Plaintiff, United Retail Incorporated, brings a motion pursuant to CPLR § 3212 seeking an order of summary judgment on plaintiff's first cause of action entitling plaintiff to recover from defendant, The Equitable Life Assurance Society of the United States, the sum of $100,000.00 plus interest upon the grounds that there are no triable issues of fact thereby warranting judgment in favor of plaintiff as a matter of law.

Defendants Equitable Life and Cor Route 5 Company, LLC ("Cor") oppose plaintiff's motion and cross-move pursuant to CPLR § 3212 for summary judgment [*2]dismissing plaintiff's complaint as a matter of law and granting partial summary judgment in favor of defendant Cor on its counterclaim for past due minimum guaranteed rent. Equitable Life also seeks an order pursuant to CPLR §3124 compelling plaintiff to comply with defendants' discovery demands.^[FN1]

On July 2, 1998, the original landlord conveyed the Fayetteville Mall

premises to Equitable Life and Equitable Life succeeded to the rights of the landlord under the Lease Agreement. Thereafter, on May 23, 2000, Equitable Life entered into a contract to sell the Fayetteville Mall premises to co-defendant Cor Route 5 Company, LLC ("Cor"). It was Cor's intention to demolish the mall and completely redevelop the property. The termination of plaintiff's lease at or prior to the closing of the sale from Equitable Life to Cor was a condition to the purchase of the property by Cor.

Accordingly, Equitable Life and plaintiff engaged in negotiations for the early termination of plaintiff's lease which otherwise had a termination date of January 31, 2009. ^[FN2] These negotiations resulted in the execution of a First Amendment of Lease Agreement dated March 12, 2001. This amendment, inter alia, recognized that Equitable Life had entered into a contract with Cor to sell the mall premises and in paragraph seven thereof, provided, in pertinent part, as follows:

"7. Payment upon Closing of the Sale Agreement: Upon Closing of the Sale Agreement . Seller agrees to pay Tenant the sum of One Hundred Thousand Dollars ($100,000). In consideration for such payment, Tenant hereby agrees, effective upon Closing of the Sale Agreement . time [*3]being of the essence, to deliver vacant possession of the Premises ("Vacant Possession") to the purchaser under the Sale Agreement Seller shall provide to Tenant at least three (3) weeks' notice of the scheduled Closing date of the Sale Agreement and at least one week's notice of any rescheduling thereof."

Without limiting the foregoing, if Tenant fails to timely deliver Vacant Possession, Seller shall pay said $100,000 to Seller's attorney, in escrow, to be paid to tenant upon delivery by Tenant of Vacant Possession. Seller's legal costs and expenses resulting from Tenant's failure to vacate the Premises in a timely manner shall be deducted from said $100,000 payment. In addition, if Tenant fails to deliver Vacant Possession within [three] months of Closing of the Sale Agreement . Tenant shall forfeit its right to receive the $100,000 payment and shall nevertheless be obligated to promptly deliver Vacant Possession."

There is no factual dispute that the closing of the Sale Agreement took place on April 26, 2001.

Taking the evidence in the light most favorable to defendant Equitable Life, the record reflects that a Orazio D. Crisalli, an employee of Jones Lang LaSalle Americas, Inc. [property manager for the Fayetteville Mall on behalf of Equitable] prepared a letter dated April 23, 2001 which, in pertinent part, stated as follows:

" . effective May 1, 2001 Jones Lang LaSalle Americas, Inc. a/a/f The Equitable Life Assurance Society of the United States (The Equitable) will no longer manage and lease the Fayetteville Mall and "The Equitable" will transfer ownership to Cor Rte Co., LLC et al on or about this same date."

The heading of this letter sets forth in bold print: "Change in Ownership, The Fayetteville Mall."

Equitable Life submits the sworn affidavit of Charles A. Maxam who states that on April 23, 2001 he personally hand delivered a copy of this letter to Karen Bersani at plaintiff's store location at the Fayetteville Mall. According to Mr. Maxam's affidavit, Ms. Bersani identified herself to him as the "manager" of plaintiff's retail store location. In all other respects, Mr. Maxam's affidavit constitutes an affidavit of personal service.

Additionally, Mr. Crisalli's affidavit indicates that on April 23, 2001 he mailed the original letter dated that same date to plaintiff at the address designated by plaintiff as set forth upon page one of the Lease Agreement and page one of the First Amendment of Lease Agreement. There is no dispute that Mr. Crisalli utilized regular or ordinary mail as contrasted with certified or return receipt requested mail. Mr. Crisalli states that his office never received any form of notification from the United States Post office that the [*4]letter was undeliverable or that it was returned.

