| Provident Bay Rd., LLC v NYSARC, Inc. |
| 2014 NY Slip Op 03895 [117 AD3d 1356] |
| May 29, 2014 |
| Appellate Division, Third Department |
[*1]
| Provident Bay Road, LLC, Respondent-Appellant, vNYSARC, Inc., Appellant-Respondent. |
FitzGerald Morris Baker & Firth, PC, Glens Falls (Gregory J. Sanda ofcounsel), for appellant-respondent.
Tuczinski, Cavalier & Gilchrist, PC, Albany (Jonathon B. Tingley of counsel),for respondent-appellant.
Garry, J. Cross appeals from an order of the Supreme Court (Muller, J.), enteredJanuary 4, 2013 in Warren County, which partially granted plaintiff's motion for, amongother things, summary judgment.
In October 2003, defendant, a not-for-profit corporation, entered into a 10-yearcommercial lease with Provident Development Corporation (hereinafter PDC). Thesubject premises were part of a building then being constructed by PDC. The leaseprovided that, following substantial completion of the construction and/or defendant'spossession of the premises, the parties would execute a confirmation agreement thatwould, among other things, specify the lease commencement date, finalize rentalpayment schedules and an early termination option, and establish the amount of certainconstruction "fit-up costs" to be repaid by defendant on an amortized basis. In December2003, PDC conveyed the building to plaintiff. Despite this transfer of ownership, theconfirmation agreement was subsequently executed by PDC and defendant in April2004. The early termination clause in the agreement provided that defendant had anoption to terminate the lease at the end of the seventh year upon, among other things,making a payment in the amount of one year of "base rent"; the corresponding leaseprovision had required payment of six months of base rent.
[*2] In 2010, defendant notified plaintiff that it wasexercising its option to terminate the lease as of April 2011, and tendered payment of sixmonths of base rent. A dispute as to the sufficiency of this payment ensued, and plaintiffcommenced this breach of contract action seeking an additional six months of base rentand other sums allegedly due. Following discovery, plaintiff moved for leave to amendits complaint to adjust the amount of damages and for summary judgment in its favor.Supreme Court granted leave to amend, and also granted partial summary judgment toplaintiff by finding, as pertinent here, that the confirmation agreement was valid and thatits early termination clause, rather than that of the lease, controlled the parties'dispute.[FN1]
The motion was otherwise denied. Defendant appeals from that part of SupremeCourt's order granting partial summary judgment to plaintiff, and plaintiff cross-appealsfrom that part of the order partially denying its motion.
Initially, defendant claims that plaintiff lacks standing to enforce any obligationscreated by the lease or confirmation agreement, as it was not a party to either document.We agree with Supreme Court that this claim was waived by defendant's failure to assertit in the answer (see CPLR 3211 [a] [3]; [e]; Matter of Ford v New York State Racing & Wagering Bd.,107 AD3d 1071, 1076 n 6 [2013], lv denied 22 NY3d 947 [2013]).Defendant further argues that the confirmation agreement is not legally valid, as it wasnot signed by plaintiff and, as stated above, PDC had transferred the building to plaintiffprior to executing the confirmation agreement. However, "[a]n unauthorized execution ofan instrument affecting the title to land or an interest therein may be ratified by the ownerof the land or interest so as to be binding upon him [or her]" (Diocese of Buffalo vMcCarthy, 91 AD2d 213, 219 [1983], lv denied 59 NY2d 605 [1983]). Sucha ratification may be shown by the owner's failure to timely repudiate the unauthorizedactions, or by conduct consistent with an intent to be bound (see Leasing Serv. Corp.v Vita Italian Rest., 171 AD2d 926, 927 [1991]). Here, plaintiff has never repudiatedPDC's execution of the confirmation agreement; on the contrary, the record reveals that,beginning on the commencement date established by the agreement and continuingthrough 2011, plaintiff regularly invoiced defendant for payments due at the intervalsand in the amounts specified in that agreement and accepted defendant's resultingpayments—thus ratifying the confirmation agreement by accepting benefits duethereunder (see Er-LoomRealty, LLC v Prelosh Realty, LLC, 77 AD3d 546, 547-548 [2010], lvdenied 16 NY3d 710 [2011]; 14A NY Jur 2d, Business Relationships§ 681).
