Smashburger Acquisition - NY LLC v. Fulton Sq. LLC

2024 NY Slip Op 33875(U)

Opinion

Smashburger Acquisition - NY LLC v Fulton Sq. LLC 2024 NY Slip Op 33875(U)

October 29, 2024

Supreme Court, Kings County Docket Number: Index No. 523177/2023 Judge: Leon Ruchelsman

Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication.

FILED: KINGS COUNTY CLERK 10/29/2024 01:28 PM INDEX NO. 523177/2023 NYSCEF DOC. NO. 45 RECEIVED NYSCEF: 10/29/2024

SUPREME COURT OF THE ST.ATE .QF NEW YORI< COUNTY OF KINGS : CIVIL TERM: COMMERCIAL PART 8 -· -------. ·---. --.---- .. -•----- .-. -----------x SMASH-BURGER ACQUISITION - NY i..LC, Plaintiff, Decision and order

- against - Index N.o. 52'3'177/2023

FULTON SQUARE LLC,

Defendant,. October 291 2024 --. -- .. -. -. --------.---- --------- .-. -------.-x PRESENT: HON. LEON RQCHELSMAN Motion. Seq. #1 _

The. defendant has mo-v.ed pursuant to CPiR §3212 seeking ·summary judgement ··rega_rding the cdunterclairh s filed.. The- plaintiff o_pposes. the motion. Pape:i;-s were sub.1,ni tted. by $..11 partie. s and after revi~wing the arguments of' ,;111 parties this c.ourt now mates th.e f ollowiri.g dete·rminatio n.

According to the complaint, t,he parties .entered into a lease on Mar.ch 31, · 202-2 for space· ·located.· at -S-23 Fulton Sq:uare in Kings County. The tenant int.ended to utilize the sp_p.ce a-s a restaur_ant and the leas.e provides for work to be performeo. by the landlord subject to. t_he tenant'--s subrn.issi<:;m of work p·1:ans. Indeed,- the compla.i,.nt all'eges the tenant .submitted certain plans in October 2022 ., however, the landlord refused to -approve the pians arguing a ce·.rtain type o._f exba-ust sy-s.tem was re·guired which was ·not included within the plans. The dispute regarding this exh.3.ust system e-v~ntua.lly 1-~d th_e plaintiff to te'rfnim:1t"e the l.ease. This li3-w;:;uit.. f.ollowe.d and the i::.omplaint se:eks a declaratory judg.ement the tenant had the legal right to terminate the lease. Al terna_t.i vei.y, the -plainti:f f alleges a breach of._ --contr~ct. The

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FILED: KINGS COUNTY CLERK 10/29/2024 01:28 PM INDEX NO. 523177/2023 NYSCEF DOC. NO. 45 RECEIVED NYSCEF: 10/29/2024

defendant filed an answer and asserted counterclaims seeking~ declaratory judgement it fulfilled its obligations under the lecJ.se and .tor breach of contract. The defendant has now moved seeking summary judgement arguing there are no questions of fact the tenant breached the lease and the landlord did not breach the lease. As noted the motion is opposed.

Conclusions of Law

Where the material facts at issue in a case are in dispute summary judgment cannot be granted (Zuckerman v. City of New York, 49 NYS2d 557, 427 NYS2d 595 [1980]). Generally, it is for the jury, the trier o:f fact to determine the legal cause of any injury, however, where only one conclusion may be drawn from the facts then the question of legal cause may be decided by the trial court as a matter of law (Marino v. Jamison, 189 AD3d 1021, 136 NYS3d 324 [2d Dept., 2021).

