Red Hook Meat Corp. v. Bogopa-Columbia, Inc.

31 Misc. 3d 814
CourtNew York Supreme Court
DecidedMarch 15, 2011
StatusPublished

This text of 31 Misc. 3d 814 (Red Hook Meat Corp. v. Bogopa-Columbia, Inc.) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Red Hook Meat Corp. v. Bogopa-Columbia, Inc., 31 Misc. 3d 814 (N.Y. Super. Ct. 2011).

Opinion

[815]*815OPINION OF THE COURT

Carolyn E. Demarest, J.

Plaintiff moves by order to show cause seeking arbitration to determine whether the defendant unreasonably withheld its consent for the plaintiff to sublet a commercial property and to enjoin the defendant from commencing a summary proceeding in the Civil Court pending the determination of the arbitration proceeding.

Background

Plaintiff Red Hook Meat Corp. is the subtenant of defendant sublandlord Bogopa-Columbia, Inc. The sublease (for clarity hereinafter referred to as the Lease) between the plaintiff and the defendant is for the premises known as 498 Columbia Street, Brooklyn, New York (Property). The term of the Lease commenced on June 1, 2004 and was for an initial term of 17 years, ending on September 22, 2021. Since July of 2007, plaintiff has sublet a portion of the Property to a nonparty, New York General Distributors, Inc., pursuant to a sub-sublease (Sublease).1 The Lease requires plaintiff to obtain consent prior to any subletting of the Property by the plaintiff, which consent would “not be unreasonably withheld or delayed.” The defendant argues that it did not consent to the Sublease prior to its execution.

In the affidavit in support of the plaintiff’s order to show cause, Damien Castillo, president of the plaintiff, alleges that in July of 2007, he spoke to both “Mr. Kyo” and “Mr. Kim,” alleged representatives of the defendant, about the plaintiff’s intent to sublease a portion of the Property and provided the defendant’s principals with a copy of the Subleasé agreement. Castillo also asserts that plaintiffs attorney sent a copy of the Sublease agreement to the defendant on July 13, 2010 along with a cover letter.2 Castillo claims that through these conversations, the defendant became aware of the Sublease but did not object to it until plaintiff received a notice to cure from the defendant dated October 12, 2010 (Notice to Cure) and the de[816]*816fendant continued to accept rent payments from the plaintiff in the interim.3 In opposition to the order to show cause, the defendant did not contest plaintiffs assertions as to when the defendant became aware of the Sublease.

The Notice to Cure stated that the plaintiff was:

“in default of substantial obligations of your [Lease] ... in that you have, without the consent of [defendant], sub-let and/or allowed to be licensed the rear of the subject premises, to one (1) or both of the following entities using such space for non-supermarket uses: [New York General Distributors, Inc.]; and
“PLEASE TAKE FURTHER NOTICE, that pursuant to Paragraph 6 (A) of the aforesaid [Lease], you must cure these above cited violations of substantial obligations of your tenancy on or before November 8, 2010 . . . and if you fail to cure said defaults on or before that date, then [the defendant] will elect to terminate your tenancy in accordance with the applicable provisions of the [Lease] and the law. . ..”

Defendant served a notice of termination on the plaintiff on November 16, 2010, terminating the Lease and requiring the plaintiff to vacate the Property by November 26, 2010.

On November 19, 2010, after the cure period had expired and the notice of termination was sent to the plaintiff, plaintiff commenced this action and brought an order to show cause seeking a Yellowstone injunction. The complaint seeks a declaratory judgment that the plaintiff did not breach the Lease, the defendant breached the Lease by failing to object to the Sublease for 21h years, thereby denying the plaintiff of the opportunity to have the refusal of consent reviewed in arbitration, and to enjoin the defendant from terminating the Lease. On November 30, 2010, this court denied plaintiffs order to show cause as it appeared that the court did not have the authority to issue a Yellowstone injunction pursuant to Korova Milk Bar of White Plains, Inc. v PRE Props., LLC (70 AD3d 646 [2d Dept 2010]). This court noted that the order to show cause “was made after the cure period had expired” and “[t]he Civil Court has authority to adjudicate all issues raised herein.”

[817]*817Although the memorandum of law in support of the first order to show cause referenced the arbitration provision in the Lease, that order to show cause did not specifically seek an order referring the matter to arbitration. Plaintiff now brings a second order to show cause seeking an order referring to arbitration the issue of whether the defendant has unreasonably withheld its consent to sublet the Property and to enjoin and restrain the defendant from commencing a summary proceeding or taking other action to terminate the Lease.

Defendant opposes the motion arguing that the court does not have the authority to enjoin a landlord from commencing a commercial landlord-tenant holdover summary proceeding after the cure period has expired. Further, defendant argues that plaintiff failed to give the defendant notice of its intention to seek arbitration within 10 days of receiving the Notice to Cure pursuant to the Lease, thereby waiving the Lease’s arbitration provision. The critical Lease provision is paragraph 16 which states:

“Consents. If [plaintiff] believes that [defendant] has unreasonably withheld its consent, acceptance or approval hereunder with respect to an assignment or sublet proposed by [plaintiff], [plaintiff] may, within ten (10) days after [plaintiff] has received notice that [defendant] has withheld its consent, acceptance or approval give notice to [defendant] of [plaintiffs] intention to submit the question of whether [defendant’s] consent, acceptance or approval was withheld unreasonably to expedited arbitration . . . .”

Plaintiff argues that the defendant implicitly consented to the Sublease by accepting rent from the plaintiff after the defendant had notice of the Sublease for over 2x/2 years, thereby waiving the contractual requirement of obtaining the defendant’s consent prior to the Sublease’s execution and precluding the defendant from objecting to the Sublease.4 The plaintiff further argues that, with no right to object to the Sublease, the defendant could not have notified the plaintiff of such an objection so as to have started the 10-day period within which the plaintiff could seek arbitration. Consequently, the plaintiff contends that the 10-day demand period never started and it can still seek arbitration. Defendant argues that the plaintiffs claim of waiver [818]*818should properly be raised as a defense in a holdover summary proceeding.

Discussion

On motions to stay or to compel arbitration, there are three threshold questions to be resolved by the court: whether the parties made a valid agreement to arbitrate; whether, if such an agreement was made, it has been complied with; and whether the claim sought to be arbitrated would be barred by limitation of time had it been asserted in a court of the State (Matter of County of Rockland [Primiano Constr. Co.], 51 NY2d 1, 5 [1980]; see CPLR 7503 [a]). The first of these questions is not in dispute as both parties agree that a valid arbitration clause is contained in the Lease. No statute of limitations issue has been raised. Therefore, the sole issue is whether the terms of the arbitration clause have been complied with by the party attempting to compel arbitration

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Cite This Page — Counsel Stack

Bluebook (online)
31 Misc. 3d 814, Counsel Stack Legal Research, https://law.counselstack.com/opinion/red-hook-meat-corp-v-bogopa-columbia-inc-nysupct-2011.