oppostion to motion to dismiss

8/10/2019 Oppostion to Motion to Dismiss

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Case 1:10-cv-03806-NRB Document 15 Filed 08/30/10 Page ! o !"

TABLE OF CONTENTS

$RE)IMINARY STATEMENT AN- STATEMENT O" "ACTS????????../

I. -E"EN-ANTS@ MOTION TO -ISMISS SOU)- 6E -ENIE- 6ECAUSE NEBYOR* ENERA) O6)IATIONS )AB O) 9'=02 -OES NOT A$$)Y TO TECONTRACTS OR "ACTS ERE. ..................................................................................... 4

A. Standard &or disissa% !nder "ed. R. Ci(. $. /D57547 ............................................. ... 4

6. -e&endants@ distortion o& te Cop%aint to attept to portray an Internetco%ocation ser(ices contract as a Fser(ice, repair or aintenance contract !nder NewYor+ O) 9'=02 to is a cynica% attept to e(ade teir contract!a% coitents. ..... 4

C. Te ser(ices to e pro(ided !nder te contracts ere are not Fser(ice, repair or

aintenance contract !nder New Yor+ O) 9'=02. .. ................................................. /0

-. -e&endants %ost te ene&it o& any entit%eent tey ay a(e ad to re%ie& !nderO) 9'=02 d!e to teir d!p%icito!s acts as a%%eged in te Cop%aint. ......................... /D

II. -E"EN-ANTS@ MOTION TO -ISMISS SOU)- 6E -ENIE- 6ECAUSE NEBYOR* ENERA) O6)IATIONS )AB 9'=09 -OES NOT A$$)Y TO TE

CONTRACTS OR "ACTS ERE. ................................................................................... /2

A. Te agreeents aong te parties were not %eases o& rea% property or preises. . /2

6. Tere is no aig!ity in te Co%ocation Agreeent s!c tat te Co!rt as reason

to &a(or an !ntena%e interpretation o& te contract and app%y O) 9'=09, and any

aig!ity as ay eGist is to e reso%(ed in "ortress@s &a(or. ........................................... /4C. -e&endants a(e wai(ed any rigt tey ay a(e ad to re%y on O) 9'=09 y

teir actions in connection wit te end o& te contract ter. .......................................... /8

III. -E"EN-ANTS@ MOTION TO -ISMISS SOU)- 6E -ENIE- 6ECAUSE TE

AUTOMATIC RENEBA) C)AUSE IS NOT AN UNEN"ORCEA6)E $ENA)TY

C)AUSE. .......................................................................................................................... D0

IV. -E"EN-ANTS@ MOTION TO -ISMISS SOU)- 6E -ENIE- 6ECAUSE TECOM$)AINT A-EHUATE)Y SETS OUT TE E#ISTENCE O" SU6JECT MATTERJURIS-ICTION. .............................................................................................................. DD

CONC)USION????????????????????????????.D9

ii


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Case 1:10-cv-03806-NRB Document 15 Filed 08/30/10 Page 3 o !"

PRELIMINARY STATEMENT AND STATEMENT OF FACTS/

$%ainti&& Uni(ersity Co!nications, Inc., doing !siness as "ortress IT# 5F"ortress 7,

pro(ides Internet in&rastr!ct!re o!tso!rcing reso!rces to !siness enterprises, ain%y y

pro(iding ser(ices at a data center, soeties ca%%ed a ser(er &ar. Tis is a &aci%ity %ocated in

C%i&ton, New Jersey o!sing cop!ter systes, partic!%ar%y cop!ter, on wic tose

c!stoers@ Internet operations Freside.

As an ind!stry'standard data center, te "ortress data center is coprised o& specia%%y

designed space and se%(ing or Frac+s &or cop!ter ser(ers, as we%% ig'%e(e% Fconnecti(ity

5connections to te Internet o& (arying types and speci&ications7. Aong te ser(ices pro(ided

y "ortress at its data center is Fco%ocation.D M!%tip%e co%ocation c!stoers rent ser(er Fspace

and reso!rces at te "ortress data center 5ence te ter Fco'%ocation 7, were tey aintain and

operate teir networ+, ser(er and storage gear and connect to te Internet. 6y !ti%i:ing

co%ocation, enterprises ipose inia% cost and cop%eGity on teir own operations and ene&it

&ro ser(ices and reso!rces p!rcased and pro(ided in !%+ and at te igest %e(e% o& tecnica%

eGpertise &or !%tip%e c!stoers. Co%ocation c!stoers a%so sEare in tEe ene&it o& ad!nct

reso!rces and &aci%ities !i%t into a co%ocation center, inc%!ding storage and ac+!p systes,

red!ndant and ac+!p power s!pp%ies, red!ndant data co!nications connections,

en(ironenta% contro%s 5e.g., air conditioning and &ire s!ppression7 and sec!rity de(ices.

