SUPREME COURT OF THE STATE OF NEW YORK APPELLATE DIVISION FIRST DEPARTMENT AEROTEK, INC. and TEKSYSTEMS, INC., Plaintiffs-Respondents, - against - 757 3RD AVENUE ASSOCIATES, LLC, Defendant-Appellant, New York County Clerk s Index No. 654294/2016 PREARGUMENT STATEMENT - and - MEPT 757 THIRD AVENUE, LLC, Defendant. Defendant-Appellant 757 3rd Avenue Associates, LLC ( 757 ), for its Pre-Argument Statement pursuant to Section 600.17 of the Rules of this Court, states as follows: 1. Title of Action: The title of this action is as set forth above. 2. Full Names of the Original Parties and Any Change in the Parties: The plaintiffs to this action are Aerotek, Inc. ( Aerotek ) and TEKsystems, Inc. ( TEKsystems ) (together, Plaintiffs-Respondents ) and have not changed. The original defendants in this action were MEPT 757 Third Avenue, LLC ( MEPT ) and RFR Realty, LLC ( RFR ). Pursuant to Stipulation and Order Consolidating Actions for All Purposes and Amending Caption, dated December 23, 2016 (NYSCEF Doc. No. 22) (the Consolidation Stipulation ), (i) RFR was dismissed from this action; (ii) a separate action, commenced by Plaintiffs-Respondents against 757 bearing Index No. 656112/16, was organically consolidated for all purposes into this action; and (iii) the caption of the consolidated action was amended to the following: 1 of 5
SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK AEROTEK, INC. and TEKSYSTEMS, INC., - against - Plaintiffs, Index No. 654294/2016 MEPT 757 THIRD AVENUE, LLC and 757 3 RD AVENUE ASSOCIATES, LLC, Defendants. On January 11, 2017, the Court so ordered the Consolidation Stipulation. In the amended decision and order that is the subject of this appeal (the Order ), the motion court dismissed all claims against MEPT and thus the only remaining defendant is 757. However, the caption has not yet been amended and remains as set forth above. 3. Name, Address and Telephone Number of Counsel for Defendant-Appellant: Janice Mac Avoy Fried, Frank, Harris, Shriver & Jacobson LLP One New York Plaza New York, New York 10004-1980 (212) 859-8000 4. Name, Address and Telephone Number of Counsel for Plaintiffs-Respondents: Gregory J. Spaun Welby, Brady & Greenblatt, LLP 11 Martine Avenue, 15 th Floor White Plains, New York 10606 (914) 428-2100 5. Court and County from Which Appeal is Taken: This appeal is taken from the Supreme Court, New York County, Index No. 654294/2016 (Scarpulla, J.). 6. Nature and Object of the Action: This action concerns claims by two commercial tenants, Plaintiffs-Respondents, who leased a portion of a building in New York City, against their current and former landlords, MEPT and 757, respectively, to recover the costs of certain alleged improvements that Plaintiffs-Respondents allegedly made to the leased premises that -2-2 of 5
Plaintiffs-Respondents claim are owed to them under the parties lease agreements (together, the Leases ). 757 and MEPT moved to dismiss all of Plaintiffs-Respondents claims, arguing, inter alia, that (i) MEPT did not assume any obligation to provide tenant improvement allowances to Plaintiffs-Respondents when MEPT purchased the property; and (ii) Plaintiffs-Respondents waived their right to seek tenant improvement costs in certain tenant estoppel certificates signed by Plaintiffs-Respondents and delivered to 757. 7. Result Reached in the Court Below: This appeal is taken from the Order, which dismissed Plaintiffs-Respondents claims as against MEPT but denied Plaintiffs-Respondents motion to dismiss with respect to Plaintiffs-Respondents claims against 757. A true and correct copy of the Order is attached hereto as Exhibit A. 8. Grounds for Seeking Reversal: Defendant-Appellant 757 seeks reversal of the Order to the extent the motion court declined to dismiss Plaintiffs-Respondents claims against 757, on the grounds it is clearly erroneous and contrary to law because, among other reasons: (i) The motion court erred in holding that tenant estoppel certificates executed by Plaintiffs-Respondents and addressed to 757 in which each of the Plaintiffs- Respondents certified, inter alia, that Tenant has no further rights to receive any allowances or Landlord contributions for tenant improvements pursuant to the terms and conditions of the Lease, thus estopping Plaintiffs-Respondents from asserting any claims against 757 for reimbursement of tenant improvement costs were executed in favor of MEPT and any present and future lender, and not 757. On the basis of this erroneous assumption the motion court held that the estoppel certificates do not estop Plaintiffs-Respondents from asserting reimbursement claims as against 757; (ii) The motion court erred in holding that tenant estoppel certificates may not be used to estop tenants from asserting rights as against their landlord; and (iii) The motion court erred in finding that Plaintiffs-Respondents raised an issue of fact as to whether 757 accepted the tenant estoppel certificates with knowledge of -3-3 of 5
a contrary state of facts that is, that Plaintiffs-Respondents were allegedly still seeking tenant improvement costs from 757 when they expressly represented to the contrary. This finding by the motion court constituted error because, among other reasons, Plaintiffs-Respondents never alleged contrary facts and the documentary evidence showed that 757 did not have any knowledge of a state of facts contrary to Plaintiffs -Respondents express representations. 757 does not seek reversal of the Order to the extent it dismissed Plaintiffs-Respondents claims as against MEPT. 9. Related Cases: As noted above, Plaintiffs-Respondents filed a separate action in the Supreme Court, New York County on November 22, 2016 asserting certain claims for breach of contract against 757. That action was assigned Index No. 656112/2016 and was assigned to the Honorable David B. Cohen. That action was consolidated with the instant action in a Stipulation and Order Consolidating Actions for All Purposes and Amending Caption, dated January 11, 2017. See Index No. 654294/16, NYSCEF Doc No. 34. There are and were no other related cases. 10. Additional Pending Appeals: There are no additional appeals pending. -4-4 of 5
Dated: New York, New York November 22, 2017 FRIED, FRANK, HARRIS, SHRIVER & JACOBSON LLP By: /s/ Janice Mac Avoy Janice Mac Avoy Mark Siegmund Chelsea P. Azrak Arthur Kutoroff One New York Plaza New York, New York 10004-1980 (212) 859-8000 Attorneys for Defendant 757 3rd Avenue Associates, LLC 5 of 5