Supreme Court, New York County, August 2, 2017

Zachary W. Carter, Corporation Counsel, New York City (Todd A. Krichmar of counsel), for respondent.

K&L Gates LLP, New York City (Kodey M. Haddox of counsel), and Cohen Schneider & O'Neill LLP, New York City (Susan R. Briggs of counsel), for petitioner.

I. Prior Administrative Proceedings

Petitioner Brooklyn Laboratory Charter School (BLCS) is a New York State charter middle school in Brooklyn, New York. Education Law § 2853 (3) (e) (5) (A) requires respondent New York City Department of Education (DOE) to provide a charter school that requests co-location within a New York City public school either a site within a school at no charge or reimbursement for the charter school's "actual rental cost" incurred in renting an alternate location. Before the 2014-2015 school year, BLCS submitted written requests to DOE seeking co-location for BLCS's grades 6-8, which DOE denied. In April 2015, BLCS appealed DOE's denial to the Commissioner of the New York State Department of Education, who found that DOE failed to comply with the Education Law's provisions regarding co-location funding and ordered DOE to pay BLCS rental assistance upon BLCS's submission of evidence of its actual rental cost to DOE.

For BLCS to receive payments, DOE required BLCS to submit documentation of BLCS's lease. BLCS submitted its executed{**58 Misc 3d at 728} lease, its rental assistance calculation, and correspondence [*2]from its landlord acknowledging that the landlord agreed to a rent below the market rate in exchange for BLCS's commitment to make alterations to the leased premises and that the costs of the alterations would be considered additional rent under the lease. BLCS claims that the documentation submitted to DOE showed that BLCS's 2015 rent was $325,000 base rent, plus $50,000 additional rent, and its 2016 rent was $325,000 base rent, plus $375,000 additional rent.

On September 2, 2015, DOE informed BLCS, via telephone, that DOE would reimburse BLCS for its base rent costs only. BLCS and its landlord amended their lease to clarify that BLCS's actual rent cost was defined as its base rent plus its expenditures on required improvement costs. On January 7, 2016, BLCS and its landlord fully executed the lease, and BLCS emailed the amended lease to DOE and requested it to recalculate the rental assistance DOE would pay to BLCS. On January 22, 2016, DOE informed BLCS that it would not change its rental assistance payments based on the amended lease and would consider only the base rent BLCS paid in making the rental assistance calculation.

BLCS now seeks a judgment pursuant to CPLR article 78 declaring that DOE's refusal to pay BLCS's actual rental cost according to its lease violated the Education Law and an order compelling DOE to pay BLCS's rental assistance costs based on BLCS's actual rental cost. DOE moves to dismiss the petition because it is barred by the applicable statute of limitations and because it fails to allege a claim for relief. (CPLR 3211 [a] [5], [7].)

II. Respondent's Motion to Dismiss the Petition under CPLR 3211 (a) (5)

Petitioner was required to commence its proceeding pursuant to CPLR article 78 within four months after DOE's refusal to calculate and pay rental assistance to BLCS based on its actual rental cost. (CPLR 217 [1]; Matter of LaSonde v Seabrook, 89 AD3d 132, 139 [1st Dept 2011]; Matter of Moskowitz v New York City Police Pension Fund, 82 AD3d 473, 473 [1st Dept 2011]; Ruskin Assoc., LLC v State of N.Y. Div. of Hous. & Community Renewal, 77 AD3d 401, 403 [1st Dept 2010].) DOE's refusal must have been explicit; any ambiguity as to whether DOE was definitively refusing the payments must be resolved against it. (Matter of Flosar Realty LLC v New York City Hous. Auth., 127 AD3d 147, 155 [1st Dept 2015]; Matter of Fischer v {**58 Misc 3d at 729}Roche, 81 AD2d 541, 542 [1st Dept 1981], affd 54 NY2d 962 [1981].) DOE bears the burden to establish its defense based on the statute of limitations. (Norddeutsche Landesbank Girozentrale v Tilton, 149 AD3d 152, 158 [1st Dept 2017]; Lebedev v Blavatnik, 144 AD3d 24, 28 [1st Dept 2016]; Benn v Benn, 82 AD3d 548, 548 [1st Dept 2011].)

[1] DOE contends that it notified BLCS September 2, 2015, of DOE's final determination that DOE would use only BLCS's base rent in calculating its actual rental cost, requiring BLCS to file its petition within four months of that date. DOE's statement in its notice September 2, 2015, however, that DOE "will now be using the base rent in all calculations" does not explicitly notify BLCS that DOE was refusing to include additional rent paid by BLCS as part of BLCS's actual rental cost. (Verified petition, exhibit 9.) In fact, when DOE received BLCS's submission of the amended lease and request for a new rental assistance cost amount January 7, 2016, DOE did not respond that its previous determination was final, but instead promised that DOE would recalculate and provide BLCS a new amount soon. (Id., exhibits 12, 15.) The emails between the parties following BLCS's January 2016 submission and request highlight the ambiguity of DOE's refusal in September 2015 and illustrate that neither party considered that earlier correspondence DOE's final refusal.

