[*1]
Sukow v Eagle Realty Holdings, Inc.
2016 NY Slip Op 51156(U) [52 Misc 3d 1215(A)]
Decided on June 21, 2016
Supreme Court, Suffolk County
Hudson, J.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and will not be published in the printed Official Reports.


Decided on June 21, 2016
Supreme Court, Suffolk County


William Sukow and ROCKWELL CUISINE CONCEPTS, LLC, Plaintiffs,

against

Eagle Realty Holdings, Inc. and GLORIA ROCCHIO, Defendants.




061523/2013



McGIFF HALVERSON, LLP
Attorneys for Plaintiffs
By: Robert R. Dooley, Esq.
96 South Ocean Avenue
Patchogue, NY 11772

FARRELL FRITZ, PC
Attorneys for Defendants
By: Michael A.H. Schoenberg, Esq.
370 Lexington Avenue, Suite 800
New York, NY 10017


James Hudson, J.

Upon the following papers numbered 1 to 41 read on this Motion/Order to Show Cause for Summary Judgment; Notice of Motion/ Order to Show Cause and supporting papers 1-34; Notice of Cross Motion and supporting papers 0; Answering Affidavits and supporting papers 35-39; Replying Affidavits and supporting papers 40-41; Other 0; (and after hearing counsel in support and opposed to the motion), it is

ORDERED that Defendants Eagle Realty Holdings, Inc. and Gloria Rocchio's motion for summary judgement in their favor and against Plaintiffs is granted under the circumstances presented (CPLR 3212). It is further

ORDERED that the Plaintiffs' complaint is dismissed.

The matter at hand is essentially an action for declaratory judgment arising from Defendants refusal to honor the extension clause of a commercial lease and a companion settlement agreement. Plaintiffs' seeks a declaration that it has a right to a lease renewal. The complaint articulates three causes of action. The first cause of action is for tortious interference with business relations; the second is for defamation and finally the third is for prima facie tort.

Depositions have been held and disclosure has been completed. The salient facts are not in dispute. Plaintiff Rockwell's principal (the Plaintiff Mr. Sukow) signed a lease (Defendants' exhibit "D") with Defendant landlord in October of 2010 and commenced operations as a restaurant shortly thereafter. Plaintiff Rockwell actually took an assignment of an existing lease which had three years remaining on its term. The lease had an option to extend for two separate five year periods. The renewal option was governed by a letter agreement and settlement agreement (Defendants' exhibits "F" and "H" respectively). The settlement agreement had certain provisions including that Plaintiffs were to: (1) pay all outstanding back rent; (2) pay each months's rent promptly; (3) pay outstanding utility bills; (4) maintain certain hours of operation; (5) pay a portion of Defendant Eagle's legal fees; (6) submit all plans and schematics relating to proposed construction to Eagle prior to filing with the appropriate governmental agency; (7) not to proceed with construction until governmental approval was received which "shall be diligently pursue[d]," and (8) obtain a completion bond in favor of Eagle prior to beginning construction.

In November of 2012, Plaintiff Rockwell attempted to exercise its renewal option. Defendant Eagle Realty Holdings Inc. declined to renew the lease on the basis of the condition of the restaurant's floor as well as outstanding tax judgments against Plaintiffs. Plaintiffs contend that Defendants wrongfully refused to extend the lease to prevent Plaintiffs from selling Mr. Sukow's business to various entities that Eagle considered unsuitable. In the process, Plaintiffs argues that Defendant Rocchio defamed him. Defendants now move for summary judgment (CPLR 3212).

Prior to discussing the arguments of the Movants and Respondents, the Court would like to commend counsel for the eloquence of their respective briefs.

Defendants argues that there are no questions of fact to be resolved and that the Court should grant the motion. The law is well-established that summary judgment is a drastic remedy to be granted only when there is clearly no genuine issue of fact to be presented at trial (Alvarez v. Prospect Hosp., 68 NY2d 320 (1986); Andre v. Pomeroy, 35 NY2d 361 [1974]; Benincasa v Garrubo, 141 AD2d 636 (2d Dept 1988]). The function of the Court in determining a motion for summary judgment is issue finding, not issue determination (Pantote Big Alpha Foods, Inc. v. Schefman, 121 AD2d 295 (1st Dept 1986). The courts have repeatedly held that in order to obtain summary judgment, movant must establish its claims or defenses sufficiently to warrant a court's directing judgment in its favor as a matter of law (Gilbert Frank Corp. v. Federal Insurance Co.,70 NY2d 966 [1988], citing Zuckerman v. City of New York,49 NY2d 557 [1980]; Friends of Animals v. Associated Fur Mfrs., 46 NY2d 1065 [1979]). Furthermore, the evidence submitted in connection with a motion for summary judgment should be viewed in the light most favorable to the party opposing the motion (Robinson v. Strong Memorial Hospital, 98 AD2d 976 [4th Dept 1983]). Once the initial burden is met, the party opposing the motion must produce evidentiary proof in admissible form sufficient to require a trial of material questions of fact on which the opposing claim rests (see Gilbert Frank Corp. v. Federal Insurance Co., supra).