/Te &acts are as set &ort in te Cop%aint, eGcept were indicated.

D Te spe%%ing o& tis re%ati(e%y new word reains te s!ect o& deate. Be a(e tro!go!t o!rpapers !ti%i:ed te Fsing%e ) spe%%ing wic, according to soe, is te Fproper one, a%to!g inreported %ega% decisions !ti%i:ing tEe ter as app%ied to a di&&erent tecEno%ogy,

te%eco!nications co%%ocation, two F)@s are !sed. See, F"re!ent%y As+ed H!estions1 Bicis itK Co%ocationK Co%%ocationK Co')ocationK Or Co%oK, 5&o!nd atttp1LLwww.iodatacenters.coLao!t'ioL&a.pp4, %ast accessed A!g!st D=, D0/07. "or

p!rposes o& consistency tis sty%e is aintained e(en wen !oting %ang!age &ro te operati(econtracts in tis atter wic !ti%i:e te Ftwo )@s approac.

/
http://www.iodatacenters.com/about-io/faq.php#q6http://www.iodatacenters.com/about-io/faq.php#q6http://www.iodatacenters.com/about-io/faq.php#q6


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Case 1:10-cv-03806-NRB Document 15 Filed 08/30/10 Page * o !"

Uti%i:ing co%ocation, "ortress@s c%ients are a%e to anage, aintain, ac+ !p and in a%% respects

operate tEeir Internet and otEer ser(er'ased !siness operations !ti%i:ing ind!stry'standard

tecnica% capacity and ene&iting &ro "ortress@s s!stantia% in(estent in in&rastr!ct!re,

pysica% space and tecnica% eGpertise.

Co%ocation agreeents s!c as te one in tis action typica%%y !ti%i:e te word Fspace to

descrie te reso!rces eing pro(ided to c!stoers, !t tis !sage so!%d not e isconstr!ed.

Under teir contract wit "ortress, de&endants, a(e;contrary to teir incorrect assertion;no

rigt to any partic!%ar Fspace, anywere, at all. As te contract ters a+e c%ear, Fspace

re&ers, not to a speci&ic geograpica% %ocation aena%e to p%otting on a ap, !t to capacity or a

J!ant! o& reso!rces ade a(ai%a%e witEin a data center, a %icense &or access to wEicE is

granted y te agreeents, wic is eas!red in Fspace. T!s, as set o!t in te Co%ocation

Ser(ices Addend! 5FCo%ocation Agreeent 7 set &ort in de&endants@ EGiit D to te Rotstein

A&&iration1

1. THE LICENSED SPACE

"ortress IT# agrees to %ease to C!stoer, and c!stoer agrees to %ease to "ortressIT#, d!ring te ter, one 5/7 or ore co%ocation ay5s7 5F6ay 7. Twenty'&o!r5D


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e!ipent, -e&endants were contract!a%%y re!ired to e Fescorted y "ortress personne% at a%%

ties 5 27.

-e&endants Capita% Mar+et Ser(ices ))C and Vis!a% Trading Systes, ))C pro(ide

in&oration tecno%ogy ser(ices to te &oreign eGcange ar+et 5F&oreG 7 ind!stry, a wor%dwide

decentra%i:ed o(er'tEe'co!nter &inancia% ar+et &or tEe trading o& &oreign c!rrencies. On or

ao!t No(eer /4, D004, -e&endants entered into a contract wit "ortress &or s!stantia% space

and co%ocation ser(ices. Te contract!a% ter &or te pro(ision o& tese ser(ices was 24 onts

at te ase price o& Q2/,D90 in addition to certain contract!a%%y'speci&ied increases.

Te contract a%so pro(ided tat &or a!toatica%%y renewa% &or an !n%iited n!er o& one

year ters at tEe sae price &or!%a !n%ess


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one o& wic too+ p%ace on Cristas E(e and te second o& wic too+ p%ace on New Year@s E(e.

In ot cases, on%y a s+e%eton sta&& was on d!ty at te "ortress data center, and eac %atenigt eGp%oit

too+ p%ace d!ring a period o& eGtended (acations and %ong wee+ends wen "ortress co!%d not insist on

c%ose s!per(ision o& de&endants.

-e&endants acted s!rreptitio!s%y to ene&it &ro te pricing in teir contract wit "ortress

preised on a ini! year'%ong coitent p!rs!ant to te a!toated renewa%, e(en to!g tey

ad no intention to onor tat contract!a% ter. -e&endants +new tat i& tey in&ored "ortress o&

teir p%ans, "ortress wo!%d %i+e%y increase teir rates to ones ore consistent wit sort'ter !sage

o& te &aci%ty, re!ire tat a%% acco!nts aong te copanies e s!ared away, and tat payent e

ade in ad(ance &or ser(ices rendered. To a(oid tese tings, de&endants is%ed "ortress and %ed

"ortress to re%y on tEe strea o& contin!ed reg!%ar payents &ro de&endants, te %ac+ o& notice

o& intent to %ea(e te data center, and teir pysica% contro% o(er de&endants@ e!ipent as ass!rance

&or s!c payents.

