| Neri's Land Improvement, LLC v J.J. Cassone Bakery, Inc. |
| 2009 NY Slip Op 06817 [65 AD3d 1312] |
| September 29, 2009 |
| Appellate Division, Second Department |
| Neri's Land Improvement, LLC, et al., Appellants, v J.J.Cassone Bakery, Inc., Respondent. |
—[*1] Danzig Fishman & Decea, White Plains, N.Y. (Thomas B. Decea and YeniseyRodriguez-McCloskey of counsel), for respondent.
In an action, inter alia, for a judgment declaring that a certain restrictive covenant isunenforceable and should be extinguished pursuant to RPAPL 1951, the plaintiffs appeal (1)from an order of the Supreme Court, Westchester County (Lefkowitz, J.), dated December 10,2007, which denied that branch of their motion which was to deem the defendant's motion todismiss the amended complaint abandoned pursuant to 22 NYCRR 202.48 and granted thedefendant's cross motion to settle an order nunc pro tunc, and (2), as limited by their brief, fromso much of an order of the same court, also dated December 10, 2007, as granted the defendant'smotion pursuant to CPLR 3211 (a) (7) to dismiss the amended complaint for failure to state acause of action.
Ordered that the first order dated December 10, 2007, is affirmed; and it is further,
Ordered that the second order dated December 10, 2007, is affirmed insofar as appealedfrom; and it is further,
Ordered that one bill of costs is awarded to the defendant.
The plaintiffs, Neri's Land Improvement, LLC (hereinafter Neri's Land) and Neri's BakeryProducts, Inc. (hereinafter Neri's Bakery, and together with Neri's Land, Neri), operate a bakeryon two parcels of property located in Port Chester, New York, and owned by Neri and/or itssubsidiaries. The defendant, J.J. Cassone Bakery, Inc. (hereinafter Cassone), also operates abakery in Port Chester on a parcel of property located approximately nine-tenths of a mile awayfrom the two properties where Neri operates its bakery business.
In 1999 Cassone acquired title to a parcel of property situated between the two propertieswhere Neri operates its bakery business (hereinafter the premises). Thereafter, in 2003, Cassonetransferred the premises by deed to 41 Pearl Street Holding Company, LLC (hereinafter 41 PearlStreet). The deed contained a restrictive covenant prohibiting the use of the premises "as abakery or for any [*2]purpose related or ancillary to a bakery" fora period of 50 years from the date of the deed. Subsequently, in 2006, 41 Pearl Street transferredthe premises by deed to Neri's Land. In that deed, Neri's Land expressly acknowledged theexistence of the restrictive covenant, which is set forth in the deed, and agreed to be bound bythe restrictive covenant.
Neri commenced this action against Cassone, inter alia, for a judgment declaring that therestrictive covenant is unenforceable and should be extinguished pursuant to RPAPL 1951, aswell as for injunctive relief and to recover damages based on Cassone's alleged violation ofGeneral Business Law § 340. Subsequently, Cassone moved to dismiss Neri's amendedcomplaint. The Supreme Court, inter alia, granted the motion and directed the submission of anorder on notice.
Thereafter, Neri moved, inter alia, to deem Cassone's motion to dismiss the amendedcomplaint abandoned pursuant to 22 NYCRR 202.48 on the ground that Cassone had failed tosettle an order on notice within 60 days. Cassone cross-moved to settle an order nunc pro tunc.The Supreme Court denied that branch of Neri's motion which was to deem Cassone's motion todismiss the amended complaint abandoned pursuant to 22 NYCRR 202.48 and granted Cassone'scross motion to settle an order nunc pro tunc. Subsequently, the Supreme Court grantedCassone's motion pursuant to CPLR 3211 (a) (7) to dismiss the amended complaint for failure tostate a cause of action.
Under the circumstances, the Supreme Court providently exercised its discretion in denyingthat branch of Neri's motion which was to deem Cassone's motion to dismiss the amendedcomplaint abandoned pursuant to 22 NYCRR 202.48 and in granting Cassone's cross motion tosettle an order nunc pro tunc (see Parisi v McElhatton, 209 AD2d 495 [1994]). Cassoneset forth a valid excuse for the short delay, its actions were devoid of any intent to abandon themotion to dismiss, and there is nothing in the record showing that Neri was prejudiced by thebrief delay (see Marzullo v General Motors Corp., 34 AD3d 540 [2006]; Parisi vMcElhatton, 209 AD2d at 495; cf. Seeman v Seeman, 154 AD2d 584 [1989]).