In Plaintiffs' counsel's affirmation dated November 5, 2015, he concedes that "...the defamation cause of action is not appropriate based upon the evidence produced during discovery." Accordingly, summary judgment will be granted on that claim and it shall be dismissed. In opposing the motion as to the claims sounding in tortious interference with a business relationship and prima facie tort, Counsel argues that issues of fact preclude the granting of the motion. For the reasons discussed, herein, the Court disagrees with Plaintiffs' counsel's contention.

As noted above, the complaint states a cause of action for tortious interference with business relations. The gravamen of Plaintiffs' claim, however, involves allegations concerning a proposed assignment of the lease. This demonstrates that the Plaintiffs' claim actually sounds in tortious interference with prospective business relations.

"The required elements of a cause of action for tortious interference with prospective business relations are as follows: (a) business relations with a third party; (b) the Defendant's interference with those business relations; (c) the Defendant acting with the sole purpose of harming the Plaintiff or using wrongful means; and (d) injury to the business relationship" (Advanced Glob. Tech. LLC v. Sirius Satellite Radio, Inc., 15 Misc 3d 776, 779, 836 N.Y.S.2d 807, 809-10 (Sup. Ct. NY Co.2007), aff'd as modified, 44 AD3d 317, 843 N.Y.S.2d 220 (2007) quoting Guard Life Corp. v. S. Parker Hardware Mfg. Corp., 50 NY2d 183, 428 N.Y.S.2d 628, 406 N.E.2d 445 [1990]; Carvel [*2]v. Noonan, 3 NY3d 182, 190, 785 N.Y.S.2d 359, 818 N.E.2d 1100 [2004]; NBT Bancorp Inc. v. Fleet/Norstar Financial Group, Inc., 87 NY2d 614, 641 N.Y.S.2d 581, 664 N.E.2d 492 [1996]).

To demonstrate tortious interference with prospective business relations it must be shown that Defendants' conduct "...was undertaken for the sole purpose of harming Plaintiffs', or that such conduct was wrongful or improper independent of the interference allegedly cause thereby" (Krasnyi Oktyabr, Inc. v. Trilini Imports, 578 F. Supp. 2d 455, 472 (E.D.NY 2008) citing Jacobs v. Continuum Health Partners, Inc., 7 AD3d 312, 313, 776 N.Y.S.2d 279, 280 (1st Dep't 2004).

In opposition to Defendants' motion, Plaintiff, Mr. Sukow has submitted an affidavit in which he details that he received notice from Defendant Eagle that his lease would not be extended for not performing construction on the property, for having judgments against Rockwell and "...for not accepting coupons" (Affidavit dated November 5, 2015 para 12). Although Mr. Sukow disputes the applicability of the agreement pertaining to construction and the accepting of coupons, he does not contradict the allegations concerning the judgments/liens. Instead, he contends that the amount of the judgments ($4,729.32) should be considered de minimus as compared with his negotiations to sell his business "...for over $400,000.00" (para 16). He also contends that he was unable to consummate a sale of the business to a Mr. Tom Bryant because of Defendants' interference. As demonstrated by the subject lease, however, Mr. Bryant was already a tenant of another property at the locus in quo and as such barred from assuming the Plaintiffs' leasehold (page 17 para VI). Moreover, Article 13 of the lease (Liens 13.01) states in relevant part "Tenant will not permit to be created or to remain undischarged any lien, encumbrance or charge." These facts alone stand in justifying (as a matter of law) Defendant Eagle's actions in denying a lease extension to the Plaintiffs.

Plaintiffs' reliance on the holding in 434 Suffolk Ave. Realty, Inc. v. Inc. Vill. of Islandia, 34 Misc 3d 1241(A), 950 N.Y.S.2d 608 (Sup. Ct. Suffolk Co. 2012) is most telling. In granting summary judgment in favor of the Defendant, the Court pointed out that the Plaintiffs had failed to identify any conduct on the part of the Defendant "...that amounted to a crime or independent tort directed at a third party." Additionally, the uncontroverted facts established that the Defendant "...was motivated, at least in part by economic self interest" (Id. at 6). This is indistinguishable from the instant case.

