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712807/2016
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SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF QUEENS

KCM REALTY COMPANY, L.P., Index No. 712807/2016

Plaintiff, Justice Leonard Livote

IAS Part 33
v. COMMERCIAL DIVISION PART
A
NEW RAM REALTY, LLC,
NOTICE OF ENTRY
Defendant.

PLEASE TAKE NOTICE that the within is a true copy of an Order and Judgment, dated

May 3, 2019, of the Supreme Court, Queens County, that was entered in the above-entitled action

and filed in the Office of the Clerk of the Supreme Court, Queens County, on May 10, 2019.

Dated: May 10, 2019

New York, New York HOLLAND & KNIGHT LLP

Mitchell J. Geflér

31 West 52nd Street

New York, New York 10019

(212) 513-3200

Attorneys for Plaintiff

KCM Realty Company, L.P.

TO: VIA NYSCEF

CLIFF ORD GREENE & ASSOCIATES

700 White Plains Post Road, Suite 309

Scarsdale, New York 10583

(914) 738-5992
Attn: Clifford H. Greene, Esq.
Attorneys for Defendant New Ram Realty, LLC

#67669949_v1

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Short Form Order and Judgment

NEW YORK SUPREME COURT- QUEENS COUNTY

Present: HONORABLE LEONARD LIVOTE COMMERCIAL DIVISION

Acting Supreme Court Justice PART A

KCM Realty Company, LP, x Index

Plaintiff, Number_7J2807 2016

- against - Motion

Date January 15. 2019

New Ram Realty, LLC,

Defendant, Motion Seq. No. 5

____ x

The following papers EF numbered below read on this motion by plaintiff KCM Realty

Company for summary judgment on its first and third causes of action.

Papers

Numbei·ed

Notice of Motion - Affidavits - Exhibits ......................... .... 107- 112

Affidavits - Exhibits .......................................................... I19-124

Answering

Reply Affidavits ................................................................................... 126-127

Memoranda of Law....................................................... .......... 113, 118, 128

Upon the foregoing papers it is ordered that the motion which is for summary
judgment on the first and third causes of action is granted and judgment is granted

accordingly, as more fully set forth below.

I. The Facts

55th
Plaintiff KCM Realty Company (KCM) owns property located at 59-40

Road, Maspeth, New York which it rented by lease dated March 5, 2004 to defendant

New Ram Realty, LLC (New Ram). Articlé 5 of the lease provides that "Tenant shall use

the Premises for (i) the erection [and] operation of a hotel which shall not exceed five (5)
stories in height, (ii) retail stores, and (iii) for the parking of vehicles related to the
*** use."
business of the hotel and such stores and for no other Section 35.8 of the Lease

states: "Tenant shall not use the Premises for any use other than to accommodate

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hotel."
transient hotel guests and for retail stores located on the ground floor of the
"
Section 12. l(b) of the lease provides that Tenant and its successors and assigns shall not

directly or indirectly seek to circumvent the requirements of this Article [Article 12]
Owner."
which require Tenant and is successors and assigns to obtain the consent of

Section 14.7 of the lease provides in relevant part: "Tenant shall also pay to Owner all

costs and expenses, including reasonable attorney's fees, paid or incurred by Owner in
***."
enforcing any of the covenants and provisions of this lease

In late August, 2016, New Ram contacted KCM about the former's plan to

sublease the hotel to a third party who would convert the building into a shelter for

homeless adults pursuant to an agreement with the New York City Department of

Homeless Services (DHS). New Ram requested KCM's consent to a Room Rental

Agreement that it proposed to enter into with Promesa Housing Fund Development

Corporation, whereby New Ram would rent l 10 of the I15 rooms in the hotel to

Promesa for the use of homeless persons at an annual rental of $2,400,000 for five years.

KCM responded by a letter dated August 25, 2016 which stated that the

conversion of the hotel into a shelter for homeless adults violated the use restrictions of

the lease and that KCM would not consent to the conversion. However, a few weeks later

DHS booked some rooms at the subject property directly though the Holiday Inn's

reservation system.

provider,"
DHS, a "nonprofit is at the premises to provide services to

homeless adults. These services include the provision of three meals a day, security
provided by three to six guards, and social services provided by about nineteen people

used by Acacia Network, Inc., an affiliate of Promesa. DHS or Acacia rented

approximately 53 rooms with 106 beds to house homeless individuals for the period May,
20I7 to November, 20l8. Acacia requested the removal of the beds in four rooms which

it uses for administrative offices. The rooms rented by DHS or Acacia amount to almost

one half of the hotel's I15 rooms. From October 2016 through March 2018, a total of

254 homeless people resided at the hotel, and on average each individual resided there for

195 nights. 100 of the homeless individuals resided at the hotel from 216 days to 537

days. 43 of the homeless individuals resided at the hotel for 365 days or more from

October, 2016 through March, 2018. Pursuant to an amendment dated December 14, 2017

to the agreement between DHS and Acacia, the latter agreed to provide 53 rooms at the

hotel to house homeless persons for the period October 10, 2016 to June, 2020.

