throbber
FILED: NEW YORK COUNTY CLERK 05/10/2018 02:38 PM
`FILED: NEW YORK COUNTY CLERK 05m2018 02:38 PM
`NYSCI
`3F DOC. NO. 123
`NYSCEF DOC. NO. 123
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`INDEX NO. 150625/2012
`INDEX NO~ 150625/2012
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`R*.C*.IV*.D NYSCEF:
`05/10/2018
`RECEIVED NYSCEF: 05/10/2018
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`SUPREME COURT OF THE STATE OF NEW YORK
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`NEW YORK COUNTY
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`PRESENT:
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`HON. DAVID BENJAMIN COHEN
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`PART
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`58
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`Justice
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`FITZGERALD EDIBLES, INC. D/B/A P.J.CARNEYS,
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`INDEX NO.
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`1506252012
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`Plaintiff,
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`MOTION DATE
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`1/12/2017
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`_ V _
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`MOTION SEQ. No.
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`003
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`OSBORNE TENANTS CORP., JOSEPH FERRARA, YUNGA
`CONSTRUCTION INC.
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`JUDGMENT
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`Defendant.
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`The following e-filed documents, listed by NYSCEF document number 80, 81, 82, 83, 88, 89, 90, 91,
`92,93,94,95,96,97,98,99,100,101,102,103,104,105,106,107,108,109,110, 111,112,113,
`114,115,116,117,118,119,120
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`were read on this application to/for
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`Set Aside Verdict
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`Defendant Osborne Tenants Corp. (“Osborne”) is the owner of a building located at 906
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`Seventh Avenue, New York, New York 10019 (the “building”). The ground floor of the
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`building, consisting of commercial stores on both 57th Street and Seventh Avenue, and the
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`basement, is net leased to 57th and 7th Associates, Inc. (“57”) which is controlled and managed
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`by Jack Resnick & Sons, Inc. (“Resnick”). Defendant Joseph Ferrara (“Ferrara”) was a
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`shareholder of Osborne and served as president of the board of directors.
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`Since 1981, plaintiff subleased stores numbered 18, 19, 20 and 21, from Resnick, in
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`which it operates a bar and restaurant. Resnick did not sublease any space in the basement to
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`plaintiff. The area at issue in this case is a common vestibule in the basement space. The master
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`lease between Osborne and Resnick provides Osborne with the right of access to the garbage
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`150625/2012 FITZGERALD EDIBLES, INC. vs. OSBORNE TENANTS
`Motion No. 003
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`FILED: NEW YORK COUNTY CLERK 05/10/2018 02:38 PM
`FILED: NEW YORK COUNTY CLERK 05m2018 02:38 PM
`NYSCI
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`NYSCEF DOC. NO. 123
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`room through the common vestibule and provides Resnick with access to certain storage space in
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`the basement through the common vestibule. Plaintiff did not lease any space in the basement
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`from Resnick. Plaintiff and Osborne use the common vestibule as a pass through between the
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`alley behind the building and other areas of the basement. Within the common vestibule there
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`are three distinct “niche” areas totaling 97 square feet in space. At some point in time, plaintiff
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`began keeping some of its equipment, including an ice maker, compressors and refrigeration
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`units, in these niches. Defendants contend that plaintiff moved this equipment into the area
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`around September 2011 when it was required to move this equipment out of the adjoining
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`garbage room. As per the testimony of plaintiffs principal, Mr. Fitzgerald, the ice machine and
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`compressors were moved from the garbage room to the common vestibule niches about two
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`weeks apart. Defendants further contend that prior to this time, the common vestibule niches did
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`not contain any equipment belonging to Osborne, Resnick or plaintiff. Plaintiff offered
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`testimony at trial that it had been using these niches for equipment for at least 30 years prior to
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`January 2012, that Resnick allowed it to use the common vestibule since 1976, its use of the
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`common vestibule had been open and notorious and without any complaint from the Osborne
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`prior to 2011, and that its predecessor in interest, 906 Tavern Corp., had also previously been
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`using the common vestibule incident to its lease to operate a bar.
