Opinion
Index No. 815112/22E
04-19-2023
798 Tremont Holding LLC, Plaintiff(s), v. Wefile LLC D/B/A LIBERTY TAX SERVICE, WEFILE INC., NY TAX INC., and NEXTPOINT FINANCIAL INC., Defendant(s).
Counsel for Plaintiff: Gordon Rees Scully Mansukhani LLP Counsel for Defendants: Ani & Asspciates, PPLC
Unpublished Opinion
Counsel for Plaintiff: Gordon Rees Scully Mansukhani LLP
Counsel for Defendants: Ani & Asspciates, PPLC
HON. FIDEL E. GOMEZ, J.S.C.
In this action for, inter alia, breach of contract, defendants move seeking an order, inter alia, (1) pursuant to CPLR § 3211(a)(8), dismissing the amended complaint against defendant NEXTPOINT FINANCIAL INC. (NP) on grounds that because NP is a nondomiciliary who transacts no business in New York State, this Court has no personal jurisdiction over it; (2) pursuant to CPLR § 3211(a)(1), dismissing the amended complaint against defendants NY TAX INC. (Tax) and defendants WEFILE INC (WF) and WEFILE, LLC D/B/A LIBERTY TAX (Liberty) on grounds that the documentary evidence evinces that neither Tax nor WF are parties to the relevant agreement alleged to have been breached by Tax and WF and that Liberty did not breach the relevant agreement between the parties; and (3) pursuant to CPLR § 3211(a)(7), dismissing the causes of action in the amended complaint for promissory estoppel and unjust enrichment because to the extent they are duplicative of the claim for breach of contract, the amended complaint fails to state a cause of action for the foregoing claims. Plaintiff opposes the instant motion asserting, inter alia, that with regard to NP, defendants fail to establish the absence of personal jurisdiction. With regard to Tax and WF, plaintiff contends that the documentary evidence evinces that while Tax and WF were not parties to the agreement between Liberty and plaintiff, when Tax assigned the original agreement to WF, who then assigned it to Liberty, neither Tax nor WF were expressly relieved of liability thereunder, such that Tax and WF are liable for a breach of the agreement by Liberty. With respect to the cause of action for breach of contract, plaintiff contends that the amended complaint states a cause of action for the same and that documentary evidence establishes that Liberty actually renewed the lease and then breached it. Lastly, plaintiff avers that the amended complaint states a cause of action for both promissory estoppel and unjust enrichment.
For the reasons that follow hereinafter, defendants' motion is granted, in part.
The instant action is for breach of contract, promissory estoppel and unjust enrichment. According to the amended complaint, on January 1, 2013, Tax entered into an agreement - a lease - with nonparty Maleh Brothers, LLC (Maleh), plaintiff's predecessor in interest, whereby the former leased from the latter, the premises located at 798 East Tremont Avenue, Bronx, NY 10460 (798). Subsequently, Maleh assigned the lease to plaintiff. On July 21, 2016, Tax assigned the lease to WF and on December 1, 2019, WF assigned the lease to Liberty. Upon assignment, neither WF nor Tax were ever relieved of their obligations under the foregoing lease and subsequent assignment. On or about December 1, 2019, Liberty notified plaintiff of its intent to renew the lease resulting in the execution of an amendment to the lease, which extended the lease's term to May 31, 2022 and provided an option whereby Liberty could, by exercising the option prior to January 1, 2022, extend the lease by an additional three years. On March 16, 2022, by letter of renewal and acceptance, Liberty exercised the option in the amendment to the lease. On March 29, 2022, plaintiff accepted the exercise of the option, conveyed the same to Liberty, and the lease was renewed through May 31, 2025. On May 31, 2022, Liberty made an initial rent payment towards the renewed lease totaling $9,286.48. On June 1, 2022, Liberty rescinded and reversed the foregoing payment and on that same date, vacated 798.
Based on the foregoing, plaintiff interposes three causes of action. The first cause of action is for breach of contract, wherein it is alleged that on March 16, 2022, defendants exercised their option to renew the lease, which on March 29, 2022, despite the belated exercise of the option, plaintiff waived the belated notice and accepted defendants' option to renew the lease. Despite the foregoing, on May 31, 2022, defendants rescinded the renewal and reversed a payment made in furtherance thereof. Accordingly, plaintiff alleges that defendants breached the agreement between the parties. The second cause of action is for promissory estoppel, wherein it is alleged that plaintiff relied on Liberty's exercise of its option to renew the lease, did not find a new tenant to replace Liberty, and that as result of Liberty's recision of the option and then vacature from 798, plaintiff sustained damages. The third cause of action is for unjust enrichment, wherein it is alleged that defendants were unjustly enriched by Liberty's exercise of its option to renew the lease and recision of the same after plaintiff's acceptance thereof.
STANDARD OF REVIEW
Pursuant to CPLR § 3211(a)(1), a pre-answer motion for dismissal based upon documentary evidence should only be granted when "the documentary evidence utterly refutes plaintiff's factual allegations, conclusively establishing a defense as a matter of law" (Goshen v Mutual Life Ins. Co. of NY, 98 N.Y.2d 314, 326 [2002]; Leon v Martinez, 84 N.Y.2d 83, 88 [1994]; IMO Industries, Inc. v Anderson Kill & Olick, P.C., 267 A.D.2d 10, 10 [1st Dept 1999]). Much like on a motion pursuant to CPLR § 3211(a)(7), on a motion to dismiss pursuant to CPLR § 3211(a)(1), the allegations in plaintiff's complaint are accepted as true, constructed liberally and given every favorable inference (Arnav Industries, Retirement Trust v Brown, Raysman, Millstein, Felder & Steiner, L.L.P., 96 N.Y.2d 300, 303 [2001], overruled on other grounds by Oakes v Patel, 20 N.Y.3d 633 [2013]; Hopkinson III v Redwing Construction Company, 301 A.D.2d 837, 837-838 [3d Dept 2003]; Fern v International Business Machines Corporation, 204 A.D.2d 907, 908-909 [3d Dept 1994]).
Affidavits are not documentary evidence for the purpose of establishing relief under CPLR § 3211(a)(1) (Fleming v Kamden Properties, LLC, 41 A.D.3d 781, 781 [2d Dept 2007][Here, the appellants' submissions in support of their motion included an affidavit and a verified Surrogate's Court petition which the Supreme Court properly declined to consider on a motion to dismiss pursuant to CPLR 3211 (a) (1) because the submissions did not constitute documentary evidence."]; Berger v Temple Beth-El of Great Neck, 303 A.D.2d 346, 347 [2d Dept 2003]).
On a motion to dismiss a complaint pursuant to CPLR § 3211(a)(7), on grounds that the complaint fails to state a cause of action, all allegations in the complaint are deemed to be true (Sokoloff v Harriman Estates Dev. Corp., 96 N.Y.2d 409, 414 [2001]; Cron v Hargro Fabrics, 91 N.Y.2d 362, 366 [1998]). All reasonable inferences which can be drawn from the complaint and the allegations therein stated shall be resolved in favor of the plaintiff (Cron at 366). In opposition to such a motion a plaintiff may submit affidavits to remedy defects in the complaint (id.). If an affidavit is submitted for that purpose, it shall be given its most favorable intendment (id.). The court's role when analyzing the complaint in the context of a motion to dismiss is to determine whether the facts as alleged fit within any cognizable legal theory (Sokoloff v Harriman Estates Development Corp., 96 N.Y.2d 409, 414 [2001]). In fact, the law mandates that the court's inquiry be not limited solely to deciding whether plaintiff has pled the cause of action intended, but instead, the court must determine whether the plaintiff has pled any cognizable cause of action (Leon v Martinez, 84 N.Y.2d 83, 88 [1994] ["(T)he criterion is whether the proponent of the pleading has a cause of action, not whether he has stated one."]). However, "when evidentiary material [in support of dismissal] is considered the criterion is whether the proponent of the pleading has a cause of action not whether he has stated one" (Guggenheimer v Ginzburg, 43 N.Y.2d 268, 275 [1977] [emphasis added).