Pursuant to Article 87 of the lease the landlord was required to perform all work included withirt .a letter tha:n became Exhibit Bat to the lease cJ.t the landlord's expense. That article states that "landlord shall not be required to perform or cause the performance of any other work in or to the Demised Premises or the Building to ready the Demised Premis_es for Tenant I s occupancy other than Lc1.ndlqrd' s Work" (see, Standard Form of Store Lease, CJI87 [NYSCEF Doc. No. 18]). Further, Article 53.11

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FILED: KINGS COUNTY CLERK 10/29/2024 01:28 PM INDEX NO. 523177/2023 NYSCEF DOC. NO. 45 RECEIVED NYSCEF: 10/29/2024

of the lease, concerning the exhaust system at issue, states that the tenant "shall properly vent and exhaust odors, smoke or fumes, from the Demised Premises, installing if necessary, prior to opening the Demised Premises for business and iri compliance with all laws, such system or systems to accomplish the same" {see, ;3tandard Form of Store Lease, ':[5'.3.11 [NYSCEF Doc.

No. 18 J ) • The lease does not explain the precise exhaust system that is required to be installed by the tenant. The landlord

argues there are no questions of fact the only exhaust system that will satisfy the lease and applicable New York City codes is the system proposed by the landlord which includes a costly precipitator. However, without any discovery at ail surely there are questions of fact whether that is the only exhaust system that will satisfy the lease. The mere fa<::t the tenant ini tia.lly proposed this system and then ultimately rejected it when i t proved expensive does not meari the tenant conceded there are no other alternative exhaust systems that are applicable. ·Moreover, the Department of Buildings did hot conclude· a precipitator was required. Rather, the Department of Buildings concluded that "it is ou:r i.mderstandirtg that a:n Emission control Device (L. e. a precipita:tot) would mitigate smoke, grease, gases, vapors,

and odors from the discharge at a level that would comply with the requirements of se:ctior1 2022 NYC..,.MC Section 506. 3; 12 .2" (see,

Department of Buildings Construction Code Determination Form, .. . .

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FILED: KINGS COUNTY CLERK 10/29/2024 01:28 PM INDEX NO. 523177/2023 NYSCEF DOC. NO. 45 RECEIVED NYSCEF: 10/29/2024

page 1 [NYSCEF Doc. No. 25]). Thus, a precipitator would surely satisfy the exhaust requirements. That does not mean it is the only method available to comply with the relevant rules, regulations and the lease. The parties must engage iii discovery to determine if there are any other systems that can ~atisfy the lease as well as administrative code requirements. Therefore, the motion seeking summary judgement concerning the first counterclaim is denied.

Turning to the issue of the commencement date, the landlor<:l seeks a summary determination there are no questions of fact the cornrnencement date was March 31, 2023. In support of that conclusion the landlord argues that the certificate of occupancy had be.en in existence sirice 1992 and that all the work the landlord was required to perform was concluded by that date. The landlord argues i t completed all the work it was required to complete which included "in.stalling the slab framing, walls, restaurant entrance doors, and appropriate utility connections.; - ensuring that the exterior walls, doors, arid roof 0£ the Premises were watertight; - providing Tenant access to the roof So that Tenant could install Vci.tious equipment; and - installing an exte:rio-r grease interceptor and HVAC unit" (see, Memorandum in Reply, page 4 [NYSCEF Doc. No. 44]). However, the lease required the landlord to engage in sixteen enumerated jobs including providing adequate lighting, natural gas service, internet

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FILED: KINGS COUNTY CLERK 10/29/2024 01:28 PM INDEX NO. 523177/2023 NYSCEF DOC. NO. 45 RECEIVED NYSCEF: 10/29/2024

requirements and compliance with all Federal and State ADA requirements. Moreover, a certificate of occupancy from 1992 cannot be sufficient proof that all the work was performed· in 2023. Thus, the landlord has failed to eliminate all questions of fact whether the work w·as substantially completed by the above noted dat.e. Therefore, the motion seeking summary judgement

concerning the second counterclaim is dep.ied.

Likewise, the request seeking summary judgement concer-ning

the third counterclaim is likewise denied. There are questions of fact which must be addressed before a determination can be made whether any party breached the lease.

So o,rdered.

ENTER:

DATED: October 29, 2024

Brooklyn N.Y. Hon. Leon Ruchelsman JSC

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