Century 21, Inc. v. F.W. Woolworth Co.

181 A.D.2d 620, 582 N.Y.S.2d 101, 1992 N.Y. App. Div. LEXIS 4140
CourtAppellate Division of the Supreme Court of the State of New York
DecidedMarch 26, 1992
StatusPublished
Cited by6 cases

This text of 181 A.D.2d 620 (Century 21, Inc. v. F.W. Woolworth Co.) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Century 21, Inc. v. F.W. Woolworth Co., 181 A.D.2d 620, 582 N.Y.S.2d 101, 1992 N.Y. App. Div. LEXIS 4140 (N.Y. Ct. App. 1992).

Opinion

— Order, Supreme Court, New York County (Carol E. Huff, J.), entered October 1, 1990, which, inter alia, granted the defendant’s cross motion for summary judgment to the extent of dismissing a portion of the plaintiff’s third cause of action and the entire second, fourth and fifth causes of action, [621]*621unanimously modified, on the law and the facts, to reinstate the fourth cause of action, and otherwise affirmed, without costs. Appeal from an order of the same court, entered February 5, 1991, which, inter alia, denied the plaintiffs motion to renew and reargue, is dismissed as academic, without costs.

The plaintiff, Century 21, Inc. ("Century”), commenced this action alleging that the defendant, F.W. Woolworth Co. ("Woolworth”), had misrepresented the amount of asbestos present at premises which Century had subleased from Woolworth and that delivery of possession with such asbestos violated agreements between the parties.

Woolworth agreed to sublease its commercial premises located at 9-17 Dey Street and 14-22 Cortlandt Street to Century in sublease and separate sublease agreements dated January 27, 1989. The parties also executed a license agreement pursuant to which Woolworth was to remain on the premises until January 31, 1990. The lease between the Overlandlord, 22 Cortlandt Realty Company, and Woolworth provided, in part, that the tenant, at its own cost and expense, "shall promptly comply with all laws, rules, regulations and orders of governmental authorities having jurisdiction with respect to the treatment, encapsulation and/or removal of any asbestos now or hereafter situate within the demised premises”.

Woolworth and Century placed their agreements in escrow pending receipt of certain documentation. The escrow agreement provided that as a condition of closing, Century demands "[a] letter from Woolworth to Century addressing Woolworth’s knowledge and notice of hazardous substances in or upon the demised premises under the Sublease, acceptable to Century.” Woolworth delivered the letter, in accordance with the escrow agreement, on March 3, 1989. The letter provided that "to the best of its knowledge and belief, F.W. Woolworth Co. is not aware of any generation, storage, or disposal of hazardous materials (as defined by law) at the Premises, except for any such hazardous materials which may be contained in products maintained at the Premises for resale by F.W. Woolworth Co. or in commonly-used cleaning materials, and that there is no asbestos, whether or not exposed or friable, or asbestos-containing structural fireproofing material located at or used in connection with the construction and maintenance of the Premises, except as shown in (i) a report dated October 22, 1986 and entitled 'Asbestos Survey for 22 Cortlandt Street, New York, New York’ prepared by Testwell Craig Laboratories of N.J. Inc. * * * and (ii) a letter dated January 27, 1989 [622]*622from Landmark Facilities Group, Inc. to Mr. S. William Manteria of our Company”.

The Testwell Craig report revealed the presence of asbestos containing materials in the cellar, first, second and third floors of the building. The asbestos content ranged from a few percent to approximately 30 percent. The report recommended that air samples be collected as soon as possible to determine whether the airborne asbestos fiber concentrations were below the current levels permitted by law. It was also recommended that an interim maintenance program be implemented. Test-well Craig’s report further indicated that it was possible that ultimately, all of the asbestos containing materials would have to be removed by demolition, remodeling, etc. The Landmark Facilities Group found asbestos in the cellar and recommended that additional surveying be conducted "to get a better definition of the conditions.”

The parties closed on the sublease on March 22, 1989. A Modification agreement dated February 17, 1989 and executed by the parties on the closing date, provided: "The Overland-lord has required the Landlord as tenant under the Overlease * * * to be responsible for all costs and expenses and for compliance with all governmental laws, rules, and ordinances governing the encapsulation or removal of asbestos in the demised premises. The Landlord and Tenant agree that the Landlord shall be solely responsible for such matters relating to asbestos at Landlord’s cost and expense relating to or arising out of the removal by the Landlord of its trade fixtures and equipment and its kitchen, food service counters and related restaurant equipment as specified in Article 4 hereof. Except as aforesaid, the Tenant shall be responsible, at its cost and expense, for compliance with the provisions of Art. 53 (b) of the Overlease.”

Woolworth thereafter notified Century, in November of 1989, that the premises contained more asbestos than was disclosed in the March 3, 1989 Asbestos Representation Letter. Century then hired a consultant who found widespread friable asbestos throughout the building. Although Woolworth confirmed the extensive presence of asbestos, it denied responsibility for its removal prior to delivery of occupancy on February 1, 1990. By letter dated February 7, 1990, Century informed Woolworth that since the premises had not been delivered in the condition required by the Sublease Documents, it was proceeding with all immediate speed to complete all required work "including, without limitation, engaging [623]*623contractors on an overtime basis, and removing and disposing of all asbestos containing materials at the Premises.” Century further notified Woolworth that it was deducting from its payment to Woolworth "an amount equal to $5,000.00 per day for the period from February 1, 1990 through February 5, 1990 and thereafter the sum of $20,000.00 per day until the Premises are put in the condition required by the Sublease Documents plus an amount equal to other damages Century incurs by reason of [Woolworth’s] failure to comply with the Sublease Documents (such as the cost of removal of the asbestos).” Century had already paid Woolworth $10 million and owed the company an additional $8,400,000. Woolworth disputed Century’s contentions and, in a letter dated March 2, 1990, advised Century that if it made any deductions, appropriate action would be taken.

Century instituted this action to preliminarily enjoin Woolworth, pending the determination of an action commenced simultaneously, from 1) taking any action to terminate the sublease 2) taking any action to evict Century and 3) commencing a summary holdover or other proceeding against Century by reason of any alleged default. Century’s complaint alleged five causes of action: The first sought a judgment declaring that Woolworth was obligated to remove the asbestos and that Century could deduct the cost of removal without violating the sublease and without subjecting itself to suit by Woolworth. The second cause of action sought a permanent injunction while the third sought monetary damages for Woolworth’s purported breach of the Sublease Documents concerning the asbestos claim and for faulty wiring. In the fourth cause of action, Century sought monetary damages for Woolworth’s representations in the Asbestos Representation Letter "concerning the absence of asbestos in the Premises.” Century maintained that those representations were false, that Woolworth knew or should have known they were false, that the absence of asbestos was a fact material to Century in negotiating and entering into the Sublease Documents and that Century relied on those representations to its detriment. The final cause of action sought damages based on Century’s allegation of harassment.

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Bluebook (online)
181 A.D.2d 620, 582 N.Y.S.2d 101, 1992 N.Y. App. Div. LEXIS 4140, Counsel Stack Legal Research, https://law.counselstack.com/opinion/century-21-inc-v-fw-woolworth-co-nyappdiv-1992.