Significantly, documentary evidence means judicial records, judgments, orders, contracts, deeds, wills, mortgages and "a paper whose content is essentially undeniable and which, assuming the verity of its contents and the validity of its execution, will itself support the ground upon which the motion is based" (Webster Estate of Webster v State of New York, 2003 WL 728780, at *1 [Ct Cl Jan. 30, 2003]). Accordingly, much like on a motion seeking dismissal pursuant to CPLR § 3211(a)(1), where affidavits and deposition transcripts are not documentary evidence sufficient to establish a right to dismissal (Fleming at 781; Berger at 347) "affidavits submitted by a defendant [in support of a motion pursuant to CPLR § 3211(a)(7)] will almost never warrant dismissal under CPLR 3211 unless they establish conclusively that the plaintiff has no cause of action" (Sokol v Leader, 74 A.D.3d 1180, 1182 [2d Dept 2010] [internal quotation marks omitted and emphasis added]; see Rovello v Orofino Realty Co., Inc., 40 N.Y.2d 633, 636 [1976] ["affidavits submitted by the defendant will seldom if ever warrant the relief he seeks unless too the affidavits establish conclusively that plaintiff has no cause of action."]; Matter of Lawrence v Miller, 11 N.Y.3d 588, 595 [2008]).
CPLR § 3013 states that
[s]tatements in a pleading shall be sufficiently particular to give the court and parties notice of the transactions, occurrences, or series of transactions or occurrences, intended to be proved and the material elements of each cause of action or defense.
As such, a complaint must contain facts essential to give notice of a claim or defense (DiMauro v Metropolitan Suburban Bus Authority, 105 A.D.2d 236, 239 [2d Dept 1984]). Vague and conclusory allegations will not suffice (id.); Fowler v American Lawyer Media, Inc., 306 A.D.2d 113, 113 [1st Dept 2003]); Shariff v Murray, 33 A.D.3d 688 [2d Dept 2006]; Stoianoff v Gahona, 248 A.D.2d 525, 526 [2d Dept 1998]). When the allegations in a complaint are vague or conclusory, dismissal for failure to state a cause of action is warranted (Schuckman Realty, Inc. v Marine Midland Bank, N.A., 244 A.D.2d 400, 401 [2d Dept 1997]; O'Riordan v Suffolk Chapter, Local No. 852, Civil Service Employees Association, Inc., 95 A.D.2d 800, 800 [2d Dept 1983]). While generally, on a motion to dismiss the complaint for its failure to state a cause of action, the facts in the complaint are deemed true, "bare legal conclusions and factual claims which are flatly contradicted by the record are not presumed to be true" (Parola, Gross & Marino, P.C. v Susskind, 43 A.D.3d 1020, 1021-1022 [2d Dept 2007]; Meyer v Guinta, 262 A.D.2d 463, 464 [2d Dept 1999]).
On a motion to dismiss a complaint pursuant to CPLR § 3211(a)(8), on grounds that the court lacks personal jurisdiction over one or more defendants, the allegations in the complaint must be accepted as true and plaintiff must be accorded every favorable inference (Whitcraft v Runyon, 123 A.D.3d 811, 812 [2d Dept 2014]; Weitz v Weitz, 85 A.D.3d 1153, 1153 [2d Dept 2011]). Significantly, on such a motion, it is generally the plaintiff or the proponent of jurisdiction who bears the burden of establishing jurisdiction (O'Brien v Hackensack Univ. Med. Ctr., 305 A.D.2d 199, 200 [1st Dept 2003] ["In either event, the burden rests on plaintiff as the party asserting jurisdiction."]; Ying Jun Chen v Lei Shi, 19 A.D.3d 407, 407 [2d Dept 2005]; Brandt v Toraby, 273 A.D.2d 429, 430 [2d Dept 2000]). The law, however, does not generally mandate that plaintiff make a prima facie showing of personal jurisdiction, but only that there has a sufficient start on the issue of jurisdiction to warrant further discovery on the issue (Peterson v Spartan Indus., Inc., 33 N.Y.2d 463, 467 [1974]; James v iFinex Inc., 185 A.D.3d 22, 30 [1st Dept 2020] ["Rather, she need only make a "sufficient start" in demonstrating, prima facie, the existence of personal jurisdiction, since facts relevant to this determination are frequently in the exclusive control of the opposing party and will only be uncovered during discovery."]; James v iFinex Inc., 185 A.D.3d 22, 30 [1st Dept 2020]; Bunkoff Gen. Contractors Inc. v State Auto. Mut. Ins. Co., 296 A.D.2d 699, 700 [3d Dept 2002]). A plaintiff demonstrates a sufficient start by establishing that there is an issue as to jurisdiction that cannot be resolved absent further discovery on that issue (Peterson at 467; James at 30; Bunkoff Gen. Contractors Inc. at 700). If questions of fact as to the issue of jurisdiction exist, the court can order a hearing to resolve any factual issues (Juron and Minzner v Dranoff and Patrizio, 180 A.D.2d 439, 439 [1st Dept 1992]; EAC Sys., Inc. v Chevie, 154 A.D.2d 813 [3d Dept 1989]).
DISCUSSION
Dismissal of NP's Claims for lack of Personal Jurisdiction
NP's motion pursuant to CPLR § 3211(a)(8) seeking dismissal of plaintiff's claims against NP on grounds that the Court has no personal jurisdiction over NP is denied. Here, the amended complaint pleads sufficient facts to establish that this Court has general jurisdiction over NP so as to confer personal jurisdiction over NP.
CPLR § 301 prescribes the power of New York courts to exercise general jurisdiction over defendants in actions brought before its courts. CPLR § 301 states that "[a] court may exercise such jurisdiction over persons, property, or status as might have been exercised heretofore." In order to exercise general jurisdiction over a defendant under CPLR § 301, a defendant must either be domiciled or have its principal place of business in New York (IMAX Corp. v The Essel Group, 154 A.D.3d 464, 466 [1st Dept 2017]; Magdalena v Lins, 123 A.D.3d 600, 601 [1st Dept 2014]), or its contacts with New York must be "so extensive as to support general jurisdiction notwithstanding domicile elsewhere" (IMAX Corp. v The Essel Group, 154 A.D.3d 464, 466 [1st Dept 2017] [internal quotation marks omitted]; see Aybar v Aybar, 169 A.D.3d 137, 144 [2d Dept 2019], affd, 37 N.Y.3d 274 [2021] ["Neither Ford nor Goodyear is incorporated in New York or has its principal place of business here. Thus, New York courts can exercise general jurisdiction over each defendant only if the plaintiffs have established that its affiliations with New York are so continuous and systematic as to render it essentially 'at home' here"]). Thus, generally, general jurisdiction over a corporation does not exist if it is neither incorporated in New York or has its principle place of business therein (Magdalena at 601). Instead, under CPLR § 301 and New York's exercise of general personal jurisdiction "a foreign corporation is amenable to suit in our courts if it is engaged in such a continuous and systematic course of doing business here as to warrant a finding of its presence in this jurisdiction" (Frummer v Hilton Hotels Intern., Inc., 19 N.Y.2d 533, 536 [1967] [internal quotation marks omitted]). The relevant inquiry is whether the exercise of personal jurisdiction satisfies due process in that a foreign corporation has minimum contacts with the forum state such that suing the corporation in the forum state does not run afoul of notions of fair play and substantial justice (id. at 536). In Frummer, the court, while noting that the mere solicitation of business in New York was not doing business in New York for purposes of general jurisdiction, nevertheless held that it had general jurisdiction over defendant, a British corporation (id. at 536). In Frummer, the British corporation, with a hotel in London, moved to dismiss the claims brought against it by plaintiff, who fell and was injured in a room at the hotel (id. at 535). In denying the defendant's motion, the Court noted that the defendant, the British corporation, was doing business in New York because its affiliate, who had an office, telephone number, and a bank account in New York, advertised that it could make reservations at defendant's hotel, such that it generated business for defendant in New York (id. at 537). In other words, the court held defendant was, in fact, doing business in New York because through its affiliate in New York, it did "all the business which [defendant, the foreign corporation] could do were it here by its own officials" (id. at 537). Notably, for purposes of general jurisdiction, merely operating an office in New York, does not, by itself, confer general jurisdiction over a foreign corporation (Matter of B&M Kingstone, LLC v Mega Intl. Commercial Bank Co., Ltd., 131 A.D.3d 259, 265 [1st Dept 2015] [Court held that it had no general jurisdiction over defendant, a foreign corporation with a branch office in New York.]).
