FILED: NEW YORK COUNTY CLERK 01/17/ :09 PM INDEX NO /2016 NYSCEF DOC. NO. 44 RECEIVED NYSCEF: 01/17/2018

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2 .. { ILEb NEW YORK COUNTY CLERK mdu 10/21/2016 m. 01 ; 54 ma PM ' "' NYSCEF DOC. No. 4 RECEIVED NYSCEF: 10/ SUPREME (.;0{JR'I' COURT OF THE STATE OF NLN' NEW YORK COUNTY OF NEW YORK X /' 120 EAST 56TH STREET, L LC. Index No / 16 Plaintiffs, -against- ANSWER AND ASANDA INC. and GENE FRISCO, COUNTERCLAIMS X Defendant. Defendants ASANDA INC. ("ASANSA") and GENE FRISCO ("FRISCO") (collectively, the "Defendants"), by their undersigned attorneys, the LAW OFFICRS OF f' WALTERS & WALTERS, as and for an Answer to the Complaint by Plaintiff 120 EAST 56TH STREET, LLC. (the "Landlord" or "Plaintiff") allege as follows: {)I' 1. Deny having knowledge or information sufficient 10 form a belief with regard to the allegations in Paragraphs Admit the allegations in paragraph 2 and Admit the allegations in paragraph 3 only insofar that they allege that FRISCO is a New York resident and neither admit nor deny the balance of the allegations in ci' paragraph<11)h 3 and instead respectfully refer the Court to the relevant documents with respect to same. 4. Deny the allegations in paragraph 4 except admit that FRISCO is a New York resident. 5. Admit the allegations 111paragraph 6 and 7 insofar that they allege that FRISCO an{1 ASANDA cxecll ted certain gllal <lntce» an{1 n('i thol' nol' adn lit d<'ny thc b<llancc of 'll'ic 1;:1' 1,'

3 Plaintiff FILED: NEW YORK COUNTY CLERK 01/17/ :09 PM INDEX NO /2016 tele>' allegations in paragraphs 6 and 7 and instead respectfully refer the Court to the relevant documents with respect to same. 6. Deny the allegations in paragraph 8, 9, 10, 1 1, 14, 15, 17, and Neither admit nor deny the balance of the allegations in paragraph 13 and instead respectfully refer the Court to the relevant documents with respect to same. AS AND FOR A FIRST AFFIRMATIVE DEFENSE 8. Defendants repeat and re-allege each of the allegations in Paragraphs 1 through 7 it' as if fully set forth hereinaller. 9. Plaintiff's claims are barred by the statute of limitations. ho AS h' ANDll/ FOR A l7 SECOND ' % Vill/ hl' AFFIRMATIVE l'$[liha I I T 4 l/dl' DEFENSE Krl 103' 10. Defendants repeat and re-allege each of the allegations in Paragraphs 1 through 7. lin(iff' 11. Plaintiff fails to state a claim on which relief can be granted. AS AND FOR A THIRD AFFIRMATIVE DEFENSE 12. Defendants repeat and re-allege each of the allegations in Paragraphs 1 through Plaintiff has unclean hands. AS AND FOR A FOURTH AFFIRMATIVE DEFENSE 14. Defendants repeat and re-allege each of the allegations in Paragraphs 1 through 7 as if fully set forth hereinalier. I'laln<t!I'I' 15. Any damages suffered by Plaintiff were the result of Plaintiff's own wrongful and/or and,'or culpable culp;lble conduct. 2 ut' ':f 12!i

4 AS AND FOR A FIFTH AFFIRMATIVE DEFENSE 16. Defendants repeat and re-allege each of the allegations in Paragraphs 1 through 7 AS AND FOR A SIXTH AFFIRMATIVE DEFENSE 17. Defendants repeat and re-allege each of the allegations in Paragraphs 1 through <4. Plaintiff has failed to perform a condition precedent. AS AND FOR A SEVENTH AFFIRMATIVE DEFENSE 19. Defendants repeat and re-allege each of the allegations in Paragraphs 1 through The Court lacks personal jurisdiction over the Defendants. AS AND FOR A EIGHTH AFFIRMATIVE DEFENSE 21. Defendants repeat and re-allege each of the allegations in Paragraphs 1 through Defendants are not liable to Plaintiff due to failure of consideration. AS AND FOR A NINTH AFFIl&lATIVE DEFENSE 23. Defendants repeat and re-allege each of the allegations in Paragraphs 1 through 7 if' Plai!1tlff' 24. Plaintiff failed to mitigate its damages. AS AND FOR A TENTH AFFIRMATIVE DEFENSE 25. Defendants repeat and re-allege each of the allegations in Paragraphs 1 through (). Plaintiff's I'l«iiitiff s causes of action actioii are arc barred due diic to thc the doctrine of')vai) waiver.cr. 3 ~t 12

