Opinion
74149 L T 2003.
Decided January 23, 2004.
DECISION
Pursuant to an order of this court, the four above-captioned proceedings were jointly tried because of the similarity of the factual occurrences and identity of Petitioner.
Petitioner landlord instituted these non-payment summary proceedings against four commercial tenants who occupied four separate offices on the same floor of Petitioner's building. Each of the tenants stopped payment of their rents when Petitioner denied them access to what had been used by the tenants as freight elevators during the entire preceding period of their tenancies.
During the latter part of 2002, Petitioner dedicated the three freight elevators in question to a few large tenants in the building. The remaining tenants on the premises were permitted to use other elevators to gain access to their offices.
It is noted that the premises in question is connotatively referred to as the "shoe building" in the footwear industry because of the unusually large number of footwear wholesalers renting space therein. The four tenants in these actions are, in fact, such wholesalers, and the leased premises were used as showrooms and general office space. None of the subject tenants used the premises for manufacturing purposes.
At trial, the tenants testified that the loss of these freight elevators had interfered with their businesses, making it more difficult for them to take their shoe samples in and out of the building. In two of the instances, the actual distance between the offices and the elevators they were permitted to use increased, and in one instance, when the tenant relocated to a different office on the same floor, the distance decreased. However, the tenants further maintained that the elevators they were permitted to use are designed as passenger elevators, and consequently are less spacious than the freight elevators previously used by them. Also, the elevators which they were allowed to continue to use open on to a busy street, making loading and unloading merchandise more difficult than when they could use the freight elevators which emptied onto a less congested side-street.
In addition to the loss of use of the freight elevators, the tenants testified at trial that Petitioner also engaged in various construction projects that, during the period of the construction, interfered with their use of the common hallways and lavatories on their floor.
Three of the tenants in question, Franco Footwear, Inc ("Franco"), MCM Footwear Ltd. ("MCM"), andf Shuman Sales Co. ("Shuman"), all have the following provision in their leases:
Lessor or its agents shall have the right to enter or pass through the premises at all times, by master key, by reasonable force or otherwise, to examine the same, and to make such repairs, alterations or additions as it may deem necessary or desirable to the premises or the building, and to take all material into and upon the premises that may be required therefore. Such entry and work shall not constitute an eviction of Lessee in whole or in part, shall not be ground for any abatement of rent, and shall impose no liability on Lessor by reason of inconvenience or injury to Lessee's business. Lessor shall have the right at any time, without the same constituting an actual or constructive eviction, and without incurring any liability to Lessee, to change the arrangement and/or location of entrances or passageways, windows, corridors, elevators stairs, toilets, or other public parts of the building, and to change the name or number by which the building is known.
The lease for the fourth tenant who is subject to these proceedings, Eastern Express Group Inc. ("Eastern"), differs slightly but contains a similar provision:
Owner shall have the right at any time without the same constituting an eviction and without incurring liability to Tenant therefore, to change the arrangement and/or location of public entrances, passageways, doors, corridors, elevators, stairs, toilets or other public parts of the building, and to change the name, number or designation by which the building may be known. There shall be no allowance to Tenant for diminution of rental value and no liability on the part of Owner by reason of inconvenience, annoyance or injury to business arising from Owner or other Tenants making such repairs in the building or any such alterations, additions and improvements. Furthermore, Tenant shall not have any claim against Owner by reason of Owner's imposition of such controls of the manner of access to the building by Tenant's social or business visitors as the Owner may deem necessary for the security of the building and its occupants.
None of the leases grants any special rights to the elevators to the tenants, and elevators are only mentioned tangentially, as in the provisions reproduced above.
All parties agree that the four subject Respondents ceased to pay rent in 2002 and have not paid any rent thereafter. It is also noted that all of the leases expired on December 31, 2003.
Respondents have defended these non-payment proceedings by asserting that Petitioner's unilateral removal of their use of the freight elevators and construction in the hallways and toilets constitute an actual partial eviction of their premises or, in the alternative, a constructive eviction of their leaseholds.
In order to constitute a partial actual eviction, a landlord must wrongfully oust a tenant from physical possession of the leased premises. Barash v. Pennsylvania Term. Real Estate Corp., 26 N.Y. 2d 77, 308 N.Y.S. 2d 649 (1970). There must be a physical expulsion or exclusion, and even where the tenant is ousted from a only a portion of the demised premised the eviction is actual, if only partial. Scolamiero v. Cincotta, 128 A.D. 2d 224, 516 N.Y.S. 2d 334 (3rd Dept. 1987). Where there is a partial actual eviction, the tenant's obligation to pay rent is entirely suspended. 81 Franklin Co. v. Ginaccini, 160 A.D. 2d 558, 554 N.Y.S. 2d 207 (1st Dept. 1990).
An actual eviction may occur if a tenant is deprived not only of use of the demised premises that are subject of the lease, but also if the tenant is deprived of other appurtenant rights. 487 Elmwood, Inc. v. Hassett, 107 A.D. 2d 285, 486 N.Y.S. 2d 113 (4th Dept. 1985). Consequently, if a landlord interferes with a tenant's appurtenant rights, even if those rights are not spelled out in the lease, that interference may also constitute a partial actual eviction.
