Opinion
702916/2018
05-07-2018
STELLAR PRINTING, INC., Plaintiff, v. VERNON BOULEVARD REALTY, LLC, Defendant.
For Plaintiff: Law Offices of Leavitt & Kerson, by Paul E. Kerson, Esq., 118–35 Queens Blvd., Forest Hills, NY 11375 For Defendant: Moritt Hock & Hamroff, LLP, by Gregory G. Calabro and Krista L. Kulp, Esqs., 1407 Broadway, New York, NY 10018
For Plaintiff: Law Offices of Leavitt & Kerson, by Paul E. Kerson, Esq., 118–35 Queens Blvd., Forest Hills, NY 11375
For Defendant: Moritt Hock & Hamroff, LLP, by Gregory G. Calabro and Krista L. Kulp, Esqs., 1407 Broadway, New York, NY 10018
Salvatore J. Modica, J.
The plaintiff-tenant, Stellar Printing, Inc. (hereinafter, "Stellar"), moved by order to show cause (hereinafter, "OSC") for a stay of all proceedings between the parties in a commercial holdover proceeding, Vernon Boulevard Realty, LLC v. Stellar Printing, Inc. , in Civil Court, Queens County, under Landlord and Tenant index number 77359/2017. Stellar also seeks a declaratory judgment declaring its lease to be the governing lease in the rental dispute between the parties. The defendant, Vernon Boulevard Realty, LLC (hereinafter, "Vernon") responded by filing a cross-motion seeking dismissal, or, in the alternative, for the posting of an undertaking by Stellar. The motion for declaratory relief is denied in all respects. The cross-motion to dismiss the petition, however, is granted. The plaintiff, Stellar, presents the Court with two versions of a lease between the parties and requests that this Court declare that its lease is the one that controls the action in Civil Court. The plaintiff contends that since the Civil Court has no equitable jurisdiction, only the Supreme Court has the power to grant declaratory relief and decide which lease is the governing version in the Civil Court action. In response, the defendant, Vernon, argues that the second lease presented by the plaintiff is a forgery and that the Civil Court has ample authority to decide which is the authoritative, governing lease. Under these circumstances, Vernon contends, the present action in Supreme Court should be dismissed.
Counsel for plaintiff Stellar boldly states that he intends to do full blown depositions and inquiry as to every witness who attended the signing of the purported lease in 2006, twelve years ago. Defendant counters that the present OSC by plaintiff is nothing more than a stalling device and that the other lease presented by plaintiff is a forgery submitted solely to create an issue of fact and an excuse for invoking this Court's equitable jurisdiction.
The defendant-landlord, Vernon, is correct. The argument by plaintiff, Stellar, is facile. With certain exceptions not applicable here, this Court, of course, has exclusive jurisdiction over equitable actions, such as those seeking a declaratory judgment. See CPLR 3001 ; see also , Siegel, Practice Commentaries, McKinney's Cons Laws of NY, Book 29A, Civil Court Act 212–a [1989 Pocket Part], at 60); see also Bury v. Cigna Healthcare , 254 A.D.2d 229, 679 N.Y.S.2d 305 (1st Dept. 1998) ; see also Suarez v. El Daro Realty, Inc. , 156 A.D.2d 356, 548 N.Y.S.2d 313 (2nd Dept. 1989) ; Dowd v. Ahr , 168 A.D.2d 763, 563 N.Y.S.2d 917 (3rd Dept. 1990), rev'd in part , 78 N.Y.2d 469, 577 N.Y.S.2d 198, 583 N.E.2d 911 (1991) ; cf. Krieger v. Krieger , 25 N.Y.2d 364, 306 N.Y.S.2d 441, 254 N.E.2d 750 (1969). Here, however, the tenant allegedly owes rent, and the landlord pursued its claims in Civil Court by filing a commercial holdover proceeding. Implicit in enforcing and applying a lease, the Civil Court Judge, must, of course, ensure that the lease with which that Court is presented is the correct, final version.
