Sator Realty Inc. v. Coventry Real Estate Advisors, LLC
| Docket Number | Index No. 657321/2020,MOTION SEQ. No. 004 005 |
| Decision Date | 25 July 2022 |
| Citation | 2022 NY Slip Op 32491 (U) |
| Parties | SATOR REALTY, INC. Plaintiff, v. COVENTRY REAL ESTATE ADVISORS, LLC, Defendant. |
| Court | New York Supreme Court |
DECISION + ORDER ON MOTION
The following e-filed documents, listed by NYSCEF document number (Motion 004) 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76 77, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 90, 91 92, 93, 94, 95, 96, 97, 98, 99, 100, 101, 102, 103, 104, 105, 106, 107, 108, 109, 110, 111, 112, 113, 114 were read on this motion to/forDISMISS
The following e-filed documents, listed by NYSCEF document number (Motion 005) 118, 119, 120, 121, 122, 123, 124, 125, 126, 127, 128, 129, 130, 131, 132, 133, 134, 135, 136, 137, 138 were read on this motion to/for , PENDENTE LITE Upon the foregoing documents, Motion Sequences 4 and 5 are jointly decided and ordered as follows:
Plaintiff Sator Realty, Inc ("Landlord") seeks an order pursuant to CPLR §§ 3211(a)(1), (a)(5), (a)(7) and 3212 dismissing the affirmative defenses and counterclaims of defendant Coventry Real Estate Advisors ("Tenant"), granting monetary judgment in favor of Landlord and ordering a hearing on attorneys' fees and costs Tenant owes Landlord. In response, Tenant cross-moves seeking to compel disclosure of certain discovery pursuant to CPLR § 3124 and an order denying or staying Landlord's motion for summary judgment pursuant to CPLR § 3212(f).
For the following reasons, Landlord's motion dismissing Tenant's affirmative defenses and counterclaims is granted in part. Further, pursuant to the plain and unambiguous terms of the commercial lease, which was negotiated and agreed to by sophisticated commercial entities, the Court grants Landlord's motion seeking money judgment and a hearing on attorneys' fees. Tenant's cross-motion is denied.
Landlord is the net-lessee of One East 52nd Street, New York, New York (the "Building") (a/k/a 655 Fifth Avenue) (NYSCEF Doc. No. 66 at ¶ 4). Tenant is a commercial entity operating a real estate investment management company (Id. at ¶ 7). The first two floors of the Building consist of retail space occupied by luxury retailer Salvatore Ferragamo, while the remaining five floors are commercial office space. (NYSCEF Doc. No. 87). Tenant and Landlord executed a lease dated August 20, 2004 ("Original Lease") whereby Tenant leased the entire fourth floor of the Building (NYSCEF Doc. No. 1 at ¶ 9). The Original Lease was modified by a First Amendment of Lease dated April 1, 2014 (the "Amendment") (Id.).
Section 2.2 and 2.3 of the Original Lease requires Tenant to pay fixed rent and additional rent on the first day of each calendar month during the lease term "without any abatement, deduction or setoff whatsoever" (Id. at ¶ 10).
In Section 5.2 of the Original Lease, Tenant agreed to pay as additional rent "a sum equal to Tenant's Tax Proportionate Share of the amount by which the Taxes payable... exceed the Base Tax" which "shall be due and payable by Tenant in full within twenty (20) days after receipt of a demand therefor from Landlord, based upon the most recent Landlord's Statement." Id. at ¶ 12). Section 5.1 of the Original Lease provides the following pertinent definitions: (i) '"Tenant's Tax Proportionate Share' shall be deemed to mean 11%"; (ii) '"Real Property' shall mean the Building and the land beneath same", and (iii) '"Taxes' shall mean...all real estate taxes and assessments.. .foreseen or unforeseen, which may be assessed, levied or imposed upon all or any part of the Real Property" (Id. at ¶ 13). Pursuant to the Amendment, "Base Tax" under the Lease was modified to mean "the Taxes for the twelve-month period ending December 31, 2014" (Id at ¶ 14).
Tenant and Landlord further agreed in Article 15 of the Original Lease that Tenant will pay as Additional Rent the amount of electricity consumed by the Tenant as determined by a submeter, "plus a fee equal to five (5%) percent of such charge to Landlord representing the administrative and overhead costs to Landlord" (Id. at ¶ 17).
