SM v. 355 LLC (2026)

This commercial-landlord-tenant action arises from a dispute between the parties about whether defendant-landlord, 355 Seventh Avenue Holding LLC, is entitled to terminate the lease of plaintiff-tenant, SM Trade International Inc.

SM Trade entered into a lease with 355 Seventh in March 2021, for commercial premises located at 355 Seventh Avenue in Manhattan. (See NYSCEF No. 1 ¶ 18 [complaint].) The lease provides SM Trade with a ten-year term of operation. (Id. at ¶ 19.) SM Trade alleges that it has expended approximately $300,000 in capital investments into the premises to operate a pizza restaurant. (Id. at ¶¶ 22-23.)

355 Seventh served a termination notice on SM Trade in November 2025. (Id. at ¶ 30.) The notice invokes a purported clause in the lease permitting the landlord to terminate SM Trade's lease early to demolish the building and replace it with a new one; and it states that the lease will terminate on or about May 31, 2026. (Id. at ¶ 32.) SM Trade vigorously disputes whether this demolition clause is in the lease. Both parties agree that the notice is void if the lease does not, in fact, include a demolition clause. (See id. at ¶¶ 33-34; NYSCEF No. 21 at ¶¶ 28-29 [aff. in opp.].)

SM Trade brought this action, seeking declaratory relief challenging the validity of the termination notice, and an injunction to halt 355 Seventh's effort to evict SM Trade. During the pendency of the action, SM Trade has alleged that 355 Seventh has engaged in "extrajudicial efforts" to pressure it to vacate the premises, such as interfering with water and electrical service to the premises. (See NYSCEF No. 22 at ¶¶ 6-7, 16-17 [aff. in support].) 355 Seventh disputes these allegations. (See NYSCEF No. 21 at ¶¶ 21-22 [aff. in opp.].)

On motion sequence 001, SM Trade seeks judgment (1) declaring that 355 Seventh has no contractual right to terminate SM Trade's lease for purposes of demolition or redevelopment; (2) declaring 355 Seventh's termination notice void and unenforceable; and (3) declaring that the lease remains in effect and that SM Trade is entitled to continued possession of the premises under the lease. SM Trade also seeks an injunction barring 355 Seventh from enforcing the termination notice or otherwise interfering with SM Trade's tenancy.

On motion sequence 002, SM Trade seeks injunctive relief directing 355 Seventh immediately to restore water and electrical service to the premises; and to refrain from interrupting water and electrical service at the premises or otherwise interfering with plaintiff's operation of its business. This court granted in part SM Trade's request for a temporary restraining order seeking similar relief pending the determination of the motion. (See NYSCEF No. 35 at 4-5.)

SM Trade's motions are granted in part and denied in part.

DISCUSSION

I. SM Trade's Requests for Declaratory and Injunctive Relief (Mot Seq 001)

A. SM Trade's Requests for Declaratory Relief

On motion sequence 001, SM Trade asks this court to issue several declarations that correspond to the causes of action in the complaint for declaratory relief, described above. In substance, these branches of SM Trade's motion seek summary judgment in SM Trade's favor on those declaratory-judgment causes of action.

In resolving this aspect of SM Trade's motion, the core question is whether the parties' lease does, or does not, include a demolition clause. SM Trade does not identify any basis, other than the asserted absence of the demolition clause, to contest the validity of the notice served by 355 Seventh. Thus, if the lease includes the clause, 355 Seventh is entitled to have terminated SM Trade's lease and to proceed with its eviction. If, however, the lease does not include the clause, 355 Seventh has no right to terminate the lease in the manner that it has sought to do; and its termination notice is void.

SM Trade insists that the lease did not include a demolition clause, and argues that it entered into the lease—and made substantial capital improvements—in reliance on the absence of that clause. (See NYSCEF No. 3 at ¶¶ 32, 37, 46.) 20-21.) On the other hand, 355 Seventh argues that a demolition clause was included and that this kind of clause is a standard provision in leases for properties in areas that are subject to potential redevelopment. (See NYSCEF No. 15 at ¶ 5.)

Each party has presented what appears to be a complete, fully executed version of the lease. In 355 Seventh's version of the lease, the demolition clause appears at Article 32. (See NYSCEF No. 18 at 48.) In SM Trade's version of the lease, Article 32 of the lease is instead described as "Intentionally Deleted." (See NYSCEF No. 20 at 48 [block capitalization omitted].)

To support its claim that its version of the lease, including the clause, is authentic, 355 Seventh submits three affidavits from people allegedly possessing personal knowledge of the lease: Charles Aini, 355 Seventh's principal (NYSCEF No. 15); David Green, a real estate broker working for Kassin Sabbagh Realty LLC ("KSR") who represented SM Trade (NYSCEF No. 16); and Ike Bibi, a real estate broker working for KSR who represented 355 Seventh (NYSCEF No. 17).

SM Trade's argument that its version of the lease, omitting the clause, is authentic is based on the affidavit of MD Faruk Hossain, SM Trade's principal. (NYSCEF No. 23.) The Hossain affidavit represents that the lease did not include the demolition clause. And he argues that SM Trade would not have made its capital investments in the premises if SM Trade had known that 355 Seventh could terminate the lease via a demolition clause. (Id. at ¶¶ 5-6.)

This court concludes that the parties' competing affidavits create a factual dispute about which version of the lease is the authentic final lease (and, as a corollary, whether the authentic lease includes a demolition clause). The parties' submissions thus do not give this court a means of determining as a matter of law whether 355 Seventh's putative termination of the lease is, or is not, valid.

