Preview
(FILED: NEW YORK COUNTY CLERK 11/05/2014 01:06 PM
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 11/05/2014
Index No:
SUPREME COURT OF THE STATE OF NEW YORK Date purchased:
NEW YORK COUNTY
meena nnn nn nnn n nnn nnn n nn nen ee ee en ee eee. -X Plaintiffs designates New York County
TRIBECA DELICATESSEN, INC. d/b/a TRIBECA DELI as the place of trial
and SERGIO URENA,
The basis for the venue is property location,
Plaintiffs’ place of business and place of the
Plaintiffs, underlying contractual transaction
- against - SUMMONS
IP MORTGAGE BORROWER, LLC and ACTION FOR DECLARATORY JUDGMENT.
WB/STELLAR IP OWNER, LLC MUTUAL MISTAKE, FRAUDULENT
INDUCEMENT AND/ OR
MISREPRESENTATION,
UNCONSCIONABILITY, DETRIMENTAL,
Defendants. RELIANCE and BREACH OF CONTRACT
penn nn nn nnn nn nn nnn nnn nnn nnn nnn nnn nnn nen n enn ne!
TO THE ABOVE DEFENDANT(S):
YOU ARE HEREBY SUMMONED to answer the complaint in this action, and to serve
a copy of your answer, or if the complaint is not served with the instant summons, to
serve a notice of appearance on the Plaintiffs’ attorneys within twenty (20) days after the
service of summons exclusive of the day of service or within thirty (30) days after
completion of service where service is made in any other manner than by personal
delivery within the State. In case of your failure to appear, or answer, judgment will be
taken against you by default, for the relief demanded in the complaint.
Dated: New York, New York
November 5, 201
I...
La “Nathaniel Muller, P.C.
attorneys for the Plaintiffs
1270 Broadway, Suite 806
New York, NY 10001
(646) 256-6003
Defendants’ addresses:
Kossoff, PLLC, 217 Broadway, Suite 401, New York, New York 10007
884.2480
SUPREME COURT OF THE STATE OF NEW YORK
NEW YORK COUNTY
wanna nnn n nnn nnn nnn nce nee e een en een ne nee!
TRIBECA DELICATESSEN, INC. d/b/a TRIBECA DELI
and SERGIO URENA,
Index No:
Plaintiffs,
- against - VERIFIED COMPLAINT
IP MORTGAGE BORROWER, LLC and
WB/STELLAR IP OWNER, LLC
Defendants.
tec ee nnn n anne nnn nn nnn nnn nnn n anne nnn en ene nem en ne nnnenenen oneness:
The Plaintiffs, by the Law Offices of Nathaniel Muller, P.C., its attorneys, complains of
the above-named Defendants and allege:
FACTS
Plaintiff TRIBECA DELICATESSEN, INC. d/b/a TRIBECA DELI (hereinafter
“Plaintiff”, “Tenant” or “Tribeca Deli”) is a domestic corporation, duly organized
and existing under and by virtue of the laws of the State of New York. Tribeca Deli
maintains its principal place of business at 368 % Greenwich Street, Ground floor
commercial retail space, New York, NY 10013 (hereinafter the “subject premises”).
Sergio Urena is the principal of Tribeca Deli.
Upon information and belief, Defendant WB/STELLAR IP OWNER, LLC
(hereinafter “Defendant”, “Defendants” or “STELLAR”) is an active Delaware
Company, authorized to do business in the State of New York, with its principal
office at 156 William Street, 10" floor, New York, NY 10038.
884.2480
Upon information and belief, Defendant IP MORTGAGE BORROWER, LLC
(hereinafter “Defendant”, “Defendants” or “IP MORTGAGE”) is an active
Delaware Company, authorized to do business in the State of New York, with its
principal office at 156 William Street, 10" floor, New York, NY 10038.
On or about January 28, 2008, Plaintiff, as tenant, entered into a lease agreement
with Plaintiff STELLAR, as landlord, for the premises known as and located at
368 4 Greenwich Street, Ground floor commercial retail space, New York, NY
10013, for a term commencing February 1, 2008 and ending January 31, 2018.
Paragraph 48 of the Lease Rider, Plaintiff Tribeca Deli is responsible for one
percent (1%) of the real estate tax escalations for every comparative year following
the base year of July 2007 / June 2008.
Lease Paragraph 48(b)(1) states in relevant part that “[...] Landlord shall furnish to
Tenant a statement of the Real Estate Taxes payable during the Base Tax year and
each Comparative Year, which statement shall reflect the amount to be paid by
Tenant [...]”.
Of particular concern, is the fact that the Building is defined in Lease Paragraph
48(a)(4) as meaning “the building in which the demised premises are located and
the land upon which such building is situated”.
A search of the New York City Department of Finance records, has shown that the
subject premises do not exist in the records of the New York City Department of
Finance. Specifically, there is no record for “368 2 Greenwich Street”.
10. In fact, there is no deed for “368 3 Greenwich Street”.
11 The closest possibility would be for the subject premises to are located on Tax
Block 142, Lot 25, because the address on the annual tax statements (310
884.2480,
Greenwich Street) provided by Defendant to Plaintiff, from the inception of the
tenancy is located on said block and lot.
12 However this investigation also uncovered that there are no less than twenty four
(24) residential and commercial buildings located on this same block and lot,
consisting of hundreds of apartments. The list is set forth on the Department of
Housing Preservation and Development, records, which have also been researched.
It turns out that none of these twenty four (24) buildings is “368 1/2 Greenwich
Street”.
13 However one of the twenty four (24) buildings on this block 142 and lot 25, is 310
Greenwich Street, which is the address that appears on the New York City
Department of Finance Statement of Account, that have been provided by the
Landlord to the Tenant since the inception of the tenancy, as the basis for
calculating annual tax escalation statements.
14 To be accurate, there are no tax records specifically for “368 1/2 Greenwich”, i.e
the demised premises. There are no real estate taxes for "368 1/2 Greenwich”.
