Court Opinion

ID: 5770021
Source: CourtListenerOpinion
Date Created: 2022-01-12 17:30:15.4917+00
Date Added: 2024-06-11T08:41:44.963937
License: Public Domain

Moskowitz, J. (dissenting).
I would affirm the order of the motion court because the contract language is ambiguous mak- ' ing it inappropriate to dismiss at this early juncture prior to development of the record and summary judgment. The majority finds no ambiguity only by overfocusing on a single sentence.
The area located on . the West Side of Manhattan known as Riverside South is a 76-acre parcel of land running north to *70south from 72nd Street to 59th Street and east to west from 11th Avenue to the Hudson River. In the early 1990s, Donald Trump, who owned Riverside South, proposed a plan for its development. Various civic groups opposed his plan. After extensive negotiation among these civic groups, Trump and local government, all sides ultimately reached agreement. The civic groups agreed to support the project. In exchange, Trump agreed to withdraw his original proposal and to implement the Riverside South Development Plan (Development Plan). The Development Plan focused on environmental sustainability and design criteria for the buildings, calling for parks, open spaces and public art programs.
The civic groups created plaintiff Riverside South Planning Corporation (RSPC), a not-for-profit corporation responsible for the planning, design and construction of Riverside South. On or about March 31, 1993, Penn Yards Associates (Penn Yards), by its general partner, Trump, the RSPC and various civic groups entered into a four-page letter agreement (1993 Agreement). The 1993 Agreement set forth the terms upon which the civic groups would support the Development Plan. Annexed to the Agreement were two pages of “Legal Requirements.”
Under the 1993 Agreement, the RSPC was to have an active role in planning Riverside South. Specifically, Trump agreed that the parties would coordinate their efforts and that, if he utilized “Special Permits,” he would develop the project in substantial conformity with the Riverside South Design Guidelines (Design Guidelines). After setting forth certain joint undertakings, the Agreement then provided:
“We agree that RSPC may be dissolved at any time by mutual agreement of the parties, and that I [Trump] shall have the right to dissolve RSPC if (1) we do not reach agreement on the development of the studio site, (2) Richard Kahan or a successor mutually agreed upon no longer heads RSPC or (3) any member organization withdraws from participation in RSPC. You agree to execute documents, promptly following request, and we shall jointly seek all required approvals, necessary to effect such dissolution. The agreements in this letter relating to design guidelines, park maintenance and operation, and restrictions on major modifications and rezoning shall survive the dissolution of RSPC, in which event approvals and consents of RSPC regarding *71these matters shall be granted by a majority of a three (3) person panel (including Donald J. Trump) to be acceptable to both me and the other members of the board of RSPC. The agreements contained herein shall continue for ten (10) years, or such lesser period as either of the following conditions shall no longer remain satisfied: (1) the Special Permits shall remain in effect; and (2) I shall own, directly or indirectly, all or any portion of the Subject Property” (emphasis added [sunset provision]).
The very next paragraph of the 1993 Agreement reads:
“I [Trump] agree that I will require any person who purchases any Parcel of the Subject Property from me so long as the Special Permits remain in effect, [] to agree to abide by the agreements in this letter insofar as they relate to the development of the project and the park, delegation of park maintenance, and the restrictions on seeking changes in the approved plan. In particular, I will contractually require the purchaser(s) to agree to develop such parcel in accordance with these guidelines and not to apply for any changes or modifications in the approved plan not permitted hereunder so long as the Special Permits remain in effect without approval of a majority of the members of RSPC, which approval is not to be unreasonably withheld or delayed.” (Emphasis added.)
Trump then agreed to fund RSPC for three years, after which, in good faith, he would consider continued funding.
In 1994, Trump transferred title to Hudson Waterfront Associates, L.P (HWA), an entity in which he retained an interest, but not control. On June 17, 2005, defendants (Extell) purchased their interest in Riverside South from HWA. RSPC claims that Extell assumed the obligations under the 1993 Agreement through a 2005 Assignment and Assumption Agreement, and that for a time after its purchase, Extell funded RSPC, had its architects correspond with RSPC and promised to provide plans for a new building, Building I. However, when construction on Building I was about to commence, Extell allegedly switched course without RSPC’s approval, constructing Building I with more glass than the Design Guidelines permitted and failing to conduct the required environmental sustainability assessments *72and calculations. Extell then refused to involve RSPC in any aspect of Riverside South’s planning or design and, as a result, allegedly prevented RSPC from fulfilling its primary function, i.e., to ensure development of Riverside South, in the public interest, in accordance with the principles agreed to by the community when it permitted the project to proceed in the first place.
