AMERICAN YOUTH DANCE THEATER INC v. 4000 EAST 102ND STREET CORP (2021)

Order, Supreme Court, New York County (Jennifer G. Schecter, J.), entered on or about March 4, 2020, which, to the extent appealed from as limited by the briefs, denied defendant's motion for summary judgment and granted plaintiff's renewed motion for summary judgment permanently enjoining defendant from terminating the parties' commercial lease and from seeking to recover possession of the demised premises, unanimously modified, on the law, to deny plaintiff's motion, and otherwise affirmed, without costs.

Defendant is not entitled to summary judgment because plaintiff's failure to secure a certificate of occupancy (C/O) that would permit use of the leased premises as a physical cultural establishment is curable (see American Youth Dance Theater, Inc. v. 4000 E. 102nd St. Corp., 140 A.D.3d 630, 33 N.Y.S.3d 714 [1st Dept. 2016]).  Plaintiff proceeded diligently and secured a building permit for the necessary renovations, and the time set by the Board of Standards and Appeals to secure a C/O upon completion of these renovations in accordance with the granted variance has not expired.  Thus, plaintiff is still “able to bring itself into compliance with the lease without vacating the premises” (Empire State Bldg. Assoc. v. Trump Empire State Partners, 245 A.D.2d 225, 229, 667 N.Y.S.2d 31 [1st Dept. 1997]).

However, plaintiff is not entitled to summary judgment, because it has not shown that its renovation project has been completed or that the Department of Buildings has certified completion and issued a C/O. Contrary to plaintiff's contention, under the lease rider and lease amendment, it is required to obtain the C/O and, if it fails to do so, defendant has the right to complete construction and obtain the C/O as plaintiff's agent and at plaintiff's expense, unless defendant caused the failure to obtain a C/O. Plaintiff's interpretation would render the relevant provisions meaningless (see Two Guys from Harrison–N.Y. v. S.F.R. Realty Assoc., 63 N.Y.2d 396, 403, 482 N.Y.S.2d 465, 472 N.E.2d 315 [1984]).  Further, under applicable law, a new C/O is required, because the approved plans change the use and occupancy and are inconsistent with the current C/O (Administrative Code of City of N.Y. §§ 28–118.3.1;  28–118.3.2), plaintiff is permitted to apply for a C/O as authorized by defendant (Administrative Code § 28–118.4.1), and, in the circumstances, a partial C/O is not permitted (Administrative Code §§ 28–118.3.4.2;  28–118.16.1;  28–118.16.2;  28–118.20).