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Theatre Row Phase II Associates v. National Recording Studios3/14/2002
This opinion is uncorrected and subject to revision before publication in the Official Reports.
(*1)
Defendant appeals from an order of the Supreme Court, New York County (Walter Tolub, J.), entered March 27, 2001, which, to the extent appealed from, denied defendant's motion for summary judgment dismissing the complaint.
Defendant National Recording Studios ("National") leased (*2)premises on West 42nd Street in Times Square in 1979, in which it operates a video and audio complex and rents studio time, space and services to production companies and related entities. National's lease specifically prohibits subleases without the written consent of the landlord. Plaintiff Theatre Row Phase II Associates ("TRA") assumed all rights as landlord under the lease as of 1980.
In September of 2000, one of National's clients, Monet Lane Productions ("Monet"), wrote to TRA regarding a personal injury action brought against Monet, asking TRA to defend and indemnify it. The letter enclosed a document which Monet described as the sublease between National and Monet.
Within two weeks of its receipt of Monet's letter referring to Monet's sublease, TRA sent National a notice to cure an alleged breach of the lease based upon illegal subletting. National responded that it had not sublet any of the premises and there was nothing to cure, that Monet was one of its many clients, and that Monet had not used National's facilities in almost six months. TRA then instituted an action alleging that National entered into improper sublease agreements with Monet and one or more of the other entities listed on the building's directory, a list that included ESPN, A&E; Juvenile Diabetes, MTV, and Nickelodeon. TRA alleged causes of action for (1) breach of the lease, (2) unjust enrichment, and (3) attorney's fees.
National moved for summary judgment, arguing that the lease afforded it the right to license part or all of the premises to clients for audio and visual recording, and that the lease terms limited the bases for any potential recovery and precluded a claim of unjust enrichment. TRA contended that the terms of Monet's agreement with National established that it was a sublease in violation of National's lease with TRA, and sought full discovery of other agreements National had entered into with clients.
National's motion for summary judgment was denied in all respects by the IAS court. On appeal, we hold that while that court was correct in regard to the breach of contract cause of action, the second cause of action, for unjust enrichment, should (*3)have been dismissed. Nevertheless, although we grant to that extent the relief sought by National, we reject National's proposed rationale for the relief.
As the IAS court properly found, issues of fact exist concerning whether the purported licensing agreement entered into between National and one of its clients, without the consent of plaintiff landlord, TRA, violated the provision of the parties' lease agreement prohibiting unauthorized subletting. The terms of the nominal licensing agreement are in many respects similar to those of a sublease (see, Miller v City of New York, 15 NY2d 34, 37-38). Indeed, in view of the ambiguous nature of the agreement between National and its client, the motion court properly determined that extrinsic evidence might be received as an aid to the agreement's construction (see, General Mills v Filmtel Intl. Corp., 195 AD2d 251, 253).
While, as the dissent points out, lease section 7.2 clarifies the point that the mere licensing of part or all of the premises to business clients for a period of time for recording purposes does not, in and o
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