Similarly, general jurisdiction over a natural person does not exist unless he/she is domiciled in New York (Magdalena at 601 ["Similarly, no jurisdiction lies pursuant to CPLR 301 over Glendun's founder, defendant Eduardo Lins. While Lins, a Brazilian national, owns an apartment in New York, he is not domiciled there. His daughters regularly reside there. Lins resides and is domiciled in Uruguay; New York is not his domicile."]), or if his/her contacts with New York are extensive so as "to support general jurisdiction notwithstanding domicile elsewhere" (Reich v Lopez, 858 F.3d 55, 63 [2d Cir 2017]).
CPLR § 302 prescribes the ability of New York courts to exercise personal long-arm or specific jurisdiction over non-domiciliaries. Generally, a court can exercise personal jurisdiction over a non-domiciliary, who in person or through an agent,
transacts any business within the state or contracts anywhere to supply goods or services in the state[,]... commits a tortious act within the state, except as to a cause of action for defamation of character arising from the act[, or if he/she]... commits a tortious act without the state causing injury to person or property within the state, except as to a cause of action for defamation of character arising from the act, if he... regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the state, or... expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce(CPLR § 302[a]).
Pursuant to CPLR § 302(a)(1), the courts of this state can exercise personal jurisdiction over any non-domiciliary who in person or through his agent "transacts any business within the state or contracts anywhere to supply goods or services in the state." However, specific personal jurisdiction can only be exercised thereunder if the cause of action asserted arises from the very transactions upon which jurisdiction is based (Deutsche Bank Sec., Inc. v Montana Bd. of Investments, 7 N.Y.3d 65, 71 [2006]; Kreutter v McFadden Oil Corp., 71 N.Y.2d 460, 467 [1988]; Longines-Wittnauer Watch Co. v Barnes & Reinecke, Inc., 15 N.Y.2d 443, 458 [1965] ["Not only did the contract upon which the suit is based have 'substantial connection' with New York but the appellant's 'contacts' with this State were such 'that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.'"]; Opticare Acquisition Corp. v Castillo, 25 A.D.3d 238, 246 [2d Dept 2005]). Provided that a defendant's activities in New York were purposeful, a defendant is deemed to have transacted business in New York, even if the contact with New York involves a single transaction conducted without actual entry into New York (Kreutter at 467 [CPLR 302(1) is "a 'single act statute' and proof of one transaction in New York is sufficient to invoke jurisdiction, even though the defendant never enters New York, so long as the defendant's activities here were purposeful and there is a substantial relationship between the transaction and the claim asserted."]). In Opticare Acquisition Corp., the defendants, nondomiciliaries, were deemed to have transacted business in New York "by entering into agreements which, in each case, gave rise to substantial relationships, both substantively and temporally, with a New York employer... [because they] had systematic, ongoing relationships with a New York company, with which they were in daily contact." (id. at 244-245). The court then noted that the requisite nexus between the business defendants transacted and the claims alleged in the complaint existed since the breach of the confidentiality agreement arose therefrom (id. at 226-247 ["We have little difficulty concluding that there is such a nexus here. If the appellants' transaction of business is viewed as the execution of their respective employment agreements, then the cause of action sued upon in each case-breach of those agreements-clearly arose from the relevant transaction. On the other hand, if the transaction of business is viewed as the appellants' post agreement business activities on behalf of Wise, then the causes of action clearly arose therefrom once again. Simply put, the appellants could not conduct any business for Wise, in New York or elsewhere, without the confidential information they allegedly misappropriated. The contractual breaches that are alleged here consist, inter alia, in the misappropriation of the very confidential information that allowed the appellants to transact business in the first place" [internal quotation marks omitted]).
The execution of a contract outside New York, by itself, does not preclude the exercise of specific jurisdiction, if there exist substantial pre and post-execution activities in New York (Longines-Wittnauer Watch Co. at 458), and the fact that a contract was executed in New York, without more, does not constitute the transaction of business in New York sufficient to allow the exercise of specific jurisdiction (Libra Glob. Tech. Services (UK) Ltd. v Telemedia Intern., Ltd., 279 A.D.2d 326, 327 [1st Dept 2001]).
Under CPLR § 302(a)(2), which premises specific personal jurisdiction upon the commission of "a tortious act within the state," jurisdiction can only be exercised when a nondomiciliary defendant commits a tortious act within New York (Longines-Wittnauer Watch Co. at 460 ["The mere occurrence of the injury in this State certainly cannot serve to transmute an out-of-state tortious act into one committed here within the sense of the statutory wording. Any possible doubt on this score is dispelled by the fact that the draftsmen of section 302 pointedly announced that their purpose was to confer on the court 'personal jurisdiction over a non-domiciliary whose act in the state gives rise to a cause of action' or, stated somewhat differently, 'to subject non-residents to personal jurisdiction when they commit acts within the state'" [internal citations omitted]). This means that in order to have a court exercise jurisdiction pursuant to CPLR § 302(a)(2), the nondomiciliary defendant has to be physically present in New York when he/she commits the tort upon which jurisdiction is premised or the factual equivalent thereof (Banco Nacional Ultramarino, S.A. v Chan, 169 Misc.2d 182, 188 [Sup Ct 1996], affd sub nom. Banco Nacional Ultramarino, S.A. v Moneycenter Tr. Co. Ltd., 240 A.D.2d 253 [1st Dept 1997]; Bensusan Rest. Corp. v King, 126 F.3d 25, 28 [2d Cir 1997]; Pilates, Inc. v Pilates Inst., Inc., 891 F.Supp. 175, 182 [SDNY 1995]; Paul v Premier Elec. Const. Co., 576 F.Supp. 384, 389 [SDNY 1983]; Dept. of Economic Dev. v Arthur Andersen & Co. (U.S.A.), 747 F.Supp. 922, 929 [SDNY 1990]).
