The opinion of the court was delivered by: Hurley, Senior District Judge:
Plaintiff Bank of America, as Trustee, ("Lender") commenced this action against defendant Jay R. Viders ("Viders") asserting a claim for breach of a Master Lease Agreement. Presently before the Court is Lender's motion for summary judgment and Viders' cross- motion to stay pending arbitration. For the reasons set forth below, Lender's motion is granted in part and the cross-motion is denied.
The following facts are undisputed unless otherwise noted.*fn1
On or about March 26, 2007, Commack Properties LLC ("Commack") borrowed from AIG Mortgage Capital LLC (the "Original Lender"), the principal amount of $5,000,000 (the "Loan"), for the financing related to certain property owned by Commack and located at 366-368 Veterans Memorial Highway, Commack, New York (the "Property"). To evidence the Loan, Commack executed a Promissory Note dated March 26, 2007. As security for the Loan, Commack executed and delivered to the Original Lender a Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture filing (the "Mortgage"), dated March 26, 2007, and recorded in the real estate records of Suffolk County on April 27, 2007. Also in connection with the Loan, Viders, Commack and Original Lender executed an Agreement concerning the Master Lease.
The Assignment of the Loan
The Mortgage, Note and other documents related to the Loan were thereafter assigned to other entities. It is undisputed that Lender is the present holder of these documents. Commack's Default
Under the terms of the Loan, Commack is required to pay per month $29,900.00 in principal and interest plus approximately $13,500 per month to cover insurance and taxes. Commack is presently in default under the terms of the Loan by, among other things, failing to make timely payments. Commack failed to make monthly payments in July, August, and September 2009. In October 2009, Commack remitted approximately $43,500 and thereafter remitted approximately $13,600 each month form November 2009 to February 2010. The defaults have not been cured and the Lender has accelerated all sums due under the Loan. Despite demand for payment, Commack has failed to pay all sums due under the Loan. The principal balance outstanding and due immediately under the Loan is at least $4,985,769.25 as of November 2009.
The Master Lease and Agreement Concerning Master Lease
On or about March 26, 2007, Original Lender, Commack and Viders entered into an Agreement concerning the Master Lease (the "ML Agreement"). As set forth therein, Commack and Viders were required to enter into a Master Lease as a condition precedent to the making of the loan. (ML Agreement Recital "C".) The ML Agreement provides that Lender "shall grant its consent to a full and complete release of the Master Lease" upon the satisfaction of 8 conditions. (ML Agreement §5(a).) Those conditions include, among other things, that (1) Commack shall have completed all improvements or renovations under replacement leases approved by Lender with respect to any portion of the space included in the Master Lease ("Approved Leases") and has delivered the demised premises to the tenants under Approved Leases; (2) no Default or Event of Default as defined by the Mortgage*fn2 shall have occurred or be continuing; (3) the term of each Approved Lease is at least thirty-six months; (4) the Property is at least ninety-five percent occupied pursuant to leases approved by Lender; and (5) the average rent for all leases entered into (a) with respect to the Master Lease Space and (b) after the date of the ML Agreement, is $24.00 per square foot over their respective terms on a modified square foot basis. The ML Agreement also provides that notwithstanding the provisions of the Master Lease, Viders shall not be required to make payments under the Master Lease unless and until an Event of Default has occurred. In such event, Commack is required to pay to Lender and Viders agrees to pay to Lender all amount to be paid by Viders under the Master Lease.
Under the terms of the Master Lease, dated February 14, 2007, Commack leased to Viders "an office consisting of 4,376 square feet in the building known as 368 Veterans Highway, Commack . . . ." The Master Lease is for a fifteen year term commencing on March 15, 2007, with an annual rent of $105,024.00 for the base year, thereafter to be increased each year in an amount equal to three (3%) of the prior year's rent. In addition, Viders is required under the Master Lease to pay for his electrical consumption which is to be measured by a direct meter or sub-meter to the demised premises. (Id. at ¶37.)*fn3
Lender has also commenced a foreclosure action in this Court as against Commack and Viders. See Civil Action No. 09-5296 (the "Foreclosure Action"). By Memorandum and Order dated December 9, 2010, the Court granted Lender's motion for summary judgment on the foreclosure claim asserted in the Foreclosure Action and ...