What did the court decide?

The Appellate Division affirmed that the tenant (defendant) was entitled to enforce the lease's alternative rent provisions and that the landlord's claim was dismissed in part; the landlord could not rely on the estoppel certificate to avoid the alternative rent.

Who is affected by this decision?

The landlord (plaintiff) and the tenant (defendant) in this retail lease dispute are directly affected, and the decision may guide other parties interpreting cotenancy clauses and estoppel certificates in lease amendments.

What happens next for the parties?

The trial court's judgment awarding alternative rent to the tenant stands; the landlord's remaining claims were dismissed as adjudicated, subject to any further proceedings consistent with this decision.

Can this decision be appealed further?

A further appeal to New York's Court of Appeals may be possible, but would require permission (leave) under applicable appellate rules.

COR Veterans Mem. Dr. Co., LLC v. Michaels Stores, Inc.

Docket 79 CA 25-00425

Court of record · Indexed in NoticeRegistry archive · AI-enriched for research

CivilAffirmed

Filed: Apr 24, 2026 · 1 week ago
Jurisdiction: New York
Court: Appellate Division of the Supreme Court of the State of New York
Type: Opinion
Case type: Civil
Disposition: Affirmed
Citation: 2026 NY Slip Op 02501
Docket: 79 CA 25-00425

Appeal from an order granting plaintiff leave to reargue and, upon reargument, adhering to a prior order that converted defendant's motion to one for summary judgment and granted it in part

Summary

The Appellate Division affirmed a trial court order that, after reargument, denied plaintiff’s challenge to defendant’s motion (converted to summary judgment) dismissing certain claims and awarding defendant unpaid alternative rent. The dispute arose from a lease cotenancy clause requiring a single anchor tenant; when the anchor space was filled by two tenants, the landlord sought full rent while the tenant claimed entitlement to an offset under the cotenancy provision. The court held the tenant could enforce the alternative rent under the lease amendments and that the landlord could not rely on an estoppel certificate to negate that rent offset obligation.

Issues Decided

Whether an estoppel certificate executed by the tenant barred the tenant from claiming rent offsets under the lease cotenancy provision
Whether the cotenancy requirement was satisfied when the landlord filled the anchor space with two tenants instead of one as required by the lease
Whether the parties' lease amendments changed the rental scheme such that cotenancy rights were not in effect at the time of the estoppel certificate

Court's Reasoning

The court reasoned that the relevant cotenancy rights were governed by the second lease amendment, not the original lease terms, so the tenant's estoppel certificate did not bar later assertion of the amended rental scheme. The court also found the lease unambiguously required a single anchor tenant, and the landlord failed that requirement by placing two tenants in the anchor space. Because the estoppel certificate did not create an entitlement for the landlord and the amendment-controlled rental scheme allowed the tenant to claim alternative rent, summary judgment for the tenant was appropriate.

Authorities Cited

W.W.W. Associates v. Giancontieri77 NY2d 157 (1990)
Linzy v. Christa Construction238 AD2d 936 (4th Dept 1997)
JRK Franklin, LLC v. 164 E. 87th St. LLC27 AD3d 392 (1st Dept 2006), lv denied 7 NY3d 705 (2006)

Parties

Plaintiff: COR Veterans Memorial Drive Company, LLC
Defendant: Michaels Stores, Inc.
Attorney: Christopher E. Buckey (Cullen and Dykman LLP)
Attorney: Julian B. Modesti (Harris Beach Murtha Cullina PLLC)
Judge: Robert E. Antonacci, II
Judge: Curran, J.P.
Judge: Bannister, Smith, Ogden, Delconte, JJ.

Key Dates

Decision date: 2026-04-24
Order appealed entered: 2024-09-23
Cotenant closed store: 2018-11-01
Estoppel certificate executed: 2021-06-01

What You Should Do Next

1
Review judgment details
The landlord should obtain a copy of the trial court's judgment and the Appellate Division mandate to determine the exact amounts of alternative rent awarded and any outstanding issues.
2
Consider petition for leave to appeal
If the landlord wishes to continue the challenge, counsel should evaluate grounds and deadlines for seeking leave to appeal to the New York Court of Appeals.
3
Comply with judgment and accounting
The tenant should ensure payment of the unpaid alternative rent as ordered and work with the landlord to resolve any accounting or postjudgment enforcement steps.

Frequently Asked Questions

What did the court decide?: The Appellate Division affirmed that the tenant (defendant) was entitled to enforce the lease's alternative rent provisions and that the landlord's claim was dismissed in part; the landlord could not rely on the estoppel certificate to avoid the alternative rent.
Who is affected by this decision?: The landlord (plaintiff) and the tenant (defendant) in this retail lease dispute are directly affected, and the decision may guide other parties interpreting cotenancy clauses and estoppel certificates in lease amendments.
What happens next for the parties?: The trial court's judgment awarding alternative rent to the tenant stands; the landlord's remaining claims were dismissed as adjudicated, subject to any further proceedings consistent with this decision.
Why didn't the estoppel certificate prevent the tenant from claiming the rent offset?: The court concluded the amended lease terms governed the parties' rights at the relevant time, so the estoppel certificate did not create an entitlement for the landlord to avoid the alternative rent under the amendment-controlled rental scheme.
Can this decision be appealed further?: A further appeal to New York's Court of Appeals may be possible, but would require permission (leave) under applicable appellate rules.