Equally important, merely couching an action as a declaratory action does not entail that the matter must be heard in Supreme Court. See e.g. Gordon v. Continental Cas. Co. , 91 A.D.2d 987, 457 N.Y.S.2d 844 (2nd Dept. 1983). The basic nature of the lawsuit in Civil Court involves Vernon's attempt to collect rent from the plaintiff, Stellar. See Ossory Trading, S.A. v. Geldermann, Inc. , 200 A.D.2d 423, 606 N.Y.S.2d 221 (1st Dept. 1994) ; see also John W. Cowper Co. v. Buffalo Hotel Dev. Venture , 99 A.D.2d 19, 22, 471 N.Y.S.2d 913 (4th Dept. 1984) ; see Douglas A. Edwards, Inc. v. Lax, 85 A.D.2d 509, 444 N.Y.S.2d 103 (1st Dept. 1981). Thus, the primary action is legal in nature, not in equity. See State Farm Mut. Auto. Ins. Co. v. Sparacio , 25 A.D.3d 777, 809 N.Y.S.2d 151 (2nd Dept. 2006). For this reason, it is obvious that Civil Court is more than capable of providing an appropriate forum in which to resolve this dispute.
The Appellate Term, First Department, dealt with a very similar factual scenario in 4446–50 Realty Inc. v. Rojas , 4 Misc.3d 140(A), 2004 WL 1944973, 2004 N.Y. Slip Op. 50956(U) (2004) (per curiam). In that case, the Appellate Term stated:
Tenant failed to establish that the May 1996 commercial lease was a "forged and fraudulent" document, as his own self-serving testimony in this regard was insufficient, standing alone, to support such a finding (see
Lum v. Antonelli, 102 A.D.2d 258, 476 N.Y.S.2d 921 ). The motion to re-open the trial for the receipt of expert testimony on this issue was properly denied, since tenant failed to offer a justifiable excuse for not introducing this evidence in a timely fashion (see Grassel v. Albany Medical Center Hospital, 223 A.D.2d 803, 636 N.Y.S.2d 154 ).
However, with respect to the proffered January 2001 lease, which would not expire until December 31, 2010, we are not satisfied that its exclusion from evidence, on "foundation" or other grounds, was correct. It appears that different copies of the lease were presented at trial, but it is not disputed that landlord drafted and signed it (including handwritten entries). Moreover, there is evidence that the lease was signed by tenant at the office of landlord's principal, and that landlord consented to an assignment of a lease "which expires on December 31, 2010". Given the confusing state of the record, we remand for a new trial on the authenticity of the January 2001 lease, which, if credited, would defeat the holdover petition. To the extent landlord argues that the lease was merely a "draft", no such limiting language appears on the face of the document.
4446–50 Realty Inc. v. Rojas , 2004 WL 1944 973, 2004 NY Slip Op. 50956(U), supra .
By remanding the case back to the Civil Court for a new trial to determine which of the two leases was the valid and enforceable one, the appellate court conclusively held that the Civil Court had jurisdiction to entertain this issue. Certainly, logic dictates that if the Appellate Term believed that the Civil Court was without jurisdiction to decide the authenticity of the lease in question, it would not have remanded the case back to Civil Court for that determination. See e.g. In re Gregory M. , 82 N.Y.2d 588, 595, 606 N.Y.S.2d 579, 627 N.E.2d 500 (1993).
