Preview
FILED: NEW YORK COUNTY CLERK 10/23/2014 08:38 PM INDEX NO. 151330/2014
NYSCEF DOC. NO. 34 RECEIVED NYSCEF: 10/23/2014
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
DAVID L. ABRAMSON, M.D. and Index No. 151330/14
SCOT BRADLEY GLASBERG, M.D.,
Plaintiffs,
V.
74TH LLC and BEN HELLER,
Defendants.
PLAINTIFFS' MEMORANDUM OF LAW IN SUPPORT OF
THEIR MOTION FOR PARTIAL SUMMARY JUDGMENT
PRYOR CASHMAN LLP
7 Times Square
New York, New York 10036
(212) 421-4100
Attorneys for Plaintiffs.
Of Counsel:
Eric D. Sherman
Cecilia M. Orlando Stighetti
TABLE OF CONTENTS
TABLE OF AUTHORITIES ii
PRELIMINARY STATEMENT 1
RELEVANT FACTUAL BACKGROUND 4
A. The Lease Agreement 5
B. Landlord's Right to Terminate the Lease Prior to Its Expiration 5
C. Landlord Alleges Pretextual and False Defaults
and Simultaneously Exercises Early Termination 6
D. Landlord Serves the Offer Notice Concerning the Building 8
E. Landlord Serves Tenants with a Notice of Termination 8
F. Tenants Rely on the Notice of Termination 9
G. Landlord Purports to Withdraw the Notice of Termination 9
ARGUMENT 10
I. LEGAL STANDARD 10
II. PLAINTIFFS ARE ENTITLED TO SUMMARY
JUDGMENT ON THEIR FIRST CAUSE OF ACTION 11
A. The Lease Does Not Allow Landlord to Unilaterally
Withdraw the Notice of Termination of Lease 11
B. Further Supporting Tenants' Position Is
The Doctrine Of Expressio Unius Est Exclusio Alterius 12
C. Once A Valid Notice To Terminate Is Exercised,
The Party To Whom It Was Given May Rely Upon It; It
Cannot Be Withdrawn Without The Consent Of Both Parties 14
CONCLUSION 16
TABLE OF AUTHORITIES
CASES PAGE(s)
Alvarez v. Prospect Hospital,
68 N.Y.2d 320, 508 N.Y.S.2d 923 (1986) 10
Banco Esprito Santo, S.A. v. Concessionria Do Rodoanel Oeste S.A.,
100 A.D.3d 100, 951 N.Y.S.2d 19 (1st Dep't 2012) 13
Devonshire v. Langstaff,
10 Cal. App. 2d 369 (1935) 14, 15
Beacon Terminal Corp. v. Chemprene, Inc.,
75 A.D.2d 350, 429 N.Y.S.2d 715 (2d Dep't 1980) 15
East Port Excavation & Utilities Contractors, Inc. v. Stoneridge Homes, Inc.,
No. 000182-08, 2009 N.Y. Misc. LEXIS 4303 (Sup. Ct. Aug. 13, 2009) 15
Housing Authority of Portland v. Martini,
141 Ore. App. 1(1996) 14
Livbros L.L.C. v. Vandenburgh,
179 Misc. 2d 736, 686 N.Y.S.2d 275 (Civ. Ct. Kings Cty. 1999) 14
Ostrov v. Rozbruch,
91 A.D.3d 147, 936 N.Y.S.2d 31 (1st Dep't 2012) 10
Quadrant Structured Prods. Co. v. Vertin,
23 N.Y.3d 549 (2014) 12
Shapiro v. Childs,
222 Mo. App. 1126 (1929) 14
South Road Associates, LLC v. IBM,
4 N.Y.3d 272, 793 N.Y.S.2d 835 (2005) 12
Suffolk County Department of Social Services ex rel. Michael V. v. James M.,
83 N.Y.2d 178, 608 N.Y.S.2d 940 (1994) 10
Wallace v. 600 Partners Co.,
86 N.Y.2d 543, 634 N.Y.S.2d 669 (1995) 12
Western Union Tel. Co. v. Pennsylvania R. Co.,
120 F. 362 (C.C.D. Pa. 1903) 15
11
CASES PAGE(s)
Westmoreland Coal Co. v. Entech, Inc.,
100 N.Y.2d 352, 763 N.Y.S.2d 525 (2003) 12
Winegrad v. New York University Medical Ctr.,
64 N.Y.2d 851, 487 N.Y.S.2d 316 (1985) 10
Vermont Teddy Bear Co. v. 538 Madison Realty Co.,
1 N.Y.3d 470, 725 N.Y.S.2d 765 (2004) 12
STATUTES
CPLR 3212 1
111
Plaintiffs David L. Abramson, M.D. and Scot Bradley Glasberg, M.D. (collectively,
"Tenants" or "Plaintiffs") respectfully submit this memorandum of law in support of their
motion, pursuant to CPLR 3212, for an order: (i) granting Plaintiffs summary judgment on their
first cause of action for a declaratory judgment adjudging that Plaintiffs are entitled to a
declaration that (a) the Notice of Termination of Lease dated March 5, 2014 remains in full force
and effect; (b) Defendants Ben Heller and 74 th LLC (collectively, "Defendants" or "Landlord")
must pay Plaintiffs nine (9) times the monthly Base Rent as set forth in Article 61(C) of the
Lease at issue, upon Plaintiffs' vacatur of the Premises on December 31, 2014; (c) the
Withdrawal of Notice of Termination of Lease dated March 26, 2014 is null and void; (d)
Plaintiffs are not in default of their obligations under the Lease; and (ii) granting Plaintiffs such
other and further relief as the Court deems just and proper.
PRELIMINARY STATEMENT
Plaintiffs operate a medical practice out of commercially leased space in a brownstone
building located on Manhattan's Upper East Side owned by co-defendant 74" LLC. 1 Almost
from the inception of the subject commercial lease in 1999, Plaintiffs had many difficulties with
Landlord, one of which is the subject of this motion: Landlord's proper exercise of its right to
prematurely terminate the lease at issue in exchange for a contractually mandated fixed payment
to Tenants and then, after having served the requisite notice of termination of lease, Landlord's
unilateral attempt to withdraw the termination notice and deem it a nullity.
Pursuant to Section 61 of the lease, which was heavily negotiated by sophisticated parties
and their attorneys, if Landlord desires to terminate the Lease prior to its natural expiration,
Landlord must (i) provide written notice to Tenants at least six months prior to the termination
I Upon information and belief, in 2009, co-defendant Ben Heller transferred his entire ownership interest in the
Building to 74th LLC; consequently, 74th LLC evidently was Ben Heller's intended successor in interest as landlord
under the Lease.
date and (ii) pay to Tenants the Termination Fee upon vacatur; the Termination Fee amounts to
nine times the current monthly rent.
At around the time Landlord exercised its right to terminate the Lease in exchange for the
Termination Fee, Landlord began attempting to fabricate a series of pretextual allegations in an
attempt to put Tenants in technical default under the lease and accelerate all the rent due under
the Lease, thereby allowing Landlord to terminate the Lease without the required six-month
notice and without paying the Termination Fee. In accordance with that scheme, Landlord
served Tenants with a notice to cure that contained incorrect information in order to proceed with
the intended sale while avoiding payment of the Termination Fee to Tenants. Glasberg Aff.,
Exhibit "E."
In fact, in recently produced correspondence between Landlord and a potential buyer,
Landlord specifically advised that it was attempting to remove Tenants from the Building prior
to the end of the six month period because Landlord has "initiated proceedings" against tenants
that "if successful" would require Tenants to pay to Landlord the "entire rent due through April
2015":
As we have discussed, my client is in the process of attempting to remove the
medical tenants currently occupying the first floor (and a portion of the
basement) (...) Tenants has failed, however, to pay landlord the Additional Rent
due (25% of any increase over base property taxes and 25% of city water). As a
consequence, Landlord has initiated proceedings against tenant, which, if
successful in total, will require tenant to pay to landlord the entire rent due
through April 2015. Failing that payment, the lease will be declared null and
void and the tenant will undoubtedly seek relief in court where, this being a
commercial lease and the facts clear, landlord expects a favorable ruling before
the six month notice to vacate on sale period expires. (...) Of course, there is
a chance that the Court will allow tenant to remain in the Premises through
the lease termination date of April 15, 2015." [Glasberg Aff., Exhibit "F;"
emphasis added.]
