Opinion
LT 75766/10.
Decided October 21, 2010.
Respondents' motion for summary judgment dismissing the petition is granted, and the proceeding is hereby dismissed; petitioner's cross-motion for an order for an order of access and entry is denied.
Patterson Belknap Webb Tyler LLP, New York, NY, for petitioner.
David Rozenholc and Associates, New York, NY, for respondent.
Petitioner brings this commercial nonpayment proceeding pursuant to the terms of a January 1, 2000 lease made between petitioner as landlord and Travers Jewelers Corp. as tenant which is due to expire by its terms on December 31, 2010 (the "Lease") (exh A to moving papers). Co-respondents Sam Kassin and Robert Kassin are guarantors of Travers's obligations under the Lease pursuant to a guaranty executed January 1, 2000, also annexed as exh A.
The predicate notice, dated July 2, 2010, entitled "Ten Days' Notice to Pay Rent" stated, in pertinent part: "Please take notice that you are justly indebted to 650 Fifth Avenue in the sum of $371,449.97 (the "Amount Due"), for rent, additional rent and related charges accrued during the months of January 2010 through July 2010, for Store Number 2. . . ." (exh A to moving papers).
Respondents assert that the proceeding must be dismissed on the grounds that (1) the rent demand was defective, (2) the petition and notice of petition were improperly served, and (3) guarantors Sam Kassin and Robert Kassin cannot properly be joined as parties to this summary proceeding.
In support of the first ground set forth in respondents' motion, its president Sam Kassin points out that the demand does not specify what the "related charges" are, and does not contain a breakdown of charges between rent, additional rent and those "related charges" (aff. in supp., para. 8). (The Court notes that the demand does not even set forth the amount of the monthly rent). On this basis, respondents assert that the demand is defective because the amount set forth therein does not bear a reasonable relationship to the amount of rent actually owed, and as such, the proceeding must be dismissed.
In opposition, there is no sworn statement from petitioner. Instead, petitioner simply attaches (as exhibit 6 to its cross-motion) its September 2, 2010 verified bill of particulars, which amplified the allegations of the petition, but not the demand. Significantly, the objection raised by respondents is the sufficiency of the demand, not the petition. It is well settled that defects in a predicate notice are not subject to cure at a later date. See Chinatown Apartments, Inc. v Chu Cho Lam, 51 NY2d 786, 433 NYS2d 86 (1980). Therefore, petitioner's attempt to cure the defects in the demand by submitting a verified bill of particulars which is explains the allegations of the petition must fail.
Even if an explanation of the amount sought in the demand were permissible after the summary proceeding is commenced, petitioner still has not, in its opposition, explained how it calculated the $371,449.97 lump sum sought in the demand, which it subsequently sought as a money judgment in the petition (para. 8), or how that number bore a reasonable relationship to the amount of rent due. Specifically, in response 6 of its verified bill of particulars, petitioner states that the amount of overdue rent sought in the petition is itemized on an attached report and further states that "Travers has not made a payment of rent since March 31, 2010, but that pursuant to the terms of the Lease, [petitioner] has applied Travers' security deposit towards unpaid charges alleged in the petition". As no one submitted an affidavit on behalf of petitioner stating the amount of the security deposit, when that deposit was allegedly applied to the arrears, or anything else, this Court was left to inspect the 3-page report/printout ("A/R Detail Aging by Alphaname As of July 31"). This document, instead of explaining how the amount sought in the demand was calculated, actually contradicts the amount sought in the demand, thus bolstering respondents' argument for dismissal. The report/printout shows that the last payment was received on April 1, 2010 in the amount of $146,000.00 and that Travers owed $127,114.63 as of July 31, 2010. In contrast, the demand claims that Travers owed $371,449.97 as of July 31, 2010, almost triple the amount actually due as reflected in petitioner's own exhibits.
As the Appellate Term, First Department stated in IG Second Generation Partners, L.P. v 166 Enterprises Corp., 2003 WL 22012208, NYLJ August 5, 2003 (p. 18, col. 1), "where nonpayment of rent is at issue, the amount demanded should bear a reasonable relationship to the amount actually owed", citing Schwartz v Weiss-Newell, 87 Misc 2d 558, 561, 386 NYS2d 191 (Civ Ct, NY County 1976)("a proper demand for rent must fairly afford the tenant . . . actual notice of the alleged amount due and of the period for which such claim is made").
In order to prevail on its motion for summary judgment, the movant must make a prima facie showing of entitlement to judgment as a matter of law, through admissible evidence, eliminating all material issues of fact. Alvarez v Prospect Hospital, 68 NY2d 320, 508 NYS2d 923 (1986). Once the movant demonstrates entitlement to judgment, the burden shifts to the opponent to rebut that prima facie showing. Bethlehem Steel Corp. v Solow, 51 NY2d 870, 872, 433 NYS2d 1015, 414 NE2d 395 (1980). In opposing such a motion, the party must lay bare its evidentiary proof. Conclusory allegations are insufficient to defeat the motion; the opponent must produce evidentiary proof in admissible form sufficient to require a trial of material questions of fact. Zuckerman v City of New York, 49 NY2d 557 at 562, 427 NYS2d 595 (1980).