II. Brief Procedural History

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Plaintiff KCM began the instant action by the filing of a summons and a

complaint on October 26, 2016. By an amended complaint dated November 28, 2016, the
plaintiff asserted three causes of action against the defendant The first is for a judgment
declaring:"that New Ram's renting of 30 rooms at the Premises to DHS or another agency
of New York City to house homeless persons constitutes a material departure from the
use provisions (Article 5 and Section 35.8) of the Lease and a breach of such use
***."
provisions The second cause of action is for a judgment "enjoining New Ram from
provisions***."
violating the Lease's use The third cause of action is for a judgment

"awarding KCM costs, expenses, and reasonable attorney's fees incurred in enforcing the
***."
use provisions of the Lease

III. Discussion

"[T]he proponent of a summary judgment motion must make a prima facie

showing of entitlement to judgment as a matter of law, tendering sufficient evidence to

***."
demonstrate the absence of any material issues of fact ( Alvarez v. Prospect

Hospital, 68 NY2d 320, 324 [1986].) Plaintiff KCM successfully carried this burden.

Turning to the first cause of action, Article 5 of the lease provides in

relevant part that "Tenant shall use the Premises for (i) the erection [and] operation of a
***"
hotel and Section 35.8 of the Lease states in relevant part: "Tenant shall not use the
***."
Premises for use other than to accommodate transient hotel guests The lease
any
guests"
between the parties does not define "transient hotel in any special way, and thus
meaning."
the phrase in the contract must be given its "plain and ordinary (See, Blake v.
[2"d "
Solomon, 169 AD3d 791 Dept. 2019]). The phrase was intended to be interpreted
meaning"
in its accepted and dictionary ( See, Engel v. Calgon Corp., 114 AD2d 108,
3d
1 I0, [ Dept 1986]), aff'd, 69 NY2d 753 [1987] ; Amato v. New York City Dep't of Parks
I"
& Recreation, 110 AD3d 439, 440[ Dept 2013] ["based on the ordinary dictionary
of the "The words and phrases used in an agreement must be given
meaning word"].)
their plain so as to define the rights of the parties ***and in this regard, it is
meaning
common practice for the courts of this State to refer to the to determine the
dictionary
"
plain and of words to a contract (Mazzola v. Cty. of Suffolk, 143
ordinary meaning
2nd
AD2d 734, 735[ Dept 1988]; Mann v. 125 E. 50th St. Corp., 124 Misc2d 115,
117[Civ. Ct. 1984]), aff'd, on the opinion below, 126 Misc 2d 1016, [App. Term 1985]
[court resorted to to determine whether an occupant of a hotel for a long
dictionary
period could be considered a "transient"]).

"transient"
Black's Law (10th ed. 2014) defines as "[a] person or
Dictionary
fleeting."
whose presence is temporary or It defines temporary as: "[1]asting for a
thing
transitory."
time only; or for a limited (usu. short) time; The Merriam
existing continuing

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"transient"
Webster on line Dictionary defines the adjective as: "passing through or by a
sojourn." "transient" "
place with only a brief stay or and the noun as a guest or boarder
briefly."
who stays only The homeless individuals placed into the subject property for

months on end by defendant New Ram do not meet these definitions.

The closest case on point, Town of Brookhaven v. Marian Chun

[2"d
Enterprises, Inc., (133 AD2d 754 Dept. 1987], rev'd on other grounds, 7 l NY2d 953

[1988]), supports plaintiff KCM's claims. In that case, the Town of Brookhaven brought

an action to permanently enjoin the defendant from operating Lakeview Lodge Motel as a

lodging, boarding and/or rooming house without having first obtained a proper certificate

of occupancy. In enjoining the the owner of the facility from operating the facility
without a proper certificate of occupancy, the Appellate Division, Second Department,,
stated: "Under the amended ordinance, a motel is defined, inter alia, as a place which
travelers"
provides lodging for "transient (see, Code of Town of Brookhaven § 85-l[B] ).

The facts in this case indicate that persons referred to Lakeview Lodge Motel by the

Suffolk County Department of Social Services may reside there for periods of three to six

months or at times longer, register their children in the local schools, and consider
"transient"
Lakeview Lodge Motel as their home. Such persons cannot be considered

travelers ***A certificate of occupancy appropriate to the use of Lakeview Lodge Motel

as housing for such persons is necessary (see, Code of the Town of Brookhaven §
85-14)" 754-755)."
( Town of Brookhaven v. Marian Chun Enterprises, Inc., supra,

The Brookhaven case relied on Mann v. 125 E. 50th St. Corp. (supra) in
'"Transient" "resident"
which the court stated: has been considered the opposite of (see

The Leontios Teryazos, 45 F Supp 618), and with respect to a hotel, is one who has a

home elsewhere and is staying at the hotel for a short period in conñêction with a trip
home"
away from (Mann at 1 17).

"
A landlord has a legal right to control the uses to which his building may
enforced."
be put by appropriate lease provisions, which to be effective must be
l''
(Qwakazi, Ltd., v. 107 W. 86th St. Owners Corp., 123 AD2d 253, 254[ Dept 1986];
[155
Beauty Plus Stores, II, Inc. v. 404 6th Ave. Realty Corp., 70 AD3d 604 Dept 2010]).