There is no indication in the lease as to how the real estate taxes are allocated
between each of the many buildings and the land on which they stand. According
to the Lease language as drafted, the Owner cannot collect any tax escalation
additional rent from the Tenant, and must reimburse forthwith all amounts paid
since the inception of the tenancy towards real estate tax escalation additional rent.
15. The Plaintiff was wrongfully billed annually for 1% of the overall tax escalation for
an entire block and lot consisting of twenty four (24) buildings, hundreds of
residential units and many commercial units, and in which the subject premises are
884.2480
not listed on the official records of the Department of Housing Preservation and
Development or even on any deed.
16 Returning to the Lease language definition of the Building as the building in which
the demised premises are located and the land upon which it is situated, there is
absolutely no reference to other buildings situated on the same block and lot.
17. Specifically, the language of lease paragraph 48 regarding the tax escalation clause
is crystal clear, especially with regard to the definition of the “building”. The tax
escalation clause refers exclusively to the building, singular, not plural, and the
land. No reference is made to other buildings. No reference is made to a block and
lot. And no reference is made to “368 2 Greenwich Street”, in the block and lot for
310 Greenwich Street (the address on the tax statements provided by Landlord to
Tenant to calculate annual tax escalation statements since the inception of the
tenancy).
18 To this day, the Owner has not set forth how the real estate tax escalation are
calculated. How mathematically does the Landlord take into account the fact that
there are many buildings located on the same block and lot? How is the value of
each allocated to the calculation of the real estate tax escalation?
19 The Plaintiff seeks a money judgment in an amount to be determined at a court
hearing at which the Owner shall recalculate all real estate taxes escalation amounts
billed to the Tenant from the inception of the tenancy to date. Either the Tenant has
been outrageously and abusively overcharged, or the Landlord was not entitled to
collect any additional rent at all for real estate tax escalation from this particular
Tenant.
884.2480
20 The tax escalation clause is defective and unenforceable on its terms and must be
stricken, and Plaintiff is entitled to the return of real estate tax escalation additional
rent, tendered to Defendant(s) from the inception of the tenancy, together with
actual, treble and / or punitive damages in an amount to be determined by the Court
at a hearing.
AS AND FOR A FIRST CAUSE OF ACTION
A. Declaratory Judgment
21 Plaintiff repeats each of the allegations contained in paragraphs 1 through 20 as if
set forth herein in full.
22. Defendants have charged Plaintiff an amount for real estate tax escalations from
the period from February 1, 2008 through October 31, 2014 that effectively charges
Plaintiff for 1% of all of the tax escalations for twenty four (24) buildings, including
hundreds of residential units and many commercial units.
23 Defendant(s) commenced a holdover proceeding in Civil Court on fabricated
grounds, seeking to evict Plaintiff for challenging the improper charges.
24 A declaratory judgment, pursuant to CPLR § 3017(b), from this Court, is necessary
and appropriate to resolve the dispute as to the proper amount of tax escalations to
be refunded, if not a full refund of all tax escalation payments from the inception of
the tenancy, and to prevent Plaintiff from losing its place of business over
fabricated allegations, for a refusal to pay an unconscionable overcharge.
25 Either Paragraph 48 of the Lease rider is not enforceable and should be rescinded,
and the Plaintiff refunded retroactively for all the tax escalation charges paid
throughout the tenancy, or the Plaintiff is entitled to a Declaratory Judgment that
884.2480
the real estate tax escalation could not have exceeded 1% of the annual tax
escalation for the particular building in which the premises is located, and not of the
entire block and lot, thus entitling Plaintiff to an immediate refund of any
overcharge payment from the inception of the tenancy.
AS AND FOR A SECOND CAUSE OF ACTION
B. Mutual Mistake
26 Plaintiff repeats each of the allegations contained in paragraphs | through 25, as if
set forth herein in full.
27 Paragraph 48 of the parties’ lease agreement, pertaining to Plaintiff's obligation to
pay real estate tax escalation charges , must be reformed on the grounds of mutual
mistake.
28. A cause of action for mutual mistake lies where the parties have reached an oral
agreement, and, unknown to either party, the signed writing does not reflect that
agreement.
29 Upon information and belief, the subject premises is not located on any deed.
30 Upon information and belief, the subject premises is not located within the records
of the New York City Department of Finance.
31 The annual tax bills provided by Defendants as a basis for calculating the taxes for
the subject premises, listed the property address as “310 Greenwich Street”.
32 Upon information and belief, “310 Greenwich Street” is located on Block 142 Lot
25.
884.2480
33 The Department of Housing Preservation and Development records lists no less
than twenty four (24) buildings on Block 142 Lot 25, including hundreds of
residential units and many commercial units.
34 However neither one of these twenty four (24) buildings is the subject premises, i.e.
“368 2 Greenwich Street”.
35 Plaintiff occupies only one small commercial unit.
36. Pursuant to Paragraph 48 of the Lease, Plaintiff is responsible for one percent (1%)
of the real estate tax escalations for every comparative year following the base year
of July 2007/ June 2008.
37 Pursuant to Paragraph 48(a)(4) of the Lease, the word “Building” is defined as
meaning “the building in which the demised premises are located and the land upon
which such building is situated”.
38, Only the singular form is used to define the building.
39. No reference is made in the Lease to a particular Block and Lot, and / or to a
calculation of the annual real estate tax escalation, based on a particular Block and
Lot.
40. At no point in time did the parties intend for Plaintiff to pay 1% of the tax
escalation for the entire Block and Lot, consisting of twenty four (24) buildings,
including hundreds of residential units and many commercial units.
41 Moreover, Defendants signed several lease agreements with numerous commercial
tenants located on the said Block 142 and Lot 25, such as Josephine de Beauharnais
LLC. Upon information and belief, said other tenant also believed that the
escalation clause was a percentage of the tax increase for the particular building in
which the commercial unit is located, and not the entire block and lot.
884.2480
42 There is no reference in the subject lease to a tax escalation based on the entire
block and lot.
43 Upon information and belief, the subject premises is not included in any block and
lot.
44 There is no method set forth in the Lease for calculating the amount of tax
escalation for the particular building in which the subject premises are located.
