The Nat'l Black Theatre Workshop Inc. v. Nubian Properties Llc

• Decision Date: 15 November 2011
• Citation: 89 A.D.3d 518,2011 N.Y. Slip Op. 08190,932 N.Y.S.2d 466
• Parties: The NATIONAL BLACK THEATRE WORKSHOP INCORPORATED, Plaintiff–Respondent,v.NUBIAN PROPERTIES LLC, et al., Defendants–Respondents–Appellants,Harlem Apple, LLC, Defendant–Appellant–Respondent.
• Court: New York Supreme Court — Appellate Division

89 A.D.3d 518

932 N.Y.S.2d 466

2011 N.Y. Slip Op. 08190

The NATIONAL BLACK THEATRE WORKSHOP INCORPORATED, Plaintiff–Respondent,

v.NUBIAN PROPERTIES LLC, et al., Defendants–Respondents–Appellants,Harlem Apple, LLC, Defendant–Appellant–Respondent.

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

Nov. 15, 2011.

Olshan Grundman Frome Rosenzweig & Wolosky LLP, New York (Mason A. Barney of counsel), for appellant-respondent.Reitler Kailas & Rosenblatt LLC, New York (Craig J. Albert of counsel), for respondents-appellants.Herrick, Feinstein LLP, New York (Raymond N. Hannigan of counsel), for respondent.TOM, J.P., SAXE, CATTERSON, MOSKOWITZ, ACOSTA, JJ.

Judgment, Supreme Court, New York County (Walter B. Tolub, J.), entered August 31, 2009, declaring the sublease between defendants Nubian Properties LLC and Harlem Apple, LLC void, and bringing up for review an order, same court and Justice, entered July 20, 2009, which granted plaintiff's motion for summary judgment declaring the sublease void, and so declared, implicitly denied so much of Harlem Apple's motion for summary judgment as sought a declaration that the sublease is valid and enforceable and denied so much of Harlem Apple's motion as sought summary judgment on its cross claims for breach of the sublease and indemnification against Nubian Properties and Nubian Realty LLC, unanimously reversed, on the law, without costs, the judgment vacated, Nubian Realty added as a defendant pursuant to CPLR 305, 1003, and 3019(b) and (d), plaintiff's motion denied, Harlem Apple's motion granted, and it is declared that the sublease is valid and enforceable. Appeal from the aforesaid order unanimously dismissed, without costs, as subsumed in the appeal from the judgment.

The motion court correctly found that section 8.8.2 of the operating agreement between plaintiff and Nubian Properties prohibited the latter from subletting to Harlem Apple the portion of the premises it had leased from Nubian Realty, LLC, the company created by the operating agreement for the sole purposes of acquiring, leasing, managing and selling real property (the Company). Nevertheless, plaintiff may not void the sublease, because Nubian Properties, assuming it had no actual authority, had apparent authority to enter into the sublease, and Harlem Apple's reliance on that authority was reasonable ( see Hallock v. State of New York, 64 N.Y.2d 224, 231–232, 485 N.Y.S.2d 510, 474 N.E.2d 1178 [1984]; Goldston v. Bandwidth Tech. Corp., 52 A.D.3d 360, 362–363, 859 N.Y.S.2d 651 [2008], lv. denied 14 N.Y.3d 703, 2010 WL 547639 [2010]; 1230 Park Assoc., LLC v. Northern Source, LLC, 48 A.D.3d 355, 852 N.Y.S.2d 92 [2008]; Limited Liability Company Law § 412[b][2] ).

Before entering into the sublease, Harlem Apple learned the uncontested facts that Nubian Properties was the general manager of the Company and that the Company was the owner of the subject premises. Harlem Apple also reviewed the overlease between the Company and Nubian Properties, which permitted Nubian Properties to sublease the premises, and received warranties from Nubian Properties, on its own behalf and as general manager of the Company, that either no consents were needed to sublease the premises or that all such consents had been obtained. That Nubian Properties executed the overlease both as lessor, on behalf of the Company, and as lessee, on its own behalf, is not dispositive. It is uncontested that Nubian Properties was the general manager of the Company, with the sole authority to enter into leases on behalf...