Surely Vittorio's January 7, 1991 memorandum to Sharon Barnes is devoid of any indication that Vittorio understood the firm was pursuing a walk away option. Vittorio speaks only of the remaining partners' concerns about their personal liability. Vittorio expresses his concern to Barnes that circumstances might arise where "we would also increase the vacancy at 100 Park;" but that concern is expressed only in the context of the remaining partners "abandoning the firm due to this situation," which "would cause the firm to cease existence. . . ." That is the only circumstance envisioned by Vittorio in his January 7, 1991 memorandum that would increase the vacancy rate at the building. But the vacancy rate would also be subject to potential increase if the firm obtained the right to walk away from the lease. It is inconceivable that, if that proposition was being put to Vittorio, he would not have called it to the attention of Barnes. The conclusion I draw from Vittorio's January 7, 1991 memorandum is that it fully reflects his understanding of what HC&G was seeking to obtain in the lease modification; and that understanding does not extend to a walk away provision in favor of the firm.
Thus far I have considered only the documents exchanged between the parties, together with Vittorio's internal memorandum to Barnes. But there is also Simon's September 5, 1990 internal memorandum, antedating the Vittorio internal memorandum by four months, in which Simon says that Vittorio had agreed to an interpretation of the modification which would allow "the firm and all of its partners to merely walk away from the lease." As noted, Simon testified that Vittorio expressed that agreement in telephone conversations with him. Vittorio testified that he never did so.
Simon's memorandum is not binding on Prudential. The testimony of Simon and Vittorio cannot be reconciled. In deciding which of two diametrically opposed accounts to accept, the factfinder uses certain tools: the demeanor of the witnesses; whether they are interested in the outcome; the inherent plausibility or implausibility of what they say; and the extent to which the competing accounts may be corroborated or not corroborated by independent evidence.
Both Simon and Vittorio appeared to testify forthrightly. Both are interested in the outcome of the litigation. These factors are in balance and do not assist me.
But the contemporaneous exchanges of documents between the parties, together with Vittorio's internal memorandum of January 7, 1991, corroborate Vittorio's trial testimony that a tenant's walk away option was neither discussed nor agreed to. That is because HC&G's expressed concerns were not phrased in that fashion; and there is no explicit reference to the firm's right to walk away.
I also think it is inherently implausible to suggest that a commercial landlord, holding a long-term lease at a rate higher than that available in a depressed rental market, would bestow upon its tenant the right to walk away from the lease upon payment of a lump sum significantly less than the rent owing under the lease.
Conversely, it is not inherently implausible that HC&G would consider and accept a lease modification falling short of conferring the ability to walk away from the lease. In point of fact, the remaining partners of HC&G achieved significant relief from the lease modification as construed by Prudential: a diminution of their potential personal liability, and the provision that Prudential could look to partners who left the firm after execution of the modification, if that was necessary to give additional economic assistance to the partners who remained.
In these circumstances, I find myself unable to accept Simon's testimony on the point, or the account given in his September 5, 1990 memorandum for the files. I think it important to say, in that regard, that I perceive nothing more at work here than the tendency, inherent in that human estate we all share, to see what we wish to see, and hear what we wish to hear.
Under New York law, "options to terminate tenures granted by the provisions of a contract or a lease should be strictly construed." Greenwich Village Associates v. Salle, 110 A.D.2d 111, 493 N.Y.S.2d 461, 462 (1st Dept. 1985). Salle arose in the perhaps more common context of a landlord seeking to terminate a tenant's lease; but no principled reason exists for applying a different construction where, as here, the tenant is seeking to terminate, particularly where both parties are sophisticated entities.
Thus HC&G faces a heightened burden of proving that the lease modification reflects Prudential's comprehension that the modification conferred upon HC&G an option to terminate, and that Prudential agreed to such a modification. On the evidence adduced at trial, I conclude that HC&G has not sustained that burden. The particular phrases in P 1 of the modification upon which the firm relies constitute too fragile a vessel to carry that heavy a cargo of contract construction.
That is particularly so, since it is so easy to draft language giving a tenant the right to terminate a lease, if that is really the parties' understanding and intent. Indeed, that truism is illustrated by an earlier communication from Rosen, then an HC&G partner, to Prudential dated April 26, 1989. Rosen forwarded proposed language to the lease which said:
In the event that landlord fails to deliver possession of (i) Suite 2201 prior to August 1, 1990, (ii) Suite 2201 prior to May 1, 1996, or (iii) Suite 2203 prior to October 1, 1990, the Tenant shall have the option to terminate this Lease upon ninety (90) days written notice to Landlord.
Whether or not Prudential agreed to that language proposed by Rosen is not material. Its significance lies in the ease with which a termination option in favor of a tenant may be drafted. Thus it becomes all the more difficult for HC&G to argue that Prudential should have placed such an interpretation upon the language contained in the lease modification with which this litigation is concerned.
When one reads the May 16, 1989 lease and the May 6, 1991 modification together, it becomes apparent that HC&G's interpretation of the modification brings about a fundamental change in the lease: conferring upon the tenant an option to terminate, whereas previously only the landlord could terminate or cancel the lease. On Prudential's interpretation, the modification furnishes a greater measure of economic relief to the remaining partners of the firm, but works no fundamental change upon the balance of the landlord-tenant relationship. It is easy enough to imagine language which might have supported HC&G's interpretation, but one does not find it in the lease modification. I conclude that HC&G has failed to sustain its burden of proving that the construction for which it contends is the proper one.
It necessarily follows that HC&G has no viable claim for damages, as alleged in the second cause of action.
The Clerk of the Court is directed to enter judgment in favor of defendant Prudential Insurance Company of America, and against plaintiff Hertzog, Calamari & Gleason, dismissing the complaint in its entirety, with costs in favor of defendant in an amount to be taxed by the Clerk.
It is SO ORDERED.
DATED: New York, New York
July 12, 1996
CHARLES S. HAIGHT, JR.
UNITED STATES SENIOR DISTRICT JUDGE
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