Respondents in the case at bar argue that the right to use the freight elevators was an appurtenant right to their leases. When the landlord unilaterally rededicated those elevators to the exclusive use of other tenants, that rededication resulted in a partial actual eviction of their leased offices.
In support of their contention, Respondents cite Broadway-Spring Street Corp. v. Jack Berens Export Corp., 12 Misc. 2d 460, 171 N.Y.S. 2d 342 (Mun. Ct. 1958), which held that, if the use of the freight elevator by the tenant is reasonably necessary and essential to the beneficial enjoyment of the demised premised, then the tenant is entitled to its continued use in the same manner in which it had always used it, and any interference therewith or disturbance thereof constitutes an actual partial eviction. However, the facts in that case are clearly distinguishable from those in the instant matter.
The freight elevator in Broadway-Spring Street Corp. was the only access to one of the floors of tenant's leased store. When that landlord converted its elevators to a manual format, it completely sealed off access, by elevator, to the tenant's mezzanine floor. Under those circumstances the court was perfectly justified in determining that the tenant had been actually evicted from a portion of its leased premises.
By contrast, in the instant case, access to Respondents' offices has never been denied or eradicated. Respondents continued to have use of several other elevators permitting ingress and egress to their rented spaces.
In Cut-Outs, Inc. v. Man Yun Real Estate Corp., 286 A.D. 2d 258, 729 N.Y.S. 2d 107 (1st Dept. 2001), a landlord restricted use of a freight elevator to its tenants during a period of reconstruction of the entire building. The tenants argued that such limitation constituted a partial actual eviction of their premises. In finding for the landlord, the court stated that, although the landlord's renovations caused the tenants substantial inconvenience, involved certain encroachments on the leased premises, and caused delays in bringing shipments in and out of the premises, the tenants were never denied access to their premises. The tenants only evidenced that access was slower, less convenient, less pleasant, and more difficult. The court held that such interference with ingress and egress does not amount to partial actual eviction.
Respondents assert that Cut-Outs, Inc v. Man Yun Real Estate Corp., is distinguishable from their situation because in that case the limitation of use was only intended to be temporary until the renovations were completed. In this analysis Respondents ignore certain other points of significant similarity.
In Cut-Outs, Inc. the landlord indicated that it would not be renewing any of the commercial leases because it was converting the use of the entire building. Petitioner had also indicated to Respondents that their leases would not be renewed. The lack of use of the freight elevators in Cut-Outs, Inc. continued until the expiration of the tenant's lease, which is identical to Respondents' situation. Finally, and perhaps most persuasively, both leases contain similar, if not identical, provisions granting the landlord the right to effectuate such changes without it constituting an eviction of the tenants. Courts have held that such exculpatory lease provisions are to be given effect. See Camatron Sewing Machine, Inc. v. F.M. Ring Associates, Inc., 179 A.D. 2d 165, 582 N.Y.S. 2d 396 (1st Dept. 1992).
In Graubard Mollen Horowits Pomeranz Shapiro v. 600 Third Avenue Associates, 240 A.D. 2d 161, 658 N.Y.S. 2d 272 (1st Dept. 1997), the Appellate Division held that the alleged interference with the tenant's ingress and egress to its premises by the landlord replacing two elevators with three smaller ones resulting in a reduction of elevator service never resulted in a denial of access and therefore did not constitute a partial actual eviction. In the instant case, Respondents elevator service was reduced, but never totally denied.
Based on the foregoing, the court concludes that Petitioner's action in rededicating its freight elevators to the exclusive use of some of its larger tenants did not constitute a partial actual eviction of Respondents' demised premises.
The court also notes that, based on testimony of Respondents at trial, all but Respondent Shuman indicated that their use of the freight elevators was limited to a few times each year when they attended trade shows. Shuman did use the freight elevators once a week, which was the only time it actually used the premises, the company being permanently based in Massachusetts.
In contrast to the theory of partial actual eviction which relieves a tenant of its entire rent obligation, it is well settled that a commercial tenant may be relieved of its obligations to pay the full rent due where it has been constructively evicted from either a whole or a part of the leasehold. Barash v. Pennsylvania Term. Real Estate Corp., op cit. A constructive eviction occurs where the landlord's wrongful acts substantially and materially deprive the tenant of the beneficial use and enjoyment of the premises. Johnson v. Cabrera dba South Express Courier, 246 A.D. 2d 578, 668 N.Y.S. 2d 45 (2nd Dept. 1998). A defense of constructive eviction is not available to a tenant who continues to occupy the demised premises. Goldberg Holding Corp. v. Blier, 60 Misc. 2d 374, 303 N.Y.S. 2d 226 (Bronx County 1969).
Respondents have failed to demonstrate that the loss of the use of the freight elevators and the obstruction in the hall and toilets during a period of renovation substantially or materially interfered with or deprived them of the use and enjoyment of their offices. At all times, Respondents continued the occupancy of their rented spaces. Further, such slight inconvenience was contemplated and agreed to by Respondents when they signed the leases with the provisions noted above.
Therefore, based on the foregoing, the court concludes that Respondents have not been constructively evicted from their premises.
The court finds for Petitioner.
The court awards Petitioner all rents due and owing from Respondents through December 31, 2003. Warrants of eviction are to be issued forthwith.