2
In any event, after having received the notice to cure and subsequent notice of
termination (for default), Tenants commenced this action. With its incorrect notice to cure and
notice attempting to terminate the Lease having been proven false, Landlord ultimately withdrew
those notices, expressly admitting that it had used incorrect information. Glasberg Aff, Exhibit
With the pretextual, fabricated notice to cure and notice of termination having failed to
achieve its desired effect of avoiding payment of the Termination Fee, Landlord had no choice
but to continue with the exercise of its right to terminate the lease and to make that payment.
Thus, once the Offer Notice expired, Landlord served Tenants with the Notice of
Termination of the Lease dated March 5, 2014, indicating that the Lease would terminate on
September 10, 2014, which was six months after its service:
Please take notice that Owner proposes to sell the Premises to a third party. In
accordance with article 61(C) of the Lease, Owner hereby elects to terminate the
lease effective on September 10, 2014, such date being six (6) months following
the delivery of this notice. [Glasberg Aff., Exhibit "I"1.
And with the Notice of Termination of the Lease indicating that the Lease would
irrevocably terminate on September 10, 2014, Tenants immediately engaged a broker and began
an extensive search to lease new medical office space in Manhattan. Glasberg Aff., Exhibit "J".
Notwithstanding Landlord's service of the Notice of Termination of the Lease, however,
by notice dated March 26, 2014, Landlord improperly attempted to withdraw the Notice of
Termination, and with it, its obligation to pay the Termination Fee.
But the Lease does not afford Landlord the right to serve a notice cancelling Tenants'
leasehold interest and then turn around and unilaterally cancel that notice on a whim. It is not
what the parties bargained for under the Lease and it was done in bad faith, which underscores
the improper nature of Landlord's conduct.
3
Plaintiffs therefore ask the Court to recognize that Defendants withdrawal of the Notice
of Termination is improper as pursuant to the Lease and applicable case law, that Landlord is not
allowed to unilaterally withdraw the Notice of Termination once it makes the explicit election to
terminate the Lease.
In fact, when the parties contemplated that Landlord would be permitted to withdraw a
notice, the Lease expressly stated so, as Section 61(B) of the Lease expressly permits Landlord
to withdraw its decision to sell the building prior to service of the Notice of Termination. But
that right does not exist after the Notice of Termination has been served. And given that this is a
commercial lease, terms (and absence of terms) must be adhered to under New York law. And
courts have held that the notice to quit or terminate a lease may not be rescinded without the
receiving party's consent.
Landlord's victimization of Tenants and its erratic conduct in serving and then
withdrawing two separate notices has significantly prejudiced Tenants by forcing them to initiate
this action and spend time, effort and a substantial amount in attorneys' fees.
Accordingly, Plaintiffs should be granted summary judgment on the First Cause of
Action of Plaintiffs' First Amended Verified Complaint since Defendants had no basis
whatsoever to withdraw the Notice of Termination. Thus, the Withdrawal of Notice of
Termination should be declared defective and null, and the Lease shall irrevocably terminate on
December 31, 2014, which was Landlord's express election.
RELEVANT FACTUAL BACKGROUND
For a full recitation of the relevant facts, the Court is respectfully referred to the Affidavit
of Scot Bradley Glasberg, sworn to October 21, 2014. Following is a summary of those facts.
4
A. The Lease Agreement
On or about November 18, 1999, Tenants and Ben Heller, as "Owner," entered into a
written lease agreement for the rental of the Premises ("Lease) (Glasberg Aff., Exhibit "A").
Tenants leased the ground floor and a portion of the basement (Premises) in a brownstone
building known as and located at 42 East 74th Street, New York, New York (Building).
At the Premises, Tenants operate one of the tri-state area's most successful plastic
surgery practices.
The Lease consisted of an initial 10-year term that commenced on April 10, 2000, and
expired on March 31, 2010. Glasberg Aft, Exhibit "A". Pursuant to properly executed
extensions, the natural termination date of the Lease is March 31, 2015.
Under the Lease, the base rent increases 3% for each year of the Extended Lease Term.
(Exhibit "A", Articles 38, 61(A)) and presently totals $12,380 per month.
The Lease also requires Tenants to pay "additional rent" which, among other items,
includes a portion of the Building's real estate tax charges and water charges. Glasberg Aff. ,
Exhibit "A", Articles 40, 41(d)).
B. Landlord's Right to Terminate the Lease Prior to Its Expiration
The Lease provides that if Landlord desires to sell the Building during the term of the
Lease, Landlord must provide Tenants with written notice of any proposed sale prior to offering
the Building for sale to any third party (the "Offer Notice"). Glasberg Aff., Exhibit "A".
The Offer Notice must include the price and "other material terms and conditions" upon
which Landlord wishes to sell the Building:
In the event that at any time during the Term the named Owner shall desire to sell
the building, provided Tenant is not then in default hereunder beyond any
applicable notice and cure period, Owner shall give Tenant the first opportunity to
acquire the building in accordance with the terms of this Section 61(B). Prior to
offering the building for sale to any third party, Owner shall deliver written notice
5
to Tenants of its proposed sale of the building, which notice shall include the
price and other material terms and conditions on which Owner wishes to sell the
building (the "Offer Notice"). [Glasberg Aff., Exhibit "A". Article 61(B)]
If Landlord then desires to terminate the Lease prior to expiration, Landlord must (i)
provide written notice to Tenants at least six months prior to the termination date (the "Notice of
Termination") and (ii) pay to Tenants a termination payment in the amount of nine times the
current monthly rent (the "Termination Fee"), which must be paid on the specified early
termination date:
In the event that at any time during the term, Owner shall propose to sell the
building to a third party, (subject to Tenant's right to purchase the building from
the named Owner as provided in the preceding Paragraph), Owner shall have the
right to terminate this Lease effective as of the date that occurs six (6) months
following written notice to Tenant (the "Termination Date"). If Owner elects to
terminate this Lease as aforesaid, Owner shall pay Tenant a termination payment
equal to nine (9) times the monthly Base Rate payable during the Lease Year in
which the Termination Date shall occur. Such termination payment shall be
payable by bank check or certified check on the date that Tenant shall vacate the
Premises in accordance with Article 22 hereof. [Glasberg Aff., Exhibit "A".
Article 61(C))]
C. Landlord Alleges Pretextual and False Defaults
and Simultaneously Exercises Early Termination
As evidenced by real estate listings and the Offer Notice sent to Tenants, Landlord
desired to sell the Building.
As confirmed in subsequent correspondence with a potential purchaser (Glasberg Aff.,
Exhibit "F"), Landlord apparently desired to rid the Building of Tenants prior to such sale in
order to present an empty Building to any potential purchaser.
In order to proceed with the intended sale while avoiding payment of the Termination Fee
to Tenants, Landlord fabricated a pretextual set of circumstances in an attempt to put Tenants in
technical default under the Lease, thereby allowing. Landlord to terminate the Lease on a much
shorter timeline and without having to pay the Termination Fee. See Exhibit "D" and "E".
6
Specifically, Landlord alleged for the first time that Tenants suddenly owed allegedly
unpaid taxes for each year going back to 2009, even though Landlord had never before
complained that Tenants failed to make additional rent payments or demanded payment of such
amounts. Indeed, Landlord had admitted in writing that throughout the lease Tenants never failed
to make additional rent payments when they were due. See Exhibit "D".
Landlord made this allegation by letter dated November 11, 2013 ("November 11
Letter"), claiming that Tenants owed payment for 2013 real estate tax charges in the amount of
$13,250.00. Notably, in the same November 11 Letter, Landlord actually admitted that Tenants
had always paid their real estate tax charges for every other year under the Lease. Glasberg Aff.,
Exhibit "D."
