Upon the foregoing papers, Frank Brunckhorst Co., LLC (plaintiff) moves, pursuant to CPLR 3212, for an order granting it summary judgment dismissing the counterclaims of JPKJ Realty, LLC (defendant).

Defendant owned a newly built, 10-story, mixed-use building at 117-119 Court Street in Brooklyn. Plaintiff agreed, in the fall of 2007, to lease the ground floor, cellar and "rear yard roof" area of the building (the Premises) to open and operate a delicatessen. Consequently, defendant and plaintiff entered into a 10-year lease, to commence on November 1, 2007, that fixed the monthly rent at $27,000, to be increased by 7.5% every three years (the Lease). Sub-paragraph 44 (c) (the Termination Clause) qualified the lease's term, stating, in part:

"[I]f the City of New York does not issue (x) a permanent certificate of occupancy for the [*2]Building within twelve months following the Commencement Date (the Termination Date') Tenant shall have the right to terminate this Lease without liability or obligation. In such event Tenant shall give Landlord ten (10) days written notice at any time after the Termination Date and the date set forth in the Tenant's notice shall be deemed to be the normal expiration date of this Lease."

Paragraph 48 (the Unavoidable Delay Clause), however, provided:

"If either party shall be prevented or delayed from punctually performing any obligation or satisfying any condition under this Lease by . . . the failure of either party to sign an application or other documents in connection with any changes or alterations or any other condition beyond the control of the party ( Unavoidable Delay'), then the time to perform such obligation or satisfy such condition shall be extended by the delay caused by such event."

Plaintiff gave defendant a $108,000 letter of credit as security and took possession of the Premises in November 2007. It undertook renovations of the Premises and eventually began operating a delicatessen therein. Plaintiff, however, notified defendant, on July 13, 2009, that it was terminating the Lease on July 23, 2009 due to defendant's failure to obtain a permanent certificate of occupancy (PCO) pursuant to the Termination Clause. Plaintiff thereafter vacated the Premises.

Plaintiff commenced this action on September 9, 2009 and sought return of the security letter of credit and refund of $7200 in rent previously paid for the period after termination. Defendant subsequently asserted six counterclaims against plaintiff and alleged, in the first, third, fourth and sixth counterclaims, that plaintiff had "impeded and/or prevented [defendant] from obtaining a Permanent Certificate of Occupancy at the demised premises" and thus breached the Lease by its early termination (the breach-of-contract counterclaims). Defendant further alleged, in the second and fifth counterclaims, respectively, that plaintiff had breached the Lease by causing and failing to remedy mechanic's liens imposed upon the property and by damaging the Premises.

Plaintiff now seeks an order granting summary judgment dismissing defendant's counterclaims. Plaintiff contends that its termination was justified as the city had not issued a PCO by the November 1, 2008 contractual deadline and, in fact, did not issue a PCO for the property until April 2010. Plaintiff asserts that at least seven unresolved construction issues existed as of the July 23, 2009 termination date that each would have prevented issuance of a PCO. Plaintiff urges that "[n]one of these Building construction issues had anything to do with [plaintiff] . . . , and the resolution of each of those issues was solely [defendant's] responsibility." Plaintiff thus argues that its own actions or inactions could not have solely caused defendant's failure to obtain a PCO because [*3]defendant was not otherwise ready, willing and able to meet the PCO requirement. Plaintiff further contends that, despite its discovery requests and the court's compliance orders, defendant has failed to produce any evidence that establishes that it was otherwise ready, willing and able to obtain a PCO or that plaintiff had obstructed defendant's efforts. In addition, plaintiff argues that the Unavoidable Delay Clause did not extend defendant's time to obtain a PCO because plaintiff's delay in "signing-off" on its renovations could not have prevented the PCO's issuance and because no evidence establishes that plaintiff intentionally interfered with defendant's ability to obtain a PCO.

