FILED: NEW YORK COUNTY CLERK 06/11/2012 INDEX NO /2012 NYSCEF DOC. NO. 28 RECEIVED NYSCEF: 06/11/2012

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1 FILED: NEW YORK COUNTY CLERK 06/11/2012 INDEX NO /2012 NYSCEF DOC. NO. 28 RECEIVED NYSCEF: 06/11/2012 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK x GETTY PROPERTIES CORP. and GETTYMART INC., : Index No /12 -against- Plaintiffs, GETTY PETROLEUM MARKETING INC., 1314 SEDG WICK AVE. LLC, HILLSIDE AVE. LLC A/K/A HILLSIDE AVE LLC, 1224 ROUTE 22 LLC, 310 BAY SHORE ROAD LLC, 751 WHITE PLAINS ROAD LLC, 1245 NEPPERHAM AVE. LLC, COLLEGE POINT BOULEVARD #2 LLC, 2 MONTAUK HIGHWAY LLC, 1714 NEW YORK AVE, LLC, 292 RAILROAD AVE., LLC, 600 WHITE PLAINS ROAD LLC, 286 ASHBURTON AVE., LLC, 857 RT. 6 MAHOPAC LLC, VAN DAM STREET LLC A/K/A VANDAM STREET LLC, QUEENS BLVD. LLC A/K/A QUEENS BLVD LLC, 69 BK STREET LLC A/K/A 69 BK STREET, LLC, 67 QUAKER RIDGE ROAD LLC, ONE PLEASANTVILLE ROAD LLC, 894 ROUTE 109, LLC, 185 EAST LINCOLN AVENUE LLC, ROBERT G. DEL GADIO and FRANK MASCOLO, Defendants x MEMORANDUM OF LAW IN SUPPORT OF LANDLORDS MOTION FOR USE AND OCCUPANCY AND OTHER RELIEF ROSENBERG & ESTIS, P.C. Attorneys for Plaintiffs 733 Third Avenue New York, New York (212) HOWARD W. KINGSLEY Of Counsel

2 TABLE OF CONTENTS Page PRELIMINARY STATEMENT...3 FACTS...4 ARGUMENT...4 POINT I LANDLORD IS ENTITLED TO USE AND OCCUPANCY...4 POINT II ALTERNATIVELY, LANDLORD IS ENTITLED TO THE INJUNCTIVE RELIEF SOUGHT...6 A. Landlord is Entitled to the Injunctive Relief Pursuant to the Terms of the Master Lease and the Subleases...6 B. To the Extent That Landlord is Required To Satisfy the Three-Part Test to Obtain the Injunctive Relief Sought, Landlord Has Done So Landlord is Likely to Succeed on the Merits Absent the Injunctive Relief Sought, Landlord Will Suffer IrreparableHarm The Balance of the Equities Tip Heavily in Landlord s Favor...10 CONCLUSION...10 RE02020\0002\477870v2

3 TABLE OF AUTHORITIES Page(s) Cases 1133 Bldg. Corp. v. Ketchum Communications, 224 A.D.2d 336, 638 N.Y.S.2d 450 (1st Dep t 1996) East 87th St. Really Co., LLC v. Ole Pa Enterprises, Inc., 191 Misc. 2d 796, 745 N.Y.S.2d 827 (Sup. Ct. N.Y. Co. 2002), aff d 304 A.D.2d 310, 757 N.Y.S.2d 31 (1St Dep t 2003)...5 Alphonse Hotel Corp. v. 76 Corp., 273 A.D.2d 124, 710 N.Y.S.2d 890 (1st Dep t 2000)...4, 6 East 4th St. Garage, Inc. v. Estate of Berkowitz, 265 A.D.2d 249, 697 N.Y.S.2d 266 (1st Dep t 1999)...4 Eli Haddad Corp. v. Cal Redmond Studio, 102 A.D.2d 730,476 N.Y.S.2d 864 (1st Dep t 1984)...5, 6 Fortune JD LLC v. Samuel John, Inc., 35 Misc. 3d 1223(A), 2012 WL (Civ. Ct. Kings Co. 2012)... 4,6 Frederick Bros. Artists Corp. v. Yates, 296 N.Y. 820 (1947)... 9 Goldman v. LaFollette Corp., 4 Misc. 3d 128(A), 791 N.Y.S.2d 869 (A.T. 1st Dep t 2004)... 5 Hutchins v. Phillips, 277 A.D. 1055, 101 N.Y.S.2d 63 (2d Dep t 1950)... 8, 9 Lipkis v. Pikus, 99 Misc. 2d 518, 416 N.Y.S.2d 694 (A.T. 1st Dep t 1979), aff d72 A.D.2d 697, 421 N.Y.S.2d 825 (1979)...5 Ma v. Lien, 198 A.D.2d 186, 604 N.Y.S.2d 84 (1st Dep t 1993)...9 MMB Assocs. v. Dayan, 169 A.D.2d 422, 564 N.Y.S.2d 146 (1st Dep t 1991)...4 One Pleasantville Road, LLC v. Pleasantville Food and Gas, Inc., 2012 WL (A.T. 9th & 10th Jud. Dists. 2012)...6 Tri-Beca Foods, Inc. v. Hanover River House, 92 A.D.2d 777, 459 N.Y.2d 615 (lstdep t 1983)

