Stellar Printing, Inc. v. Vernon Boulevard Realty, LLC

• Decision Date: 07 May 2018
• Docket Number: 702916/2018
• Citation: 77 N.Y.S.3d 271
• Parties: STELLAR PRINTING, INC., Plaintiff, v. VERNON BOULEVARD REALTY, LLC, Defendant.
• Court: New York Supreme Court

60 Misc.3d 697

77 N.Y.S.3d 271

STELLAR PRINTING, INC., Plaintiff,

v.VERNON BOULEVARD REALTY, LLC, Defendant.

702916/2018

Supreme Court, Queens County, New York.

Decided May 7, 2018

For Plaintiff: Law Offices of Leavitt & Kerson, by Paul E. Kerson, Esq., 118–35 Queens Blvd., Forest Hills, NY 11375

For Defendant: Moritt Hock & Hamroff, LLP, by Gregory G. Calabro and Krista L. Kulp, Esqs., 1407 Broadway, New York, NY 10018

Salvatore J. Modica, J.

The plaintiff-tenant, Stellar Printing, Inc. (hereinafter, "Stellar"), moved by order to show cause (hereinafter, "OSC") for a stay of all proceedings between the parties in a commercial holdover proceeding, Vernon Boulevard Realty, LLC v. Stellar Printing, Inc. , in Civil Court, Queens County, under Landlord and Tenant index number 77359/2017. Stellar also seeks a declaratory judgment declaring its lease to be the governing lease in the rental dispute between the parties. The defendant, Vernon Boulevard Realty, LLC (hereinafter, "Vernon") responded by filing a cross-motion seeking dismissal, or, in the alternative, for the posting of an undertaking by Stellar. The motion for declaratory relief is denied in all respects. The cross-motion to dismiss the petition, however, is granted.

The plaintiff, Stellar, presents the Court with two versions of a lease between the parties and requests that this Court declare that its lease is the one that controls the action in Civil Court. The plaintiff contends that since the Civil Court has no equitable jurisdiction, only the Supreme Court has the power to grant declaratory relief and decide which lease is the governing version in the Civil Court action. In response, the defendant, Vernon, argues that the second lease presented by the plaintiff is a forgery and that the Civil Court has ample authority to decide which is the authoritative, governing lease. Under these circumstances, Vernon contends, the present action in Supreme Court should be dismissed.

Counsel for plaintiff Stellar boldly states that he intends to do full blown depositions and inquiry as to every witness who attended the signing of the purported lease in 2006, twelve years ago. Defendant counters that the present OSC by plaintiff is nothing more than a stalling device and that the other lease presented by plaintiff is a forgery submitted solely to create an issue of fact and an excuse for invoking this Court's equitable jurisdiction.

The defendant-landlord, Vernon, is correct. The argument by plaintiff, Stellar, is facile. With certain exceptions not applicable here, this Court, of course, has exclusive jurisdiction over equitable actions, such as those seeking a declaratory judgment. See CPLR 3001 ; see also , Siegel, Practice Commentaries, McKinney's Cons Laws of NY, Book 29A, Civil Court Act 212–a [1989 Pocket Part], at 60); see also Bury v. Cigna Healthcare , 254 A.D.2d 229, 679 N.Y.S.2d 305 (1st Dept. 1998) ; see also Suarez v. El Daro Realty, Inc. , 156 A.D.2d 356, 548 N.Y.S.2d 313 (2nd Dept. 1989) ; Dowd v. Ahr , 168 A.D.2d 763, 563 N.Y.S.2d 917 (3rd Dept. 1990), rev'd in part , 78 N.Y.2d 469, 577 N.Y.S.2d 198, 583 N.E.2d 911 (1991) ; cf. Krieger v. Krieger , 25 N.Y.2d 364, 306 N.Y.S.2d 441, 254 N.E.2d 750 (1969). Here, however, the tenant allegedly owes rent, and the landlord pursued its claims in Civil Court by filing a commercial holdover proceeding. Implicit in enforcing and applying a lease, the Civil Court Judge, must, of course, ensure that the lease with which that Court is presented is the correct, final version.

Equally important, merely couching an action as a declaratory action does not entail that the matter must be heard in Supreme Court. See e.g. Gordon v. Continental Cas. Co. , 91 A.D.2d 987, 457 N.Y.S.2d 844 (2nd Dept. 1983). The basic nature of the lawsuit in Civil Court involves Vernon's attempt to collect rent from the plaintiff, Stellar. See Ossory Trading, S.A. v. Geldermann, Inc. , 200 A.D.2d 423, 606 N.Y.S.2d 221 (1st Dept. 1994) ; see also John W. Cowper Co. v. Buffalo Hotel Dev. Venture , 99 A.D.2d 19, 22, 471 N.Y.S.2d 913 (4th Dept. 1984) ; see Douglas A. Edwards, Inc. v. Lax, 85 A.D.2d 509, 444 N.Y.S.2d 103 (1st Dept. 1981). Thus, the primary action is legal in nature, not in equity. See State Farm Mut. Auto. Ins. Co. v. Sparacio , 25 A.D.3d 777, 809 N.Y.S.2d 151 (2nd Dept. 2006). For this reason, it is obvious that Civil Court is more than capable of providing an appropriate forum in which to resolve this dispute.

