| Staples the Off. Superstore E., Inc. v Flushing Town Ctr. III,L.P. |
| 2011 NY Slip Op 08927 [90 AD3d 638] |
| December 6, 2011 |
| Appellate Division, Second Department |
| Staples the Office Superstore East, Inc.,Respondent, v Flushing Town Center III, L.P., Appellant. |
—[*1] Belkin Burden Wenig & Goldman, LLP, New York, N.Y. (Jeffrey L. Goldman, Magda L.Cruz, and Steven Kirkpatrick of counsel), and O'Melveny & Myers, LLP, New York, N.Y.(Andrew J. Frackman and Anton Metlitsky of counsel), for respondent (one brief filed).
In an action, inter alia, for a judgment declaring that the defendant landlord failed to satisfy acotenancy requirement set forth in a certain lease, the defendant landlord appeals, as limited byits brief, from stated portions of an order of the Supreme Court, Queens County (Taylor, J.),entered March 3, 2011, which, inter alia, granted those branches of the plaintiff tenant's motionwhich were for summary judgment on the second, third, fourth, fifth, and sixth causes of actiondeclaring that (a) BJ's Wholesale Club is not a national retailer within the meaning of the lease'scotenancy requirement, (b) the defendant landlord failed to satisfy the cotenancy requirement ofsection 14.18 of the lease, (c) the plaintiff tenant properly served a cotenancy termination notice,(d) the plaintiff tenant has no obligation to pay any rent under the lease and the lease was dulyterminated without any obligations or further liability by the plaintiff tenant to the defendantlandlord, and (e) the plaintiff tenant did not default on its obligations under the lease as alleged inthe defendant landlord's notice to cure and notice of termination, and said notices are null andvoid, and denied its cross motion for summary judgment on its counterclaims.
Ordered that the order is affirmed insofar as appealed from, with costs, and the matter isremitted to the Supreme Court, Queens County, for the entry of a judgment declaring that (a) BJ'sWholesale Club is not a national retailer within the meaning of the lease's cotenancy requirement,(b) the defendant landlord failed to satisfy the cotenancy requirement of section 14.18 of thesubject lease, (c) the plaintiff tenant properly served a cotenancy termination notice, (d) theplaintiff tenant has no obligation to pay any rent under the lease and the lease was dulyterminated without any obligations or further liability by the plaintiff tenant to the defendantlandlord, and (e) the plaintiff tenant did not default on its obligations under the lease as alleged inthe landlord's notice to cure and notice of termination, and said notices are null and void.
This commercial lease dispute between the plaintiff, Staples the Office Superstore East, Inc.(hereinafter Staples or the tenant), and the defendant, Flushing Town Center III, L.P. (hereinafterthe landlord), came about as a result of Staples' termination of the parties' 15-year lease, prior totaking possession of the subject premises, on the ground that the landlord failed to satisfy a keylease provision setting forth a cotenancy requirement. This provision required that the landlord[*2]lease the premises adjacent to Staples' leased premises to a"national retailer having not less than 100 stores and occupying not less than 100,000 squarefeet." The adjacent premises were subsequently leased to BJ's Wholesale Club (hereinafter BJ's).Staples notified the landlord that it believed BJ's did not satisfy the cotenancy requirementbecause it was a regional, not a national, retailer. The landlord disputed that contention.Ultimately, Staples commenced the underlying action for a judgment declaring, inter alia, thatBJ's was a regional, not a national, retailer and, therefore, the landlord failed to satisfy thecotenancy requirement of the lease and Staples properly terminated the lease. The landlordasserted counterclaims seeking a judgment declaring that Staples had wrongfully terminated thelease, and sought to recover unpaid rent and an attorney's fee. Staples moved and the landlordcross-moved for summary judgment. In the order appealed from, the Supreme Court, inter alia,held that BJ's was a regional, and not a national, retailer, granted those branches of Staples'motion which were for summary judgment on the second, third, fourth, fifth, and sixth causes ofaction declaring that (a) BJ's Wholesale Club is not a national retailer within the meaning of thelease's cotenancy requirement, (b) the defendant landlord failed to satisfy the cotenancyrequirement of section 14.18 of the lease, (c) the plaintiff tenant properly served a cotenancytermination notice, (d) the plaintiff tenant has no obligation to pay any rent under the lease andthe lease was duly terminated without any obligations or further liability by the plaintiff tenant tothe defendant landlord, and (e) the plaintiff tenant did not default on its obligations under thelease as alleged in the defendant landlord's notice to cure and notice of termination, and saidnotices are null and void, and denied the landlord's cross motion for summary judgment on itscounterclaims. We affirm the order insofar as appealed from.