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`It should be noted that Ferrara
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`testified that, to his knowledge, plaintiff had been using the common vestibule niches for at least
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`thirty years prior to 2011 with consent from Osborne, until plaintiff exceeded that consent in
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`September 2011, presumably by moving addition equipment into these spaces.
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`At trial, evidence was presented that on December 16, 2011, Osborne sent plaintiff a
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`letter seeking that they remove all of their equipment from the common vestibule in order to
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`relocate the waste line under the floor. The letter represented that with respect to the common
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`150625/2012 FITZGERALD EDIBLES, INC. vs. OSBORNE TENANTS
`Motion No. 003
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`Page 2 of 12
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`FILED: NEW YORK COUNTY CLERK 05/10/2018 02:38 PM
`FILED: NEW YORK COUNTY CLERK 05m2018 02:38 PM
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`NYSCEF DOC. NO. 123
`NYSCEF DOC. NO. 123
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`INDEX NO. 150625/2012
`INDEX NO~ 150625/2012
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`vestibule, the scope of work was going to be the relocation of a waste pipe in the floor, removing
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`the plywood wall, and whitewashing the walls. Plaintiff contends that this scope of work did
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`not require removal of its equipment from the common vestibule and it did not remove its
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`equipment. Defendants chose to do the work the week of January 3, 2012 for the convenience of
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`the plaintiff since plaintiff would be closed for its annual renovations. Yunga Construction Inc.
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`(“Yunga”) was the general contractor retained by Osborne to perform the work in the basement,
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`including in the common vestibule. At the time, plaintiff contended that it had ice machines,
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`refrigerators, freezers, compressors and other equipment located in the niches of the common
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`vestibule. Prior to starting the work, Ferrara directed its contractors to remove all of plaintiff” s
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`equipment located in the vestibule; and the equipment was removed on or about January 4, 2012.
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`During the course of the renovation, the Osborne decided to lower the floor of the entire
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`common vestibule to improve overhead clearance in the room. After the equipment was moved,
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`Yunga began excavating the entire floor of the vestibule and this work continued through Friday
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`January 6, 2012. Ferrara then authorized Yunga to perform the additional work of fabricating
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`and installing locking metal cage doors enclosing the niches in the vestibule, thereby preventing
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`plaintiff from returning its equipment to the niches. Plaintiff became aware of the removal of its
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`equipment on or about January 9, 2012. Plaintiff was never restored to use of the niches that
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`were locked behind the metal cage doors and the area has remained free of equipment. Plaintiff
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`has never claimed that it was excluded from possession from any portion of the ground floor bar
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`and restaurant which is continued to operate profitably through the date of trial.
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`Plaintiff claimed that, as a result of the destruction of the equipment, including
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`refrigerators, ice machines, compressors and other equipment, its business was harmed as its
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`reopening was delayed by two weeks. Mr. Fitzgerald’s testimony as to the duration of the
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`150625/2012 FITZGERALD EDIBLES, INC. vs. OSBORNE TENANTS
`Motion No. 003
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`FILED: NEW YORK COUNTY CLERK 05/10/2018 02:38 PM
`FILED: NEW YORK COUNTY CLERK 05m2018 02:38 PM
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`NYSCEF DOC. NO. 123
`NYSCEF DOC. NO. 123
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`150625/2012
`INDEX NO. 150625/2012
`INDEX NO~
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`closure was impeached at trial using his deposition testimony that the closure was only five days
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`beyond when he expected to reopen. Plaintiff also claimed that it incurred higher costs to
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`maintain and replace equipment with more expensive equipment, and the amount of food served
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`and stored has been diminished, increasing plaintiff’ s costs.
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`At trial, the jury returned a verdict in favor of plaintiff finding both defendants liable for
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`wrongful eviction, trespass to chattel and conversion. The jury found defendants not liable for
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`trespass to land and not liable in fraud, finding that Osborne did not make a false representation
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`to plaintiff and that Ferrara did not make a representation to plaintiff. The jury awarded to
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`plaintiff $3 7,000 in compensatory damages for property damage and loss, and $17,000 for loss
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`of business profits -- significantly less than plaintiff had sought. The jury awarded punitive
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`damages against Osborne in the amounts of $20,000 on the claim for wrongful eviction and
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`$37,000 on the claim for conversion, and awarded punitive damages against Ferrara in the
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`amounts of $138,355.94 on the claim for wrongful eviction and $23,288.12 on the claim for
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`conversion.
