Trinity NYC Hotel, LLC v. Metro. Transit Auth.

• Decision Date: 16 November 2020
• Docket Number: INDEX NO. 150665/2020
• Citation: 2020 NY Slip Op 33815 (U)
• Parties: TRINITY NYC HOTEL, LLC, Plaintiff, v. METROPOLITAN TRANSIT AUTHORITY, NEW YORK CITY TRANSIT AUTHORITY, Defendant.
• Court: New York Supreme Court

2020 NY Slip Op 33815(U)

TRINITY NYC HOTEL, LLC, Plaintiff, v. METROPOLITAN TRANSIT AUTHORITY, NEW YORK CITY TRANSIT AUTHORITY, Defendant.

INDEX NO. 150665/2020

SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PART IAS MOTION 21

RECEIVED: November 17, 2020

November 16, 2020

NYSCEF DOC. NO. 185

PRESENT: HON. SUZANNE J. ADAMS Justice

MOTION DATE N/A

MOTION SEQ. NO. 004

DECISION + ORDER ON MOTION

The following e-filed documents, listed by NYSCEF document number (Motion 004) 119, 120, 121, 122, 123, 124, 125, 126, 127, 128, 129, 130, 131, 132, 133, 134, 138, 139, 140, 141, 142, 143, 144, 145, 146, 147, 148, 149, 150, 151, 165, 166, 167, 168, 169, 170, 171, 172, 173 were read on this motion to/for DISMISS.

This matter arises out of a hotel construction project located at 50 Trinity Place, New York, New York (the "50 Trinity Project"), of which Trinity NYC Hotel, LLC ("Trinity"), is the developer, as well as the fee owner of the underlying property at 50 Trinity Place. To date, this court has issued two decisions on motions and cross-motions made by the respective parties since the inception of this matter: the Decision and Order dated March 25, 2020 (the "March Decision"), and the Decision and Order dated June 10, 2020 (the "June Decision"). Reference is made to these decisions for a recitation of the underlying facts and the meaning of any defined terms used herein. In brief, the March Decision granted Trinity a preliminary injunction enjoining and restraining MTA and NYCTA from (1) moving or interfering with Trinity's construction fence and (2) enforcing the Stop Work Order of January 13, 2020, pending resolution of Trinity's petition pursuant to CPLR Article 78 for permanent relief and for declaratory judgment pursuant to CPLR § 3001; denied MTA's cross-motion to dismiss this action; granted Trinity's cross-motion to dismiss a separate and simultaneous petition by MTA (referred to in the March Decision as Action No. 2, which had been consolidated with this action prior to its dismissal); and dismissed MTA's motion for preliminary injunctive relief in Action No. 2 as moot. The June Decision granted Trinity a preliminary injunction enjoining and restraining MTA and NYCTA from (1) maintaining MTA's October 21, 2019, letter to the NYC Department of Transportation ("DOT") on the basis of New York Public Authorities Law § 1266(12) (the "PAL Letter"); and (2) interfering with Trinity's project and site permits, including the release thereof; and denied MTA and NYCTA's cross-motion for leave to reargue and renew their prior motions decided by the March Decision. MTA and NYCTA have filed notices of appeal of both decisions. They were granted leave to appeal the March Decision and await a determination of their motion for leave to appeal the June Decision. (Affirmation of John J. Nicolich, Esq., ¶ 12)

Subsequent to the June Decision, MTA and NYCTA served the Verified Answer and Counterclaims of Respondents Metropolitan Transportation Authority and New York City Transit Authority dated July 3, 2020. The Verified Answer asserts two counterclaims. The First Counterclaim sounds in trespass, encroachment and improper preliminary injunction, in violation of Public Authorities Law § 1266(12), and is asserted against Trinity as well as Rinaldi as counterclaim defendants. The Second Counterclaim, solely against Trinity, alleges breach of the implied covenant of good faith and fair dealing of the First Amendment to Easement Agreement dated November 29, 2017. Trinity now moves to dismiss the counterclaims. MTA and NYCTA oppose the motion and cross-move to stay this action pending determination of their appeals as noted hereinabove and for summary judgment dismissing Trinity's claims. Both the motion and cross-motion also seek sanctions against the opposing parties. (In separate motion sequences,Rinaldi moves to dismiss the First Counterclaim as asserted against it, and MTA and NYCTA move to strike certain materials submitted by Trinity on its instant motion. These motions are being decided separately and concurrently with the instant motion and cross-motion.)

For the reasons discussed below, Trinity's motion is granted to the extent that the First Counterclaim is dismissed, and MTA and NYCTA's cross-motion is denied in its entirety. The court declines to award sanctions against any party at this time.