Defendant further contends that the confirmation agreement is invalid as it wassigned on its behalf by a former executive director who was not authorized to do so.Defendant's bylaws require real property transactions to be authorized by a resolution ofits Executive Committee and, in April 2004, the Executive Committee duly issued aresolution authorizing defendant to enter into the lease. The resolution did not expresslymention the former executive director or the confirmation agreement, but it did authorizeseveral named persons to designate others to "execute [lease-related] agreements [and]contracts" and to "sign any documents, without limitation required to effectuate thelease." The lease, which is unchallenged, was signed by the former executive director, aswas the subsequent confirmation agreement; we agree with Supreme Court thatdefendant's challenge to the authority of its former executive director to sign theconfirmation agreement is inconsistent with its acceptance of her signature on the lease.Further, we find that the authority conferred by these provisions plainly extends to the[*3]confirmation agreement, as this document wasexpressly referenced in the lease as a related agreement intended to finalize andeffectuate the lease terms. Additionally, we find that defendant's failure to raise this claimwhen the documents were signed, and its performance under the lease and confirmationagreement thereafter, effectively ratified the former executive director's signature on bothdocuments. As previously discussed, "ratification . . . is an adoption of theacts of another by one for whom the other assumes to be acting, [albeit] withoutauthority" (Jayne v TalismanEnergy USA, Inc., 84 AD3d 1581, 1583 [2011], lv denied 17 NY3d 710[2011] [internal quotation marks and citations omitted]).[FN2]
We find no error in Supreme Court's conclusion that defendant failed to identifytriable issues of fact as to the validity of the confirmation agreement, and that its termstherefore control the parties' dispute.
We further agree with Supreme Court that ambiguities in the language of theconfirmation agreement prevent summary determination of the amounts due to plaintiffunder the early termination provision. Contrary to defendant's claim, these ambiguities donot render the confirmation agreement so indefinite as to be unenforceable; its languageis sufficiently clear to manifest the parties' intention to be bound and to permit objectivedetermination of their meaning by reference to extrinsic evidence (see Matter of 166Mamaroneck Ave. Corp. v 151 E. Post Rd. Corp., 78 NY2d 88, 91 [1991];Cobble Hill Nursing Home v Henry & Warren Corp., 74 NY2d 475,482-483 [1989]; Capital Dist.Enters., LLC v Windsor Dev. of Albany, Inc., 53 AD3d 767, 770-771 [2008]).Nevertheless, the requirement for payment of one year's "base rent" in the earlytermination clause is ambiguous. No definition of this term appears in either document,and the parties disagree as to whether the sum due as base rent includes the "fit-up cost"payments by which defendant was reimbursing plaintiff for certain construction costs. Asthere is support for conflicting interpretations based upon the schedules within thedocuments, this aspect of the parties' dispute cannot be resolved as a matter of law (see Yauchler v Serth, 114AD3d 1069, 1071 [2014]).
The early termination clause in the confirmation agreement also requires defendant toreimburse "the unamortized portion of Landlord's Work and associated transactionalcosts, including architectural and brokerage costs and fees." Again, neither the terms"Landlord's Work" nor "associated transactional costs" are defined in the documents, andthe parties offer conflicting interpretations. Analysis necessarily requires factualdeterminations and consideration of extrinsic evidence and, as such, "is not amenable tosummary disposition" (Williamsv Village of Endicott, 91 AD3d 1160, 1163 [2012]; see Pozament Corp. v AESWestover, LLC, 27 AD3d 1000, 1001-1002 [2006]). Accordingly, SupremeCourt properly denied plaintiff's summary judgment motion insofar as it sought adetermination of the full [*4]amount of damages payableunder the early termination provision.
Given the ambiguities in the confirmation agreement, we reject plaintiff's contentionthat defendant's attempt to comply with the conditions of the early termination provisionwas so ineffective as to constitute a default and an abandonment of the lease (compare Lot 57 Acquisition Corp.v Yat Yar Equities Corp., 63 AD3d 1109, 1111 [2009]; Blumberg vFlorence, 143 AD2d 380, 381 [1988]). We likewise reject plaintiff's claim thatSupreme Court should have granted summary judgment on its claims for certain otherpayments, including rental payments that defendant allegedly improperly offset againstother credits; among other things, the parties disagree as to whether plaintiff waived itsalleged contractual right to rental payments without offsets by accepting at least onepartial payment in the past (seeNatale v Ernst, 63 AD3d 1406, 1407 [2009], lv denied 13 NY3d 716[2010]). Resolution of these claims requires factual determination.
Lahtinen, J.P., McCarthy and Egan Jr., JJ., concur. Ordered that the order is affirmed,without costs.
Footnote 1:Supreme Court alsodismissed defendant's counterclaims as time-barred; that determination is not challengedon appeal.
Footnote 2:To the extent thatdefendant indirectly suggests that it was unaware of the confirmation agreement, anysuch claim is inconsistent with the explicit reference to that agreement in the lease.Further, defendant's actions during the lease term reveal its knowledge of commencementdates and other matters established by the confirmation agreement. Among other things,minutes of a teleconference among defendant's officials reveal their knowledge of theexpiration date for the early termination option—a date established by theconfirmation agreement—and their expectation to pay a "breakage fee" for earlytermination in an amount consistent with the 12-month payment required by thatagreement.