Commercial Division Blog

Posted: May 12, 2017 / Categories Commercial, Court Rules/Procedures

Declaratory Judgment Claim Justiciable Even Though Option Had Not Yet Been Exercised

On April 19, 2017, Justice Scarpulla of the New York County Commercial Division issued a decision in Robert B. Jetter, M.D., PLLC v. 737 Park Ave. Acquisition LLC, 2017 NY Slip Op. 30797(U), holding that a declaratory judgment claim was justiciable even though the option that was the subject of the claim had not yet been exercised, explaining:

It is fundamental that to establish a cause of action for a declaratory judgment, a party must present a justiciable controversy. CPLR § 3001. A request for a declaratory judgment is premature if the future event is beyond the control of the parties and may never occur.

Here, the future event is within the parties' control as the Lease provides Jetter with the option to exercise the right to renew, and the time to exercise that right will eventually occur. In fact, a declaratory judgment is intended to declare the respective legal rights of the parties based on a given. set of facts. The crux of 73 7 Park's argument serves that very purpose - that by wrongfully withholding rent for at least three months (as found by the court in the first proceeding), Jetter should be prohibited from attempting to exercise the future right to renew, because the time for the renewal option will occur, and the declaration now has a direct impact on how the parties proceed with the Lease's duration.

Under the circumstances of this action, I find that a justiciable controversy exists regarding each party's rights and obligations under the Lease. In addition, because the court in the first
proceeding found that Jetter wrongfully failed to pay rent for at least three months, under the plain terms of the renewal option, Jetter is no longer able to exercise the renewal option.

Accordingly, I grant 737 Park's fifth counterclaim for declaratory judgment, and declare that Jetter is precluded from exercising the Lease's renewal option.

(Internal quotations and citations omitted).