-e&endants now a+e ade tis otion c%aiing tat, despite ot teir and teir cynica%

Fgaing o& te terination date !nder te agreeents, tey are entit%ed to te ene&it o& two New

Yor+ stat!tes eant to protect sa%% !sinesses &ro !netica% Fser(ice contract pro(iders and

tenants &ro !nscr!p!%o!s %and%ords tat re%y on a!toatic ter renewa%s. 6!t in &act, none o& te

rigts associated wit eiter an e!ipent ser(ice contract or an agreeent to %ease space, or e(en to

gain access to it, are granted !nder te Co%ocation Agreeent. Indeed, te Master Ser(ices

Agreeent and te Co%ocation Agreeent pro(ide te eGact opposite.

TEe Master Ser(ices Agreeent is a !siness arrangeent etween pres!ed eJ!a%s

preised on te s!ission, y de&endants, o& ser(ice orders to "ortress. Tese, in t!rn, are set o!t in

(ario!s re%ated agreeents, inc%!ding te Co%ocation Agreeent, wic pro(ides1


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Case 1:10-cv-03806-NRB Document 15 Filed 08/30/10 Page " o !"

!. USE OF THE LICENSED SPACE

a. Un%ess oterwise eGpress%y pro(ided in a Ser(ice Order, C!stoer wi%% eresponsi%e &or con&ig!ring, pro(iding, p%acing, insta%%ing, !pgrading,

aintaining, repairing, and operating C!stoer@s E!ipent. . .

11. E"UIPMENT REPAIR AND MAINTENANCE-!ring te Ter, C!stoer sa%% pro(ide, at its eGpense, repair and aintenance witrespect to C!stoer pro(ided e!ipent insta%%ed in te 6ay.

Tese pro(isions are o(io!s%y inconsistent wit a c%ai tat te contract ere was one in wic

"ortress contracted to pro(ide ser(ice or aintenance o& de&endants@ property.

Te inapp%icai%ity o& te Frea% property de&ense ere is a%so stri+ing%y o(io!s wen

considering not on%y te description o& te %icense to Fspace set &ort in te act!a% Co%ocation

Agreeent 5epasis added7, !t te &o%%owing reser(ations o& rigts as we%% &o!nd tere1

1#. ADDITIONAL RIGHTS $ RESER%ATIONS OF RIGHTS OFFORTRESS IT&

a. Tis Agreeent, and te Rigts o& C!stoer ere!nder, are, wito!t any&!rtEer action y any party, s!ect and s!ordinate to tEe %eases &or tEe -ata

CPenters and a%% s!perior instr!ents to s!cE %eases 5inc%!ding, wito!t%iitation, ortgages or gro!nd %eases &or te -ata Centers'. T()* A+,---nt )*a *-,/)0-* a+,---nt an )* not )nt-n- to an 2)ll not 0on*t)t3t-a l-a*- o, an4 ,-al o, 5-,*onal 5,o5-,t4. C!stoer ac+now%edges andagrees tat

i. it as een granted on%y a %icense 5F)icense 7 to !se te )icensed Space inaccordance wit tis agreeent

ii. C3*to-, (a* not 6--n +,ant- an4 ,-al 5,o5-,t4 )nt-,-*t 3n-, t()*A+,---nt and

iii. C3*to-, (a* no ,)+(t* a* a t-nant o, ot(-,2)*- 3n-,an4 ,-al5,o5-,t4 o, lanlo, $ t-nant la2*7 ,-+3lat)on*7 o, o,)nan0-*. . .

No pro(ision in te agreeents, inc%!ding tose cited y de&endants granting a %icense &or

access to teir own e!ipent at a &aci%ity deterined y "ortress IT#, reote%y contradicts te

&oregoing !ne!i(oca% ters. "or tese reasons, tere is no reason de&endants so!%d e a%e to

e(ade teir contract!a% and ora% o%igations ased on &ar'o!t interpretations o& an agreeent tey,

in &act, read c%ose%y and a!sed sore%y.

9


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LEGAL ARGUMENT

I. DEFENDANTS MOTION TO DISMISS SHOULD BE DENIEDBECAUSE NEW YORK GENERAL OBLIGATIONS LAW GOL 89:#;< DOES NOT APPLY TO THE CONTRACTS OR FACTS

HERE.

