37 East 50th Street Corporation, Plaintiff-Respondent-Appellant,
Restaurant Group Management Services, L.L.C., Defendant-Appellant-Respondent.
Cashman LLP, New York (Todd E. Soloway of counsel), for
Camarinos Law Group, LLC, New York (John M. Mavroudis of
counsel), for respondent-appellant.
J.P., Richter, Andrias, Gesmer, JJ.
Supreme Court, New York County (Anil C. Singh, J.), entered
May 19, 2015, which, to the extent appealed and
cross-appealed from as limited by the briefs, granted
defendant's motion for summary judgment dismissing the
fifth and sixth causes of action, and denied the motion as to
the second through fourth causes of action and for judgment
on its second counterclaim, unanimously affirmed, without
court properly denied so much of the motion as sought
dismissal of the second cause of action. First, like the IAS
court, we reject defendant's argument that the sentences
in the parties' 2011 agreement referring to a lease with
both parties as tenants are inoperative. These sentences are
not in recital or "whereas" clauses. Furthermore,
"[i]n construing a contract, one of a court's goals
is to avoid an interpretation that would leave contractual
clauses meaningless" (Two Guys from Harrison-N.Y. v
S.F.R. Realty Assoc., 63 N.Y.2d 396, 403 ).
"[T]he aim is a practical interpretation of the
expressions of the parties to the end that there be a
realization of their reasonable expectations"
(Sutton v East Riv. Sav. Bank, 55 N.Y.2d 550, 555
 [brackets and internal quotation marks omitted]). The
drafts of the 2011 letter agreement show that plaintiff
specifically negotiated to have itself named as a tenant.
Second, there is a disputed issue of fact as to whether the
parties are the sole members of the tenant. Third, we agree
with the motion court that the issue of whether plaintiff
waived its right to sue defendant presents a question of fact
(see e.g. Fundamental Portfolio Advisors, Inc. v
Toqueville Asset Mgt., L.P., 7 N.Y.3d 96, 104 ).
second cause of action is also based on defendant's
alleged failure to manage the restaurant on a
"meaningful profitable basis." Like the motion
court, we decline to find that phrase too indefinite to be
enforceable as a matter of law. "Striking down a
contract as indefinite and in essence meaningless is... a
last resort" (Matter of 166 Mamaroneck Ave. Corp. v
151 E. Post Rd. Corp., 78 N.Y.2d 88, 91  [internal
quotation marks omitted]). The 2011 letter agreement does not
contain a merger/integration clause; hence, parol evidence is
admissible to explain what "meaningful profitable
basis" means. Depositions had not yet been held when
defendant moved for summary judgment. If extrinsic evidence
is required to glean the intent of the parties to a contract,
summary judgment is inappropriate (see e.g. Bank of N.Y.
Mellon Trust Co., N.A. v Merrill Lynch Capital Servs.
Inc., 99 A.D.3d 626, 628 [1st Dept 2012]; Musman v
Modern Deb, 56 A.D.2d 752, 753 [1st Dept 1977]).
extent the second cause of action and second counterclaim are
based on plaintiff's termination notice, defendant is not
entitled to summary judgment. If one views the record in the
light most favorable to plaintiff, as one must on
defendant's motion (see e.g. Fundamental Portfolio
Advisors, 7 N.Y.3d at 105), the July 19, 2013 notice
says, "we will take control... on August 26, 2013,
" i.e., more than 30 days after the notice. Although
plaintiff did not give defendant an opportunity to cure its
defaults, plaintiff alleges that some of the defaults (such
as defendant's failure to operate the restaurant on a
meaningful profitable basis in 2012 and 2013) can never be
cured. We do not find the phrase "upon thirty... days
notice to [defendant] of default, which default remains
uncured, and which [defendant] does not commence diligent
effort to cure" to be a condition precedent (see MHR
Capital Partners LP v Presstek, Inc., 12 N.Y.3d 640, 645
 ["the use of terms such as if, ' unless'
and until' constitutes unmistakable language of
condition"] [some internal quotation marks omitted]).
Even if it were a condition precedent, there are issues of
fact as to whether plaintiff properly terminated defendant
for cause, as opposed to for default.
court properly denied so much of the motion as sought
dismissal of the fourth cause of action (breach of fiduciary
duty). A "contracting party may be charged with a
separate tort liability arising from a breach of a duty
distinct from, or in addition to, the breach of
contract" (North Shore Bottling Co. v Schmidt &
Sons, 22 N.Y.2d 171, 179 ) and "[i]t is well
settled that the same conduct which may constitute the breach
of a contractual obligation may also constitute the breach of
a duty arising out of the relationship created by contract
but which is independent of the contract itself"
(Mandelblatt v Devon Stores, 132 A.D.2d 162, 167-168
[1st Dept 1987]). The parties had a long-term fiduciary
relationship that preceded the 2011 agreement by 15 years.
Pursuant to this relationship of higher trust, plaintiff
relied on defendant to ably manage its business and to
exercise business judgment in good faith and without personal
bias or conflict of interest. Plaintiff alleges that
defendant created a company without plaintiff's consent
and then intentionally entered into a lease in contravention
of the parties' 2011 agreement. In other words, it is
alleged that defendant "intentionally improperly
performed their contract... and did so, in connection with
their other acts... to [its] own substantial benefit"
(Albemarle Theatre v Bayberry Realty Corp., 27
A.D.2d 172, 177 [1st Dept 1967]). While these claims concern
some of the same underlying conduct as the breach of contract
claim, the allegations concern a breach of a duty that is
independent of the contract, and therefore not subject to
dismissal as duplicative (see Phipps Houses Servs., Inc.
v New York Presbyt. Hosp., 139 A.D.3d 480, 481 [1st Dept
2016]; Minnelli v Soumayah, 41 A.D.3d 388, 389 [1st
Dept 2007], lv dismissed 9 N.Y.3d 1028');">9 N.Y.3d 1028 ;
Sally Lou Fashions Corp. v Camhe-Marcille, 300
A.D.2d 224, 225 [1st Dept 2002]).
considered defendant's arguments regarding the third
cause of action and plaintiff's arguments on its ...