Court Opinion

ID: 9965019
Source: CourtListenerOpinion
Date Created: 2024-05-01 15:10:06.287381+00
Date Added: 2024-06-11T08:24:39.301696
License: Public Domain

Flatbush Ctr. Parking LLC v Kings Theatre Master
                     Tenant, LLC
               2024 NY Slip Op 31499(U)
                     April 26, 2024
           Supreme Court, New York County
        Docket Number: Index No. 654526/2020
                 Judge: David B. Cohen
Cases posted with a "30000" identifier, i.e., 2013 NY Slip
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                       publication.
                                                                                                                      INDEX NO. 654526/2020
  NYSCEF DOC. NO. 241                                                                                           RECEIVED NYSCEF: 04/26/2024

                                   SUPREME COURT OF THE STATE OF NEW YORK
                                             NEW YORK COUNTY
            PRESENT:             HON. DAVID B. COHEN                                              PART                              58
                                                                                      Justice
            ----------------------------------------------------------------- ----------------X
                                                                                                  INDEX NO.          654526/2020
             FLATBUSH CENTER PARKING LLC
                                                                                                  MOTION DATE         03/15/2024
                                                         Plaintiff,
                                                                                                  MOTION SEQ. NO.         007
                                                 - V -

             KINGS THEATRE MASTER TENANT, LLC,                                                      DECISION + ORDER ON
                                                                                                          MOTION
                                                         Defendant.
            ------------------------------------------------------------------- --------------X

            The following e-filed documents, listed by NYSCEF document number (Motion 007) 212, 213,214,215,
            216,217,218,219,220,221,223,224,225,226
            were read on this motion to/for                                                           SEAL

                      In this commercial contract case, defendant moves for an order sealing two

            specific documents designated as "Confidential" by non-party Staples, Inc., and plaintiff cross-

            moves for an order sealing more than 75 additional documents. The parties are presently

            briefing motions for summary judgment, and the documents at issue in this motion relate to

            exhibits and deposition transcripts filed in connection with the summary judgment motions.

                      For the reasons set forth below, defendant's motion is granted; and plaintiff's cross-

            motion is granted in part and denied in part.

                                      I.        FACTUAL AND PROCEDURAL BACKGROUND

                      The claims and counterclaims at issue in this action were discussed in the Court's prior

            decision on plaintiff's motion to quash third-party subpoenas served by defendants on Staples

            and three other retail tenants at a shopping center in Brooklyn (NYSCEF 112). Briefly, the

            disputes relate to expense charges made by plaintiff for a parking facility used by customers of

            the retail tenants and by persons attending events at defendant's premises.

             654526/2020 FLATBUSH CENTER PARKING LLC vs. KINGS THEATRE MASTER TENANT,                                 Page 1 of 5
             Motion No. 007

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                                                                                                     INDEX NO. 654526/2020
  NYSCEF DOC. NO. 241                                                                        RECEIVED NYSCEF: 04/26/2024

                   Plaintiff, defendant, and Staples were supposed to share in the expenses of operating the

            parking facility in agreed proportions. Defendant contends that for years, plaintiff failed to

            produce budgets for operating the parking facility, and when it finally started to prepare budgets

            and associated bills, it charged the retail tenants for some of those expenses and then credited the

            associated receipts from those tenants to its own share of the expense of operating the parking

            facility, instead of sharing those receipts pro rata with defendant. Plaintiff argues that it had its

            own separate and independent contracts with the retailers, and the right to utilize those contracts

            to offset its share of the parking facility expenses without having any obligation to share that

            savings with defendant.

                   Defendant further contends that some of the expenses that plaintiff tried to assess

            against it were, in reality, capital improvements for leaks in the ceilings of the retail stores that

            were underneath part of the parking deck, and were necessary tenant-improvement repairs to fix

            the leaks, and therefore did not constitute expenses of plaintiffs operation of the parking facility

            at all. Plaintiff seeks to recover the disputed charges which defendant refused to pay, and

            defendant counterclaims for reimbursement of excessive charges that it claims it paid

            unknowingly.

                   During this litigation, the parties entered into a stipulated, and so-ordered, confidentiality

            order, which provides that:

                           "'Confidential Information" shall mean all Documents and Testimony, and
                           all information contained therein, and all other information designated as
                           confidential, if such Documents or Testimony contain trade secrets,
                           proprietary business information, competitively sensitive information
                           or other information the disclosure of which would, in the good faith
                           judgment of the Party or, as appropriate, non-party designating the
                           material as confidential, be detrimental to the conduct of that Party's or
                           non-party's business or the business of any of that Party's or non-party's
                           customers or clients.

             654526/2020 FLATBUSH CENTER PARKING LLC vs. KINGS THEATRE MASTER TENANT,                Page 2 of 5
             Motion No. 007

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                                                                                                     INDEX NO. 654526/2020
  NYSCEF DOC. NO. 241                                                                       RECEIVED NYSCEF: 04/26/2024

                   Relatedly, Section 216.1 of the Uniform Rules for N. Y. State Trial Courts provides that:

                             a court shall not enter an order in any action or proceeding sealing the
                             court records, whether in whole or in part, except upon a written finding of
                             good cause, which shall specify the grounds thereof. In determining
                             whether good cause has been shown, the court shall consider the interests
                             of the public as well as of the parties.

                   Thus, to sustain a request to seal, the parties must establish that the documents at issue

            satisfy the confidentiality provision of their stipulation and the standards for sealing set forth in

            Section 216.1.

