DECISION, VERDICT & ORDER AFTER NON-JURY TRIAL Petitioner commenced the instant nonpayment proceeding alleging respondent defaulted in the payment of rent between August 2022 and December 2023. Respondent contends that it paid the appropriate amount according to the terms of the parties’ agreement and is therefore not in default. Upon the pre-trial conference held on September 19, 2024, at which time the non-jury trial in this matter was assigned to the undersigned, and upon the parties’ stipulation dated September 24, 2024, the trial of this matter was taken on the submission of stipulated evidence and trial memoranda. As set forth in the stipulation, the sole issue requiring the Court’s determination is the interpretation of a specific paragraph in the Temporary Rent Adjustment Agreement (TRAA). The purpose of the TRAA was to help accommodate all of petitioners’ tenants’ obligation to pay minimum annual guaranteed base rent (“MAG”) under their existing leases on a temporary basis (see NYSCEF Doc No 55 at 1 [the TRAA]). Petitioners’ TRAA with respondent was entered into on December 13, 2021 and provides in relevant part as follows at paragraph 3: (b) In lieu of the scheduled Lease Year Base Rent and Percentage Rent, if any, payable under the Existing Lease, and subject to paragraph 3(e) below, Tenant shall, with respect to all months occurring during the Alternative Rent Period [ARP], pay an alternative base rent (“Alternative Period Base Rent”) equal to the greater of: (x) the product of (i) ten percent (10 percent) (the “Alternative Period Percentage Rent Rate”) which Alternative Period Percentage Rent Rate will be subject to further adjustment, in Landlord’s sole discretion at the end of each calendar year and (ii) the Gross Sales (as defined on Schedule B hereof) for each month during the Alternative Rent Period (such product being, the “Alternative Period Percentage Rent”) and (y) a minimum annual guaranteed base rent (“MAG Rent”), as further set forth on Schedule A hereof, equal to *** (ii) for the period January 1, 2021 through the end of the Alternative Rent Period, twenty (20 percent) of the then current scheduled Lease Year Monthly Base Rent which, but for this Amendment, would have been in effect during such period under the Existing Lease. (NYSCEF Doc No 55 at 2 [emphasis removed]). In other words, paragraph 3 (b) sets forth the amount of rent the tenant is obligated to pay during the Alternative Rent Period,1 which is either 10 percent of gross sales or 20 percent of MAG rent. Gross sales were being tracked by a point of sale (POS) system that the tenant had to install and operate to receive this Alternative Period Percentage Rent set forth in 3 (b) per section 3 (e). The parties’ point of contention is in the last paragraph of 3 (b), which states: Notwithstanding anything to the contrary contained in paragraph 3(b) above, so long as Tenant has installed an operating point of sale system on or before the Outside POS Operational Date (as defined below in Paragraph 3(e)), then for the period from the first day of the Alternative Rent Period through the last day of the month in which such point of sale system is installed and operating, Tenant’s Rent obligation shall be solely as set forth in Paragraph 3(b)(y) without regard to Paragraph 3(b)(x). (id. [the disputed provision or paragraph]). The “Outside POS Operational Date” as defined in paragraph 3 (e) is 30 days after the agreement was executed, which here is January 12, 2022. The parties do not dispute that respondent had its POS system installed prior to that date. Respondent contends that the clause in the disputed paragraph should be read so that the words “so long as” and “installed and operating” are continuing and temporal words. In other words, for “so long as” tenant has installed an operating POS system, then from the first day of the ARP through the last day of the month in which the POS system is installed and operating, tenant’s rent is 20 percent MAG rent, without regard to rent based on gross sales. Respondent further relies on the “notwithstanding anything to the contrary” clause to mean that the language that follows is the language that controls in the event it conflicts with 3 (b) at all. Petitioner reads “so long as” as a condition: “if” tenant has installed an operating POS system on or before January 12, 2022, then from the first day of the ARP through the last day of the month in which the POS system is installed, then tenant’s rent obligation is 20 percent MAG without regard to rent based on gross sales. “A familiar and eminently sensible proposition of law is that, when parties set down their agreement in a clear, complete document, their writing should as a rule be enforced according to its terms” (W.W.W. Assoc. v. Giancontieri, 77 NY2d 157, 162 [1990]). “Construction of an unambiguous contract is a matter of law, and the intention of the parties may be gathered from the four corners of the instrument…” (Beal Sav. Bank v. Sommer, 8 NY3d 318, 324 [2007]; see W.W.W. Assoc. v. Giancontieri, 77 NY2d at 162 ["Whether or not a writing is ambiguous is a question of law to be resolved by the courts"]). “[C]ourts should read a contract ‘as a harmonious and integrated whole” to determine and give effect to its purpose and intent” (Nomura Home Equity Loan, Inc., Series 2006-FM2 v. Nomura Credit & Capital, Inc., 30 NY3d 572, 581 [2017], quoting Matter of Westmoreland Coal Co. v. Entech, Inc., 100 NY2d 352, 358 [2003]). “[A] contract must be construed in a manner which gives effect to each and every part, so as not to render any provision ‘meaningless or without force or effect’” (Nomura Home Equity Loan, Inc., 30 NY3d at 581, quoting Ronnen v. Max Elec. Motor Corp., 88 NY2d 582, 589 [1996]; see Beal Sav. Bank, 8 NY3d at 324 ["A reading of the contract should not render any portion meaningless"]). The Court finds that the disputed paragraph in the TRAA, when read as a whole, clearly implies that it was applicable to only those situations where a tenant had not yet installed a POS system as of the date of their respective agreement but did install it by the outside POS operational date. Respondent’s interpretation would render paragraph 3(b)(x) (the first of two options for determining the Alternative Period Base Rent based on gross sales) as meaningless — a tenant’s rent would just be 20 percent MAG, always. There would be no need for an alternative value of rent based on the amount of gross sales. Clearly, the purpose of the TRAA was to give tenants some relief in the payment of rent, and the modification of rent was either a standard 20 percent reduction or a percentage of a tenant’s gross sales. The only way to track gross sales is to have the POS system installed as required by paragraph 3 (e). Respondent’s interpretation also ignores paragraph 3 (e), which was specifically referenced in the disputed paragraph and reads as follows: In the event Tenant does not currently have a [POS System] capable of tracking and retaining Gross Sales installed at the Premises. Tenant must install, and have operational, such POS System on or before [30] days after the date of this Agreement [here, January 12, 2022]…and provide Landlord with confirmation in writing of the date that such POS System is operational…. In the event Tenant fails to install and have operational a POS system as required herein on or before [January 12, 2022], then the terms of this Paragraph 3 shall be null and void and Tenant shall continue to be obligated for all Rent due and owing under the Existing Lease from and after first day of the [ARP]. There was a clear incentive for tenants to install a POS System — to take advantage of lowered Alternative Period Base Rent. The disputed paragraph’s words “through the last day of the month in which such [POS System] is installed and operating” provides how rent is determined in the very month that the POS System is installed and cannot be feasibly construed as applying to any and every month thereafter. To be sure, while a POS system could be continuously operating, as respondent points out, it cannot be continuously “installed.” Here, respondent installed the POS system before the operational date and even before the ARP began. Thus, the disputed paragraph has no application to respondent. Finally, the Court notes that the respondent’s evidence of how each side interpreted the agreement has not been considered. “Extrinsic evidence of the parties’ intent may be considered only if the agreement is ambiguous, which is an issue of law for the courts to decide” (Greenfield v. Philles Records, Inc., 98 NY2d 562. 569 [2002]). Here, the TRAA is not ambiguous and may be read consistently and in a manner that gives full effect and meaning to its stated purpose and in relation to other provisions. As respondent failed to pay the greater of 3(b)(x) over 3(b)(y) as required by the TRAA during the months of August 2022 through December 2023, the Court finds that respondent has defaulted in the payment of rent. The Court’s VERDICT is in favor of petitioner and petitioner is awarded a judgment of possession of the demised premises. Accordingly, it is hereby ORDERED that the Clerk is directed to enter a final judgment granting the non-payment petition and awarding possession of the premises — i.e., Space #LC-31 in the Lower Concourse Food Court In the building known as Grand Central Terminal as shown as on the floor plan annexed to the Petition as Exhibit A located in 89 East 42nd Street New York, NY 10017 in Manhattan — to petitioners METROPOLITAN TRANSPORTATION AUTHORITY and METRO-NORTH COMMUTER RAILROAD COMPANY, against respondent DONATELLA GCT, LLC d/b/a PROVA PIZZA BAR. along with a money judgment in petitioners’ favor and against respondent DONATELLA GCT, LLC d/b/a PROVA PIZZA BAR in the amount of $211,392.59, with costs and disbursements in the amount of $50.00; and it is further ORDERED that a warrant of eviction shall be issued forthwith, without stay. The earliest execution date of the warrant is January 31, 2025. This constitutes the decision, verdict, and order of the court. Dated: January 14, 2025