In deciding the motion, the court must draw all reasonable inferences in favor of the non-moving party and must not decide credibility issues ( Dauman Displays, Inc. v Masturzo, 168 AD2d 204, 562 NYS2d 89 [1st Dept 1990]). As summary judgment is a drastic remedy which deprives a party of being heard, it should not be granted where there is any doubt as to the existence of a triable issue of fact ( Chemical Bank v West 95th Street Development Corp., 161 AD2d 218, 554 NYS2d 604 [1st Dept 1990]), or where the issue is even arguable or debatable ( Stone v Goodson, 8 NY2d 8, 200 NYS2d 627). Here, respondents have demonstrated entitlement to judgment as a matter of law; petitioner has failed to rebut that showing by demonstrating that the amount demanded in the predicate notice, $371,449.97, bore a reasonable relationship to the amount it claimed Travers owed as reflected in the printout, to wit, $127,114.63. Accordingly, respondents' motion for summary judgment dismissing the proceeding is granted, and the proceeding is hereby dismissed.
Because respondents claimed service was improper, the Court now addresses the issue of when a traverse hearing is necessary. In this case, contrary to petitioner's argument, a traverse hearing would be required. In support of the branch of its motion seeking dismissal of the proceeding based on improper service, respondents submit the affidavit of Sam Kassin who disputes the assertions made by the process server in the affidavit of service sworn to July 28, 2010 and states, inter alia, that "(n)o one delivered to or left with me a copy or copies of the Notice of Petition and Petition on July 26, 2010" (para. 3). In opposition, petitioner submits the affidavit of the process server (exh 3) who reiterates the facts alleged in his July 28, 2010 affidavit of service, that on July 26, 2010 he served Travers by leaving a copy of the notice of petition and petition with Sam Kassin, including a physical description of Mr. Kassin, giving his height as "approximately 5 feet, 8 inches". In his reply affidavit, Mr. Kassin states that he is 6 feet 2 inches tall, not 5 feet 8 inches tall as stated in the process server's description.
Both affidavits could not possible be true — either the process server handed the papers to Sam Kassin on that date or he did not. Either Mr. Kassin knowingly submitted a false affidavit, the process server knowingly submitted a false affidavit, or the process server handed the papers to someone he mistakenly thought to be Sam Kassin. A hearing is necessary to determine whether what the process server swore to is true.
The three cases cited by petitioner in support of the proposition that a respondent's conclusory denial unaccompanied by "further probative facts" is insufficient to rebut the presumption of service, are inapposite to the facts of this case. In American Savings Loan Assoc. v Twin Eagles Bruce, Inc., 208 AD2d 446, 617 NYS2d 717 (1st Dept 1994), the court simply stated that defendant's "conclusory denial was not accompanied by further probative facts that would require a traverse hearing". It is impossible to tell from that decision exactly what defendant stated or what the process server claimed; in any event, Mr. Kassin has alleged a "further probative fact"?the 6 inch height discrepancy. Likewise, in Ross v Queens Organization, LLC, 9 Misc 3d 1128(A), 862 NYS2d 811 (Sup Ct, Queens County 2005) it is impossible to tell what the underlying affidavits set forth. The court found that the mere denial of receipt failed to rebut the presumption of regularity of service upon the corporate defendant; while that proposition is true, the decision does not reveal the exact allegations made which failed to rebut the presumption. It could very well have been that the process server handed the papers to the vice president of the company, but the affidavit challenging service was from the president who claimed "I never received it". That is starkly different from what is presently at bar, where the same individual allegedly served flatly denies the truth of the process server's affidavit.
Finally, Fairmount Funding Ltd. v Stefansky, 235 AD2d 213, 652 NYS2d 14 (1st Dept 1997) is also distinguishable; there, the papers were served by "nail and mail" and the defendant claimed he never received them. Because there is no requirement that the papers actually be received for there to be proper service, an allegation that they were not received does not rebut the presumption of proper service. In Fairmount Funding and similar cases, the process server could have done a proper "nail and mail" yet the wind or a passerby could have knocked the papers off the door and the mailing could have been refused or thrown away. Under such facts, service would be proper even if the target may not have received it. In other words, when both affidavits may be true, there is no need for a hearing.
To warrant a traverse hearing when the process server's affidavit contains the elements of proper service, the rebutting affidavit must specifically contradict something contained in the process server's affidavit. Here, the process server claims he gave the papers to Sam Kassin on July 26, 2010, and Sam Kassin did not offer a conclusory denial; Mr. Kassin affirmatively states that no one gave him papers on that date? and that he is six inches taller than described by the process server. This is the classic situation which requires a court to conduct a traverse hearing; both stories cannot be true. Where a respondent rebuts an affidavit of service with a sworn denial of service, the petitioner must establish jurisdiction by a preponderance of the evidence at a traverse hearing. Backman v Kleidman , 27 Misc 3d 1215 (A), 2010 WL 1712245 (Civ Ct, NY County 2010), citing Skyline Agency v Ambrose Coppotelli, 117 AD2d 135, 502 NYS2d 479 (2d Dept 1986).
Based on the foregoing, the Court need not consider respondents' other grounds for dismissal. As for petitioner's "cross-motion" for an "Order of Entry", respondents' attorney correctly states that this relief should properly be sought in a complaint sounding in equity, and that this Court lacks jurisdiction to order such relief in the context of a cross-motion in a commercial nonpayment proceeding. Accordingly, respondents' motion for summary judgment dismissing the petition is granted due to the defective rent demand and the proceeding is dismissed; petitioner's cross-motion for an Order of Entry is denied.
This is the Decision and Order of the Court.