Under CPLR § 302(a)(3),
a court can exercise primary personal jurisdiction over a nondomiciliary when the nondomiciliary commits a tortious act outside of New York which causes injury to person or property in New York if the nondomiciliary regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the state, or... expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce(id. at § 302[a][3][i)]and [ii]). As the court in LaMarca v Pak-Mor Mfg. Co. (95 N.Y.2d 210 [2000]) discussed, jurisdiction under the foregoing statute rests on five elements
[f]irst, that defendant committed a tortious act outside the State; second, that the cause of action arises from that act; third, that the act caused injury to a person or property within the State; fourth, that defendant expected or should reasonably have expected the act to have consequences in the State; and fifth, that defendant derived substantial revenue from interstate or international commerce(id. at 214; see Ingraham v Carroll, 90 N.Y.2d 592, 596 [1997]).
The fourth element - that a defendant expects or should reasonably expect the act to have consequences in the State - an element designed to make it reasonable to require a defendant to come to New York and answer for tortious conduct committed elsewhere - is established when defendant knows that its goods are likely to be sold in New York, such that he/she should reasonably expect that an out of state tortious act will have direct consequences in New York (id. at 214-215; see Ingraham at 598 ["The first prong of CPLR 302 (a)(3)(ii) has been satisfied. Respondent concededly was aware that decedent, a New York resident, was receiving treatment from New York State primary physicians based, at least in part, on his recommendations. He contacted decedent's physicians directly, by mail and via telephone, concerning the treatment she was to receive in New York. Significantly, respondent acknowledged that his expectation, when making recommendations, is that the CHP doctor in New York would follow his advice. Hence, respondent, in essence, has admitted that his allegedly tortious action (a misdiagnosis and improper recommendation) would have consequences within New York, satisfying the fourth prong of CPLR 302(a)(3)(ii)."]).
The fifth element - that a defendant derives substantial revenue from interstate or international commerce - an element designed to narrow the reach of specific jurisdiction so as to preclude jurisdiction over injurious conduct by those whose business is local and outside of New York is established when the defendant derives substantial commerce from interstate commerce (LaMarca at 215; cf Ingraham at 600 ["Undisputably, all of respondent's revenue is derived from such local medical services, provided in Vermont. In this respect, respondent's revenue is even less interstate in character than that of a renowned medical specialist, the bulk of whose income may be earned from treating out-of-State patients."]).
Here, a review of the amended complaint evinces that it alleges that NP is a foreign business corporation authorized to transact business in New York State and that at all relevant times alleged in the amended complaint, NP transacted business in New York.
The foregoing allegations, taken as true, sufficiently establish that this Court has general jurisdiction over NP. To be sure, as noted above, on a motion to dismiss a complaint pursuant to CPLR § 3211(a)(8), on grounds that the court lacks personal jurisdiction over one or more defendants, the allegations in the complaint must be accepted as true and plaintiff must be accorded every favorable inference (Whitcraft at 812; Weitz at 1153). While on such a motion, it is generally the plaintiff or the proponent of jurisdiction who bears the burden of establishing jurisdiction (O'Brien at 200; Ying Jun Chen at 407; Brandt at 430), the law does not mandate that plaintiff make a prima facie showing of personal jurisdiction, but only that there has a sufficient start on the issue of jurisdiction to warrant further discovery on the issue (Peterson at 467; James at 30; James at 30; Bunkoff Gen. Contractors Inc. at 700), and a plaintiff demonstrates a sufficient start by establishing that there is an issue as to jurisdiction that cannot be resolved absent further discovery on that issue (Peterson at 467; James at 30; Bunkoff Gen. Contractors Inc. at 700). With regard to general jurisdiction, CPLR § 301 states that "[a] court may exercise such jurisdiction over persons, property, or status as might have been exercised heretofore." Accordingly, in order to exercise general jurisdiction over a defendant under CPLR § 301, a defendant must either be domiciled or have its principal place of business in New York (IMAX Corp. at 466; Magdalena at 601), or its contacts with New York must be "so extensive as to support general jurisdiction notwithstanding domicile elsewhere" (IMAX Corp. at 466). With regard to a foreign corporation, under CPLR § 301 "a foreign corporation is amenable to suit in our courts if it is engaged in such a continuous and systematic course of doing business here as to warrant a finding of its presence in this jurisdiction" (Frummer at 536). Here, the amended complaint, conceding that NP is a foreign corporation, sufficiently pleads, that NP nevertheless "regularly did or solicited business in State of New York... engaged in a persistent course of conduct within the State of New York...[and] derived substantial revenue from services rendered in the State of New York." (NY St Cts Elec Filing [NYSCEF] Doc No. 15 at 4). Accordingly, the amended complaint sufficiently establishes that this Court has general jurisdiction over NP.
In support of the instant motion, NP submits several documents, including a Certificate Change of Name and NP's Amended and Restated Articles, both of which evince that NP is incorporated pursuant to the Business Corporations Act of British Columbia, in Canada. NP also submits two documents - including one titled Notes to the Interim Condensed Consolidated Financial Statements - which evince that NP was incorporated in Canada and that NP's head office in the United States is located in Hurst, Texas. The foregoing documents, however, merely establish that NP is a foreign corporation with no principal place of business in New York. Indeed, the documents do nothing more than establish what plaintiff concedes - that NP is a foreign corporation because it has no principal place of business in New York. This however, does not negate the allegations in the amended complaint that NP transacts significant business in New York so as to warrant the exercise of general jurisdiction.
To the extent that NP asserts that the Court lacks specific jurisdiction over it, the Court agrees. Again, with regard to specific jurisdiction pursuant to CPLR § 302(a)(1), the courts of this state can exercise personal jurisdiction over any non-domiciliary, who in person or through his agent, "transacts any business within the state or contracts anywhere to supply goods or services in the state." Specific personal jurisdiction, however, can only be exercised if the cause of action asserted arises from the very transactions upon which jurisdiction is based (Deutsche Bank Sec., Inc. at 71; Kreutter at 467; Longines-Wittnauer Watch Co. at 458; Opticare Acquisition Corp. at 246). Here, the amended complaint is utterly silent with respect to any allegations that NP's liability and therefore, the basis of long arm jurisdiction, or specific jurisdiction, arises from any of NP's transactions in New York with plaintiff. In other words, the mere allegation that NP transacts business in New York without an allegation that those transactions have a nexus to the wrongs alleged in the amended complaint are insufficient to warrant a finding of specific jurisdiction.
Dismissal for Failure to State a Cause of Action
Defendants' motion seeking dismissal of the amended complaint on grounds that it fails to state a cause of action is granted to the extent of dismissing all but the first cause of action against Liberty for breach of contract. Significantly, the amended complaint states a cause of action against Liberty for breach of the renewed lease. Moreover, given the documentary evidence submitted by defendants, the amended complaint fails to state a cause of action for breach of contract against any other defendant because the documents establish that the agreement between Liberty and plaintiff, wherein the lease term was modified and, inter alia, extended until May 31, 2022, constitutes material alteration to the original agreements to which Tax and WF were bound, thereby releasing them from any liability. Lastly, insofar as the causes of action for promissory estoppel and unjust enrichment seek to recover for conduct by defendants governed by the agreements, the foregoing claims are duplicative and must be dismissed.
In support of the instant motion, and insofar as relevant, defendants submit several documents.
First, defendants submit an undated lease between Maleh and Tax, wherein Tax leased 798 for a term commencing on June 1, 2013 and ending April 31, 2018. Paragraph 11 of the lease states that
[t]enant... shall not assign... nor under let... the demised premises or any part thereof to be used by others, without the prior consent of Owner in each instance... If this lease be assigned... Owner, may after default by Tenant... collect rent from assignee... but no such assignment... shall be deemed a waiver of the covenant, or the acceptance of the assignee... or a release of Tenant from further performance by Tenant of covenants on the part of the Tenant herein contained.
