Hussein Env't, Inc. v. Roxborough Apartments Corp.

• Decision Date: 02 February 2012
• Citation: 2012 N.Y. Slip Op. 00728,92 A.D.3d 426,938 N.Y.S.2d 23
• Parties: HUSSEIN ENVIRONMENT, INC., etc., Plaintiff–Appellant, v. ROXBOROUGH APARTMENTS CORP., Defendant,Katouna, Inc., etc., Defendant–Respondent.
• Court: New York Supreme Court — Appellate Division

2012 N.Y. Slip Op. 00728

92 A.D.3d 426

938 N.Y.S.2d 23

HUSSEIN ENVIRONMENT, INC., etc., Plaintiff–Appellant,

v.ROXBOROUGH APARTMENTS CORP., Defendant,Katouna, Inc., etc., Defendant–Respondent.

Supreme Court, Appellate Division, First Department, New York.

Feb. 2, 2012.

David H. Singer & Associates, LLP, New York (David H. Singer of counsel), for appellant.

Novick, Edelstein, Lubell, Reisman, Wasserman & Leventhal, P.C., Yonkers (Lawrence Schiro of counsel), for respondent.

MAZZARELLI, J.P., FRIEDMAN, CATTERSON, RENWICK, ROMÁN, JJ.

Judgment, Supreme Court, New York County (Jane S. Solomon, J.), entered July 26, 2010, dismissing the complaint as against defendant Katouna, Inc., dismissing the second, third, fourth and fifth causes of action as against defendant Roxborough Apartments Corp., and declaring, upon the first cause of action, that Roxborough violated the restrictive covenant in its lease to the extent it permitted Katouna to expand its seafood menu, alter its logo, and install an awning, unanimously affirmed, without costs.

Plaintiff operates a restaurant called Cleopatra's Needle at premises leased from defendant Roxborough's predecessor in interest at 2483–85 Broadway in Manhattan. The lease states that plaintiff shall use the premises for “a table cloth restaurant operation serving only so-called ‘Middle Eastern’ and/or seafood menu, and, at Tenant's sole option, including liquor and/or beer and wine service.” Pursuant to Article 43 of the lease, the building owner agreed not to enter into any lease containing a use clause “substantially identical” to the use clause.

At the time that plaintiff entered into the lease, defendant Katouna was operating a pizzeria called Perfecto Ristorante in the same building. Perfecto consisted of a few tables and a counter along one side of the space, with an oven, grill, and refrigerator behind it. Plaintiff commenced this action after Katouna expanded Perfecto, began operating a full bar and an unenclosed sidewalk café that abutted Cleopatra's Needle's enclosed sidewalk café, and installed awnings with the words “Mediterranean Cuisine” and “Brick Oven Pizza * Caffe * Bar” on them.

Plaintiff argues that Katouna competed with every aspect of its operation of Cleopatra's Needle by converting Perfecto from a small take-out pizzeria to an eat-in restaurant serving food similar to that served by Cleopatra's Needle, with a full liquor license and outdoor sidewalk café. However, nothing in the restrictive covenant prohibits Roxborough from permitting Perfecto to operate a sidewalk café. Nor, under the circumstances, was Perfecto's procurement of a liquor license inconsistent with Roxborough's covenant. Perfecto offers a more casual dining experience than that offered by Cleopatra's Needle (“a table cloth restaurant”) and, in contrast to Cleopatra's Needle, does not provide live entertainment or hold happy hours, and is closed by midnight. Given the different ambiance of the two restaurants, the mere fact that both have bars is...