Opinion
15065, 651931/13
05-12-2015
HARMIT REALTIES LLC, Plaintiff–Appellant–Respondent, v. 835 AVENUE OF THE AMERICAS, L.P., et al., Defendants–Respondents–Appellants, “XYZ CORPS 1–5,” etc., et al., Defendants.
Pryor Cashman LLP, New York (Todd E. Soloway, Eric D. Sherman and Jared D. Newman of counsel), for appellant-respondent. Kasowitz, Benson, Torres & Friedman LLP, New York (Jed I. Bergman of counsel), for respondents-appellants.
Pryor Cashman LLP, New York (Todd E. Soloway, Eric D. Sherman and Jared D. Newman of counsel), for appellant-respondent.
Kasowitz, Benson, Torres & Friedman LLP, New York (Jed I. Bergman of counsel), for respondents-appellants.
GONZALEZ, P.J., MAZZARELLI, DeGRASSE, KAPNICK, JJ.
Opinion Order, Supreme Court, New York County (Charles E. Ramos, J.), entered September 5, 2014, which granted in part, and denied in part, defendants' motion to dismiss the complaint pursuant to CPLR 3211, unanimously modified, on the law, the first cause of action, for declaratory judgment, and second cause of action, for breach of contract and monetary damages, reinstated, and otherwise affirmed, without costs.
The court properly rejected defendants' contention that the action was time- barred. As air rights are an interest in real property (see Macmillan, Inc. v. CF Lex Assoc., 56 N.Y.2d 386, 392–393, 452 N.Y.S.2d 377, 437 N.E.2d 1134 [1982] ; see also El Paso Corp. v. New York State Dept. of Taxation & Fin., 36 A.D.3d 655, 657, 828 N.Y.S.2d 209 [2d Dept.2007], lv. denied 8 N.Y.3d 813, 836 N.Y.S.2d 552, 868 N.E.2d 235 [2007] ), the three-year statute of limitations for conversion claims is inapplicable (see B&C Realty, Co. v. 159 Emmut Props. LLC, 106 A.D.3d 653, 656, 966 N.Y.S.2d 402 [1st Dept.2013] ; Benn v. Benn, 82 A.D.3d 548, 550, 918 N.Y.S.2d 465 [1st Dept.2011] ). The cases cited by defendant do not involve real property (see Sporn v. MCA Records, 58 N.Y.2d 482, 488, 462 N.Y.S.2d 413, 448 N.E.2d 1324 [1983] ), or analyze whether the development rights therein constituted real or personal property (Board of Mgrs. of the Chelsea 19 Condominium v. Chelsea 19 Assoc., 73 A.D.3d 581, 582, 905 N.Y.S.2d 8 [1st Dept.2010] ; Goulian v. Gramercy 29 Apts., 199 A.D.2d 98, 98, 605 N.Y.S.2d 246 [1st Dept.1993] ). Plaintiff's first cause of action, for a declaratory judgment, is reinstated, as the allegations and documentary evidence establish a justiciable controversy concerning the parties' legal rights involving the development rights under the agreements (see American Ins. Assn. v. Chu, 64 N.Y.2d 379, 383, 487 N.Y.S.2d 311, 476 N.E.2d 637 [1985], cert. denied 474 U.S. 803, 106 S.Ct. 36, 88 L.Ed.2d 29 [1985] ; Thome v. Alexander & Louisa Calder Found., 70 A.D.3d 88, 99–100, 890 N.Y.S.2d 16 [1st Dept.2009], lv. denied 15 N.Y.3d 703, 2010 WL 2572017 [2010] ).
We also reinstate the second cause of action, for breach of contract and monetary damages, as plaintiff has sufficiently pleaded breach of the agreements by alleging that defendants overbuilt their building based on their inaccurate reporting of air rights that plaintiff had sold and transferred to them, and the pleadings state allegations from which damages may be inferred (see CAE Indus. v. KPMG Peat Marwick, 193 A.D.2d 470, 472–473, 597 N.Y.S.2d 402 [1st Dept.1993] ). The complaint alleges that defendants used certain of plaintiff's development rights without proper compensation, and that plaintiff's rights to further development of its building has been negatively affected by defendants' actions. Further, as the complaint alleges direct damages that “directly flow from the breach” (see generally Biotronik A.G. v. Conor Medsystems Ireland, Ltd., 22 N.Y.3d 799, 988 N.Y.S.2d 527, 11 N.E.3d 676 [2014] ), the court erred in concluding that the waiver of consequential damages provision barred the requested relief at this stage of the proceeding. For these reasons, and because it is unclear at this point whether monetary damages provide an adequate remedy, we affirm the sustaining of the third cause of action, for specific performance.
The court properly dismissed the fourth cause of action, for trespass, as plaintiff failed to show physical encroachment on its property (cf. Madison 96th Assoc., LLC v. 17 E. 96th Owners Corp., 120 A.D.3d 409, 990 N.Y.S.2d 811 [1st Dept.2014] ; Wing Ming Props. (U.S.A.) v. Mott Operating Corp., 172 A.D.2d 301, 568 N.Y.S.2d 605 [1st Dept.1991], affd. 79 N.Y.2d 1021, 584 N.Y.S.2d 427, 594 N.E.2d 921 [1992] ). The claim is also duplicative of the breach of contract claims, as it is based on the same allegations, and seeks the same damages (Eden Roc, LLLP v. Marriott Intl., Inc., 116 A.D.3d 486, 983 N.Y.S.2d 549 [1st Dept.2014] ).