On or about January 22, 2014, Landlord sent to Tenants the "Notice to Cure", which
stated the following:
Take notice that you are justly indebted to the Landlord of the above described
Premises in the amount of $47,327.47 representing Tenant's Tax Payment for the
years 2009, 2010, 2011, 2012 and 2013 and you are justly indebted to Landlord of
the above described Premises in the amount of $836,22, representing Tenant's
Water Payment for the years 2010, 2011, 2012 and 2013. You are required to pay
the total sum of $48,163.69 on or before the expiration of the three days from the
day of the service of this Notice, or surrender up the possession of said Premises
to the Landlord, in default of which the Landlord will terminate the Lease and
commence summary proceedings to recover the possession of the Premises."
[Glasberg Aff., Exhibit "E"].
Landlord followed up such "Notice to Cure" with the "Notice of Termination of Lease
and Acceleration of Rent", which purported to give Tenants notice that the Lease not only would
terminate in 5 days, but also purported to accelerate the entire rent due for the remainder of the
Lease (total amount of $ 172,607.20). Glasberg Aft, Exhibit "G".
7
D. Landlord Serves the Offer Notice Concerning the Building
As Landlord was making the foregoing improper demands through inaccurate notices, he
was also exercising his right under the Lease to terminate it prematurely in exchange for the
Termination Fee.
Hence, on or about November 27, 2013, Landlord delivered to Tenant a letter with the
subject line "Notice of First Opportunity to Acquire 42 East 74th Street (the "November 27
Notice"), which Landlord claimed was an official Offer Notice that would trigger Tenants' right
of first refusal pursuant to Article 61(B) of the Lease.
The "November 27 Notice" specifically provided, inter alia:
Please take notice that Owner desires to sell the building, in its existing physical
condition, for $ 17,600,000.00, all cash, Accordingly, this document constitutes
the Offer Notice referenced in the Lease Agreement. In the event that you elect to
purchase the building for the price and material terms set forth above, you must
proceed in strict accordance with all of terms and requirements of the Lease, time
being of the essence. [Glasberg Aff., Exhibit "C"].
Though the November 27 Notice arguably did not satisfy the requirements of Article
61(B) of the Lease as an official notice of sale under that provision, Landlord subsequently
clarified and addressed those apparent defects by letter by letter dated March 5, 2014, Landlord
clarified the issues raised by Plaintiffs in a way that left Plaintiffs satisfied that the notice was
compliant with Article 61(B) of the Lease. Glasberg Aff., Exhibit "H."
E. Landlord Serves Tenants with a Notice of Termination
In addition to the foregoing March 5, 2014 Letter, Landlord served also Tenants (on that
same day) with a "Notice of Termination of Lease" (the "Notice of Termination"), which
constituted Landlord's formal notice of termination of lease in accordance with Article 61(C) of
the Lease, by which Landlord elected to terminate the Lease effective September 10, 2014 (such
date being six (6) months following the date of the notice). Glasberg Aff., Exhibit "1."
8
Specifically, pursuant to the Notice of Termination, Landlord proposed to sell the
Building to a third party and elected to terminate the Lease:
In accordance with article 61(C) of the Lease, Owner hereby elects to terminate
the lease effective on September 10, 2014, such date being six (6) months
following the delivery of this notice.
Finally, on March 5, 2014, subsequent to the commencement of this action and after
Landlord was served with Tenants' Complaint, Landlord's attorney withdrew the "Notice to
Cure" and "Notice of Termination of Lease and Acceleration of Rent", expressly admitting that
it had used incorrect information when preparing such notices ("It is true that the Tax Statements
were prepared using incorrect information"). Glasberg Aff., Exhibit "H".
F. Tenants Rely on the Notice of Termination
After Landlord served Tenants with the Notice of Termination dated March 5, 2014,
Tenants commenced an extensive search for alternative medical office space pursuant to the
Notice of Termination.
Tenants relied on the Notice of Termination and acted upon it. With the Notice of
Termination of the Lease indicating that the lease would terminate on September 10, 2014,
Tenants engaged a broker and began their search to lease new medical office space in Manhattan.
Glasberg Aff., Exhibit "J."
During that search, Tenants inspected and evaluated the potential rental spaces located at
111 East 57th Street, 60 East 88th Street; 140 East 72nd Street, 30 East 72nd Street, 1095 Park
Avenue; 161 East 69th Street, 160 East 66th Street; 230 East 61st Street, amongst others.
Glasberg Aff., Exhibit "J."
G. Landlord Purports to Withdraw the Notice of Termination
On or about March 26, 2014, three weeks after serving its Notice of Termination,
Landlord improperly served Tenants with a "Withdrawal of Notice of Termination of Lease" (the
9
"Withdrawal of Termination of Lease") dated March 26, 2014, by which Landlord purported to
withdraw the Notice of Termination (presumably to avoid once again payment of the
Termination Fee). Glasberg Aff., Exhibit "K."
On or about May 11, 2014, and due to Landlord's improper attempt to withdraw the
Notice of Termination, Tenants served the First Amended Verified Complaint, which amended
its first cause of action for declaratory judgment, requesting the declaration that the Withdrawal
of Termination of Lease is defective, null and void. Sherman Aff., Exhibit "M".
ARGUMENT
I. LEGAL STANDARD
On a motion for summary judgment, the proponent "must make a prima facie showing of
entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any
material issues of fact from the case." Winegrad v. New York Univ. Med. Ctr., 64 N.Y.2d 851,
853, 487 N.Y.S.2d 316, 317 (1985) (citations omitted); Alvarez v. Prospect Hosp., 68 N.Y.2d
320, 324, 508 N.Y.S.2d 923, 925 (1986). Once the proponent has made this showing, the burden
of proof shifts to the party opposing the motion to produce evidentiary proof in admissible form
to establish that material issues of fact exist. Id. Where only questions of law remain, judgment
may be entered as a matter of law. See Ostrov v. Rozbruch, 91 A.D.3d 147, 152, 936 N.Y.S.2d
31, 34 (1st Dep't 2012) (summary judgment is "a valuable, practical tool for resolving cases that
involve only questions of law") (citation & quotations omitted); Suffolk County Dep't of Social
Services ex rel. Michael V. v. James M., 83 N.Y.2d 178, 182, 608 N.Y.S.2d 940, 941 (1994)
("summary judgment is a highly useful device for expediting the just disposition of a legal
dispute for all parties and conserving already overburdened judicial resources").
10
II. PLAINTIFFS ARE ENTITLED TO SUMMARY
JUDGMENT ON THEIR FIRST CAUSE OF ACTION
In their first cause of action, Plaintiffs seek a declaratory judgment adjudging in
substance that Landlord cannot withdraw the Notice of Termination and that it now must abide
by the path it expressly chose and pay to Plaintiffs the Termination Fee.
Here, there is no dispute that Landlord effectively served Tenants with the Notice of
Termination. Landlord's purported withdrawal of the Notice of Termination of Lease is contrary
to the Lease and contrary to principles of contract law; thus, the withdrawal ought to be deemed
a nullity.
A. The Lease Does Not Allow Landlord to Unilaterally
Withdraw the Notice of Termination of Lease
The lease at issue, a commercial lease, was extensively negotiated between sophisticated
parties and their counsel. Dispositive to this motion, the express, relevant terms of the Lease
simply do not contemplate or permit Landlord to withdraw the Notice of Termination:
"In the event that at any time during the term, Owner shall propose to sell the
building to a third party, (subject to Tenant's right to purchase the building from
the named Owner as provided in the preceding Paragraph), Owner shall have the
right to terminate this Lease effective as of the date that occurs six (6)
months following written notice to Tenant (the "Termination Date"). If
Owner elects to terminate this Lease as aforesaid, Owner shall pay Tenant a
termination payment equal to nine (9) times the monthly Base Rate payable
during the Lease year in which the Termination Date shall occur. Such
termination payment shall be payable by bank check or certified check on the date
that Tenant shall vacate the Premises in accordance with Article 22 hereof. On
the Termination Date, the Term shall expire in the manner and with the
same force and effect as if it where the date set for the expiration of this
Lease (...)." [Glasberg Aff, Ex. "A"] [emphasis added].