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`Treble Damages
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`Plaintiff seeks the imposition of treble damages on the compensatory award. The jury
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`returned a verdict in favor of the plaintiff on the cause of action for wrongful eviction. “If a
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`person is disseized, ejected, or put out of real property in a forcible or unlawful manner, or, after
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`he has been put out, is held and kept out by force or by putting him in fear of personal violence
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`or by unlawful means, he is entitled to recover treble damages in an action therefor against the
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`wrongdoer.” (RPAPL 853). An award of treble damages pursuant to RPAPL 853 is
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`discretionary (see Moran v. Orth, 36 AD3d 771, 772 [1St Dept 2007]; Lyke v. Anderson, 147
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`150625/2012 FITZGERALD EDIBLES, INC. vs. OSBORNE TENANTS
`Motion No. 003
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`FILED: NEW YORK COUNTY CLERK 05/10/2018 02:38 PM
`FILED: NEW YORK COUNTY CLERK 05m2018 02:38 PM
`NYSCI
`3F DOC. NO. 123
`NYSCEF DOC. NO. 123
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`INDEX NO. 150625/2012
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`AD2d 18, 28 [2d Dept 1989]). At bar, the deliberate resort to self-help, unlawful eviction,
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`removal, damage and destruction of plaintiff’s property from the side niches in the common
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`vestibule, and the installation of cages to prevent reentry was not unintentional (see Moran at
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`773), and, as per the verdict, was the cause of the delayed reopening and some ensuing loss of
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`profits. A showing of physical force or violence is not necessary to sustain an award of treble
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`damages (O’Hara v. Bishop, 256 AD2d 983, 984 [3d Dept 1998]). Further, treble damages are
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`subject to pre-judgment interest (Mohassel v. Fenwz'ck, 5 NY3d 44 [2005]); Altman v. 285 West
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`Fourth LLC, 143 AD3d 415 [1St Dept 2016]). Under these circumstances, an award of treble
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`damages is the appropriate exercise of this Courts discretion and plaintiff shall be awarded a
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`trebling of damages in the total amount of $162,000.00 with statutory interest from January 9,
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`2012.
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`Restoration to Possession
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`Plaintiff seeks an injunction under the fifth cause of action, seeking to be restored to the
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`premises. RPAPL 853 provides that a tenant is entitled to be restored to possession of the
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`premises unless the restoration would be futile (110-45 Queens Blvd. Garage, Inc. v. Park Briar
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`Owners, Inc., 265 AD2d 415 [2d Dept 1999]). A party is not entitled to restoration to possession
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`to a commercial property to which it cannot assert an enforceable leasehold (Pied-A-Terre
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`Networks Corp. v. Porto Resources, LLC, 33 Misc3d 126[A] [App Term 1St Dept 2011]) as
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`restoration would result in certain eviction (Soukouna v. Canal Corp. , 48 AD3d 359 [lSt Dept
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`2008]).
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`The master lease documents refer to this area in question as a common vestibule and
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`confers on both Resnick and the Osborne mutual rights of passage through the common vestibule
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`150625/2012 FITZGERALD EDIBLES, INC. vs. OSBORNE TENANTS
`Motion No. 003
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`Page 5 of 12
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`FILED: NEW YORK COUNTY CLERK 05/10/2018 02:38 PM
`FILED: NEW YORK COUNTY CLERK 05m2018 02:38 PM
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`NYSCEF DOC. NO. 123
`NYSCEF DOC. NO. 123
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`as a means of access from the alley behind the building to and from other areas of the basement.
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`Plaintiffs sublease with Resnick did not give, nor could it have given, plaintiff the right to
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`possess any space within the basement that Resnick itself did not possess. Generally, a sublease
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`cannot confer rights greater than those to which the lessor is entitled (Morris Hgts. Health Ctr.,
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`Inc. v. Della Pietra, 38 AD3d 261 [1St Dept 2007]). Consistent with this, was the jury
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`determination that, although the plaintiff was wrongfully evicted from the niches, plaintiff did
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`not establish that a trespass to land resulted from its removal and exclusion from the niches.
