Harbor Frgt. Tools USA, Inc. v Maguire, LLC

Supreme Court, Tompkins County

Decided on March 18, 2026

Index No. EF2025-1091

Mark G. Masler, J.

In 2016, plaintiff entered into a written agreement to lease from Agracel, Inc., approximately 17,530 square feet in a commercial building located at 100 Commercial Avenue in the City of Ithaca for an initial, or primary, term of 15 years expiring on October 31, 2031 (see NY St Cts Elec Filing [NYSCEF] Doc No. 7; herein the lease agreement). The lease agreement provided plaintiff with the option to extend the lease for up to six successive five-year renewal terms. Plaintiff has continuously operated a retail store at the premises since July 2016. In 2017, the lease agreement was assigned to defendant Maguire Family Limited Partnership upon [*2]Agracel, Inc.'s sale of the premises to defendant Maguire Family Holdings, LLC. Plaintiff has submitted proof, which defendants have not disputed, that it made all rental payments that were due under the lease agreement from January 1, 2018 through October 2025 (see NYSCEF Doc No. 47).

The relevant facts are undisputed. On or about October 22, 2025, plaintiff sent a $35,154.42 check for payment of the rental installment that was due on November 1, 2025 by mail addressed to Maguire Family Holdings LLC, ATTN: Chelsea Smith, 318 Elmira Road, Ithaca, NY 14850-5104, the address to which plaintiff had routinely sent prior rent installments. The check was not received by defendants.FN1 On November 11, 2025, the Chief Financial Officer of defendant Maguire, LLC, Frank Vassallo, sent by email to plaintiff's representatives a letter, also dated November 11, 2025, advising, as relevant here, that the November rent installment had not yet been received and, further, that if it was not received by defendants within five days the lease agreement would be considered terminated without further action (NYSCEF Doc No. 38). On November 17, 2025, defendants' counsel sent by overnight delivery service to plaintiff's representatives a letter, dated November 17, 2025, representing that the November rent installment had not been received by defendants and terminating the lease agreement (NYSCEF Doc No. 34). Plaintiff sent a second check to defendants for payment of the November rent that was received by defendants on November 18, 2025, which was seven days, or five business days, after defendants had served plaintiff with notice of the unpaid November rental installment. Notwithstanding their receipt of the replacement check, defendants did not rescind their termination of the lease agreement.

Plaintiff commenced this action on December 16, 2025 seeking to preclude termination of the lease. At commencement, plaintiff also sought a temporary restraining order (TRO) and moved for a preliminary injunction (NYSCEF motion number one). The court scheduled a conference to be held by Microsoft Teams on December 23, 2025 to consider plaintiff's request for a TRO. Following the conference, at which counsel for all parties appeared, the court executed and filed an order to show cause that included a TRO permitting plaintiff to remain in possession of the leased premises and scheduling the return date for plaintiff's preliminary injunction motion. On January 15, 2026, defendants moved for summary judgment dismissing this action, with prejudice, and declaring the lease agreement to have been properly terminated (NYSCEF motion number two). Plaintiff responded to defendants' motion and defendants filed a reply. Oral argument on the pending motions was held by Microsoft Teams on February 20, 2026.

In support of their motion for summary judgment, defendants contend they properly (1) gave a five-day notice of opportunity to cure to plaintiff by email, in accordance with paragraph 9 of the lease agreement; and (2) terminated the lease agreement when they did not receive the November rent within five days after service of the five-day notice of opportunity to cure, in accordance with paragraphs 29, 39, and 41 of the lease agreement. In opposition, plaintiff contends that notice of the opportunity to cure was defective because it was not served by overnight delivery service, which it contends is the method mandated by paragraph 41 of the lease agreement. Plaintiff further contends that receipt of the November 2025 rent by defendants [*3]within five business days was timely. In the alternative, plaintiff also seeks equitable relief to avoid the substantial forfeiture that would result from termination of the lease agreement.

