relate to non-assignment and non-waiver rights. These clauses expressly state that collection of rent by the Owner shall not be deemed a waiver of covenant and that receipt of rent also is not a waiver "unless such waiver be in writing signed by Owner." Lease Provisions #11 & #25; Rider Provision #15. Despite these non-waiver clauses contained in the Lease, plaintiff contends...
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