4 W. T Grant Co. v. Srogi, 52 N.Y.2d 496, 438 N.Y.S.2d 761 (1981)...8 Workbench, Inc. v. Syblin Really Corp., 140 A.D.2d 693, 528 N.Y.S.2d 888 (2d Dep t 1988)... 9 Statutes RealProperty Law

5 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK x GETTY PROPERTIES CORP. and GETTYMART INC., : Index No /12 -against- Plaintiffs, GETTY PETROLEUM MARKETING INC., 1314 SEDG WICK AVE. LLC, HILLSIDE AVE. LLC A/K/A HILLSIDE AVE LLC, 1224 ROUTE 22 LLC, 310 BAY SHORE ROAD LLC, 751 WHITE PLAINS ROAD LLC, 1245 NEPPERHAM AVE. LLC, COLLEGE POINT BOULEVARD #2 LLC, 2 MONTAUK HIGHWAY LLC, 1714 NEW YORK AVE, LLC, 292 RAILROAD AVE., LLC, 600 WHITE PLAINS ROAD LLC, 286 ASHBURTON AVE., LLC, 857 RT. 6 MAHOPAC LLC, VAN DAM STREET LLC A/K/A VANDAM STREET LLC, QUEENS BLVD. LLC A/K/A QUEENS BLVD LLC, 69 BK STREET LLC A/K/A 69 BK STREET, LLC, 67 QUAKER RIDGE ROAD LLC, ONE PLEASANTVILLE ROAD LLC, 894 ROUTE 109, LLC, 185 EAST LINCOLN AVENUE LLC, ROBERT G. DEL GADIO and FRANK MASCOLO, Defendants x MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANT S SECOND MOTION FOR SUMMARY JUDGMENT Plaintiffs, Getty Properties Corp. and Gettymart Inc. (collectively and/or individually, "Landlord"), by their attorneys, Rosenberg & Estis, P.C., hereby submit this memorandum of law in support of their motion for an order: a. Directing Former Subtenants to pay for their use and occupancy of the subject 19 properties (the "Sites") at the total rate of $165,750 per month for the month of June 2012 forthwith and on the first day of each month thereafter pendente lite, without prejudice to all of Landlord s rights and remedies and without creating any landlord-tenant relationship between Landlord and Former Subtenants, or alternatively:

6 i. Directing Former Subtenants to notify, in writing, each person and/or entity in possession of, using, occupying, managing and/or operating any of the Sites other than defendant Getty Petroleum Marketing Inc. (collectively and/or individually, the "Sub-subtenants") that (A) Former Subtenants rights of possession with respect to the Sites were terminated effective April 30, 2012, and (B) all rents, subrents, sub-sub-rents and/or other monies (the "Sub-sub-rents") should be paid when due (1) directly to Getty Properties Corp., 125 Jericho Turnpike, Suite 103, Jericho, New York , without prejudice to any and all of Landlord s rights, remedies and claims under applicable law, and without creating a landlord-tenant relationship between Landlord and Former Subtenants and/or Sub-sub-tenants, or (2) into Court until further order of the Court; ii. iii. enjoining and restraining Former Subtenants from billing for, collecting, depositing, demanding and/or using any and all Subsub-rents from Sub-sub-tenants with respect to any lease, sublease, sub-sub-lease or other agreement (the "Sub-sub-leases") between Former Subtenants and Sub-sub-tenants; and directing Former Subtenants to deposit and/or transfer into escrow with the Court any and all Sub-sub-rents received by Former Subtenants on and after May 1, 2012 by wire, check, cash or otherwise within 24 hours of Former Subtenants receipt of each payment of Sub-sub-rent, except with respect to any Sub-sub-rents already received, which must be deposited and/or transferred into escrow with the Court within 24 hours from the date hereof, until further order of the Court; b. Directing Former Subtenants to provide Landlord or its counsel with (i) on the first day of each month starting on July 1, 2012, an accounting of all Sub-sub-rents received by Former Subtenants on and after May 1, 2012, and (ii) all books, records and other materials relating to the Sites, including, without limitation, Sub-sub-leases, and/or the operation, maintenance and/or environmental controls and other environmental issues at the Sites (electronic or otherwise) in the possession, custody and control of Former Subtenants within five days from the date of the order granting this motion. 1 1 Defined terms not defined herein have the meanings ascribed to them in the affidavit of Joshua Dicker, sworn to on June 8, 2012 (the "Dicker AM"). -2-