It is also significant, but by no means dispositive, that the lease presented by Stellar contains a clause revealing that the plaintiff waived an assortment of legal rights, including the right to a trial by jury and the right of redemption. Pursuant to that clause, the plaintiff also agreed that the defendant had the right to bring a summary holdover proceeding, plus any claim in law or in equity against Stellar. The second lease in controversy, the one that the defendant, Vernon argues is the true lease, contains the same exact clause. Certainly, one of these leases is, in fact, valid and legally binding. Given that both leases contain the same clause as to the respective legal rights of the parties under the lease, this provision, if interpreted to restrict the defendant's right to bring an action in Supreme Court, would necessarily govern this proceeding. See Kalisch–Jarcho, Inc. v. City of New York , 72 N.Y.2d 727, 731–32, 536 N.Y.S.2d 419, 533 N.E.2d 258 (1988). In sum, this provision, upon which neither of the parties has relied, may impose certain legal hurdles on Stellar. As noted by the late Chief Judge Kaye in Kalisch–Jarcho, Inc. v. City of New York :
A declaratory judgment action may be an appropriate vehicle for settling justiciable disputes as to contract rights and obligations (see, Matter of Public Serv. Commn. v. Norton, 304 N.Y. 522, 529 ; see also, Restatement [Second] of Contracts § 345, comment d, at 107–108; 5 Corbin, Contracts § 991, at 4–5; 4 Williston, Contracts § 601, at 316–317 [3d ed.] ). But parties to an agreement may not seek a declaration of their contract rights when their agreement specifies a different, reasonable means for resolving such disputes (see, e.g.,
Rifkin v. Rifkin, 118 N.Y.S.2d 322 [Sup. Ct.], affd 281 App. Div. 1035, 121 N.Y.S.2d 277 ; 16 Williston, Contracts § 1919A, at 155–156). A declaratory judgment in such circumstances may be unnecessary (see, Walsh v. Andorn, 33 NY2d 503, 507 [355 N.Y.S.2d 329, 311 N.E.2d 476] ; James v. Alderton Dock Yards, 256 N.Y. 298, 305, 176 N.E. 401 ), and could also enable parties to circumvent their contractual undertakings (see, Siegel, Practice Commentaries, McKinney's Cons Laws of NY.
Kalisch–Jarcho, Inc. v. City of New York, supra 72 N.Y.2d at 732, 536 N.Y.S.2d 419, 533 N.E.2d 258.
The Court, after reading both leases, concludes that this specific clause in the contract is neither clear nor concise. On the one hand, if this clause were designed to restrict Stellar from bringing any type of action in Supreme Court, then the language in the clause should have been drafted plainly and concisely to that effect. See Evans Co. v. Zurich Ins. Co., 95 N.Y.2d 779, 710 N.Y.S.2d 301, 731 N.E.2d 1109 (2000). On the other hand, permitting Stellar to have this action heard in Supreme Court might render meaningless Vernon's right under the contract to bring a summary holdover proceeding against Stellar. Although ambiguous clauses are generally construed against the party who drafted the contract, [see Evans Co. v. Zurich Ins. Co., 95 N.Y.2d 779, 710 N.Y.S.2d 301, 731 N.E.2d 1109 (2000) ], that legal principle is of no significance to this case. Even if this clause were construed in Stellar's favor, such interpretation simply cannot resolve the issue of which lease governs the Civil Court action.
In any event, this Court has, in fact, reviewed the papers submitted by both sides and concludes that the declaratory relief sought by Stellar cannot be granted as a matter of law. See Yue Fung USA Enterprises, Inc. v. Novelty Crystal Corp. , 105 A.D.3d 840, 841–42, 963 N.Y.S.2d 678 (2nd Dept. 2013). Such relief might, arguably, be warranted if and only if Stellar submitted documentary evidence conclusively establishing which of the two lease versions is the governing and legitimate lease. See Yue Fung USA Enterprises v. Novelty Crystal Corp. , supra 105 A.D.3d at 841–842, 963 N.Y.S.2d 678. The plaintiff, however, has utterly failed to provide the appropriate proof to this Court conclusively establishing its right to declaratory relief. Thus, Stellar's request for declaratory relief is denied.