Plaintiff also argues that defendant may not recover on its breach-of-contract counterclaims because, if the termination were a default, defendant failed to fulfill its contractual duty to use "all best efforts" to mitigate its damages. Plaintiff alleges that, after it vacated the Premises, defendant did not hire a broker to market the Premises, nor did defendant list the Premises on any websites or in any newspapers; defendant, instead, merely placed a sign in the window. Furthermore, plaintiff urges, defendant refused to deal with potential tenants represented by brokers and, when defendant found a new tenant, plaintiff alleges, defendant granted that new tenant a below-market rate.

Finally, plaintiff argues that summary judgment must be granted dismissing defendant's claims regarding mechanic's liens plaintiff allegedly left unremedied and property damage plaintiff purportedly caused because defendant has failed to produce any evidence supporting these allegations.

Plaintiff supports its motion with the affidavit of Lloyd Noel (Noel), a building consultant, who states that plaintiff hired him to assist in securing permits and sign-offs related to its renovations of the Premises. Noel recounts that defendant had obtained a temporary certificate of occupancy (TCO) for 117-119 Court Street, but that this TCO expired on July 22, 2008 and was not renewed. He opines that "[r]enewal of the TCO typically is an administrative, almost automatic process," and also that "[n]othing associated with [plaintiff's] renovations would have prevented renewal of the TCO." Noel further explains that, as of July 13, 2009, there were multiple open issues with the building: the lack of a "curb-cut signoff" or appropriate exemption; the lack of a smoke detector certification; the lack of a final survey; the lack of a construction or "OT" sign-off; the lack of a final tax lot; defendant's failure to amend the building's plan with descriptions of the eighth and tenth floors; and the lack of a certification that outstanding violations had been cleared. Noel opines, "Each of these issues would have prevented a PCO from issuing. None of those issues could be resolved by a tenant, such as [plaintiff], and each of those issues could be resolved only by the Building owner."

Defendant argues, in opposition, that plaintiff "illegally utilized the [Termination Clause] of the lease in an attempt to rescind the lease because [its] sales from the deli were far less than anticipated." Defendant contends that it engaged in numerous communications with plaintiff between November 2008 and July 2009 regarding [*4]renovations of the Premises, including e-mails informing plaintiff's counsel that plaintiff needed to obtain its architect's sign-off so that defendant could compile a PCO application package. Defendant stresses that plaintiff admits it had still not completed closing out its building permits when it sent the Notice of Termination. Defendant argues that TCO renewals do not occur automatically, contrary to Noel's assertion, and that the Department of Buildings had informed defendant that it needed to apply for a PCO instead. Defendant maintains that it need not show that plaintiff's prevention of defendant's performance was intentional or affirmative in order to establish that the PCO deadline was excused or extended.

Defendant asserts that the open issues, which plaintiff contends prevented defendant from being ready, willing and able to obtain a PCO, consisted only of ministerial forms that needed to be filed with a complete PCO package and that the work underlying these forms had been completed. It elaborates, recounting that the curb-cut inspection had already been performed, that the smoke detectors were all properly installed, that a final survey could not be completed until plaintiff obtained proper renovation sign-offs, that the necessary amendments regarding the eighth and tenth floors were due to a Department of Buildings clerical error and that defendant had, by November 2008, obtained a final tax lot number. Defendant thus argues that plaintiff's failure to close out its permits and resolve Environmental Control Board violations prevented defendant from applying for a PCO. Defendant also asserts that plaintiff waived its rights under the Termination Clause because it continued paying rent and occupying the Premises for several months after the PCO deadline had passed.

Defendant additionally argues that it took sufficient steps to mitigate its damages in the wake of the termination and urges that it advertised the space and met with brokers and potential tenants. It adds that it leased the space to a new tenant approximately one year after plaintiff's termination and contends that the question whether it sufficiently met its duty to mitigate damages constitutes a factual issue. Finally, defendant asserts that plaintiff failed to pay its contractors and caused mechanic's liens to be placed on the building, which caused defendant damages.

Plaintiff, in reply, reiterates its argument that numerous issues related to the building as a whole would have prevented defendant obtaining a PCO and that any issues allegedly caused by plaintiff thus could not have solely caused that condition's failure. Plaintiff urges that defendant fails to show that it was ready to obtain a PCO or that plaintiff's issues prevented defendant from proceeding with the PCO process. Plaintiff again stresses that no evidence shows it intentionally interfered with defendant's obtaining a PCO or that it purposely waived the PCO requirement. Finally, plaintiff contends that there is no question that defendant failed to use "all best efforts" to mitigate damages after termination and that defendant produces no evidence showing that plaintiff caused a mechanic's lien or damage to the Premises.

