Jack LaLanne Biltmore Health Spa, Inc. v. Builtland Partners

• Decision Date: 14 February 1984
• Citation: 471 N.Y.S.2d 854,99 A.D.2d 705
• Parties: JACK LaLANNE BILTMORE HEALTH SPA, INC., Plaintiff-Appellant-Respondent, v. BUILTLAND PARTNERS et al., Defendants-Respondents-Appellants.
• Court: New York Supreme Court — Appellate Division

Page 854

471 N.Y.S.2d 854

99 A.D.2d 705

JACK LaLANNE BILTMORE HEALTH SPA, INC., Plaintiff-Appellant-Respondent, v. BUILTLAND PARTNERS et al., Defendants-Respondents-Appellants.

Supreme Court, Appellate Division,

First Department.

Feb. 14, 1984.

I.G. Seeger, New York City, for plaintiff-appellant-respondent.

C.G. Moerdler, New York City, for defendants-respondents-appellants.

Before MURPHY, P.J., and ROSS, CARRO, ASCH and BLOOM, JJ.

MEMORANDUM DECISION.

Order, Supreme Court; New York County, entered February 16, 1983, which, inter alia, (1) denied plaintiff's motion for partial summary judgment; (2) granted defendants' cross-motion for partial summary judgment to dismiss so much of plaintiff's complaint as seeks a declaratory judgment; and, (3) decreed that the defendants' notice of termination of the lease is valid and enforceable, affirmed, without costs.

Pursuant to a twenty-one year lease executed in 1972, plaintiff-tenant operated a health spa and a swimming pool in the cellar and sub-cellar of the Biltmore Hotel (Biltmore), located at 43rd Street and Madison Avenue, Manhattan. In 1978 Builtland Partners (Builtland) purchased the Biltmore and became plaintiff's landlord. Article 61 of plaintiff's lease reads in pertinent part:

"If Landlord shall enter into a bona fide arrangement to demolish ... the building of which the demised premises are a part, Landlord shall have the right to terminate this lease by giving Tenant 18 months' prior written notice, and, in such event, the term hereof shall terminate on the date contained in such notice as if such date were the original expiration date."

By registered letter, dated October 23, 1981, landlord Builtland notified plaintiff that it was exercising its option to terminate this lease, in accordance with the terms of Article 61, quoted supra. Builtland had decided to demolish the Biltmore and replace it with a commercial office building. The other defendant Lehrer/McGovern, Inc. is the construction manager for the project.

After receipt and rejection of Builtland's notice, plaintiff commenced action against defendants for, inter alia, a declaratory judgment that their lease is still in effect because the alteration of the Biltmore does not constitute a demolition within the meaning of the subject article. Subsequent to the joinder of issue, plaintiff moved and defendants cross-moved for partial summary judgment concerning the declaratory judgment portion of the complaint.

Our examination of this record reveals that the Biltmore Hotel no longer exists. In fact, all that remains of the "old Biltmore" is most of the steel skeleton and two structural slabs above Grand Central Station; while everything else such as the exterior masonry, internal walls, floors, ceilings, elevators, fixtures, electrical and plumbing conduits have been removed. Incidentally, in view of the fact that Grand Central Terminal has been designated a landmark under New York City's Landmarks Preservation Law (see, Penn Central Transp. Co. v. New York City, 438 U.S. 104, 136-138, 98 S.Ct. 2646, 2665-2666, 57 L.Ed.2d 631), certain parts of the Biltmore that pertained to that landmark were required to be preserved. As we unanimously said in Friedman v. Ontario Holding Corp., 279 App.Div. 23, 107 N.Y.S.2d 610, aff'd 304 N.Y. 625, 107 N.E.2d 97, 279 App.Div. at page 25, 107 N.Y.S.2d 610:

"Practically speaking this building was demolished ... The mere circumstance that part of the former structure could be salvaged or was usable ... does not change the result."

We disagree with the dissents' contention that Friedman v. Ontario, etc., supra, is distinguishable in that it interpreted a statute. Clearly this Court, in Friedman, established the principle that a common sense meaning of "demolish" is not confined to razing the building.

For all practical purposes the Biltmore was demolished, as that term is defined in Article 61 of the lease between the parties.

We agree with Special Term that plaintiff's motion should be denied and defendants' cross-motion should be granted.

All concur except MURPHY, P.J., who dissents in a memorandum as follows:

On June 5, 1972, plaintiff Jack LaLanne Biltmore Health Spa, Inc. (LaLanne) executed a lease with Realty Hotel, Inc., the then owner of the Biltmore Hotel. This lease covered portions of the cellar and sub-cellar. The term of the lease was twenty-one years; it was to expire on June 30, 1993.

Article 61 of the lease provides as follows:

"61. If Landlord shall enter into a bona fide arrangement to demolish (sic) the building of which the demised premises are a part, Landlord shall have the right to terminate this lease by giving Tenant 18 months' prior written notice, and, in such event, the term hereof shall terminate on the date contained in such notice as if such date were the original expiration date, and Tenant shall surrender the demised premises to Landlord on or before such date."

Defendant Builtland Partners (Builtland) acquired the Biltmore Hotel on or about July 28, 1978. Builtland, on or about October 23, 1981, sent written notice terminating the lease pursuant to Article 61 on April 30, 1983. LaLanne immediately rejected this termination notice on the ground that the modification of the building did not constitute a demolition of it under Article 61.

Thereafter, Builtland undertook the renovation of the building. The construction was aimed at changing the Biltmore from a hotel to a commercial office building. LaLanne remained in operation until April 27, 1982, when it was required to vacate the premises upon order of the Department of Buildings. The order was issued because there was imminent danger to the safety and life of the occupants due to the alteration operations.

This action was commenced on May 13, 1982. LaLanne sought declaratory and compensatory relief as a result of its forcible eviction by Builtland and defendant Lehrer/McGovern, the construction manager. In an order dated June 2, 1982, Justice Kleiman denied LaLanne's motion for a preliminary injunction. This Court also denied a motion for a preliminary injunction on July 1, 1982.

By notice dated July 28, 1982, Builtland informed LaLanne that it was in default under Article 6 of the lease. It was Builtland's contention that LaLanne had failed to obtain a special permit required under the New York City Zoning Resolution for the operation of its health spa. Builtland stated that if the default was not cured, it would cancel the lease under Article 17. When LaLanne did not cure, Builtland served a notice to terminate that was dated September 14, 1982 and effective September 17, 1982.

Both sides moved for summary judgment at Special Term. LaLanne maintained that the lease did not terminate on April 30, 1983 because the building had not been "demolished." It further contended that it had been forcibly evicted on April 27, 1982. Builtland, on the other hand, asserted that the building was, in fact, being "demolished". It averred that, in any event, the lease had terminated on September 17, 1982 upon LaLanne's failure to cure the default. Finally, Builtland argued that it was justified in evicting LaLanne since it failed to pay certain additional rent due under Article 50.

Special Term's decision did not address all the issues raised in the papers. It found that the building had been demolished for purposes of Article 61. The court relied upon Friedman v. Ontario Holding Corp., 279 App.Div. 23, 107 N.Y.S.2d 610, aff'd 304 N.Y. 625, 107 N.E.2d 97. The order entered upon the decision (i) denied plaintiff's motion, (ii) granted defendants' cross-motion to the extent of dismissing so much of the complaint as sought declaratory judgment, (i...