Resolution of the parties' arguments regarding construction of lease terms turns on whether paragraph 9 of the lease agreement, which provides that "[s]olely for the purpose of notifying Tenant of a late Rent payment, Landlord shall have the right to provide Tenant with written notice thereof by email to all of the following addresses . . . ," authorizes service of the five-day notice of opportunity to cure by email only and, further, whether paragraph 29.1, which provides that the tenant's failure to cure nonpayment of any monetary obligation under the lease agreement "within five (5) days after Tenant's receipt of written notice of same" affords plaintiff five calendar days or five business days to cure a default after receipt of notice.

The court need not decide the meaning of the disputed lease terms because, on the undisputed facts set forth above, equity will intervene to prevent a forfeiture that would result in a loss out of proportion to the gravity of any potential trivial breach plaintiff may have committed (see Cooper v Number 535 Park Ave., 73 AD3d 433, 433 [1st Dept 2010]; Cellular Tel. Co. v 210 E. 86th St. Corp., 14 AD3d 305, 306 [1st Dept 2005]). Even if it is assumed, without deciding, that defendants' construction of the lease is correct, plaintiff missed the deadline for curing its default by only two days, a trivial default for which defendants have alleged no prejudice. In this regard, it has been long-settled that

"equity will intervene to relieve a tenant of the consequences of [] untimely [performance under a lease agreement] where said failure resulted from an honest mistake or inadvertence, the [default] would result in a substantial forfeiture by the tenant and the landlord would not be prejudiced (see, J. N. A. Realty Corp. v Cross Bay Chelsea, 42 NY2d 392, 399-400; Sy Jack Realty Co. v Pergament Syosset Corp., 27 NY2d 449, 452; Souslian Wholesale Beer & Soda v 380-4 Union Ave. Realty Corp., 166 AD2d 435, 437, lv denied 78 NY2d 85)" (Beltrone v Danker, 228 AD2d 763, 763 [3d Dept 1996]; accord Fifty States Mgt. Corp. v Pioneer Auto Parks, 46 NY2d 573, 578-579 [applying the principle that equity will intervene to prevent forfeiture of a commercial lease for a landlord's refusal to accept cure of a late rent installment]).

Any potential default resulted from an honest mistake or inadvertence by plaintiff. At issue is the timing of plaintiff's payment of rent once it was notified that defendants had not received the original check it timely mailed. Upon receipt of the five-day notice of opportunity to cure, plaintiff sent a check for the November 2025 rent to defendants by overnight delivery service. Plaintiff received the five-day notice of opportunity to cure on Tuesday, November 11, 2025, on which Veterans Day was recognized as a federal holiday. Plaintiff waited until the following Monday, November 16, 2025, to send the replacement check. Although plaintiff could have prevented this entire dispute by sending a replacement check in the week that it received the notice of opportunity to cure, the decision to wait until Monday to send the check evinces, at most, an inadvertent lack of attention to the looming deadline.

Plaintiff has established that termination of the lease agreement would result in a substantial forfeiture. As previously noted, the lease is still within the primary 15-year term, which does not expire until October 31, 2031, and the lease agreement provides plaintiff with options to extend the lease for up to an additional 30 years, which means the term of the lease may extend through October 2061. The loss of a lease which can be extended 36 years beyond the attempted termination would plainly constitute a substantial forfeiture. Plaintiff has operated a successful store at the location for nearly 10 years, which implicates two factors that have been [*4]recognized in establishing substantial forfeiture: the loss of goodwill (see e.g. J. N. A. Realty Corp. v Cross Bay Chelsea, 42 NY2d 392, 399 [1977]; Popyork, LLC v 80 Ct. St. Corp., 23 AD3d 538, 539 [2d Dept 2005]) and the cost of relocation (see e.g. Dutchess Radiology Assoc. v Narotzky, 192 AD2d 1049, 1050 [3d Dept 1993]). In this regard, plaintiff represents it has established significant customer goodwill at the present location and that it would take as long as two years and cost at least $1,800,000 to open a new store and relocate (NYSCEF Doc No. 48, Feller affirmation, ¶¶ 5-6).