45 There are no grounds for the Plaintiff to have paid real estate tax escalation charges
for a property for which no tax records exist.
46. As such, Plaintiff seeks retroactive reformation of Paragraph 48 of the Lease Rider,
on the grounds of mutual mistake.
AS AND FOR A THIRD CAUSE OF ACTION
C. Fraudulent Misrepresentation
47 Plaintiff repeats each of the allegations contained in paragraphs | through 46 as if
set forth herein in full.
48 If Defendants actually intended to bill Plaintiff for real estate tax escalation charges
based on the entire Block 142 Lot 25, then Defendants fraudulently misrepresented
the terms of the parties’ lease agreement to Plaintiff.
49. A cause of action for fraudulent misrepresentation lies where there is evidence of:
a) a representation of the fact; b) which is either untrue or known to be untrue or
recklessly made; and c) which is offered to deceive the other party; and d) to induce
them to act upon it; e) thus, causing injury.
884.2480
50. Specifically, to state a claim for fraud, the claimant must allege a material false
representation; an intent to defraud; reasonable reliance; and damages (Keles v. Yale
University, 889 F. Supp. 729 (SDNY 1995) (applying New York Law).
51 Defendants represented in the lease that the tax escalation for the subject premises
would be calculated based upon the increase in real estate taxes of the building in
which the subject premises is located (Lease Paragraph 48).
52 The annual real estate tax statements provided annually by Defendants to Plaintiff,
all mention the overall tax as being for “310 Greenwich Street”
53 “310 Greenwich Street” is located on Block 142 Lot 25.
54 The subject premises (“368 % Greenwich Street”) is not listed on the deed for “310
Greenwich Street”.
55 The subject premises (“368 % Greenwich Street”) is not listed on the Department of
Housing Preservation and Development records for 310 Greenwich Street a/k/a
Block 142 Lot 25, which exhaustively list all twenty four (24) buildings located on
the same block and lot, but not the subject premises i.e. “368 / Greenwich street”.
56. There is no record of the subject premises with the New York City Department of
Finance.
57 There are no tax records for the subject premises, i.e. “368 / Greenwich street”.
58 Therefore the Defendants’ representation in the Lease are untrue.
59 The Plaintiff was misled into believing the tax escalation would be calculated based
upon the real estate tax increase for the single building in which the subject
premises is located.
884.2480
60. As such Paragraph 48 of the Parties’ Lease rider should be reformed retroactively
based upon Defendants’ fraudulent misrepresentations of a substantial term of the
parties’ lease agreement.
61 If anything Paragraph 48 of the Lease rider is not enforceable and should be
rescinded, and the Plaintiff refunded retroactively for all the tax escalation charges
paid throughout the tenancy.
AS AND FOR A FOURTH CAUSE OF ACTION
D. Unconscionability
62 Plaintiff repeats each of the allegations contained in paragraphs 1 through 61 as if
set forth herein in full.
63 The doctrine of unconscionability requires a showing that a contract is either
procedurally or substantively unconscionable when made. When invoked, this
equitable doctrine is intended to prevent oppression and unfair surprise.
64 The Plaintiff never agreed to pay real estate tax escalations calculated based upon
an entire block and lot.
65 Defendants’ cannot justify these exorbitant charges, as there is no reference in the
Lease to a particular Block and Lot, and the singular is used to define the building
that will serve as a basis for calculating any real estate tax increases.
66. Further, Defendants are attempting to transfer 100% of their real estate tax bill for
an entire block and lot, to their commercial tenants, in violation of the terms of the
commercial lease, while their residential tenants are benefitting from a tax write-off
by allegedly being charged for these same real estate tax charges.
884.2480
67 The tax escalation clause in the commercial tenant’s leases was intended as a means
for the Defendants to recover their real estate tax escalations, not to recoup their
entire tax bill.
68 The Lease language does not refer to any tax escalation for a particular entire block
and lot. Plaintiff was led to believe, in the own language of the Lease that Plaintiff
would only be responsible for 1% of the tax escalation of the building in which the
subject premises is located.
69 If Defendants were entitled to continue billing the Plaintiff in this manner for real
estate tax escalation for an entire block and lot, then in the short term, it is likely
that the real estate tax escalation charges will exceed the Plaintiffs annual rent.
70. Thus, if interpreted the way the Defendants have done so far, the terms of the lease
would so unreasonably favorable to the landlord that it would be unconscionable to
enforce it.
71 Said result would be absurd, oppressive and definitely beyond the scope of what
either party contemplated or intended at the time that the lease was executed.
72 Plaintiff is without adequate remedy at law.
73 Therefore, Plaintiff seeks rescission or reformation of Paragraph 48 of the parties”
lease agreement, on the grounds of unconscionability. The Plaintiff refunded
retroactively for all the tax escalation charges paid throughout the tenancy.
AS AND FOR A FIFTH CAUSE OF ACTION
E. Equitable Estoppel / Detrimental Reliance
74 Plaintiff repeats each of the allegations contained in paragraphs 1 through 73 as if
set forth herein in full.
884.2480
75. “Equitable estoppels prevents one from denying his own expressed or implied
admission which has in good faith been accepted and acted upon by another”. Walls
v. Levin, 150 AD2d 873, 874, 540 NYS2d 623, 625 (App. Div. 34 Dept. 1989).
76. The elements of estoppels are, with respect to the party stopped: a) conduct which
amounts to a false representation or concealment of material facts; b) intention that
such conduct will be acted upon by the other party; and c) knowledge of the real
facts. The party asserting estoppels must show with respect to himself: a) lack of
knowledge of the true facts; b) reliance upon the conduct of the party stopped; and
c) a prejudicial change in his position. See e.g., First Union Nat'l Bank v.
Tecklenburg, 2, AD3d 575, 769 NYS2d 573 (App. Div. 2™ Dept. 2003; Walls _v.
Levin, 150 AD2d 873, 540 NYS2d 623 (App. Div. 3" Dept. 1989); Adams v.
Washington Group, LLC, 819 NYS2d 846 (Sup. Ct. Kings Co. 2006).
