Adam Leitman Bailey, PC defended a Nassau County landlord in an action brought against it by its commercial tenant in which the tenant sought a declaratory judgment that the tenant had not breached its lease by paying rent at a rate lower than required by the lease.
In this case, the parties executed a letter of intent, which proposed terms for an extension of the applicable lease, including a reduction in the rental rate and rental square footage of the subject premises. Notably, the letter of intent contained specific language that it was not binding upon either party until a new lease was executed, which did not occur. However, the tenant unilaterally began making rental payments at the lower rate offered in the letter of intent. As a result, Adam Leitman Bailey, P.C., on behalf of the landlord, served the tenant with a rent demand, which prompted the tenant to bring the declaratory judgment action against the landlord. The tenant argued that the landlord should be bound to the terms of the letter of intent because it accepted the tenant’s payment of rent at the lower rate, and the landlord was equitably estopped from denying the lease had been modified by the terms of the letter of intent.
Adam Leitman Bailey, P.C. first successfully opposed the tenant’s motion for injunctive relief in which the tenant sought to stay any efforts by the landlord to enforce the rent demand and proceed with a non-payment proceeding.
Adam Leitman Bailey, P.C. then moved to dismiss the case on the grounds that the tenant had failed to state a cause of action against the landlord and the documentary evidence demonstrated that the tenant was required to pay rent at the rate delineated in the lease. Adam Leitman Bailey, P.C. cited the language of the letter of intent, which made clear that it was not a binding agreement upon the parties, and the lease itself, which demonstrated that the landlord was permitted to accept a partial payment of rent without waiving its rights to collect the full amount. Adam Leitman Bailey, P.C. also argued to the court that the principles of equitable estoppel, which state that a party to a contract can reasonably rely on an oral modification to that contract, did not apply to this case: the parties’ potential agreement had already been reduced to writing, and as such, no oral modification existed.
The Supreme Court of the State of New York, County of Nassau agreed with Adam Leitman Bailey, P.C.’s arguments in a recent decision and order which adopted the arguments set forth by Adam Leitman Bailey, P.C.
Vladimir Mironenko and Courtney J. Lerias of Adam Leitman Bailey, P.C. represented the commercial landlord.