Paragraph 52 of the lease rider prescribes an escalating rent schedule with rent for the first year at $7,000 per month and rent for year five, the last year, at $7,878.56 per month.
Second, defendants submit an Amendment and Assignment of Lease (amendment) dated July 21, 2016. The amendment states that it is between WF and Maleh, references the lease between Tax and Maleh, and states that Tax assigned the lease to WF with Maleh's consent. The amendment amends the lease solely to the extent of allowing WF to assume the lease and allowing Liberty to use 798.
Third, defendants submit a Lease Extension Amendment (extension) dated December 1, 2019. The extension is between plaintiff and Liberty, references the lease and the amendment, and extends the expiration of the lease until May 31, 2022. Paragraph 1 prescribes an escalating rent schedule with monthly rent at $8,500 per month from December 1, 2019 through May 31, 2020 and at $9,016 per month from June 1, 2021 through May 31, 2022. Paragraph 2 details an option to extend the lease by three years, and states that
[t]enant shall have the option, to be exercised upon written notice to Landlord on or before 1/1/2022, to extend the term of this Lease for another 3 years provided that base rent shall be increased by 3% on June 1 of any year.
Fourth, defendants submit a document dated March 16, 2022, wherein Liberty states that the document is "notice of our intent to renew the existing lease. Pursuant to section 2 of the lease extension amendment dated December 1, 2019." Liberty notes that the rent effective June 1, 2022 is $9,286.48.
Fifth, defendants submit several emails. In an email dated March 22, 2022, a Salim Maleh (SM) emails Akila Evans (Evans) at Liberty and inquires whether Liberty will be renewing the lease at 798. That same day, Evans responds and indicates that she attached a "letter of intent to renew the lease for [Liberty] located at 798 East Tremont Avenue" to her message. Later that day, SM responds to Evans, thanking her" for this and look[s] forward to working with [Evans] in the future".
Sixth, defendants submit a document which evinces that on March 31, 2022, Liberty paid plaintiff $9,286.48 and the next day reversed the foregoing payment.
Tax and WF
Based on the foregoing, defendants motion seeking dismissal of the amended complaint against Tax and WF is granted. As noted above, on a motion to dismiss a complaint pursuant to CPLR § 3211(a)(7), on grounds that the complaint fails to state a cause of action, all allegations in the complaint are deemed to be true (Sokoloff at 414; Cron at 366). All reasonable inferences which can be drawn from the complaint and the allegations therein stated shall be resolved in favor of the plaintiff (Cron at 366). In opposition to such a motion a plaintiff may submit affidavits to remedy defects in the complaint (id.). The court's role when analyzing the complaint in the context of a motion to dismiss is to determine whether the facts as alleged fit within any cognizable legal theory (Sokoloff at 414). However, "when evidentiary material [in support of dismissal] is considered the criterion is whether the proponent of the pleading has a cause of action not whether he has stated one" (Guggenheimer at 275[emphasis added).
Here, contrary to defendants' assertion, the amended complaint states a cause of action against Tax and WF by alleging that despite the ultimate assignment of the lease to Liberty, Tax was never relieved of responsibility under the lease and the subsequent assignment of the same. With regard to WF's assignment of the lease to Liberty, the amended complaint alleges the same. To the extent that the none of the documents submitted by defendants contradict the allegation in the amended complaint that neither Tax nor WF were expressly relived of liability under the lease and the extension, dismissal is not warranted on the grounds that the assignments, in and of themselves, obviate Tax and Wf's liability.
To be sure, it is well settled that one who is not a party to an agreement bears no liability thereunder (Black Car and Livery Ins., Inc. v H & W Brokerage, Inc., 28 A.D.3d 595, 596 [2d Dept 2006]; Balk v 125 W. 92nd St. Corp., 24 A.D.3d 193, 193 [1st Dept 2005]; Blank v Noumair, 239 A.D.2d 534, 534 [2d Dept 1997]). It is equally well settled, however, that an assignor to a contract is not released of its obligations thereunder merely by virtue of an assignment by the assignor (Mandel v Fischer, 205 A.D.2d 375, 376 [1st Dept 1994] ["As the IAS court correctly stated, an assignment does not release the assignor of its obligations under the assigned contract."]; Matter of Auerbach v State Tax Com'n, 142 A.D.2d 390, 394 [3d Dept 1988] see Rosenthal Paper Co. v Natl. Folding Box & Paper Co., 226 NY 313, 326 [1919] ["The assignment did not absolve him from its obligations."]). This is particularly true in the context of a tenant who is a party to a lease, where, "[i]t has long been settled that neither the consent of a landlord to the assignment of a lease nor the acceptance of rent from an assignee of the original tenant releases the latter from his covenant to pay the rent" (Halbe v Adams, 172 AD 186, 189 [1st Dept 1916]). Indeed, in the context of a landlord/tenant relationship even assignment of the lease with the landlord's consent is not tantamount to releasing the assignor of its liability under the lease (185 Madison Assoc. v Ryan, 174 A.D.2d 461, 461 [1st Dept 1991]; Iorio v Superior Sound, Inc., 49 A.D.2d 1008, 1008 [4th Dept 1975] ["Plaintiff's consent to the assignment did not serve as a release of defendant's liability for rent under the lease."]). Accordingly, to be released from liability upon assignment, there must be express agreement to that effect (Mandel at 376 ["absent an express agreement to that effect or one that can be implied from facts other than the other contracting party's mere consent to the assignment."]; Matter of Auerbach at 394; Iorio at 1008; Halbe at 86).
Here, pursuant to the lease, Tax was the original lessee at 798. Thereafter, per the amendment, dated July 21, 2016, Tax assigned the lease to WF with Maleh's consent. The amendment, however contains no express language, which relieves Tax of its obligations under the lease. The same is true of the extension, dated December 19, 2019, which while listing Liberty as the new lessee, is utterly silent as to whether WF was liable under the extension. Since a release of liability must be express, the extension's failure to mention WF is tantamount to a failure to relieve it of any liability under the amendment.
Despite the foregoing, however, a review of the agreements, specifically, the extension, evince that both Tax and WF were released from liability by operation of law. To be sure, it is well settled that when a landlord and the original tenant's assignee enter into an agreement, modifies the original lease, the result is that the original tenant is released from liability under the lease as a matter of law (Mid Val. Assoc., LLC v Foot Locker Specialty, Inc., 28 A.D.3d 206 [1st Dept 2006] ["In this action against a tenant for unpaid rent, the motion court properly found that plaintiff had recognized defendant's assignee as the new tenant under the lease by accepting rent from it directly and granting it an additional renewal not included in the lease, thus releasing the original tenant, by operation of law, from its obligation to pay rent."]; Brill v Friedhoff, 184 AD 673, 676 [1st Dept 1918], affd, 229 NY 547 [1920]). As the court in Brill noted,
[w]here [] a new agreement is made between the landlord and the assignee, whereby the assignee is given the duration of the term and assumes the obligations of the original lease, it is generally considered that this creates a surrender by operation of law(Brill at 676). Here, the extension not only extended the term of the original lease by four years, but also include a an option to renew the lease for an additional three years. Accordingly, these significant changes and additions to the original lease, materially altered the lease and the amendment sought, such that Tax and WF were released from any liability thereunder as a matter of law. Accordingly, the amended complaint against Tax and WF must be dismissed.
