METROPOLITAN TRANSPORTATION AUTHORITY v. TRINITY NYC HOTEL LLC (2025)

Order, Supreme Court, New York County (Suzanne J. Adams, J.), entered on or about May 17, 2024, which granted defendant's motion to dismiss the complaint pursuant to CPLR 3211(a)(1) and (7), unanimously modified, on the law, to deny the motion as to the fourth cause of action and to remand for a hearing on damages, and otherwise affirmed, without costs.

The court properly dismissed the first cause of action for breach of the covenant of good faith and fair dealing implied in the first amendment to the easement agreement.  The first amendment states defendant “consents to work being performed by [plaintiff New York City Transit Authority] and/or third parties ․ within the sidewalk and vault space adjacent to [defendant's] Property for the construction of [a] New Elevator and the New Stair.”  Contrary to plaintiffs’ contention, defendant did not consent to change its construction schedule to accommodate the construction of the new elevator, and the first amendment should not be interpreted to impliedly state something “which the parties have neglected to specifically include” (Rowe v. Great Atl. & Pac. Tea Co., 46 N.Y.2d 62, 72, 412 N.Y.S.2d 827, 385 N.E.2d 566 [1978]).  Plaintiff Metropolitan Transportation Authority (MTA) assured defendant in writing that it “may proceed with construction on its own schedule and is not required to halt or speed up construction based on the installation schedule of the New Elevator.”  Ultimately, plaintiffs received the “fruits of the contract” (Singh v. City of New York, 40 N.Y.3d 138, 146, 195 N.Y.S.3d 429, 217 N.E.3d 1 [2023] [internal quotation marks omitted]) in that defendant constructed the MTA Room contemplated under the first amendment.

The court correctly dismissed the second cause of action for private nuisance, because the MTA's right to occupy the street and sidewalk does not constitute a sufficient “property” right for a private nuisance claim (see generally Copart Indus., Inc. v. Consolidated Edison Co. of N.Y., Inc., 41 N.Y.2d 564, 570, 394 N.Y.S.2d 169, 362 N.E.2d 968 [1977]).  In a prior appeal involving the same parties, we determined, albeit concerning a trespass claim, that “[t]he MTA's right to occupy the street and sidewalk [pursuant to Public Authorities Law § 1266(12)] does not constitute sufficient property rights” (Matter of Trinity NYC Hotel, LLC v. Metropolitan Transp. Auth., 191 A.D.3d 448, 450, 142 N.Y.S.3d 482 [1st Dept. 2021] [internal quotation marks omitted]).  Furthermore, plaintiffs allege only economic loss, namely, the amount by which the cost to construct an elevator and repair stairs allegedly exceeds a payment that a nonparty made to plaintiffs, which is insufficient (see Cedar & Wash. Assoc., LLC v. Bovis Lend Lease LMB, Inc., 95 A.D.3d 448, 449, 944 N.Y.S.2d 47 [1st Dept. 2012]).

The court properly dismissed the third cause of action for public nuisance because there was no “substantial interference ․ with the use by the public of a public place” (532 Madison Ave. Gourmet Foods, Inc. v. Finlandia Ctr., Inc., 96 N.Y.2d 280, 292, 727 N.Y.S.2d 49, 750 N.E.2d 1097 [2001];  see also Graceland Corp. v. Consolidated Laundries Corp., 7 A.D.2d 89, 91, 180 N.Y.S.2d 644 [1st Dept. 1958], affd 6 N.Y.2d 900, 190 N.Y.S.2d 708, 160 N.E.2d 926 [1959]).  The documentary evidence demonstrates that, during construction, defendant maintained a five-foot clear protected pedestrian walkway.  Moreover, a claim for public nuisance fails where, as here, a plaintiff “seeks damages for purely economic losses” (Goldberg Weprin & Ustin v. Tishman Constr. Corp., 275 A.D.2d 614, 713 N.Y.S.2d 57 [1st Dept. 2000], affd 96 N.Y.2d 280, 727 N.Y.S.2d 49, 750 N.E.2d 1097 [2001]).

However, the court should not have dismissed the fourth cause of action seeking “damages and costs that [plaintiffs] sustained as a result of the preliminary injunctions improperly granted” by the court in the prior litigation.  It was “finally determined” (CPLR 6312[b]) that defendant was not entitled to injunctions in the prior litigation when we vacated the injunctions (see Trinity NYC Hotel, LLC, 191 A.D.3d at 448–449, 142 N.Y.S.3d 482) and when our decision stood “undisturbed” (Margolies v. Encounter, Inc., 42 N.Y.2d 475, 481, 398 N.Y.S.2d 877, 368 N.E.2d 1243 [1977]) because the parties in the prior litigation discontinued it without prejudice in April 2023.

Defendant's contention, that it need only pay on the undertaking if the rights of the parties were finally determined in the prior litigation, is unavailing, as “ ‘liability under CPLR 6312(b) turns on whether it is finally determined that [a party] was not entitled to an injunction’ ” (Matter of Technicare Corp. v. New York City Health & Hosps. Corp., 131 A.D.2d 371, 374, 516 N.Y.S.2d 937 [1st Dept. 1987], quoting J.A. Preston Corp. v. Fabrication Enters., 68 N.Y.2d 397, 406, 509 N.Y.S.2d 520, 502 N.E.2d 197 (1986)] [internal quotation marks and emphasis omitted]).

Defendant also contends that plaintiffs may not recover the cost of the new elevator from the undertaking.  However, on the fourth cause of action, plaintiffs seek “attorneys’ fees and costs incurred in their successful appeals of the [motion court's] orders to the Appellate Division” in the prior litigation, which is proper (see Shu Yiu Louie v. David & Chiu Place Rest., Inc., 261 A.D.2d 150, 152, 689 N.Y.S.2d 476 [1st Dept. 1999]).  We remand for a hearing on the amount of damages sustained by plaintiffs (see id. at 152, 689 N.Y.S.2d 476).