That should end the analysis. Moreover, well-settled New York law supports this
position, namely that a contract must be enforced according to the express terms of the
agreement: "[in] cases of contract interpretation, it is well settled that when parties set down their
11
agreement in a clear, complete document, their writing should . . . be enforced according to its
terms (Vermont Teddy Bear Co. v. 538 Madison Realty Co., 1 N.Y.3d 470, 475 [2004], quoting
W.W.W. Assoc. v. Giancontieri, 77 N.Y.2d 157, 162 [1990])." South Rd. Assocs., LLC v. IBM,
4 N.Y.3d 272, 277-78, 793 N.Y.S.2d 835, 838 (2005) (quotation omitted).
Courts have also repeatedly held that this principle is particularly important "'in the
context of real property transactions, where commercial certainty is a paramount concern, and
where . . . the instrument was negotiated between sophisticated, counseled business people
negotiating at arm's length'" Vermont Teddy Bear Co. v. 538 Madison Realty Co., 1 N.Y.3d 470,
475, 725 N.Y.S.2d 765, 768 (2004), quoting Wallace v. 600 Partners Co., 86 N.Y.2d 543, 548,
634 N.Y.S.2d 669, 671 (1995).
B. Further Supporting Tenants' Position Is
The Doctrine Of Exnressio Unius Est Exclusio Alterius
Independently dispositive to this motion is the additional fact that a related section of the
Lease permits Landlord to cancel the sale process, but the relevant section here does not. Thus,
the doctrine of expressio unius est exclusio alterius dispositively supports Plaintiffs' position
that the Notice of Termination may not be withdrawn.
Under New York law, a document must be read as a whole to ensure that excessive
emphasis is not placed upon particular words or phrases. See Westmoreland Coal Co. v. Entech,
Inc., 100 N.Y.2d 352, 358, 763 N.Y.S,2d 525, 528 (2003); South Rd. Assocs., LLC, 4 N.Y.3d at
277, 793 N.Y.S.2d at 838.
As the Court of Appeals reaffirmed just this year, if parties omit terms that are readily
found in other contractual provisions, the "inescapable conclusion is that the parties intended the
omission." Quadrant Structured Prods. Co. v, Vertin, 23 N.Y.3d 549, 560 (2014). "The maxim
expression unius est exclusio alterius, as used in the interpretation of contracts, supports
12
precisely this conclusion. Where sophisticated drafter omits a term, expressio unius precludes the
court from implying it from the general language of the agreement." Id.
Courts have in fact held repeatedly that a "fundamental rule of contract interpretation is
that agreements are construed in accord with the parties' intent, and [t]he best evidence of what
parties to a written agreement intend is what they say in their writing". Banco Espirito Santo,
S.A. v. Concessionaria Do Rodoanel Oeste S.A.,100 A.D.3d 100, 106, 951 N.Y.S.2d 19, 24 (1st
Dep't 2012) (citation & quotations omitted).
Here, the Lease provides that if Tenant waives its right to buy the Building by not
delivering written notice of its election to do so, Landlord is expressly afforded the right to
withdraw the Building from the market, prior to serving the Notice of Termination:
"... it being expressly understood that the foregoing option to purchase the
Building shall be a "one-time" option and that if Tenant shall waive its rights as
aforesaid, Owner shall be free to withdraw the building from the market or to
sell the building on any terms Owner sees fit." [Glasberg Aff., Exhibit "A",
Section 61(B)] [emphasis added].
However, in the section at issue, i.e., the section addressing termination of the Lease,
there is no language affording Landlord the right to withdraw the Notice of Termination (which
is quoted again here for ease of reference):
In the event that at any time during the term, Owner shall propose to sell the
building to a third party, (subject to Tenant's right to purchase the building from
the named Owner as provided in the preceding Paragraph), Owner shall have the
right to terminate this Lease effective as of the date that occurs six (6) months
following written notice to Tenant (the "Termination Date"). If Owner elects to
terminate this Lease as aforesaid, Owner shall pay Tenant a termination payment
equal to nine (9) times the monthly Base Rate payable during the Lease Year in
which the Termination Date shall occur. Such termination payment shall be
payable by bank check or certified check on the date that Tenant shall vacate the
Premises in accordance with Article 22 hereof. On the Termination Date, the
Term shall expire in the manner and with the same force and effect as if it were
the date set for the expiration of this Lease (...) [Glasberg Aff, Exhibit "A",
Section 61(C) of the Lease]
13
In sum, when the parties intended for Landlord to have the option of withdrawing a
notice, the Lease expressly stated so.
C. Once A Valid Notice To Terminate Is Exercised,
The Party To Whom It Was Given May Rely Upon It; It
Cannot Be Withdrawn Without The Consent Of Both Parties
Although there appears to be a dearth of case law in New York on this particular subject,
case law in other jurisdictions supports the proposition that when a valid notice to terminate is
given by a party, whether landlord or tenant, the party to whom it is given may rely upon it, and
it may not be withdrawn without the consent of both parties:
"When a valid notice to quit is given by landlord or tenant, the party to whom it is given
is entitled to count upon it, and it cannot be withdrawn without the consent of both parties"
Shapiro v. Childs, 222 Mo. App. 1126, 1132 (1929) (citations omitted); Housing Auth. of
Portland v. Martini, 141 Ore. App. 1 (1996).
In Livbros L.L.C. v. Vandenburgh, the court held that since tenant's election to terminate
the tenancy was explicit, such party could not simply retract its voluntary termination. 179 Misc.
2d 736, 686 N.Y.S.2d 275 (Civ. Ct. Kings Cty. 1999).
In Devonshire v. Langstaff, quoting a Supreme Court case, the California Court of
Appeal noted:
It will be observed that withdrawal of a notice to quit is not, like a waiver of
forfeiture, the act of one party but requires the assent of both and when such a
joint assent is given it creates a new tenancy. The question, then, whether there
was a waiver of a notice to quit, is one of intent on the part of both parties to the
tenancy. When a valid notice to quit is given by the landlord or tenant the party to
whom it is given is entitled to count upon it, and it cannot be withdrawn without
the consent of both parties. If such consent is given, there is a new agreement
between the parties and a new tenancy is created, which exists only under that
new agreement.
14
10 Cal. App. 2d 369, 374 (1935) (quoting Western -Union Tel. Co. v. Pennsylvania R. Co.,
120 F. 362 (C.C.D. Pa. 1903) (quotations omitted).
Finally, lease agreements cannot be modified except by mutual assent of both parties:
"Fundamental to the establishment of a contract modification is proof of each element requisite
to the formulation of a contract, including mutual assent to its terms." East Port Excavation &
Utilities Contractors, Inc. v. Stoneridge Homes, Inc., No. 000182-08, 2009 N.Y. Misc. LEXIS
4303, at *9 (Sup. Ct. Aug. 13, 2009); see also Beacon Terminal Corp. v. Chemprene, Inc., 75
A.D.2d 350, 354, 429 N.Y.S.2d 715, 718 (2d Dep't 1980) (likewise noting that "fflundamental to
the establishment of a contract modification is proof of each element requisite to the formulation
of a contract").
Here, it is undisputed that Tenants never consented to the withdrawal of the Notice of
Termination and that the parties never consented to a modification of the Lease.
In the end, once Tenants were served with the Notice of Termination, they reasonably
relied on the Landlord's communication and that the Lease would irrevocably terminate on
September 10, 2014. In fact, Tenants commenced a search for an alternative office space, and
engaged Wexler Healthcare Properties as their broker, which they have continued up to this date.
See Glasberg Aff., Exhibit "J."
Thus, Plaintiffs move for summary judgment as to their first cause of action for
declaratory judgment because, as the documentary evidence already produced by the parties
conclusively establishes, there is no dispute of any material facts as to the declaratory judgment
that Plaintiffs respectfully request.
