Eastside Exhibition Corp. v. 210 East 86th Street Corp.

Eastside Exhibition Corporation (plaintiff) leased two floors of a seven-story building from 210 East 86th Street Corporation (defendant) to operate a movie theatre under an 18-year lease. Eastside paid $2.75 million to convert the space into a four-screen theatre with a first-floor lobby about 15 feet wide and 40 feet long, with two one-foot square columns 20 feet apart in the center. Four years into the lease, the landlord installed cross bracing between the columns on both floors of the theatre to add two more floors to the building. The cross bracing took up only about 12 square feet of the theatre’s total 15,000 to 19,000 square footage but was not aesthetically appealing, blocked some foot traffic in the lobby, and slightly diminished the second floor waiting area. Eastside stopped paying rent and sued for an injunction, arguing that New York law allowed abatement of rent for any partial eviction, no matter how minimal. The trial court dismissed Eastside’s claim and awarded the landlord unpaid rent, reasoning that the minimal intrusion did not warrant full abatement of the rent. The appellate court reversed, finding no de minimis exception to the New York rule that any unauthorized taking of leased premises amounts to an actual eviction and remanded to the trial court to determine damages. Two experts testified for Eastside but were unwilling or unable to quantify actual damages resulting from the intrusion. The trial court awarded Eastside no damages as a result, and the appellate court affirmed, unwilling to revisit the law of the case as expressed in its earlier opinion. By the time Eastside appealed to New York’s highest state court, it had not paid rent in nine years.