GUILDERLAND — The owners of the former Uno’s Pizzeria in Crossgates Mall are appealing the decision of a lower-court judge to hold the group accountable for a lease agreement it signed after the very worst of the COVID-19 pandemic had abated. 

In a Feb. 11 filing with the fourth appellate division of the state Supreme Court in Onondaga County, NY DEEP LLC, Unos’s owner, said it would appeal Justice Robert Antonacci’s late January partial summary judgement in favor of Crossgates.

Toward the end of 2020, Crossgates had filed suit against nearly a dozen tenants who stopped paying their rent in the very first days of the pandemic, collectively owing at least $2 million in lease payments. 

The mall largely settled most of the cases quietly, typically in some kind of modified lease agreement, which was the case with Uno’s, a tenant since 2006, and its owner since 2018, NY DEEP. 

At the time of Crossgates’ first lawsuit filing, Uno’s had not paid rent for six months, totaling $229,000. The case was discontinued in May 2021, after both sides signed a modified lease agreement, which placed NY DEEP on the hook for about $170,650 in back-rent. NY DEEP would continue its tradition of not paying rent until September 2022, when Crossgates terminated its lease with the company, which had $139,000 in unpaid rent.

In its termination notice, Crossgate advised that it was “accelerating the rents due” to the mall, which resulted in Crossgates demanding “the present value of all sums due under the lease for the remainder of the term.” This was supposed to run till October 2026 and amounted to $1,893,002.03, and for past-due amounts totaling $234,689.79, according to Justice Antonacci’s decision

Antonacci did not rule in favor of Crossgates for the damages, but did say the mall was entitled to the rent due before and after its September 2022 termination notice, about a half-million dollars, which NY DEEP felt it did not owe. 

For Antonacci, it didn’t matter if what NY DEEP was saying about Crossgates going south was true. 

 What did matter was the mall had established “prima facie,” meaning the evidence it provided the court, in the form of a the modified lease agreement and proof no rent had been paid since the contract was signed appeared, “at first sight” or “based on first impression,” to be enough to support Crossgates’ initial request for what would end up as a partial summary judgment, meaning the mall was able to prove there was no genuine dispute over its attempt to obtain back-rent from NY DEEP, but Crossgates hadn’t done enough to show it was entitled to over a million dollars in damages.

NY DEEP, in an earlier court filing, argued that Crossgates had breached the “implied covenant of good faith and fair dealing in at least two ways, both of which undermined the purpose of the Lease and ultimately caused Tenant to go out of business.”

First, the mall “unilaterally changed the Mall’s hours, preventing Tenant from running dinner and evening bar service, when it made most of its revenue.”

Prior to the pandemic, Crossgates hours were  Monday through Saturday, from 10 a.m. to 9:30 p.m., and Sunday, from 11 a.m. to 6 p.m. When the world opened back up, Crossgates did as well, every day, from 11 a.m. to 7 p.m. Current hours are Monday through Thursday, 10 a.m. to 8 p.m.; Friday and Saturday, 10 a.m. to 9 p.m;, and Sunday, 11 a.m. to 6 p.m.

Crossgates’ second implied breach of good faith had to do with the mall’s reputation as the the Capital Region’s premier spot for donnybrooks involving 30 or more teenagers, and the occasional shooting; NY DEEP argued Crossgates failed “to provide adequate security at the Mall, driving away patrons and employees understandably fearful of injury or death.”

NY DEEP also claimed Crossgates “breached the covenant of quiet enjoyment in the Lease by actually and constructively evicting Tenant from the Premises through its unilateral restriction of the Mall’s operating hours,” which justified NY DEEP’s withholding of rent.

Antonacci brushed aside NY DEEP’s hours-of-operation arguments, pointing out the lease agreement gave Crossgates the power to say when it opens and closes, and noted that, under no circumstances, would the the company have been able to withhold its rent payment, which is something it should have been aware of for years.

The 2022 post-pandemic contract between the mall and NY DEEP included a provision similar in spirit to one in the 2018 agreement between NY DEEP, Crossgates, the previous LLC owner of Uno’s, and the two restaurants’ bankers, which said Pizzeria Uno of Albany Inc. had not been “not released or discharged from any liability under the Lease irrespective of this Assignment.”

Effectively, if something happened where, say, for example, NY DEEP didn’t pay its rent, then Pizzeria Uno of Albany Inc. was still responsible for lease payments. 

The 2022 agreement cut out the middle man, stating NY DEEP “reaffirms [its] obligations to the Landlord are unconditional and in-evocable, and that [NY DEEP] hereby waives any rights to receive the right to require Landlord first to proceed against Tenant and/or Guarantor, if any, prior to proceeding against [NY DEEP] for enforcement of the obligations under the Lease. 

NY DEEP’s “obligations shall remain in full force and effect, notwithstanding any amendment or modification of the Lease.”