5 AS AND FOR A ELEVENTH AFFIRMATIVE DEFENSE 27. Defendants repeat and re-allege each of the allegations in Paragraphs 1 through 7 as if fully set forth hereinafier. 28. Plaintiff's causes of action are barred due to the doctrine of offset. AS AND FOR A TWELFTH AFFIRMATIVE DEFENSE 29. Defendants repeat and re-allege each of the allegations in Paragraphs I through 7 30, Plaintiff failed to cornply with the terms of the lease agreement that is the subject of this action and is barred from maintaining this proceeding. AS AND FOR A THIRTEENTH AFFIRMATIVE DEFENSE 31. Defendants repeat and re-allege each of the allegations in Paragraphs 1 through 7 sci' as if fully set forth hereinafier. 32..)?. This proceeding is barred by the doctrine of unconscionability. AS AND FOR A FOURTEENTH AFFIRh1ATIVE DEFENSE 33. Defendants repeat and re-allege each of the allegations in Paragraphs 1 through This proceeding is barred by the doctrine of laches. AS AND FOR A FIFTEENTH AFFIRMATIVE DF FENSE 35. Defendants repeat and re-allege each of the allegations in Paragraphs 1 through 7 as if fully set forth hereinafier. 36. Plaintiff has breached the covenant of good faith and fair dealing and is thus barred bai red from f'ion) maintaining n)<iiniaining this action. <! "f. ',,'I )2

6 AS AND FOR A SIXTEENTI) AFFIRMATIVE DEFENSE 37..',7. Defendants repeat and re-allege each of the allegations in Paragraphs 1 through 7 as if I' fully set forth hereinafter. 38. Legal fees which Plaintiff seeks to recover in this proceeding and/or otherwise of' were incurred by Plaintiff as a result of its own willful and/or negligent acts/omissions, wl'tholli' including without limitation, its failure to perform its obligations under the Lease. ~ AS AND FOR A SEVENTEENTH. AFFIRMATIVE DEFENSE 39. Defendants repeat and re-allege each of the allegations in Paragraphs 1 through 7 as ~~ if fully set lul forthul ~Ibis.llulllvl hereinaf1er Plaintiff is barred from maintaining this proceeding due to the doctrine of fraud in the inducement. AS AND FOR A EIGHTEENTH AFFIRMATIVE DEFENSE 41. Defendants repeat and re-allege each of the allegations in Paragraphs 1 through 7 n1aintainin' of' 42. Plaintiff is barred from maintaining this proceeding due to the doctrine of detrimental reliance. AS AND FOR A NINETEENTH AFFIRMATIVE DEFENSE 43. Defendants repeat and re allege each of the allegations in Paragraphs 1 through 7. Pfaintif'f' 44. Plaintiff is barred from maintaining this proceeding due to the doctrine of accord and 'uld satisfaction.ion. sal lsf act vf 12

7 AS AND FOR A TWENTIETI] AFFIRMATIVE DEFENSE 45. Defendants repeat and re-allege each of the allegations in Paragraphs 1 through 7 il' 46. Plaintif'f' Plaintiff is barred from ptocccding> maintaining this proceeding due to the doctrine of frustration of purpose. AS AND FOR A TWENTY FIRST AFFIRMATIVE DEFENSE 47. Defendants repeat and re-allege each of the allegations in Paragraphs 1 through 7 il' 48. Plaintiff is barred from maintaining this proceeding because there is a prior pending action in which Plaintiff has asserted identical claims. 49. Defendants repeat and re-allege each of the allegations in Paragraphs 1 through 7 il' 50. Plaintiff is barred from ol' ot' maintaining this proceeding because of the doctrine of failure of consideration. AS AND FOR A FIRST COUNTERCLAIM (BREACH OF THE IMPLIED DUTY OF GOOD FAITH AND FAIR DEALING) (SEEKING MONEY DAMAGES) 51. Plaintiffs repeat and re-allege each of the allegations in Paragraphs 1 through 50 owncl' 52. At all times relevant herein 1 andlord was and is the owner of real property and improvements thereon commonly known as 120 East 56th Street, New York, New York "Building' (the "Building"). 6(s vf <!' 12 I 2

