Staples the Office Superstore East, Inc. v. Flushing Town Ctr. III, L.P.

• Decision Date: 06 December 2011
• Citation: 2011 N.Y. Slip Op. 08927,90 A.D.3d 638,933 N.Y.S.2d 732
• Parties: STAPLES the OFFICE SUPERSTORE EAST, INC., respondent, v. FLUSHING TOWN CENTER III, L.P., appellant.
• Court: New York Supreme Court — Appellate Division

2011 N.Y. Slip Op. 08927

90 A.D.3d 638

933 N.Y.S.2d 732

STAPLES the OFFICE SUPERSTORE EAST, INC., respondent,

v.FLUSHING TOWN CENTER III, L.P., appellant.

Supreme Court, Appellate Division, Second Department, New York.

Dec. 6, 2011.

Katsky Korins, LLP, New York, N.Y. (Mark Walfish, Adrienne B. Koch, and Thomas M. Lopez of counsel), for appellant.

Belkin Burden Wenig & Goldman, LLP, New York, N.Y. (Jeffrey L. Goldman, Magda L. Cruz, and Steven Kirkpatrick of counsel), and O'Melveny & Myers, LLP, New York, N.Y. (Andrew J. Frackman and Anton Metlitsky of counsel), for respondent (one brief filed).

MARK C. DILLON, J.P., RUTH C. BALKIN, JOHN M. LEVENTHAL, and ARIEL E. BELEN, JJ.

In an action, inter alia, for a judgment declaring that the defendant landlord failed to satisfy a cotenancy requirement set forth in a certain lease, the defendant landlord appeals, as limited by its brief, from stated portions of an order of the Supreme Court, Queens County (Taylor, J.), entered March 3, 2011, which, inter alia, granted those branches of the plaintiff tenant's motion which were for summary judgment on the second, third, fourth, fifth, and sixth causes of action declaring that (a) BJ's Wholesale Club is not a national retailer within the meaning of the lease's cotenancy requirement, (b) the defendant landlord failed to satisfy the cotenancy requirement of section 14.18 of the lease, (c) the plaintiff tenant properly served a cotenancy termination notice, (d) the plaintiff tenant has no obligation to pay any rent under the lease and the lease was duly terminated without any obligations or further liability by the plaintiff tenant to the defendant landlord, and (e) the plaintiff tenant did not default on its obligations under the lease as alleged in the defendant landlord's notice to cure and notice of termination, and said notices are null and void, and denied its cross motion for summary judgment on its counterclaims.

ORDERED that the order is affirmed insofar as appealed from, with costs, and the matter is remitted to the Supreme Court, Queens County, for the entry of a judgment declaring that (a) BJ's Wholesale Club is not a national retailer within the meaning of the lease's cotenancy requirement, (b) the defendant landlord failed to satisfy the cotenancy requirement of section 14.18 of the subject lease, (c) the plaintiff tenant properly served a cotenancy termination notice, (d) the plaintiff tenant has no obligation to pay any rent under the lease and the lease was duly terminated without any obligations or further liability by the plaintiff tenant to the defendant landlord, and (e) the plaintiff tenant did not default on its obligations under the lease as alleged in the landlord's notice to cure and notice of termination, and said notices are null and void.

This commercial lease dispute between the plaintiff, Staples the Office Superstore East, Inc. (hereinafter Staples or the tenant), and the defendant, Flushing Town Center III, L.P. (hereinafter the landlord), came about as a result of Staples' termination of the parties' 15–year lease, prior to taking possession of the subject premises, on the ground that the landlord failed to satisfy a key lease provision setting forth a cotenancy requirement. This provision required that the landlord lease the premises adjacent to Staples' leased premises to a “national retailer having not less than 100 stores and occupying not less than 100,000 square feet.” The adjacent premises were subsequently leased to BJ's Wholesale Club (hereinafter BJ's). Staples notified the landlord that it believed BJ's did not satisfy the cotenancy requirement because it was a regional, not a national, retailer. The landlord disputed that contention. Ultimately, Staples commenced the underlying action for a judgment declaring, inter alia, that BJ's was a regional, not a national, retailer and, therefore, the landlord failed to satisfy the cotenancy requirement of the lease and Staples properly terminated the lease. The landlord asserted counterclaims seeking a judgment declaring that Staples had wrongfully terminated the lease, and sought to recover unpaid rent and an attorney's fee. Staples moved and the landlord cross-moved for summary judgment. In the order appealed from, the Supreme Court, inter alia, held that BJ's was a regional, and not a national, retailer, granted those branches of Staples' motion which were for summary judgment on the second, third, fourth, fifth, and sixth causes of action declaring that (a) BJ's Wholesale Club is not a national retailer within the meaning of the lease's cotenancy requirement, (b) the defendant landlord failed to satisfy the cotenancy requirement of section 14.18 of the lease, (c) the plaintiff tenant properly served a cotenancy termination notice, (d) the...