"Where the use and occupation of the premises are restricted by express provision to the

purpose therein specified, any material departure from the specified use constitutes a
lease"
violation of the express terms of the (74 N.Y. Jur. 2d Landlord and Tenant § 271;

see, Burber v. Jilamb Prime Meat, Inc., 1 15 Misc2d 976 [Civ. Ct. 1982]).

"use"
Where it is clear that a tenant has violated the clause in his lease.
appropriate"
summary judgment declaring the landlord's rights is (see Qwakazi, Ltd, v.

107 W. 86th St. Owners Corp., supra; Dennis & Jimmy's Food Corp. v. Milton Co., 99

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[2nd
AD2d 477 Dept 1984], aff'd, 62 NY2d 613[1984].) Under all of the facts and

circumstances mix *** ascertain

of this case, including "an analysis of percentage to
"
whether a departure is material or deminimus (see Burber v. Jilamb Prime Meat, Inc.,

supra, 978), plaintiff KCM has demonstrated its prima facie right to summary judgment
,
on its first cause of action. The court again notes that from October 2016 through March

2018, a total of 254 homeless people resided at the hotel, and on average each individual

resided there for 195 nights.

The burden on this branch of the motion shifted to defendant New Ram,

requiring it to produce proof that there is an issue of fact which must be tried (see Alvarez

v. Prospect Hospital, supra) or of demonstrating the existence of a defense warranting

the denial of summary judgment. (See Plantamura v. Penske Truck Leasing, inc., 246
[1"
AD2d 347 Dept 1998]). Defendant New Ram failed to carry this burden. First,

contrary to the assertions made in the defendant's memorandum of law, no issue of fact

arises merely because the lease does not expressly prohibit defendant New Ram "from
time"
licensing rooms to Acacia or DHS to house homeless persons for any period of and

merely because the lease does not expressly prohibit the hotel from being used as a

homeless shelter. Although the lease requires some interpretation, the lease

unambiguously restricts the use of the premises to the operation of a hotel, which a
Owners'
homeless shelter is not. Second, the defendant relies on Chelsea Bus. & Prop.
[1"
Ass'n, LLC v. City of New York (107 AD3d 414, Dept 2013]), an Article 78

proceeding brought to annul a determination by the Board of Standards and Appeals of

the City of New York (BSA) concerning the approvals issued for the operation of a

homeless shelter. In upholding the administrative determination, the Appellate Division,

First Department stated: "The BSA rationally determined that the defmition of "transient
hotel"
in section 12-10 of the Zoning Resolution is clear and unambiguous and that the

proposed use of the building meets the three criteria of the definition, i.e., it (1) provides

sleeping accommodations used primarily for transient occupancy; (2) has a common

entrance to serve the sleeping accommodations; and (3) provides 24-hour desk service,
laundering."
housekeeping, telephone and linen Defendant New Ram's reliance on

Chelsea is misplaced. At best for the defendant, Chelsea, decided by the Appellate

Division, First Department, conflicts with Town of Brookhaven, decided by the Appellate

Division, Second Department, and, of course, this court is obligated to follow the

decisions of the latter. Moreover, the Chelsea court followed the usual practice in Article

78 proceedings in deferring to interpretations made by administrative agencies, and the

Appellate Division, First Department made little or no analysis of its own concerning the
hotel" occupancy."
terms "transient and "transient Finally, the case at bar is

distinguishable from Chelsea because the meaning and intent of the use clause in the

lease differs from the meaning and intent of the Zoning Resolution as interpreted by

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BSA. The use clause in the lease was clearly intended to restrict the use of the premises to .

the operation of a hotel as that term is traditionally and commonly understood.

The interest of a landlord in tightly controlling the use of his private property differs from

the interest of an administrative agency in expanding the use of property for public

purposes.

Accordingly, plaintiff KCR is entitled to summary judgment on its first -

cause of action.

Turning to the third cause of action, generally, a plaintiff may be awarded

attorney's fees as part of a damages award where such relief is specifically authorized by

statute, rule or contract (Lemming v. Barnwell Nursing Home & Health Facilities, Inc., 15

NY3d 375 [2010]; Hooper Assoc. v. AGS Computers, 74 NY2d 487 [1989]). In the case

at bar, a judgment awarding KCM costs, expenses, and reasonable attorney's fees

incurred in enforcing the use provisions of the Lease is authorized by Section I4.7 of the

lease. Accordingly, it is,

Ordered, adjudged and decreed that defendant New Ram Realty, LLC's
55th
renting of rooms at property located at 59-40 Road, Maspeth, New York to DHS or

another agency of New York City to house homeless persons constitutes a material

departure from the use provisions (Article 5 and Section 35.8) of the lease and a breach of

such use provisions; and it is further,

Ordered, adjudged and decreed that plaintiffKCM Realty Company is

entitled to exercise its remedies under the lease; and it is further,

Ordered, that the motion for su,nincu-y judgment on the third cause of action

is granted on the issue of liability.

This constitutes the Order of the Court.

Dated:
NV 3 a
A. .S.C.

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