Spa 77 G L.P. v. Motiva Enterprises Llc

• Decision Date: 01 June 2011
• Docket Number: No. CV–09–1665 (SJF)(WDW).,CV–09–1665 (SJF)(WDW).
• Citation: 772 F.Supp.2d 418
• Parties: SPA 77 G L.P., Plaintiff,v.MOTIVA ENTERPRISES LLC, Defendant.Motiva Enterprises LLC, Third-party Plaintiff,v.Sergio Enterprises Inc. and Sergio Celikoyar, Third-party Defendants.
• Court: U.S. District Court — Eastern District of New York

772 F.Supp.2d 418

SPA 77 G L.P., Plaintiff,

v.MOTIVA ENTERPRISES LLC, Defendant.Motiva Enterprises LLC, Third-party Plaintiff,

v.Sergio Enterprises Inc. and Sergio Celikoyar, Third-party Defendants.

No. CV–09–1665 (SJF)(WDW).

United States District Court, E.D. New York.

Feb. 22, 2011.Order Denying Reconsideration June 1, 2011.

Jonathan H. Freiberger, Stephan B. Gleich, Lara Pouratian Emouna, Gleich, Siegel & Farkas, Great Neck, NY, for Plaintiff.William A. Ruskin, Victoria Marie Sloan, Epstein Becker & Green P.C., New York, NY, for Defendant/Third–party Plaintiff.C. Fred Weil, Law Offices of C. Fred Weil, Syosset, NY, for Third–party Defendants.

OPINION & ORDER

FEUERSTEIN, District Judge.

On April 23, 2009, plaintiff Spa 77 G L.P. (“Spa 77”) commenced this action against defendant Motiva Enterprises LLC (“Motiva”) pursuant to this Court's diversity jurisdiction under 28 U.S.C. § 1332(a), seeking to recover money allegedly due and owing from defendant to plaintiff for, inter alia, unpaid rent and real estate taxes and certain repairs to the subject premises, as well as costs and attorney's fees. On January 12, 2010, Motiva commenced a third-party action against third-party defendants Sergio Enterprises Inc. and Sergio Celikoyar (collectively, “Sergio”) seeking defense and indemnification, contribution and damages for unjust enrichment. Spa 77 now moves pursuant to Rule 56 of the Federal Rules of Civil Procedure for summary judgment. For the reasons stated herein, Spa 77's motion is granted in part and denied in part.

I. BackgroundA. Factual Background ¹

1. The Parties

On June 19, 1989, Spa 77's predecessor, Staller Properties Associates, entered into a lease with Motiva's predecessor, Star Enterprise, for certain premises located in Port Jefferson Station, New York (“the subject premises”), for use principally as a gasoline service station. (Parties' respective 56.1 Statements and Counterstatements [collectively “56.1 Stat.”], ¶¶ 1). The term of the lease expired June 30, 2006. (56.1 Stat., ¶¶ 2).

In or about 1991 until on or about June 30, 2006, Sergio executed leases and supply agreements with Texaco, Motiva's predecessor, and Motiva for the use and operation of a Texaco branded retail gasoline station on the subject premises. (Affidavit of Sergio Celikoyar [Sergio Aff.], ¶ 2). On or about June 30, 2006, Sergio vacated the premises after Motiva failed to renew its franchise. (Sergio Aff., ¶ 3).

2. Termination of Lease

By letter dated June 6, 2006, Shell Oil Products U.S. (“Shell”), on behalf of Motiva, advised Spa 77 that it “consider[ed] the lease to be terminated as of June 30, 2006” and that “[o]n or before that date [Motiva] will surrender the Premises to [Spa 77], subject * * * to the provisions of the Lease.” (Affidavit of Cary F. Staller in Opposition to Motiva's Motion to Vacate its Default [Staller Aff. (Vacate Mot.) ], Ex. B). By letter dated June 22, 2006, counsel for Spa 77 responded, inter alia, that pursuant to the terms of the lease, Spa 77 “expect[ed] that all underground tanks, piping, and related equipment w[ould] be removed (‘Equipment Removal’), and the premises w[ould] be clean at the end of the Lease term or after any permitted clean-up periods” and demanded that Motiva “provide, for [Spa 77's] approval, the name of the environmental engineer that [it] intend[ed] to retain for purpose of conducting the environmental studies required by the Lease.” (Staller Aff. (Vacate Mot.), Ex. C).

In July 2006, Motiva, by its consultants, removed underground tanks, piping and related equipment from the leased premises. (56.1 Stat., ¶¶ 9). During the removal activities, petroleum impacted soil was encountered and reported to the New York State Department of Environmental Conservation (“DEC”). (56.1 Stat., ¶ ¶ 10). The DEC opened “Spill No. 06–04605” to conduct oversight of Motiva's remediation of the contaminated soil. (56.1 Stat., ¶¶ 10, 11).

