Summary
The Appellate Division, Second Department reversed a lower court's grant of summary judgment in favor of a landlord seeking unpaid rent and late fees under a commercial lease. The court held that the plaintiff failed to eliminate triable issues of fact regarding the defendants' affirmative defenses of promissory estoppel and alleged oral modifications to the lease terms, particularly concerning reduced rent payments during the pandemic and installment payment arrangements. Consequently, the judgment was reversed, the motion for summary judgment was denied, and costs were awarded to the defendants.
Topics
Practice areas
Questions Presented
- Whether summary judgment on the breach of contract cause of action was proper where there are disputed facts regarding alleged oral modifications of the lease and the defendants' promissory‑estoppel defenses.
- Whether the defendants' affirmative defenses of promissory estoppel and alleged oral modifications are viable under the statute of frauds and the part‑performance doctrine.
Holdings
- Summary judgment was improper because triable issues of fact exist as to whether the plaintiff made clear, unambiguous promises that the defendants relied upon and whether there is part performance that is unequivocally referable to alleged oral modifications.
Key quotations
“"A motion for summary judgment should not be granted where the facts are in dispute, where conflicting inferences may be drawn from the evidence, or where there are issues of credibility" (Walker v. Ryder Truck Rental & Leasing, 206 AD3d 1036, 1037‑1038).”
“"[T]he statute of frauds bars oral modifications to a contract which expressly provides that modifications must be in writing" (B. Reitman Blacktop, Inc. v. Missirlian, 52 AD3d 752, 753).”
Factual background
In 2017 the plaintiff, as landlord, executed a five‑year written lease with NY PDK Trading, Inc., as tenant for a Brooklyn commercial unit. The tenant's principal, Cai Ping Wang, signed a personal guaranty. The lease required rent on the first of each month and imposed a 10% late fee for payments more than five days late. The lease prohibited oral modifications and allowed early termination upon six months' written notice. The tenant's gift shop closed for two months in March 2020 due to COVID‑19. The parties later agreed to reduced rent, which the plaintiff accepted, and the tenant paid rent in two installments for roughly three and a half years. The plaintiff later sued for breach of contract, seeking unpaid rent and additional rent, while the defendants asserted affirmative defenses based on alleged oral modifications and promissory estoppel.
Procedural history
The Supreme Court, Kings County entered an order granting the plaintiff's summary‑judgment motion on the breach of contract claim and dismissing the defendants' fourth, fifth, and sixth affirmative defenses. The court thereafter entered a judgment for the plaintiff in the amount of $105,365.55. The defendants appealed both the order and the judgment to the Appellate Division, Second Department.
Remand instructions
The order granting summary judgment is denied and the order is modified accordingly; the case is remanded for further proceedings consistent with this opinion.