"The fundamental, neutral precept of contract interpretation is that agreements are construedin accord with the parties' intent" (Greenfield v Philles Records, 98 NY2d 562, 569[2002]; see Hooper Assoc. v AGS Computers, 74 NY2d 487, 491 [1989]). "When theterms of a written contract are clear and unambiguous, the intent of the parties must be foundwithin the four corners of the contract, giving practical interpretation to the language employedand the parties' reasonable expectations" (Franklin Apt. Assoc., Inc. v Westbrook Tenants Corp., 43 AD3d860, 861 [2007]; see Gutierrez vState of New York, 58 AD3d 805, 807 [2009]). In the context of real propertytransactions, and where a contract is negotiated at arm's length between sophisticated counseledparties, special import must be given (see M & R Rockaway, LLC v SK Rockaway Real Estate Co., LLC, 74AD3d 759 [2010]; see alsoVermont Teddy Bear Co. v 538 Madison Realty Co., 1 NY3d 470, 475 [2004]) to therule that "a written agreement that is complete, clear and unambiguous on its face must beenforced according to the plain meaning of its terms" (Greenfield v Philles Records, 98NY2d at 569).
Here, the Supreme Court properly concluded that the plain and ordinary meaning of the term"national" is "nationwide in scope."
Staples met its prima facie burden of establishing its entitlement to a judgment on the secondcause of action declaring that BJ's is not a national retailer within the meaning of the lease'scotenancy requirement by its submission of undisputed evidence that BJ's only maintainswarehouses in 15 states, principally located along the eastern seaboard and stretching only as farwest as Ohio, and does not operate any retail warehouses in the remainder of the United States.In opposition, the landlord failed to raise a triable issue of fact as to whether BJ's retail operationsare nationwide in scope (see Alvarez v Prospect Hosp., 68 NY2d 320 [1986];Zuckerman v City of New York, 49 NY2d 557 [1980]). Accordingly, the Supreme Courtproperly determined that Staples was entitled to summary judgment declaring that BJ's is not a"national retailer," as that term is used in the lease.
Since the Supreme Court correctly concluded that BJ's is not a national retailer, the SupremeCourt properly determined that Staples was entitled to summary judgment on the third, fourth, fifth,and sixth causes of action declaring that the landlord failed to satisfy the cotenancy requirementof section 14.18 of the lease, that Staples properly served a cotenancy termination notice, and hasno obligation to pay any rent under the lease, that the lease was duly terminated without anyobligations or further liability by Staples to the landlord, that Staples did not default on itsobligations under the lease as alleged in the landlord's notice to cure and notice of termination,and that said notices are null and void.
The landlord's remaining contentions are without merit.[*3]
Since this is a declaratory judgment action, the mattermust be remitted to the Supreme Court, Queens County, for the entry of a judgment declaringthat (a) BJ's Wholesale Club is not a national retailer within the meaning of the lease's cotenancyrequirement, (b) the landlord failed to satisfy the cotenancy requirement of section 14.18 of thelease, (c) Staples properly served a cotenancy termination notice, (d) Staples has no obligation topay any rent under the lease and the lease was duly terminated without any obligations or furtherliability by Staples to the landlord, and (e) Staples did not default on its obligations under thelease as alleged in the landlord's notice to cure and notice of termination, and said notices are nulland void (see Lanza v Wagner, 11 NY2d 317, 334 [1962], appeal dismissed 371US 74 [1962], cert denied 371 US 901 [1962]). Dillon, J.P., Balkin, Leventhal and Belen,JJ., concur. [Prior Case History: 30 Misc 3d 1239(A), 2011 NY Slip Op 50405(U).]