8 53. At all times relevant herein, ASANDA PARK AVENUE, INC. ("ASANDA! PARK" PARK") was and is in the business of ~ operating spa facilities for providing spa services and retail sales of products related thereto. 01' 54. On or about January 24, 2014, ASANDA PARK and Landlord entered into a. ' "Lease" f certain lease agreement (the "Lease") whereby Landlord would lease to ASANDA PARK the second floor' and 11portion of the basement of the Building for ten ()0) years with an option to renew by ASANDA PARK for an additional five (5) years. A copy of the Lease is annexed hereto as Exhibit L 55. Contemporaneously with the Lease, FRISCO and ASANDA entered into agreements with Plaintiff whereby FRISCO and ASANDA would guarantee the performance certain obligations of ASANDA PARK as required under the Lease (the "Personal Guarantees") In the Lease, the Landlord authorized ASANDA PARK to erect certain signs. awnings, and flags on the exterior of the Building as set forth in Exhibit 8 thereof(the "Signage"). 57. During the negotiation of the terms of the Lease, Landlord was expressly advised that the installation of the Signage was of critical import to ASANDA PARK's business cn((.i' and that ASANDA PARK would not enter into the Lease (and, concomitantly, that enter' FRISCO and ASANDA would not enter into the Personal Guarantees) without the right to install same. I I 1-:! 58. However, upon information and belief, prior to executing the Lease, Landlord had entered into an agreement (or knew that it would enter into an agreement) with the owner andror and'or lessee (the ((he "Adjacent 'Adfacent Property Owner" Olvner") ) of the (he real 11 property commonly conlmonly known l(nown as 7 vf '.! 12

9 425 Park Avenue, New York, New York, which is adjacent to the Building (the Property" "Adjacent Property"), to allow the owner of said Adjacent Property to erect certain "Scaffolding" scaffolding and other structures (the "Scaffolding") on and around the Building for the purposes of facilitating demolition and/or construction of a new building on the Adjacent Property. 59. Upon information and belief, Landlord and/or its principals received monetary or I other compensation from the Adjacent Property Owner in exchange for its consent to the erection of the Scaffolding. 60. Upon information and belief, Landlord knew that the presence Scaffolding would make it impossible for ASANDA PARK to erect the Signage. l./ 61. Upon information and belief, at the time Defendant entered into the Lease, it knew that the Scaffolding would be erected on the Premises leased to ASANDA PARK. 62. On or about March 12, 2014, the ASANDA took occupancy of the Premises. 01' 63. Once ASANDA PARK was prepared to install the Signage in or about September approximately six months after the commencement of the term of the Lease (the Term" "Lease Term"), Landlord advised ASANDA PARK that it should not install the Signage 1'1'!clcaftcl' because the Scaffolding would be erected shortly thereafter and that the erection of the Scaffolding would require the removal of the Signage and/or block the Signage. I I 64. Approximately one year after the commencement of the term 01 the Lease Term, in March with Defendant's permission. the Adjacent Property Owner erected the tev!' "Terrace" evrace" ot' Scaffolding on the back terrace (the "Terrace") of the second floor 01 the Building, rendering the Terrace unusable for spa-related services by ASANDA PARK. -''65. 65, The of' Terrace 1 ev!»ce was v as part pa! t ol the Premises Pren1ises leased to ASANDA PARK. PARI<. 8 Qr ]2! i