On November 29, 2007, RSPC filed a complaint, asserting causes of action for breach of contract and breach of the implied covenant of good faith and fair dealing and demanding specific performance of Extell’s assumed obligations. On January 18, 2008, Extell, relying on the sunset provision, moved to dismiss. Extell claimed that the entire contract was only effective for 10 years, 10 years had passed and therefore the agreement had expired by its own terms. RSPC claimed that the 10-year sunset provision only applied to Trump’s obligations to abide by the Design Guidelines, work with RSPC on park development and maintenance and not apply for major rezonings without consent. The court denied Extell’s motion, finding the 1993 Agreement ambiguous because “it is unclear whether the ‘sunset provision’ applies to the entire agreement or only to those obligations recited in the paragraph in which the provision is embedded.” (2008 NY Slip Op 30836[U], *8.) Extell appealed.
“Whether or not a contract provision is ambiguous is a question of law to be resolved by a court” (Van Wagner Adv. Corp. v S & M Enters., 67 NY2d 186, 191 [1986]; see 1414 APF, LLC v Deer Stags, Inc., 39 AD3d 329, 331 [2007]). In interpreting a contract, it is important to read the writing as a whole in order to give each clause its intended purpose (see Williams Press v State of New York, 37 NY2d 434, 440 [1975]). “ ‘[Particular words should be considered, not as if isolated from the context, but in the light of the obligation as a whole and the intention of the parties as manifested thereby’ ” (Duane Reade, Inc. v Cardtronics, LP, 54 AD3d 137, 144 [2008], quoting Atwater & Co. v Panama R.R. Co., 246 NY 519, 524 [1927]).
The majority focuses on the words “agreements contained herein shall continue for ten (10) years, or such lesser period” in the sunset provision to interpret the 1993 Agreement to mean that 10 years is the maximum term for the entire contract. However, once the entire contract is taken into account, the contract can be read to apply the 10-year limitation only to certain of Trump’s obligations.
To begin with, it is clear that not all the obligations in the 1993 Agreement ran for 10 years. For example, Trump had only *73a three-year obligation to fund RSPC. Therefore, by the very terms of the 1993 Agreement, the sunset provision cannot possibly apply to every obligation.
In addition, the paragraph immediately succeeding the sunset provision requires Trump to bind his successors to the subset of obligations from the preceding paragraph relating to “the development of the project and the park, delegation of park maintenance, and the restrictions on seeking changes in the approved plan.” However, 10 years is not the time period for which this paragraph requires successors to abide by those obligations. Rather, this subsequent paragraph binds them “so long as the Special Permits remain in effect.” (Emphasis added.) That same paragraph also requires Trump to bind successors to develop the parcel in accordance with the Design Guidelines. The repetition of those same obligations in a paragraph following the sunset provision, then, at the very least raises questions about the length of time successors are bound. Is it for the 10-year term from the preceding paragraph or is it for “so long as the Special Permits remain in effect”? This question cannot be answered on a motion to dismiss.
Further, the paragraph containing the sunset provision clarifies that provision’s limitations. The phrase the majority isolates and relies upon so heavily, “agreements contained herein,” occurs as the last sentence in a paragraph discussing Trump’s obligations “relating to design guidelines, park maintenance and operation, and restrictions on major modifications and rezoning.” Therefore, the phrase “agreements contained herein” does not necessarily mean the entire 1993 Agreement, but rather could easily just put a time limit on Trump’s obligations relating to these issues. Had the parties intended the sunset provision to govern the entire agreement, why would they have embedded it as the fourth sentence of a paragraph dealing primarily with the dissolution of RSPC and a specific subset of Trump’s obligations?
The majority reads the agreement to implicate the paragraph immediately following the sunset provision only: (1) when the Special Permits are in effect and (2) Trump owns only a part of the “Subject Property” rather than the entire “Subject Property.” It then interprets the second paragraph to refer to the situation where Trump sells some portion of the property but retains an interest. The majority then argues that because Ex-tell purchased the entire property, the second paragraph does not become implicated.