Nextpoint
Defendants' motion seeking dismissal of the amended complaint against Nextpoint on grounds that the amended complaint fails to state a cause of action is granted. First, insofar as the amended complaint attempts to premise Nextpoint's liability as vicarious, on the ground that WF is Nextpoint's subsidiary, the dismissal of the amended complaint against WF, discussed above, warrants, as a matter of law, dismissal of the amended complaint against Nextpoint. Moreover, the allegations in the amended complaint, even if true, fail to state a cause of action against Nexpoint.
A review of the amended complaint evinces that with regard to Nextpoint, the only allegation concerning the events in the amended complaint are that WF was Nexpoint's subsidiary, who Nextpoint controlled. Accordingly, the amended complaint attempts to plead a cause of action against Nextpoint premised on vicarious liability. In other words, and as urged by plaintiff in its opposition papers to the instant motion, Nextpoint's laibility is purely vicarious.
The doctrine of vicarious liability holds a one person liable for another person's wrongdoing (Bros. v New York State Elec. and Gas Corp., 11 N.Y.3d 251, 257 [2008]; Feliberty v Damon, 72 N.Y.2d 112, 117 [1988]; Bennett v State Farm Fire and Cas. Co., 198 A.D.3d 857, 96-97 [2d Dept 2021]). The foregoing theory is grounded on the notion that if a defendant controls the actions of a wrongdoer, the defendant should be liable for the wrongdoer's conduct and stands in the wrongdoer's shoes (Feliberty at 117-18 ["The doctrine of vicarious liability, which imputes liability to a defendant for another person's fault, rests in part on the theory that-because of an opportunity for control of the wrongdoer, or simply as a matter of public policy loss distribution-certain relationships may give rise to a duty of care, the breach of which can indeed be viewed as the defendant's own fault."]; see Bros. at 257; Bennett at 96-97). To that end, since control is the lynchpin of vicarious liability (Kavanaugh by Gonzales v Nussbaum, 71 N.Y.2d 535, 547 [1988] ["The court concluded that vicarious liability "ought not be extended to rest on a situation where there is neither a legal nor an actual control of the treating physician by the other physician and the relationship between them upon which responsibility is sought to be imputed turns upon a shared office and an agreement to service each other's patients for a shared fee."]), it is well settled that unless "the parent intervenes in the subsidiary's management so thoroughly as to ignore the subsidiary's paraphernalia of incorporation, directors and officers," a parent company is not liable for the acts of its subsidiary (Dempsey v Intercontinental Hotel Corp., 126 A.D.2d 477, 478 [1st Dept 1987]; see Billy v Consol. Mach. Tool Corp., 51 N.Y.2d 152, 163 [1980] ["But, such liability can never be predicated solely upon the fact of a parent corporation's ownership of a controlling interest in the shares of its subsidiary. At the very least, there must be direct intervention by the parent in the management of the subsidiary to such an extent that the subsidiary's paraphernalia of incorporation, directors and officers are completely ignored" (internal quotation marks omitted)]; Mitchell v TAM Equities, Inc., 27 A.D.3d 703, 708 [2d Dept 2006] Merrell-Benco Agency, LLC v HSBC Bank USA, 20 A.D.3d 605, 609 [3d Dept 2005]). The foregoing notion is premised on the longstanding principle that a Corporation is a unique legal entity "distinct from [its] managers and shareholders and ha[s] an independent legal existence. [As such,] their separate personalities cannot be disregarded" (Port Chester Elec. Const. Co. v Atlas, 40 N.Y.2d 652, 656 [1976]; R.T. Subway Const. Co. v City of New York, 259 NY 472, 487 [1932]).
Here, since the amended complaint against WF has been dismissed, dismissal of the amended complaint against Nextpoint, alleged to be WF's parent company, must also be dismissed by operation of law. Significantly, any action dismissed against an agent necessarily warrants dismissal of the same action against the principal who is sought to be held vicariously liable. Moreover, the two conclusory allegations in the amended complaint alleging that WF was controlled by Nextpoint and that the former was the latter's subsidiary are insufficient to state a cause of action against Nexpoint, who as non-signatory to any of the agreements in this action, is only vicariously liable for WF's actions (Am. Real Estate Holdings Ltd. Partnership v Citibank, N.A., 45 A.D.3d 277, 278 [1st Dept 2007] ["However, we modify to the extent of dismissing the action as against defendant Citigroup, Inc., Citibank's parent corporation. Citigroup was not a party to the subject lease, and although Citibank's correspondence with plaintiff appeared on Citigroup letterhead, these letters specifically refer to Citibank, define the 'tenant' as Citibank, and cannot form the basis for holding Citigroup liable for Citibank's alleged breach of the lease."]). Indeed, the amended complaint's dearth of facts on the instant issue results in nothing more than two vague and conclusory allegations with regard to Nextpoint's control of WF, which, as a matter of law, is insufficient to state a cause of action (DiMauro at 239) and requires dismissal of the amended complaint (Schuckman Realty, Inc. at 401; O'Riordan at 800).
Promissory Estoppel and Unjust Enrichment
Defendants' motion seeking dismissal of the second and third causes of action for promissory estoppel and unjust enrichment, respectively, is granted. Significantly, the instant causes of action are premised on the same events on which the breach of contract claim is premised. Accordingly, these are duplicative quasi-contract causes of action, which when, as here, they merely duplicate an existing and pleaded cause of action for breach of contract, must be dismissed.
It is well settled that "[a]n unjust enrichment claim is not available where it simply duplicates, or replaces, a conventional contract or tort claim" (Corsello v Verizon New York, Inc., 18 N.Y.3d 777, 790 [2012]; Cooper, Bamundo, Hecht & Longworth, LLP v Kuczinski, 14 A.D.3d 644, 645 [2d Dept 2005]; Bettan v Geico Gen. Ins. Co., 296 A.D.2d 469, 470 [2d Dept 2002]). This is because a quasi contract cause of action only exists in the absence of a valid contract governing the very same events being asserted in a quasi contract cause of action (Clark-Fitzpatrick, Inc. v Long Is. R. Co., 70 N.Y.2d 382, 388 [1987]). Stated differently, where a party sues in tort, solely to enforce a contract, a tort claim is barred (Encore Lake Grove Homeowners Ass'n, Inc. v Cashin Assoc., P.C., 111 A.D.3d 881, 883 [2d Dept 2013] ["A court enforcing a contractual obligation will ordinarily impose a contractual duty only on the promisor in favor of the promisee and any intended third-party beneficiaries. Thus where a party is merely seeking to enforce its bargain, a tort claim will not lie" [internal citation and quotation marks omitted].). The same is true with a claim for promissory estoppel (Kim v Francis, 184 A.D.3d 413, 414 [1st Dept 2020] ["We modify to dismiss the promissory estoppel claim, however, because although it was adequately pleaded, the allegations were duplicative of the breach of contract claim."]; Brown v Brown, 12 A.D.3d 176 [1st Dept 2004]).
Here, the amended complaint makes it abundantly clear that the nexus for all of the causes of action therein is the failure by defendants to pay rent after it renewed the lease between the parties and its subsequent vacature from 798. Thus, insofar as plaintiff pleads a breach of contract cause of action, the claims for unjust enrichment and promissory estoppel cannot, as a matter of law stand. Accordingly, the second and third causes of action must be dismissed.
Breach of Contract
Defendants' motion seeking dismissal of the first cause of action for breach of contract is denied. Significantly, none of the documents submitted by defendants negate any of the allegations in the amended complaint, which sufficiently state a cause of action for breach of contract.