77. Since the inception of the tenancy, Plaintiff operated their business under the
impression that their real estate tax escalation would be computed only in relation to
the building in which the subject premises is located.
78 Defendants should be equitably stopped from collection real estate tax escalation
computed with relation to an entire block and lot, since Plaintiff detrimentally relied
on the terms of the Lease agreement, in relation to real estate tax escalation charges.
AS AND FOR A SIXTH CAUSE OF ACTION
F. Breach of contract
79 Plaintiff repeats each of the allegations contained in paragraphs | through 78 as if
set forth herein in full.
884.2480
80. To establish a claim for breach of contract, the Plaintiff must allege the specific
terms of the agreement, the consideration, the Plaintiffs performance, the
Defendants’ breach of the agreement, and damages. Furia v. Furia, 116 AD2d 694,
498 NYS2d 12 (2™ Dept. 1986); Sylmark Holdings Lid_v. Silicone Zone Intern.
Lid, 5 Misc.3d 285, 783 NYS2d 758 (NY Sup. 2004); J&L American Enterprise.
Li td_v. DSA Direct, LLC, 110 Misc.3d 1076(A), 814 NYS2d 890 (NY Sup. 2006).
81 Here, Paragraph 48 of the Lease Rider clearly makes no reference to a block and lot
in relation to computing the real estate tax escalation charge of 1%.
82. To the contrary, reference is made to a single building, that in which the premises
are located.
83 The annual tax statements provided by Defendants as a basis for calculating the real
estate tax escalation, are specifically for a different address, i.e. 310 Greenwich
Street, and should not have been used as a reference.
84. Plaintiff has been damaged by being grossly overcharged throughout the tenancy
for real estate tax escalation additional rent calculated based on an entire block and
lot.
85 Plaintiff is entitled to a refund of the real estate tax escalation charges overpaid
from the inception of the tenancy.
AS AND FOR A SEVENTH CAUSE OF ACTION
G. Unjust Enrichment
86. Plaintiff repeats each of the allegations contained in paragraphs 1 through 85 as if
set forth herein in full.
884.2480
87 In asserting a claim for unjust enrichment , the essential elements are: (1) the
Defendants received services from the plaintiff; (2) the Defendants benefitted from
the receipt of such services; and (3) under principles of equity and good conscience,
the Defendant should compensate Plaintiff for the reasonable value of such
services. Wiener v. Lazard Freres & Co., 241 AD2d 114, 672 NYS2d 8 (1" Dept.
1998).
88 Here, it is undisputed that the Defendants benefitted from their relationship with the
tenant Plaintiff, including without limitation payment of additional rent in the form
of real estate tax escalation.
89 However, Plaintiff was overcharged, since Defendant calculated the tax escalation
based on an entire block and lot, and not based on the singular building in which the
premises is located.
90. Therefore, Plaintiff must be compensated for having unjustly enriched the
Defendants by overpaying the real estate tax escalation. A full refund of the
overpayment in real estate tax escalation is required.
WHEREFORE, the Plaintiffs demand judgment against the Defendants and all persons
claiming under them, as follows:
1) Declaring what amount if any, Plaintiff should have been charged by Defendants in
terms of real estate tax escalation charges for the terms February 1, 2008 through
November 30, 2014;
2) Reforming Paragraph 48of the Lease rider as relating to the real estate tax escalation
charges on the ground of mutual mistake;
3) Reforming Paragraph 48 of the Lease rider as relating to the real estate tax escalation
charges on the grounds of fraudulent misrepresentation;
4) Rescinding Paragraph 48 of the Lease rider on the grounds of unconscionability;
5) Rescinding or reforming Paragraph 48 of the Lease rider on the grounds of equitable
estoppel;
6) Rescinding Paragraph 48 of the Lease rider as not enforceable and / or impossible to
calculate, and refunding retroactively for all the tax escalation charges paid from the
inception of the tenancy;
884.2480
7) Finding Defendants in breach of contract of Paragraph 48 of the Lease Rider and
ordering an immediate refund of all real estate tax escalation overpaid since the
inception of the tenancy;
8) Ordering a full refund of the overpayment in real estate tax escalation from the
inception of the tenancy, based upon the theory of unjust enrichment;
9) Ordering the Defendants to explain mathematically how are the real estate tax
escalations calculated and the methodology for allocating to each building the
calculated real estate tax escalations;
10) Awarding the Plaintiff(s) a money judgment in the amount of actual damages, treble
damages and / or punitive damages; and
11) Awarding Plaintiff such other and further relief as shall be just and equitable.
Dated: New York, New York
— VAY
November 5, 2014
Law Offices of Nathaniel Muller, P.C.
attorneys for the Plaintiffs
1270 Broadway, Suite 806
New York, NY 10001
(646) 256-6003
884.2480
VERIFICATION
STATE OF NEW YORK )
) ss
COUNTRY OF NEW YORK)
SERGIO URENA, being duly sworn, deposes and says to be true and correct, under the
penalties of perjury, the following
I am the PRINCIPAL AND PRESIDENT of the named Plaintiff TRIBECA
DELICATESSEN, INC. d/b/a TRIBECA DELI, as well as a named Plaintiff in the
within action and have read the foregoing Summons and Verified Complaint and know
the contents thereof. The same are true and correct to my own knowledge, except as to
the matters therein stated to be alleged upon information and belief, and as to those
matters, I believe them to be true.
The instant verification is made by the deponent because I am a named Plaintiff as well
as the Principal and President of Plaintiff TRIBECA DELICATESSEN, INC. d/b/a
TRIBECA DELI, in the within action and the essential facts in the Complaint are within
the personal knowledge and / or belief of the deponent.
(Ceceeer
Sergio rena
Swojn to before me this
_S ey of November 2014
884.2480
SUPREME COURT OF THE STATE OF NEW YORK
NEW YORK COUNTY
wee ee nnn nn nen ee nn enna en nn een en enna en eeee: oX
TRIBECA DELICATESSEN, INC. d/b/a TRIBECA DELI
and SERGIO URENA,
Index No:
Plaintiffs,
- against -
IP MORTGAGE BORROWER, LLC and
WB/STELLAR IP OWNER, LLC
Defendants.
wenn en enn en ene nent neem nen nen!