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`Thus, plaintiff has no right to exclusive use of these niches and restoration to exclusive use
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`would be contrary to the controlling lease documents and therefore, futile.
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`Prescriptive Easement
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`Plaintiff also seeks a declaration that they have a prescriptive easement to use the
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`common vestibule spaces. This application is denied as academic as the plaintiff already has the
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`right of passage through the common vestibule through Resnick and as Resnick’s undertenant
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`already has access through the common vestibule, what they would otherwise obtain by
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`establishing the easement. In any event, such claim would be denied on the merits as the
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`plaintiff has failed to satisfy the elements necessary to establish such an easement. The
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`elements of a claim for a prescriptive easement are that the use “be adverse, open and notorious,
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`continuous and uninterrupted for the prescriptive period.” (Di Leo v. Pecksto Holding Corp,
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`304 NY 505, 512 [1952]). Where the elements of open, notorious, and continuous use are
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`proven, the element of adverse is presumed (Bookchin v Maraconda, 162 AD2d 393, 394 [1St
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`Dept 1990]), but where the relationship between the parties and their predecessors is one of
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`“cooperation and neighborly accommodation,” permission may be inferred (Bookchin, at 394;
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`150625/2012 FITZGERALD EDIBLES, INC. vs. OSBORNE TENANTS
`Motion No. 003
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`FILED: NEW YORK COUNTY CLERK 05/10/2018 02:38 PM
`FILED: NEW YORK COUNTY CLERK 05m2018 02:38 PM
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`NYSCEF DOC. NO. 123
`NYSCEF DOC. NO. 123
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`150625/2012
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`Susquehanna Realty Corp v. Barth, 108 AD2d 909, 910 [2d Dept 1985]). Accepting plaintiff
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`evidence on this point, its use was not adverse. As stated above, Resnick had the right of
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`passage through the common vestibule, and consented to plaintiff’s making the same use.
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`Likewise, the Osborne, in a show of cooperation and accommodation to plaintiff, and to
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`plaintiff’s predecessor, permitted plaintiff to use the niches in the common vestibule until, as
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`Osborne contends, the use began to exceed its consent. Accordingly, plaintiff has failed to
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`establish that its use of the common vestibule was adverse, and the declaration of a prescriptive
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`easement is denied.
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`Punitive Damages
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`Defendants have moved to set aside the punitive damages award or alternatively to
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`reduce the award. A verdict may be set aside where it is contrary to the weight of the evidence,
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`or in the interest ofjustice (CPLR 4404[a]). A verdict may be set aside as a matter of law where
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`there is no valid line of reasoning and permissible inferences, based on the evidence presented at
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`trial, which could possibly lead rational people to the conclusion reached by the jury (Obey v,
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`City OfNew York, 29 NY3d 958, 960 [2017]; Cohen v, Hallmark Cards, Inc, 45 NY2d 493, 499
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`[1978]). A verdict may be set aside as contrary to the weight of the evidence where “the verdict
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`could not have been reached on any fair interpretation of the evidence” (Kilian v. Parrotta, 28
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`NY2d 101, 107 [2016]; Lolik v. Big v Supermarkets, 86 NY2d 744, 746 [1995]). The punitive
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`damages verdict in this case is both contrary to law and against the weight of the evidence and
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`must be vacated.