It has long been held that absent a violation of law or some transgression of public policy, people are free to enter into contracts, making whatever agreement they wish, no matter how unwise they may seem to others (Rowe v Great Atlantic & Pacific Tea Company, Inc., 46 N.Y.2d 62, 67-68 [1978]). Consequently, when a contract dispute arises, it is the court's role to enforce the agreement rather than reform it (Grace v Nappa, 46 N.Y.2d 560, 565 [1979]). In order to enforce the agreement, the court must construe it in accordance with the intent of the parties, the best evidence of which being the very contract itself and the terms contained therein (Greenfield v Philles Records, Inc., 98 N.Y.2d 562, 569 [2002]). It is well settled that "when the parties set down their agreement in a clear, complete document, their writing should be enforced according to its terms" (Vermont Teddy Bear Co., Inc. v 583 Madison Realty Company, 1 N.Y.3d 470, 475 [2004] [internal quotation marks omitted]). Moreover, "a written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms" (Greenfield at 569). Accordingly, courts should refrain from interpreting agreements in a manner which implies something not specifically included by the parties, and courts may not by construction add or excise terms, nor distort the meaning of those used and thereby make a new contract for the parties under the guise of interpreting the writing (Vermont Teddy Bear Co., Inc. at 475). This approach serves to preserve "stability to commercial transactions by safeguarding against fraudulent claims, perjury, death of witnesses [and] infirmity of memory" (Wallace v 600 Partners Co., 86 N.Y.2d 543, 548 [1995] [internal quotation marks omitted]).
The proscription against judicial rewriting of contracts is particularly important in real property transactions, where commercial certainty is paramount, and where the agreement was negotiated at arm's length between sophisticated, counseled business people (Vermont Teddy Bear Co., Inc. at 475). Specifically, in real estate transactions, parties to the sale of real property, like signatories of any agreement, are free to tailor their contract to meet their particular needs and to include or exclude those provisions which they choose. Absent some indicia of fraud or other circumstances warranting equitable intervention, it is the duty of a court to enforce rather than reform the bargain struck (Grace v Nappa, 46 N.Y.2d 560, 565 [1979]).
Leases are nothing more than contracts and are thus subject to the rules of contract interpretation, namely, that the intent of the parties is to be given paramount consideration, which intent is to be gleaned from the four corners of the agreement, and that of course, the court may not rewrite the contract for the parties under the guise of construction, nor may it construe the language in such a way as would distort the contract's apparent meaning (Tantleff v Truscelli, 110 A.D.2d 240, 244 [2d Dept 1985]).
In the absence of fraud or other wrongful act, a party who signs a written contract is presumed to know and have assented to the contents therein (Pimpinello v Swift & Co., 253 NY 159, 162 [1930]; Metzger v Aetna Ins. Co., 227 NY 411, 416 [1920]; Renee Knitwear Corp. v ADT Sec. Sys., 277 A.D.2d 215, 216 [2d Dept 2000]; Barclays Bank of New York, N.A. v Sokol, 128 A.D.2d 492, 493 [2d Dept 1987]; Slater v Fid. & Cas. Co. of NY, 277 AD 79, 81 [1st Dept 1950]). In discussing this long-standing rule the court in Metzger stated that
[i]t has often been held that when a party to a written contract accepts it as a contract he is bound by the stipulations and conditions expressed in it whether he reads them or not. Ignorance through negligence or inexcusable trustfulness will not relieve a party from his contract obligations. He who signs or accepts a written contract, in the absence of fraud or other wrongful act on the part of another contracting party, is conclusively presumed to know its contents and to assent to them and there can be no evidence for the jury as to his understanding of its terms. This rule is as applicable to insurance contracts as to contracts of any kind.(Metzger at 416 [internal citations omitted]).
Provided a writing is clear and complete, evidence outside its four corners "as to what was really intended but unstated or misstated is generally inadmissible to add to or vary the writing" (W.W.W. Assoc., Inc. v Giancontieri, 77 N.Y.2d 157, 162 [1990]; see Greenfield v Philles Records, Inc., 98 N.Y.2d 562, 569 [2002]; Mercury Bay Boating Club Inc. v San Diego Yacht Club, 76 N.Y.2d 256, 269-270 [1990]; Judnick Realty Corp. v 32 W. 32nd St. Corp., 61 N.Y.2d 819, 822 [1984]). Whether a contract is ambiguous is a matter of law for the court to decide (id. at 162; Greenfield at 169; Van Wagner Adv. Corp. v S & M Enterprises, 67 N.Y.2d 186, 191 [1986]). A contract is unambiguous if the language it uses has "definite and precise meaning, unattended by danger of misconception in purport of the agreement itself, and concerning which there is no reasonable basis for a difference of opinion" (Greenfield at 569; see Breed v Ins. Co. of N. Am., 46 N.Y.2d 351, 355 [1978]). Hence, if the contract is not reasonably susceptible to multiple meanings, it is unambiguous and the court is not free to alter it, even if such alteration reflects personal notions of fairness and equity (id. at 569-570). Notably, it is well settled that silence, or the omission of terms within a contract are not tantamount to ambiguity (id. at 573; Reiss v Financial Performance Corp., 97 N.Y.2d 195, 199 [2001]). Instead, the question of whether an ambiguity exists must be determined from the face of an agreement without regard to extrinsic evidence (id. at 569-570), and an unambiguous contract or a provision contained therein should be given its plain and ordinary meaning (Rosalie Estates, Inc. v RCO International, Inc., 227 A.D.2d 335, 336 [1st Dept 1996]).
Notably, while the parol evidence rule forbids proof of extrinsic evidence to contradict or vary the terms of a written instrument, it has no application in a suit brought where there are claims of fraud in the execution of an agreement or to rescind a contract on the ground of fraud (Sabo v Delman, 3 N.Y.2d 155, 161 [1957]; Adams v Gillig, 199 NY 314, 319 [1910]; Berger-Vespa v Rondack Bldg. Inspectors Inc., 293 A.D.2d 838, 840 [3d Dept 2002]).
The essential elements in an action for breach of contract "are the existence of a contract, the plaintiff's performance pursuant to the contract, the defendant's breach of his or her contractual obligations, and damages resulting from the breach" (Dee v Rakower, 112 A.D.3d 204, 209 [2d Dept 2013]; Elisa Dreier Reporting Corp. v Global Naps Networks, Inc., 84 A.D.3d 122, 127 [2d Dept 2011]; Brualdi v IBERIA Lineas Aeraes de España, S.A., 79 A.D.3d 959, 960 [2d Dept 2010]; JP Morgan Chase v J.H. Elec. of NY, Inc., 69 A.D.3d 802, 803 [2d Dept 2010]; Furia v Furia, 116 A.D.2d 694, 695 [2d Dept 1986]). Unless expressly proscribed by the Statute of Frauds (General Obligations Law § 5-701), a contract or agreement need not be in writing (see generally McCoy v Edison Price, Inc., 186 A.D.2d 442, 442-443 [1st Dept 1992] [Alleged oral agreement which, by its terms, was to last for as long as defendant remained in business was incapable of performance within one year, rendering it voidable under Statute of Frauds.]; Karl Ehmer Forest Hills Corp. v Gonzalez, 159 A.D.2d 613, 613 [2d Dept 1990] ["An oral promise to guarantee the debt of another is barred by the Statute of Frauds."]).