By letter dated July 21, 2006, Shell, as agent for Motiva, returned Motiva's keys to the building on the subject premises and advised Spa 77 that Motiva had completed the removal of the underground storage tanks on the premises. (Second Affidavit of Cary F. Staller [Staller Aff.], Ex. G). By letter dated August 1, 2006, counsel for Spa 77 advised counsel for Motiva that “neither Shell's tendering of the: keys nor [Spa 77's] receipt of the keys operated to terminate Shell's obligations under the Lease;” that Motiva had not complied with the testing and reporting requirements of paragraphs 58, 59 and 63 of the lease; that Motiva had not repaired the asphalt paving or removed the monitoring wells on the subject premises; that “Shell's obligations under the Lease, including its obligation to pay rent, remain[ed] in full force and effect, until all of the conditions [under the Lease] [were] satisfied;” and that Motiva was required to pay its rent for July and August, as well as the real estate taxes for June, July and August, which had not been paid. (Staller Aff., Ex. G).

Kleinfelder East, Inc. (“Kleinfelder”) prepared a Tank Excavation Assessment (“TEA”) report on behalf of Motiva relating to the underground storage tank removal activities conducted at the subject premises. (Staller Aff., Ex. H). In a letter to the DEC dated September 12, 2006, Kleinfelder reported, inter alia, that all but one (1) of the post-excavation soil samples were below DEC Recommended Soil Cleanup Objectives (“RSCOs”) for volatile organic compounds (“VOCs”) and semivolatile organic compounds (“SVOCs”), but one (1) soil sample revealed a concentration of benzene “slightly above the RSCOs; and that “[a]ll analytical results” of groundwater samples were below DEC groundwater standards. ( Id.; see also TEA report annexed to Affidavit of Robert E. Rule [Rule Aff.] as Exhibit A). Kleinfelder, on behalf of Motiva, recommended that the DEC close Spill No. 06–04605. (Staller Aff., Ex. H).

By letter dated September 22, 2006, the DEC advised Shell that “[b]ased upon a review of [its] file, [Shell] ha[d] completed the investigation/remediation for the [subject] site;” that the DEC had “no further requirements for the referenced spill [Spill No. 06–04605] at th[at] time;” and that “[t]he spill file [Spill No. 06–04650] ha[d] been removed from [the DEC's] active spill list.” (Rule Aff, Ex. B). The DEC further advised, however, that “[s]hould additional environmental problems be discovered at th[e] site, [the DEC] w [ould] require further action at that time.” ( Id.).

Motiva paid rent under the lease at the agreed upon rental rate of ten thousand dollars ($10,000.00) per month, plus real estate taxes, for the months of July, August and September 2006, but not thereafter. (56.1 Stat., ¶¶ 21, 22).

By letter dated October 12, 2006, counsel for Spa 77 advised counsel for Motiva that “additional testing and clean-up [was] required at the site before the DEC case [could be] closed and before Motiva's obligation under the Lease [would be] deemed completed.” (Staller Aff., Ex. H). Specifically, Spa 77 advised Motiva: (1) that since soil samples had only been taken in the “areas in or around underground storage tanks and related systems,” testing and, if necessary, remediation still had to be conducted in “areas around the periphery of the premises and/or in any storm drains, cesspools or like areas;” (2) that remediation was required of “several of the tested areas [that] did contain [VOCs];” and (3) that Motiva did not comply with all of the testing requirements of the lease. ( Id.)

After failing to receive a response to their October 12, 2006 letter, counsel for Spa 77 sent counsel for Motiva another letter, dated November 1, 2006, requesting that Motiva meet its obligation under the lease to pay rent for the months of October and November 2006. (Staller Aff, Ex. I). By letter dated November 3, 2006, Motiva advised counsel for Spa 77 that it believed that it had “satisfied is [sic] testing obligations under the Lease and [was] not required to conduct further testing of the Property,” and was not responsible for paying rent for the months of October and November 2006' because “there [were] no proscribed environmental conditions on the Property” and “Motiva [was] no longer accessing the Property.” (Affidavit of William A. Ruskin [Ruskin Aff], Ex. A).

By letter dated November 7, 2006, counsel for Spa 77 reiterated to counsel for Motiva that “Motiva has failed to fully perform its Lease termination obligations at the subject Premises.” (Staller Aff., Ex. I). According to counsel for Spa 77, “[u]ntil all required Tests [were] performed and an environmental engineer certifie[d] that no environmental conditions exist[ed] at the site, Motiva's obligations under the Lease continue[d].” ( Id.) In addition, counsel for Spa 77 advised that “in conjunction with the removal of the [underground storage tanks] and related systems, the asphalt at the premises was damaged and should have been repaired in accordance with paragraph '63' of the Lease,” but no repairs had been made. ( Id.)

By letter dated January 18, 2007, counsel for Spa 77 demanded that Motiva address the outstanding issues by February 16, 2007. (Staller Aff, Ex. I).

By letter dated February 14, 2007, Shell advised Spa 77's counsel that although Motiva denied that further environmental testing was “necessary or required under the lease[,] * * * in the spirit of compromise, Motiva agree[d] to perform additional tests by taking samples of the five drywells located on the Property and installing one monitoring well/soil boring down-gradient of the cesspool.” (Rule Aff, Ex. C) ².

By letter dated February 15, 2007, in-house counsel for Shell advised Spa 77 that Motiva and Shell's consultant, Sovereign Consulting Inc. (“Sovereign”), were “willing to perform the additional supplemental testing at the [subject] property * * * ” and proposed the scope of work they would perform. (Staller Aff., Ex. J). By letter dated that same date, Motiva...