The Court also dismisses the plaintiff's petition. In doing so, this Court is well-aware that two very respected commentators have disapproved of the summary dismissal of a declaratory action. See e.g. Connors & Siegel, Practice Commentaries, McKinney's Cons Law of NY, Book 7B, CPLR 3001 ; see also Connors, 2016 and 2017 Supplemental Practice Commentaries, McKinney's Cons Law of NY, Book 7B, CPLR 3001. In expressing their disapproval, they note that the law permits an action for declaratory relief to be maintained even if issues of fact are involved. See Id.; see also Empire Mutual Insurance Co. v. McLaughlin , 35 A.D.2d 1074, 316 N.Y.S.2d 395 (4th Dept. 1970). And, as further pointed out by Professor Connors, the Second Department in E. W. Bank v. L & L Assocs. Holding Corp. , reversed an order of the Supreme Court, which summarily dismissed a cause of action for a declaratory judgment. See Connors, 2017 Supplemental Practice Commentaries, McKinney's Cons Law of NY, Book 7B, CPLR 3001, at C3001:5; see also E. W. Bank v. L & L Assocs. Holding Corp. , 144 A.D.3d 1030, 43 N.Y.S.3d 369 (2nd Dept. 2016). Given that no party requested this relief, the Second Department concluded that the summary dismissal procedure available in a CPLR Article 78 proceeding, could not be used to "dispose of the declaratory judgment cause of action." Id.; see also E. W. Bank v. L & L Assocs. Holding Corp. , supra 144 A.D.3d at 1033, 43 N.Y.S.3d 369. The Second Department then converted that part of the petition, wherein a declaratory judgment was sought, into an action. See id.; see also E. W. Bank v. L & L Assocs. Holding Corp. , supra at 1033, 43 N.Y.S.3d 369.
In the case before this Court, the defendant, Vernon, cross-moved to dismiss the OSC petition solely based on the plaintiff's failure to state a cause of action. See CPLR 3211(7). It did not move for summary judgment in this case. That procedural defect, however, does not end the inquiry. Proceeding with both the above-noted practice commentaries and decision in E. W. Bank v. L & L Assocs. Holding Corp. very much in mind, this Court finds that the facts of the case at bar, as outlined by the parties' motion papers, do not warrant the treatment similar to that which was extended by the Second Department in E. W. Bank v. L & L Assocs. Holding Corp. As explained below, there are other considerations in this case that warrant dismissal of this petition.
Significantly, this case is factually distinguishable from E. W. Bank v. L & L Assocs. Holding Corp. for a variety of reasons. First, there is an action pending in Civil Court involving the exact same issue as is raised in Stellar's OSC. And even if the issue has not yet been raised in Civil Court, the plaintiff has not represented that the Civil Court refuses to hear its claim that the defendant's lease is a forgery. Inasmuch as the plaintiff presently has a forum in which to litigate its "two-lease claim," there is no compelling need to convert this declaratory action into a plenary action in Supreme Court, as might otherwise be required by CPLR 103(c). But more important, Stellar is not requesting that the parties litigate this entire matter in Supreme Court. Rather, Stellar requests this Court to declare that its lease is the valid and enforceable lease. Ultimately, that declaration would bind the parties in their Civil Court action. As noted, the Court, on the papers submitted, cannot grant Stellar's OSC for declaratory relief as a matter of law; a fact-finder is necessarily required to make this determination.
In this case, the Civil Court Judge who is presently presiding over the dispute between the parties, certainly has the jurisdiction and legal acumen to decide this issue. Under these circumstances, and in light of the pending action in Civil Court, the Court declines to, sua sponte , duplicate that action in Supreme Court. In that regard, this is the key factor distinguishing this case from the holding in E. W. Bank v. L & L Assocs. Holding Corp.
Stated somewhat differently, the Court is not dismissing this action because "an adequate coercive remedy [is] available" or that "[the proceeding] [has not been] brought in the proper form." Connors & Siegel, Practice Commentaries, McKinney's Cons Law of NY, Book 7B, CPLR 3001, at C3001:5; see also Siegel, New York Practice § 4 (4th ed. 2005) ; see also CPLR 103(d). The existence of an adequate coercive remedy does not, arguably, provide a basis for dismissing a declaratory proceeding unless, of course, the action has the effect of depriving a litigant, against whom such relief is sought, of a significant and important right. See Gordon v. Continental Cas. Co., supra 91 A.D.2d at 987–88, 457 N.Y.S.2d 844. Nevertheless, the outcome of a case such as this is dependant upon the meaning of the term "availability" This Court interprets availability to mean "potentially," not "actually," available. Here, the action for which Stellar seeks a resolution of its "two-leases claim," is presently, that is, actually, in existence in Civil Court. Thus, the Court's dismissal of this petition is not based on the conclusion that another coercive remedy is potentially available.