Pursuant to Section 33.1 of the Lease, "Tenant expressly acknowledges and agrees that Landlord has not made and is not making... any warranties, representations, promises or statements, except to the extent they are expressly set forth in this Lease..." and "Tenant, in executing and delivering this Lease, is not relying upon" any representations or warranties (NYSCEF Doc. No. 70 at §33).
From 2004 until 2019 Tenant never objected to the payment or method of calculating real estate tax escalation charges ("RET") (NYSCEF Doc. No. 66 at 1 23). However, after receiving the 2019/2020 RET statement, Tenant inquired whether Landlord was attempting to reduce the assessed taxes (Id at ¶ 25). It was not until June 10, 2020 that Peter Henkel, the Chief Executive Officer of Tenant, wrote to Landlord formally objecting to the RET (NYSCEF Doc. No. 75). In sum and substance, Henkel's objection to the RET "is not necessarily a question that the taxes are too high for the building" but rather that Tenant was "paying the high taxes assessed on the rents and value of the retail space and not taxes related to the rents and value of our office space." (Id.) Henkel requested that Tenant's "tax escalations be revised to reflect the value of only the office portion of the building starting in FY 2015-2016." (Id.-). Landlord declined this request and sent the 2020/2021 RET statement to Tenant in July of 2020. (NYSCEF Doc. No. 73). According to Landlord, Tenant has made only a few sporadic payments during 2020, and has failed to pay any rent or additional rent beginning January 2021. (NYSCEF Doc. No. 66 at ¶ 30).
Landlord filed a Complaint on December 29, 2020 alleging Breach of the Lease, Unjust Enrichment, Use and Occupancy, Declaratory Judgment, and Attorneys' Fees Under the Lease. (NYSCEF Doc. No. 1) In reply, Tenant filed a motion to dismiss causes of action duplicative of the Breach of the Lease claim. (NYSCEF Doc. No. .8). The Court dismissed Landlord's unjust enrichment and declaratory judgment claims as duplicative (NYSCEF Doc. No. 18). Tenant then filed its Answer with Affirmative Defenses and Counterclaims on July 6, 2021 (NYSCEF Doc. No. 20). Tenant pleaded 39 affirmative defenses and asserted counterclaims. (Id.)
On July 28, 2021, Landlord filed a notice of motion seeking fixed rent and metered electric charges commencing July 2021 pendente lite, as well as a bond in the amount of $413,408.52 to secure outstanding arrears for fixed rent and electric charges through June 30, 2021 (NYSCEF Doc. No. 40). The Court denied Plaintiffs application for a bond to secure outstanding arrears but ordered Tenant to pay fixed rent and electric charges pendente lite from July 2021 (NYSCEF Doc. No. 115). Since entry of that Order, no payment has been made. (NYSCEF Docs. No. 136-137). Landlord filed an order to show cause seeking entry of the money judgment awarded in Motion Sequence 3 and provided an accounting of Landlord's total outstanding arrears up to June 2022. (NYSCEF Docs. No. 128, 131, 133-136).
Landlord seeks dismissal of Tenant's affirmative defenses artd counterclaims pursuant to CPLR 3211 § § (a)(1), (a)(5), and (a)(7) and summary judgment awarding Landlord damages for Tenant's breach of the Lease pursuant to CPLR § 3212 (NYSCEF Doc. No. 65). Landlord argues that it is entitled to summary judgment as the terms of the Lease are clear and unambiguous and must therefore be enforced. Landlord asserts that Tenant's counterclaims should be dismissed per the terms of the Lease and the voluntary payment doctrine. Further, Landlord provides a variety of grounds as to why Tenant's 39 affirmative defenses must be dismissed. In response, Tenant filed a cross-motion pursuant to CPLR § 3124 seeking to compel certain discovery and requesting the Court to deny or stay Landlord's motion for summary judgment pursuant to CPLR §3212(f). Landlord has also moved seeking entry of money judgment to enforce its right to rent pendente lite pursuant to the Court's decision in motion sequence 3 (see NYSCEF Doc. No. 115).
Landlord seeks dismissal of Tenant's counterclaim for breach of implied duty of good faith and fair dealing. While a complaint is to be liberally construed on a motion to dismiss, the court is not required to accept factual allegations that are plainly contradicted by documentary evidence. ( . A written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms. (. .
In its counterclaim alleging breach of the implied duty of good faith and fair dealing, Tenant alleges that there have been "exorbitant real estate tax charge...
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