A. Stana, =o, )*)**al 3n-, F-. R. C)/. P. 1!>6'>'

Ben deciding a otion to disiss !nder R!%e /D57547, te Co!rt !st accept as tr!e a%%

we%%'p%eaded &act!a% a%%egations o& te cop%aint and draw a%% in&erences in &a(or o& te p%eader. See

Cit% o +os #ngeles v) P$ee$$ed Communications' (nc .,


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TEe Eistory and p!rpose o& O) 9'=02 Eas a%ready een apt%y s!ari:ed y tEe

co!rts. As tEe Appe%%ate -i(ision@s "irst -epartent eGp%ained in Donald Ru5in' (nc) v)

.c2a$t7, /40 A.-.Dd 92, 94, 99= N.Y.S.Dd 208, 20= 5N.Y. App. -i(. /==071

Restrictions on a!toatic renewa% c%a!ses were &irst app%ied to %eases o& rea%property. "orer R$) D20. 5)./=24, cE. 80D7. "orer Section 2== o& tEe

enera% 6!siness )aw 5F6) 7, enacted in /=92 5)./=92, C. 80/7, eGtended tisrestriction to %eases o& persona% property. See, Pee$less 0o2el .u--l% Co) v)$iton P$ess, 2 A.-.Dd D


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Un&ort!nate%y, de&endants do noting o& te sort. Ignoring wat te Master Ser(ices or

Co%ocation agreeents say, de&endants arg!e 5Mo(ing Meorand! o& )aw FMO) P at 2'


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Ma)nt-nan0- on -3)5-nt )* on-7 not 64 Fo,t,-**7 63t 64 )t* 0olo0at)on

03*to-,*;on%y.

-e&endants@ second re&erence is to te word Fe!ipent as !sed in /3 o& te

Cop%aint. TEis, again, eans to s!ggest tEat tEe contract was one &or Fser(ice, repair or

aintenance to or &or persona% property. 6!t tEere is notEing ao!t tEe !se o& tEe word

Fe!ipent tat co!%d s!stain s!c an !nderstanding. In &act, te &!%% sentence in /3 &ro

wic tat word as een eGcised is as &o%%ows 5epasis added71

Une+nownst to "ortress, owe(er, de&endants egan to reo(e its -3)5-nt&ro "ortress@s &aci%ity and o(e it to anoter data center s!rreptitio!s%y in two

steps, one o& wic too+ p%ace on Cristas E(e and te second o& wic too+ p%aceon New Year@s E(e.

It is !nderstanda%e wy de&endants wo!%d not want to reind te Co!rt o& tis a%%egation. 6!t it

is not de&ensi%e &or tEe to t!rn tEis sentence into soetEing so di(orced &ro its p%ain

eaning. "or $aragrap /4 o& te Cop%aint is a description, not o& Fser(ice or aintenance y

"ortress, !t o& de&endants@ o2n a0t)on*in secreting eJ!ipent, on wEicE "ortress Ead a

sec!rity interest, &ro "ortress@s data center. Tis was done in order to Fceat "ortress o!t o&

its rigt&!% reco!rse to tat sec!rity interest. -e&endants@ arg!ent tat te word Fe!ipent

ere re&ers in any way to Fser(ice, repair or aintenance o& de&endants@ e!ipent y "ortress

goes eyond ad(ocacy to &ran+ isrepresentation. In a sii%ar (ein, de&endants state1

In se(era% p%aces, tEe cop%aint descries tEe contract as one &or Fser(icesre%ated to tis property, inc%!ding, as entioned ear%ier, Freso!rces p!rcased andpro(ided y p%ainti&&1 Fstorage and ac+!p systes, en(ironenta% contro%s 5e.g.,air conditioning and &ire s!ppression7 and sec!rity de(ices. 5Cp%t. 2, 9, //'/D,

/8, D07.6!t o& co!rse, te Cop%aint does not a%%ege tat "ortress pro(ided Fser(ices to property, and

certain%y not ser(ices to de&endants@ property, at a%%. RatEer, it descries a s!ite o& ser(ices,

can on%y re&er to FP!%tip%e c!stoers, a p%!ra% copo!nd no!n constit!ting te on%y possi%eantecedent to te p%!ra% prono!n Ftey. -e&endants@ in(enti(e !t disonest approac toFparsing te Cop%aint !st e reected.

=


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Case 1:10-cv-03806-NRB Document 15 Filed 08/30/10 Page 1! o !"

reso!rces and in&rastr!ct!re pro(ided tro!go!t an entire &aci%ity were de&endants, a%ong wit

oter c!stoers, were coitted to a)nta)n t(-), o2n -3)5-nt. As te Cop%aint

contin!es, FUti%i:ing co%ocation, Fo,t,-*** 0l)-nt* a,- a6l- to ana+-7 a)nta)n7 6a0

35 an

)n all ,-*5-0t* o5-,at- tEeir Internet and otEer ser(er'ased !siness operations . . . 5


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/0


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responsii%ity on de&endants a%one &or e(ery concei(a%e synony descriing Fser(ice, repair and

aintenance. Tis is to e contrasted wit te sit!ation in Ca$o (ndus)' (nc) v) Coastal Re)

,tg)' (nc), /9< ". AppG. D/3, D/= 5Dd Cir. D0097, cited y de&endants, were te p%ainti&& ad

eGpress%y agreed to pro(ide and aintain storage &aci%ities &or de&endants@ petro%e! prod!cts, as

we%% as ins!rance co(erage, a!toated card'contro%%ed tr!c+ %oading &aci%ities, in(entory

(eri&ication, Fspecia% additi(e e!ipent and e(en te act!a% addition o& additi(e to te

petro%e!. Co!rts do not, owe(er, ignore tat act!a% operati(e ters o& a contract, as de&endant

as+s tEe Co!rt to do Eere, in e(a%!ating tEeir eaning. TE!s in Po7ament Co$-) v) #;.