7 PRELIMINARY STATEMENT In this action, defendants rights to remain in possession of the 20 Sites were terminated as of April 30, 2012 based upon the terms of the order of the United States Bankruptcy Court for the Southern District of New York entered on April 2, 2012 (the "Master Lease Rejection Order"). The Master Lease Rejection Order not only terminated defendants rights in the Sites, but specifically required them to vacate and relinquish possession of the Sites. However, they have not done so. Thus, Landlord commenced this action against Former Tenant and Former Subtenants to obtain an order of ejectment and other relief. As demonstrated below, Courts routinely require a former tenant or subtenant that is holding over in possession after termination to pay U&O pendente lite because it is extremely unfair that a tenant or subtenant should be able to holdover in possession without paying for the use thereof. The monthly amount of U&O that Former Subtenants should pay is $165,750, which was the amount of fixed rent due and the proportion of annual real estate taxes due to Landlord under the Master Lease before it was terminated, without prejudice to Landlord s rights and remedies to seek a higher amount and without creating a landlord-tenant relationship. If the Court does not require Former Subtenants to pay U&O, Former Subtenants should not be able to collect any Sub-sub-rents because such subrents have already been assigned to Landlord pursuant to the terms of the Master Lease and the Subleases, and any Sub-sub-rents collected or to be collected should be placed into escrow into Court in order to protect Landlord. Moreover, the Master Lease expressly provides Landlord with the right to enjoin violations thereof. Here, the violations are the failure to pay the assigned Sub-sub-rents to Landlord. Accordingly, Landlord s Motion should be granted. -3-

8 FACTS For the sake of brevity, the facts are set forth in the accompanying emergency affirmation of Howard W. Kingsley, dated June 11, 2012 (the "Kingsley Aff"), the Dicker Aff. and the exhibits annexed thereto. ARGUMENT POINT I LANDLORD IS ENTITLED TO USE AND OCCUPANCY Real Property Law 220 provides, in pertinent part: "The landlord may recover a reasonable compensation for the use and occupancy of real property... " It is well settled that the Court has broad discretion to award a landlord use and occupancy pendente lite when the premises is being used and occupied. Alphonse Hotel Corp. v. 76 Corp., 273 A.D.2d 124, 710 N.Y.S.2d 890 (1st Dep t 2000); East 4th St. Garage, Inc. v. Estate of Berkowitz, 265 A.D.2d 249, 697 N.Y.S.2d 266 (1st Dep t 1999); MMBAssocs. v. Dayan, 169 A.D.2d 422, 564 N.Y.S.2d 146 (1st Dep t 1991); Fortune JD LLC v. Samuel John, Inc., 35 Misc. 3d 1223(A), 2012 WL at *1 (Civ. Ct. Kings Co. 2012) (monthly U&O awarded in the amount of rent set forth in the lease). The rationale of the rule was stated in MMBAssocs., 169 A.D.2d at 422, as follows: "[t]he award of use and occupancy during the pendency of an action or proceeding accommodates the competing interest of the parties in affording necessary and fair protection to both [citations omitted]. It is manifestly unfair that defendant herein should be permitted to remain in possession of the subject premises without paying for their use" (emphasis supplied). -4-