15
CONCLUSION
For the reasons set forth herein, Plaintiffs respectfully request that this motion be granted
in its entirety and that the Court grant to Plaintiffs such other and further relief as the Court
deems just and proper.
Dated: New York, New York
October 23, 2014
PRYOR CASHMAN LLP
Attorneys for Plaintiffs
By:
Eric D. Sherman
Cecilia M. Orlando Stighetti
7 Times Square
New York, New York 10036
(212) 421-4100
16
Preview
FILED: NEW YORK COUNTY CLERK 10/23/2014 08:38 PM INDEX NO. 151330/2014 NYSCEF DOC. NO. 34 RECEIVED NYSCEF: 10/23/2014 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK DAVID L. ABRAMSON, M.D. and Index No. 151330/14 SCOT BRADLEY GLASBERG, M.D., Plaintiffs, V. 74TH LLC and BEN HELLER, Defendants. PLAINTIFFS' MEMORANDUM OF LAW IN SUPPORT OF THEIR MOTION FOR PARTIAL SUMMARY JUDGMENT PRYOR CASHMAN LLP 7 Times Square New York, New York 10036 (212) 421-4100 Attorneys for Plaintiffs. Of Counsel: Eric D. Sherman Cecilia M. Orlando Stighetti TABLE OF CONTENTS TABLE OF AUTHORITIES ii PRELIMINARY STATEMENT 1 RELEVANT FACTUAL BACKGROUND 4 A. The Lease Agreement 5 B. Landlord's Right to Terminate the Lease Prior to Its Expiration 5 C. Landlord Alleges Pretextual and False Defaults and Simultaneously Exercises Early Termination 6 D. Landlord Serves the Offer Notice Concerning the Building 8 E. Landlord Serves Tenants with a Notice of Termination 8 F. Tenants Rely on the Notice of Termination 9 G. Landlord Purports to Withdraw the Notice of Termination 9 ARGUMENT 10 I. LEGAL STANDARD 10 II. PLAINTIFFS ARE ENTITLED TO SUMMARY JUDGMENT ON THEIR FIRST CAUSE OF ACTION 11 A. The Lease Does Not Allow Landlord to Unilaterally Withdraw the Notice of Termination of Lease 11 B. Further Supporting Tenants' Position Is The Doctrine Of Expressio Unius Est Exclusio Alterius 12 C. Once A Valid Notice To Terminate Is Exercised, The Party To Whom It Was Given May Rely Upon It; It Cannot Be Withdrawn Without The Consent Of Both Parties 14 CONCLUSION 16 TABLE OF AUTHORITIES CASES PAGE(s) Alvarez v. Prospect Hospital, 68 N.Y.2d 320, 508 N.Y.S.2d 923 (1986) 10 Banco Esprito Santo, S.A. v. Concessionria Do Rodoanel Oeste S.A., 100 A.D.3d 100, 951 N.Y.S.2d 19 (1st Dep't 2012) 13 Devonshire v. Langstaff, 10 Cal. App. 2d 369 (1935) 14, 15 Beacon Terminal Corp. v. Chemprene, Inc., 75 A.D.2d 350, 429 N.Y.S.2d 715 (2d Dep't 1980) 15 East Port Excavation & Utilities Contractors, Inc. v. Stoneridge Homes, Inc., No. 000182-08, 2009 N.Y. Misc. LEXIS 4303 (Sup. Ct. Aug. 13, 2009) 15 Housing Authority of Portland v. Martini, 141 Ore. App. 1(1996) 14 Livbros L.L.C. v. Vandenburgh, 179 Misc. 2d 736, 686 N.Y.S.2d 275 (Civ. Ct. Kings Cty. 1999) 14 Ostrov v. Rozbruch, 91 A.D.3d 147, 936 N.Y.S.2d 31 (1st Dep't 2012) 10 Quadrant Structured Prods. Co. v. Vertin, 23 N.Y.3d 549 (2014) 12 Shapiro v. Childs, 222 Mo. App. 1126 (1929) 14 South Road Associates, LLC v. IBM, 4 N.Y.3d 272, 793 N.Y.S.2d 835 (2005) 12 Suffolk County Department of Social Services ex rel. Michael V. v. James M., 83 N.Y.2d 178, 608 N.Y.S.2d 940 (1994) 10 Wallace v. 600 Partners Co., 86 N.Y.2d 543, 634 N.Y.S.2d 669 (1995) 12 Western Union Tel. Co. v. Pennsylvania R. Co., 120 F. 362 (C.C.D. Pa. 1903) 15 11 CASES PAGE(s) Westmoreland Coal Co. v. Entech, Inc., 100 N.Y.2d 352, 763 N.Y.S.2d 525 (2003) 12 Winegrad v. New York University Medical Ctr., 64 N.Y.2d 851, 487 N.Y.S.2d 316 (1985) 10 Vermont Teddy Bear Co. v. 538 Madison Realty Co., 1 N.Y.3d 470, 725 N.Y.S.2d 765 (2004) 12 STATUTES CPLR 3212 1 111 Plaintiffs David L. Abramson, M.D. and Scot Bradley Glasberg, M.D. (collectively, "Tenants" or "Plaintiffs") respectfully submit this memorandum of law in support of their motion, pursuant to CPLR 3212, for an order: (i) granting Plaintiffs summary judgment on their first cause of action for a declaratory judgment adjudging that Plaintiffs are entitled to a declaration that (a) the Notice of Termination of Lease dated March 5, 2014 remains in full force and effect; (b) Defendants Ben Heller and 74 th LLC (collectively, "Defendants" or "Landlord") must pay Plaintiffs nine (9) times the monthly Base Rent as set forth in Article 61(C) of the Lease at issue, upon Plaintiffs' vacatur of the Premises on December 31, 2014; (c) the Withdrawal of Notice of Termination of Lease dated March 26, 2014 is null and void; (d) Plaintiffs are not in default of their obligations under the Lease; and (ii) granting Plaintiffs such other and further relief as the Court deems just and proper. PRELIMINARY STATEMENT Plaintiffs operate a medical practice out of commercially leased space in a brownstone building located on Manhattan's Upper East Side owned by co-defendant 74" LLC. 1 Almost from the inception of the subject commercial lease in 1999, Plaintiffs had many difficulties with Landlord, one of which is the subject of this motion: Landlord's proper exercise of its right to prematurely terminate the lease at issue in exchange for a contractually mandated fixed payment to Tenants and then, after having served the requisite notice of termination of lease, Landlord's unilateral attempt to withdraw the termination notice and deem it a nullity. Pursuant to Section 61 of the lease, which was heavily negotiated by sophisticated parties and their attorneys, if Landlord desires to terminate the Lease prior to its natural expiration, Landlord must (i) provide written notice to Tenants at least six months prior to the termination I Upon information and belief, in 2009, co-defendant Ben Heller transferred his entire ownership interest in the Building to 74th LLC; consequently, 74th LLC evidently was Ben Heller's intended successor in interest as landlord under the Lease. date and (ii) pay to Tenants the Termination Fee upon vacatur; the Termination Fee amounts to nine times the current monthly rent. At around the time Landlord exercised its right to terminate the Lease in exchange for the Termination Fee, Landlord began attempting to fabricate a series of pretextual allegations in an attempt to put Tenants in technical default under the lease and accelerate all the rent due under the Lease, thereby allowing Landlord to terminate the Lease without the required six-month notice and without paying the Termination Fee. In accordance with that scheme, Landlord served Tenants with a notice to cure that contained incorrect information in order to proceed with the intended sale while avoiding payment of the Termination Fee to Tenants. Glasberg Aff., Exhibit "E." In fact, in recently produced correspondence between Landlord and a potential buyer, Landlord specifically advised that it was attempting to remove Tenants from the Building prior to the end of the six month period because Landlord has "initiated proceedings" against tenants that "if successful" would require Tenants to pay to Landlord the "entire rent due through April 2015": As we have discussed, my client is in the process of attempting to remove the medical tenants currently occupying the first floor (and a portion of the basement) (...) Tenants has failed, however, to pay landlord the Additional Rent due (25% of any increase over base property taxes and 25% of city water). As a consequence, Landlord has initiated proceedings against tenant, which, if successful in total, will require tenant to pay to landlord the entire rent due through April 2015. Failing that payment, the lease will be declared null and void and the tenant will undoubtedly seek relief in court where, this being a commercial lease and the facts clear, landlord expects a favorable ruling before the six month notice to vacate on sale period expires. (...) Of course, there is a chance that the Court will allow tenant to remain in the Premises through the lease termination date of April 15, 2015." [Glasberg Aff., Exhibit "F;" emphasis added.] 