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Case 1:10-cv-03806-NRB Document 15 Filed 08/30/10 Page 1* o !"

D. D-=-nant* lo*t t(- 6-n-t o= an4 -nt)tl--nt t(-4 a4 (a/-(a to ,-l)-=3n-, GOL 8 9:#;< 3- to t(-), 35l)0)to3* a0t* a* all-+- )n t(-Co5la)nt.

-e&endants as+ te Co!rt, in app%ying a stat!te eant to de&end pres!a%y de&ense%ess sa%%

!siness owners &ro anip!%ati(e Fser(ice contract copanies, to &orget te centra% &act!a%

a%%egations o& te Cop%aint. Tese are te a%%egations tat de&endants not on%y +new te renewa% and

terination dates o& te agreeents, !t a&&irati(e%y anip!%ated teir actions aro!nd te tie o&

tose dates. Tese a%%egations state tat de&endants did tis in order to Feat "ortress o!t o& its

ai%ity to readi%y en&orce te contract!a% protections in p%ace to a(oid its eing depri(ed o& te ene&its

o& tose contracts. Cop%aint /8'D/. Te Co!rt !st accept tese a%%egations as tr!e see

,ills, su$a, /D ".2d at //8


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/=32. T!s, we are not concerned erein wit a sa%% !siness F!nwitting%y%oc+ed into te a!toatic renewa% o& a ser(ice contract.

/40 A.-.Dd at 98, 99= N.Y.S.Dd at 2/0. Tis reasoning app%ies a%% te ore so ere, were te

Cop%aint a%%eges not on%y de&endants@ +now%edge o& te a!toatic renewa% c%a!se, !t teir a!se

o& "ortress@s reasona%e eGpectations wit respect to tat c%a!se. As in Donald Ruin' (nc), tis

Co!rt so!%d not e concerned at a%% &or de&endants@ !n!sti&ied desire to ide eind O) 9'=02

and a(oid teir contract!a% o%igations nine onts a&ter ta+ing &!%% ad(antage o& te (ery contract

ters tey wis to in(a%idate today.

II. DEFENDANTS MOTION TO DISMISS SHOULD BE DENIEDBECAUSE NEW YORK GENERAL OBLIGATIONS LAW 8 9:#;9DOES NOT APPLY TO THE CONTRACTS OR FACTS HERE.

A. T(- a+,---nt* aon+ t(- 5a,t)-* 2-,- not l-a*-* o= ,-al 5,o5-,t4 o,5,-)*-*.

-e&endants pro&&er, as an a%ternate gro!nd &or disissa%, O) 9'=09, wic is

copanion %egis%ation to 9'=02.


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de&ined as a F6ay, i.e., te s!are area necessary to accoodate de&endants@ e!ipent, a%ong

wit a %icense pro(iding te access to teir 6ay. As stated in te Co%ocation Agreeent in /

1. THE LICENSED SPACE

"ortress IT# agrees to %ease to C!stoer, and c!stoer agrees to %ease to "ortressIT#, d!ring te ter, one 5/7 or ore co%ocation ay5s7 5F6ay 7. Twenty'&o!r5D


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Case 1:10-cv-03806-NRB Document 15 Filed 08/30/10 Page 1" o !"

de&ined in 6%ac+s )aw -ictionary as Fa person wo as a pri(i%ege to enter !pon%and arising &ro te perission or consent, eGpress or ip%ied, o& te possessor o&%and !t wo goes on te %and &or is own p!rpose rater tan &or any p!rpose orinterest o& te possessor. Tis de&inition is consistent wit tat ep%oyed y NewYor+ co!rts. It Eas %ong een tEe r!%e in New Yor+ tEat a %icensee, as opposed to

a tenant or one a(ing a greater interest in te !se or partic!%ar rea% property, cannotaintain an action &or wrong&!% eection. Bi%e it is tr!e tat tenants ay ee(icted on%y tro!g %aw&!% proced!re, oters, s!c as %icensees wEo are co(ered yNew Yor+ Rea% $roperty Actions and $roceedings )aw 5FR$A$) 7 8/2 are not soprotected. . .

