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WAIVER OF DECLARATORY JUDGMENT ACTIONS TO RESOLVE DISPUTES ARISING FROM A LEASE WAS NOT AGAINST PUBLIC POLICY AND WAS ENFORCEABLE, THE COMMERCIAL LEASE WAS NEGOTIATED BY SOPHISTICATED, COUNSELED PARTIES (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge DiFiore, over a three-judge dissenting opinion, determined that the clause in a commercial lease which waived any action for a declaratory judgment concerning lease provisions, and required all disputes to be adjudicated in summary proceedings, was not against public policy and was therefore enforceable:

… [T]he declaratory judgment waiver is clear and unambiguous, was adopted by sophisticated parties negotiating at arm’s length, and does not violate the type of public policy interest that would outweigh the strong public policy in favor of freedom of contract. … [t]here is simply nothing in our contemporary statutory, constitutional, or decisional law indicating that the interest in access to declaratory judgment actions or, more generally, to a full suite of litigation options without limitation, is so weighty and fundamental that it cannot be waived by sophisticated, counseled parties in a commercial lease. CPLR 3001 enables Supreme Court to grant declaratory judgments in the context of justiciable controversies but in no way indicates that sophisticated parties may not voluntarily waive the right to seek such relief. A declaratory judgment is a useful tool for providing clarity as to parties’ obligations and may, in some circumstances, enable parties to perform under a contract they might otherwise have breached. Access to declaratory relief benefits the parties as well as society in quieting disputes. However, a declaratory judgment is merely one form of relief available to litigants in enforcing a contract. In codifying the right to seek declaratory relief, the Legislature neither expressly nor impliedly made access to such a claim nonwaivable with respect to any party, much less sophisticated commercial tenants.  159 MP Corp. v Redbridge Bedford, LLC2019 NY Slip Op 03526, CtApp 5-7-19

 

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