Here, the amended complaint alleges that pursuant to the extension, provided that Liberty exercised the same prior to January 1, 2022, Liberty had an option to renew the lease for an additional three years. It is alleged that on March 16, 2022, by letter of renewal and acceptance, Liberty exercised the option in the extension, that on March 29, 2022, plaintiff accepted the exercise of the option, conveyed the same to Liberty, and thus, the lease was renewed through May 31, 2025. Lastly, it is alleged that despite the foregoing and Liberty's tender of rent in the sum of $9,286.48 for the new term On May 31, 2022, on June 1, 2022, Liberty rescinded and reversed the foregoing payment, vacated 798, and that such vacature damaged plaintiff.
The foregoing establishes all the essential elements for purposes of a claim for breach of contract, namely the existence of a contract, performance pursuant to the contract, the breach of the contractual obligations, and damages resulting from the breach (Dee at 209; Elisa Dreier Reporting Corp. at 127; Brualdi at 960; JP Morgan Chase at 803; Furia at 695).
Contrary to defendants' assertion, the documents they submit confirm all the allegations in the complaint rather than negate them. Indeed, here, the documents bolster the allegations in the complaint in that they evince that the extension clearly and unambiguously set forth the existence of an option, that Liberty exercised the same, albeit untimely, and that plaintiff, waived its right to reject the option, and instead accepted it.
Notably, defendants' application to dismiss the breach of contract claim is less a question of the sufficiency of the pleadings and more about a novel legal theory, which turns prevailing contract law on its head. In essence, defendants seek to avail themselves the right by Liberty to rescind the exercise of the option on a basis solely available to plaintiff - the untimely exercise of the option. This Court finds that argument wholly bereft of merit and holds that the fact that Liberty did not timely exercise the option to renew the lease pursuant to the extension is no basis to obviate Liberty's obligation to perform under the extension.
Generally, the failure to exercise an option within the time specified by the relevant agreement precludes the exercise of the option (J. N. A. Realty Corp. v Cross Bay Chelsea, Inc., 42 N.Y.2d 392, 396 [1977]; Sy Jack Realty Co. v Pergament Syosset Corp., 27 N.Y.2d 449, 452 [1971]; Dan's Supreme Supermarkets, Inc. v Redmont Realty Co., 216 A.D.2d 512, 513 [2d Dept 1995]; Souslian Wholesale Beer & Soda, Inc. v 380-4 Union Ave. Realty Corp., 166 A.D.2d 435, 437 [2d Dept 1990]). However, the belated exercise of an option only avails, as relevant here, the landlord, who can refuse to honor the same, and not as urged here, the tenant, who as urged here, can use the belated exercise of an option as a basis to refuse to performance thereunder (J. N. A. Realty Corp. at 400 [tenant's failure to timely exercise option to renew lease which would result in forfeiture of premises warranted exercise of court's equitable powers to remedy said failure; Sy Jack Realty Co. at 463-464 [same]; Dan's Supreme Supermarkets, Inc. at 792 [same]). This is especially true in this case, where plaintiff - the landlord - excused the belated exercise of the option and chose to accept it.
Indeed,
[a]n option contract to lease a premises is an agreement to hold an offer open; [and] it confers upon the optionee, for consideration paid, the right to lease the premises at a later date. An option contract is a promise which meets the requirements for the formation of a contract and limits the promisor's power to revoke an offer, and an option offer is made binding by consideration that is, giving the requested price for the performance of the other party to the contract. Where the option involves the purchase or lease of real property, an optionee must strictly adhere to the terms and conditions of the option agreement(Mam Properties, LLC v Omnipoint Communications, Inc., 36 Misc.3d 75, 77 [App Term 2010] [internal citations and quotation marks omitted]; see Broadwall Am., Inc. v Bram Will-El LLC, 32 A.D.3d 748, 751 [1st Dept 2006]).
Here, the allegations in the amended complaint and the extension itself demonstrate that per the clear terms of the extension, Liberty belatedly exercised its option to renew the lease by exercising it almost four months past the deadline in the extension. Nevertheless, in accepting Liberty's option to renew, plaintiff ostensibly waived its right of refusal to renew the lease. Here, then, the option to renew was nothing less than defendants' offer (Mam Properties, LLC at 77; Broadwall Am., Inc. at 751), which plaintiff accepted, and therefore, a binding contract between the parties was created. To be sure,
It is well settled that "[a] waiver is the voluntary abandonment or relinquishment of a known right" (Jefpaul Garage Corp. v Presbyt. Hosp. in City of New York, 61 N.Y.2d 442, 446 [1984]; Sunoce Properties, Inc. v Bally Total Fitness of Greater New York, Inc., 148 A.D.3d 751, 752 [2d Dept 2017]). Here, plaintiff had the right under the extension to reject the option, but chose to accept it instead.
[t]o create a binding contract, there must be a manifestation of mutual assent sufficiently definite to assure that the parties are truly in agreement with respect to all material terms generally, courts look to the basic elements of the offer and the acceptance to determine whether there is an objective meeting of the minds sufficient to give rise to a binding and enforceable contract(26th St. Partners, LLC v Fedn. of Organizations for New York State Mentally Disabled, Inc., 182 A.D.3d 543, 543-544 [2d Dept 2020] [internal quotation marks omitted]; 1912 Newbridge Rd., LLC v Liantonio, 172 A.D.3d 962, 963-64 [2d Dept 2019]). Indeed, where as here, there was a clear offer - the option - and an unequivocal acceptance - SM's email to Evans - there arose a binding contract between the parties (Matter of Express Indus. and Term. Corp. v New York State Dept. of Transp., 93 N.Y.2d 584, 589 [1999] ["The first step then is to determine whether there is a sufficiently definite offer such that its unequivocal acceptance will give rise to an enforceable contract."]). Notably, Liberty's tender of the rent for the first month of the renewed term is additional indicia of its attempt to be bound by the renewed lease (Rodriguez v New York City Hous. Auth. (NYCHA), 84 A.D.3d 630, 631 [1st Dept 2011] ["Petitioner's challenge to the validity of the lease is unavailing, as she admittedly signed the lease and evinced a clear intent to be bound by it via her conduct, including the submission of affidavits of income identifying herself as the 'Lessee' and the payment of rent."]).
Lastly, while it is true that options must be timely exercised so as to "ripen[] into an enforceable bilateral contract upon [its] exercise" (Broadwall Am., Inc. at 751), the failure to timely exercise the option protects the optioner, who can decline to accept its exercise. The untimely exercise of an option cannot, as urged, proscribe the formation of a valid contract where, as here, the optioner accepts the same.
In this case, the amended complaint further alleges that after the formation of this new contract, whereby the lease was renewed for three more years, Liberty then breached the agreement by reversing its first month's rent payment and thereafter by vacating 798 three years early. These allegations sufficiently plead a cause of action for breach of contract. Again, the foregoing establishes all the essential elements for purposes of a claim for breach of contract, namely the existence of a contract (the option to renew and its acceptance), performance pursuant to the contract (Liberty's tender of rent for the first month of the new term), the breach of the contractual obligations (Liberty's reversal of the rent payment and premature vacature of 798), and damages resulting from the breach (unpaid rent for the renewal term) (Dee at 209; Elisa Dreier Reporting Corp. at 127; Brualdi at 960; JP Morgan Chase at 803; Furia at 695).
Dismissal Based on Documentary Evidence
Defendants' motion seeking dismissal of the amended complaint on grounds that the documentary evidence warrants it is denied as moot. It is hereby
ORDERED that the amended complaint be dismissed against Nextpoint, WF, and Tax. It is further
ORDERED that all the causes of action, except the first, for breach of contract as against Liberty, be dismissed. It is further
ORDERED that the defendants serve a copy of this Decision and Order with Notice of Entry upon plaintiffs within thirty (30) days hereof.
This constitutes this Court's Decision and Order.