Moreo(er, te e%eents o& a wrong&!% e(iction pro(ided y te New Yor+ Co!rto& Appea%s re!ire tat te tenant e depri(ed o& te enoyent or possession o&te 5,-)*-*) A%to!g te ter preises as any eanings, one o& itsde&initions;and te on%y one app%ica%e to a wrong&!% e(iction conteGt;is te&o%%owing1 F)and wit its app!rtenances and str!ct!res tereon ... A dwe%%ing !nit

and te str!ct!re o& wic it is a part and &ac!%ties and app!rtenances terein andgro!nds, areas, and &aci%ities e%d o!t &or te !se o& tenants genera%%y or wose !seis proised to te tenant. 6%ac+s )aw -ictionary . . . -e&endant did not enterinto an agreeent to rent %and or a dwe%%ing !nit &ro p%ainti&&. TEe contract

agreed to y te parties was sip%y a storage agreeent wic ga(e de&endant%icense to enter onto p%ainti&&s %and &or te p!rpose o& storing and accessing is(esse%.

6ased on tEe &oregoing, de&endant is a %icensee and not a tenant and tEere&orecannot aintain an action &or wrong&!% e(iction !nder New Yor+ %aw.

(d. at 3'= 5citations and !otations oitted7. Bi%e tis is not an action &or wrong&!% eection,

as =lads1% was, tEe ana%ysis in tEat opinion is entire%y apposite Eere. TEe iss!e e&ore tEe

=lads%Co!rt was essentia%%y te sae1 Bere te contracting parties entering into a %easeo%d

s!c tat te reedia% stat!tory protections, eant to reedy ia%ances in argaining power,

so!%d app%yK Te answer in =lads%was Fno, eca!se s!c protections are a&&orded to parties

respecting %eases &or rea% property, wereas tat re%ationsip tere ip%icated no ore tan a

%icense tat was app!rtenant to a ser(ice contract. ere too te answer so!%d e Fno as to

de&endant@s disissa% c%ai, &or te sae reasons1 No %ease, no rea% property, no preises.

/9


19/29


B. T(-,- )* no a6)+3)t4 )n t(- Colo0at)on A+,---nt *30( t(at t(-Co3,t (a*,-a*on to =a/o, an 3nt-na6l- )nt-,5,-tat)on o= t(- 0ont,a0t an a55l4 GOL8 9:#;97an an4 a6)+3)t4 a* a4 -)*t )* to 6- ,-*ol/- )n Fo,t,-*** =a/o,.

S!nting aside, once again, te operati(e ters o& te contracts ere, de&endants

nonete%ess ac+now%edge teir need to address te ters in /= o& te Co%ocation Agreeent

wEicE a+e it crysta%'c%ear tEat it is neitEer a %ease nor a grant o& rigEts in rea% property.

-e&endants !st try to eGp%ain wy te Co!rt so!%d disregard te pro(isions stating tat

FTis Agreeent is a ser(ices agreeent and is not intended to and wi%% not constit!te a

%ease or any rea% or persona% property

-e&endants ac+now%edge eing granted Fon%y a %icense to gain %iited, conditiona%

access to teir 6ay tat -e&endants a(e Fnot een granted any rea% property interest

!nder tis Agreeent and tat

-e&endants a(e Fno rigts as a tenant or oterwise !nder any rea% property or %and%ord L

tenant %aws, reg!%ations, or ordinances.

5Co%ocation Agreeent /=7. U%tiate%y, tey cannot do so.

-e&endants do try, owe(er. One approac tey ta+e is once ore to p%ay aro!nd wit

te words o& te Cop%aint, ignore te doc!ent as a wo%e and c%ai tat te eGistence o& te

words Fspace and F%ease raise an Faig!ity, t!s eriting a Fgenero!s interpretation s!c

tEat tEe Co!rt sEo!%d, nat!ra%%y, app%y O) 9'=09 5MO) at 4'8.7 6!t tEere is no s!cE

aig!ity Eere. Co!rts %oo+ to rea%ity, not %ae%s, wEen interpreting contracts. Contract

%ang!age is deeed aig!o!s on%y i& it is Fcapa%e o& ore tan one eaning wen (iewed

oecti(e%y y a reasona%y inte%%igent person wEo Eas eGained t(- 0ont-t o= t(- -nt),-

)nt-+,at- a+,---ntand wo is cogni:ant o& te c!stos, practices, !sages and terino%ogy

as genera%%y !nderstood in te partic!%ar trade or !siness. .a%e$s v) Roceste$ el) Co$)

.ulemental ,gmt) Pension Plan, 8 ".2d /0=/, /0=9 5Dd Cir. /==27 5epasis added interna%

!otes oitted7. As te Second Circ!it eGp%ained in .a%e$s, eGpanding on tis concept1


20/29

/4


21/29


A%to!g te parties disp!te te eaning o& speci&ic contract c%a!ses, o!r tas+ is todeterine weter s!c c%a!ses are aig!o!s wen read in te conteGt o& teentire agreeent. 6y eGaining te entire contract, we sa&eg!ard againstadopting an interpretation tat wo!%d render any indi(id!a% pro(ision s!per&%!o!s.$arties to a contract ay not create an aig!ity ere%y y !rging con&%icting

interpretations o& teir agreeent.

