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11/09/2020 Plaintiff's OTSC Directing Defendants Pay Rent Pendente Lite FILED: NEW YORK COUNTY CLERK 11/09/2020 06:05 PM INDEX NO. 653839/2020 NYSCEF DOC. NO. 12 RECEIVED NYSCEF: 11/09/2020 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ––––––––––––––––––––––––––––––––––––––––––––––– x EAST 16TH STREET OWNER LLC, : : Index No. 653839/2020 Plaintiff, : : - against - : : UNION 16 PARKING LLC and : TMO PARENT LLC, : : Defendants. : : ––––––––––––––––––––––––––––––––––––––––––––––– x MEMORANDUM OF LAW IN SUPPORT OF LANDLORD’S MOTION FOR AN ORDER DIRECTING DEFENDANTS TO PAY RENT PENDENTE LITE COZEN O’CONNOR Attorneys for Plaintiff 45 Broadway, 16th Floor New York, New York 10006 LEGAL\49080730\13 27979.0001.000/493058.000 1 of 22 FILED: NEW YORK COUNTY CLERK 11/09/2020 06:05 PM INDEX NO. 653839/2020 NYSCEF DOC. NO. 12 RECEIVED NYSCEF: 11/09/2020 TABLE OF CONTENTS Page PRELIMINARY STATEMENT .................................................................................................... 1 STATEMENT OF FACTS ............................................................................................................. 2 A. The Lease and the Parking Garage ............................................................................... 2 B. The Guaranties .............................................................................................................. 4 C. COVID-19 and Executive Orders ................................................................................. 5 D. Tenant Defaults on its Lease Obligations ..................................................................... 6 E. Procedural History ........................................................................................................ 6 ARGUMENT .................................................................................................................................. 7 I. Defendants Should be Required to Pay Rent Pendente Lite Directly to Landlord ........................................................................................................................ 7 II. The COVID-19 Pandemic Does Not Excuse Tenant’s Obligation to Pay Rent ............................................................................................................................. 12 A. Tenant Does Not Satisfy the Substantial Requirements for Asserting a Frustration of Purpose Defense ................................................................................... 13 B. Defendants’ Frustration of Purpose Defense is Insufficient to Override the Clear Language of the Lease ................................................................................. 15 CONCLUSION ............................................................................................................................. 16 i LEGAL\49080730\13 27979.0001.000/493058.000 2 of 22 FILED: NEW YORK COUNTY CLERK 11/09/2020 06:05 PM INDEX NO. 653839/2020 NYSCEF DOC. NO. 12 RECEIVED NYSCEF: 11/09/2020 TABLE OF AUTHORITIES Page(s) Cases 255 Butler Assocs., LLC v. 255 Butler, LLC, 173 AD3d 651 (2nd Dep’t 2019) ...............................................................................................9 2865 University Owners Corp. v. High, N.Y.L.J., June 6, 1988, p. 23, col. 1 (App. T. 1st Dep’t) ...............................................................................................................................8 300 E. 34th St. Co. v. Paleias, N.Y.L.J., June 20, 1997, p. 25, col. 5 (App. Term 1st Dep’t) .................................................................................................................................10 40 Broad Assoc. No. 3 LLC v. 40 Broad Commer. LLC, 2018 NYLJ LEXIS 3992, *2 (Civ. Ct. N.Y. Co. 2018) .......................................................................................................9 407 E. 61st Garage, Inc. v. Savoy Fifth Ave. Corp., 23 N.Y.2d 275 (1968) ..............................................................................................................15 468-470 9th Avenue Corp. v. Randall. N.Y.L.J., February 10, 1986, p. 7, col. 2 (App. T. 1st Dep’t) .....................................................................................................................8 538 Morgan Ave. Props. LLC v. 538 Morgan Realty LLC, 2020 N.Y. Misc. LEXIS 4912 .................................................................................................12 A+E TV Networks, LLC v. Wish Factory, No. 15-CV-1189 (DAB), 2016 U.S. Dist. LEXIS 33361 (S.D.N.Y. Mar. 11, 2016) ........................................................................................................................................13 Albright v. Shapiro, 92 A.D.2d 452 (1st Dep’t 1983) ..........................................................................................9, 10 