Plaintiff alleges that it never received the April 23, 2001 letter and that it did not receive any notice of the closing of the Sale Agreement until August 27, 2001 when Cor sent plaintiff a "Notice to terminate tenancy" which Cor sent by certified mail and regular mail.^[FN3]

There is no dispute that plaintiff did not close its store until September 27, 2001 and did not deliver "Vacant Possession" of the premises until September 30, 2001. Upon such delivery, plaintiff demanded payment of the $100,000 described in paragraph seven (7) of the First Amendment to Lease Agreement. On November 26, 2001, Cor, through its attorney, issued a letter to plaintiff refusing such payment on the ground that "plaintiff failed to vacate the premises within three months of the closing" and therefore, "the $100,000 payment was forfeited."

Plaintiff's complaint advances three causes of action, all directed at recovering the $100,000 early termination payment under breach of contract, equitable estoppel and unjust enrichment legal theories. According to plaintiff's Notice of Motion dated, August 31, 2004, plaintiff is only seeking summary judgment at this time on the complaint's first cause of action against Equitable Life under a breach of contract theory. This cause of action and plaintiff's instant motion do not seek any relief as against Cor.

Although not raised as an affirmative defense, Cor advances the position that Equitable Life should be dismissed from this action because Cor is the "proper party in this case." (See, Aiello Affidavit at ¶ 5). The record before the court vaguely addresses the question of Cor's standing or authority to declare a "forfeiture" and refuse payment to plaintiff. The affidavit of Steven F. Aiello, a member of Cor, alleges at ¶ 4 that all of Equitable's leases and contracts relating to the Fayetteville Mall were assigned by Equitable to Cor. While this may be true, it has no bearing on plaintiff's right to seek the $100,000 early termination payment from Equitable. ^[FN4] It is well established rule that a [*5]party to a contract cannot relieve himself of his obligations by assigning the contract (John W. Cowper Co., Inc. v CDC-Troy, Inc., 50 AD2d 1076 [4th Dept 1975]).

The First Amendment to Lease Agreement required Equitable Life, as "seller" to make the $100,000 payment to plaintiff or to seller's attorney to be held in escrow. Cor was not the "seller" under the amendment. Cor was the "purchaser" under the amendment. The $100,000 payment obligation to plaintiff or to Seller's attorney was absolute and was to be satisfied by the seller at the closing of the sale agreement. This one time only obligation became fixed and due upon the closing of the sale agreement and was specifically part of the early termination transaction designed to facilitate Equitable Life's desire to sell to Cor. (See, Bank of New York, Albany v Hirschfield, 63 AD2d 794, 795 [3rd Dept 1978]). Although Cor, as successor owner-landlord, succeeded to all the rights of Equitable Life under the Lease Agreement, the court finds that the $100,000 early termination payment was a personal covenant not intended to run with the land or the Lease Agreement (See, St. Regis Restaurant v Powers, 219 AD 321, 323 [1st Dept 1927]). As such, the court finds that Equitable Life remains a proper defendant against which plaintiff may pursue the remedy sought in the first cause of action.

Defendants' answer raises a number of affirmative defenses and also interposes a counterclaim on behalf of co-defendant Cor. This counterclaim asserts that plaintiff failed to pay rent for the period May 1, 2001 through September 30, 2001 and otherwise failed to comply with the terms and conditions of the Lease Agreement. Therefore, co-defendant Cor, as successor owner-lessor, claims entitlement to the sum of $35,000 for "accrued rent arrearages and other damages."

Applicable Legal Standards

The interpretation of an unambiguous contract provision is a function for the court, and matters extrinsic to the agreement may not be considered when the intent of the parties can be gleaned from the face of the instrument (Chimart Assoc. v Paul, 66 NY2d 570, 572 [1986]). A contract is unambiguous when the words and phrases employed have a definite and precise meaning, unattended by danger of misconception and concerning which there is no reasonable basis for a difference of opinion (Breed v Ins. Co. Of N. America, 46 NY2d 351, 355 [1978]). Whether or not a writing is ambiguous is a question of law to be resolved by the courts (W.W.W. Assoc. V Giancontieri, 77 NY2d 157, 162 [1990]). In the present case, the First Amendment of Lease Agreement, read as a whole to determine its purpose and intent (See, e.g., Rentways, Inc. v O'Neill Milk & Cream Co., 308 NY 342, 347), plainly manifests the intention that plaintiff was to receive $100,000 in return for agreeing to an early termination of the existing Lease Agreement.

