One Stop 34, LLC v. Stimdel Props. (FL)

• Decision Date: 04 September 2021
• Docket Number: 19-CV-04011 (LDH) (PK)
• Parties: ONE STOP 34, LLC, Plaintiff, v. STIMDEL PROPERTIES (FL), INC., Defendant.
• Court: U.S. District Court — Eastern District of New York

ONE STOP 34, LLC, Plaintiff, v. STIMDEL PROPERTIES (FL), INC., Defendant.

No. 19-CV-04011 (LDH) (PK)

United States District Court, E.D. New York

September 4, 2021

REPORT & RECOMMENDATION

Peggy Kuo, United States Magistrate Judge

One Stop 34, LLC (“Plaintiff” or “One Stop”) brought this declaratory judgment and breach of contract action against Stimdel Properties (FL), Inc (“Defendant” or “Stimdel”). (Compl Dkt. 1.) The Complaint seeks a declaratory judgment construing a lease provision and damages for breach of contract in performance of the lease. (See Compl.) Defendant filed an answer, asserting affirmative defenses and counterclaims for damages for breach of contract and declaratory judgments. (Amended Answer, Dkt. 16.) Both parties seek attorneys' fees and costs. (Compl. at 8; Amended Answer at 15-16.)

Defendant filed a Motion for Partial Summary Judgment (the “Motion, ” Dkt. 46.) The Honorable LaShann DeArcy Hall referred the Motion to the undersigned for a report and recommendation.

For the reasons below, the undersigned respectfully recommends that the Motion be granted in part and denied in part.

BACKGROUND

I. Factual Background

Unless otherwise stated, the following facts are taken from Defendant's Rule 56.1 Statement (“Def. 56.1, ” Dkt. 29-8), Plaintiff's Response to Defendant's Rule 56.1 Statement (“Pl Response 56.1, ” Dkt. 38), the Exhibits attached to the Motion (Dkt. 47), and the Exhibits attached to Plaintiff's Memorandum of Law in Opposition to Defendant's Motion for Partial Summary Judgment (“Pl. Opp., ” Dkt. 48).

A. The Lease and the Demised Premises

The material facts are largely undisputed. Plaintiff is a New York limited liability company, and Defendant is a Florida corporation. (Def. 56.1 ¶¶ 1-2; Pl. Response 56.1 ¶¶ 1-2.) On December 15, 2017, Plaintiff signed an agreement to lease a property in Queens, New York from Defendant. (Def. 56.1 ¶ 3; Pl. Response ¶ 3; the “Lease, ” Ex. F to the Motion, Dkt. 47-7.) The Lease describes the leased property as:

that certain building known as 12-01 34^th Avenue, Long Island City, Queens County, New York, containing approximately 63, 000 rentable square feet of space (the “Building”) and the land on which the Building sits, identified as Block 522, Lots 1 and 21…

(Lease at ¶ 000000001.) The Building and the land are together referred to as the “Demised Premises.” (Id.) An attachment to the Lease more particularly describes the Demised Premises as running along 34th Avenue (Graham Avenue) between 12th Street (Sherman Street) and 13th Street and extending north along 12th Street and 13th Street 345.81 feet, with a line connecting the corners of the property on 12th Street and 13th Street. (Ex. A to the Lease, Dkt. 47-7 at ¶ 000000035.)

A survey attached to the Motion shows the Demised Premises as consisting of the Building and an area outside the building to its north. (See Ex. G to the Motion, “Survey, ” Dkt. 47-8.)

(Image Omitted)

The outdoor area spans the length of the block between 12th Street and 13th Street and is separated from the sidewalk on both streets by a closed fence. (Id.) It has four marked parking spaces and several loading docks. (Id.) The Lease makes no mention of any parking spaces or loading docks. (See Lease.) A brochure for the Demised Premises and the Adjoining Property which was “created by Stimdel's real estate broker, Avison Young” (Pl. Opp. at 6) described the Demised Premises as “a one (1) story older mill-constructed, fully sprinklered warehouse and storage facility, totaling 63, 000-square feet, ” which included “Off-street loading and parking.” (Ex. 1 to the Declaration of Daniel Gildin, “Gildin Decl., ” Dkt. 48-3 at 3.) The brochure was not incorporated into or referenced in the Lease.

The Lease includes several provisions concerning the use of the Demised Premises. Section 3.1 notes that “the Demised Premises are leased to [Plaintiff] for subdivision into smaller units to be used by [Plaintiff]'s licensees.” (Lease § 3.1.) Similarly, the Lease notes, “it is agreed that [Plaintiff]'s business is to license the use of space within the Demised Premises to one or more entities.” (Id. § 10.11.)

Section 1.4(d) gives Plaintiff “the right to peacefully and quietly have, hold, occupy and enjoy the Demised Premises, subject to the terms of the Lease without any hindrance or molestation from Landlord or any person claiming by, from or under Landlord.” (Id. § 1.4(d).) The Lease gives Plaintiff “exclusive control and possession of the Demised Premises, ” and Defendant “shall have no liabilities, obligations or responsibilities whatsoever with respect thereto accept [sic] as expressly set forth herein.” (Id. § 7.6.) Plaintiff agreed that it had “inspected the Demised Premises and accepts the same on the date hereof, subject to the representations, warranties and covenants of Landlord in this Lease.” (Id. § 7.1.)