SUMMONS AND VERIFIED COMPLAINT
LAW OFFICES OF NATHANIEL MULLER, P.C.
attorneys for Plaintiffs Tribeca Deli
1270 Broadway, Suite 806
New York, NY 10001
(646) 256-6003
884.2480
Preview
(FILED: NEW YORK COUNTY CLERK 11/05/2014 01:06 PM NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 11/05/2014 Index No: SUPREME COURT OF THE STATE OF NEW YORK Date purchased: NEW YORK COUNTY meena nnn nn nnn n nnn nnn n nn nen ee ee en ee eee. -X Plaintiffs designates New York County TRIBECA DELICATESSEN, INC. d/b/a TRIBECA DELI as the place of trial and SERGIO URENA, The basis for the venue is property location, Plaintiffs’ place of business and place of the Plaintiffs, underlying contractual transaction - against - SUMMONS IP MORTGAGE BORROWER, LLC and ACTION FOR DECLARATORY JUDGMENT. WB/STELLAR IP OWNER, LLC MUTUAL MISTAKE, FRAUDULENT INDUCEMENT AND/ OR MISREPRESENTATION, UNCONSCIONABILITY, DETRIMENTAL, Defendants. RELIANCE and BREACH OF CONTRACT penn nn nn nnn nn nn nnn nnn nnn nnn nnn nnn nnn nen n enn ne! TO THE ABOVE DEFENDANT(S): YOU ARE HEREBY SUMMONED to answer the complaint in this action, and to serve a copy of your answer, or if the complaint is not served with the instant summons, to serve a notice of appearance on the Plaintiffs’ attorneys within twenty (20) days after the service of summons exclusive of the day of service or within thirty (30) days after completion of service where service is made in any other manner than by personal delivery within the State. In case of your failure to appear, or answer, judgment will be taken against you by default, for the relief demanded in the complaint. Dated: New York, New York November 5, 201 I... La “Nathaniel Muller, P.C. attorneys for the Plaintiffs 1270 Broadway, Suite 806 New York, NY 10001 (646) 256-6003 Defendants’ addresses: Kossoff, PLLC, 217 Broadway, Suite 401, New York, New York 10007 884.2480 SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY wanna nnn n nnn nnn nnn nce nee e een en een ne nee! TRIBECA DELICATESSEN, INC. d/b/a TRIBECA DELI and SERGIO URENA, Index No: Plaintiffs, - against - VERIFIED COMPLAINT IP MORTGAGE BORROWER, LLC and WB/STELLAR IP OWNER, LLC Defendants. tec ee nnn n anne nnn nn nnn nnn nnn n anne nnn en ene nem en ne nnnenenen oneness: The Plaintiffs, by the Law Offices of Nathaniel Muller, P.C., its attorneys, complains of the above-named Defendants and allege: FACTS Plaintiff TRIBECA DELICATESSEN, INC. d/b/a TRIBECA DELI (hereinafter “Plaintiff”, “Tenant” or “Tribeca Deli”) is a domestic corporation, duly organized and existing under and by virtue of the laws of the State of New York. Tribeca Deli maintains its principal place of business at 368 % Greenwich Street, Ground floor commercial retail space, New York, NY 10013 (hereinafter the “subject premises”). Sergio Urena is the principal of Tribeca Deli. Upon information and belief, Defendant WB/STELLAR IP OWNER, LLC (hereinafter “Defendant”, “Defendants” or “STELLAR”) is an active Delaware Company, authorized to do business in the State of New York, with its principal office at 156 William Street, 10" floor, New York, NY 10038. 884.2480 Upon information and belief, Defendant IP MORTGAGE BORROWER, LLC (hereinafter “Defendant”, “Defendants” or “IP MORTGAGE”) is an active Delaware Company, authorized to do business in the State of New York, with its principal office at 156 William Street, 10" floor, New York, NY 10038. On or about January 28, 2008, Plaintiff, as tenant, entered into a lease agreement with Plaintiff STELLAR, as landlord, for the premises known as and located at 368 4 Greenwich Street, Ground floor commercial retail space, New York, NY 10013, for a term commencing February 1, 2008 and ending January 31, 2018. Paragraph 48 of the Lease Rider, Plaintiff Tribeca Deli is responsible for one percent (1%) of the real estate tax escalations for every comparative year following the base year of July 2007 / June 2008. Lease Paragraph 48(b)(1) states in relevant part that “[...] Landlord shall furnish to Tenant a statement of the Real Estate Taxes payable during the Base Tax year and each Comparative Year, which statement shall reflect the amount to be paid by Tenant [...]”. Of particular concern, is the fact that the Building is defined in Lease Paragraph 48(a)(4) as meaning “the building in which the demised premises are located and the land upon which such building is situated”. A search of the New York City Department of Finance records, has shown that the subject premises do not exist in the records of the New York City Department of Finance. Specifically, there is no record for “368 2 Greenwich Street”. 10. In fact, there is no deed for “368 3 Greenwich Street”. 11 The closest possibility would be for the subject premises to are located on Tax Block 142, Lot 25, because the address on the annual tax statements (310 884.2480, Greenwich Street) provided by Defendant to Plaintiff, from the inception of the tenancy is located on said block and lot. 12 However this investigation also uncovered that there are no less than twenty four (24) residential and commercial buildings located on this same block and lot, consisting of hundreds of apartments. The list is set forth on the Department of Housing Preservation and Development, records, which have also been researched. It turns out that none of these twenty four (24) buildings is “368 1/2 Greenwich Street”. 13 However one of the twenty four (24) buildings on this block 142 and lot 25, is 310 Greenwich Street, which is the address that appears on the New York City Department of Finance Statement of Account, that have been provided by the Landlord to the Tenant since the inception of the tenancy, as the basis for calculating annual tax escalation statements. 