In re Caldor, Inc.-NY
Decision Date | 30 January 1998 |
Docket Number | Bankruptcy No. 95 B 44080 JLG,Adversary No. 97/8832A. |
Citation | 217 BR 121 |
Parties | In re CALDOR, INC. — NY, The Caldor Corporation, Caldor, Inc. — CT, et al., Debtors. The CALDOR CORPORATION, Plaintiff, v. S PLAZA ASSOCIATES, L.P., Defendant. |
Court | U.S. Bankruptcy Court — Southern District of New York |
Reisman, Peirez, Reisman & Calica, L.L.P., Garden City, NY, for S Plaza Associates, L.P.
Camhy, Karlinsky & Stein, L.L.P., New York City, for Caldor Corporation.
The Caldor Corporation ("Caldor") commenced this adversary proceeding to recover $702,285, plus prejudgment interest, representing its alleged overpayment to S Plaza Associates, L.P. ("S Plaza") and its predecessor-in-interest, Garden City Shopping Associates ("Shopping Associates"), of Additional Rent (as defined below) under a lease of nonresidential real property. S Plaza seeks an order (i) staying this adversary proceeding on the grounds that the dispute presents an arbitrable controversy, (ii) authorizing and directing the parties to proceed with arbitration as the lease allegedly requires, (iii) granting it relief from the automatic stay pursuant to § 362(d) of the Bankruptcy Code for that purpose, or (iv) alternatively, pursuant to Fed.R.Bankr.Proc. 7056 and Fed. R.Civ.P. 56, granting it summary judgment dismissing the adversary proceeding on the merits. Caldor opposes the motion and cross-moves for summary judgment in the amount of the alleged overpayments. We deny Plaza's motion for a stay of this proceeding, but we grant it summary judgment dismissing Caldor's complaint. We deny Caldor's cross-motion for summary judgment.
Unless noted otherwise, the relevant facts are not in dispute. On September 18, 1995, Caldor and nine of its subsidiaries filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code. Pursuant to §§ 1107 and 1108 of the Bankruptcy Code, they remain in possession of their assets as debtors in possession.
On May 9, 1986, Caldor, Inc. and Shopping Associates, as predecessors-in-interest to Caldor and S Plaza, respectively, entered into a lease (as amended, the "Lease") of a portion of a shopping center in Garden City, New York (the "Shopping Center"). In or about April 1990, Caldor, Inc. assigned its interest in the Lease to Caldor, which has occupied the leased premises since on or about October 15, 1990. Later, Shopping Associates surrendered a deed-in-lieu of foreclosure for the Shopping Center to Marine Midland Bank. In December 1994, S Plaza purchased the property from the bank and, pursuant to an Assignment and Assumption of Lease dated December 7, 1994 (the "Lease Assignment"), S Plaza assumed all of Shopping Associates' rights and obligations thereunder.
The Shopping Center contains 195,871 square feet of leasehold floor area. Caldor presently leases approximately 123,070 square feet. It accumulated that space as follows:
Under the Lease, Caldor pays a percentage of the Shopping Center's real estate taxes as additional rent (the "Additional Rent"). Caldor contends that the methodology for calculating the Additional Rent payable on the 96,200 square feet of space that Caldor acquired prior to the 1993 Amendments (the "Demised Premises") differs from that used in calculating the Additional Rent payable on the 26,870 square feet of space that Caldor acquired pursuant to the 1993 Amendments (the "New Space").
Caldor contends that paragraphs 10(A) and 9(F) of the Lease govern the calculation of Additional Rent payable on the Demised Premises. Paragraph 10(A) of the Lease states:
In substance, Caldor argues that those provisions dictate that for any year after the year in which the First Year RE Tax is assessed, Caldor will pay Additional Rent for the Demised Premises equal to (i) its Fraction (49.11%, representing the area of the Demised Premises (96,200 sq. ft.) divided by the total area of the Shopping Center (195,871 sq. ft.)) multiplied by the amount of any increase in real estate taxes attributable to the Shopping Center over the First Year RE Tax, plus (ii) the Base RE Tax ($168,350, representing the area of the Demised Premises (96,200 sq. ft.) × $1.75).
Pursuant to the April 1993 Amendment, Caldor acquired an additional 26,100 square feet of space in the Shopping Center and the parties added a new Section (H) to Article 10 of the Lease, as follows:
Id. ¶ 3(f). For Caldor, that amendment dictates that S Plaza calculate the Additional Rent Caldor must pay on the New Space as its pro rata share of the total tax assessed on the New Space in a given year. For example, for the period commencing December 1, 1993 and continuing to present, the Additional Fraction is 13.72% (26,870 square feet divided by 195,871 square feet).
Caldor maintains that S Plaza and Shopping Associates have incorrectly calculated and billed its Additional Rent since October 1991. Caldor contends that rather than calculating the Additional Rent pursuant to the formula contained in the Lease, they calculated it as if Caldor were a "net lessee" and charged it Additional Rent in direct proportion to the percentage of the Shopping Center it occupies. Caldor says that it did not discover its error until early 1997. It contends that Shopping Associates and S Plaza overbilled it for Additional Rent, as follows:
BILLED BY LANDLORD/PAID CORRECT OVERPAYMENT PERIOD BY CALDOR AMOUNT DUE CALDOR 10/15/91 — $146,923 $ 35,976 $110,947 12/31/91 1992 $229,092 $172,513 $126,579 1993 $351,275 $244,281 $106,994 1994 $456,413 $317,356 $141,057 1995 $404,194 $316,111 $ 88,083 1996 $551,850 $421,224 $130,625
S Plaza filed a proof of claim herein in the amount of $246,400.32 for rent and Additional Rent under the Lease. In August of 1997, Caldor commenced this adversary proceeding seeking repayment of the alleged overpayments on theories of unjust enrichment, breach of contract and tortious conversion. S Plaza admits that the landlords have billed Caldor for the Additional Rent as a "net lessee" and does not dispute Caldor's calculation of the alleged overpayments. However, in its answer to Caldor's complaint, it denies liability and asserts six affirmative defenses.
We have subject matter jurisdiction of this matter pursuant to 28 U.S.C. §§ 1334(b) and 157(a) and the July 10, 1984 "Standing Order of Referral of...
To continue reading
Request your trial-
Kramer Levin Naftalis & Frankel, LLP v. Metropolitan 919 3rd Ave., LLC, 2004 NY Slip Op 24510 (NY 4/6/2005)
...owner's] assumption of any of [the former owner's] liabilities which arose prior to the assumption." (See also, In re Caldor, Inc.-N.Y., 217 BR 121, 135 [US Bankr Ct, SD NY 1998]; cf. Cirfico Holdings Corp. v. GTE Prods. Corp., 99 AD2d 939, 940 [1st Dept 1984] [where the buyer assumed "all ......
-
KRAMER LEVIN v. METRO. 919
...owner's] assumption of any of [the former owner's] liabilities which arose prior to the assumption." (See also, In re Caldor, Inc.-N.Y., 217 BR 121, 135 [US Bankr Ct, SD NY 1998]; cf. Cirfico Holdings Corp. v GTE Prods. Corp., 99 AD2d 939, 940 [1st Dept 1984] [where the buyer assumed "all o......