*74However, there is another way to interpret these two paragraphs. This is because it is not clear that the second paragraph deals only with the situation where an entity purchases part of the Subject Property while Trump retains ownership of a portion. The language requires “any person who purchases any Parcel of the Subject Property from me” to abide by the 1993 Agreement so long as the Special Permits remain in effect. There is no indication that by using the words “any Parcel” the parties meant to exempt an entity that purchased all 76 acres. If the parties meant to exempt this sort of purchaser, would they not have said so, particularly as the 1993 Agreement does contemplate the possibility that Trump would sell the entire parcel.
Moreover, the sunset provision states that it will continue for
“ten (10) years, or such lesser period as either of the following conditions shall no longer remain satisfied: (1) the Special Permits shall remain in effect; and (2) I [Trump] shall own, directly or indirectly, all or any portion of the Subject Property.” While this language is hardly a model of clarity, I agree with the majority that it contemplated a possible time period that was less than 10 years if Trump sold his entire interest to another entity. But, this time limit may only impact Trump’s obligations. If the parties meant to tie the 10-year time limit to successor entities also, why would they not have put the 10-year time limit in the second paragraph, or said so directly?
That the language of the contract could be read to obligate Trump for only 10 years while successors could conceivably have obligations under the Design Guidelines for longer than that may be a sensible construction. The parties would have drafted the 1993 Agreement to provide for precisely that event, if, for instance, everyone knew that Trump would eventually sell his interest to another party. The 1993 Agreement certainly contemplates this possibility. However, the motivation behind this ambiguous document will never come to light because the majority cuts this case off at the motion to dismiss stage before discovery into the intent of the parties can occur.
The majority characterizes RSPC’s argument to mean that the Design Guidelines and other environmental considerations would expire at the end of 10 years if Trump were the developer but continue “in perpetuity” for any other subsequent developer. *75This is an incorrect characterization of RSPC’s argument and a misreading of the 1993 Agreement. As I have already discussed, the 1993 Agreement states that the Design Guidelines and other considerations were to continue “so long as the Special Permits remain in effect,” not “in perpetuity” as the majority claims.
I agree with the majority that Vermont Teddy Bear Co. v 538 Madison Realty Co. (1 NY3d 470 [2004]) mandates courts to enforce contracts according to their express terms, especially in cases involving real property. However, the majority’s application of Vermont Teddy Bear to this case is misplaced. In Vermont Teddy Bear neither party claimed that the lease was ambiguous. Here, not only does RSPC claim that the 1993 Agreement is ambiguous, but the agreement is ambiguous because it contains two, possibly competing, time restrictions. The first, that the majority relies upon, could be read to restrict the entire agreement to 10 years. The second could be read to bind successors “so long as the Special Permits remain in effect.”
In Vermont Teddy Bear, the Court of Appeals cautioned that courts “ ‘may not by construction add or excise terms, nor distort the meaning of those used and thereby make a new contract for the parties under the guise of interpreting the writing’ ” {id. at 475 [internal quotation marks and citation omitted]). Yet, that is precisely what the majority does here. By ignoring the paragraph requiring successors to abide by the guidelines “so long as the Special Permits remain in effect” (emphasis added), the majority effectively excises that language from the 1993 Agreement.
Thus, the agreement is facially ambiguous as it is subject to more than one interpretation (see Yanuck v Paston & Sons Agency, 209 AD2d 207 [1994]). Accordingly, resort to extrinsic evidence is necessary to resolve the ambiguity (Korff v Corbett, 18 AD3d 248, 251 [2005]).
Finally, the majority’s decision does not address what happens to design decisions that RSPC and either Extell or its predecessor have already made. It would undermine design agreements RSPC made with Trump or HWA during the 10-year period for Extell to fail to abide by those decisions. This would render the 1993 Agreement a complete nullity. There would have been no reason for RSPC to have entered into it, and it would have received nothing in exchange for its support of Trump’s Development Plan.
*76Accordingly, I would affirm the order of the Supreme Court.
Tom, J.E, and Saxe, J., concur with Catterson, J.; Williams and Moskowitz, JJ., dissent in a separate opinion by Moskowitz, J.
Order, Supreme Court, New York County, entered March 25, 2008, reversed, on the law, with costs, and defendants’ motion to dismiss the complaint granted. The Clerk is directed to enter judgment in favor of defendants dismissing the complaint.