Three Park Avenue Co. v. Feuer Leather Corp.

(Sup. Ct. N.Y. Cty. 7/17/92)

We represented: Petitioner

Beverly S. Cohen, J.S.C.

DECISION and ORDER Plaintiff landlord, Three Park Avenue Co., moves for an order granting partial summary judgment against defendant tenant, Feuer Leather Corporation ("Feuer"), on the first and second causes of action of the complaint; and dismissing defendant's counterclaim.

In this motion, plaintiff seeks to recover rent of $56,476.72 (comprising $5,628 as for unpaid rent for September and October 1991; $19,236.08 for the 1990 operating expense escalation; $31,612.64 for the real estate tax equivalency escalation as additional rent; and $394.80 as its expenses in recovering possession).

This is an action by plaintiff to recover base and additional rent and certain ancillary damages from defendant, its former tenant, pursuant to a commercial lease executed on March 18, 1977 by and between plaintiff as landlord and Feuer as tenant. Pursuant to the written lease agreement, plaintiff leased to defendant a certain portion of the 29^th floor of the building located at Three Park Avenue, New York, New York (the "premises"), for a term commencing on June 3, 1977 and ending on June 30, 1987. On or about October 10, 1986, defendant exercised its option to extend the term of the lease by five years. Plaintiff elected to terminate the lease on October 1, 1991.

The first cause of action in the complaint is for recovery of monies representing unpaid minimum rent and additional rent for operating expense escalation and real estate tax equivalency escalation allegedly due under the provisions of the lease agreement in the amount of $25,595.14.

The second cause of action in the complaint is for recovery from defendant of all expenses incurred by plaintiff in recovering possession of the subject premises on October 2, 1991, pursuant to Article 16, Section 16.03 of the lease agreement, in the amount of $600, based upon Feuer's alleged failure to pay rent due and plaintiff's giving defendant a Notice of Default.

In its answer, Feuer asserts six affirmative defenses and one counterclaim. The affirmative defenses include allegations that plaintiff failed to provide the defendant with adequate ventilation for heat in the winter and cooling in the summer, and that as a result, the defendant is entitled to an abatement of rent in the period of January 1988 through the date of termination of the lease (First Affirmative Defense); and that as a result of the failure to provide said services, plaintiff has breached the covenant of quiet enjoyment (Fourth Affirmative Defense). The counterclaim alleges past overcharges by plaintiff for tax and operating expense escalation charges.

When a party has made a prima facie showing of entitlement to summary judgment, it is incumbent upon the opposing party to show by evidentiary facts that a defense exists which is real and can be established at trial (Indig v. Finkelstein, 23 NY2d 728; Speller v. Ryder Truck Rental, Inc., 47 AD2d 608). Here, plaintiff has established its right to the relief sought under the lease agreement which provided that defendant pay to plaintiff the sum of $33,768 as minimum rent; a portion of any increase in the real estate tax equivalency charges assessed against the premises; the costs and expenses incurred by plaintiff with respect to furnishing electricity to the subject premises, payable as minimum rent; and, a portion of any increase in the expenses incurred by plaintiff in connection with, inter alia, the ownership, operation and maintenance of the premises. In addition, plaintiff has established that it is entitled to recover expenses incurred in recovering possession of the premises, under Article 16.

Beyond mere conclusory allegations, defendant has failed to provide this court with evidence or specifics to support its claims that defendant breached covenants of the lease by failing to adequately ventilate, cool and heat the subject premises. Moreover, covenants in a lease are independent, rather than mutually dependent; thus, even assuming, arguendo, the breach of plaintiff's obligations under the lease, this would not provide a defense to defendant's obligations (S.E. Nichols, Inc. v. American Shopping Centers, Inc., 130 AD2d 855, appeal dismissed 70 NY2d 871). Likewise, the covenant to pay rent is independent of landlord's covenant of quiet enjoyment (Dave Herstein Co. v. Columbia Pictures Corp., 4 NY2d 117). Furthermore, the court notes that defendant has failed to allege the necessary elements for a breach of a covenant of quiet enjoyment; i.e., an eviction, actual or constructive, since it is conceded that defendant left the premises voluntarily (see, Finkelstein v. Johnson, 71 Misc 2d 1089).

That branch of plaintiff's motion which seeks summary judgment dismissing the counterclaim is based upon Article 16 of the lease agreement, which prohibits tenant's assertion of counterclaims in any action predicated on tenant's default in the payment of rent. The courts have consistently upheld this standard waiver of counterclaims clause in commercial leases (see, e.g., Randall Co. v. Alan Lobel Photography Inc., 120 Misc 2d 112). While courts have sometimes disregarded the waiver provision where the "counterclaim is intertwined with the landlord's claim," defendant's claim for overcharge does not meet this criteria (see, e.g., Rasch, New York Landlord and Tenant [3rd ed.], § 43:40 [1988]). Thus, the counterclaim is dismissed.

Finally, defendant's contention that it needs discovery as to the correct amount of damages is not a bar to plaintiff's motion for summary judgment on the issue of liability. Plaintiff is directed to comply with defendant's outstanding discovery requests on the issue of damages. The issue of damages is severed and referred to trial.

Accordingly, plaintiff's motion for partial summary judges as to liability on the first and second causes of action judgment is granted, and those causes of action are severed and may be set down for trial on damages after a note of issue has been filed. The defendants' counterclaim is dismissed.

This constitutes the order of this court.