2 In any event, after having received the notice to cure and subsequent notice of termination (for default), Tenants commenced this action. With its incorrect notice to cure and notice attempting to terminate the Lease having been proven false, Landlord ultimately withdrew those notices, expressly admitting that it had used incorrect information. Glasberg Aff, Exhibit With the pretextual, fabricated notice to cure and notice of termination having failed to achieve its desired effect of avoiding payment of the Termination Fee, Landlord had no choice but to continue with the exercise of its right to terminate the lease and to make that payment. Thus, once the Offer Notice expired, Landlord served Tenants with the Notice of Termination of the Lease dated March 5, 2014, indicating that the Lease would terminate on September 10, 2014, which was six months after its service: Please take notice that Owner proposes to sell the Premises to a third party. In accordance with article 61(C) of the Lease, Owner hereby elects to terminate the lease effective on September 10, 2014, such date being six (6) months following the delivery of this notice. [Glasberg Aff., Exhibit "I"1. And with the Notice of Termination of the Lease indicating that the Lease would irrevocably terminate on September 10, 2014, Tenants immediately engaged a broker and began an extensive search to lease new medical office space in Manhattan. Glasberg Aff., Exhibit "J". Notwithstanding Landlord's service of the Notice of Termination of the Lease, however, by notice dated March 26, 2014, Landlord improperly attempted to withdraw the Notice of Termination, and with it, its obligation to pay the Termination Fee. But the Lease does not afford Landlord the right to serve a notice cancelling Tenants' leasehold interest and then turn around and unilaterally cancel that notice on a whim. It is not what the parties bargained for under the Lease and it was done in bad faith, which underscores the improper nature of Landlord's conduct. 3 Plaintiffs therefore ask the Court to recognize that Defendants withdrawal of the Notice of Termination is improper as pursuant to the Lease and applicable case law, that Landlord is not allowed to unilaterally withdraw the Notice of Termination once it makes the explicit election to terminate the Lease. In fact, when the parties contemplated that Landlord would be permitted to withdraw a notice, the Lease expressly stated so, as Section 61(B) of the Lease expressly permits Landlord to withdraw its decision to sell the building prior to service of the Notice of Termination. But that right does not exist after the Notice of Termination has been served. And given that this is a commercial lease, terms (and absence of terms) must be adhered to under New York law. And courts have held that the notice to quit or terminate a lease may not be rescinded without the receiving party's consent. Landlord's victimization of Tenants and its erratic conduct in serving and then withdrawing two separate notices has significantly prejudiced Tenants by forcing them to initiate this action and spend time, effort and a substantial amount in attorneys' fees. Accordingly, Plaintiffs should be granted summary judgment on the First Cause of Action of Plaintiffs' First Amended Verified Complaint since Defendants had no basis whatsoever to withdraw the Notice of Termination. Thus, the Withdrawal of Notice of Termination should be declared defective and null, and the Lease shall irrevocably terminate on December 31, 2014, which was Landlord's express election. RELEVANT FACTUAL BACKGROUND For a full recitation of the relevant facts, the Court is respectfully referred to the Affidavit of Scot Bradley Glasberg, sworn to October 21, 2014. Following is a summary of those facts. 4 A. The Lease Agreement On or about November 18, 1999, Tenants and Ben Heller, as "Owner," entered into a written lease agreement for the rental of the Premises ("Lease) (Glasberg Aff., Exhibit "A"). Tenants leased the ground floor and a portion of the basement (Premises) in a brownstone building known as and located at 42 East 74th Street, New York, New York (Building). At the Premises, Tenants operate one of the tri-state area's most successful plastic surgery practices. The Lease consisted of an initial 10-year term that commenced on April 10, 2000, and expired on March 31, 2010. Glasberg Aft, Exhibit "A". Pursuant to properly executed extensions, the natural termination date of the Lease is March 31, 2015. Under the Lease, the base rent increases 3% for each year of the Extended Lease Term. (Exhibit "A", Articles 38, 61(A)) and presently totals $12,380 per month. The Lease also requires Tenants to pay "additional rent" which, among other items, includes a portion of the Building's real estate tax charges and water charges. Glasberg Aff. , Exhibit "A", Articles 40, 41(d)). B. Landlord's Right to Terminate the Lease Prior to Its Expiration The Lease provides that if Landlord desires to sell the Building during the term of the Lease, Landlord must provide Tenants with written notice of any proposed sale prior to offering the Building for sale to any third party (the "Offer Notice"). Glasberg Aff., Exhibit "A". The Offer Notice must include the price and "other material terms and conditions" upon which Landlord wishes to sell the Building: In the event that at any time during the Term the named Owner shall desire to sell the building, provided Tenant is not then in default hereunder beyond any applicable notice and cure period, Owner shall give Tenant the first opportunity to acquire the building in accordance with the terms of this Section 61(B). Prior to offering the building for sale to any third party, Owner shall deliver written notice 5 to Tenants of its proposed sale of the building, which notice shall include the price and other material terms and conditions on which Owner wishes to sell the building (the "Offer Notice"). [Glasberg Aff., Exhibit "A". Article 61(B)] If Landlord then desires to terminate the Lease prior to expiration, Landlord must (i) provide written notice to Tenants at least six months prior to the termination date (the "Notice of Termination") and (ii) pay to Tenants a termination payment in the amount of nine times the current monthly rent (the "Termination Fee"), which must be paid on the specified early termination date: In the event that at any time during the term, Owner shall propose to sell the building to a third party, (subject to Tenant's right to purchase the building from the named Owner as provided in the preceding Paragraph), Owner shall have the right to terminate this Lease effective as of the date that occurs six (6) months following written notice to Tenant (the "Termination Date"). If Owner elects to terminate this Lease as aforesaid, Owner shall pay Tenant a termination payment equal to nine (9) times the monthly Base Rate payable during the Lease Year in which the Termination Date shall occur. Such termination payment shall be payable by bank check or certified check on the date that Tenant shall vacate the Premises in accordance with Article 22 hereof. [Glasberg Aff., Exhibit "A". Article 61(C))] C. Landlord Alleges Pretextual and False Defaults and Simultaneously Exercises Early Termination As evidenced by real estate listings and the Offer Notice sent to Tenants, Landlord desired to sell the Building. As confirmed in subsequent correspondence with a potential purchaser (Glasberg Aff., Exhibit "F"), Landlord apparently desired to rid the Building of Tenants prior to such sale in order to present an empty Building to any potential purchaser. In order to proceed with the intended sale while avoiding payment of the Termination Fee to Tenants, Landlord fabricated a pretextual set of circumstances in an attempt to put Tenants in technical default under the Lease, thereby allowing. Landlord to terminate the Lease on a much shorter timeline and without having to pay the Termination Fee. See Exhibit "D" and "E". 6 Specifically, Landlord alleged for the first time that Tenants suddenly owed allegedly unpaid taxes for each year going back to 2009, even though Landlord had never before complained that Tenants failed to make additional rent payments or demanded payment of such amounts. Indeed, Landlord had admitted in writing that throughout the lease Tenants never failed to make additional rent payments when they were due. See Exhibit "D". Landlord made this allegation by letter dated November 11, 2013 ("November 11 Letter"), claiming that Tenants owed payment for 2013 real estate tax charges in the amount of $13,250.00. Notably, in the same November 11 Letter, Landlord actually admitted that Tenants had always paid their real estate tax charges for every other year under the Lease. Glasberg Aff., Exhibit "D." On or about January 22, 2014, Landlord sent to Tenants the "Notice to Cure", which stated the following: Take notice that you are justly indebted to the Landlord of the above described Premises in the amount of $47,327.47 representing Tenant's Tax Payment for the years 2009, 2010, 2011, 2012 and 2013 and you are justly indebted to Landlord of the above described Premises in the amount of $836,22, representing Tenant's Water Payment for the years 2010, 2011, 2012 and 2013. You are required to pay the total sum of $48,163.69 on or before the expiration of the three days from the day of the service of this Notice, or surrender up the possession of said Premises to the Landlord, in default of which the Landlord will terminate the Lease and commence summary proceedings to recover the possession of the Premises." [Glasberg Aff., Exhibit "E"]. Landlord followed up such "Notice to Cure" with the "Notice of Termination of Lease and Acceleration of Rent", which purported to give Tenants notice that the Lease not only would terminate in 5 days, but also purported to accelerate the entire rent due for the remainder of the Lease (total amount of $ 172,607.20). Glasberg Aft, Exhibit "G". 