In truth, this Court is, essentially being asked to intervene in the Civil Court matter, a request that invokes the Court's discretionary powers. See CPLR 602(b) & 604; see also New York State Const. Art. 6 § 19(a). Accordingly, this Court has discretion to decide whether or not it is prudent or necessary to interfere in that ongoing case. See e.g. Krakower v. Krakower , 264 A.D. 912, 35 N.Y.S.2d 904 (1st Dept. 1942) ; aff'd, 291 N.Y. 604, 50 N.E.2d 1012 (1943) ; see also Krieger Krieger, supra 25 N.Y.2d at 370–71, 306 N.Y.S.2d 441, 254 N.E.2d 750. In exercising its discretion, a Judge must weigh factors that support granting the requested relief with those that argue against it. Accordingly, after carefully weighing the relevant factors, which have been expressed in this opinion, the Court concludes that, on balance, the facts of this case do not require this Court, in the exercise of its discretion, to convert the OSC into an action and, in effect, divest Civil Court of its jurisdiction over this rent dispute. And this decision in no way prejudices Stellar, for it still permits this plaintiff to continue to litigate its claims in the Civil Court action.
Also, in view of the pending Civil Court case, this Court has real concerns that the instant petition is merely an attempt by Stellar to delay this action, avoid the payment of rent, and to engage in judge shopping. In order to conserve precious judicial resources, courts must be wary of attempts by litigants to engage in such tactics. See e.g. Perl v. Meher , 18 N.Y.3d 208, 936 N.Y.S.2d 655, 960 N.E.2d 424 (2011) ; see also Pommells v. Perez , 4 N.Y.3d 566, 797 N.Y.S.2d 380, 830 N.E.2d 278 (2005). This is especially so in this case, where it is plain that a declaratory judgment in Supreme Court is not the exclusive means by which to resolve the issue of the two leases. Rather than duplicate the Civil Court action, this Court, instead, directs the Judge presiding over the action between the parties in Civil Court to resolve this issue and any other issues relating to the lease. By directing the Civil Court to resolve Stellar's "two-leases claim," the Court has fulfilled its obligation to "make [an appropriate] order [that] is required for its proper prosecution." CPLR 103(c).
In closing, it should be stressed that, in the absence of a pending Civil Court action, this Court would certainly have followed the procedures in E. W. Bank v. L & L Assocs. Holding Corp., and converted the application for a declaratory judgment into an action, and deemed the petition a complaint. As explained above, however, there is simply no need to do so. If, however, Stellar wishes to file an action in Supreme Court, it is perfectly free to do so; this decision is without prejudice to do so. Should that event transpire, a Supreme Court Justice might be called upon to determine whether or not the pending Civil Court action should be moved to Supreme Court or whether it is best for both actions to be heard in Civil Court. See CPLR 602(b) & 604; see also New York State Const Art. 6 § 19(a). In the view of this Court, Civil Court, which, because of its expertise, routinely handles disputes regarding leases, should be permitted to continue presiding over this matter.
Accordingly, the motion by OSC, seeking a stay, premised on the entirely incorrect and false belief that the Civil Court does not have such jurisdiction, is denied in its entirety and for the reasons stated in this decision and order. And for those same reasons, the defendant's motion for declaratory relief is denied and the petition dismissed.
It is hereby:
ORDERED that the motion by plaintiff, Stellar, for a stay of the proceedings in Civil Court is denied in all respects; and it is further
ORDERED that the motion by plaintiff, Stellar, for declaratory relief is denied in all respects; and it is further
ORDERED that the motion by defendant, Vernon, to dismiss the instant petition is granted in all respects; and it is further
ORDERED that Civil Court is directed to resolve the dispute between the parties as to which lease is the valid and governing one that applies to the action pending before that Court; and it is further
ORDERED that the Clerk of this Court is to enter this decision and order as a judgment; it is further
The foregoing constitutes the decision, order, and opinion of the Court.