SUBCARRIER COMMUNICATIONS INC v. SATRA REALTY LLC

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

SUBCARRIER COMMUNICATIONS, INC., Respondent, v. SATRA REALTY, LLC, Appellant.

Decided: October 28, 2004

Before:  CARDONA, P.J., PETERS, MUGGLIN, ROSE and KANE, JJ. Satra Realty, L.L.C., Binghamton, appellant pro se. Pearis, Kline, Barber & Schaewe L.L.P., Binghamton (Catherine C. Schaewe of counsel), for respondent.

Appeal from an order of the Supreme Court (Hester Jr., J.), entered October 23, 2002 in Broome County, which, inter alia, granted plaintiff's motion for summary judgment declaring the lease agreement enforceable.

In January 1997, plaintiff, engaged in procuring building and tower sites on behalf of telecommunications companies, entered into a five-year lease with Bank Hapoalim, the former owner of a building located in the City of Binghamton, Broome County.   Plaintiff acquired the right to use a portion of the building's rooftop and designated interior space for the purpose of installing, maintaining and operating antennas for its telecommunications customers;  the annual rent was $1,200.   By letter dated May 18, 2001, plaintiff requested access to the building in order to repair its equipment.   Defendant refused and served plaintiff with a 10-day notice of default alleging, among other things, that the lease was unconscionable.

Plaintiff commenced this action seeking specific performance of the lease and a declaration that it was valid and binding.   After defendant answered and asserted a counterclaim, plaintiff exercised its option to renew for an additional five-year term pursuant to the renewal clause in the lease, which states as follows:

“This Agreement shall be in effect for a term of five (5) years commencing upon construction of [plaintiff's] first customer and terminating five (5) years later.   Term shall begin February 1, 1997 and expire on February 1, 2002, with two, five year renewal options.”

With it undisputed that plaintiff timely exercised its option to renew, defendant nonetheless directed plaintiff to vacate the building.   Thereafter, plaintiff was notified that the rent for the first five-year renewal period would be substantially increased.   Plaintiff paid the original rent and subsequently moved, by order to show cause, to enjoin defendant from taking any action to terminate the lease.   Plaintiff also sought summary judgment regarding the enforceability of the lease, its proper renewal and the rental amount.   Defendant cross-moved for, among other things, summary judgment and a declaration that the renewal provision was invalid and unenforceable.   Supreme Court found, among other things, that plaintiff had a right to two five-year renewal options at the rent fixed by the original lease.   Defendant appeals and we affirm.

 While it is clear that an indefinite renewal provision in a lease will render it void and unenforceable (see Martin Delicatessen v. Schumacher, 52 N.Y.2d 105, 109-110, 436 N.Y.S.2d 247, 417 N.E.2d 541 [1981];  Tracy v. Albany Exch. Co., 7 N.Y. 472, 474 [1852];  Matter of Seiden v. Francis, 184 A.D.2d 904, 905, 585 N.Y.S.2d 562 [1992] ), the definiteness doctrine is not applied rigidly.

“Contracting parties are often imprecise in their use of language, which is, after all, fluid and often susceptible to different and equally plausible interpretations.   Imperfect expression does not necessarily indicate that the parties to an agreement did not intend to form a binding contract.   A strict application of the definiteness doctrine could actually defeat the underlying expectations of the contracting parties” (Matter of 166 Mamaroneck Ave. Corp. v. 151 E. Post Rd. Corp., 78 N.Y.2d 88, 91, 571 N.Y.S.2d 686, 575 N.E.2d 104 [1991] ).

Here, the original term of the lease was for a five-year period “with two, five year renewal options.”   It specified that the $1,200 annual rent shall be “for and during the term hereof” with no further mention of rent for any renewal periods.   Had the covenant to renew detailed that the rent for each or all of the renewal periods would be an amount to be agreed upon in the future, we would find the provision void for uncertainty (see Martin Delicatessen v. Schumacher, supra at 109-110, 436 N.Y.S.2d 247, 417 N.E.2d 541;  Tracy v. Albany Exch. Co., supra at 474;  Matter of Seiden v. Francis, supra at 904-905, 585 N.Y.S.2d 562).   However, where, as here, the material term, to wit, the rental amount, has not been left open for future negotiations, case law has established that it will be on the terms of the original lease (see Tracy v. Albany Exch. Co., supra;  Hoff v. Royal Metal Furniture Co., 117 App.Div. 884, 885, 103 N.Y.S. 371 [1907], affd. 189 N.Y. 555, 82 N.E. 1128 [1907];  Western N.Y & Pennsylvania Ry. Co. v. Rea, 83 App.Div. 576, 581, 81 N.Y.S. 1093 [1903];  compare Martin Delicatessen v. Schumacher, supra at 109-111, 436 N.Y.S.2d 247, 417 N.E.2d 541;  Matter of Seiden v. Francis, supra at 905-906, 585 N.Y.S.2d 562).   With no other viable interpretation proffered by defendant, we affirm.

ORDERED that the order is affirmed, without costs.

PETERS, J.

CARDONA, P.J., MUGGLIN, ROSE and KANE, JJ., concur.

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