PS Food Corp. v. Granville Payne Retail, LLC
| Decision Date | 10 November 2014 |
| Docket Number | No. 16438/2013.,16438/2013. |
| Citation | 7 N.Y.S.3d 244 (Table) |
| Parties | PS FOOD CORP., Plaintiff, v. GRANVILLE PAYNE RETAIL, LLC, Defendant. |
| Court | New York Supreme Court |
Robert Salzman, Esq., Salzman & Salzman LLP, Brooklyn, for Plaintiff.
Gary Rosen, Esq., Gary Rosen Law Firm, P.C., Great Neck, for Defendants.
The following papers numbered 1 to 25 read herein:
| Papers | Numbered |
| Notice of Motion/Order to Show Cause/ Petition/Cross Motion and Affidavits (Affirmations) Annexed | 1–211–16, 17, 18 |
| Opposing Affidavits (Affirmations) | 3–6, 719 |
| Reply Affidavits (Affirmations) | 820–21 |
| Memoranda of Law | 9, 1022–23 |
| Depositions | 24, 25 |
In this action by plaintiff PS Food Corp. (plaintiff), a tenant pursuant to a commercial lease, against defendant Granville Payne Retail LLC (defendant), its landlord, for a declaratory judgment that a Notice of Default under the lease, a Notice of Termination of the lease, and a lease termination clause contained in section 23.2(a) of the lease are invalid and unenforceable, and that defendant is equitably estopped from terminating the lease, plaintiff moves, under motion sequence number four, for an order, pursuant to pursuant to CPLR 3212, granting it summary judgment in its favor and awarding it attorney's fees as the prevailing party pursuant to section 28.11 of the lease. Defendant moves, under motion sequence number five, for an order granting it summary judgment dismissing this action and awarding it costs and attorney's fees as the prevailing party pursuant to the lease terms.
On June 24, 2011, plaintiff, as the tenant, and defendant, as the landlord, entered into a lease agreement (the lease) for commercial premises which are part of a condominium unit in a building located at 340 Pennsylvania Avenue a/k/a 626 Sutter Avenue, in Brooklyn, New York. Pursuant to section 2.1 of the lease, the lease was for a 26–year term, commencing on July 1, 2011 and ending on June 30, 2037. In accordance with section 7.1 of the lease, plaintiff leased the premises for the operation of a Key Food supermarket. The building in which the leased premises are located contains seven stories, with the supermarket on the first floor and a part of the cellar, and 103 residential apartments on the second through seventh floors.
The lease required plaintiff, as the tenant, to be responsible for, and pay the costs for installing and maintaining a Fire Sprinkler System as required by law. Section 11.4 of the lease provided as follows:
“If Tenant cooks or has cooking facilities in the Premises, then Tenant shall install and maintain an “Ansul' system or fire sprinkler system permitted by the City of New York to be installed in the Premises, at Tenant's sole cost and expense.”
Section 11.5 of the lease provided, in pertinent part, as follows:
“In the event that Tenant's use of the Premises requires a fire sprinkler system and/or fire extinguishers or if there is presently a fire sprinkler system installed in the Premises, the Tenant, shall be required to (x) install and maintain a sprinkler system and/or fire extinguishers as required by law in the Premises to the extent not theretofor installed and (y) make all modifications to any existing sprinkler system, if any. “[I]n connection with the foregoing, the following provisions of this Section shall apply: (i) such sprinkler system and/or modifications thereto shall comply with all applicable laws, orders, rules and regulations ...”
Section 11.7 of the lease, in pertinent part, provided:
“Tenant, at Tenant's sole cost and expense, shall comply with all Legal Requirements (hereinafter defined) which shall impose any duty upon Tenant with respect to Tenant's use or occupation of the Premises, including, but not limited to, the installation of, modification to and/or maintenance of a sprinkler system to serve the Premises or any part thereof required by Tenant's specific use ... For all purposes of this Lease the term Legal Requirements' shall mean all present and future laws, codes, ordinances, statutes, requirements, orders and regulations ... of any Governmental Authority ... and all directions, requirements, orders and notices of violations thereof.”
