then give 90 days' notice of its termination of the Lease Agreement. By prefacing the entire
phrase as to termination on 90 days' notice with the separate, independent phrase "[s]ubsequent
to the first consecutive twelve month anniversary of the rent," the language is unambiguous that
the notice could only occur after one year of the Lease Agreement being in effect, contrary to
plaintiff's contention. Thus, the notice plaintiff sent of its forthcoming vacatur of the building on
October 8, 2008 was premature, as plaintiff could not vacate prior to three months after the one
year anniversary, that is, January 2009.
As a result, plaintiff's motion for summary judgment dismissing defendants' counterclaims is
denied. Although, as discussed above, the security deposit must be returned to plaintiff due to
defendant Developer's commingling of the funds which constituted conversion, Developer is
nonetheless entitled to seek any rental payments properly due and owing. Developer's
counterclaim for rent may go forward, as "[a] covenant to pay rent is independent [*7]from a covenant by the landlord to return a security deposit"
(Matter of Ideal Reliable Sundries, Inc., 49 AD2d at 852; see also Paterno v Carroll, 75 AD3d
625, 628 [2d Dep't 2010]). While a landlord is not entitled to offset the security deposit with
any amounts resulting from a breach of the lease (see Tappan Golf Drive Range, Inc., 68
AD3d at 441; Dan Klores Assocs., Inc., 288 AD2d at 121), here, as indicated above,
plaintiff in its complaint sought the return of only a portion of the security deposit, as plaintiff
provided an offset for the amount it conceded was owed to the landlord under the Lease for rent
and additional rent, including taxes and insurance payments.