Jennifer CHAITMAN, et al., Plaintiffs–Appellants,
v.
Francis MOEZINIA, et al., Defendants,
FSM Holdings II, LLC, et al., Defendants-Respondents.
[And Third-Party Actions]
 
 

*1 Orders, Supreme Court, New York County (Melissa Crane, J.), entered on or about August 7, 2018, which, to the extent appealed from as limited by the briefs, denied plaintiffs' motion for partial summary judgment on the claim for a full rent abatement, and granted defendants FSM Holding II, LLC, DMZ III, LCC and SM 84th TIC, LLC's motion for summary judgment dismissing the claims for a full rent abatement and lost profits as against them, unanimously modified, on the law, to deny defendants' motion as to the claim for a full rent abatement to the extent predicated upon paragraph 26 of the lease, and otherwise affirmed, without costs.

While the motion court correctly denied plaintiffs' motion for partial summary judgment on the claim for a full rent abatement, it should not have dismissed the claim to the extent it was based on paragraph 26 of the lease, which provides that “if more than thirty percent (30%) of the demised premises is damaged or affected thereby and the demised premises cannot be open for business to the general public, then all rent and additional rent shall be fully abated until it can be opened for business.” Issues of fact exist as to the percentage of the premises that was affected by defendants' negligent renovations. Plaintiffs were not precluded from asserting this claim on the ground that the plain meaning of “open for business to the general public” included the situation in which, due to the renovations, the business remained open to existing clients but could not accept new clients.
The claim for lost profits, however, was properly dismissed.  General Obligations Law § 5–321 provides:
“Every covenant, agreement or understanding in or in connection with or collateral to any lease of real property exempting the lessor from  liability for damages for injuries to person or property caused by or resulting from the negligence of the lessor, his agents, servants or employees, in the operation or maintenance of the demised premises or the real property containing the demised premises shall be deemed to be void as against public policy and wholly unenforceable.”
The  exculpatory  clauses in the lease relieving defendants of  liability for lost profits resulting from their own negligence are not void under  General Obligations Law § 5–321 because lost profits are distinct from property damage ( see e.g.  Duane Reade v. 405 Lexington, L.L.C., 22 A.D.3d 108, 112, 800 N.Y.S.2d 664 [1st Dept. 2005] [ General Obligations Law § 5–321does not void the waiver of business loss  liability because claims for business losses are “wholly distinct and separate from property damage” claims];  Periphery Loungewear v. Kantron Roofing Corp., 190 A.D.2d 457, 461, 599 N.Y.S.2d 554 [1st Dept. 1993] [“If we accept plaintiff's argument that ‘injuries to ... property’ include loss due to business interruption, then  General Obligations Law § 5–321 might very well invalidate [the  exculpatory  clause] of the lease. But ... from the perspective of insurance coverage, the concept of business interruption loss is  one wholly distinct and separate from property damage.”]. This Court has repeatedly enforced  exculpatory  clauses related to business interruption losses ( see After Midnight Co. LLC v. MIP 145 E. 57th St., LLC, 146 A.D.3d 446, 447, 43 N.Y.S.3d 749 [1st Dept. 2017], and cases cited therein).
*2 Moreover, paragraph 23 of the lease amendment specifically provides that “[ n]otwithstanding anything to the contrary ... Tenant waives, to the full extent permitted by  law, any claim for consequential or punitive damages in connection [with damage to Tenant's property]” (emphasis added). 1 In view of this unequivocal  exculpatory  clause stating that no other provision in the lease shall entitle the tenant to consequential damages, the claim for lost profits is barred ( see generally Board of Mgrs. of the Saratoga Condominium v. Shuminer, 148 A.D.3d 609, 610, 51 N.Y.S.3d 34 [1st Dept. 2017];  Periphery Loungewear, 190 A.D.2d at 461, 599 N.Y.S.2d 554).
Contrary to plaintiff's argument, the separate provision in the lease amendment that requires the landlord to “use its reasonable efforts to minimize the inconvenience to, annoyance and injury to Tenant's business and its use and enjoyment of the demised premises” does not override the  exculpatory  clause in this lease amendment ( cf.  Duane Reade v. Reva Holding Corp., 30 A.D.3d 229, 235, 818 N.Y.S.2d 9 [1st Dept. 2006] [plaintiff's claim for business interruption losses permitted where lease  clause that provided that owner shall not unreasonably interfere with tenant's business took precedence over  exculpatory  clause that provided that “[e]xcept as specifically provided in  Article 9 or elsewhere in the lease” there shall be no  liability to tenant for injury to business, and there was a provision elsewhere in the lease];  Union City Union Suit Co. v. Miller, 162 A.D.2d 101, 102, 104, 556 N.Y.S.2d 864 [1st Dept. 1990] [plaintiff's claim for damages arising out of failure of landlord to provide heat and freight elevator  service permitted because the  exculpatory  clausestating that “[e]xcept as specifically provided in  Article 9 or elsewhere in this lease” there shall be no  liability to the tenant for injury to business was significantly narrowed by another  clause providing that alterations to premises shall be made at such time so as not to unreasonably interfere with tenant's use of the premises],  lv denied  77 N.Y.2d 804, 568 N.Y.S.2d 912, 571 N.E.2d 82 [1991]).
Since the  exculpatory  clause in this lease amendment, unlike the  clauses in  Duane Reade and  Union City, overrides any other  clause in the lease amendment that could be interpreted as imposing  liability on the landlord for lost profits, that claim was correctly dismissed.