14 To be accurate, there are no tax records specifically for “368 1/2 Greenwich”, i.e the demised premises. There are no real estate taxes for "368 1/2 Greenwich”. There is no indication in the lease as to how the real estate taxes are allocated between each of the many buildings and the land on which they stand. According to the Lease language as drafted, the Owner cannot collect any tax escalation additional rent from the Tenant, and must reimburse forthwith all amounts paid since the inception of the tenancy towards real estate tax escalation additional rent. 15. The Plaintiff was wrongfully billed annually for 1% of the overall tax escalation for an entire block and lot consisting of twenty four (24) buildings, hundreds of residential units and many commercial units, and in which the subject premises are 884.2480 not listed on the official records of the Department of Housing Preservation and Development or even on any deed. 16 Returning to the Lease language definition of the Building as the building in which the demised premises are located and the land upon which it is situated, there is absolutely no reference to other buildings situated on the same block and lot. 17. Specifically, the language of lease paragraph 48 regarding the tax escalation clause is crystal clear, especially with regard to the definition of the “building”. The tax escalation clause refers exclusively to the building, singular, not plural, and the land. No reference is made to other buildings. No reference is made to a block and lot. And no reference is made to “368 2 Greenwich Street”, in the block and lot for 310 Greenwich Street (the address on the tax statements provided by Landlord to Tenant to calculate annual tax escalation statements since the inception of the tenancy). 18 To this day, the Owner has not set forth how the real estate tax escalation are calculated. How mathematically does the Landlord take into account the fact that there are many buildings located on the same block and lot? How is the value of each allocated to the calculation of the real estate tax escalation? 19 The Plaintiff seeks a money judgment in an amount to be determined at a court hearing at which the Owner shall recalculate all real estate taxes escalation amounts billed to the Tenant from the inception of the tenancy to date. Either the Tenant has been outrageously and abusively overcharged, or the Landlord was not entitled to collect any additional rent at all for real estate tax escalation from this particular Tenant. 884.2480 20 The tax escalation clause is defective and unenforceable on its terms and must be stricken, and Plaintiff is entitled to the return of real estate tax escalation additional rent, tendered to Defendant(s) from the inception of the tenancy, together with actual, treble and / or punitive damages in an amount to be determined by the Court at a hearing. AS AND FOR A FIRST CAUSE OF ACTION A. Declaratory Judgment 21 Plaintiff repeats each of the allegations contained in paragraphs 1 through 20 as if set forth herein in full. 22. Defendants have charged Plaintiff an amount for real estate tax escalations from the period from February 1, 2008 through October 31, 2014 that effectively charges Plaintiff for 1% of all of the tax escalations for twenty four (24) buildings, including hundreds of residential units and many commercial units. 23 Defendant(s) commenced a holdover proceeding in Civil Court on fabricated grounds, seeking to evict Plaintiff for challenging the improper charges. 24 A declaratory judgment, pursuant to CPLR § 3017(b), from this Court, is necessary and appropriate to resolve the dispute as to the proper amount of tax escalations to be refunded, if not a full refund of all tax escalation payments from the inception of the tenancy, and to prevent Plaintiff from losing its place of business over fabricated allegations, for a refusal to pay an unconscionable overcharge. 25 Either Paragraph 48 of the Lease rider is not enforceable and should be rescinded, and the Plaintiff refunded retroactively for all the tax escalation charges paid throughout the tenancy, or the Plaintiff is entitled to a Declaratory Judgment that 884.2480 the real estate tax escalation could not have exceeded 1% of the annual tax escalation for the particular building in which the premises is located, and not of the entire block and lot, thus entitling Plaintiff to an immediate refund of any overcharge payment from the inception of the tenancy. AS AND FOR A SECOND CAUSE OF ACTION B. Mutual Mistake 26 Plaintiff repeats each of the allegations contained in paragraphs | through 25, as if set forth herein in full. 27 Paragraph 48 of the parties’ lease agreement, pertaining to Plaintiff's obligation to pay real estate tax escalation charges , must be reformed on the grounds of mutual mistake. 28. A cause of action for mutual mistake lies where the parties have reached an oral agreement, and, unknown to either party, the signed writing does not reflect that agreement. 29 Upon information and belief, the subject premises is not located on any deed. 30 Upon information and belief, the subject premises is not located within the records of the New York City Department of Finance. 31 The annual tax bills provided by Defendants as a basis for calculating the taxes for the subject premises, listed the property address as “310 Greenwich Street”. 32 Upon information and belief, “310 Greenwich Street” is located on Block 142 Lot 25. 884.2480 33 The Department of Housing Preservation and Development records lists no less than twenty four (24) buildings on Block 142 Lot 25, including hundreds of residential units and many commercial units. 34 However neither one of these twenty four (24) buildings is the subject premises, i.e. “368 2 Greenwich Street”. 35 Plaintiff occupies only one small commercial unit. 36. Pursuant to Paragraph 48 of the Lease, Plaintiff is responsible for one percent (1%) of the real estate tax escalations for every comparative year following the base year of July 2007/ June 2008. 37 Pursuant to Paragraph 48(a)(4) of the Lease, the word “Building” is defined as meaning “the building in which the demised premises are located and the land upon which such building is situated”. 38, Only the singular form is used to define the building. 39. No reference is made in the Lease to a particular Block and Lot, and / or to a calculation of the annual real estate tax escalation, based on a particular Block and Lot. 40. At no point in time did the parties intend for Plaintiff to pay 1% of the tax escalation for the entire Block and Lot, consisting of twenty four (24) buildings, including hundreds of residential units and many commercial units. 41 Moreover, Defendants signed several lease agreements with numerous commercial tenants located on the said Block 142 and Lot 25, such as Josephine de Beauharnais LLC. Upon information and belief, said other tenant also believed that the escalation clause was a percentage of the tax increase for the particular building in which the commercial unit is located, and not the entire block and lot. 884.2480 42 There is no reference in the subject lease to a tax escalation based on the entire block and lot. 43 Upon information and belief, the subject premises is not included in any block and lot. 44 There is no method set forth in the Lease for calculating the amount of tax escalation for the particular building in which the subject premises are located. 