United States District Court, Southern District of New York
January 17, 1991
PARK SOUTH TENANTS CORPORATION, PLAINTIFF,
200 CENTRAL PARK SOUTH ASSOCIATES, L.P., BERNARD SPITZER, JACK LIPMAN AND MELVIN D. LIPMAN, DEFENDANTS.
The opinion of the court was delivered by: William C. Conner, District Judge.
OPINION AND ORDER
Plaintiff Park South Tenants Corporation ("Park South") moves
for reconsideration of the Court's Opinion and Order, dated
October 12, 1990, dismissing plaintiff's claim for damages and
declaratory relief under Section 3607 of the Condominium and
Cooperative Protection and Abuse Relief Act of 1980 (the
"Act"), 15 U.S.C. § 3601 et seq. against defendants 200 Central
Park South Associates (the "Sponsor") and Bernard Spitzer, Jack
Lipman and Melvin D. Lipman, as individuals and as directors of
plaintiff (collectively, the "Directors"). Plaintiff makes its
motion pursuant to Rules 59(e), 60(a), and 60(b), Fed.R.Civ.P.
In petitioning the Court for reargument under Local Civil Rule
3(j), plaintiff asks the Court to pass judgment on the issue of
defendants' entitlement to a rent reduction for the property it
continues to rent from plaintiff.
This Court has carefully considered "the matters [and]
controlling decisions" which plaintiff "believes the court has
overlooked." Local Rule 3(j); accord Ruiz v. The Commissioner
of the Department of Transportation of the City of New York,
687 F. Supp. 888, 890 (S.D.N.Y.), aff'd 858 F.2d 898 (2d Cir.
1988). Upon reflection, the Court concludes that its prior
dismissal of plaintiff's damage claim and affiliated pendent
claims was proper and that there is no reason to amend its
prior holding. The Court further denies plaintiff's request for
"[a]n order establishing the annual rental amount to be paid"
by defendant to plaintiff for the relevant rental property.
Familiarity with the Court's opinion of October 12, 1990 is
presumed. This matter concerns the termination by plaintiff of
a portion of a long-term master commercial lease dated January
16, 1984 (the "Lease"), between plaintiff, as lessor, and
defendant 200 Central Park South Associates, L.P., as lessee.
The Lease pertained to the garage beneath the apartment
building at 200 Central Park South (the "Building") in addition
to two retail stores and nineteen professional offices. The
Lease was executed at a time when the lessee controlled the
In accordance with its rights under the Act, on December 5,
1989 plaintiff elected to terminate that portion of the Lease
pertaining to the garage pursuant to a vote of the shareholders
representing 105 of the 120 apartment units in the Building.
Termination was to be effective ninety days from the date of
notice. Complaint, ¶ 19. Defendants relinquished control of the
garage as of the end of March 1990, without protest.*fn1
Plaintiff commenced this action simultaneously with the
delivery of the notice of termination on December 12, 1989.
Plaintiff's amended complaint dated June 15, 1990 alleged
three claims upon which relief could be granted: (1) a claim
for money damages under the Act for an amount equal to the
difference between what the Sponsor paid to the Apartment
Corporation for the Garage and the fair market rental value of
the Garage between the date of the Lease, January 16, 1984, and
the date on which the Lease, as applied to the Garage, was
effectively terminated, March 13, 1990, (2) a request under
28 U.S.C. § 2201 for a judgment declaring the Lease to have been
validly terminated under § 3607 of the Act, and (3) a claim
that the individual defendants, serving as directors
of the Apartment Corporation while they were principals of the
lessee, breached their duties as fiduciaries under New York Law
in perpetuating the Lease to their own financial benefit and to
the financial detriment of the lessor Apartment Corporation.
This Court dismissed plaintiff's claims in its Order and
Opinion dated October 12, 1990.
Standard for Reargument
The standard for granting a motion for reargument is strict
in order to preclude repetitive arguments on issues that have
already been considered fully by the Court. Ruiz v.
Commissioner of D.O.T. of City of New York, at 890. Such
motions may be granted only where the Court has overlooked
matters or controlling decisions which might have materially
influenced the earlier decision. Caleb & Co. v. E.I. DuPont De
Nemours & Co., 624 F. Supp. 747, 748 (S.D.N.Y. 1985) (citing New
York Guardian Mortgagee Corp. v. Cleland, 473 F. Supp. 409, 420
(S.D.N.Y. 1979)).*fn2 After careful review, the Court
concludes that plaintiff's contentions on reargument fail to
meet this standard. Accordingly, the motion is denied.