7 D. Landlord Serves the Offer Notice Concerning the Building As Landlord was making the foregoing improper demands through inaccurate notices, he was also exercising his right under the Lease to terminate it prematurely in exchange for the Termination Fee. Hence, on or about November 27, 2013, Landlord delivered to Tenant a letter with the subject line "Notice of First Opportunity to Acquire 42 East 74th Street (the "November 27 Notice"), which Landlord claimed was an official Offer Notice that would trigger Tenants' right of first refusal pursuant to Article 61(B) of the Lease. The "November 27 Notice" specifically provided, inter alia: Please take notice that Owner desires to sell the building, in its existing physical condition, for $ 17,600,000.00, all cash, Accordingly, this document constitutes the Offer Notice referenced in the Lease Agreement. In the event that you elect to purchase the building for the price and material terms set forth above, you must proceed in strict accordance with all of terms and requirements of the Lease, time being of the essence. [Glasberg Aff., Exhibit "C"]. Though the November 27 Notice arguably did not satisfy the requirements of Article 61(B) of the Lease as an official notice of sale under that provision, Landlord subsequently clarified and addressed those apparent defects by letter by letter dated March 5, 2014, Landlord clarified the issues raised by Plaintiffs in a way that left Plaintiffs satisfied that the notice was compliant with Article 61(B) of the Lease. Glasberg Aff., Exhibit "H." E. Landlord Serves Tenants with a Notice of Termination In addition to the foregoing March 5, 2014 Letter, Landlord served also Tenants (on that same day) with a "Notice of Termination of Lease" (the "Notice of Termination"), which constituted Landlord's formal notice of termination of lease in accordance with Article 61(C) of the Lease, by which Landlord elected to terminate the Lease effective September 10, 2014 (such date being six (6) months following the date of the notice). Glasberg Aff., Exhibit "1." 8 Specifically, pursuant to the Notice of Termination, Landlord proposed to sell the Building to a third party and elected to terminate the Lease: In accordance with article 61(C) of the Lease, Owner hereby elects to terminate the lease effective on September 10, 2014, such date being six (6) months following the delivery of this notice. Finally, on March 5, 2014, subsequent to the commencement of this action and after Landlord was served with Tenants' Complaint, Landlord's attorney withdrew the "Notice to Cure" and "Notice of Termination of Lease and Acceleration of Rent", expressly admitting that it had used incorrect information when preparing such notices ("It is true that the Tax Statements were prepared using incorrect information"). Glasberg Aff., Exhibit "H". F. Tenants Rely on the Notice of Termination After Landlord served Tenants with the Notice of Termination dated March 5, 2014, Tenants commenced an extensive search for alternative medical office space pursuant to the Notice of Termination. Tenants relied on the Notice of Termination and acted upon it. With the Notice of Termination of the Lease indicating that the lease would terminate on September 10, 2014, Tenants engaged a broker and began their search to lease new medical office space in Manhattan. Glasberg Aff., Exhibit "J." During that search, Tenants inspected and evaluated the potential rental spaces located at 111 East 57th Street, 60 East 88th Street; 140 East 72nd Street, 30 East 72nd Street, 1095 Park Avenue; 161 East 69th Street, 160 East 66th Street; 230 East 61st Street, amongst others. Glasberg Aff., Exhibit "J." G. Landlord Purports to Withdraw the Notice of Termination On or about March 26, 2014, three weeks after serving its Notice of Termination, Landlord improperly served Tenants with a "Withdrawal of Notice of Termination of Lease" (the 9 "Withdrawal of Termination of Lease") dated March 26, 2014, by which Landlord purported to withdraw the Notice of Termination (presumably to avoid once again payment of the Termination Fee). Glasberg Aff., Exhibit "K." On or about May 11, 2014, and due to Landlord's improper attempt to withdraw the Notice of Termination, Tenants served the First Amended Verified Complaint, which amended its first cause of action for declaratory judgment, requesting the declaration that the Withdrawal of Termination of Lease is defective, null and void. Sherman Aff., Exhibit "M". ARGUMENT I. LEGAL STANDARD On a motion for summary judgment, the proponent "must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case." Winegrad v. New York Univ. Med. Ctr., 64 N.Y.2d 851, 853, 487 N.Y.S.2d 316, 317 (1985) (citations omitted); Alvarez v. Prospect Hosp., 68 N.Y.2d 320, 324, 508 N.Y.S.2d 923, 925 (1986). Once the proponent has made this showing, the burden of proof shifts to the party opposing the motion to produce evidentiary proof in admissible form to establish that material issues of fact exist. Id. Where only questions of law remain, judgment may be entered as a matter of law. See Ostrov v. Rozbruch, 91 A.D.3d 147, 152, 936 N.Y.S.2d 31, 34 (1st Dep't 2012) (summary judgment is "a valuable, practical tool for resolving cases that involve only questions of law") (citation & quotations omitted); Suffolk County Dep't of Social Services ex rel. Michael V. v. James M., 83 N.Y.2d 178, 182, 608 N.Y.S.2d 940, 941 (1994) ("summary judgment is a highly useful device for expediting the just disposition of a legal dispute for all parties and conserving already overburdened judicial resources"). 10 II. PLAINTIFFS ARE ENTITLED TO SUMMARY JUDGMENT ON THEIR FIRST CAUSE OF ACTION In their first cause of action, Plaintiffs seek a declaratory judgment adjudging in substance that Landlord cannot withdraw the Notice of Termination and that it now must abide by the path it expressly chose and pay to Plaintiffs the Termination Fee. Here, there is no dispute that Landlord effectively served Tenants with the Notice of Termination. Landlord's purported withdrawal of the Notice of Termination of Lease is contrary to the Lease and contrary to principles of contract law; thus, the withdrawal ought to be deemed a nullity. A. The Lease Does Not Allow Landlord to Unilaterally Withdraw the Notice of Termination of Lease The lease at issue, a commercial lease, was extensively negotiated between sophisticated parties and their counsel. Dispositive to this motion, the express, relevant terms of the Lease simply do not contemplate or permit Landlord to withdraw the Notice of Termination: "In the event that at any time during the term, Owner shall propose to sell the building to a third party, (subject to Tenant's right to purchase the building from the named Owner as provided in the preceding Paragraph), Owner shall have the right to terminate this Lease effective as of the date that occurs six (6) months following written notice to Tenant (the "Termination Date"). If Owner elects to terminate this Lease as aforesaid, Owner shall pay Tenant a termination payment equal to nine (9) times the monthly Base Rate payable during the Lease year in which the Termination Date shall occur. Such termination payment shall be payable by bank check or certified check on the date that Tenant shall vacate the Premises in accordance with Article 22 hereof. On the Termination Date, the Term shall expire in the manner and with the same force and effect as if it where the date set for the expiration of this Lease (...)