45 There are no grounds for the Plaintiff to have paid real estate tax escalation charges for a property for which no tax records exist. 46. As such, Plaintiff seeks retroactive reformation of Paragraph 48 of the Lease Rider, on the grounds of mutual mistake. AS AND FOR A THIRD CAUSE OF ACTION C. Fraudulent Misrepresentation 47 Plaintiff repeats each of the allegations contained in paragraphs | through 46 as if set forth herein in full. 48 If Defendants actually intended to bill Plaintiff for real estate tax escalation charges based on the entire Block 142 Lot 25, then Defendants fraudulently misrepresented the terms of the parties’ lease agreement to Plaintiff. 49. A cause of action for fraudulent misrepresentation lies where there is evidence of: a) a representation of the fact; b) which is either untrue or known to be untrue or recklessly made; and c) which is offered to deceive the other party; and d) to induce them to act upon it; e) thus, causing injury. 884.2480 50. Specifically, to state a claim for fraud, the claimant must allege a material false representation; an intent to defraud; reasonable reliance; and damages (Keles v. Yale University, 889 F. Supp. 729 (SDNY 1995) (applying New York Law). 51 Defendants represented in the lease that the tax escalation for the subject premises would be calculated based upon the increase in real estate taxes of the building in which the subject premises is located (Lease Paragraph 48). 52 The annual real estate tax statements provided annually by Defendants to Plaintiff, all mention the overall tax as being for “310 Greenwich Street” 53 “310 Greenwich Street” is located on Block 142 Lot 25. 54 The subject premises (“368 % Greenwich Street”) is not listed on the deed for “310 Greenwich Street”. 55 The subject premises (“368 % Greenwich Street”) is not listed on the Department of Housing Preservation and Development records for 310 Greenwich Street a/k/a Block 142 Lot 25, which exhaustively list all twenty four (24) buildings located on the same block and lot, but not the subject premises i.e. “368 / Greenwich street”. 56. There is no record of the subject premises with the New York City Department of Finance. 57 There are no tax records for the subject premises, i.e. “368 / Greenwich street”. 58 Therefore the Defendants’ representation in the Lease are untrue. 59 The Plaintiff was misled into believing the tax escalation would be calculated based upon the real estate tax increase for the single building in which the subject premises is located. 884.2480 60. As such Paragraph 48 of the Parties’ Lease rider should be reformed retroactively based upon Defendants’ fraudulent misrepresentations of a substantial term of the parties’ lease agreement. 61 If anything Paragraph 48 of the Lease rider is not enforceable and should be rescinded, and the Plaintiff refunded retroactively for all the tax escalation charges paid throughout the tenancy. AS AND FOR A FOURTH CAUSE OF ACTION D. Unconscionability 62 Plaintiff repeats each of the allegations contained in paragraphs 1 through 61 as if set forth herein in full. 63 The doctrine of unconscionability requires a showing that a contract is either procedurally or substantively unconscionable when made. When invoked, this equitable doctrine is intended to prevent oppression and unfair surprise. 64 The Plaintiff never agreed to pay real estate tax escalations calculated based upon an entire block and lot. 65 Defendants’ cannot justify these exorbitant charges, as there is no reference in the Lease to a particular Block and Lot, and the singular is used to define the building that will serve as a basis for calculating any real estate tax increases. 66. Further, Defendants are attempting to transfer 100% of their real estate tax bill for an entire block and lot, to their commercial tenants, in violation of the terms of the commercial lease, while their residential tenants are benefitting from a tax write-off by allegedly being charged for these same real estate tax charges. 884.2480 67 The tax escalation clause in the commercial tenant’s leases was intended as a means for the Defendants to recover their real estate tax escalations, not to recoup their entire tax bill. 68 The Lease language does not refer to any tax escalation for a particular entire block and lot. Plaintiff was led to believe, in the own language of the Lease that Plaintiff would only be responsible for 1% of the tax escalation of the building in which the subject premises is located. 69 If Defendants were entitled to continue billing the Plaintiff in this manner for real estate tax escalation for an entire block and lot, then in the short term, it is likely that the real estate tax escalation charges will exceed the Plaintiffs annual rent. 70. Thus, if interpreted the way the Defendants have done so far, the terms of the lease would so unreasonably favorable to the landlord that it would be unconscionable to enforce it. 71 Said result would be absurd, oppressive and definitely beyond the scope of what either party contemplated or intended at the time that the lease was executed. 72 Plaintiff is without adequate remedy at law. 73 Therefore, Plaintiff seeks rescission or reformation of Paragraph 48 of the parties” lease agreement, on the grounds of unconscionability. The Plaintiff refunded retroactively for all the tax escalation charges paid throughout the tenancy. AS AND FOR A FIFTH CAUSE OF ACTION E. Equitable Estoppel / Detrimental Reliance 74 Plaintiff repeats each of the allegations contained in paragraphs 1 through 73 as if set forth herein in full. 884.2480 75. “Equitable estoppels prevents one from denying his own expressed or implied admission which has in good faith been accepted and acted upon by another”. Walls v. Levin, 150 AD2d 873, 874, 540 NYS2d 623, 625 (App. Div. 34 Dept. 1989). 76. The elements of estoppels are, with respect to the party stopped: a) conduct which amounts to a false representation or concealment of material facts; b) intention that such conduct will be acted upon by the other party; and c) knowledge of the real facts. The party asserting estoppels must show with respect to himself: a) lack of knowledge of the true facts; b) reliance upon the conduct of the party stopped; and c) a prejudicial change in his position. See e.g., First Union Nat'l Bank v. Tecklenburg, 2, AD3d 575, 769 NYS2d 573 (App. Div. 2™ Dept. 2003; Walls _v. Levin, 150 AD2d 873, 540 NYS2d 623 (App. Div. 3" Dept. 1989); Adams v. Washington Group, LLC, 819 NYS2d 846 (Sup. Ct. Kings Co. 2006). 