59 N.Y.2d 170 (1983)
A subtenant’s option to renew a sublease, which is expressly subject to the terms of the master lease, is contingent upon the tenant’s exercise of its option to renew the master lease, absent an agreement or special circumstances compelling the tenant to renew.
Summary
The Court of Appeals addressed whether a subtenant, Modell, could compel the tenant, 198 Broadway, Inc., to exercise its option to renew a master lease to enable Modell to exercise its sublease renewal option. The sublease was explicitly subject to the master lease. The court held that the tenant had no obligation to renew the master lease for the subtenant’s benefit, absent an explicit agreement or special circumstances. The court emphasized that the express terms of the leases controlled, and no evidence of bad faith or grounds to pierce the corporate veil existed.
Facts
Levy and Richter leased premises at 198 Broadway to Bienenstock, granting him two renewal options. Bienenstock subleased the ground floor and part of the basement to Modell, with a sublease term ending on the same date as the initial master lease term. Modell’s sublease included an option to renew, but it was made subject to the terms of the master lease. Bienenstock assigned the master lease to 198 Broadway, Inc., which assumed the obligations under the sublease. The Church acquired fee title to the property and its subsidiary became the tenant under the master lease.
Procedural History
Modell notified 198 Broadway, Inc., of its intent to renew the sublease. 198 Broadway, Inc., stated it would not renew the master lease, claiming Modell’s renewal was ineffective. The Church initiated a holdover proceeding against Modell’s undertenant. Civil Court initially favored Modell, but the Appellate Term reversed, granting summary judgment to the Church. The Appellate Division affirmed, and Modell appealed to the Court of Appeals.
Issue(s)
Whether a subtenant can compel a tenant to exercise its option to renew a master lease solely to enable the subtenant to exercise its renewal option on the sublease, when the sublease is subject to the terms of the master lease and the tenant has not otherwise agreed to renew the master lease.
Holding
No, because the sublease was explicitly subject to the terms of the master lease, and the tenant had no obligation to renew the master lease for the subtenant’s benefit in the absence of an explicit agreement or special circumstances.
Court’s Reasoning
The court relied on the express terms of the sublease, which stated it was subject to the master lease. The court found no language in either lease imposing an obligation on the tenant to renew the master lease for the subtenant’s benefit. The court rejected Modell’s argument that the Church’s acquisition of fee ownership and its subsidiary’s role as tenant obligated them to accept Modell’s renewal, stating that Modell offered no admissible proof or legal theory to support this claim. The court emphasized the separate corporate identities of the Church and 198 Broadway, Inc., finding no evidence of fraud or bad faith that would warrant piercing the corporate veil. The court noted sound business reasons for 198 Broadway, Inc., not to renew the master lease, as it would have required leasing the entire 12-story building, not just the space subleased to Modell. The court stated, “In the circumstances disclosed in this record the court is obliged to determine the rights of the parties in accordance with the express terms of the legal documents executed by them.” Dissent argued the sublease was ambiguous and Modell should have been allowed discovery to establish special circumstances.