." [Glasberg Aff, Ex. "A"] [emphasis added]. That should end the analysis. Moreover, well-settled New York law supports this position, namely that a contract must be enforced according to the express terms of the agreement: "[in] cases of contract interpretation, it is well settled that when parties set down their 11 agreement in a clear, complete document, their writing should . . . be enforced according to its terms (Vermont Teddy Bear Co. v. 538 Madison Realty Co., 1 N.Y.3d 470, 475 [2004], quoting W.W.W. Assoc. v. Giancontieri, 77 N.Y.2d 157, 162 [1990])." South Rd. Assocs., LLC v. IBM, 4 N.Y.3d 272, 277-78, 793 N.Y.S.2d 835, 838 (2005) (quotation omitted). Courts have also repeatedly held that this principle is particularly important "'in the context of real property transactions, where commercial certainty is a paramount concern, and where . . . the instrument was negotiated between sophisticated, counseled business people negotiating at arm's length'" Vermont Teddy Bear Co. v. 538 Madison Realty Co., 1 N.Y.3d 470, 475, 725 N.Y.S.2d 765, 768 (2004), quoting Wallace v. 600 Partners Co., 86 N.Y.2d 543, 548, 634 N.Y.S.2d 669, 671 (1995). B. Further Supporting Tenants' Position Is The Doctrine Of Exnressio Unius Est Exclusio Alterius Independently dispositive to this motion is the additional fact that a related section of the Lease permits Landlord to cancel the sale process, but the relevant section here does not. Thus, the doctrine of expressio unius est exclusio alterius dispositively supports Plaintiffs' position that the Notice of Termination may not be withdrawn. Under New York law, a document must be read as a whole to ensure that excessive emphasis is not placed upon particular words or phrases. See Westmoreland Coal Co. v. Entech, Inc., 100 N.Y.2d 352, 358, 763 N.Y.S,2d 525, 528 (2003); South Rd. Assocs., LLC, 4 N.Y.3d at 277, 793 N.Y.S.2d at 838. As the Court of Appeals reaffirmed just this year, if parties omit terms that are readily found in other contractual provisions, the "inescapable conclusion is that the parties intended the omission." Quadrant Structured Prods. Co. v, Vertin, 23 N.Y.3d 549, 560 (2014). "The maxim expression unius est exclusio alterius, as used in the interpretation of contracts, supports 12 precisely this conclusion. Where sophisticated drafter omits a term, expressio unius precludes the court from implying it from the general language of the agreement." Id. Courts have in fact held repeatedly that a "fundamental rule of contract interpretation is that agreements are construed in accord with the parties' intent, and [t]he best evidence of what parties to a written agreement intend is what they say in their writing". Banco Espirito Santo, S.A. v. Concessionaria Do Rodoanel Oeste S.A.,100 A.D.3d 100, 106, 951 N.Y.S.2d 19, 24 (1st Dep't 2012) (citation & quotations omitted). Here, the Lease provides that if Tenant waives its right to buy the Building by not delivering written notice of its election to do so, Landlord is expressly afforded the right to withdraw the Building from the market, prior to serving the Notice of Termination: "... it being expressly understood that the foregoing option to purchase the Building shall be a "one-time" option and that if Tenant shall waive its rights as aforesaid, Owner shall be free to withdraw the building from the market or to sell the building on any terms Owner sees fit." [Glasberg Aff., Exhibit "A", Section 61(B)] [emphasis added]. However, in the section at issue, i.e., the section addressing termination of the Lease, there is no language affording Landlord the right to withdraw the Notice of Termination (which is quoted again here for ease of reference): In the event that at any time during the term, Owner shall propose to sell the building to a third party, (subject to Tenant's right to purchase the building from the named Owner as provided in the preceding Paragraph), Owner shall have the right to terminate this Lease effective as of the date that occurs six (6) months following written notice to Tenant (the "Termination Date"). If Owner elects to terminate this Lease as aforesaid, Owner shall pay Tenant a termination payment equal to nine (9) times the monthly Base Rate payable during the Lease Year in which the Termination Date shall occur. Such termination payment shall be payable by bank check or certified check on the date that Tenant shall vacate the Premises in accordance with Article 22 hereof. On the Termination Date, the Term shall expire in the manner and with the same force and effect as if it were the date set for the expiration of this Lease (...) [Glasberg Aff, Exhibit "A", Section 61(C) of the Lease] 13 In sum, when the parties intended for Landlord to have the option of withdrawing a notice, the Lease expressly stated so. C. Once A Valid Notice To Terminate Is Exercised, The Party To Whom It Was Given May Rely Upon It; It Cannot Be Withdrawn Without The Consent Of Both Parties Although there appears to be a dearth of case law in New York on this particular subject, case law in other jurisdictions supports the proposition that when a valid notice to terminate is given by a party, whether landlord or tenant, the party to whom it is given may rely upon it, and it may not be withdrawn without the consent of both parties: "When a valid notice to quit is given by landlord or tenant, the party to whom it is given is entitled to count upon it, and it cannot be withdrawn without the consent of both parties" Shapiro v. Childs, 222 Mo. App. 1126, 1132 (1929) (citations omitted); Housing Auth. of Portland v. Martini, 141 Ore. App. 1 (1996). In Livbros L.L.C. v. Vandenburgh, the court held that since tenant's election to terminate the tenancy was explicit, such party could not simply retract its voluntary termination. 179 Misc. 2d 736, 686 N.Y.S.2d 275 (Civ. Ct. Kings Cty. 1999). In Devonshire v. Langstaff, quoting a Supreme Court case, the California Court of Appeal noted: It will be observed that withdrawal of a notice to quit is not, like a waiver of forfeiture, the act of one party but requires the assent of both and when such a joint assent is given it creates a new tenancy. The question, then, whether there was a waiver of a notice to quit, is one of intent on the part of both parties to the tenancy. When a valid notice to quit is given by the landlord or tenant the party to whom it is given is entitled to count upon it, and it cannot be withdrawn without the consent of both parties. If such consent is given, there is a new agreement between the parties and a new tenancy is created, which exists only under that new agreement. 14 10 Cal. App. 2d 369, 374 (1935) (quoting Western -Union Tel. Co. v. Pennsylvania R. Co., 120 F. 362 (C.C.D. Pa. 1903) (quotations omitted). Finally, lease agreements cannot be modified except by mutual assent of both parties: "Fundamental to the establishment of a contract modification is proof of each element requisite to the formulation of a contract, including mutual assent to its terms." East Port Excavation & Utilities Contractors, Inc. v. Stoneridge Homes, Inc., No. 000182-08, 2009 N.Y. Misc. LEXIS 4303, at *9 (Sup. Ct. Aug. 13, 2009); see also Beacon Terminal Corp. v. Chemprene, Inc., 75 A.D.2d 350, 354, 429 N.Y.S.2d 715, 718 (2d Dep't 1980) (likewise noting that "fflundamental to the establishment of a contract modification is proof of each element requisite to the formulation of a contract"). Here, it is undisputed that Tenants never consented to the withdrawal of the Notice of Termination and that the parties never consented to a modification of the Lease. In the end, once Tenants were served with the Notice of Termination, they reasonably relied on the Landlord's communication and that the Lease would irrevocably terminate on September 10, 2014. In fact, Tenants commenced a search for an alternative office space, and engaged Wexler Healthcare Properties as their broker, which they have continued up to this date. See Glasberg Aff., Exhibit "J." Thus, Plaintiffs move for summary judgment as to their first cause of action for declaratory judgment because, as the documentary evidence already produced by the parties conclusively establishes, there is no dispute of any material facts as to the declaratory judgment that Plaintiffs respectfully request. 15 CONCLUSION For the reasons set forth herein, Plaintiffs respectfully request that this motion be granted in its entirety and that the Court grant to Plaintiffs such other and further relief as the Court deems just and proper. Dated: New York, New York October 23, 2014 PRYOR CASHMAN LLP Attorneys for Plaintiffs By: Eric D. Sherman Cecilia M. Orlando Stighetti 7 Times Square New York, New York 10036 (212) 421-4100 16