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Maiden Lane Properties, LLC v Just Salad Partners LLC Published Decision

By Adam Leitman Bailey


CIVIL COURT OF THE CITY OF NEW YORK
COUNTRY OF NEW YORK DECISION

Index No.056312/13

Papers considered
(1) Petition & Post
Trial Memo,
(2) Answer, Post
Trial Memo

MAIDEN LANE PROPERTIES, LLC,

Petitioner-Landlord,

-against-

JUST SALAD PARTNERS LLC Papers considered
100 MAIDEN LANE
GROUND FLOOR STORE #C
As designated and described on the diagram
annexed hereto
NEW YORK, NY 10038,

Respondent-Tenant.

JENNIFER G. SCHECTER, J.:

After a March 11, 2013 bench trial and consideration of the parties’ post-trial submissions, it is ORDERED that judgment is awarded in favor of petitioner landlord Maiden Lane Properties, LLC (“MLP”) and against respondent tenant Just Salad Partners LLC (“Just Salad”) .

The parties agree on the material facts. Their witnesses all testified credibly.

In 2007, MLP leased commercial space–Ground Floor Store #C at 100 Maiden Lane (“Premises”)–to Just Salad.

After Superstorm Sandy, which struck in late October 2012, 100 Maiden Lane, a mixed-use building that includes residences and commercial establishments, did not have power. The entire building was without electricity. Nine days after the storm, MLP obtained a generator and provided power to its residential tenants (Tr at 7, 41). MLP did not allow its commercial tenants, including Just Salad, to hook up to the generator because it was concerned whether the supply would be sufficient for its residential tenants (Tr at 42). MLP informed Just Salad that it could investigate obtaining power through another commercial tenant’s generator or arrange for its own generator and informed Just Salad of the generator company that it was using in an effort to be helpful (Tr at 42).

In mid-November, Just Salad made a “business decision” to attempt to obtain a generator “instead of being out the whole month of December and possibly January” (Tr at 8). Just Salad procured a generator on December 6, 2012 that was operational the following day (Tr at 10, 14). On December 7, 2012, Just Salad resumed its business with occasional disruption because of lack of power (Tr 22, 34).

On January 28, 2013, Just Salad was able to reconnect to the building’s electricity (Tr 18).

It is undisputed that Just Salad did not pay MLP for use of the Premises for the months of December 2012 and January 2013 and that it did not pay certain costs for February 2013 (Tr at 2-3) . MLP commenced this non-payment proceeding to recover the unpaid rent, additional rent and fees. Just Salad asserts that it was not obligated to pay for those months as a result of MLP’s failure to repair damage caused to [the Premises] by Superstorm Sandy” (Answer, at ¶ 3).

This dispute centers on interpretation of the parties’ lease and their contractual obligations. Just Salad urges that based on section nine of the lease (“Destruction, Fire, and Other Casualty”) it was relieved of its obligation to pay rent. Section 9 of the lease states:

(a) “If the [Premises] or any part thereof shall be damaged by fire or other casualty, [Just Salad] shall give immediate notice thereof to [MLP] and this lease shall continue in full force and effect except as hereinafter set forth.

(b) If the [Premises] are partially damaged or rendered partially unusable by fire or other casualty, the damages thereto shall be repaired by and at the expense of [MLP] and the rent, until such repair shall be substantially completed, shall be apportioned from the day following the casualty according to the part of the premises which is usable.

(c) If the [Premises] are totally damaged or rendered wholly unusable by fire or other casualty, then the rent shall be proportionately paid up to the time of the casualty and thenceforth shall cease until the date when the premises shall have been repaired and restored by [MLP] . . .

(d)”. . .[Unless MLP serves a termination notice, it] shall make the repairs and restorations under the conditions of (b) and (c) hereof, with all reasonable expedition subject to delays due to the adjustment of insurance claims, labor troubles and causes beyond [MLP’ s] control. After any such casualty, [Just Salad] shall cooperate with [MLP’s] restoration by removing from the premises as promptly as reasonably possible all of [its] salvageable inventory and moveable equipment furniture and other property. [Just Salad’s] liability for rent shall resume five (5) days after written notice from [MLP] that the premises are substantially ready for [Just Salad’s] occupancy. . .” (Petitioner Ex I, at § 9 [emphasis added]).

Based on this provision, Just Salad argues that it is entitled to an abatement of rent until receipt of a reoccupancy notice” (Resp Post Trial Mem at 4). It contends that all rent accruing after power was lost during Hurricane Sandy should be abated,” and that even if the abatement were deemed to continue only until it opened for business, then “the abatement should include the amount [it spent] to rent a generator and mitigate its damages” (id.).

MLP contends that section nine was not implicated because Just Salad never gave immediate notice” of a casualty loss in accordance with the lease’s requirements as the lease mandates that any notice be served by mail (Petitioner Ex 1, at § 27) . It further argues that Just Salad’s obligation to pay rent is not contingent on its provision of electricity.

