Court Opinion

ID: 6098345
Source: CourtListenerOpinion
Date Created: 2022-01-13 20:41:23.357383+00
Date Added: 2024-06-11T08:53:29.245110
License: Public Domain

Gonzalez, J.
(dissenting). In my view, the majority’s holding sanctions the judicial rewriting of the parties’ lease by imposing a written notice requirement on the landlord that does not exist under the plain terms of that document. Accordingly, I respectfully dissent from the majority’s holding and would reverse the grant of summary judgment to plaintiff.
*43This action arises out of a 10-year lease dated October 24, 1996 between plaintiff The Vermont Teddy Bear Co. (VTB), as tenant, and defendant 538 Madison Realty Company (538), as landlord, for retail space located on the ground floor of 538 Madison Avenue (the premises). At some point in 1997, VTB decided to discontinue its business operations at the location and informed 538 that it intended to vacate the premises after the 1997 holiday season. VTB hoped to arrange an assignment of the lease to a new tenant. On December 7, 1997, a large portion of the southern facade of the building adjacent to 538 Madison Avenue collapsed, causing substantial damage to 538 Madison Avenue and the surrounding area. As a result, VTB was unable to continue its retail business operations at the premises.
Paragraph 3 of the rider to the parties’ lease states, in pertinent part:
“[I]n the event that the Premises are totally damaged or rendered wholly unusable Tenant shall provide Landlord within thirty (30) days of the fire or casualty, a written notice of Tenant’s election to terminate the Lease if the Premises are not restored within one (1) year after Owner’s receipt of such Tenant’s notice. In the event the Premises are not restored within such one (1) year period the Lease shall be deemed terminated as of the end of the 12 [month] period and both Landlord and Tenant shall be released from all obligations which may arise after the Termination Date.”
Article 9 of the lease provides, in part: “After any such casualty, Tenant shall cooperate with Owner’s restoration by removing from the premises [all of Tenant’s property]. Tenant’s liability for rent shall resume five (5) days after written notice from Owner that the premises are substantially ready for Tenant’s occupancy.”
On December 16, 1997, VTB wrote a letter to 538’s managing agent demanding reimbursement for a portion of the prepaid December rent, confirming its intention to vacate the premises after the holiday season and requesting that the managing agent secure a subtenant. The letter further provided notice to the managing agent that, pursuant to the lease agreement, VTB intended to terminate the lease if the premises were not restored within one year.
By letter dated January 19, 1998, 538’s managing agent responded that VTB would be in default if it vacated the *44premises and demanded assurances that VTB intended to continue performance under the lease. 538’s letter further stated that repairs to the premises had begun and that it would notify VTB as soon as the space was ready for occupancy. However, it is undisputed that between January and December 1998, VTB paid no rent for the premises and 538 never gave written notice to VTB that the premises had been restored.
By letter dated December 21, 1998, VTB declared the lease to be terminated based on the fact that more than one year had elapsed since VTB had sent its notice to terminate. VTB noted that it had not received any notice from 538 that the premises had been restored, that it could reoccupy the premises or that VTB’s obligation to pay rent had recommenced.
On December 24, 1998, 538 responded in a letter stating that the lease remained in effect because the premises had been restored and was substantially ready for occupancy as of July 7, 1998. Defendant demanded back rent from July 8, 1998 through December 31, 1998, and further demanded that VTB reoccupy the premises.
In May 1999, VTB commenced the instant action, seeking a declaration that the lease was properly terminated, the return of its $150,000 security deposit and a refund of rent overpayments from December 1997. VTB moved for summary judgment, and the IAS court granted the motion. The court concluded that 538 had failed to submit any “meaningful evidence” that it had restored the premises within one year and that, in any event, it had failed to provide VTB with written notice that the premises had been restored as required by article 9 of the lease. On this latter point, the court rejected 538’s argument that “mere restoration of the premises, without written notice to the tenant, would have sufficed under the terms of the Lease.” The court reasoned that “[t]he obligation to restore the premises within a year under paragraph 3 of the lease rider cannot be reasonably read in isolation from the obligation to give written notice of such restoration in [article] 9, as such an interpretation would permit the landlord to avert termination indefinitely beyond the one year period by simply withholding notice.”
It is well established that lease interpretation is subject to the same rules of construction as are applicable to other agreements (Backer Mgt. Corp. v Acme Quilting Co., 46 NY2d 211, 217 [1978]). “The parties’ intention should be determined from the language employed, and where the language is clear and unambiguous, interpretation is a matter of law to be deter*45mined solely by the court [citations omitted]” (1009 Second Ave. Assoc, v New York City Off-Track Betting Corp., 248 AD2d 106, 107 [1998], lv dismissed 92 NY2d 947 [1998]). Courts should not rewrite the terms of an agreement under the guise of contract interpretation (see 85th St. Rest. Corp. v Sanders, 194 AD2d 324, 326 [1993]).
