A commercial tenant commenced an action to “reform the rent provision of a 1984 ground lease” with the city of New York (City). The city moved to dismiss the complaint pursuant to CPLR 3211(a)(7) and 3211(a)(1) and to dismiss a reformation claim based on mutual mistake and a claim for a declaratory judgment that the subject rent provision is “unconscionable and unenforceable,” based on inter alia, the applicable Statute of Limitations (SOL). The tenant cross-moved for leave to amend its complaint.

The complaint sought reformation of the lease and/or a declaration that it was unenforceable because it contained a “manifestly unconscionable rent increase provision.” The lease provided that the annual basic rent for renewal terms should be determined by a formula which used fair market value of the land (FMV) and the average Treasury bond rate.