Drawing all inferences from the petition and its exhibits in BLCS's favor, DOE fails to show that its ambiguous correspondence September 2, 2015, was an explicit refusal to include BLCS's additional rent paid in BLCS's actual rental cost calculation. Therefore the four month limitations period did not begin to run September 2, 2015. (Girozentrale v Tilton, 149 AD3d at 158; Lebedev v Blavatnik, 144 AD3d at 28; Flosar Realty LLC v New York City Hous. Auth., 127 AD3d at 155; Benn v Benn, 82 AD3d at 548.) The four month limitations period began, at the earliest, on January 22, 2016, when DOE informed BLCS that DOE would not consider anything beyond BLCS's base rent as actual rental cost, rendering the petition timely.

III. Respondent's Motion to Dismiss the Petition under CPLR 3211 (a) (7)

In evaluating DOE's motion to dismiss the petition under CPLR 3211 (a) (7), the court must accept BLCS's allegations as true, liberally construe them, and draw all reasonable inferences in its favor. (JF Capital Advisors, LLC v Lightstone{**58 Misc 3d at 730} Group, LLC, 25 NY3d 759, 764 [2015]; Miglino v Bally Total Fitness of Greater N.Y., Inc., 20 NY3d 342, 351 [2013]; Lawrence v Graubard Miller, 11 NY3d 588, 595 [2008]; Matter of Drug Policy Alliance v New York City Tax Commn., 131 AD3d 815, 816 [1st Dept 2015].) When a statute's terms are unambiguous, the court must construe the statute to give effect to the plain meaning of the terms used. (Matter of Avella v City of New York, 29 NY3d 425, 433-435 [2017]; Matter of Raritan Dev. Corp. v Silva, 91 NY2d 98, 107 [1997]; Matter of Luongo v Records Access Officer, Civilian Complaint Review Bd., 150 AD3d 13, 19 [1st Dept 2017]; Myers v Schneiderman, 140 AD3d 51, 56 [1st Dept 2016].) If a statute does not define a term, the court must construe "words of ordinary import with their usual and commonly understood meaning." (Yaniveth R. v LTD Realty Co., 27 NY3d 186, 192 [2016]; Myers v Schneiderman, 140 AD3d at 57; see Rosner v Metropolitan Prop. & Liab. Ins. Co., 96 NY2d 475, 479 [2001].) The court may not add to or subtract from an undefined term's definite meaning. (Majewski v Broadalbin-Perth Cent. School Dist., 91 NY2d 577, 583 [1998]; Myers v Schneiderman, 140 AD3d at 57; UMG Recs., Inc. v Escape Media Group, Inc., 107 AD3d 51, 57 [1st Dept 2013].)

[2] Education Law § 2853 (3) (e) (5) (A) provides that DOE must pay BLCS the "actual rental cost of an alternative privately owned site," but does not define "actual rental cost." Respondent insists that "actual rental cost" includes only the base rent BLCS pays and not its additional rent. Neither Education Law § 2853 (3) (e) (5) (A) nor any other section of the Education Law, however, defines "actual rental cost" to mean "base rent." Therefore the court must construe each word in the phrase with its "usual and commonly understood meaning." (Yaniveth R. v LTD Realty Co., 27 NY3d at 192; Rosner v Metropolitan Prop. & Liab. Ins. Co., 96 NY2d at 479; Myers v Schneiderman, 140 AD3d at 57.) Giving each word its ordinary import, "actual rental cost" must mean the costs BLCS actually incurred in renting its facility. To interpret "actual rental cost" to mean only the base rent petitioner paid and to exclude any additional rent BLCS incurred under the lease would require the court to subtract impermissibly from the undefined words' meaning. (Majewski v Broadalbin-Perth Cent. School Dist., 91 NY2d at 583; Myers v Schneiderman, 140 AD3d at 57; UMG Recs., Inc. v Escape Media Group, Inc., 107 AD3d at 57.) DOE provides no authority supporting DOE's narrowing of the phrase "actual rental cost" or authority supporting its claim {**58 Misc 3d at 731}that the additional rent BLCS paid does not fall under the ambit of "actual rental cost."

Finally, DOE claims that BLCS fails to allege that it actually incurred and paid costs beyond the base rent. Although the amended lease does not expressly state whether the amounts to which it refers in the table of actual rental cost represent amounts BLCS already incurred and paid, the petition alleges that BLCS and its landlord agreed to amend the lease to clarify "the 'actual rental cost' paid by BLCS by adding required tenant improvement costs to the annual base rent." (Verified petition ¶ 49 [emphasis added].) This phrase implies that BLCS did in fact incur those costs and make the payments. Because the court, upon DOE's motion to dismiss the petition, must resolve all inferences from it in BLCS's favor, this allegation states a viable claim for reimbursement of the actual rental cost BLCS incurred and paid. (JF Capital Advisors, LLC v Lightstone Group, LLC, 25 NY3d at 764; Miglino v Bally Total Fitness of Greater N.Y., Inc., 20 NY3d at 351; Nonnon v City of New York, 9 NY3d 825, 827 [2007]; Matter of Drug Policy Alliance v New York City Tax Commn., 131 AD3d at 816.)

IV. Conclusion

For the reasons explained above, the court denies respondent's motion to dismiss the petition. (CPLR 3211 [a] [5], [7].)