The plain meaning of paragraph 3 of the lease rider is that in circumstances where the premises have been rendered wholly unusable due to casualty, and the tenant has properly served a notice to terminate the lease, the lease is automatically terminated if “the Premises are not restored within such one (1) year period.” Thus, in regards to the tenant’s right to terminate due to casualty, the failure to restore within one year is the sole and exclusive ground for termination of the lease. Nowhere in the parties’ agreement does it say that the lease is terminated if the landlord fails to provide written notice of restoration within a year. Under the agreement, restoration alone is sufficient to avoid termination. If the parties had intended to require written notice by the landlord signaling the completion of the restoration, it would have been easy to add such a requirement (see id.).*
In imposing an additional notice condition upon 538 in order to avoid termination, the reasoning of the IAS court and the majority is flawed in several respects. While they correctly note that the agreement must be read as a whole, they erroneously relied on this principle to impose a notice requirement that otherwise did not exist. The two lease provisions dealt with distinct issues — paragraph 3 of the rider covered the landlord’s obligation to restore the premises within one year to avoid termination of the lease, and article 9 dealt with the landlord’s written notice obligation before the tenant’s rent liability recommences after a casualty. There is nothing inherently contradictory or implausible about requiring written notice before a tenant’s rent liability recommences while simultaneously permitting a landlord to forestall termination of the lease by mere completion of an act — the restoration of the property — without requiring written notice thereof.
Although the IAS court found it reasonable to engraft the written notice requirement for resumption of rent liability onto the landlord’s obligation to restore within one year, because “a tenant out of possession is not likely to become aware of the *46premises’ restoration without notice,” a rationale the majority adopts, that is not what the agreement says. Nor is the lack of a written notice requirement prejudicial to the tenant in these circumstances. Because the tenant’s liability for rent recommences only after written notice that “the premises are substantially ready for Tenant’s occupancy” is provided by the landlord, the landlord has strong economic incentive to provide such notice as soon as the premises are restored. There is no logical reason for a landlord to complete the repairs, thereby forestalling termination of the lease, but then intentionally withhold notice of restoration to the tenant, and by doing so, forfeit the reactivation of the tenant’s liability for rent.
Additionally, the IAS court’s rationale that written notice of restoration must be required by the lease since otherwise, the landlord could “avert termination indefinitely beyond the one year period by simply withholding notice,” is simply not accurate. Termination of lease by a tenant is authorized only where, after proper notice to the landlord of an intent to terminate, the landlord fails to restore the property within one year. If the property is not restored within a year, the lease is automatically terminated — there is nothing the landlord can do to delay or prevent this outcome. While it may be necessary for the tenant to monitor the condition of the property in order to demonstrate that it was not restored within one year, such is not an unreasonable burden for a party seeking to avoid the remaining nine years of a million dollar 10-year lease.
Accordingly, in my view, the written notice requirement of article 9 of the parties’ lease does not apply to the requirement in paragraph 3 of the lease rider that the landlord must restore the property within a year to prevent termination. To the extent the court’s grant of summary judgment to plaintiff was based on a lack of written notice of restoration, that portion of the court’s order should be reversed.
Nor is VTB entitled to summary judgment on the basis that it has demonstrated, as a matter of law, that the property was not restored within one year. There is a clear question of fact as to whether 538 restored the premises within one year of receiving VTB’s notice of intent to terminate. Indeed, VTB offers no direct evidence concerning the condition of the premises. Rather, it surmises that 538’s failure to demand rent between July and December 1998 must be due to the fact that the premises had not yet been restored — since there is no possible motive for 538 to waive six months rent. This argument hardly establishes the nonrestoration of the property as a matter of *47law; and 538’s reasons for not providing notice of restoration, or not demanding rent from VTB despite the claimed restoration in July 1998, cannot fill in the gaps in proof regarding the actual condition of the premises. VTB’s failure to meet its burden of demonstrating entitlement to judgment as a matter of law requires denial of its motion, regardless of the sufficiency of the opposition papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]).
Buckley, P.J., and Rosenberger, J., concur with Saxe, J.; Lerner and Gonzalez, JJ., dissent in a separate opinion by Gonzalez, J.
Judgment, Supreme Court, New York County, entered August 10, 2001, affirmed, without costs. Appeal from order, same court, entered on or about August 2, 2001, dismissed, without costs, as subsumed in the appeal from the ensuing judgment.

 We note that the parties’ lease required “written notice” in other circumstances, such as when either the tenant or the landlord notified the other party of their election to terminate the lease.