The Appellate Term, First Department, dealt with a very similar factual scenario in 4446–50 Realty Inc. v. Rojas , 4 Misc.3d 140(A), 2004 WL 1944973, 2004 N.Y. Slip Op. 50956(U) (2004) (per curiam). In that case, the Appellate Term stated:

Tenant failed to establish that the May 1996 commercial lease was a "forged and fraudulent" document, as his own self-serving testimony in this regard was insufficient, standing alone, to support such a finding (see Lum v. Antonelli, 102 A.D.2d 258, 476 N.Y.S.2d 921 ). The motion to re-open the trial for the receipt of expert testimony on this issue was properly denied, since tenant failed to offer a justifiable excuse for not introducing this evidence in a timely fashion (see Grassel v. Albany Medical Center Hospital, 223 A.D.2d 803, 636 N.Y.S.2d 154 ).

However, with respect to the proffered January 2001 lease, which would not expire until December 31, 2010, we are not satisfied that its exclusion from evidence, on "foundation" or other grounds, was correct. It appears that different copies of the lease were presented at trial, but it is not disputed that landlord drafted and signed it (including handwritten entries). Moreover, there is evidence that the lease was signed by tenant at the office of landlord's principal, and that landlord consented to an assignment of a lease "which expires on December 31, 2010". Given the confusing state of the record, we remand for a new trial on the authenticity of the January 2001 lease, which, if credited, would defeat the holdover petition. To the extent landlord argues that the lease was merely a "draft", no such limiting language appears on the face of the document.

4446–50 Realty Inc. v. Rojas , 2004 WL 1944 973, 2004 NY Slip Op. 50956(U), supra .

By remanding the case back to the Civil Court for a new trial to determine which of the two leases was the valid and enforceable one, the appellate court conclusively held that the Civil Court had jurisdiction to entertain this issue. Certainly, logic dictates that if the Appellate Term believed that the Civil Court was without jurisdiction to decide the authenticity of the lease in question, it would not have remanded the case back to Civil Court for that determination. See e.g. In re Gregory M. , 82 N.Y.2d 588, 595, 606 N.Y.S.2d 579, 627 N.E.2d 500 (1993).

It is also significant, but by no means dispositive, that the lease presented by Stellar contains a clause revealing that the plaintiff waived an assortment of legal rights, including the right to a trial by jury and the right of redemption. Pursuant to that clause, the plaintiff also agreed that the defendant had the right to bring a summary holdover proceeding, plus any claim in law or in equity against Stellar. The second lease in controversy, the one that the defendant, Vernon argues is the true lease, contains the same exact clause. Certainly, one of these leases is, in fact, valid and legally binding. Given that both leases contain the same clause as to the respective legal rights of the parties under the lease, this provision, if interpreted to restrict the defendant's right to bring an action in Supreme Court, would necessarily govern this proceeding. See Kalisch–Jarcho, Inc. v. City of New York , 72 N.Y.2d 727, 731–32, 536 N.Y.S.2d 419, 533 N.E.2d 258 (1988). In sum, this provision, upon which neither of the parties has relied, may impose certain legal hurdles on Stellar. As noted by the late Chief Judge Kaye in Kalisch–Jarcho, Inc. v. City of New York :

A declaratory judgment action may be an appropriate vehicle for settling justiciable disputes as to contract rights and obligations (see, Matter of Public Serv. Commn. v. Norton, 304 N.Y. 522, 529 ; see also, Restatement [Second] of Contracts § 345, comment d, at 107–108; 5 Corbin, Contracts § 991, at 4–5; 4 Williston, Contracts § 601, at 316–317 [3d ed.] ). But parties to an agreement may not seek a declaration of their contract rights when their agreement specifies a different, reasonable means for resolving such disputes (see, e.g., Rifkin v. Rifkin, 118 N.Y.S.2d 322 [Sup. Ct.], affd 281 App. Div. 1035, 121 N.Y.S.2d 277 ; 16 Williston, Contracts § 1919A, at 155–156). A declaratory judgment in such circumstances may be unnecessary (see, Walsh v. Andorn, 33 NY2d 503, 507 [355 N.Y.S.2d 329, 311 N.E.2d 476] ; James v. Alderton Dock Yards, 256 N.Y. 298, 305, 176 N.E. 401 ), and could also enable parties to circumvent their contractual undertakings (see, Siegel, Practice Commentaries, McKinney's Cons Laws of NY.

Kalisch–Jarcho, Inc. v. City of New York, supra 72 N.Y.2d at 732, 536 N.Y.S.2d 419, 533 N.E.2d 258.

The Court, after reading both leases, concludes that this specific clause in the contract is neither clear nor concise. On the one hand, if this clause were designed to restrict Stellar from bringing any type of action in Supreme Court, then the language in the clause should have been drafted plainly and concisely to that effect. See Evans Co. v. Zurich Ins. Co., 95 N.Y.2d 779, 710 N.Y.S.2d 301, 731 N.E.2d 1109 (2000). On the other hand, permitting Stellar to have this action heard in Supreme Court might render meaningless Vernon's right under the contract to bring a summary holdover proceeding against Stellar. Although ambiguous clauses are generally construed against the party who drafted the contract, [see Evans Co. v. Zurich Ins. Co., 95 N.Y.2d 779, 710 N.Y.S.2d 301, 731 N.E.2d 1109 (2000) ], that legal principle is of no significance to this case. Even if this clause were construed in...