Finally, defendants have not alleged they were substantially prejudiced by receiving the replacement rent check only two days past the claimed deadline — i.e. seven days after the notice of opportunity to cure was sent rather than five days. Instead, they rely entirely on their arguments that the lease agreement should be strictly construed and that equitable principles do not apply to default based on the failure to timely pay rent.FN2 As to the first argument, there is no prejudice whatsoever from a two-day delay in receiving a single rent installment (see Fifty States Mgt. Corp. v Pioneer Auto Parks, 46 NY2d at 578-579 [landlord would have suffered no prejudice had tenant immediately cured the default in paying a single month's rent]; Di Matteo v North Tonawanda Auto Wash, 101 AD2d 692, 693 [4th Dept 1984] [mortgagees suffered no prejudice, but were only slightly inconvenienced, by a delay of approximately one month in receiving a single installment], appeal dismissed 63 NY2d 675 [1984]; see also Beltrone v Danker, 228 AD2d at 764; Souslian Wholesale Beer & Soda v 380-4 Union Ave. Realty Corp., 166 AD2d at 437). The second argument necessarily fails because equity will not permit the agreement to be strictly enforced in a manner that, the undisputed facts establish, would result in a substantial forfeiture based on the alleged failure to timely cure late payment of the November 2025 rent installment.

Based on the foregoing, defendants' motion for summary judgment (NYSCEF motion number two) must be, and hereby is, denied. Plaintiff did not cross move for summary judgment. However, "[i]f it shall appear that any party other than the moving party is entitled to a summary judgment, the court may grant such judgment without the necessity of a cross-motion" (CPLR 3212 [b]). As emphasized by defendants, there are no disputed material facts (NYSCEF Doc No. 50, Elia reply affirmation at 1, ¶ 2; at 2 ¶¶ 2-4). Accordingly, plaintiff is hereby granted summary judgment vacating defendants' lease termination notice dated November 17, 2025 and adjudging and declaring that (1) plaintiff is not in default under the lease agreement by reason of a purported failure to timely cure late payment of the November 2025 rent installment; and (2) that the lease agreement remains in full force and effect as of this date. This final determination renders moot the need for the TRO and plaintiff's motion for a preliminary injunction (NYSCEF motion number one). On this basis, the TRO is vacated and plaintiff's motion for a preliminary injunction is denied.

As the prevailing party, plaintiff is entitled to an award of reasonable attorneys' fees [*5]incurred in this action pursuant to paragraph 54 of the lease agreement. Plaintiff is accordingly awarded summary judgment on its sixth cause of action seeking an award of attorneys' fees. The amount of attorneys' fees to be awarded shall be determined as follows: Plaintiff may submit proof of any attorneys' fees it seeks to recover by April 30, 2026 . Defendants shall have 30 days from the date of plaintiff's submission to respond. If defendants fail to timely respond to plaintiff's submission, attorneys' fees will be determined on plaintiff's written submissions alone. If defendants timely respond to plaintiff's submission, the court will determine whether further proceedings will be required.

This decision constitutes the order and judgment of the court. The filing of this decision, order, and judgment, or the transmittal of copies hereof, by the court shall not constitute notice of entry (see e.g. CPLR 2221 [d] [3]; 5513). The prevailing party shall serve notice of entry hereof as required by CPLR 2220 (b) and Uniform Rules for Trial Courts (22 NYCRR) § 202.5-b (h) (2).

Dated: March 18, 2026

Cortland, New York

ENTER

HON. MARK G. MASLER

Supreme Court Justice

The following documents filed with the Clerk of the County of Tompkins via the New York State Courts Electronic Filing System were considered herein (see CPLR 2219 [a]):

Document Numbers 4-21; 26; 30-31; 33-40; 42-50.