Section 15.1 of the Lease states, in part, “This Lease may not be changed or terminated orally.” (Id. § 15.1.) There is also a merger clause that states, “This lease and the Schedules annexed hereto constitute the entire agreement between [Defendant] and [Plaintiff] referable to the Demised Premises, and all prior negotiations and agreements are merged herein.” (Id. § 15.5.) The “Lease may be amended only in writing, signed by both [Defendant] and [Plaintiff].” (Id. § 20.7.)

The Lease is governed by New York law. (Id. at §§ 19.2, 20.8.) In any action to enforce its terms, the Lease provides for reasonable attorneys' fees, expert's fees, related expenses, and costs to a prevailing party. (Id. at § 19.3.)

Finally, “[t]he language in all parts of this Lease shall in all cases be construed as a whole according to its fair meaning and neither strictly for nor against [Defendant] and [Plaintiff].” (Id. § 20.4.)

The Lease neither provides for nor prohibits consequential damages in case of breach. (Def. 56.1 ¶ 14; Pl. Response 56.1 ¶ 14.)

B. The Adjoining Property

Adjacent to the Demised Premises is Lot 29 of Block 522 of the Queens County Tax Map. (the “Adjoining Property” or the “Adjoining Premises, ” Def. 56.1 ¶ 15; Pl. Response 56.1 ¶ 15; see also Compl. ¶ 13.) The Adjoining Property consists of a building and an outside area with fourteen marked parking spaces. (See Survey.) The boundary between the Demised Premises and the Adjoining Property is marked by a yellow dividing line between the two outside areas. (See Ex. 4 to Gildin Decl., Dkt. 48-7 at ¶ 003655-3656; Ex. 5 to Gildin Decl., Dkt. 48-8 at ¶ 000000148.) The two properties do not overlap. (Def. 56.1 ¶ 17 (“No portion of the Adjoining Property is a part of the Demised Premises”); Pl. Response 56.1 ¶ 17) The Lease's description of the Demised Premises does not include the Adjoining Property. (Def. 56.1 ¶ 16; Pl. Response 56.1 ¶ 16.)

Defendant also owns the Adjoining Property and leased it to DHL Express (USA), Inc. (“DHL”). (Deposition of Alejandro Onofrio, “Onofrio Depo., ” Dkt. 47-17 at 15:18-16:9.) Pursuant to the written lease with DHL, Defendant was to provide 35 parking spaces on the Adjoining Property. (See Ex. 4 to the Gildin Decl. at ¶ 003651.)

A brochure for the Demised Premises and the Adjoining Property describes the properties as “separated by a street-to-street shared loading area and parking lot.” (Ex. 1 to Gildin Decl. at 3.)

C. The Disputed “Common Area”

Plaintiff describes as the “Common Area” a strip of land “approximately 30 feet wide by 200 feet long, at each end of which is a driveway and gate through which vehicles, including large buses and trucks, enter the Demised Premises and the Adjoining Property.” (Compl. ¶ 13.) Based on this description and the dimensions indicated on the Survey, the Common Area would extend from the gate on 12^th Street to the gate on 13^th Street for the width of the open gate on 12^th Street. (See Survey.) This “Common Area, ” despite Plaintiff's description, is located entirely on the Adjoining Property. (See Pl. Opp. at 10 (“The term Demised Premises … does not include the Common Area.”)) The Lease makes no mention of the “Common Area, ” or of any common area that Plaintiff could use pursuant to the Lease that was outside the Demised Premises.

Plaintiff contends that “[t]he only access to the Demised Premises requires travelling through the fence gates and Common Area (outside of the Demised Premises)…” (See Pl. Opp. at 2.) However, there appear to be several access points from the street to the Building on the Demised Premises, including one access point on 12th Street, access points on 13th Street, and one access point on 34th Avenue. (See Survey; see also Pl. Opp. at 11 (admitting that there is access to the Building).) Alejandro Onofrio, the Vice President of Administration and Finance for Defendant and Ocasa (a sister company to Defendant), testified at his deposition that “small vehicles” and “reasonable size small trucks” may have been able to access the outside area of the Demised Premises by driving through the Building. (Onofrio Depo. at 69:8-73:18.)

Nevertheless for some time after the parties signed the Lease, Plaintiff and its licensees were permitted to access the parking and loading area of the Demised Premises through the gates on the Adjoining Property. Onofrio testified, “My understanding is that One Stop has the right to access this property through the gates and then access their side of the property that they rented” and that “One Stop had the right to access the property from both gates.” (Id. at 27:16-19, 29:18-20.) DHL employees also believed that Plaintiff could use the gates and area on the Adjoining Property to enter and exit the Demised Premises. In an email, one such DHL employee sought to work with Defendant to ensure that new parking spots planned for the...