Section 23.1 (a) of the lease set forth that:
Section 23.2 (a) of the lease stated as follows:
“If an event of default by Tenant shall have occured under the terms of section 23.1 of this Lease, Landlord shall as its sole and exclusive remedy:
(a) Give Tenant a notice of Landlord's intention to end the term of this Lease at the expiration of the five (5) day period after such notice of cancellation is given. Unless the default is cured before the expiration of the five (5) day period, this Lease shall be canceled, and all of the obligations and responsibilities of the parties under this Lease shall terminate except for accrued liabilities and except that Tenant shall surrender the Premises to Landlord in accordance with this Lease.”
On July 31, 2012, the New York City Fire Department issued a violation order for the Retail (Key Food) Supermarket (the Violation Order). The Violation Order stated that an inspection of the supermarket premises indicated the existence of a violation, listing the absence of an interior fire alarm. It required that a fire alarm system be provided and installed in accordance with the “real occupancy of the building,” and that all required documentation and forms be submitted and an inspection be arranged. It cited Administrative Code of the City of New York § 901.5 as authority for the violation. The Violation Order listed that it was received by Richard Quiroz (Quiroz), as the owner's representative. In addition, Ahmed A. Hakim (Hakim), a 50% owner of the corporate shares of plaintiff, admitted, at his deposition, that he received a copy of the Violation Order in August 2012, when the fire department came to the supermarket (Hakim's Dep. Transcript at 46–47). He explained that he was present when the fire department came and the Violation Order was handed to his manager, who then gave it to him, and that he then contacted Quiroz, who had also received a copy of the Violation Order and they began a conversation on how to “do the fire alarm” (Id. at 47). He further stated that he never told defendant or its representatives that it was not plaintiff's responsibility to install a fire alarm (Id. at 47–48).
Quiroz sent an e-mail to Hakim on October 16, 2012 (defendant's exhibit 1), in which he stated as follows:
From August 2012 to May 2013, plaintiff obtained price quotes for installing the fire alarm system. However, Hakim claims that since he did not have the funds to pay for the installation, no fire alarm was installed by plaintiff (Hakim's Dep. Transcript at 62). One year after the violation was issued, plaintiff received a Notice of Default dated July 31, 2013 from defendant's attorney, Gary Rosen, Esq. (Mr. Rosen) of the Gary Rosen Law Firm, PC (the Gary Rosen Law Firm). The Notice of Default advised plaintiff that the Gary Rosen Law Firm represented defendant and issued this letter with its authority. It set forth that it constituted notice that plaintiff was in default of the lease, and that in the event that it did not cure the default within 10 days, the lease would terminate. It specified that the present fire code required plaintiff to install a fire alarm system connected to a central station, and cited and attached a copy of the Violation Order, listing exactly what had been set forth in that order, i.e., that it required that a fire alarm system be provided and installed in accordance with the real occupancy of the building, and that documentation was required to be submitted and an inspection arranged. The Notice of Default further referred to sections 11.4, 11.5, and 11.7 of the lease, and set forth what these sections stated in their entireties. It then warned that if plaintiff failed to comply with the attached Violation Order, the lease would be terminated.
In response to the Notice of Default, plaintiff did not seek a Yellowstone injunction to toll the cure period. Plaintiff claims that, instead, it responded to it by meeting with defendant's representatives at its offices on August 5, 2013 to discuss curing the alleged default. Plaintiff alleges that at that meeting, defendant's representatives advised it that they would consider contributing $10,000 toward an alarm system to cure the violation to be paid back in future rent installments, and that they needed a few days to finalize this arrangement, and that they would contact defendant to finalize the details on August 9, 2013. Plaintiff claims that it relied on the ongoing negotiations with defendant's representatives and took no legal action to stay the 10–day period set forth in the Notice of Default, which ended on August 9, 2013. Plaintiff alleges that on August 9, 2013, defendant's representative called it and advised that defendant would not work with it in any manner to cure the...
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