Kaygreen Realty Co., LLC v. IG Second Generation Partners, L.P.
Decision Date | 23 November 2010 |
Citation | 912 N.Y.S.2d 246,78 A.D.3d 1010 |
Parties | KAYGREEN REALTY CO., LLC, respondent, v. IG SECOND GENERATION PARTNERS, L.P., et al., appellants. (Matter No. 1) Kaygreen Realty Co., LLC, respondent, v. IG Second Generation Partners, L.P., et al., appellants. (Matter No. 2) In the Matter of IG Second Generation Partners, L.P., et al., appellants, v. Kaygreen Realty Co., LLC, respondent. (Matter No. 3) |
Court | New York Supreme Court — Appellate Division |
Pryor Cashman, LLP, New York, N.Y. (Todd E. Soloway of counsel), for appellants.
Duane Morris, LLP, New York, N.Y. (Michael L. Chartan and Jessica Y. Singh of counsel), and Borah, Goldstein, Altschuler, Nahins & Goidel, P.C., New York, N.Y. (Harriet Polinsky and Paul Gruber of counsel), for respondent (one brief filed).
MARK C. DILLON, J.P., FRED T. SANTUCCI, THOMAS A. DICKERSON, and CHERYL E. CHAMBERS, JJ.
In two related actions and a related proceeding which were joined for trial, inter alia, for a judgment declaring that Kaygreen Realty Co., LLC, the plaintiff in Matter Nos. 1 and 2 and the respondent in Matter No. 3, properly exercised its option to purchase certain property as set forth in a lease between the parties, and specific performance of certain provisions in the lease pertaining to the option to purchase, and IG Second Generation Partners, L.P., and I BLDG Co., Inc., the defendants in Matter Nos. 1 and 2 and the petitioners in Matter No. 3, appeal from an order of the Supreme Court, Queens County (Kitzes, J.), dated April 9, 2010, which denied their motion, inter alia, for summary judgment on their cause of action in Matter No. 3 for possession of the premises and granted the cross motion of Kaygreen Realty, LLC, for summary judgment dismissing the petition in Matter No. 3, and granted the separate cross motion of Kaygreen Realty, LLC, inter alia, for summary judgment on its causes of action in Matter Nos. 1 and 2 for a judgment declaring that it had properly exercised its option to purchase and for specific performance of the subject provisions in the lease.
ORDERED that the order is modified, on the law, by deleting the provision thereof granting that branch of the cross motion of Kaygreen Realty, LLC, which was for summary judgment on its causes of action in Matter Nos. 1 and 2 for specific performance of the appraisal process to set the purchase price for the premises set forth in the subject lease and substituting therefor a provision denying that branch of the cross motion; as so modified, the order is affirmed, with costs to Kaygreen Realty, LLC.
Kaygreen Realty, LLC (hereinafter Kaygreen), and the IG Second Generation Partners, L.P., and I BLDG Co., Inc. (hereinafter the Landlords), are the successors-in-interestto the tenant and landlord respectively, under a lease dated February 11, 1948, and entered into between R.H. Macy & Co., Inc., as landlord, and Jamkay Realty Corp., as tenant, as amended by a supplemental indenture dated January 1, 1979 (hereinafter the Lease).
By notice and demand dated March 13, 2003, and notice of default dated April 4, 2003, the Landlords advised Kaygreen that it was in default of the Lease. Thereafter, Kaygreen commenced an action (hereinafter the 2003 Default Action) seeking a judgment declaring that it was not in default of the Lease. After a trial, the Supreme Court determined that Kaygreen was not in default of the Lease as claimed by the Landlords in the notice and demand and notice of default. By decision and order dated December 15, 2009, this Court affirmed the judgment ( see Kaygreen Realty Co., v. IG Second Generation Partners, L.P., 68 A.D.3d 933, 934-935, 893 N.Y.S.2d 76).
In June 2006, while the 2003 Default Action was pending, the Landlords declined to extend the Lease beyond December 31, 2008, which triggered Kaygreen's option to purchase the subject property. In December 2006 Kaygreen exercised its option to purchase the subject property. The Landlords, however, claimed that the option was not properly exercised since Kaygreen was in default of various terms of the Lease. As a result, in February 2007, Kaygreen commenced Matter No. 1 (hereinafter the 2007 Purchase Option Action) seeking, inter alia, a judgment declaring that it had properly exercised its option to purchase the subject property and specific performance of those provisions of the Lease pertaining to the option. By notice of default dated February 15, 2008, the Landlords advised Kaygreen that it was and continued to be in substantial default. Thereafter, Kaygreen commenced Matter No. 2 (hereinafter the 2008 Default Action) seeking a judgment declaring that it was not in default of the Lease as alleged in the notice of default dated February 15, 2008. After the Lease expired on December 31, 2008, the Landlords commenced a summary holdover proceeding, Matter No. 3 (hereinafter the Holdover Proceeding), against Kaygreen.
By order dated June 17, 2009, the Supreme Court granted Kaygreen's motion to remove the Holdover Proceeding from Civil Court and to join it for trial with the 2007 Purchase Option Action and the 2008 Default Action. Subsequently, the Landlords moved for summary judgment on their cause of action for possession of the subject property in the Holdover Proceeding and Kaygreen cross-moved for summary judgment dismissing the Holdover Proceeding. In the 2007 Purchase Option Action and the 2008 Default Action, Kaygreen also cross-moved for summary judgment on its causes of action for a judgment declaring that it had properly exercised its option to purchase the subject property, that there were no existing defaults barring it from exercising the option, and for specificperformance of those provisions of the Lease pertaining to its option to purchase. By order dated April 9, 2010, the Supreme Court denied the Landlords' motion and granted Kaygreen's cross motions. The Landlords appeal.
Contrary to the Landlords' contentions, Kaygreen demonstrated its prima facie entitlement to judgment as a matter of law on its causes of action in the 2007 Purchase Option Action and the 2008 Default Action for a judgment declaring that it had properly exercised its option to purchase. However, the Supreme Court erred in granting those branches of Kaygreen's cross motion on those causes of action on the ground of res judicata based upon the judgment in the 2003 DefaultAction. "Under the doctrine of res judicata, a disposition on the merits bars litigation between the same parties or those in privity with them of a cause of action arising out of the same transaction or series of transactions as a cause of action that either was raised or could have been raised in the prior proceeding" ( Goldstein v. Massachusetts Mut. Life Ins. Co., 32 A.D.3d 821, 821, 820 N.Y.S.2d 852; see Matter of Hunter, 4 N.Y.3d 260, 269, 794 N.Y.S.2d 286, 827 N.E.2d 269). "[What] constitutes a 'transaction' or [a] series of transactions depends on how the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a unit conforms to the parties' expectations or business understanding or usage" ( Smith v. Russell Sage Coll., 54 N.Y.2d 185, 192-193, 445 N.Y.S.2d 68, 429 N.E.2d 746).
The 2003 Default Action was limited to the alleged defaults in an April 2003 notice, and the issues in that action were whether Kaygreen was in default (1) of its insurance obligations under Article X of the Lease, (2) of its maintenance obligations under Articles III and VIII of the Lease by failing to cure or remedy certain violations and conditions set forth on schedule A annexed to the notice, (3) by failing to defend the Landlords in two personal injury actions, and (4) by committing waste in violation of Articles VIII and IX by dismantling an elevator on the premises. After trial, Kaygreen was awarded a judgment, which was affirmed by this Court, declaring that it was not in default of the Lease as alleged in the April 2003 notice.
The 2003 notice also alleged, inter alia, that Kaygreen was in default for failing to cure the defaults in...
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