Plaintiff's Motion for Reargument
In moving the Court to reconsider its prior opinion in this
case, plaintiff argues that the Court should adjudicate the
issue of the post-termination rent as a matter within its
jurisdictional authority. The Court disagrees. Jurisdiction
under the Act and the authority to grant relief thereunder is
not triggered by a lease termination per se, but rather by a
violation of a party's right of termination as provided for
under the Act.*fn3 Where a developer acts to frustrate a
party's statutorily recognized right of termination, federal
jurisdiction under the Act is retained by the Court and
appropriate remedial relief under the Act may be considered.
Such relief may include the affirmation of a party's right to
terminate such lease pursuant to § 3607 of the Act, see 181
East 73rd Street Co. v. 181 East 73rd Tenants Corp., No.
87-3362, slip op., 1988 WL 45634 (S.D.N.Y. May 2, 1988), as
well as monetary or equitable relief where "actual damages have
been suffered." 15 U.S.C. § 3611(b). Such equitable relief may
include a court-ordered rent abatement upon the partial
termination of a Lease under the Act.
However, as in the instant case, where the Court finds no
violation of plaintiff's rights under the Act nor any effort on
the part of defendants to question the validity of plaintiff's
termination of the Lease, there is no jurisdictional predicate
upon which the Court can determine defendants' right to a rent
reduction. The Court, reaffirming its earlier decision to grant
defendants' motion for summary judgment, cannot now identify a
triable issue of fact with respect to plaintiff's rights under
the Act which would empower it to consider plaintiff's request
for relief. The Court, therefore, reconfirms its original
Opinion in which it held that it
. . will not place liability upon defendants for
the defendant Sponsor's exercise of control over
the coop at a level contemplated by federal
statute and, more importantly, not in conflict
with any of plaintiff's statutory rights. Only
upon defendant Sponsor's surrender of such control
would plaintiff's right of termination under
Section 3607 have accrued — and only upon
interference therewith, could a violation be
Park South Tenants Corporation v. 200 Central Park South
Associates, L.P., 748 F. Supp. 208, 213 (S.D.N.Y. 1990).
Given that (a) no "violation" can be demonstrated, (b) the
validity of the Lease termination is unquestioned, and (c)
plaintiff cannot demonstrate "actual damages" caused by such
violation, as required by the "additional remedies" provision
of Section 3611 of the Act, the Court is left without the
statutory prerequisite to oblige plaintiff's request for a
determination of defendants' entitlement to a rent reduction.
The statutory language of the Act makes the Court's denial of
plaintiff's demands for remedial assistance obligatory and not
discretionary. Section 3612 of the Act, which provides federal
district courts with "jurisdiction under this chapter" to
adjudicate "actions at law or in equity brought under this
chapter," must be read in conjunction with Section 3611, which
provides that suit may be brought under the Act by a "person
aggrieved by a violation of [section 3607 or 3608 of] this
chapter." 15 U.S.C. § 3611. Section 3611 further provides that
"other relief [may be] granted" where "actual damages have been
suffered." Because plaintiff is not aggrieved by any such
violation of the Act, no showing of resulting damages could be
made. That being the case, this Court's prior dismissal of
plaintiff's action is reaffirmed by this Court on plaintiff's
motion for reconsideration.
This case differs from those cited by plaintiff in its
Memorandum of Law in Support of its Motion to Reargue. Both
Brabert Realty Co. v. 20125 Owners Corp., 703 F. Supp. 314
(S.D.N.Y. 1989) and 181 East 73rd Street Co. v. 181 East 73rd
Tenants Corp., No. 87-3362, Slip. op. (S.D. N.Y. May 2, 1988)
involve situations in which a lease termination was challenged
by a condominium sponsor as invalid under the Act and the
owner-lessor filed suit for relief.*fn4 In both Brabert and
181 East 73rd Street, after passing judgment on the validity of
the controverted lease termination, the Court was obliged to
rule on plaintiff's demands for equitable relief under § 3611
of the Act. That is not the case here.
Because there is no justiciable issue with respect to the
termination of the portion of the Lease demising the garage
space, the issue of residual rent is one that must be left for
the parties to resolve themselves by negotiation or for a state
court to resolve as a "landlord-tenant" dispute.*fn5 With
respect to plaintiff's demand for a declaratory judgment under
28 U.S.C. § 2201 as to the validity of the lease termination,
the Court concludes that such demand is superfluous. This Court
concluded in its Order and Opinion of October 12, 1990, that
defendants' uncontested acquiescence to plaintiff's lease
termination did not constitute any violation of plaintiff's
rights under the Act and that plaintiff's termination was
undertaken in accordance with the requirements of the Act and
was therefore valid. If such implicit determination of the
validity of the lease termination was not sufficiently clear,
this restatement should remedy the deficiency.
For the reasons stated above, plaintiff's motion for
reconsideration pursuant to Fed.R.Civ.P. 59(e), Fed.R.Civ.P.
60(a), and Fed.R.Civ.P. 60(b) is denied. Plaintiff's request
for reargument under Local Civil Rule 3(j) is also denied.*fn6