Alphonse Hotel Corp. v. 76 Corp., 273 A.D.2d 124 (1st Dep’t 2000) ............................................................................................10 Axginc Corp. v. Plaza Automall, Ltd., 759 Fed. App’x 26 (2d Cir. 2018)............................................................................................16 Capital One Equip. v. Deus, 2018 NY Slip Op 31819(U) (Sup. Ct. N.Y. Co. 2018) ............................................................14 Corris v. 129 Front Co., 85 A.D.2d 176, 447 N.Y.S.2d 480 (1st Dep’t 1982) .................................................................8 Eli Haddad Corp. v. Cal Redmond Studio, 102 A.D.2d 730, 476 N.Y.S.2d 864 (1st Dep’t 1984) .............................................................10 ii LEGAL\49080730\13 27979.0001.000/493058.000 3 of 22 FILED: NEW YORK COUNTY CLERK 11/09/2020 06:05 PM INDEX NO. 653839/2020 NYSCEF DOC. NO. 12 RECEIVED NYSCEF: 11/09/2020 Esposito v. Larig, 174 A.D.3d 574 (2d Dep’t 2019) .............................................................................................10 Gander Mt. Co. v. Islip U-Slip LLC, 923 F. Supp. 2d 351 (N.D.N.Y. 2013) ...............................................................................12, 13 Kate Spade & Co. v. G-CNY Grp. LLC, 114 N.Y.S.3d 184, 63 Misc. 3d 1205(A), (N.Y. Civ. Ct. 2019) ..............................................14 La Fabrique Owners Corp. v. La Fabrique LLC, 16 Misc. 3d 130(A), 841 N.Y.S.2d 826 (App. Term 1st Dep’t 2007) .....................................10 Lincoln Plaza Tenants Corp. v. MDS Properties Development Corp., 169 A.D.2d 509 (1st Dep’t 1991) ..............................................................................................7 Maiden Lane Props., LLC v. Just Salad Partners LLC, 2013 N.Y. Misc. LEXIS 2647 (Civ. Ct. N.Y. Co. 2013) ...........................................................8 MMB Associates v. Dayan, 169 A.D.2d 422, 564 N.Y.S.2d 146 (1st Dep’t 1991) ...............................................................8 PPF Safeguard, LLC v. BCR Safeguard Holding, LLC, 85 A.D.3d 506 (1st Dep’t 2011) ........................................................................................13, 14 Robitzek Investing Co. v. Colonial Beacon Oil Co., 265 A.D. 749 (1st Dep’t 1943) ................................................................................................14 Rockland Dev. Assocs. v. Richlou Auto Body, 173 A.D.2d 690 (2d Dep’t 1991) .............................................................................................13 Steve Madden Retail, Inc. v. 720 Lex Acquisition LLC, 2016 N.Y. Misc. LEXIS 2985 2016 NY Slip Op 31522(U) (Sup. Ct. N.Y. Co. 2016) ....................................................................................................................................9, 10 Towers Org., Inc. v. Glockhurst Corp., N.V., 160 A.D.2d 597 (1st Dep’t 1990) ..............................................................................................7 Urban Archaeology Ltd. v. 207 E. 57th St. LLC, 34 Misc. 3d 1222(A), 951 N.Y.S.2d 84 (Sup. Ct. N.Y. Co. 2009) aff’d 68 A.D.3d 562 (1st Dep’t 2009) ...................................................................................................16 Walden Fed. S&L Ass’n v. Slane Co., No. 09 Civ. 1042 (DLC), 2011 U.S. Dist. LEXIS 37010, at *3 (S.D.N.Y. Apr. 5, 2011) ....................................................................................................................................15 Statutes Real Property Law Section 220 .......................................................................................................9 iii LEGAL\49080730\13 27979.0001.000/493058.000 4 of 22 FILED: NEW YORK COUNTY CLERK 11/09/2020 06:05 PM INDEX NO. 653839/2020 NYSCEF DOC. NO. 12 RECEIVED NYSCEF: 11/09/2020 Other Authorities CRAIN'S NEW YORK BUSINESS, May 11, 2020 .................................................................................2 Executive Order 202.6 .....................................................................................................................5 Executive Order 202.8 ...................................................................................................................11 https://therealdeal.com/2020/09/09/icon-parking-sued-for-rent-at-midtown- headquarters/ ..............................................................................................................................1 iv LEGAL\49080730\13 27979.0001.000/493058.000 5 of 22 FILED: NEW YORK COUNTY CLERK 11/09/2020 06:05 PM INDEX NO. 653839/2020 NYSCEF DOC. NO. 12 RECEIVED NYSCEF: 11/09/2020 Plaintiff EAST 16TH STREET OWNER LLC (“Landlord”) respectfully submits this memorandum of law in support of Landlord’s motion for an order directing Defendant UNION 16 PARKING LLC (“Tenant”) and defendant
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