9 In Eli Haddad Corp. v. Cal Redmond Studio, 102 A.D.2d 730, 731, 476 N.Y.S.2d 864 (1st Dep t 1984), the Appellate Division, First Department, quoted the Appellate Term in Lipkis v. Pikus, 99 Misc. 2d 518, 520, 416 N.Y.S.2d 694 (A.T. 1st Dep t 1979), aff d 72 A.D.2d 697, 421 N.Y.S.2d 825 (1979), as follows: "Having entered into possession fully cognizant of the existing realities, tenants should not now be permitted to reap the benefits of occupancy and, at the same time, avoid the payment of rent." Here, Former Subtenants have admitted that the Master Lease was terminated and that they have no right of possession. Dicker Aff., Ex. K. More significant, Del Gadio admitted that one of his LLCs, 185 East Lincoln Avenue LLC, would pay Landlord "the same amount of rent that we have paid to [Former Tenant] including taxes." Dicker Aff., Ex. L. Former Subtenants promise to pay U&O directly to Landlord recognizes the well settled principle of law that a subtenant must pay its over-landlord use and occupancy during the holdover period although there is no privity of contract between the landlord and the subtenant Bldg. Corp. v, Ketchum Communications, 224 A.D.2d 336, 638 N.Y.S.2d 450 (1st Dep t 1996); 501 East 87th St. Really Co., LLC v. Ole Pa Enterprises, Inc., 191 Misc. 2d 796, 745 N.Y.S.2d 827 (Sup. Ct. N.Y. Co. 2002), aff d 304 A.D.2d 310, 757 N.Y.S.2d 31(1st Dep t 2003); Goldman v. LaFollette Corp., 4 Misc. 3d 128(A), 791 N.Y.S.2d 869 (A.T. 1st Dep t 2004). It would be inherently unfair for Former Subtenants, who have expressly acknowledged the termination of the Master Lease and their rights to remain in possession of the Sites to avoid the obligation to pay U&O to Landlord, especially when one of the Former Subtenants, One Pleasantville Road LLC, as landlord, had very recently argued in a holdover proceeding that it was entitled to more than $40,000 in U&O after the expiration of the tenancy against its -5-

10 (sub)tenant. One Pleasantville Road, LLC v. Pleasantville Food and Gas, Inc., 2012 WL (A.T. 9th & 10th Jud. Dists. 2012). As for the amount of U&O, Courts have awarded the last amount reserved under the terminated or expired lease (Eli Haddad Corp. v. Cal Redmond Studio, 102 A.D.2d 730, 731, 476 N.Y.S.2d 864 (1st Dep t 1984); Fortune JD LLC, 2012 WL at *1), without prejudice to a showing that the reasonable or fair market value of the Sites is higher (see Alphonse Hotel, 273 A.D.2d at 124). Accordingly, Former Subtenants should pay monthly U&O in the amount of $165,750 starting with the month of June 2012 and on the first day of each month thereafter during the holdover period. POINT II ALTERNATIVELY, LANDLORD IS ENTITLED TO THE INJUNCTIVE RELIEF SOUGHT If Former Subtenants are not required to pay U&O, Former Subtenants should be enjoined from collecting Sub-sub-rents and they should be required to place all Sub-sub-rents into escrow into this Court to protect Landlord. A. Landlord is Entitled to the Injunctive Relief Pursuant to the Terms of the Master Lease and the Subleases Because Former Tenant did not pay the November Rent, there was a Material Monetary Event of Default and Landlord terminated the Master Lease as a result thereof. Dicker Aff., Exs. D, H. As a result of the termination of the Master Lease, whether by the Termination Notice or the Master Lease Rejection Order, Former Tenant agreed, inter alia, in Master Lease 16.3 that all Subleases "shall automatically terminate upon any termination of this [Master] Lease." -6-

11 Dicker Aff., Ex. D. Upon termination of the Master Lease, 16.3 clearly and unambiguously states, inter alia, as follows: "Tenant hereby assigns, transfers and sets over to Landlord all of Tenant s right, title and interest in and to each Sublease entered into by Tenant from time to time, together with all subrents or other sums of money due and payable under each Sublease" (emphasis supplied). Id. The above provision clearly includes the Sub-sub-rents, which are "subrents." Thus, upon termination of the Master Lease, the Sub-sub-rents that are due under the Sub-sub-leases were also assigned to Landlord. Such provisions of the Master Lease also apply to Former Subtenants because the Subleases were "subject to" the Master Lease. Dicker Aff, Ex. E, 13, Ex. F, 12. Accordingly, the Sub-sub-rents have been assigned to Landlord and Former Subtenants are not entitled to them. Master Lease , entitled "Injunction of Tenant s Breaches," states that if there is a Material Monetary Event of Default under the Master Lease, which was the case here: "Landlord shall be entitled to obtain a court order enjoining Tenant from continuing conduct constituting a breach of Tenant s covenant s in this [Master] Lease." Based upon this clear language, Landlord is entitled to enjoin Former Subtenants from collecting and not paying Sub-sub-rents over to Landlord, just like this Court had, in the December 2011 TRO, enjoined Former Tenant from collecting subrents from its subtenants. Dicker Aff, Ex. I, pp There is absolutely no reason why the same relief should not be granted here. Indeed, since the Master Lease has been terminated, all subrents, including, Subsub-rents have been assigned to Landlord. These subrents obviously include the Sub-sub-rents, which are further down the chain, and now belong to Landlord. Former Subtenants cannot be in a better position than Former Tenant by being able to collect Sub-sub-rents, but not paying them -7-