Plaintiffs' reference to Bayside Carting, Inc. v. Chic Cleaners, 240 AD2d 687, 660 N.Y.S.2d 23, (2nd Dept. 1997) is similarly chimerical. The Court in Bayside was applying the law relating to tortious interference with contractual obligation. The elements of that tort are: 1) the existence of a valid contract between Plaintiff and a third-[*3]party;(2) Defendant's knowledge of that contract; (3) Defendant's intentional procurement of the third party's breach of that contract without justification; (4) actual breach of the contract; and (5) damages resulting therefrom (Lama Holding v. Smith Barney, 88 NY2d 413, 424; 434 Suffolk Ave. Realty, Inc., supra). When the specified behavior, however, involves a prospective contract as opposed to a currently binding one, case law uniformly requires egregious behavior on the part of Defendant rising to the level of: (1) a crime; (2) an independent tort; (3) a solely malicious act; or (4) employing wrongful means (Id. At 687, citing Carvel Corp v. Noonan, 3 NY3d 182, 190-191; see 434 Suffolk Ave. Realty, Inc., supra). Since there is no evidence of such behavior on the part of Defendant Eagle, this cause of action must be dismissed.

The Court next addresses whether summary judgment is appropriate for Plaintiffs' claim sounding in prima facie tort. "The requisite elements of a cause of action for prima facie tort are: (1) the intentional infliction of harm; (2) which results in special damages; (3) without any excuse or justification; and (4) by an act or series of acts which would otherwise be lawful" (Freihofer v. Hearst Corp., 65 NY2d 135, 142-43, 480 N.E.2d 349, 355 [1985] citing Curiano v. Suozzi, 63 NY2d 113, 117, 480 N.Y.S.2d 466, 469 N.E.2d 1324; Burns Jackson Miller Summit & Spitzer v. Lindner, 59 NY2d 314, 332, 464 N.Y.S.2d 712, 451 N.E.2d 459)]. An allegation of special damages is essential since it is a "...critical element of the cause of action is that Plaintiff suffered specific and measurable loss..." (Freihofer v. Hearst Corp., supra at 143 citing Curiano v. Suozzi, supra, 63 NY2d at p. 117, 480 N.Y.S.2d 466, 469 N.E.2d 1324; ATI, Inc. v. Ruder & Finn, supra, 42 NY2d at p. 458, 398 N.Y.S.2d 864, 368 N.E.2d 1230; Morrison v. National Broadcasting Co., 19 NY2d 453, 458, 280 N.Y.S.2d 641, 227 N.E.2d 572; Nichols v. Item Publishers, 309 NY 596, 602, 132 N.E.2d 860; Susskind v. Ipco Hosp. Supply Corp., 49 AD2d 915, 373 N.Y.S.2d 627).

In the case before us, the special damages alleged for prima facie tort consist of the following "...Plaintiffs have suffered damages directly related to his business and livelihood... By virtue of the forgoing, Defendants are liable to Plaintiffs for compensatory damages in an amount to be determined at trial....and therefore warrants an award of punitive damages" (verified amended complaint). We find that Plaintiffs' general allegations of damages to business and livelihood are patently insufficient and warrant dismissal on this basis alone (Epifani v. Johnson, 65 AD3d 224, 233, 882 N.Y.S.2d 234, 242 [2nd Dept. 2009]; DiSanto v. Forsyth, 258 AD2d 497, 498, 684 N.Y.S.2d 628, 629 (2nd Dept. 1999]).

Assuming, arguendo, that special damages were adequately pled, the Court would still be obliged to dismiss this claim. The established actions of the Defendants cannot be construed in any manner as constituting the "disinterested malevolence" required to [*4]sustain the cause of action for prima facie tort (Smith v. Meridian Techs., Inc., 86 AD3d 557, 559, 927 N.Y.S.2d 141, 144 (2nd Dept. 2011) citing Burns Jackson Miller Summit & Spitzer v. Lindner, 59 NY2d 314, 333, 464 N.Y.S.2d 712, 451 N.E.2d 459, quoting American Bank & Trust Co. v. Federal Reserve Bank of Atlanta, 256 U.S. 350, 358, 41 S.Ct. 499, 65 L.Ed. 983).

We have considered the remaining arguments of Plaintiffs and although they are presented with great skill, they fail to persuade the Court.

Therefore, Plaintiffs' complaint is dismissed.

This Order also constitutes the judgment of the Court



DATED: JUNE 21, 2016
RIVERHEAD, NY
HON. JAMES HUDSON, A.J.S.C.