The opinion of the court was delivered by: ROBERT W. SWEET
Defendant Thom Rock Realty Company. L.P. ("Thom Rock"), the landlord, has moved to strike the jury demand in the complaint of plaintiff Herman Miller, Inc. ("Miller"), the tenant, based upon the jury waiver provision in the lease between the parties. The underlying action concerns a dispute over whether or not Thom Rock lived up to its representation that plaintiffs were renting in a building which would be operated solely as a showroom center for furniture manufacturers, and not leased (as it actually was) to other businesses or organizations. Miller seeks to preserve its demand by invocation of § 259-c of N.Y. Real Property Law (McKinney 1989). For the reasons set forth below, the motion is granted and the jury demand is stricken.
Miller filed its initial complaint on March 25, 1992, and served a demand for a jury trial on Thom Rock on May 28, 1992. This motion was filed on December 17, argued on January 6, and considered fully submitted as of January 8, 1993.
The Waiver is Enforceable
Section 259-c of New York's Real Property Law provides:
Any provision in a lease, executed after the effective date of this act [July 2, 1965], that a trial by jury is waived in any action, proceeding or counterclaim brought by either of the parties thereto against the other in any action for personal injury or property damage, is null and void.
Miller's first claim alleges a violation of the lease, as to which the parties concede the jury waiver applies unless New York law renders that provision void in these circumstances.
Miller's second claim is for a declaration of the rights of the parties regarding the lease which is not subject to that portion of Real Property Law ("RPL") § 259-c that provides that jury waiver provisions are not enforceable as to claims for property damage. See Damsky v. Zavatt, 289 F.2d 46 (2d Cir. 1961) (If demand for jury trial includes issues as to which a party is not entitled to a jury trial, court should not strike demand but should limit it to issues on which a jury trial was properly sought), citing Federal Rule of Civil Procedure 39(a).]
In support of the claim that the jury waiver in the lease is void, Miller relies upon 81 Franklin Co. v. Ginaccini, 149 Misc. 2d 124, 563 N.Y.S.2d 977 (N.Y. Civ.Ct. 1990), where the plaintiff sought to recover lost profits based on the landlord's alleged breach of the lease. The landlord had constructed an elevator shaft through the tenant's art gallery on Franklin Street, resulting in a minor diminution of the total rented space and considerable disruption of the tenant's business during construction. In 81 Franklin, the Court, considering whether the plaintiff's claim for money damages entitled it to avoid the waiver of a jury agreed to in the lease, stated:
The court finds that the defendant business constitutes personal property . . . . Moreover, it is well established that when the interruption or destruction of a business is the proximate consequence of defendant's wrongful act, plaintiff can recover resulting lost profits as a measure of injury to the personal property which plaintiff's business represents. . . . .
Therefore, based upon a strict interpretation of Real Property Law section 259-c, and the fundamental nature of the right to a jury trial [citations omitted], the Court concludes that the jury waiver provision of the lease is inapplicable to defendant's claim for damage to its business based on breach of the lease, and as such, defendant is entitled to a jury trial on this claim.
81 Franklin Co., 563 N.Y.S.2d at 982; accord, Swinger Realty Corp. v. Kizner Imports, 70 Misc. 2d 742, 743, 335 N.Y.S.2d 108 (App. Term, 1st Dept. 1972) (damages sustained by tenant's installation of security gate on ...