Special Event Entertainment v. Rockefeller Ctr.

• Decision Date: 11 September 1978
• Docket Number: No. 78 Civ. 2162 (KTD).,78 Civ. 2162 (KTD).
• Citation: 458 F. Supp. 72
• Parties: SPECIAL EVENT ENTERTAINMENT, Plaintiff, v. ROCKEFELLER CENTER, INC., Radio City Music Hall Corp., Nelson A. Rockefeller, Urban Development Corporation, Urban Development Corporation-Civic Hall Preservation Project Corp., Robert T. Dormer and Mary Ann Krupsak, Lieutenant Governor of the State of New York, Defendants.
• Court: U.S. District Court — Southern District of New York

458 F. Supp. 72

SPECIAL EVENT ENTERTAINMENT, Plaintiff, v. ROCKEFELLER CENTER, INC., Radio City Music Hall Corp., Nelson A. Rockefeller, Urban Development Corporation, Urban Development Corporation-Civic Hall Preservation Project Corp., Robert T. Dormer and Mary Ann Krupsak, Lieutenant Governor of the State of New York, Defendants.

No. 78 Civ. 2162 (KTD).

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

September 11, 1978.

Parker, Auspitz, Neesemann & Delehanty, New York City, for plaintiff; John M. Delehanty, Carolyn Lewis Ziegler, New York City, of counsel.

Milbank, Tweed, Hadley & McCloy, New York City, for defendants Rockefeller Center, Inc., Radio City Music Hall Corp. and Nelson A. Rockefeller; Edward J. Reilly, New York City, of counsel.

Schulte & McGoldrick, New York City, for defendants New York State Urban Development Corp. and Civic Hall Preservation Project Corp.; Robert Kasanof, Bart M. Schwartz, Mark A. Levine, New York City, of counsel.

Daniel J. Kornstein, New York City, for Robert T. Dormer; Daniel J. Kornstein, New York City, of counsel.

Phillips, Nizer, Benjamin, Krim & Ballon, New York City, for Mary Ann Krupsak; Albert H. Blumenthal, Martin Stein, New York City, of counsel.

OPINION

KEVIN THOMAS DUFFY, District Judge.

This is a diversity action brought by plaintiff, Special Event Entertainment hereinafter referred to as "SEE", a California corporation, against Rockefeller Center, Inc. hereinafter referred to as "RCI", Radio City Music Hall Corp. hereinafter referred to as "Radio City", Nelson A. Rockefeller, the Urban Development Corporation hereinafter referred to as "UDC", the Urban Development Corp.-Civic Hall Preservation Project Corp. hereinafter referred to as "CHPPC",¹ Robert T. Dormer² and Mary Ann Krupsak, Lieutenant Governor of the State of New York, all of whom are New York defendants. SEE alleges that it entered into a contract with RCI to lease the Radio City Music Hall for a one-year period, subject to SEE's option to continue the lease over a longer term. SEE has allegedly developed a closed circuit television distribution system which will broadcast live entertainment from around the world to various theatres in the United States. According to SEE, Radio City Music Hall is "uniquely suited to be an `origination theatre' for live entertainment to be distributed on the SEE Theatre Network." Complaint ¶ 9.

The complaint further alleges that at the behest of Radio City, SEE's executives surveyed the Music Hall to determine its feasibility as an "origination theatre" for the SEE Theatre Network. Thereafter, RCI's president, Alton Marshall, allegedly offered SEE a contract to lease the Music Hall for $25,000 per week for one year, with a unilateral option in SEE to continue the lease beyond the original one year period. No written lease was executed, nor was one tendered by RCI to plaintiff although the parties allegedly agreed that a written lease would be prepared immediately with execution to follow at a future date.³

The complaint further alleges that, on information and belief, RCI, Radio City and Rockefeller (collectively referred to as the Radio City defendants) "entered into a conspiracy later joined by UDC, CHPPC, Dormer and Krupsak (collectively referred to as the State defendants), to eliminate SEE's rights under the contract and to injure SEE in its business and property." Complaint ¶ 26. Allegedly, an additional objective of this conspiracy was to persuade the public that the Music Hall was not economically viable, "thus, clearing the way for RCI's demolition of the Music Hall and the erection of a large office tower which would generate additional profits for RCI and the Rockefeller family." Id. at ¶ 27.

Although SEE allegedly continued to press RCI for delivery of the written lease, delivery was never effected and RCI remained silent with regard to a public announcement of SEE's lease. In the meantime, RCI had announced the closing of Radio City which evoked considerable public controversy and resulted in efforts, led by defendant Krupsak, to have the Music Hall designated as a landmark.

