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Ninth Street Associates v. 20 East Ninth Street Corp.

Supreme Court of New York, New York County

June 14, 2013

20 EAST NINTH STREET CORPORATION, Defendant. No. 650434/10.

Editorial Note:

This decision has been referenced in a table in the New York Supplement.

Thomas A. Cunnane, Jr., Cuddy & Feder LLP by Andrew Schriever, for Plaintiff.

Smith Gambrell & Russell LLP, by Donald Rosenthal for Defendant.


Plaintiff moves for summary judgment. Defendant cross-moves for summary judgment dismissing the complaint and granting its counterclaim.

The parties in this action seek a declaratory judgment as to plaintiff Ninth Street Associates' (" Ninth Street" ) contractual right to renew a valuable lease related to commercial space in a cooperative building.

Ninth Street is a partnership and lessee of the premises located at 20 East 9th Street, New York, New York. Defendant 20 East Ninth Street Corporation (" the Co-op" ) is the cooperative corporation that owns the premises. The building was converted to a cooperative apartment corporation in 1974 by Ninth Street's predecessor-in-interest. Before the conversion, the sponsor was the tenant under a long-term ground lease. At the conversion, the Co-op became a tenant under a ground lease.

On March 1, 1955, University-Eighth Corporation (the Ground Tenant) entered into a ground lease with the Trustees of the Sailors' Snug Harbor for the premises, which was subsequently amended on November 1, 1963, in a first renewal lease. The term of the ground lease, as amended, was to be deemed renewed for a first renewal term from 1992 to 2003, unless the Ground Tenant elected not to renew. The ground lease was to renew for successive terms 2003 through 2024; 2024 through 2045; and 2045 through 2066.

In 1974, the Ground Tenant sponsored the conversion to a cooperative and assigned its rights under the ground lease to the Co-op. The lease at issue here, which covered the commercial space, was executed by the parties on February 26, 1974. The lease ran from February 26, 1974, to March 1, 1992. An automatic renewal gave an additional term of 11 years. With respect to further renewal rights applicable to the commercial space, the lease provided that it would be automatically renewed, conditioned on the simultaneous renewal of the ground lease and Ninth Street's option to renew the lease. If Ninth Street gave written notice to the Co-op of its decision not to renew, there would be no renewal.

On July 26, 1979, the Trustees of the Sailor's Snug Harbor sold its ownership of the building to the Co-op. The deed provided as follows: " Said Agreement or [Ground Lease] shall survive delivery of this deed and shall not be deemed to merge in the fee interest hereby conveyed."

On March 2, 1993, the Co-op, without giving notice to Ninth Street, recorded a memorandum of termination with respect to Ninth Street's lease. The Co-op asserted in the memorandum that the lease had expired as of March 1, 1992. Ninth Street opposed termination and, after negotiations with counsel, the parties entered into an amendment of the lease, dated September 23, 1993. In the amendment, the parties agreed to renew the lease for the period from 2003 through 2024.

In this action, Ninth Street maintains that it is entitled to continued possession of the commercial space on the premises pursuant to a commercial lease between the parties. Ninth Street contends that the lease enables it to extend its possession of this space until 2066 based on a series of renewals provided two conditions are met: first, that the Co-op continue to maintain its leasehold interest in the entire building; and second, that the commercial lease automatically renews unless Ninth Street expressly elected not to renew. Both conditions have been met. The Co-op counters that, pursuant to its terms, renewal of the lease is conditioned upon the Co-op renewing the ground lease. The ground lease cannot be renewed as it expired in 1992. Therefore, the lease cannot be renewed for the 2024-2045 term.

Because a lease is both a conveyance of an interest in real property and a contract, like other contracts its meaning is determined by the intent of the parties (See Farrell Lines, Inc. v.. City of New York, 30 N.Y.2d 76, 82-3 [1972] ). Where a written lease is complete, clear and unambiguous on its face, it must be enforced according to the plain meaning of its terms ( Nola Realty LLC v. DM & M Holding L.L.C., 33 A.D.3d 523, 526 [1st Dep't, 2006] ). A court may not re-write the terms of a lease in order to reflect the real intention of the parties where to do so would contradict the clearly expressed language of the document ( Ran First Associates v. 363 East 76th Street Corporation, 297 A.D.2d 506, 508 [1st Dep't, 2002] ).

" The rules governing the construction of ambiguous contracts are not triggered unless the court first finds an ambiguity" ( Matter of Wallace v. 600 Partners Co., 86 N.Y.2d 543, 548 [1995] ). The test of whether a lease provision is ambiguous was summarized in 239 East 79th Owners Corp. v. ...

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