12 up the chain to Landlord. As a result, Landlord is entitled to an order restraining Former Subtenants from collecting Sub-sub-rents from Sub-sub-tenants. Moreover, in a substantially similar case, the Appellate Division, First Department, has held that the over-landlord was entitled to an injunction: "enjoining the lessees from collecting rents from the occupants of the previous [and] requiring the lessees to account to appellant for rents collected by them from occupants for the [holdover] period. [because the landlord] as owner of the property, became entitled to the rents paid by the occupants of the premises." Hutchins v. Phillips, 277 A.D. 1055, 101 N.Y.S.2d 63 (2d Dep t 1950). Simply, the alternative injunctive relief sought is merely requiring Former Subtenants to comply with the terms of the Subleases. Tri-Beca Foods, Inc. v. Hanover River House, 92 A.D.2d 777, 459 N.Y.2d 615 (1st Dep t 1983) (injunction granted to require party to comply with lease). Accordingly, Landlord is entitled to the injunctive relief sought. B. To the Extent That Landlord is Required To Satisfy the Three-Part Test to Obtain the Injunctive Relief Sought, Landlord Has Done So If the Court requires Landlord to demonstrate a likelihood of success on the merits, irreparable harm absent the granting of the preliminary injunction, and a balancing of the equities in its favor (W.T Grant Co. v. Srogi, 52 N.Y.2d 496, 517, 438 N.Y.S.2d 761 (1981)), to obtain the injunctive relief sought, Landlord has done so. 1. Landlord is Likely to Succeed on the Merits The Bankruptcy Court, in the Master Lease Rejection Order, has already determined that the Master Lease and the Subleases were terminated on April 30, 2012 and required Former Tenant and Former Subtenants to vacate possession immediately (Kingsley Aff, Ex. B, 4). fl17\flflflflfl\flflflfl\ ,fl tj,\jlulv\vuulvti JOIUVL. -8-

13 Indeed, Former Subtenants have admitted that they no longer have any rights of possession of any of the Sites by purportedly surrendering possession of them. Thus, they are admittedly holdovers and Landlord is entitled to possession and an order of ejectment for each of the Sites as demanded in its first cause of action. Kingsley Aff., Ex. B. As a result, Landlord is also entitled to the monetary relief sought on its other causes of action. 2. Absent the Injunctive Relief Sought, Landlord Will Suffer Irreparable Harm At the time that Hutchins v. Phillips was decided in 1950, a movant had to demonstrate irreparable injury absent the relief sought. Frederick Bros. Artists Corp. v. Yates, 296 N.Y. 820 (1947). Thus, when the Appellate Division issued the injunction after it was denied by the trial court in Hutchins, it is respectfully submitted that the Court found the required element of irreparable harm. In any event, since the Former Tenant and Former Subtenants are not paying the real estate taxes for the Sites, they are undisputedly putting these unique properties at a risk of being lost by foreclosure or otherwise. This potential loss of unique real property also constitutes irreparable harm. Workbench, Inc. v. Syblin Realty Corp., 140 A.D.2d 693, 528 N.Y.S.2d 888 (2d Dep t 1988). Moreover, since each Former Subtenant LLC is a single asset entity of attorney Del Gadio (Dicker Aff., 71), it is respectfully submitted that he can easily dissipate or make unavailable for recovery these substantial assets. Such threatened harm constitutes irreparable injury. Ma v. Lien, 198 A.D.2d 186, 604 N.Y.S.2d 84 (1st Dep t 1993). Based upon the foregoing, Landlord has satisfied this part of the test. -9-

14 3. The Balance of the Equities Tip Heavily in Landlord s Favor The balance of the equities tip heavily in favor of Landlord because Landlord is being deprived of possession of its Sites, and the payment of fixed rent and real estate taxes for the Sites, which will amount to over $1 million annually. Moreover, Former Subtenants should not be able to reap a financial windfall to Landlord s substantial detriment. On the other hand, there is absolutely no prejudice to Former Subtenants to, in effect require them to comply with the Subleases to the extent of requiring them to pay U&O for the Sites while they are in possession. Moreover, in no event will Former Subtenants be harmed if they are required to place Sub-subrents into escrow. CONCLUSION Based upon the foregoing, Landlord s motion should be granted. Dated: New York, New York June 11, 2012 Respectfully submitted, ROSENBERG & ESTIS, P.C. Attorneysfor Flaintffs Howard W. 733 Third Avenue New York, New York (212) HOWARD W. KINGSLEY Of Counsel -10-