Court Opinion

ID: 2745008
Source: CourtListenerOpinion
Date Created: 2014-10-23 14:09:40.238697+00
Date Added: 2024-06-11T12:31:35.982096
License: Public Domain

State of New York
                   Supreme Court, Appellate Division
                      Third Judicial Department
Decided and Entered: October 23, 2014                   517378
________________________________

MAXON ALCO HOLDINGS, LLC,
                    Appellant-
                    Respondent,
      v                                     MEMORANDUM AND ORDER

STS STEEL, INC.,
                    Respondent-
                    Appellant.
________________________________

Calendar Date:   September 8, 2014

Before:   McCarthy, J.P., Rose, Egan Jr., Devine and Clark, JJ.

                             __________

      Gilberti Stinziano Heintz & Smith, PC, Syracuse (Lisa
DiPoala Haber of counsel), for appellant-respondent.

      Hacker Murphy, LLP, Latham (Patrick L. Seely Jr. of
counsel), for respondent-appellant.

                             __________

Devine, J.

      Cross appeals from an order of the Supreme Court (Reilly
Jr., J.), entered April 4, 2013 in Schenectady County, which,
among other things, denied plaintiff's motion for partial summary
judgment.

      In 1989, defendant entered into a 35-year commercial lease
agreement with Schenectady Industrial Corporation (hereinafter
SIC) to lease real property located in an industrial park in the
City of Schenectady, Schenectady County. Under the lease
agreement, defendant was obligated to pay a monthly base rent and
"additional rent" for, among other things, "[a]ll real property
taxes assessed against the subject premises." SIC sold the
                              -2-                517378

industrial park to plaintiff and assigned to plaintiff all of its
rights pursuant to the lease. A few months later, plaintiff
notified defendant that defendant owed, as additional rent, more
than $1.3 million in outstanding property taxes and gave
defendant 20 days to remit such payment. When no payment was
made, plaintiff declared that it would elect to terminate the
lease and take possession of the leased property in 30 days and,
further, rejected defendant's demand for arbitration. Plaintiff
commenced this action seeking, in its first cause of action, a
judgment awarding plaintiff possession of the leased premises and
a warrant of eviction. Plaintiff's second cause of action sought
damages of more than $1.3 million for defendant's default in
making additional rent payments and fair rental value of the
property for the period following plaintiff's termination of the
lease. Following joinder of issue, plaintiff moved for partial
summary judgment on its first cause of action seeking defendant's
eviction from the leased property. Defendant cross-moved for
summary judgment dismissing plaintiff's first and second causes
of action. Supreme Court denied plaintiff's motion and granted
that part of defendant's cross motion to the extent that it
challenged plaintiff's assertion that defendant was responsible
for paying all of the property taxes imposed against the three
tax parcels that are subject to the parties' lease agreement.
Plaintiff now appeals.1

      Plaintiff contends that it is entitled to judgment as a
matter of law on its eviction cause of action inasmuch as
defendant defaulted in paying, as additional rent, any portion of
the back taxes that had accrued on the three tax parcels at
issue, thereby triggering the cancellation provision in the lease
agreement. Conversely, defendant maintains, among other things,
that it fully satisfied its obligation to pay property taxes on
the leased premises. It is well established that whether
language employed in a contract is ambiguous presents an issue of

    1
         In its brief, defendant requests that this Court affirm
Supreme Court's order and does not address its cross appeal,
thereby abandoning it (see Mills v Chauvin, 103 AD3d 1041, 1044 n
2 [2013]; Matter of Dickinson v Woodley, 44 AD3d 1165, 1166 n 1
[2007]).
                              -3-                517378

law for the courts to decide (see W.W.W. Assoc. v Giancontieri,
77 NY2d 157, 162 [1990]; Ruback's Grove Campers Assn., Inc. v
Moore, 96 AD3d 1180, 1181-1182 [2012]; Hart v Kinney Drugs, Inc.,
67 AD3d 1154, 1156 [2009]). "'Interpretation of a written
agreement requires us to determine the parties' intent as derived
from the language of the instrument, with the words and phrases
employed given their plain meaning'" (M & P Upstate Corp. v
D.R.S.R. Realty Corp., 111 AD3d 1191, 1192 [2013], quoting
Accurate Realty, LLC v Donadio, 80 AD3d 1041, 1041 [2011], lv
dismissed 17 NY3d 844 [2011], lv denied 21 NY3d 858 [2013]).

      In support of its motion, plaintiff's representative,
Michael McDermott, averred that plaintiff was provided tax data
from the City of Schenectady indicating that all 10 tax parcels
in the industrial park had property tax arrears dating back
several years – as early as 2005 for certain parcels – including
the three parcels that were subject to the parties' lease.
Following defendant's failure to remit payment of more than $1.3
million in additional rent, plaintiff alleged that such default
provided grounds to terminate the lease and take possession of
the leased premises. Our interpretation of the term "subject
premises," however, leads us to find, as Supreme Court did, that
defendant's obligation to pay property taxes was limited to those
portions of the three parcels that were expressly defined in the
lease. The original lease contained a section entitled
"Description of Subject Premises," which stated that defendant
leased "Parcel 304 and Parcel 'A'" as depicted in an annexed
drawing.2 The lease was subsequently amended in 2008 after
defendant purchased the building known as "Parcel 304" and
decided to continue to lease the adjoining property after it
became apparent that there were back taxes on the parcels that
were subject to the lease. The lease amendment, among other
things, eliminated any reference to the building that defendant
had purchased and, further, limited the description of the

    2
         Paragraph 7 (C) further stated that "[f]or purposes of
this lease, the subject premises shall consist of sixty-two
thousand eight hundred (62,800) square feet," which described the
building on Parcel 304 in which defendant operated its steel
fabrication business.
                              -4-                517378

subject premises to Parcel "A," which was explicitly described in
a metes and bounds description that was attached as an exhibit to
the lease.

      Plaintiff insists that, while other lease provisions
require defendant to pay a proportionate share of expenses that
fall within the additional rent lease term, including costs for
common area maintenance and municipal water and sewer services,
the absence of any language that specifically apportions
defendant's obligation to pay "[a]ll real property taxes"
requires us to find that the provision relates to the three tax
parcels in their entirety and not those portions of the parcels
that defendant actually occupies. To do so, however, would
require us to imply a term into the lease that "'the parties
themselves failed to include'" (Goldman v Emerald Green Prop.
Owners Assn., Inc., 116 AD3d 1279, 1280 [2014], quoting
Westchester County Corr. Officers Benevolent Assn., Inc. v County
of Westchester, 99 AD3d 998, 999 [2012], lv denied 21 NY3d 853
[2013]). Supreme Court, having found no ambiguity in the lease
language, properly construed and enforced it "in accordance with
the parties' intent as discerned from the plain language of the
contract itself" (Catskill Hudson Bank v A&J Hometown Oil, Inc.,
115 AD3d 1090, 1092 [2014]) and, thus, found that plaintiff
failed to establish its prima facie entitlement to judgment as a
matter of law on its claim that defendant's default under the
lease allowed plaintiff to terminate the lease and recover
possession of the property (see Alvarez v Prospect Hosp., 68 NY2d
320, 342 [1986]; Holly v Morgan, 2 AD3d 1170, 1171 [2003]).

      Upon our consideration of the parties' remaining arguments,
we find them to be either rendered academic or lacking in merit.

     McCarthy, J.P., Rose, Egan Jr. and Clark, JJ., concur.
                        -5-                  517378

ORDERED that the order is affirmed, without costs.

                       ENTER:

                       Robert D. Mayberger
                       Clerk of the Court