The complaint further alleges that in late March or early April of 1978 defendants Krupsak, Dormer, UDC, and CHPPC, with knowledge of RCI's agreement with SEE, approached RCI with an offer to have UDC, through its subsidiary, CHPPC, subsidize the operation of the Music Hall. RCI agreed to this proposal and thereafter advised SEE that its lease would not be forthcoming. As a result of this advice, SEE commenced the instant lawsuit asserting the following seven claims:

1. That it is entitled to a declaratory judgment that the lease between SEE and RCI is valid and to specific performance thereof;

2. That UDC and CHPPC acted beyond the scope of their authority and wasted public funds for the benefit of the Rockefeller family. SEE seeks to enjoin the continued performance under the agreement;

3. That SEE is entitled to damages from the Radio City defendants for breach of the lease;

4. That SEE is entitled to damages from UDC, CHPPC, Dormer, Krupsak, and Rockefeller for tortious interference with the lease;

5. That SEE should recover damages from UDC, CHPPC, Dormer and Krupsak for their conspiring with RCI and Radio City to breach the lease;

6. That SEE relied to its detriment on the promises of RCI and Radio City and expended hundreds of hours and thousands of dollars in preparing to take possession of the Music Hall;

7. SEE further charges all the defendants with prima facie tort for intentionally conspiring to injure SEE in its business or property without justification.

Defendants have moved, pursuant to F.R. C.P. 12(b) to dismiss the complaint for failure to state a claim upon which relief can be granted.⁴ They assert as grounds for their motion that (i) the oral contract which SEE has alleged falls within the statute of frauds; (ii) SEE lacks standing to challenge the expenditure of public moneys; and (iii) the claims of conspiracy and tortious interference are insufficient.

I. The Statute of Frauds

Defendants urge that SEE has alleged an oral lease falling squarely within the Statute of Frauds. New York's General Obligations Law § 5-703 (McKinney 1964) sets out the state law relating to real property:

1. An estate or interest in real property, other than a lease for a term not exceeding one year . . . cannot be created, granted, assigned, surrendered or declared, unless . . . by a deed . . . .

2. A contract for the leasing for a longer period than one year . . . is void unless the contract or some note or memorandum thereof . . . is in writing, subscribed by the party to be charged . . ..

Thus, it is clear that to be enforceable a lease of real property for more than one year must be memorialized in some kind of writing which is signed by the party to be charged.

In the instant case, SEE has alleged an agreement to lease the Music Hall for a period of one year, subject to SEE's option to continue the lease over a longer term. SEE also claims that a formal lease was prepared. Conspicuously absent from the complaint, however, is any allegation or intimation that this lease was ever executed by RCI. Thus, SEE's suggestion, in its memorandum of law opposing the instant motions, that a writing satisfying the Statute of Frauds exists is not borne out by a fair reading of the complaint.

SEE further urges, in opposition to defendants' motions to dismiss, that the alleged lease is capable of performance within a year. According to SEE, the mere fact that a one-year agreement may contain an option to renew does not subject it to the Statute of Frauds. While this statement may be an accurate reflection of the general state of the law, see Ward v. Hasbrouck, 169 N.Y. 407, 62 N.E. 434 (1902), it ignores those cases where the option to renew is solely with the plaintiff. See, e. g., Belfert v. Peoples Planning Corporation of America, 22 Misc.2d 753, 199 N.Y.S.2d 839, 842 (Sup.Ct.N.Y.County 1959) aff'd, 11 A.D.2d 760, 202 N.Y.S.2d 101 (1st Dep't 1960) aff'd, 11 N.Y.2d 755, 226 N.Y.S.2d 693, 181 N.E.2d 630 (1962).

In Belfert, the Court refused to enforce an oral agreement where the option to renew was solely with the plaintiff. Quoting from Harris v. Home Indemnity Co., 6 A.D.2d 861, 175 N.Y.S.2d 603, 604 (1st Dep't 1958) the Court observed that where the right to renew is limited unilaterally to the plaintiff, "it is illusory, from the point of view of the defendant, to consider the contract terminable or performable within one year."

It is the party to be charged with the contract whom the Statute of Frauds is designed to protect. Were plaintiff to have a right, based only upon an oral representation, to unilaterally extend the contract for more than one year, the defendant would be at the mercy of such representation without any protection from possible fraud. Thus, the rule that unilateral control in the hands of plaintiff brings the contract within the Statute of Frauds furthers the salient objectives of the statute. Accordingly, I cannot agree with plaintiff's characterization of the rule as "senseless and inequitable." Plaintiff's Memorandum at 28. Nor do I believe that such rule is applicable only to those situations involving employment contracts. Belfert makes no distinction between employment contracts and other types of agreements but rather lays down a sensible rule for general application. SEE's alleged lease falls within this rule and thus is within the Statute of Frauds.

II. Equitable Estoppel

I must now determine whether plaintiff's allegations are sufficient to invoke the doctrine of equitable estoppel⁵ and thus avoid the effect of the Statute of Frauds. An equitable estoppel will arise where one party rightfully relies upon the word or deed of another party and in "so relying, changes his position to his injury." Metropolitan Life Insurance Co. v. Childs, 230 N.Y. 285, 292, 130 N.E. 295, 298 (1921). The essential elements of equitable estoppel...