The law abhors forfeitures. Precisely for that reason, it is the duty of the court to interpret an agreement strictly in order to avoid such a result (Boyarsky v Froccaro, 131 AD2d 710, 713 [2nd Dept 1987], citing Lyon v Hersey, 103 NY 264 [1886]). In the construction of all contracts under which forfeitures are claimed, it is the duty of the [*6]court to interpret them strictly for a forfeiture is not favored in the law (Lyons v Hersey, 103 NY at 270).

The Lease Agreement Notice Provision

Insofar as is relevant to the issues before the court, Paragraph 37, Bills And Notices, of the Lease Agreement contains the following language:

"37. Unless otherwise expressly in this Lease provided, any notice or communication which either party may desire or be required to give to the other including any notice of termination, shall be if sent by Registered or Certified Mail, Return Receipt Requested to tenant at the address as shown on the Lease or at such other address as the Tenant may designate in writing from time to time; or at the time when a copy of same is delivered personally to Tenant, its agent, representative, or employee, or delivered in compliance with the laws of the state where the Shopping Center is located concerning substitute or abode service of process, or the date when any such notice or communication is deposited in any post office or branch post office regularly maintained by the United States Postal Service, except for notice of change of address or revocation of a prior notice, which shall only be effective upon receipt. Any notice by Tenant to Landlord must be sent by Registered or Certified Mail, Return Receipt Requested addressed to Landlord at the address as shown on the Lease or at such other address as the Landlord may designate in writing from time to time." (Emphasis supplied).

There is no dispute that, insofar as mailing is concerned, Equitable Life did not utilize registered or certified mail, return receipt requested in the service of the April 23, 2001 letter by mail as required by ¶ 37 of the Lease Agreement. There is also no factual dispute that plaintiff's managerial employee, Karen Bersani, was personally served with a copy of this letter on April 23, 2001 at plaintiff's retail store location at the Fayetteville Mall.

The Early Termination Payment

Paragraph seven (7) of the First Amendment of Lease Agreement requires Seller (Equitable Life) to pay Tenant $100,000 "upon Closing of the Sale Agreement." In consideration of such payment, according to ¶ 7, Tenant agreed, effective upon Closing of the Sale Agreement, time being of the essence, to deliver Vacant Possession of the premises to the purchaser under the Sale Agreement (Cor).

Plaintiff's consent to the early termination of the lease (by eight [8] years) was an accommodation to Equitable Life (and ultimately Cor) in exchange for which plaintiff contracted and expected to receive $100,000. Insofar as plaintiff was concerned, its assent to execute the First Amendment of Lease Agreement was in return for payment [*7]of the $100,000.^[FN5]

There is no dispute that Seller (Equitable Life) has not paid Tenant (United Retail) the $100,000. There is no factual dispute that Equitable Life did not pay $100,000 to its attorney at the time of closing to be held in escrow as required by ¶ 7 of the First Amendment to Lease Agreement.

Paragraph 7 also, by its express and unambiguous terms, requires seller to give tenant "at least three (3) weeks', notice of the scheduled Closing date of the Sale Agreement."

There is no dispute that, not only did Equitable Life fail to give the required three (3) weeks' notice, but that Equitable Life at best gave three (3) days' notice of the scheduled Closing date to plaintiff.^[FN6]

This conclusion is not changed even if, for purposes of the motions at hand, the court was to find that the April 23, 2001 letter was "notice" as required under ¶ 37 of the Lease Agreement and that it was actually mailed and hand delivered. This conclusion also would not change even if the court was to decide that regular or ordinary mail was sufficient under ¶ 37. Further, this conclusion would not change even if the court were to find that by delivering the April 23, 2001 letter, Equitable Life actually gave notice of the scheduled Closing date (instead of a change in management and an indefinite transfer of ownership date) as being scheduled for April 26, 2001.

In construing ¶ 7 as a whole, the court finds that the intent of the parties was to compensate plaintiff for vacating the premises much earlier than the agreed lease termination date of January 31, 2009. However, the amendment states that plaintiff would continue to operate in the mall location until it was advised of a closing date for the conveyance of title to the premises from Equitable Life to Cor. Therefore, the amendment required Equitable Life to give plaintiff adequate notice of the scheduled closing date so plaintiff would have sufficient time to wind up its affairs at the mall location and vacate the premises as called for under the amendment. The parties expressly agreed that "three (3) weeks' notice" of the scheduled closing date was required for this purpose.

