This was originally published on the SGR Blog.
Was Operation of Printing Press on Second Floor an Actionable Breach by Landlord?
Andrianna Shamaris, Inc, operated a luxury home specialty store located at 121 Varick Street, pursuant to a commercial lease signed in January of 2019 with 121 Varick St. Corp. The lease covered a portion of the ground floor retail space to be used as an “upscale furniture showroom.”
121 Varick Street sits atop the subway under Varick Street and is at the mouth of the Holland Tunnel. It also is located in what has historically been known as New York’s “printing district.” The building had a history of housing printing presses ever since seven printing companies formed the cooperative that is known as Varick. Each unit in the building also had a certificate of occupancy for manufacturing.
Shamaris took possession of the leased premises in October 2019. The lease contains a clause that states that so long as tenant is not in default, then “Tenant may peaceably and quietly enjoy the premises without hindrance or molestation by Landlord or any person lawfully claiming by, through or under Landlord…”
Shamaris alleged that Irene David Realty, Inc. (Realty) owned the space above her unit and subleases that space to Positive Print Litho Offset, Inc. (Print).
Shamaris alleged that Varick and Realty allowed Print to move a printing press to be operated all day during business hours Monday through Friday directly above her showroom. She also alleged that the printing press and cutting machine caused continuous noises which made it impossible for her to use the leased premises for its intended purposes, resulting in lost business, and that after making complaints to Varick, she was told a noise remediation plan would be put into effect. However, the noise had not been remediated.
Shamaris stated that the noise caused her employees (herself and her son, Royston Redmond) to have excruciating headaches. After numerous complaints, a site inspection was held on January 20, 2021 with Print and Varick’s property manager at which she was told that a mitigation plan was in progress and that Print was relocating to a new building.
Shamaris then retained Alan Feierstein of Acoustulog, Inc. to record and analyze the noise emanating from Print. Acoustilog found that the noise levels exceeded noise limits set forth by New York City’s noise ordinance. Shamaris remained in possession of the premises and continued to use it as a showroom, to receive furniture, and to ship furniture.
Shamaris filed a complaint on May 4, 2021 claiming breach of the covenant of quiet enjoyment, breach of the implied covenant of good faith, constructive eviction, nuisance, injunctive relief, rescission, and restitution. Answers were filed denying the allegations and asserting cross-claims and affirmative defenses.
Shamaris moved for partial summary judgment: (1) declaring Varick to be in material breach of its express covenant of quiet enjoyment contained in the lease executed, (2) cancelling and rescinding the lease based on Varick’s breach, failure of consideration and fraud, and (3) awarding judgment in the amount of $105,472 representing rent paid under the lease for periods since commencement of the action.
The motion was opposed by Varick and Realty on numerous grounds including: (1) Shamaris failed to show there were no genuine issues of material fact requiring a trial, (2) the motion was procedurally defective, and (3) the motion was premature as there has been no discovery or preliminary conference in this action since submission of the motion. Realty sold ownership interest of the premises above the showroom and Print was no longer a tenant of the building.
To establish a breach of a covenant of quiet enjoyment, Shamaris was required to show that Varick’s conduct substantially and materially deprived her of the beneficial use and enjoyment of the premises or that she was actually evicted or abandoned possession of the leased premises.
To establish entitlement to rescission on the basis of fraud, Shamaris was required to set forth the circumstances of the fraud in detail showing that Varick and Realty made a false material representation upon which she relied to her detriment and that reliance upon the misrepresentation was justifiable. Rliance upon a misrepresentation is not justifiable if there was the means to discover the true nature of the transaction by the exercise of ordinary intelligence.
The Court found the motion for summary judgment to be premature. First, it is undisputed that Shamaris continued to use the premises, including using the freight elevator, receiving and/or shipping deliveries, and having guests and/or customers in the space. To the extent it was disputed how often the premises was used, or to what extent she was not using the premises due to alleged noise from the printing press, those were material issues of fact that were in dispute which warranted denial of summary judgment.
What’s more, Shamaris touted herself as “appointment only,” so an inference could be made in favor of Varick and Realty that she was not at the premises merely because appointments were not scheduled. So the Court found that, at this stage of litigation, and viewing all facts in favor of the non-moving party, Shamaris had not met her prima facie burden of proving a breach of the express covenant of quiet enjoyment because she had not adequately shown that it was undisputed that the premises was abandoned because of the alleged noise from the printing press.
Shamaris did not meet her prima facie burden entitling her to rescission of the lease. Even if there were misrepresentations or “active concealment” made regarding the existence of a printing press on the second floor, it was s hotly contested whether Shamaris justifiably relied on such misrepresentations or active concealment, especially when the numerous facts had been brought up which would show that she could have discovered the existence of the printing press with due diligence – it having been alleged that Shamaris had been a tenant in the neighborhood for years prior to this action and her real estate broker was alleged to be a “seasoned expert in the Printing District.” Varick was formed by seven printing companies as shown on NY Times website, and a directory on the ground floor lobby of the building listed all of the printing operations in the building, including Print’s operation on the second floor.