Motion to Dismiss Counterclaims

The First Counterclaim alleges that Trinity and Rinaldi have "unlawfully occupied, trespassed upon, and encroached upon the Trinity Place sidewalk without valid permits and approvals and in violation of section 1266(12) of the PAL." (Affirmation of William R. Fried, Esq., Exh. B, ¶ 195) The counterclaim is founded upon MTA's and NYCTA's allegation that the statute affords MTA the right to occupy the sidewalk area at issue, despite that fact that the March Decision ruled that the statute is inapplicable to the circumstances of this matter. In light of the March Decision, MTA and NYCTA are barred from maintaining this claim by virtue of the doctrine of law of the case. This doctrine "addresses the potentially preclusive effect of judicial determinations made in the course of a single litigation before final judgment [citations omitted]." People v. Evans, 94 N.Y.2d 499, 502 (2000). The doctrine "has been aptly characterized as 'a kind of intra-action res judicata' (Siegel, New York Practice § 448, at 723 [3d ed])." Evans, 94 N.Y.2d at 502. It "expresses the practice of courts generally to refuse to reopen what has been decided." Id. at 503 (quoting Messenger v. Anderson, 225 U.S. 436, 444). MTA and NYCTA therefore cannot assert a claim that was previously dismissed by this court. The fact that an appeals court is not bound by this court's decision does not change this outcome. MTA and NYCTA cite no authority that requires this court to put aside its own priordeterminations in light of a pending appeal. Only when the appeal is decided will the parties be obliged to abide by its outcome.

Furthermore, there is no new evidence that could allow this court to alter the findings of the March Decision. Subsequent to the March Decision, Trinity applied to Empire State Development ("ESD") to have the 50 Trinity Project declared "essential" so that construction could continue despite the lockdown occasioned by the state-wide, pandemic-incurred halt to "non-essential" construction. MTA and NYCTA argue that in its request to ESD, Trinity admitted that the 50 Trinity Project constituted the type of project that falls within PAL § 1266(12). (Nicolich Aff., Exh. H) However, the application's description of "an ADA-related Capital Improvement project for New York City Transit Authority ('NYCTA') directly connected to the 'R' Line station" is not new, as it was set forth in the Easement Agreement and the First Amendment to Easement Agreement. Nor can the context and language of the application be construed as a legal pronouncement on either the nature of the work itself or the general construction and applicability of PAL § 1266(12). Whether the work at issue, occasioned by §§ 91-43 and 37-40 of the New York City Zoning Resolution, constitutes the type of project that allows MTA to occupy the sidewalk at issue under PAL § 1266(12) is a legal question that was addressed and answered in the March Decision (and reiterated in the June Decision). Accordingly, the First Counterclaim is dismissed for failure to state a cause of action pursuant to CPLR 3211(a)(7).

With respect to the Second Counterclaim, Trinity's motion is denied. The Second Counterclaim, solely against Trinity, alleges that Trinity's refusal to vacate the disputed sidewalk "has deprived NYCT of important benefits of the First Amendment, in breach of the implied covenant [sic] and fair dealing of the First Amendment." (Fried Aff., Exh. B, ¶ 201; thecomplete phrase "covenant of good faith and fair dealing" appears in ¶ 202) The claim rests upon Section 6 of the First Amendment (Fried Aff., Exh. I), which provides:

Consents; Developer consents to work being performed by Authority and/or third parties including but not limited to TPHGreenwich and their employees, contractors, consultants within the sidewalk and vault space adjacent to the Property for the construction of the New Elevator and the New Stair.

MTA and NYCTA allege, in sum, that Trinity's refusal to vacate the sidewalk has prevented 42 Trinity Developer's construction of the new elevator, in contravention of Trinity's agreement to consent to such work per Section 6, thereby depriving NYCTA of the benefit of the elevator's construction.

"On a motion to dismiss pursuant to CPLR 3211, the pleading is to be afforded a liberal construction (see, CPLR 3026). We accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory." Leon v. Martinez, 84 N.Y.2d 83, 87-88 (1994). Whether a party is ultimately able to establish its allegations is not to be considered in determining a motion to dismiss. Charles Schwab Corporation v. Goldman Sachs Group, Inc., 186 A.D.3d 431 (1^st Dep't 2020). Here, according MTA and NYCTA the benefit of a favorable inference, they have alleged sufficient facts to state a claim sounding in breach of an implied covenant of good faith and fair dealing, as they have alleged facts which tend to show that Trinity has acted so as to withhold from NYCTA certain benefits of the First Amendment. See Aventine Investment Management, Inc., v. Canadian Imperial Bank of Commerce, 265 A.D.2d 513, 514...