255 BUTLER ASSOCIATES LLC v. 255 BUTLER LLC (2019)

DECISION & ORDER

ORDERED that the order is modified, on the law, by deleting the provision thereof denying that branch of the defendants' motion which was to dismiss the cause of action to recover damages for tortious interference with prospective economic relations, and substituting therefor a provision granting that branch of the motion;  as so modified, the order is affirmed, without costs or disbursements.

The underlying facts of this appeal are summarized in the companion appeals decided herewith (255 Butler Associates, LLC v. 255 Butler, LLC, 173 A.D.3d 649, 103 N.Y.S.3d 589, 2019 WL 2363813 [Appellate Division Docket No. 2016–04374];  and 255 Butler Associates, LLC v. 255 Butler, LLC, 173 A.D.3d 651, 102 N.Y.S.3d 259, 2019 WL 2363810 [Appellate Division Docket No. 2017–10260]).  The plaintiff tenant, 255 Butler Associates, LLC, commenced this action after being served with notice that it was in default under the terms of a commercial lease (hereinafter the lease) entered into between it and the defendant landlord 255 Butler, LLC. In the first cause of action in the amended complaint, the plaintiff sought a judgment declaring, inter alia, that it did not default under the lease and enjoining the landlord from terminating the lease.  The second cause of action sought to recover damages for breach of the implied covenant of good faith and fair dealing.  The third cause of action sought to recover damages for breach of the covenant of quiet enjoyment.  The fourth cause of action, which was asserted against the landlord as well as the individual members of the landlord, sought to recover damages for tortious interference with prospective economic relations.  The defendants moved pursuant to CPLR 3211(a)(1) and (7) to dismiss the amended complaint, and that motion was denied in an order dated February 21, 2018.  The defendants appeal.

In considering a motion to dismiss a complaint pursuant to CPLR 3211(a)(7), “the complaint must be accorded a liberal construction, the facts as alleged therein must be accepted as true, and the plaintiff must be accorded the benefit of every favorable inference” (Elow v. Svenningsen, 58 A.D.3d 674, 674, 873 N.Y.S.2d 319).  The “sole criterion is whether the pleading states a cause of action, and if from its four corners factual allegations are discerned which taken together manifest any cause of action cognizable at law a motion for dismissal will fail” (Guggenheimer v. Ginzburg, 43 N.Y.2d 268, 275, 401 N.Y.S.2d 182, 372 N.E.2d 17).  A party seeking dismissal pursuant to CPLR 3211(a)(1) “on the ground that its defense is based on documentary evidence must submit documentary evidence that resolves all factual issues as a matter of law and conclusively disposes of the plaintiff's claim” (Elow v. Svenningsen, 58 A.D.3d at 675, 873 N.Y.S.2d 319;  see Goshen v. Mutual Life Ins. Co. of N.Y., 98 N.Y.2d 314, 326, 746 N.Y.S.2d 858, 774 N.E.2d 1190;  Leon v. Martinez, 84 N.Y.2d 83, 88, 614 N.Y.S.2d 972, 638 N.E.2d 511).

Contrary to the defendants' contention, the documentary evidence they submitted failed to conclusively establish that the plaintiff defaulted under the lease by failing to “diligently pursue” the conversion of the building located on the subject property “into a multi unit commercial property.”  In addition, the amended complaint properly stated a cause of action to recover damages for breach of the implied covenant of good faith and fair dealing by alleging that the landlord's unlawful conduct destroyed and/or frustrated the tenant's right “to receive the fruits of the [lease]” (511 W. 232nd Owners Corp. v. Jennifer Realty Co., 98 N.Y.2d 144, 153, 746 N.Y.S.2d 131, 773 N.E.2d 496 [internal quotation marks omitted];  see C & E 608 Fifth Ave. Holding, Inc. v. Swiss Ctr., Inc., 54 A.D.3d 587, 587, 863 N.Y.S.2d 655;  Outback/Empire I, Ltd. Partnership v. Kamitis, Inc., 35 A.D.3d 563, 563, 825 N.Y.S.2d 747).  The amended complaint also stated a cause of action to recover damages for breach of the covenant of quiet enjoyment by alleging that the tenant was deprived of the beneficial use of the subject property based on the landlord's alleged wrongful service of notices of default and termination (see generally TDS Leasing, LLC v. Tradito, 148 A.D.3d 1079, 1080, 51 N.Y.S.3d 96;  Joylaine Realty Co., LLC v. Samuel, 100 A.D.3d 706, 707, 954 N.Y.S.2d 179).  The defendants' submissions failed to demonstrate, as a matter of law, that the plaintiff remained in possession of the subject property and, thus, was not constructively evicted (see Prakhin v. Fulton Towers Realty Corp., 122 A.D.3d 601, 603, 996 N.Y.S.2d 85).

Nevertheless, construing the amended complaint in the light most favorable to the plaintiff, it fails to state a cause of action to recover damages for tortious interference with prospective economic relations.  The facts alleged in the amended complaint establish that the defendants' alleged actions were motivated by self-interest and other economic considerations, and not for the sole purpose of harming the plaintiff (see Holliswood Owners Corp. v. Rivera, 145 A.D.3d 968, 970, 44 N.Y.S.3d 159;  Law Offs. of Ira H. Leibowitz v. Landmark Ventures, Inc., 131 A.D.3d 583, 586, 15 N.Y.S.3d 814;  Devash LLC v. German Am. Capital Corp., 104 A.D.3d 71, 79, 959 N.Y.S.2d 10;  Out of Box Promotions, LLC v. Koschitzki, 55 A.D.3d 575, 577, 866 N.Y.S.2d 677).  Moreover, the acts attributed to the individual members of the landlord were committed in their capacity as corporate officers, and the plaintiff failed to adequately allege independent torts committed by them (see East Hampton Union Free School Dist. v. Sandpebble Bldrs., Inc., 16 N.Y.3d 775, 776, 919 N.Y.S.2d 496, 944 N.E.2d 1135;  Travelsavers Enters. v. Analog Analytics, Inc., 149 A.D.3d 1003, 1007, 53 N.Y.S.3d 99).  Accordingly, the Supreme Court should have granted that branch of the defendants' motion which was to dismiss the cause of action to recover damages for tortious interference with prospective economic relations.

AUSTIN, J.P., COHEN, BRATHWAITE NELSON and IANNACCI, JJ., concur.