622 Building Co. v. Cosi Sandwich Bar

(Sup. Ct. N.Y. Cty. 8/21/00)

We represented: Plaintiff

Jane S. Solomon, J.S.C.

DECISION and ORDER Upon the foregoing papers, it is ordered that this motion is decided as follows:

Respondent Xando Cosi, Inc. is the successor by merger to petitioner's tenant. The lease provides that the consent of petitioner to an assignment under 12.01 is not required if there is a merger provided that the successor is financially qualified (12.04 (i)) and proof thereof is given 10 days before the merger transaction's "effective date." Here, respondent"s predecessor failed only to give timely notice.

The lease permits subleasing with petitioner's consent and if there is a dispute about whether petitioner's denial of same is reasonable, the parties are to arbitrate that dispute.

The subject premises are empty never having been occupied by respondent. The Lease is dated July 16, 1998 for a 15-year term to commence upon completion of the petitioner's alteration of the building lobby. Petitioner learned of the merger of Oct. 19 when the successor requested permission to sublease to a stranger to the transaction in May 2000.

Then, when the intended Tenant never took occupancy, failed to honor every commitment it made to give notice of its corporate changes and proposed an independent sub-tenant, it cannot be said that its breach of the clear terms of the lease can be ignored or forgiven so as to permit the successor to arbitrate with petitioner under a lease it did not make, over the propriety of the petitioner's objection to the proposed sub-tenant.

Accordingly, petitioner is entitled to judgment staying the arbitration on the grounds that it has no agreement with respondent, and it is so ordered and adjudged.