The Supreme Court properly granted that branch of Cassone's motion which was to dismissthe first cause of action in Neri's amended complaint for failure to state a cause of action.
In order to state a cause of action pursuant to RPAPL 1951, a plaintiff seeking a declarationthat a restrictive covenant is unenforceable must allege that, upon a balancing of the equities, therestrictive covenant is of no actual and substantial benefit to the party seeking to enforce it(see RPAPL 1951 [2]; Chambers v Old Stone Hill Rd. Assoc., 1 NY3d 424, 434[2004]; Orange & Rockland Util. v Philwold Estates, 52 NY2d 253, 265 [1981]).
Here, Neri's amended complaint, even as supplemented by an affidavit from its owner andchief executive officer, contains only a bare and conclusory allegation that the restrictivecovenant is of no actual and substantial benefit to Cassone. Moreover, the amended complaintfailed to allege any reason why the restrictive covenant is of no actual and substantial benefit toCassone, such as "the purpose of the restriction has already been accomplished or, by reason ofchanged conditions or other cause, its purpose is not capable of accomplishment" (RPAPL 1951[2]; see Matter of Zimmerman v Seven Corners Dev., 237 AD2d 892, 893 [1997]). Infact, the allegations in the amended complaint, as well as the evidentiary material submitted bythe parties in connection with the motion to dismiss, establish that the restrictive covenantclearly is of a substantial benefit to Cassone inasmuch as the restrictive covenant preventscompetition by another bakery business at the premises, which is located less than a mile awayfrom Cassone's bakery business. Notably, this is not a case in which the party owning the landburdened by the restrictive covenant will be unable to put the land to any use whatsoever if thecovenant is enforced (see Orange & Rockland Util. v Philwood Estates, 52 NY2d at265).
Moreover, despite Neri's allegations that enforcement of the restrictive covenant will cause iteconomic harm and inconvenience, the evidentiary material submitted by the parties inconnection with the motion to dismiss establishes that Neri had notice of the restrictive covenantwhen it acquired the premises. Thus, Neri's alleged hardship could not "tip the balance ofequities in favor of extinguishing" the restrictive covenant (Chambers v Old Stone Hill Rd.Assoc., 1 NY3d at 434; see Deak v Heathcote Assn., 191 AD2d 671 [1993]).[*3]
The Supreme Court also properly granted that branch ofCassone's motion which was to dismiss the second cause of action in Neri's amended complaint,alleging a violation of New York's antitrust law, known as the Donnelly Act (General BusinessLaw § 340), for failure to state a cause of action. In order to state a cause of actionpursuant to General Business Law § 340, a plaintiff "must identify the relevant market,describe the nature and effects of the purported conspiracy, allege how the economic impact ofthat conspiracy does or could restrain trade in the market, and set forth a conspiracy or reciprocalrelationship between two or more legal or economic entities" (Watts v Clark Assoc. FuneralHome, 234 AD2d 538, 538 [1996]; see General Business Law § 340 [1]).Here, Neri's amended complaint alleged in conclusory fashion that Cassone conspired with twoindividuals, 41 Pearl Street, "and others presently unknown." There is no allegation in theamended complaint, however, that the alleged conspirators were in competition with one anotheror with Neri (see Benjamin of Forest Hills Realty, Inc. v Austin Sheppard Realty, Inc.,34 AD3d 91, 98 [2006], citing Sands v Ticketmaster-N.Y., Inc., 207 AD2d 687, 688[1994]).
Based on the foregoing, the Supreme Court properly granted Cassone's motion pursuant toCPLR 3211 (a) (7) to dismiss the amended complaint.
The arguments made by the parties with respect to whether the restrictive covenant runs withthe land need not be addressed, since the amended complaint does not seek a declaration that therestrictive covenant was personal to 41 Pearl Street (cf. Orange & Rockland Util. v PhilwoodEstates, 52 NY2d at 260). Skelos, J.P., Angiolillo, Balkin and Belen, JJ., concur.