It is undisputed that Just Salad never gave notice of any “casualty” as required by §§ 9(a) and 27 of the lease, which is fatal to its argument that it is entitled to a rent abatement (see Milltown Park Inc. v American Felt and Filter Co., 180 AD2d 235, 237 [3d Dept 1992] [lease provisions requiring written notice, as opposed to actual or constructive notice, are enforceable]; see also Marina Towers Assocs. v Stacy’s Landing, 2003 WL 22519603, 2003 Slip Op 51361[U] [App Term, 1st Dept 2003]).

In any event, there was no evidence that the Premises was physically “damaged” by the storm in a manner that would implicate section nine. There was no evidence, for example, that the landlord had to perform any repair to the actual Premises due to flooding. MLP did not have any obligation to give Just Salad notice that the Premises was substantially ready for occupancy because it is undisputed that Just Salad never vacated nor did it properly notify MLP that the Premises was partially or totally damaged and rendered unusable by the storm.

Loss or lack of electricity, moreover, was a situation that was addressed elsewhere in the lease. Section 52 provides that:

• the tenant must arrange to obtain electricity directly from the public utility (§ 52[A]);

• the Premises’ “electrical capacity shall be at least 200 amps, . however, if either the quantity or character of the electrical services is changed by the public utility or other company supplying electrical service to the Building or is no longer available or suitable for [Just Salad’s] requirements, no such change, unavailability or unsuitability shall constitute an actual or constructive eviction, in whole or in part, or entitle [Just Salad] to any abatement or diminution of rent, or relieve [Just Salad] from any of its obligations under this Lease, or impose any liability upon Landlord, by reason of inconvenience or annoyance to [Just Salad], or injury or interruption of [Just Salad’s] business or otherwise” (§ 52 [A] [emphasis added] ) ;

• MLP is not liable “in any way for any interruption, curtailment or failure, or defect in the supply or character of electricity furnished [to the Premises] by reason of any requirement, act or omission of [MLP] or of any public utility or other company servicing the Building with electricity or for any other reason except [MLP’s] gross negligence or willful misconduct” (§ 52[C] [emphasis added]).

In addition, section 58(H) (“Interruption of Services”) states:

• “[MLP] reserves the right to stop service of electrical. . systems or facilities in the Building. . . when necessary, by reason of accident or emergency, or for repairs . . .[MLP] shall have no responsibility or liability for interruption, curtailment or failure to supply. . electricity. . when prevented by . . . any cause whatsoever reasonably beyond [MLP’s] control. The exercise of such right or such failure by [MLP] shall not constitute an actual or constructive eviction, in whole or in part, or entitle [Just Salad] to anv compensation or to any abatement or diminution of Rent, or relieve [Just Salad] from any of its obligations .. [MLP] shall not be liable to [Just Salad] in any way for any interruption, curtailment or failure, or defect in the supply or character of any service furnished to the [Premises] by reason of any requirement, act or omission of any public utility or other company servicing the Building” (emphasis added).

These terms establish that loss of electricity was a contingency that was anticipated and accounted for by the parties and not, under the circumstances, a type of casualty damage subject to section nine. The Lease makes plain that the unavailablity of electricity does not entitle Just Salad to a rent abatement (id., at §§ 52 [A] ; 58[H]). Additionally, there was no evidence that MLP engaged in any gross negligence or misconduct that resulted in the loss or interruption of Maiden Lane Properties, LLC v Index No.56312/ 13 Just Salad Partners LLC Page 8 electricity here. Just Salad has not shown that MLP had any obligation to provide it with access to a generator.

The evidence established that Just Salad did not give notice of any casualty damage as required by the lease. Furthermore, although Superstorm Sandy undoubtedly created hardship for Just Salad, in their lease, the parties placed the risk of this type of loss on the tenant. As such, Just Salad was required to continue to pay rent and there is no basis for its defense or any abatement here (see also Petitioner, Ex 1 at § 40[A] [agreement to pay “Base Rent” without offset or defense] ).

Accordingly, petitioner is awarded a final judgment in the amount of $47,846 . 40 for all rent and additional rent due through February 2013. Issuance of the warrant is stayed five days for payment.

An attorneys ‘ fees hearing will be held at 10:00 a .m. on Monday, May 20, 2013. The parties are to appear in Room 352 at 111 Centre Street and ask that the matter be referred to me .

This constitutes the Decision and Order of the Court

Dated: April 29, 2013

HON. JENNIFER G SCHECTER

Civil Court of the City of New York
ENTERED
NEW YORK COUNTY

The parties may arrange to pick up their exhibits by emailing kpraport@courts state.ny.us within 30 days. After then, exhibits may be destroyed in accordance with administrative directives.

 

Adam Leitman Bailey, P.C.

NEW YORK REAL ESTATE ATTORNEYS