Morris v. Monit Management, Ltd.

Decision Date22 December 1995
Citation222 A.D.2d 1090,635 N.Y.S.2d 845
PartiesWilliam C. MORRIS, Respondent, v. MONIT MANAGEMENT, LTD., David Gordon, Individually and as Vice-President, Administration of Monit Management, Ltd., Canadian Four State Holdings, Ltd., and Iatt Investments, N.V., Appellants.
CourtNew York Supreme Court — Appellate Division

Melvin and Melvin by Kenneth Bobrycki, Syracuse, for appellants.

Kernan and Kernan, P.C. by Matt Hamlin, Utica, for respondent.

Before GREEN, J.P., and PINE, FALLON, CALLAHAN and DOERR, JJ.

MEMORANDUM:

Plaintiff commenced this declaratory judgment action against his landlord and its agent (defendants), who asserted counterclaims based upon plaintiff's alleged breach of the lease. Following a nonjury trial, Supreme Court made extensive findings of fact and issued a judgment, from which defendants appeal.

In 1969 plaintiff sold a shopping center he had developed to the New Hartford U.S.I.F. Corporation (USIF), and simultaneously leased the property back from its new owner. According to section 3.02 of the lease, plaintiff was required to pay fixed annual rent of $491,000 (later reduced to $465,000) and "additional rent", defined in the lease as 15% of "total minimum guaranteed rentals and percentage of overage and rentals" above an agreed upon amount (currently $798,003.14). The lease was amended in 1971 to provide that no additional rent is owed for rent derived from "new construction" in which the landlord does not contribute "at least a portion of the costs." The amendment further provides that new construction shall include "any alteration or change in existing structures" that exceeds $10 per square foot in cost. In 1972 USIF transferred its interest in the shopping center to Arlen Realty, which sold the property six years later to Canadian Four State Holdings, the current landlord and one of the defendants herein.

At trial, it was undisputed that plaintiff made numerous alterations to the property and erected several new buildings over the past two decades. The landlord received notice of only a few of those projects and contributed money to none. As a result, the base upon which additional rent is computed has eroded and plaintiff has retained a greater percentage of the money received from subtenants. Defendants alleged in their counterclaim that, in failing to provide notice of construction projects, plaintiff thereby deprived the landlord of its right to contribute pursuant to the amended lease. Defendants also alleged that plaintiff has wrongfully excluded various common costs paid by subtenants from the rent roll so as to further reduce the source of income from which additional rent is determined. The court disagreed, finding, inter alia, that (1) plaintiff need not provide notice to or obtain consent from the landlord before building new structures or remodeling existing buildings; (2) the landlord has no right to contribute to the costs of new construction or alterations; (3) income received by plaintiff from subtenants for common costs, including taxes and insurance, may be excluded from the additional rent roll; and (4) the landlord's failure to deposit insurance premiums received from plaintiff in an interest-bearing account constitutes a breach of the lease.

The court erred in finding that plaintiff may engage in new construction and alterations without the landlord's knowledge and consent. Article 14 of the lease provides that plaintiff must obtain the landlord's written consent before undertaking "capital improvements" costing more than $20,000. In interpreting article 14, the court concluded that it applies only to alterations to buildings that existed when the lease was signed in 1969. According to section 14.01 of the lease, however, capital...

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3 cases
  • Robinson v. Robles
    • United States
    • New York Supreme Court — Appellate Division
    • 27 de maio de 2010
    ...See also Dwyer by Dwyer v. Mazzola, 171 A.D.2d 726, 727, 567 N.Y.S.2d 281 (2nd Dept., 1991);. Morris v. Monit Management, Ltd., 222 A.D.2d 1090, 1091, 635 N.Y.S.2d 845 (4th Dept., 1995). 12 In addition, a landlord's review of his or her copy of the rent receipts would be of assistance in pr......
  • Condren Realty Management Corp. v. Insurance Co. of North America
    • United States
    • New York Supreme Court — Appellate Division
    • 22 de dezembro de 1995
  • Canadian Four State Holdings, Ltd. v. Estate of Morris, 1
    • United States
    • New York Supreme Court — Appellate Division
    • 10 de fevereiro de 1999
    ...of the judgment, concluding that the remaining contentions of the landlord and its agent were "without merit" (Morris v. Monit Mgt., 222 A.D.2d 1090, 1092, 635 N.Y.S.2d 845). Because the issues raised in this action were litigated and decided in the prior action, plaintiffs are collaterally......

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