.a%e$s, 8 ".2d at /0=9 5citations and interna% !otes oitted7. As set &ort ao(e, it is on%y y

wrencing tese Fagic words &ro te Co%ocation Agreeent and te Cop%aint tat

de&endants can e(en c%ai so !c as an aig!ity. -e&endants wise%y do not e(en s!ggest tat teirs

is te on%y p%a!si%e interpretation o& te Co%ocation Agreeent.

Teir odesty, owe(er, is o& no a(ai%, &or in te !n%i+e%y e(ent tat te Co!rt were to

&ind tat tere were a contract!a% aig!ity ere, te Co!rt wo!%d not ten ere%y Fde&a!%t to

an interpretation &a(oring a reedia% stat!te. In &act, te ac+'%etter %aw concerning c%ais o&

contract!a% aig!ities on a /D57547 otion is precise%y te opposite1 FI& te interpretation o& a

contract is at iss!e . . . all 0ont,a0t3al a6)+3)t)-* 3*t 6- ,-*ol/- )n t(- 5la)nt)*

=a/o,. Bans v) Co$$) .e$vices Co$.,


22/29


23/29

Case 1:10-cv-03806-NRB Document 15 Filed 08/30/10 Page !1 o !"

to stay. FTis e(idence, wic was !ncontradicted, sowed a wai(er o& te stat!tory notice, wrote

te Appe%%ate Ter. Fere we a(e te e!i(a%ent o& an eGpress wai(er. F (d. at 29'24. Bi%e

!%tiate%y te tenant did o%d o(er, it was not its presence in te %easeo%d on wic te co!rt ased

its r!%ing, !t rater its wai(er. EGp%ained te co!rt1

APs te stat!te was enacted so%e%y &or te ene&it o& te tenant, we see no reasonwy e cannot wai(e its ene&its, !st as a ont%y tenant or tenant &ro ont toontE in tEe city o& New Yor+ ay wai(e tEe 20'day stat!tory notice as apre%iinary to tEe aintenance o& s!ary proceedings &or Eo%ding o(er tEe

ter.

(d. #cco$d, Doulel Bldg) Co) v) +ittell, D2 N.Y.S.Dd 8D3, 8D= 5N.Y. App. Ter. /=


24/29

Case 1:10-cv-03806-NRB Document 15 Filed 08/30/10 Page !! o !"

R!%e /D57547, &ro tEeir contract!a% o%igations ere%y eca!se tEey did not get a registered

%etter in&oring te o& a &act tey sowed tat tey +new a%% too we%%.

III. DEFENDANTS MOTION TO DISMISS SHOULD BE DENIEDBECAUSE THE AUTOMATIC RENEWAL CLAUSE IS NOT ANUNENFORCEABLE PENALTY CLAUSE.

-e&endants aintain4tat te a!toatic renewa% c%a!se ere is an !nen&orcea%e pena%ty

c%a!se as a atter o& %aw. Notwitstanding te sattering o& cases, soe in(o%(ing cons!er or sa%%

c%ais or in distant !risdictions, tEe %aw in tEis State does not s!pport de&endants@ arg!ent.

As tis Co!rt as noted1

)i!idated daages ay e esta%ised in ad(ance were te ao!nt esta%isedears a reasona%e proportion to te proa%e %oss, and act!a% daages aredi&&ic!%t to ascertain as o& tEe tie tEe parties enter into tEe contract. A c%a!se

wEicE pro(ides &or an ao!nt p%ain%y disproportionate to act!a% daages isdeeed a pena%ty and is not en&orcea%e eca!se it cope%s per&orance y teF(ery disproportion etween %iJ!idated and act!a% daages. 6otE tEereasona%eness o& tEe %iJ!idated daages and tEe certainty o& act!a% daages!st e eas!red as o& te tie o& te contracts eGec!tion rater tan at te tie o&te %oss act!a%%y inc!rred. . .

owe(er, d!e consideration !st a%so e gi(en to te nat!re o& te contract and teattendant circ!stances. "!rter, te New Yor+ Co!rt o& Appea%s asca!tioned against inter&ering witE tEe agreeent o& tEe parties, asent soepers!asi(e !sti&ication. C) Fit% .tates ,anagement Co$) v) Pionee$#uto Pa$s' (nc)'


25/29


!nconsciona%e cond!ct on tEe part o& tEe %and%ord to eGp%oit a tecEnica% reacE, tEere is no

warrant, eitEer in %aw or eJ!ity, &or a co!rt to re&!se en&orceent o& tEe agreeent o& tEe

parties 7 $uc Rent-#-Ct$)' (nc) v) Pu$itan Fa$ms !nd' (nc),


26/29

Case 1:10-cv-03806-NRB Document 15 Filed 08/30/10 Page !* o !"

