Medi

Apr 24, 2023

The Legal Beat

What happens when a high-end Medi-Spa leases a space in a shopping center but either isn't aware or wasn't told that another tenant, owned by the landlord, is operating a business that involves the noise, odors, and particulates that result from cutting galvanized steel?

A bitter dispute that lands the parties in court.

Charles Collishaw, who owns the Colonial Plaza Shopping Center at 285 Route 303 in Congers, as well as Dean Custom Awnings, which is a tenant at the center, filed a lawsuit in Rockland County Supreme Court against Christina Milivia who operates ANU U Injectables LLC, a retail Medi-Spa directly above Dean's awning business.

Plaintiffs claim Milivia defamed Collishaw and his businesses when she made false statements accusing him of having "bought and bribed local government officials" from the Town of Clarkstown to enable him to open his awning service business at the rear of the retail shopping center.

Milivia leased a retail store at the shopping center to provide "non-surgical aesthetic medical services under the supervision of a licensed physician." She says she spent more than $100,000 to build out the space to serve her clients’ needs.

In response to the defamation case, Milivia countersued Collishaw, claiming damages in excess of $500,000.

At issue is how the courts will ultimately view the needs of two operating businesses who are in conflict with one another. In this case, the operation of one is purportedly causing a severe disruption in the peaceful operation of the other but it remains unclear as to how the uses of their spaces ever coexist.

The spa owner claims she was misled by Plaintiffs who had allegedly told her the only noise from the awning business would be the opening and closing of overhead garage doors under her Medi-Spa. Instead, she says that the sound and odors from the cutting of galvanized steel pipes under her floor has laid to waste the $100,000 she spent outfitting her spa space. The disruptions have destroyed the calm atmosphere necessary for the operation of her business.

Collishaw rebukes these accusations, saying the noise levels are reasonable, and that he has taken steps to mitigate them. He also says Milivia, the spa tenant, declined his offer to tear up the lease and let her move. Instead, he claims she started a campaign of lies and harassment that has damaged his reputation. He also has taken steps to declare Milivia in breach of her lease and terminate her tenancy.

The Town Zoning Code permits the accessory production and servicing of goods in the LS (Local Shopping District), provided that the goods produced or serviced are delivered to customers on the premises; that the floor area for production and services is less than 3,000 square-feet; that no more than five employees are engaged in production; and, that only electrically driven machinery be used. Dean also maintains an office in the upper level of the shopping center.

Last February, Dean Awnings received a Notice of Violation from the Town for having more than five employees engaged in the production of goods.

Milivia charges that in response to her complaints to the Town, she was served with a Notice of Breach of Lease. She denies she is in breach and asked the Court to allow her to pay her rent to the Clerk of the Court pending the outcome of the suit.

In an Order dated May 3rd, Judge Paul Marx, based on the papers filed with the Court, entered an order enjoining Dean Awnings from operating in violation of the Town Code and from causing any loud noises, vibrations or noxious odors that interfered with the operation of Milivia's Medi-Spa.

But less than two weeks later, at a hearing on May 15th, Judge Marx vacated his own order, and held that Milivia had no legal right to seek a court order enjoining a violation of the Town Code. That right, the Judge ruled, belongs to the town, not a tenant at the shopping center where the violation was alleged to have occurred. In other words, unless the town finds the awning company in violation, the court cannot find in favor of Milivia.

The court also rejected Milivia's other claims because she remained in possession and continued to operate her business despite the disruption she claimed from the awning business. And, the Court also said that since she was seeking money damages to make her whole, the harm she claimed was not "irreparable" and she was not entitled to an injunction.

After the hearing, Collishaw asked the Court to dismiss Milivia's counterclaims.

The court must still decide whether Milivia defamed Collishaw and whether or not Milivia was misled by the landlord or can find relief under the language in her lease. Even though Milivia was denied an injunction, she may be entitled to money damages.

As an aside, here's some free advice for businesses.

If you are a tenant, make sure the space you are leasing is suitable for the use you intend and secure the guarantees you need to keep it that way. Look at neighboring uses and make sure provisions in your lease protect the intended use of the space before sinking money into a buildout, especially in a shopping center or mixed-use property.

For the landlord, consider your tenant mix before leasing to someone who though may be technically zoning compliant, but may not be compatible with other paying tenants at the shopping center. If you cannot provide a quiet environment, don't rent to a tenant who requires one, and certainly don't let them spend hard-earned money building a space that may become problematic for their success.

Collishaw and his companies are represented by Feerick Nugent MacCartney of Nyack. Milivia and her company are represented by Condon Paxos of Nanuet.