The above suggestions and answers are AI-generated for informational purposes only. They may contain errors. NoticeRegistry assumes no responsibility for their accuracy. Consult a qualified attorney before relying on them.

Full Filing Text

COR Veterans Mem. Dr. Co., LLC v Michaels Stores, Inc. - 2026 NY Slip Op 02501

COR Veterans Mem. Dr. Co., LLC v Michaels Stores, Inc.

2026 NY Slip Op 02501

April 24, 2026

Appellate Division, Fourth Department

COR VETERANS MEMORIAL DRIVE COMPANY, LLC, PLAINTIFF-APPELLANT,

MICHAELS STORES, INC., DEFENDANT-RESPONDENT.

Supreme Court of the State of New York, Appellate Division, Fourth Judicial Department

Decided on April 24, 2026

79 CA 25-00425

Present: Curran, J.P., Bannister, Smith, Ogden, And Delconte, JJ.

CULLEN AND DYKMAN LLP, ALBANY (CHRISTOPHER E. BUCKEY OF COUNSEL), FOR PLAINTIFF-APPELLANT.

HARRIS BEACH MURTHA CULLINA PLLC, SYRACUSE (JULIAN B. MODESTI OF COUNSEL), FOR DEFENDANT-RESPONDENT.

Appeal from an order of the Supreme Court, Onondaga County (Robert E. Antonacci, II, J.), entered September 23, 2024. The order granted plaintiff's motion for leave to reargue and, upon reargument, adhered to a prior order granting defendant's motion to dismiss certain causes of action.

It is hereby ORDERED that the order so appealed from is unanimously affirmed without costs.

Memorandum: Defendant rented a commercial property from plaintiff in a shopping center. The parties executed a lease that, inter alia, subjected plaintiff to an ongoing cotenancy requirement. Under the terms of the lease, if the ongoing cotenancy requirement was not satisfied for a period of six months, the minimum rent would be abated until such time as the ongoing cotenancy requirement was satisfied, and, in lieu thereof, defendant would pay "[a]lternative [r]ent."

The parties thereafter executed several amendments to the lease. In November 2018, after the parties executed the first amendment, but before the lease term under that amendment took effect, one cotenant (cotenant) closed its store. In June 2021, more than two years after the cotenant closed its store, defendant executed an estoppel certificate in which it declared that plaintiff was not in default on any provision of the lease.

Nevertheless, defendant thereafter informed plaintiff that plaintiff had not complied with the ongoing cotenancy requirement because the lease required the premises in question to be occupied by one anchor tenant, but, after the cotenant closed its store and vacated the premises, plaintiff filled the premises with two tenants. Defendant then advised that it was entitled to pay the alternative rent under the terms of the original lease upon the conclusion of the third amendment term. Plaintiff thereafter sent defendant a notice of default, terminated defendant's right of possession to the premises and commenced this action seeking, inter alia, back rent and continuing damages for defendant's alleged failure to make payments under the lease.

Subsequently, defendant moved to dismiss certain causes of action in the amended complaint and Supreme Court, upon converting defendant's motion to one for summary judgment, granted the motion and ordered defendant to pay to plaintiff all unpaid alternative rent due. Plaintiff now appeals from an order that, inter alia, granted plaintiff's motion for leave to reargue its opposition to the converted motion and, upon reargument, adhered to the court's prior determination. We affirm.

Plaintiff contends that the estoppel certificate bars defendant from claiming a rent offset under the relevant terms of the lease. We reject that contention. Assuming, arguendo, that
plaintiff's failure to abide by the cotenancy requirement could be considered a default in the performance of a duty under the lease, we conclude that defendant's rights pursuant to the cotenancy requirement were not in effect at the time of the execution of the estoppel certificate (
see generally W.W.W. Assoc. v Giancontieri
, 77 NY2d 157, 162 [1990];
Linzy v Christa Constr.
, 238 AD2d 936, 936 [4th Dept 1997]). Instead, the parties were operating during the relevant time period under the second amendment to the lease wherein they agreed to a separate rental scheme (
see generally W.W.W. Assoc.
, 77 NY2d at 162). We further conclude that the lease did not provide plaintiff with any entitlement to rely upon the estoppel certificate (
cf. JRK Franklin
,
LLC v 164 E. 87th St. LLC
, 27 AD3d 392, 393 [1st Dept 2006],
lv denied
7 NY3d 705 [2006]). Moreover, contrary to plaintiff's further contention, it failed to satisfy the ongoing cotenancy requirement inasmuch as it filled the premises in question with two tenants instead of one as unambiguously required by the terms of the lease.

We have considered plaintiff's remaining contentions and conclude that they lack merit.

Entered: April 24, 2026

Ann Dillon Flynn