I%. DEFENDANTS MOTION TO DISMISS SHOULD BE DENIEDBECAUSE THE COMPLAINT ADE"UATELY SETS OUT THEE&ISTENCE OF SUBECT MATTER URISDICTION.

-e&endants !rge te co!rt to disiss tis action on te gro!nds tat 5a7 te !ndersigned

&ai%ed proper%y to &i%% o!t te Ci(i% Co(er Seet in tis action, oitting to indicate tat 57 tere

ad een a disissa% o& a case re%ated to tis one, not on te erits, y anoter !dge sua sonte,

ased on 5c7 a s!pposed %ac+ o& s!ect atter !risdiction. None o& tese is an ade!ate gro!nd

&or disissa% o& tEis action and, to tEe eGtent tEis arg!ent is &!ndaenta%%y ased on 5c7,

de&endants Ea(e &ai%ed to o(e !nder tEe proper R!%e o& "edera% $roced!re go(erning s!cE

disissa%s, to en!nciate te %ega% standards o& tat R!%e or to app%y tose standards to te &acts

ere.

6eginning wit 5c7, te ost s!stanti(e o& de&endants@ cop%aints;a %ac+ o& s!ect

atter !risdiction;de&endants arg!e tat te Cop%aint &ai%s to a%%ege te citi:ensip o& te

eers o& te ))C de&endants, citing te !nreported decision in .cante ,ed)' (nc) v) .aella,

03'CV'


27/29


wi%% a%ost a%ways e te case at te p%eading stage, de&endants@ arg!ent, i& accepted, wo!%d

ao!nt to an eGeption o& ))C@s &ro any case ased on di(ersity !risdiction.

-e&endants co!%d a(e a(oided tis gaesansip y proper%y designating tis otion

as eing ased a%ternati(e%y on a %ac+ o& s!ect atter !risdiction !nder "ed. R. Ci(. $. /D57

5/7, instead o& R!%e /D57547, and pro(iding te Co!rt and parties wit appropriate &act!a%

s!issions pro&&ering act!a% !risdictiona% &acts. It ay e tat one or ot o& te de&endant

entities is coposed o& eers wose citi:ensip destroys di(ersity;!t ten again, it is ard to

iagine tat i& tis were in &act te case, de&endants wo!%d not !st say so instead o& reacing &or

arcane gro!nds &or disissa%.

"aced witE a sii%ar sit!ation in 9ccidental /otels ,gmt) B)A) v)


28/29


+now any o& tat now, and no possi%e !sti&ication &or disissa% ased on gro!nds.

-e&endants a%so cop%ain tat te prior order disissing anoter cop%aint y "ortress

against one de&endant sEo!%d go(ern tEis case, !t cite no a!tEority otEer tEan tEe !tter%y

inapp%ica%e decision in Ruotolo v) Cit% o Ne2 o$, 9/< ".2d /3


29/29

Case 1:10-cv-03806-NRB Document 15 Filed 08/30/10 Page !" o !"

actions necessary. Bat de&endants a(e &ai%ed to do, owe(er, is to cite any were a cop%aint was

disissed on s!c tecnica% gro!nds. And tey certain%y a(e coe !p epty in

deonstrating a!tority &or te s!ggestion tat an action in tis Co!rt so!%d e disissed ased on

an incorrect entry on a Ci(i% Co(er Seet, wic is Fere%y an adinistrati(e aid to te co!rt c%er+,

and is tere&ore not typica%%y considered part o& a %itigants p%eading papers. Favo$s v) Couglin,

388 ".Dd D/=, DD0 5Dd Cir. /=3=7.

U%tiate%y, owe(er, to te eGtent de&endants@ %ast gro!nd &or disissa% is, as teir rie&

says, ased on F&ai%!re to proper%y a%%ege s!ect'atter !risdiction, it is de&icient and so!%d

e denied eca!se aendent, not disissa%, is tEe appropriate reedy eca!se tEe Co!rt

so!%d o%d any s!c deterination in aeyance &o%%owing an opport!nity, at tis eginning stage

o& te %itigation, &or !risdictiona% disco(ery and eca!se de&endants tese%(es a(e &ai%ed to

o(e or arg!e !nder te appropriate R!%e o& "edera% $roced!re &or disissa% on tese gro!nds.

CONCLUSION

"or te &oregoing reasons, p%ainti&& Uni(ersity Co!nications, Inc. respect&!%%y

re!ests tat te Co!rt deny de&endants@ otion to disiss in its entirety.

GOETZ FITZPATRICK LLP

6y1WWWWWWWLSLWWWWWWWWWWWWWWWWWWWRona%d -. Co%ean 5RC 23897

One $enn $%a:a;S!ite

oppostion to motion to dismiss

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