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`“Punitive damages are normally not recoverable for an ordinary breach of
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`contract as their purpose is not to remedy private wrongs but to vindicate public rights”
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`150625I2012 FITZGERALD EDIBLES, INC. vs. OSBORNE TENANTS
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`FILED: NEW YORK COUNTY CLERK 05/10/2018 02:38 PM
`FILED: NEW YORK COUNTY CLERK 05m2018 02:38 PM
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`NYSCEF DOC. NO. 123
`NYSCEF DOC. NO. 123
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`INDEX NO. 150625/2012
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`(Rocanova v Equitable Life Assur. Socy., 83 NY2d 603, 613, [1994], citing Garrity v Lyle
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`Stuart, Inc., 40 NY2d 354, 358 [1976]). “However, where the wrong complained of
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`evinces a ‘high degree of moral turpitude’ and demonstrating ‘such wanton dishonesty as
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`to imply a criminal indifference to civil obligations’ punitive damages are recoverable if
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`the conduct was ‘aimed at the public generally’ (Id; quoting Walker v. Sheldon, 10
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`NY2d 410, 404-405 [1961]). To recover punitive damages in a breach of contract case,
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`(1) the defendants conduct must be actionable as an independent tort, (2) the tortious
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`conduct must be egregious in nature as set forth in Walker v. Sheldon, (3) the conduct
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`must be directed as the plaintiff; and (4) it must be part of a patter directed to the public
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`in general (New York University v. Continental Insurance Company, 87 NY2d 308, 316
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`[1995]). As a matter of law, plaintiff has failed to meet several prongs of this test and the
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`jury’s verdict must be set aside.
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`First, there is no actionable independent tort. Here, the jury found that the
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`plaintiff failed to prove a fraud by either Osbourne or Ferrara. Further, the defendants
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`have not engaged in conduct outside the contract intended to defeat the contract (New
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`York University, 87 NY2d at 316). Significantly, the conduct was not part of a pattern
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`directed at the public generally and was solely aimed at a private entity.
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`To the extent that Sufi’olk Sports Ctr. V. Belli Constr. Corp, 212 AD2d 241, 246
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`[2d Dept 1995], suggests that where an action is predicated on a landlord-tenant
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`relationship, if the actions are sufficiently reprehensible, punitive damages may still be
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`imposed, this holding has been rejected by the subsequent holding in New York
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`University, 87 NY2d 308, which made it clear that punitive damages were recoverable in
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`a contract action only “if necessary to vindicate a public right” (TVT Records v. Island
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`DefJam Music Group, 412 F3d 82, 94, and at footnote 12). Even were this Court to
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`follow Suffolk Sports holding that punitive damages are available where the action is
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`predicated on a landlord-tenant relationship and the actions were “sufficiently
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`reprehensible so as to warrant the imposition of punitive damages” (Sufi’olk Sports, at
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`246), this case is so distinguishable from Sig/folk Sports that there would nevertheless be
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`no reasonable view of the evidence supporting an award of punitive damages.
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`In Sufi’olk Sports, the plaintiff was the operator of a fitness related baseball clinic.
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`In its ongoing effort to evict the plaintiff from possession of the leased premises, the
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`defendant landlord first refused to accept rent, and insisted that the tenant enter into a
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`one-year lease in place of its existing longer-term lease. When the tenant refused, the
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`landlord chained and locked the premises, thereafter removing the lock. Then, at a later
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`point the landlord blockaded one entrance with two five-ton cement blocks and the other
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`entrance with a tremendous red truck, preventing plaintiff from operating and effectively
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`evicting the tenant from its business. The blockage was removed 37 days later pursuant
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`to court order, but the blockade caused plaintiff to be unable to operate, prevented
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`member of the public from patronizing their gym, and unable to reestablish customer
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`loyalty. Plaintiff suffered reduced gross revenue and was forced to close its business for
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`good after the season. The jury awarded plaintiff a total ofjust under $100,000.00 in
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`compensatory damages and $300,000 in punitive damages. Affirmed on appeal were the
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`trial court’s determinations that, although punitive damages were appropriate, the award
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`was disproportionate to the amount of compensatory damages, and the ordering of a new
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`trial on the issue unless the parties stipulated to an award of $60,000. In finding punitive
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`damages appropriate, the Appellate Division noted that:
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`150625I2012 FITZGERALD EDIBLES, INC. vs. OSBORNE TENANTS
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`[Defendant] embarked upon a calculated effort to vitiate the landlord-
`tenant relationship between it and [plaintiff], by repeatedly insisting that
`[plaintiff] enter into a new lease for one year only, demanding that Suffolk
`expend additional monies to improve the property, and threatening to
`interfere with [plaintiffl’s business operation. When it became apparent
`that [plaintiff] would not be intimidated, [defendant] resorted to the more
`drastic tactic of preventing [plaintiff] from gaining access to the premises,
`with the result that [plaintiff] was essentially forced out of business.