10 'J/ I, '' / 66. Approximately one year after the commencement of the term of the Lease Term, in March 2015, with Landlord's permission, the Adjacent Property Owner erected the Scaffolding on the front of the Building, blocking the windows to the Premises and preventing the Signage from being installed. i / g'',1. / 67. Landlord has now informed ASANDA PARK that the Scaffolding will remain in place until sometime in l~i act' 68. Every contract carries with it an implied duty for all parties thereto to act in good faith and engage in fair dealing with respect to same. 69. At the time it entered into the Lease, Landlord knew that the installation of the Signage was of critical import to ASANDA PARK and that, without an agreement to allow the installation of the Signage, ASANDA PARK would not have entered into the Lease. 70. At the time it entered into the Lease, Landlord knew that the Signage would have 0!' to be blocked or removed for most of the Lease Term due to the erection of the Scaffolding Defendant did not disclose to FRISCO, ASANDA, or ASANDA PARK that it was aware <livill'c that the Scaffolding <ScBffoldlilg would have to be erected before the Lease was executed. 72. By entering into a Lease that expressly authorized ASANDA PARK 10 install the <' I' Signage despite ' knowing that the Signage would have to be blocked.; or removed for most of' of the Lease Term due to the erection of the Scaffolding. Defendant breached the implied duty of good faith and fair dealing. 73. At the time it entered into the Lease, Landlord knew that Scaffolding would have to erected on the Terrace, which is part of the Premises, for most of the Lease Term. 9 of 12

11 I 74. At the time it entered into the Lease, Defendant knew that the installation of the I'ARI<' Terrace was of critical import to ASANDA PARK's business. 75. Defendant did not disclose to FRISCO, ASANDA, or ASANDA PARK that it /' was aware that the Scaffolding would have to be erected on the Terrace before the Lease was executed. 76. By entering into a Lease that expressly granted ASANDA a leasehold interest in ('hat' the Terrace despite its knowledge that that Scaffolding would have to erected on the Terrace for most of the Lease Term, Defendant breached the implied duty of good faith and fair dealing. l ~' l 77. FRISCO and ASANDA personally communicated to Defendant that the installation of the Signage was of critical import to ASANDA PARK and that, without an agreement to allow the installation of the Signage, ASANDA PARK would not have entered into the Lease and FRISCO and ASANDA would likewise not have entered into the Personal Guarantees. I j 78. By entering into the Personal Guarantees with ASANDA and FRISCO as a corollary to a Lease that expressly authorized <luthoi'ized ASANDA PARK to install the Signage despite knowing that the Signage would have to be blocked or removed for most of the Lease Term due to the erection of the Scaffolding, Landlord breached the implied duty of good faith and <1nd fair dealing 79. By entering into the Personal Guarantee with FRISCO and ASANDA as a corollary to a Lease that expressly granted ASANDA PARK a leasehold interest in the Terrace despite its knowledge that that Scaffolding would be crected on the Terrace for 1C 'rr 12 I J

12 of' most of the Lease Term, Plaintiff breached the implied duty of good faith and fair dealing.,/ 80. As a result of the forgoing, ASANDA and FRISCO have been damaged in an amount to be determined by the Court, not less than SI50,000. AS AND FOR A SECOND COUNTERCLAIM (BREACH OF THE IMPLIED DUTY OF GOOD FAITH AND FAIR DEALING) (SEEKING RESCISSION) i/ 81. Defendants repeat and re-allege each of the allegations in Paragraphs 1 through 80 i / 82. As a result ASANDA and FRISCO seek rescission in the form of a declaratory judgment from the Court declaring that the transfer of the Personal Guarantees be an are null, void, and of no force and effect. WHEREFORE, Defendants respectfully requests judgment: (1) on the First Counterclaim, a judgment against Plaintiff in the amount of $150,000; (2) on the Second Counterclaim, a declaratory judgment from the Court declaring that the Personal of' Guarantees be are null, void, and of no force and effect; (3) dismissing the Complaint; and (4) attorneys' attori]eys' fees, costs, and disbursements in an amount to be determined by this coul'i' rclicf' plopc]' court and for such other and further relief that this court may deem just, proper and equ e(]iiii<!bl<' i table. 11 I] 't i' 12

13 Dated: New York, New York October 20, 2016 LAW OFFICES OF WALTERS & ck. WAl TERS Ry: /s! Matthew J..I, Walters Attorneys,I for Plaintif fs Asanda, Inc. &. ck". Gene Frisco 20 Vesey Street, Suite 700 New York, New York (212)