Paragraph 7 unambiguously required Equitable Life to pay plaintiff the sum of [*8]$100,000 at the time of closing. However, if at such time, plaintiff had not or could not deliver vacant possession of the premises to the purchaser (Cor), Equitable Life was required under the amendment to pay the $100,000 to Equitable Life's attorney to be held in escrow and to be paid to plaintiff upon delivery of Vacant Possession to Cor. Plaintiff had three (3) months to deliver Vacant Possession after the closing date or forfeit the payment.

There is no proof in this record that at the scheduled closing of the Sale Agreement Equitable Life made the $100,000 payment to its attorney to be held in escrow for three months. There is no proof that Equitable Life did anything whatsoever to notify plaintiff of the actual closing date. There is no proof of any attempts by Equitable Life to contact plaintiff concerning the closing date as scheduled. ^[FN7] In fact, (other than the Criselli affidavit concerning the delivery of the April 23, 2001 letter) the record before the court does not contain any submission from a representative of Equitable Life as to any of the pre or post-closing activity or communications between the parties. In other words, insofar as these motions are concerned, Equitable Life's voice is silent.

The defendants, however, argue that plaintiff, through a variety of other means (none of which are provided for or permitted under ¶ 37 of the Lease Agreement) acquired actual notice of the transfer of title to Cor. For example, Steven Aiello, a member of Cor Route 5 Company, LLC ^[FN8] submits an affidavit wherein he states that "in or about May 2001" he had several conversations with one of plaintiff's employees (Adam Rabin) and plaintiff's real estate agent, Penny Cipolla concerning placing plaintiff's "Avenue" store in a different Cor location in Clay, New York. According to Mr. Aiello, during these discussions he told Mr. Rabin that Cor had closed on the Fayetteville Mall location.

Mr. Aiello also indicates that Cor's purchase of the mall was publicized on local television, radio and in the newspaper. Additionally, according to Mr. Aiello, there were numerous signs posted in the mall stating that the mall was under new ownership.^[FN9]

While all of Mr. Aiello's assertions are not factually disputed, there are significant [*9]gaps in their content which are of concern. Initially, there is no indication in what capacity Mr. Rabin was employed by plaintiff or that Mr. Rabin was authorized to receive notice under the Lease Agreement or waive the agreement's requirement that notice be in writing and delivered to the tenant's address as shown on the lease.^[FN10] There is no indication how a news story about the sale of the mall, in whatever form, is a bona fide substitute for the notice requirements which were negotiated by the parties and set forth with some precision and detail in the Lease Agreement and First Amendment to Lease Agreement.

Based upon the record submitted by the parties, there is no dispute that from the April 23, 2001 "Change in Ownership" letter of Mr. Crisalli until the "Notice to terminate tenancy" letter of Cor dated August 27, 2001, no written communication was sent from Cor or Equitable Life to plaintiff concerning the scheduled closing date, completion of closing or commencement of plaintiff's three (3) month window of opportunity to deliver vacant possession.

The court has also reviewed the full text of the Lease Agreement and First Amendment of Lease Agreement with reference to the issue of the landlord's

right to terminate. The Lease Agreement at ¶ 19, "Events of Termination," contains a number of circumstances, none of which apply here, under which the tenant shall be deemed to be in default for lease termination purposes.

The First Amendment of Lease Agreement, however, at ¶ 6, "Tenant's Right of Cancellation," gave plaintiff-tenant the right commencing May 31, 2001, in its sole discretion, to cancel the lease upon at least ninety (90) days notice to seller.

Cor's "Notice to terminate tenancy" does not make reference to or rely upon any provision of the Lease Agreement or First Amendment of Lease Agreement. It does direct that the plaintiff was to "vacate the premises and remove all property" no later than September 30, 2001. There is no dispute that plaintiff complied with this notice.

In light of the foregoing, and based upon the defendants' failure to comply with the spirit and letter of the notice provisions set forth in ¶ 7, the court finds that there is no basis for a forfeiture of plaintiff's contractual right to receive the $100,000.00 early lease termination payment as agreed to be paid Equitable Life in the plain and unambiguous language of the First Amendment to Lease Agreement.

