On August 31, 2022, the Second Department issued a decision in 255 Butler Assoc., LLC v. 255 Butler, LLC, 2022 NY Slip Op. 05068, holding that when a contract did not specify a particular time for performance, the defendant had a reasonable time in which to perform, explaining:
Here, the parties agree that the lease does not contain any deadlines or milestones but rather requires only that the tenant diligently pursue conversion of the subject property. It is likewise undisputed that the lease contains no terms by which the tenant’s diligence may be measured. Where a contract fails to specify the time for performance, the law will imply a reasonable time. What constitutes a reasonable time for performance depends upon the facts and circumstances of the particular case.
In support of its claim that it diligently pursued conversion of the subject property, the tenant proffered evidence that, since leasing the property, it had commissioned a hotel economic impact study, prepared a business plan, and obtained proposals from three firms interested in operating the planned hotel. Based upon this investigative work, the tenant assembled a design team; obtained a survey of the property, zoning approval, an environmental spill report, and various permits; accepted proposals and entered into contracts with an architect, a food service contractor, a façade repair firm, general, green roof, pool, acoustical, lighting, and IT designers, and general, structural, and geotechnical engineers; obtained architectural drawings for the hotel project; and participated in numerous meetings. During the summer of 2015, the tenant was also negotiating with prospective lenders to obtain a leasehold mortgage to finance construction. After the tenant entered into negotiations with WeWork, it obtained an architectural assessment of the property for use as offices and began preparing alternate plans, despite still pursuing its plans for a hotel. The tenant thereby satisfied its prima facie burden.
In opposition, the defendants offered only conclusory assertions that the tenant should have made greater progress in the approximately two years between the signing of the lease and the issuance of the notice to cure. The Supreme Court therefore correctly determined that the defendants failed to raise a triable issue of fact in opposition to the tenant’s prima facie showing that it had diligently pursued conversion of the property notwithstanding the fact that construction had not yet commenced.
To the extent that the landlord additionally contends that the tenant’s negotiations with WeWork violated the terms of the lease, there is no dispute that the tenant’s proposed sublease to WeWork was never executed. Consequently, that proposed sublease could not serve as an alternative basis for finding the tenant in default of the lease.
Accordingly, the Supreme Court properly granted that branch of the plaintiff’s motion which was for summary judgment on its cause of action seeking a declaration that no default existed under the lease.
(Internal quotations and citations omitted).