ENFORCING AN OPTION TO PURCHASE PROPERTY CONTAINED IN A LEASE

Long Beach Medical Center v. 249 East Park Corp., 543-07
Decided: May 17, 2007

Justice Leonard B. Austin, NASSAU COUNTY, Supreme Court

Counsel for Plaintiff: June Diamant, Esq.
Counsel for Defendant: Ackerman, Levine, Cullen, Brickman & Limmer, LLP

READ FULL DECISION HERE

Plaintiff Long Beach Medical Center ("LBMC") moves, pursuant to CPLR 6301, for a preliminary injunction enjoining Defendant 249 East Park Corp. ("East Park" or "Landlord") from taking any action to terminate a certain Lease Agreement dated July 29, 1996, or Plaintiff's tenancy in the premises known as 249 East Park Avenue, Long Beach, New York.

East Park moves to dismiss the complaint pursuant to CPLR 3212.

LBMC cross-moves, pursuant to CPLR 3212, for summary judgment granting specific performance of the Option to Purchase set forth in the Lease Agreement.

In this action, LBMC seeks specific performance of its Option to Purchase a certain four-story office building and appurtenant parking facilities owned by Defendant located at 249 East Park Avenue, Long Beach, New York. It also seeks a declaration that the Lease Agreement regarding said property, and the Purchase Option therein (¶27 [A] and [B]) are in full force and effect...

As confirmed in the Amended and Restated Memorandum of Lease and Purchase Option, dated July 25, 1997, the initial term of the Lease commenced on May 1, 1997 and expired on May 31, 2007. LBMC had the option to extend the lease term for two consecutive periods of five years commencing after May 31, 2007. In addition, pursuant to ¶27(A) of the Lease, LBMC had the option to purchase the premises:

Beginning in the sixth year of the Lease term and upon ninety (90) days notice, Tenant shall have the right (the "Option") to purchase the Leased Premises including Landlord's interest in the Parking Area at the following purchase price figures:

Years 6 through 10 $1,650,000.00

Years 11 through 15 $1,815,000.00

Years 16 through 20 $1,996,500.00

With respect to exercise of this Purchase Option, ¶27(B) provides as follows:

Tenant shall have the right to exercise the Option at any time after the expiration of the fifth Lease Year and prior to the expiration or termination of this Lease (including any renewal term thereof) by notice (the "Exercise Notice") to Landlord, which shall be given at least ninety (90) days prior [to] the closing date, and shall be accompanied by (i) Tenant's check payable to an attorney trust account in an amount equal to five percent (5 percent) of the Purchase Price, and (ii) four executed counterparts of the Contract of Sale in the form attached hereto as Exhibit D, and incorporated herein by reference. Within ten (10) business days after Owner's receipt of Tenant's notice exercising the Option, Owner shall, with respect to all four original counterparts of the Contract of Sale, sign each counterpart and have Seller's Attorney sign each counterpart, as escrowee, and return two full [sic] executed counterparts of the Contract of Sale to the Tenant. Prior to executing the counterparts of the Contract of Sale, Tenant may complete those portions of the Contract of Sale which are dependent upon knowing the date on which the Option is exercised. Owner and Tenant shall execute, deliver and record such other documents as shall be necessary to protect [sic] effectuate the purposes hereof, including, without limitation, a memorandum of lease which gives notice of Tenant's Option and such transfer tax returns as may be required in connection with the recording of such memorandum.

In addition to the Purchase Option, ¶27(C) afforded LBMC the right of first refusal, in the event the Landlord received a bona fide offer...

The Lease herein is fair and equitable in all its terms and based upon good consideration. LBMC has substantially complied with all of its obligations. East Park signed the lease and is bound by its terms absent any showing of fraud or other wrongful act by the Plaintiff. DaSilva v. Musso, 53 N.Y. 2d 543, 550 (1981)...

Accordingly, it is,

ORDERED, that Defendant's motion to dismiss the complaint is denied; and it is further,

ORDERED, that Plaintiff's motion for a preliminary injunction is denied as moot; and it is further,

ORDERED, that Plaintiff's cross-motion for summary judgment is granted. Counsel for the parties are directed to appear for a conference on June 22, 2007 at 9:30 a.m. for the purpose of scheduling the closing of the premises in accordance herewith.

This constitutes the decision and Order of the Court.

APOLOGY

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