Z. Justin Mgmt. Co. v. Metro Outdoor, LLC

• Decision Date: 17 March 2016
• Citation: 28 N.Y.S.3d 31,137 A.D.3d 577
• Parties: Z. JUSTIN MANAGEMENT CO., INC., Plaintiff–Appellant, v. METRO OUTDOOR, LLC, et al., Defendants–Respondents.
• Court: New York Supreme Court — Appellate Division

137 A.D.3d 577

28 N.Y.S.3d 31

Z. JUSTIN MANAGEMENT CO., INC., Plaintiff–Appellant,

v.METRO OUTDOOR, LLC, et al., Defendants–Respondents.

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

March 17, 2016.

Belkin Burden Wenig & Goldman, LLP, New York (Magda L. Cruz of counsel), for appellant.

Balber Pickard Maldonado & Van Der Tuin, P.C., New York (Roger J. Maldonado of counsel), for Metro Outdoor, LLC, respondent.

Rosenberg & Estis, P.C., New York (Bradley S. Silverbush of counsel), for 860 Sign, LLC, respondent.

FRIEDMAN, J.P., ANDRIAS, SAXE, KAPNICK, JJ.

Order, Supreme Court, New York County (Saliann Scarpulla, J.), entered on or about December 16, 2014, which, to the extent appealed from, granted the motions of defendants Metro Outdoor, LLC (Metro) and 860 Sign, LLC (860 Sign) to dismiss the second amended complaint, unanimously affirmed, with costs.

This case involves a purported wrongful assignment of an outdoor advertising agreement by defendant Metro to defendant 860 Sign. The agreement, which was originally entered into between plaintiff and defendant Metro, was assigned by Metro to 860 Sign for an assignment fee of $1.6 million. On appeal, plaintiff contends that the agreement, despite being labeled a "sublease," was actually a non-assignable licensing agreement as a matter of law, or, in the alternative, that plaintiff was entitled to a portion of the assignment fee.

Plaintiff's arguments are unavailing. "The nature of the transfer of absolute control and possession is what differentiates a lease from a license ... [w]hereas a license connotes use or occupancy of the grantor's premises, a lease grants exclusive possession of designated space to a tenant, subject to rights specifically reserved by the lessor. The former is cancellable at will, and without cause" ( American Jewish Theatre v. Roundabout Theatre Co., 203 A.D.2d 155, 156, 610 N.Y.S.2d 256 [1st Dept.1994] ). The "critical question in determining the existence of a lease ... is whether exclusive control of the premises has passed to the tenant" ( Women's Interart Ctr., Inc. v. New York City Economic Dev. Corporation[EDC], 97 A.D.3d 17, 21, 944 N.Y.S.2d 137 [1st Dept.2012], lv. dismissed 20 N.Y.3d 1034, 960 N.Y.S.2d 348, 984 N.E.2d 323 [2013] ).

Under the relevant standard, the plain language of the agreement at issue reveals that the agreement is a lease and not a license. In the first paragraph of the agreement the property is unambiguously granted to Metro outright, providing that plaintiff "[s]ubleases and grants exclusively to [Metro]" the...