Plaintiff's motion for summary judgment on its first cause of action for breach of contract by Equitable Life is granted and Equitable Life is directed to pay plaintiff the sum of $100,000.00 plus interest at the rate of nine (9%) per annum pursuant to CPLR [*10]§ 5001 [a] and CPLR § 5004 from September 27, 2001 until the date of entry of judgment by plaintiff.

Defendants also move for dismissal of plaintiff's complaint in its entirety. In light of this court's determination that plaintiff is entitled to summary judgment on its first cause of action for breach of contract, defendants' motion directed to this claim is denied. Defendants' cross-motion papers do not address, factually or legally, the merit or lack thereof in plaintiff's equitable estoppel (2nd cause of action) or unjust enrichment (3rd cause of action) theories. Accordingly, the court finds that defendants have not met their burden of demonstrating entitlement to summary judgment as a matter of law and defendants' cross-motion for summary judgment dismissing plaintiff's second and third causes of action is also denied.

Defendants' counterclaim alleges that plaintiff failed to pay rent and has otherwise failed to comply with the terms and conditions of the Lease Agreement as amended and therefore owes Defendant COR the sum of $35,000.00 for accrued rent arrearage and other damages from May 1, 2001.

The First Amendment of Lease Agreement, at ¶ 3, Abatement of Rent, Taxes and Other Charges, provides that the rent, taxes and other monetary obligations (other than utilities) of tenant shall be abated for the period January 1, 2001 through April 30, 2001. The First Amendment of Lease Agreement does not indicate what obligation tenant would have, insofar as payment of rent was concerned, if the closing did occur before April 30, 2001, which it did in this case.

The First Amendment of Lease Agreement, at ¶ 4, Rent Modification if Sale Agreement does not Close prior to April 30, 2001, provides that if the closing of the Sale Agreement does not occur on or before April 30, 2001, tenant shall pay landlord, in lieu of rent provided for in the Lease Agreement, monthly rent equal to four (4%) per cent of the monthly gross sales of tenant.

Paragraph 8 of the First Amendment of Lease Agreement, Ratification of the Lease, provides that:

"Except as specifically modified herein, all terms, covenants and conditions of the lease are hereby ratified and confirmed, and shall remain in full force and effect."

Accordingly, to the extent that the First Amendment of Lease Agreement is silent as to plaintiff's rental payment obligation after April 30, 2001 in the face of the closing actually taking place before April 30, 2001, the court finds that the original Lease [*11]Agreement remains applicable and controls the rental payment obligation for the five-month period (May 1, 2001 through September 30, 2001) that the plaintiff continued to occupy the premises.

The Lease Agreement (in a paragraph entitled "Rent") provided for minimum monthly rent in the amount of $4,666.67 during years 1 through 6 of the lease. The lease was executed on September 13, 1995 and commenced on a date thereafter which is not clear from the moving papers. In any event, the lease could not have commenced earlier than September 13, 1995 and the period of May 1, 2001 through September 30, 2001 would therefore have to be within the first six years of the lease and minimum rent would then be the $4,666.67 per month.

Therefore, the court finds that plaintiff is obligated to pay to Cor (as successor owner-lessor to Equitable Life) the sum of $23,333.35 representing minimum guaranteed rent due under the "Rent" provision of the Lease Agreement for the period of May 1, 2001 through September 30, 2001. Plaintiff shall pay to defendant Cor interest at the rate of nine (9%) percent per annum (CPLR § 5004) on each monthly rental payment due and owing from May 1, 2001 through September 30, 2001. Such interest shall be computed from the first day each such rental payment became due until the entry of judgment.

Defendants correctly point out that the Lease Agreement also obligated plaintiff to pay percentage rent in the form of four (4%) per cent of plaintiff's gross sales in excess of $900,000.00 and other common area maintenance (CAM) charges. These amounts cannot be determined without reference to and production of plaintiff's accounts and records which defendants intend to obtain through discovery.

Accordingly, defendants' motion seeking to compel plaintiff to comply with defendants' discovery demands as served is granted. Plaintiff is to respond to defendants' documentary discovery demands within forty-five days of the entry of the order issued upon this decision and a representative of plaintiff is to be deposed within ninety-days of the entry of such order.

This constitutes the decision of the Court. Plaintiff's counsel to submit proposed order on notice.

ENTER

DATED: March 8, 2005_______________________

EDWARD D. CARNI, J.S.C.