| Anita Babikian, Inc. v TMA Realty, LLC |
| 2010 NY Slip Op 08879 [78 AD3d 1088] |
| November 30, 2010 |
| Appellate Division, Second Department |
| Anita Babikian, Inc., Doing Business as Haritz Barne, et al.,Respondents, v TMA Realty, LLC, Appellant. |
—[*1] Feder Kaszovitz LLP, New York, N.Y. (Jonathan Honig and David Sack of counsel), forrespondents.
In an action, inter alia, for a judgment declaring that a commercial lease expired by its termsand was not renewed, the defendant appeals from an order and judgment (one paper) of theSupreme Court, Westchester County (Nicolai, J.), entered March 11, 2010, which granted theplaintiffs' motion for summary judgment, denied its cross motion for summary judgment, anddeclared that the plaintiffs did not timely exercise their option to renew and that the lease and itsterms, including the personal guaranties of the individual plaintiffs, expired as of April 30, 2009.
Ordered that the order and judgment is modified, on the law, (1) by deleting the provisionthereof granting the plaintiffs' motion for summary judgment and substituting therefor aprovision denying the plaintiffs' motion, and (2) by deleting the provision thereof declaring thatthe plaintiffs did not timely exercise their option to renew the lease and that the lease and itsterms, including the personal guaranties of the individual plaintiffs, expired as of April 30, 2009;as so modified, the order and judgment is affirmed, with costs to the defendant.
In 2004, Anita Babikian, Inc., doing business as Haritz Barne, and Jean Carrau Decoration,Inc. (hereinafter together the tenants), entered into a commercial lease with the then-owner of abuilding in Mamaroneck. The lease was to run for a period of five years, and the tenants had anoption to renew it for one five-year period. In order to exercise the option, the tenants wererequired to give the landlord written notice no later than nine months before the end of the initialfive-year term. Anita Babikian and Jean Carrau (hereinafter together the guarantors) eachexecuted the lease on behalf of their corporations, and both signed a personal guaranty.
In late August 2008, after the deadline for exercising the option had passed, the tenants sent aletter to the landlord, TMA Realty, LLC (hereinafter TMA), which recited that it was dispatchedfor the purpose of "confirm[ing] our phone conversation . . . whereby I [sic]advised you of our option to renew the lease . . . for a period of five years after itsexpiration date of April 30, 2009." Michael Mikhailov, the managing member of TMA, wrote"Agreed" on the letter (hereinafter the renewal letter) and signed it. Thereafter, but before theinitial five-year term expired, the tenants asserted that the renewal letter was not an exercise ofthe option to renew the lease; TMA [*2]disagreed.
In January 2009, the tenants and the guarantors (hereinafter collectively the Babikians)commenced this action seeking a judgment declaring that the tenants did not renew the lease andthat all of the Babikians' obligations to TMA would expire on April 30, 2009. TMA assertedcounterclaims seeking damages. The Babikians moved and TMA cross-moved for summaryjudgment. The Supreme Court granted the Babikians' motion and denied TMA's cross motion.TMA appeals, and we modify.
"The fundamental, neutral precept of contract interpretation is that agreements are construedin accord with the parties' intent . . . The best evidence of what parties to a writtenagreement intend is what they say in their writing . . . Thus, a written agreementthat is complete, clear and unambiguous on its face must be enforced according to the plainmeaning of its terms . . .
"Extrinsic evidence of the parties' intent may be considered only if the agreement isambiguous, which is an issue of law for the courts to decide . . . A contract isunambiguous if the language it uses has a definite and precise meaning, unattended by danger ofmisconception in the purport of the [agreement] itself, and concerning which there is noreasonable basis for a difference of opinion . . . Thus, if the agreement on its face isreasonably susceptible of only one meaning, a court is not free to alter the contract to reflect itspersonal notions of fairness and equity" (Greenfield v Philles Records, 98 NY2d 562,569-570 [2002] [citations and internal quotation marks omitted]).Further, "[w]hen the terms of a written contract are clear and unambiguous, the intent of theparties must be found within the four corners of the contract, giving practical interpretation to thelanguage employed and the parties' reasonable expectations" (Franklin Apt. Assoc., Inc. vWestbrook Tenants Corp., 43 AD3d 860, 861 [2007]; see Gutierrez v State of NewYork, 58 AD3d 805, 807 [2009]). This Court has observed that, in the context of realproperty transactions and where a contract was negotiated at arm's length between sophisticatedcounseled parties, special import must be given (see M & R Rockaway, LLC v SK RockawayReal Estate Co., LLC, 74 AD3d 759 [2010]) to the rule that "a written agreement that iscomplete, clear and unambiguous on its face must be enforced according to the plain meaning ofits terms" (Greenfield v Philles Records, 98 NY2d at 569).
Here, as the parties agree, there is no ambiguity in the lease itself, so resort to parol evidencein order to ascertain its meaning is not permitted. However, despite the tenants' failure to exercisethe option no later than nine months prior to the end of the initial lease term, TMA was free toforego enforcement of that timeliness requirement, inasmuch as that requirement was included inthe lease for the landlord's sole benefit (see Israel v Charnews, 46 AD3d 753, 755 [2007];Calkins Corporate Park, LLC v Eye Physicians & Surgeons of W. N.Y., P.L.L.C., 56AD3d 1122 [2008]; Columbia Equities v Apple Bank for Sav., 176 AD2d 780, 781[1991]; Laxrand Constr. Corp. v R.S.C.A. Realty Corp., 135 AD2d 685, 686 [1987];De Freitas v Holley, 93 AD2d 852 [1983]; United Mut. Life Ins. Co. v ICBCCorp., 64 AD2d 506, 509 [1978]). Additionally, there is no dispute that TMA did, in fact,waive the nine-month requirement. The only issue remaining is whether the renewal letterconstituted an exercise of the tenants' option to renew the lease. Since the renewal letter itself isambiguous, consideration of parol evidence as to the tenants' intent is permitted. The parolevidence submitted, however, including affidavits from Anita Babikian and Michael Mikhailov,did not eliminate triable issues of fact as to the tenants' intent to exercise the option to renew.Consequently, the motion and cross motion for summary judgment should both have beendenied, and we modify the order and judgment accordingly. Skelos, J.P., Fisher, Santucci andLeventhal, JJ., concur.