Court Refuses to Consider Parol Evidence in Interpreting Document Granting Easement

On December 4, 2018, Justice Bransten of the New York County Commercial Division issued a decision in 101 H 216 Lafayette, LLC v. J&G Family L.P., 2018 NY Slip Op. 33107(U), refusing to consider parol evidence in interpreting a document granting an easement, explaining:

Express easements are defined by the intent, or object, of the parties. If an easement's language is not ambiguous, it alone may be considered in determining the true intent of the parties to the grant, to the exclusion of the circumstances surrounding the conveyance and the situation of the parties. A written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms. The interpretation of an unambiguous contract is a question of law for the court, and the provisions of the contract delineating the rights of the parties prevail over the allegations set forth in the complaint. Courts should be extremely reluctant to interpret an agreement as impliedly stating something which the parties have neglected to specifically include. Thus, courts may not by construction add or excise terms, nor distort the meaning of those used and thereby make a new contract for the parties under the guise of interpreting the writing.

The pertinent language from the easement agreement is as follows: "The [easement] ... shall be used and maintained ... by the Tenant Parties for a term expiring on the earlier of the date Tenant, its successors and assigns, vacate [216 parcel] and [218 parcel] or May 31, 2031 ... " The word "and" in "vacate [216 parcel] and [218 parcel] or May 31, 2031" demonstrates that the termination clause is only triggered upon 218 Tenant vacating both the 216 parcel and the 218 parcel. 218 Tenant has not vacated the 218 parcel, thus, the easement is still in effect. If J&G and Schwartz intended that the easement extinguish upon 218 Tenant vacating at least one of the parcels, the easement agreement should have been drafted as such (e.g. "a term expiring on the earlier of the date Tenant, its successors and assigns, vacate [216 parcel]" or "[218 parcel]") in the same way that the or is used in "or May 31, 2031."

Plaintiffs' argument that it is therefore entirely consistent that the Term of the easement expires when the Tenant vacates both spaces because the easement requires that the Tenant be the occupant of both spaces is unavailing. If 218 Tenant is required to be the occupant of both spaces, then the easement agreement would state that termination is effective when "Tenant" vacates one property (i.e. [the 216 parcel or the 218 parcel). However, the termination provision explicitly states that the easement terminates when "Tenant", here 218 Tenant, "vacates [216 parcel] and [218 parcel]" (i.e. not just one property) "or May 31, 2031".

Plaintiffs' argument that the easement may be used only as long as both the 216 parcel and the 218 parcel solely operate as a restaurant and both leases are in effect is also unavailing as the easement agreement does not contain this limitation. A condition precedent is an act or event, other than a lapse of time, which, unless the condition is excused, must occur before a duty to perform a promise in the agreement arises. Terms such as if, unless and until constitute unmistakable language of condition. As for a condition subsequent, it is disfavored and is not found to exist unless the intention to create them is clearly expressed. The easement agreement contains the following language, which is an unconditional grant of the easement:

[Schwartz], [her] successors and assigns do hereby grant, bargain, quitclaim and convey to [J&G Family] and Tenant, their successors and assigns, for the benefit of [218 parcel] and the exclusive use by Tenant, the right to .. the use and enjoyment of, over, upon, across and through the Access Easement for ingress and egress by ... the 'Tenant Parties; [among other rights].

Although the easement agreement refers to the existence of the 216 lease and the 218 lease, its validity is not dependent on the continued validity of both leases. The easement agreement merely states that, "[218 LLC] shall be permitted to use the Pass-Through and enter upon the premises of[the 216 parcel] and [the 218 parcel] pursuant to the terms of the Lease Agreement between [J&G] and [218 Tenant] ... and the lease Agreement between [Schwartz] and [218 Tenant]". It does not indicate a condition precedent or a condition subsequent regarding the 216 lease or the 218 lease. Moreover, the easement runs with the land, not the 216 lease. The easement agreement states, "[t]he covenants set forth herein shall run with the land and be binding upon and inure to the benefit of the [J&G and Schwartz] and their respective heirs, legal representatives, successors and assigns" Moreover, the 216 lease states that it is "subject to a Party Wall Agreement to be mutually agreed upon by the parties."

The easement agreement also provides that the "[easement agreement] constitutes the entire understanding between the parties with respect to the properties affected by this [easement agreement]..." ,and it contains a severability provision, which states that any provisions found "to be illegal or unenforceable . . . shall be excised ... and the remainder ... shall continue into full force and effect. Furthermore, even if, assuming arguendo, the easement is ambiguous, any ambiguities in an easement are to be construed in the manner most favorable to the grantee and its successors.

(Internal quotations and citations omitted).

We frequently litigate disputes regarding commercial property. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you are involved in a dispute regarding a commercial real estate transaction.