Grill, Schieber, and Tare deliver victory for 110 Greenwich Street

June 16, 2014 | Real Estate, Zoning & Land Use | Appeals | Corporate

David M. Grill, Evan Schieber and Joshua Tare won a resounding victory for 110 Greenwich Street, LLC (“Landlord”) against its commercial tenant Waterfront Athletic Club, Inc., (“Tenant”) a famous boxing studio with locations in New York City and Los Angles. The dispute arose out of a so-ordered stipulation of settlement entered into by the Landlord and Tenant in 2011 that resolved the parties’ prior dispute. Pursuant to the stipulation, in exchange for Tenant’s agreement to comply with the stipulation’s terms and to surrender its tenancy rights, Landlord agreed to permit Tenant to remain in physical occupancy of the studio through February 28, 2014. The current dispute involved a provision in the stipulation that gave Tenant the right to reinstate and renew its lease, provided it gave Landlord nine (9) month’s written notice prior to the stipulated February 28, 2014 vacate date. While Tenant ultimately served the notice, it did not do so in accordance with the time parameters set forth in the stipulation. Tenant’s inadvertent failure to timely exercise its option to renew the lease generated a series of legal battles in both the Supreme Court and Civil Court, in which Tenant tried to relieve itself from the consequence of its conceded failure to comply with the notice requirements in stipulation. Tenant relied principally on the Court of Appeal’s decision in J.N.A. Realty Corp. v Cross Bay Chelsea, Inc., 42 NY2d 392, 397 N.Y.S.2d 958 (1977) (“JNA”), in which the Court of Appeals held that equity will intervene to save a tenant who neglects to timely exercise a renewal to avoid a forfeiture of that tenant’s valuable leasehold interest.

Judge Schecter held that relief under JNA was not appropriate under the circumstances. The Court aptly found that, unlike the Tenant in JNA, Tenant’s rights were derived exclusively from the enforceable so-ordered stipulation. In strictly construing the terms of the settlement agreement, the Court held that the Tenant’s loss of possession was not a forfeiture, but merely the contracted for consequence of the Tenant’s failure to comply with the stipulation’s notice requirements. The Court further directed that the Tenant to pay all of Landlord’s attorneys’ fees in defending its rights under the stipulation. The decision sends an unmistakable message to litigants that a binding settlement agreement will not be lightly cast aside and cannot be used as an invitation for further activity by litigants, who, in hindsight regret the bargain struck.

Read the decision.

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