STERLING NATIONAL BANK v. FASHION ASSOCIATES

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Supreme Court, Appellate Division, First Department, New York.

STERLING NATIONAL BANK, Plaintiff-Appellant, v. FASHION ASSOCIATES, Defendant-Respondent.

Decided: January 28, 2010

MAZZARELLI, J.P., SWEENY, MOSKOWITZ, MANZANET-DANIELS, ROMÁN, JJ. Meyer, Suozzi, English & Klein, P.C., Garden City (Abraham B. Krieger of counsel), for appellant. Thomas R. Kleinberger, PLLC, New York (Thomas R. Kleinberger of counsel), for respondent.

Judgment, Supreme Court, New York County (Louis Crespo, Special Referee), entered December 24, 2008, awarding defendant damages of $197,773.48, inclusive of interest, costs and disbursements, and bringing up for review an order (denominated judgment and order), Supreme Court, New York County (Leland DeGrasse, J.), entered May 6, 2008, which, inter alia, declared, upon the parties' respective motions for summary judgment, that plaintiff tenant was contractually obligated to restore the subject premises to a rentable condition upon termination of the parties' lease, and referred the issue of defendant landlord's damages to a special referee to hear and determine, unanimously affirmed, with costs.   Appeal from the above order unanimously dismissed, without costs, as subsumed in the appeal from the above judgment.

 The motion court correctly held that the parties' lease modification agreement pertained not to the lease at issue, but rather to a previously expired lease between the same parties for different premises, and that tenant was not relieved of its obligation, under article 12 of the lease, to remove its alterations, installations, additions and improvements from the premises and restore the premises to good order and condition.   Tenant's claim that landlord's notice invoking article 12 was insufficiently specific as to the particular installations and alterations to be removed seeks to impose notice obligations that were not required by the lease.   We also reject tenant's argument that Supreme Court's declaration that tenant was obligated to restore the premises to “a rentable condition” reformed the lease requirement to restore to “good order and condition.”  “A rentable condition,” at least as minimally defined by the Special Referee (“the barest, but legal, necessities essential for letting the space”), does not involve a greater burden of restoration than the lease's well-understood “good order and condition” requirement (see Akron Meats v. 1418 Kitchens, 160 A.D.2d 242, 244, 553 N.Y.S.2d 355, lv. denied 76 N.Y.2d 704, 559 N.Y.S.2d 984, 559 N.E.2d 678 [1990] ), and we note that no damages were awarded landlord for the part of the restoration costs it incurred in upgrading the space specially for the new tenant it had procured.