KRAMER LEVIN v. METRO. 919

• Decision Date: 14 December 2004
• Citation: 791 N.Y.S.2d 318,6 Misc.3d 796
• Court: New York Supreme Court
• Parties: KRAMER LEVIN NAFTALIS & FRANKEL, LLP, Plaintiff,<BR>v.<BR>METROPOLITAN 919 3RD AVENUE, LLC, Defendant.

6 Misc.3d 796
791 N.Y.S.2d 318

KRAMER LEVIN NAFTALIS & FRANKEL, LLP, Plaintiff,
v.
METROPOLITAN 919 3RD AVENUE, LLC, Defendant.

December 14, 2004.

Stempel Bennett Claman & Hockberg, New York City, for defendant.

[6 Misc.3d 797]

OPINION OF THE COURT

EDWARD H. LEHNER, J.

Before me are motions for summary judgment: (i) by defendant to dismiss the complaint, and (ii) by plaintiff to grant it a declaration that it is entitled to a credit against its base rent and to dismiss the counterclaim.

Defendant is the landlord of the building located at 919 Third Avenue, New York, New York (the building), having acquired it from the bankruptcy estate of the former owner on October 30, 2000. Plaintiff is a law firm that occupies several floors, amounting to 11.47% of the building, pursuant to a lease with the former owner dated December 22, 1983, which was modified on May 1, 1993 (the first lease amendment), and on July 1, 1994 (the second lease amendment). Plaintiff commenced this action on December 16, 2002, seeking damages for breach of the lease in the amount of $684,471. In its amended complaint it withdrew the claim for money damages and in lieu seeks a declaration that it is entitled to a rent credit in that amount.

The lease included a provision for a fixed amount of annual rent, defined as "Base Rent," which was increased in both the first and second lease amendments. The lease also included a rent escalation rider that designated a "Base Year" and provided in clause RE (11) that:

"Nothing contained in this Rent Escalation Rider is intended to reduce the annual rate of Base Rent, as the same is fixed by the lease and modified by any provision of the lease other than this Rent Escalation Rider, although credits against such Base Rent may be taken by Tenant as provided by this Rent Escalation Rider."

Other provisions of the lease provide:

"32. The term `Landlord' as used in this lease means only the owner . . . for the time being of the land and Building. . . so that in the event of any sale or sales of said land and Building . . . the Landlord shall be and hereby is entirely freed and relieved of all covenants and obligations of landlord hereunder, and it shall be deemed and construed without further agreement between the parties or their successors in interest, or between the parties and the transferee, at any such sale or other conveyance or transfer . . . that the transferee . . . of the Building has assumed and agreed to carry out any and all

[6 Misc.3d 798]

covenants and obligations of landlord hereunder.

"33. The covenants, conditions and agreements contained in this lease shall bind and inure to the benefit of Landlord and Tenant and their respective heirs, distributees, executors, administrators, successors and except as otherwise provided, their assigns . . .

"63. RENT CREDITS

"If Tenant shall be entitled to credits against rental hereunder, whether by reason of a refund to Landlord of Taxes (after receipt thereof by Landlord) or a reduction or adjustment in Operating Expenses, and if this lease shall expire or terminate before Tenant shall have deducted the full amount of such credit from rental due hereunder, Landlord shall promptly pay to Tenant the full amount of any such unrecovered credit, and this obligation of Landlord shall survive the expiration or termination of this lease."

The first lease amendment extended the term of the lease until April 30, 2005, increased the base rent and amended the rent escalation rider to provide that the "Base Expense Year" shall be the calendar year 1994 and the base year shall be the 1993-1994 tax year. For the tax...