Decided and Entered: September 29, 2026

Index No. 655576/24|Appeal No. 7060|Case No. 2025-04717|

Before: Scarpulla, J.P., Gesmer, Shulman, O'Neill Levy, Chan, JJ.

[*1]

Order, Supreme Court, New York County (Arthur F. Engoron, J.), entered on or about May 15, 2025, which granted defendants' CPLR 3211(a)(1) motion to dismiss the complaint, unanimously affirmed, without costs.

On July 26, 2022, plaintiff, the owner of an office complex in Henderson, Nevada, entered into a loan agreement with defendant KeyBank National Association. KeyBank later assigned the loan to defendant Wilmington Trust, as trustee of a trust titled BBCMS Mortgage Trust 2022-C17, Commercial Mortgage Pass-Through Certificates, Series 2022-C17.

One of the building tenants was nonparty Greenspun Media Group, which occupied about 25,000 square feet of the property and which was defined as a "Primary Tenant" in the loan agreement. By the terms of that loan agreement, Greenspun's failure to renew its lease within nine months of its June 30, 2023, expiration date would constitute a "Primary Tenant Cash Sweep" event. Once such event occurred, the lender was entitled to initiate a "cash sweep" in which plaintiff was required to deposit all revenue exceeding the property's operating expenses into a cash management account that the lender controlled. Greenspun had not executed a lease extension by October 1, 2022, and the lender initiated its cash sweep.

In December 2022, plaintiff furnished the lender with an extended Greenspun lease, which stated that it was for a term of five years. However, the lease included provisions that, provided certain conditions were met, gave Greenspun the option to reduce the amount of space being occupied or to terminate the lease before the expiration of the five-year period. Greenspun could exercise the option on the first day of the 13th month following the extended lease's execution. If exercised that day, Greenspun could terminate the lease at the end of the 13th month.

The documentary evidence conclusively established that the lender was entitled to continue the cash sweep after plaintiff furnished it with the Greenspun lease. The loan agreement provided that plaintiff could cure the cash sweep if the Primary Tenant "has renewed the Primary Tenant Lease on terms reasonably satisfactory to Lender (but not for a term of less than five (5) years or for rent below the then market rental rate)." This language plainly provided that plaintiff could not cure the cash sweep if the lease term for a primary tenant was for less than five years, even if the lease was otherwise "reasonably satisfactory" to Lender.

[*2]

Accordingly, the court correctly concluded that the loan agreement's language was unambiguous that the lease must not be "for a term of less than five . . . years" in order to avoid initiation of the cash sweep (see Ark Bryant Park Corp. v Bryant Park Restoration Corp., 285 AD2d 143, 150 [1st Dept 2001]; cf. LDIR, LLC v DB Structured Prods., Inc., 172 AD3d 1, 5-6 [1st Dept 2019]). The Greenspun lease unambiguously grants Greenspun the option to terminate the lease, at will, after 13 months, and does not unequivocally bind Greenspun for a full five-year "term." As each of plaintiff's claims depends on whether the lease was for a term of at least five years, those claims were properly dismissed.

We have considered plaintiff's remaining arguments and find them unavailing.

THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: September 29, 2026