At most, 355 Seventh argues that this court should credit its account because one of the affidavits supporting that account was provided by SM Trade's own real-estate broker. (See NYSCEF No. 21 at ¶ 16.) But that broker is employed by KSR (see NYSCEF No. 16 at ¶ 1)—the same firm as 355 Seventh's real-estate broker (see NYSCEF No. 17 at ¶ 1). It is thus unclear whether the affidavit of SM Trade's broker should be entitled to the added weight that 355 Seventh would ascribe to it, as a kind of statement against interest. And even if that affidavit were entitled to great weight as 355 Seventh argues, it would be insufficient to permit this court to disregard or discredit the squarely contrary affidavit of SM Trade's principal.

Given the clear factual dispute about whether the demolition clause is in the parties' lease, this court lacks a basis at this time to issue the declarations that SM Trade requests. The branches of SM Trade's motion that, in effect, seek summary judgment in SM Trade's favor on its declaratory-judgment claims are denied.

B. SM Trade's Request for Injunctive Relief

SM Trade also seeks injunctive relief barring 355 Seventh from enforcing its termination notice. For the reasons set forth above, SM Trade has not established a likelihood of success on the merits of the (in)validity of the notice. Moreover, SM Trade has not shown that it would be irreparably injured absent injunctive relief, because SM Trade can raise its arguments about (the absence of) the demolition clause in any eviction proceeding predicated on that notice.

This court does agree with SM Trade, though, that it is entitled to injunctive relief barring 355 Seventh from otherwise interfering with SM Trade's tenancy, possession of the premises, or operation of its business. To be sure, this court declines to extend the scope of this injunction as far as SM Trade would prefer. The injunction does not bar 355 Seventh from taking steps that might interfere with SM Trade's operation of the business if they are necessary to comply with a statute, regulation, ordinance, or governmental order; or if those steps are undertaken to conduct temporary repairs within the building in emergent circumstances. But these limited exceptions to the requested injunction are not, and should not be understood as, a license for 355 Seventh to engage in impermissible self-help to eject SM Trade from the premises. (See 1414 Holdings, LLC v BMS-PSO, LLC, 116 AD3d 641, 643 [1st Dept 2014] [discussing limits on permissible landlord self-help].)

The branches of SM Trade's motion for injunctive relief are granted in part and denied in part as set forth above.

II. SM Trade's Requests for Further Injunctive Relief (Mot Seq 002)

On motion sequence 002, SM Trade seeks again an injunction barring 355 Seventh from interfering with SM Trade's tenancy and operation of its business. It also asks for a series of items of injunctive relief to undo what SM Trade contends to be unjustified and impermissible interference with water and electrical service to the premises. (See NYSCEF No. 35 at 3-4 [signed order to show cause].) As noted above, SM Trade also sought, and this court granted in part, an interim temporary restraining order seeking similar relief. (See id. at 4-5.)

It is undisputed that at least some interruptions to water and electrical service to the premises have occurred. The parties do, however, hotly dispute the scope of, and responsibility for, those interruptions. (Compare NYSCEF No. 36 [affidavit of 355 Seventh's chief operating officer], with NYSCEF No. 48 [affidavit of SM Trade's principal].)

As discussed above, 355 Seventh may not force SM Trade out of its premises through self-help measures—for example, cutting water and power service to the premises, or choosing to let stand ongoing water and power interruptions that were originally caused by others but that are within 355 Seventh's capacity now to remedy. Thus, this court need not now resolve the factual disputes between the parties about who is at fault for which interruptions. To the extent that SM Trade's operation of the business is hindered by obstructions that 355 Seventh may legally remove, or by non-emergency interruptions in water and electrical service that 355 Seventh undertook or can undo, 355 Seventh must now eliminate those hindrances. To the extent that any such forms of interference with SM Trade's enjoyment of the premises and operation of its business have ceased (as 355 Seventh contends), 355 Seventh need only refrain, going forward, from interfering with SM Trade's possession of the premises and operation of its business, unless and until 355 Seventh has obtained a valid warrant of eviction or writ of ejectment.

Accordingly, it is

ORDERED that the branches of SM Trade's motion seeking judgment in SM Trade's favor on its claims for declaratory relief (mot seq 001) are denied; and it is further

ORDERED that the branch of SM Trade's motion seeking injunctive relief barring 355 Seventh from enforcing its termination notice (mot seq 001) is denied; and it is further

ORDERED that the branch of SM Trade's motion seeking injunctive relief enjoining defendant and its agents from "otherwise interfering with Plaintiff's tenancy, possession, or operation of its business at the Premises" (mot seq 001) is granted, except to the extent that any such interference is required to comply with a statute, regulation, ordinance, or governmental order, or such interference is the result of temporary repairs within the building undertaken in emergency circumstances; and it is further

ORDERED that the branch of SM Trade's motion seeking injunctive relief barring 355 Seventh from enforcing its termination notice or otherwise interfering with SM Trade's tenancy, possession of the premises, or operation of its business therein (mot seq 002) is denied as academic in light of this court's resolution of motion sequence 001; and it is further

ORDERED the branches of SM Trade's motion seeking an injunction requiring 355 Seventh immediately to restore water and electrical service to the premises, and other related forms of injunctive relief, is granted, and 355 Seventh is required (i) to take all steps available to it to restore immediately water and electrical services to the premises, to the extent that the premises do not currently have functioning water and electrical service; (ii) to afford SM Trade reasonable access to utility rooms, lines and panels necessary for the provision of water and electricity to the premises; and (iii) to refrain from interrupting, terminating, obstructing, or otherwise interfering with, water and electrical services to the premises or ingress to and egress from the premises, except to the extent necessary to comply with statute, regulation, ordinance, or governmental order, or to undertake temporary repairs within the building in emergency circumstances; and it is further

ORDERED that the parties shall appear before this court for a telephonic preliminary conference on June 24, 2026.

DATE 6/9/2026

Gerald Lebovits, J.