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`(161., at 247). The Appellate Division held that defendant’s actions “involve[d] that
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`degree of bad faith evincing a 'disingenuous or dishonest failure to carry out [the parties']
`'99
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`contract
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`so as to justify the imposition of punitive damages” (Id. at 247; quoting
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`Williamson, Picket, Gross, Inc. v Hirschfelcl 92 AD2d 289, 295 [lSt Dept 1983]
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`and Gordon v Nationwide Mut. Ins. Co., 30 NY2d 427, 437 [1972]).
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`At bar, defendants’ conduct was not the sort of calculated effort to vitiate the
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`landlord-tenant relationship contemplated by Suffolk Sports. Defendants took one action,
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`and in so doing it wrongfully evicted plaintiff from an area totaling just 96 square feet of
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`space that it used for equipment storage in the basement, for which it had not leasehold
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`interest. The eviction did involve the use of force or violent means, plaintiff was never
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`restricted in any way from access to its bar and restaurant storefront, and plaintiff was not
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`forced out of business. Although in considering punitive damages, the jury found that the
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`defendants conduct was sufficiently egregious and morally culpable, it also found in
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`favor of defendants on the trespass to land and the fraud claims, specifically that neither
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`the Osborne nor Ferrara made a false representation to plaintiff. On this record, the
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`punitive damages award in favor to the plaintiff is both contrary to law and against the
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`weight of the evidence. This case is remarkably unlike Suffolk Sports in that it did not
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`involve an ongoing pervasive effort to actually evict a tenant from a business to which
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`they held a lease, resulting in the business ultimately closing for good. At bar, as a matter
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`150625/2012 FITZGERALD EDIBLES, INC. vs. OSBORNE TENANTS
`Motion No. 003
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`of law, defendants conduct was not sufficiently reprehensible as to warrant to imposition
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`of punitive damages in the absence of conduct aimed at the public generally (see Suffolk
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`Sports, at 246). On these facts, there can be no valid line of reasoning and permissible
`
`inferences, which would support any punitive damages award as a matter of law and a
`
`verdict awarding punitive damages could not have been reached on any fair interpretation
`
`of the evidence. Accordingly, it is hereby
`
`ORDERED that the plaintiff is awarded treble damages and the Clerk is directed to enter
`
`judgment in favor of plaintiff and against both defendants Osborne and Ferrara in the sum of
`
`$162,000.00, with interest at the rate of 9 % per annum from the date of January 9, 2012, until
`
`the date of the decision on this motion, and thereafter at the statutory rate, as calculated by the
`
`Clerk, together with costs and disbursements as taxed by the Clerk; and it sis further
`
`ORDERED that plaintiff s application for a declaratory judgment restoring it to
`
`possession of the niches in the common vestibule in the building basement is denied; and it is
`
`further
`
`ORDERED plaintiff S application for a declaration that they have a prescriptive easement
`
`is denied; and it is further
`
`ORDERED that defendants’ post trial motion to vacate the jury’s punitive damages
`
`award is granted and the punitive damages awards as against defendant Osborne and Ferrara are
`
`hereby vacated.
`
`62 7’10 1/7
`
`DATE
`
`CHECK ONE:
`
`APPLICATION:
`
`CHECK IF APPROPRIATE:
`
`CASE DISPOSED
`GRANTED
`SETTLE ORDER
`
`DO NOT POST
`
`I: DENIED
`
`five“ “WWW
`K [I
`
`r' 1
`.
`
`
`
`DA
`’BENJAMIN COHEN, J.S.C,
`HON. DAVID B. COHEN
`NON-FINAL DISPOSITION
`J's'c‘
`GRANTED IN PART
`B OTHER
`SUBMIT ORDER
`
`FIDUCIARY APPOINTMENT
`
`El REFERENCE
`
`
`
`150625/2012 FITZGERALD EDIBLES, INC. VS. OSBORNE TENANTS
`Motion No. 003
`
`Page 11 of
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`ll of 11
`11 of 11
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`

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