                                                    II.     LEGAL ANALYSIS

                   In Gryphon Domestic VL LLC v APP Intl. Fin. Co., B. V, the Appellate Division, First

            Department, observed that "confidentiality is clearly the exception, not the rule", and that even if

            there were no opposition to the sealing order, "a court is always required to make an independent

            determination of good cause before it may grant a request for sealing" (28 AD3d 322 [1st Dept

            2016]; see also Mosallem v Berenson, 76 AD3d 345 [1st Dept 2010] [pursuant to "New York

            law, there is a broad presumption that the public is entitled to access to judicial proceedings and

            court records" [citations omitted]).

                   22 NYCRR 216. l(a) requires the Court to make a determination as to whether there

            exists good cause to seal court documents, and provides that "a court shall not enter an order in

            any action or proceeding sealing the court records, whether in whole or in part, except upon a

            written finding of good cause, which shall specify the grounds thereof." The statute requires that

            a judge find the requisite good cause to seal even if the parties stipulate to sealing (Maxim, Inc. v

            Feifer, 145 AD3d 516 [1st Dept 2016]).

                   Applying these standards, the Court will grant the request made by third-party Staples,

            through defense counsel, to seal Exhibits 61 and 63 (NYSCEF 187, 189) dealing with Common

             654526/2020 FLATBUSH CENTER PARKING LLC vs. KINGS THEATRE MASTER TENANT,                Page 3 of 5
             Motion No. 007

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                                                                                                   INDEX NO. 654526/2020
  NYSCEF DOC. NO. 241                                                                      RECEIVED NYSCEF: 04/26/2024

            Area Maintenance (CAM) charges. CAM provisions in large commercial leases are often

            heavily negotiated, and it could prejudice Staples for other landlords to see how it

            negotiates CAM provisions and to what it is willing to agree. This request is tailored, and it

            appears covered under the parties' confidentiality stipulation, as its disclosure could "be

            detrimental to the conduct of that Party's or non-party's business or the business of any of that

            Party's or non-party's customers or clients" (see also Mancheski v Gabelli Group Cap. Partners,

            39 AD3d 499 [2d Dept 2007] [third-party financial information sealed since disclosure could

            affect its privacy rights, and proprietary financial information also properly sealed as it could

            hurt non-party's competitive standing]).

                   For similar reasons, plaintiff's other retail leases in these premises will be sealed

            (NYSCEF 186, 191, 194, 195) (see Linkable Networks, Inc. v Mastercard Inc., 81 Misc3d

            1235[A] [Sup Ct, New York County 2024] [Reed, J. Robert] [records sealed as they revealed

            extensive non-public aspects of defendant's business and legal strategy, as well as private

            financial information of nonparties ]).

                   Plaintiff's various tax returns will also be sealed (NYSCEF 154-160 and 162-168), as tax

            returns are generally kept confidential (see 26 USC§ 6103; IRS Taxpayer Bill of Rights, No.

            8), and need not be produced in civil litigations absent "special circumstances" (David Leino.ff,

            Inc. v. 208 West 29th Street Assocs., 243 AD2d 418 [1st Dept 1997]).

                   For the rest of the documents which plaintiff seeks to seal, its request is broad and

            conclusory, making only general assertions that they contain "confidential financial

            information," and without showing how disclosure will cause it competitive or business harm.

            Thus, the Court has no basis to find that good cause exists to seal these documents, which

            Section 216.1 expressly requires (see Matter ofArbitration between Cyprium Therapeutics, Inc.

             654526/2020 FLATBUSH CENTER PARKING LLC vs. KINGS THEATRE MASTER TENANT,              Page 4 of 5
             Motion No. 007

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                                                                                                        INDEX NO. 654526/2020
  NYSCEF DOC. NO. 241                                                                         RECEIVED NYSCEF: 04/26/2024

            and Curia Global, Inc., 223 AD3d 1042 [3d Dept 2024] [party's claim that disclosure of material

            at issue would harm it competitively was broad and conclusory and lacked specific showing as to

            how it would be harmed]; see also Eusini v Pioneer Electronics (USA), Inc., 29 AD3d 623, 626

            [2d Dept 2006] [party's "designation of the materials as confidential or highly confidential is not

            controlling on the court's determination whether there is good cause to seal the record"]).

                      Accordingly, and as explained above, the court, pursuant to and in accordance with Part

            216 of the Uniform Rules for the Trial Courts, having determined that good cause exists for the

            sealing in part of the file in this action and the grounds therefor having been specified, it is now

                      ORDERED, that the County Clerk, upon service on him of a copy of this order, is

            directed to seal NYSCEF nos. 154-160, 162-168, 186, 187, 189, 191, 194, and 195, and to

            separate these papers and to keep them separate from the balance of the file in this action; it is

            further

                      ORDERED, that thereafter, or until further order of the court, the Clerk of the Court shall

            deny access to the said sealed documents to anyone (other than the staff of the Clerk or the court)

            except for counsel of record for any party to this case and any party; and it is further

                      ORDERED, that service upon the Clerk of the Court shall be made in accordance with the

            procedures set forth in the Protocol on Courthouse and County Clerk Procedures for

            Electronically Filed Cases (accessible at the "E-Filing" page on the court's website).

                      4/26/2024
                                                                            •=,4~                 ~m

                        DATE                                                      DAVID B. COHEN, J.S.C.

                                      ~
             CHECK ONE:                   CASE DISPOSED                   NON-FINAL DISPOSITION

                                          GRANTED         □ DENIED        GRANTED IN PART              □ OTHER
             APPLICATION:                 SETTLE ORDER                    SUBMIT ORDER

             CHECK IF APPROPRIATE:        INCLUDES TRANSFER/REASSIGN      FIDUCIARY APPOINTMENT        □ REFERENCE

             654526/2020 FLATBUSH CENTER PARKING LLC vs. KINGS THEATRE MASTER TENANT,                   Page 5 of 5
             Motion No. 007

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