PK Restaurant, LLC v. LifshutzPK Restaurant, LLC v. Lifshutz
From 1987 until December 2012, Associates owned real property located at 133 East 65th Street. The building was ultimately leased to defendant 133 East 65th Street Corporation (Corporation). As of December 28, 1998, Corporation leased the cellar, basement, and first floor (the premises) to plaintiff‘s predecessor through September 30, 2019. From June 1999 through February 8, 2010, plaintiff and its predecessor operated a successful restaurant. However, on the latter date, a fire devastated the premises, forcing plaintiff to vacate. Plaintiff alleges that Corporation failed either to restore the premises or to obtain a new certificate of occupancy so that plaintiff could reopen its restaurant. On or about January 31, 2011, Corporation informed plaintiff that it had ended its (Corporation‘s) tenancy with Associates, effective as of September 15, 2010. Thereafter, plaintiff tried unsuccessfully to have Associates restore the premises and obtain the certificate of occupancy.
After Associates locked plaintiff out of the premises and served a notice to cure, plaintiff commenced an action (the other action) against Associates and Corporation. The court in the other action restored plaintiff to the premises, conditioned upon its posting of an undertaking and payment of rent. Plaintiff failed to fulfill these conditions, and on July 5, 2012, it returned the keys to the premises to Associates and removed its furniture, fixtures, and equipment. Initially, Associates offered to let plaintiff take the keys back, but on July 18, 2012, it
On September 13, 2012, Associates and Lifshutz entered into a contract whereby the former agreed to sell 133 East 65th Street to the latter or his assignee. Lifshutz assigned his rights to Realty, and Realty purchased the subject property on December 21, 2012. Some time between December 21, 2012 and December 4, 2013, Realty re-let the premises to a new tenant. On December 4, 2013, plaintiff commenced the instant action and, the next day, filed a notice of pendency against the property.
The court providently exercised its discretion in dismissing the first (breach of contract), second (constructive eviction), and seventh (declaratory judgment) causes of action1 as against the Associates defendants pursuant to
The court correctly dismissed the fourth cause of action seeking to pierce Associates’ corporate veil to impose personal liability on Steensen since piercing the corporate veil is not a cause of action independent of a cause of action against the corporation (see Ferro Fabricators, Inc. v 1807-1811 Park Ave. Dev. Corp., 127 AD3d 479, 480 [1st Dept 2015]). In any event, plaintiff‘s allegations about Steensen‘s domination and control and abuse of the corporate form are entirely conclusory and, hence, insufficient (see e.g. id.).
The second cause of action (constructive eviction) is also time-barred, as is the fifth cause of action (unlawful detainer). Plaintiff alleges that it was constructively evicted on or about July 5, 2012. It commenced the instant action more than a year
The court correctly dismissed the first cause of action (breach of the sublease between plaintiff and Corporation and the master lease between Corporation and Associates) as against Lifshutz because Lifshutz is not a party to either of the above contracts. Although he was a party to the contract of sale with Associates, he assigned his rights thereunder to Realty, and Realty is the one that ultimately bought the subject property. For the same reason, the court correctly dismissed the seventh cause of action (declaratory judgment) as against Lifshutz.
However, the breach of the lease and sublease cause of action should not be dismissed as against Realty. The contract by which Associates sold 133 East 65th Street to Lifshutz or his assignee said, “Purchaser hereby agrees to assume at closing all liabilities with respect to all tenants of the Premises arising prior to or subsequent to the date of this Contract” (emphasis added). On the current record, it is difficult to discern Associates’ and Lifshutz‘s intentions and, therefore, whether plaintiff was an intended (as opposed to incidental) third-party beneficiary of the contract of sale (see generally Edge Mgt. Consulting, Inc. v Blank, 25 AD3d 364, 368 [1st Dept 2006], lv dismissed 7 NY3d 864 [2006]). However, even if, arguendo, plaintiff were only an incidental beneficiary, it would have a remedy, independent of the contract of sale, under
Realty contends that plaintiff has no contract claim against it because plaintiff surrendered the premises by operation of law on July 5, 2012. However, whether plaintiff surrendered the premises by operation of law must be determined on the facts (see Riverside Research Inst. v KMGA, Inc., 68 NY2d 689, 692 [1986]).
Realty also relies on Associates’ termination of the lease. However, plaintiff disputes whether that termination was proper.
The third cause of action (tortious interference with contractual relations against the Realty defendants) should be dismissed. Plaintiff does not allege that, but for the Realty defendants’ conduct, Associates would have continued the sublease (see Burrowes v Combs, 25 AD3d 370, 373 [1st Dept 2006], lv denied 7 NY3d 704 [2006]). On the contrary, the record indicates that Associates wanted to terminate it even before the Realty defendants arrived on the scene. Furthermore, the complaint alleges only in conclusory fashion that the Realty defendants intended to induce Associates to breach the sublease (see CDR Créances S.A. v Euro-American Lodging Corp., 40 AD3d 421 [1st Dept 2007]).
The Realty defendants contend that the sixth cause of action (specific performance against Realty) should be dismissed because, inter alia, plaintiff can be adequately compensated with money damages. However, resolution of the question whether money damages would adequately compensate plaintiff must await a fuller record (see Sokoloff v Harriman Estates Dev. Corp., 96 NY2d 409, 415 [2001]; Warberg Opportunistic Trading Fund, L.P. v GeoResources, Inc., 112 AD3d 78, 87 [1st Dept 2013]). We have considered the Realty defendants’ remaining arguments about specific performance in their main brief and find them unavailing. We decline to consider their contention, improperly raised for the first time in their reply brief, that plaintiff may not assert claims for both constructive eviction (which terminated the lease) and specific performance (of a terminated lease). Even if we were to consider this argument, we would find it unavailing, since causes of action may be stated alternatively (
The Realty defendants contend that the seventh cause of action (declaratory judgment) should be dismissed as against Realty because plaintiff makes no allegations against it, and an innocent tenant would be adversely affected if plaintiff were restored to possession. Contrary to the first argument, plaintiff alleges that Realty and/or Lifshutz re-let the premises to the new tenant. As to the second argument, the record does not
The Realty defendants’ motion to cancel the notice of pendency is granted. “[A] lease for years is deemed personalty” (Matter of Grumman Aircraft Eng‘g Corp. v Board of Assessors of Town of Riverhead, 2 NY2d 500, 507 [1957], cert denied 355 US 814 [1957]). Accordingly, we have held that “[e]ven in the context of a summary proceeding to recover possession under a lease, a notice of pendency is unavailable” (Rose v Montt Assets, 250 AD2d 451, 452 [1st Dept 1998]). This is consistent with the notion that courts should apply “a narrow interpretation in reviewing whether an action is one affecting ‘the title to, or the possession, use or enjoyment of, real property‘” (5303 Realty Corp. v O & Y Equity Corp., 64 NY2d 313, 321 [1984], quoting
To the extent plaintiff relies on Lawlor v 543 Second Ave. LLC (49 AD3d 449 [1st Dept 2008]) in support of its position that the notice of pendency was properly filed, we note that that case was decided on a unique set of facts. There, the out-of-possession tenant was asserting restoration, pursuant to
We have considered the Realty defendants’ arguments as to why plaintiff should be sanctioned and find them unavailing. Concur — Mazzarelli, J.P., Renwick, Manzanet-Daniels and Kapnick, JJ.