77. Since the inception of the tenancy, Plaintiff operated their business under the impression that their real estate tax escalation would be computed only in relation to the building in which the subject premises is located. 78 Defendants should be equitably stopped from collection real estate tax escalation computed with relation to an entire block and lot, since Plaintiff detrimentally relied on the terms of the Lease agreement, in relation to real estate tax escalation charges. AS AND FOR A SIXTH CAUSE OF ACTION F. Breach of contract 79 Plaintiff repeats each of the allegations contained in paragraphs | through 78 as if set forth herein in full. 884.2480 80. To establish a claim for breach of contract, the Plaintiff must allege the specific terms of the agreement, the consideration, the Plaintiffs performance, the Defendants’ breach of the agreement, and damages. Furia v. Furia, 116 AD2d 694, 498 NYS2d 12 (2™ Dept. 1986); Sylmark Holdings Lid_v. Silicone Zone Intern. Lid, 5 Misc.3d 285, 783 NYS2d 758 (NY Sup. 2004); J&L American Enterprise. Li td_v. DSA Direct, LLC, 110 Misc.3d 1076(A), 814 NYS2d 890 (NY Sup. 2006). 81 Here, Paragraph 48 of the Lease Rider clearly makes no reference to a block and lot in relation to computing the real estate tax escalation charge of 1%. 82. To the contrary, reference is made to a single building, that in which the premises are located. 83 The annual tax statements provided by Defendants as a basis for calculating the real estate tax escalation, are specifically for a different address, i.e. 310 Greenwich Street, and should not have been used as a reference. 84. Plaintiff has been damaged by being grossly overcharged throughout the tenancy for real estate tax escalation additional rent calculated based on an entire block and lot. 85 Plaintiff is entitled to a refund of the real estate tax escalation charges overpaid from the inception of the tenancy. AS AND FOR A SEVENTH CAUSE OF ACTION G. Unjust Enrichment 86. Plaintiff repeats each of the allegations contained in paragraphs 1 through 85 as if set forth herein in full. 884.2480 87 In asserting a claim for unjust enrichment , the essential elements are: (1) the Defendants received services from the plaintiff; (2) the Defendants benefitted from the receipt of such services; and (3) under principles of equity and good conscience, the Defendant should compensate Plaintiff for the reasonable value of such services. Wiener v. Lazard Freres & Co., 241 AD2d 114, 672 NYS2d 8 (1" Dept. 1998). 88 Here, it is undisputed that the Defendants benefitted from their relationship with the tenant Plaintiff, including without limitation payment of additional rent in the form of real estate tax escalation. 89 However, Plaintiff was overcharged, since Defendant calculated the tax escalation based on an entire block and lot, and not based on the singular building in which the premises is located. 90. Therefore, Plaintiff must be compensated for having unjustly enriched the Defendants by overpaying the real estate tax escalation. A full refund of the overpayment in real estate tax escalation is required. WHEREFORE, the Plaintiffs demand judgment against the Defendants and all persons claiming under them, as follows: 1) Declaring what amount if any, Plaintiff should have been charged by Defendants in terms of real estate tax escalation charges for the terms February 1, 2008 through November 30, 2014; 2) Reforming Paragraph 48of the Lease rider as relating to the real estate tax escalation charges on the ground of mutual mistake; 3) Reforming Paragraph 48 of the Lease rider as relating to the real estate tax escalation charges on the grounds of fraudulent misrepresentation; 4) Rescinding Paragraph 48 of the Lease rider on the grounds of unconscionability; 5) Rescinding or reforming Paragraph 48 of the Lease rider on the grounds of equitable estoppel; 6) Rescinding Paragraph 48 of the Lease rider as not enforceable and / or impossible to calculate, and refunding retroactively for all the tax escalation charges paid from the inception of the tenancy; 884.2480 7) Finding Defendants in breach of contract of Paragraph 48 of the Lease Rider and ordering an immediate refund of all real estate tax escalation overpaid since the inception of the tenancy; 8) Ordering a full refund of the overpayment in real estate tax escalation from the inception of the tenancy, based upon the theory of unjust enrichment; 9) Ordering the Defendants to explain mathematically how are the real estate tax escalations calculated and the methodology for allocating to each building the calculated real estate tax escalations; 10) Awarding the Plaintiff(s) a money judgment in the amount of actual damages, treble damages and / or punitive damages; and 11) Awarding Plaintiff such other and further relief as shall be just and equitable. Dated: New York, New York — VAY November 5, 2014 Law Offices of Nathaniel Muller, P.C. attorneys for the Plaintiffs 1270 Broadway, Suite 806 New York, NY 10001 (646) 256-6003 884.2480 VERIFICATION STATE OF NEW YORK ) ) ss COUNTRY OF NEW YORK) SERGIO URENA, being duly sworn, deposes and says to be true and correct, under the penalties of perjury, the following I am the PRINCIPAL AND PRESIDENT of the named Plaintiff TRIBECA DELICATESSEN, INC. d/b/a TRIBECA DELI, as well as a named Plaintiff in the within action and have read the foregoing Summons and Verified Complaint and know the contents thereof. The same are true and correct to my own knowledge, except as to the matters therein stated to be alleged upon information and belief, and as to those matters, I believe them to be true. The instant verification is made by the deponent because I am a named Plaintiff as well as the Principal and President of Plaintiff TRIBECA DELICATESSEN, INC. d/b/a TRIBECA DELI, in the within action and the essential facts in the Complaint are within the personal knowledge and / or belief of the deponent. (Ceceeer Sergio rena Swojn to before me this _S ey of November 2014 884.2480 SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY wee ee nnn nn nen ee nn enna en nn een en enna en eeee: oX TRIBECA DELICATESSEN, INC. d/b/a TRIBECA DELI and SERGIO URENA, Index No: Plaintiffs, - against - IP MORTGAGE BORROWER, LLC and WB/STELLAR IP OWNER, LLC Defendants. wenn en enn en ene nent neem nen nen! SUMMONS AND VERIFIED COMPLAINT LAW OFFICES OF NATHANIEL MULLER, P.C. attorneys for Plaintiffs Tribeca Deli 1270 Broadway, Suite 806 New York, NY 10001 (646) 256-6003 884.2480