The issue before the Court is whether plaintiff is collaterally estopped from seeking to declare the lease, and all subsequent lease assignments, signed by defendant null and void on the basis that defendant was not a legal entity at the time it executed a lease assignment.

Plaintiff landlord commenced this declaratory judgment action against defendant tenant ^[FN1], for a determination that the lease assignment dated August 18, 1994 be declared null and void. Plaintiff maintains that defendant tenant may not obtain any rights under the lease assignment since defendant was not a legal entity at the time the assignment was signed. Plaintiff asserts that defendant tenant did not become a legal entity until October 24, 1994, when it became a limited partnership. Plaintiff further maintains that the lease extension, which provides for an additional five years, should also be declared null and void since defendant tenant does not have any rights under the assignment. Before the Court is plaintiff's motion for summary judgment in which it asserts the above arguments.

In opposition, defendant tenant maintains that plaintiff's [*2]arguments in this lawsuit and in its motion for summary judgment, are in direct contravention of a prior decision by the Honorable Martin F. Engoron, rendered in the context of a Civil Court, Landlord-Tenant proceeding. Specifically, defendant tenant argues that in an unsuccessful effort to dismiss defendant tenant's counterclaim in a non-payment proceeding pending in the Civil Court, plaintiff alleged that defendant tenant was not a legal entity on the date the lease was assigned by the prior tenant, Good Sports of New York, Inc. Judge Engoron, in his decision/order dated December 13, 2005, rejected such argument, in relevant part, as follows:

"Petitioner's second motion to strike respondent's first (and only) counterclaim dated November 14, 2005, is denied for at least three reasons...the first ground of the motion is that the counterclaim does not allege the proper party [that] was wrongfully damaged by the [petitioner]', and the second ground of the motion is that the defendant is not a legal entity'...[a]ny defense to the counterclaim on the basis that respondent was not a legal entity at the time it received an assignment of the subject leasehold is unavailing on the grounds of waiver, ratification, and/or estoppel. In particular, petitioner has been trying to collect rent from respondent (which apparently did become a legal entity' shortly after the purported assignment and long before the events here in issue) in three separate summary proceedings spanning approximately a decade. To suggest at this point that respondent has no legal rights and obligations concerning the matters here in issue would be disingenuous and inconsistent. Petitioner has charted its own path, and must now accept the consequences (be they favorable, unfavorable, or indifferent)."

Thus, defendant tenant asserts that the exact legal issue pending before this Court was previously determined by Judge Engoron.

By interim order of this Court, the parties were ordered to submit memorandum of law on the issue of whether the doctrine of collateral estoppel precludes this case from proceeding based upon the prior order and determination by the Hon. Arthur F. Engoron, JCC, dated December 13, 2005, in the case of 349 Amsterdam Ave. Corp. v. Good Sports LP d/b/a Time Out, Civil Court, New York County Index No. 81973/03. [Exh. A, Affirmation in Opposition].

In response to the interim order, plaintiff argues that the current action is "separate and distinct" from the Civil Court proceeding in that this action involves a declaratory judgment, which was not an issue in the landlord-tenant matter. [See ¶1, [*3]Plaintiff's Memorandum of Law in Response to the Interim Order]. Plaintiff asserts that "[t]he lower court never determined the issue of a declaratory judgement [sic] [and therefore, plaintiff may] bring [this] second action for the necessary subsequent relief". [See Id.]. Plaintiff further argues that collateral estoppel does not apply since the December 13, 2005 decision by Judge Engoron did not decide the issue of the legality of respondent, and plaintiff did not have a full opportunity to contest the issue in the landlord-tenant proceeding.

Defendant tenant, in response to this Court's interim order, argues that they are entitled to summary judgment of dismissal of this case, since plaintiff is barred from re-litigating the issue of defendant tenant's status as a legal entity at the time the lease was assigned, pursuant to the doctrine of collateral estoppel. Defendant tenant maintains that the issue in this lawsuit is identical to the one decided by Judge Engoron in the context of the landlord-tenant non-payment proceeding and that plaintiff had a full and fair opportunity to litigate the issue.