Considering a summary judgment motion requires viewing the evidence in the light most favorable to the motion opponent (Vega, 18 NY3d at 503). Nevertheless, "mere conclusions, expressions of hope or unsubstantiated allegations or assertions are insufficient" to defeat a summary judgment motion (Zuckerman, 49 NY2d at 562). "The court's function on a motion for summary judgment is to determine whether material factual issues exist, not to resolve such issues" (Ruiz v Griffin, 71 AD3d 1112, 1115 [2010] [internal quotation marks omitted]).

A breach-of-contract claim requires showing a contract between the plaintiff and the defendant, that the plaintiff performed under the contract's terms, that the defendant did not perform and that damages resulted to the plaintiff (Brualdi v IBERIA, Lineas Aereas de España, S.A., 79 AD3d 959, 960 [2010]). "[A] party to a contract may not avoid his obligations under the contract by frustrating a condition precedent, or by deliberately causing a condition subsequent which ends the contract" (Freedman v Shapiro, 186 AD2d 786, 786 [1992]; see also A.H.A. Gen. Constr. v New York City Hous. Auth., 92 NY2d 20, 31 [1998], rearg denied 92 NY2d 920 [1998]; Young v Hunter, 6 NY 203, 207 [1852]). Thus, a party effectively waives a condition to its performance if that party actively prevents or hinders performance of the condition (see Amies v Wesnofske, 255 NY 156, 163 [1931]; Matter of Capizola v Vantage Intl., 2 AD3d 843, 845 [2003]; Lasher v Racer, 74 AD2d 917, 918 [1980]).

Here, plaintiff makes a prima facie showing that its actions could not have caused defendant's failure to obtain the PCO by the November 1, 2008 deadline. Defendant, however, contends that plaintiff's renovations and its subsequent failure to close out its work permits and obtain required sign-offs delayed defendant's PCO application. These arguments raise a triable factual question whether plaintiff frustrated defendant's performance of the PCO condition. In addition, the Lease's Unavoidable Delay Clause [*6]seems almost to anticipate exactly what defendant contends prevented it from obtaining a PCO: a party's "failure . . . to sign an application or other documents in connection with any changes or alterations." This clause thus presents another issue that precludes granting summary judgment as to the breach-of-contract counterclaims on this motion.

Plaintiff's arguments that defendant failed to fulfill its contractual duty to take "all best efforts" to mitigate damages in the event of default do not amount to a prima facie showing against defendant's breach-of-contract counterclaims both because whether a party fulfilled his or her duty to mitigate generally constitutes a question of fact (see Losei Realty Corp. v City of New York, 254 NY 41, 47 [1930]; Tynan Incinerator Co. v International Fid. Ins. Co., 117 AD2d 796, 797 [1986]) and because plaintiff fails to establish the extent that defendant's alleged failure to mitigate damages would reduce defendant's potential award (see Eskenazi v Mackoul, 72 AD3d 1012, 1014 [2010] ["(a) party seeking to avail itself of the affirmative defense of failure to mitigate damages must establish . . . the extent to which such (mitigation) efforts would have diminished those damages"]). Accordingly, summary judgment must be denied as to defendant's first, third, fourth and sixth counterclaims.

Plaintiff properly asserts that defendant has introduced no evidence establishing that plaintiff caused a mechanic's lien to be filed against the building (the second counterclaim) or that plaintiff caused damage to the Premises (the fifth counterclaim). Defendant has failed to introduce any such evidence and fails to raise any triable issues in response to plaintiff's prima facie showing. Summary judgment must, therefore, be granted dismissing defendant's second and fifth counterclaims. Accordingly, it is

ORDERED that plaintiff's summary judgment motion is granted as to defendant's second and fifth counterclaims and those counterclaims are dismissed, and the motion is otherwise denied.

This constitutes the decision and order of the court.

E N T E R,

J. S. C.