The doctrine of collateral estoppel precludes a party from relitigating "an issue which has previously been decided against him in a proceeding in which he had a fair opportunity to fully litigate the point...". Gilberg v. Barbieri, 53 NY2d 285, 291 (1981)(citations omitted); see also Schwartz v. Public Administrator of the County of Bronx, 24 NY2d 65, 76 (1968). It is a doctrine intended to reduce litigation and conserve the resources of the court and litigants and it is based upon the general notion that it is not fair to permit a party to relitigate an issue that has already been decided. Kaufman v. Eli Lilly & Co., 65 NY2d 449, 455 (1985).

In order to invoke collateral estoppel, a two-pronged test must be satisfied requiring that: (1) an issue that is presently under consideration in an action or proceeding be identical to an issue determined in a prior action or proceeding; and (2) the party against whom preclusion is sought had a full and fair opportunity to contest the issue. Id. at 455; All Terrain Properties, Inc. v. Hoy, 265 AD2d 87 (1st Dept 2000).

Applying such principles to the case at bar, the doctrine of collateral estoppel bars this action and warrants the granting of summary judgment of dismissal.

The relief sought by plaintiff in this declaratory judgment action is for this Court to declare null and void the lease and all subsequent lease documents signed by defendant, on the basis that Good Sports LP was not a legal entity on August 28, 1994, [*4]the date the lease was assigned and therefore cannot acquire rights by contract, assignment or otherwise. Notwithstanding that the Civil Court matter did not involve a declaratory judgment action, plaintiff asserted this identical argument in the context of the Civil Court landlord-tenant proceeding, and such position was specifically rejected by that Court. In response, Judge Engoron stated that "any defense...on the basis that [defendant] is not a legal entity at the time it received assignment of the subject leasehold is unavailing on the grounds of waiver, ratification, and/or estoppel". [Decision/order dated December 13, 2005]. The Court further noted that:

"[plaintiff] has been trying to collect rent from [defendant] (which apparently did become a legal entity' shortly after the purported assignment and long before the events here in issue) in three separate summary proceedings spanning approximately a decade. To suggest at this point that respondent has no legal rights and obligations concerning the matters here in issue would be disingenuous and inconsistent".

Thus, the issue of whether the lease and all subsequent lease documents should be declared null and void because defendant tenant was not a legal entity on the date the lease was assigned, and therefore failed to acquire any rights, has already been decided in Civil Court; in fact it is the identical issue that was decided and rejected by Judge Engoron in his December 13, 2005 decision/order.

Moreover, plaintiff had a full opportunity to litigate the issue in the Civil Court. Significantly, plaintiff relies upon the same documentary evidence in this case that it previously supplied on its motion to dismiss defendant tenant's counterclaim in the Civil Court proceeding. [See Exh. B, Affirmation in Opposition; Exhs. II & III, Notice of Motion]. In fact, the language of the complaint in this case similarly tracks the language contained in plaintiff's motion to strike defendant's counterclaim, which was submitted to the Civil Court. [Cf. ¶5, Complaint, Notice of Motion, Exh. VII; Exh. B Amelio Marino November 14, 2005 Affirmation in Support of Motion to Dismiss Counterclaim`, Affirmation in Opposition].

It appears that the instant action was commenced in an apparent effort to circumvent the Civil Court's decision, so that plaintiff could attempt to relitigate the issue of whether the lease, and all subsequent lease assignments signed by defendant, could be declared null and void, claiming defendant tenant was not a legal entity on the date it executed the lease assignment. As plaintiff had a full and fair opportunity to litigate this [*5]precise issue in the Civil Court, plaintiff is collaterally estopped.

Defendant's failure to file a cross-motion for summary judgment does not preclude the granting of summary judgment in its favor. It is within this Court's authority and discretion pursuant to CPLR §3212 to grant summary judgment to a non-moving party. See Frieman v. Carey Press Corp., 117 AD2d 568, 569 (1st Dept 1986). CPLR §3212 provides that "[i]f it shall appear that any party other than the moving party is entitled to summary judgment, the court may grant such judgment without the necessity of a cross-motion".

Accordingly, it is

ORDERED that plaintiff's motion for summary judgment is granted in favor of defendants and the Clerk of the Court is directed to enter a judgment dismissing the complaint in its entirety as against defendants; it is further

ORDERED that within 30 days of entry of this order, defendants shall serve a copy upon plaintiffs with notice of entry.

Dated: June __, 2007

Doris Ling-Cohan, JSC