Opinion
Index No. LT-322516-23/NY
05-15-2024
Delshah 60 Ninth LLC, Petitioner, v. The Chelsea Winery, Ltd., Respondent-Tenant. "XYZ CORP.", Respondents-Undertenants.
Attorneys for Petitioner Belkin Burden Goldman, LLP, Scott Loffredo, Esq., One Grand Central Place. Attorneys for Respondent-Tenant Whiteford, Taylor & Preston L.L.P., William Keith Watanabe, Esq.
Unpublished Opinion
Attorneys for Petitioner Belkin Burden Goldman, LLP, Scott Loffredo, Esq., One Grand Central Place.
Attorneys for Respondent-Tenant Whiteford, Taylor & Preston L.L.P., William Keith Watanabe, Esq.
RENA MALIK, J.
Upon the foregoing papers, respondent moves pursuant to CPLR 3211 (a) (7) to dismiss the petition, and petitioner opposes and cross-moves for summary judgment pursuant to CPLR 3211 (c) and 409 (b).
In May of 2022, the respondent-tenant entered into a lease with petitioner-landlord to operate a retail space in a portion of the ground floor of 60 Ninth Avenue in New York County. Upon respondent's default in paying rent in around July of 2023, petitioner served respondent with a notice of default dated August 4, 2023 (see NYSCEF Doc No 9) (default notice). Respondent claims that petitioner then served a notice of termination dated September 19, 2023, which stated that the lease would terminate as of September 29, 2023 (September termination notice) (see NYSCEF Doc No 7 [Gancarz aff] at ¶ 3, citing NYSCEF Doc No 10). On October 18, 2023, respondent claims that it tendered a $105,000.00 payment, which was accepted by petitioner "without any conditions or reservations as to it being without prejudice to the purported termination of the lease" (Gancarz aff at ¶ 4).
Petitioner then served a notice of termination dated October 27, 2023, which terminated the parties' lease as of November 6, 2023 (October termination notice) (see Gancarz aff at ¶ 5, citing NYSCEF Doc No 11; NYSCEF Doc No 15 [Shah aff] at ¶ 19). The affidavit from petitioner's principal explained that there appeared to have been a problem with the overnight courier service in delivering the September notice of termination and therefore asked petitioner's counsel to prepare another one (Shah aff at ¶ 19). This October termination notice is the predicate notice for the instant holdover proceeding, which was commenced on November 17, 2023 seeking a judgment of possession and monetary damages (see NYSCEF Doc No 1).
In determining dismissal pursuant to CPLR 3211 (a) (7) the pleading "is to be afforded a liberal construction" (Goldfarb v Schwartz, 26 A.D.3d 462, 463 [2d Dept 2006]). The "allegations are presumed to be true and accorded every favorable inference" (Godfrey v Spano, 13 N.Y.3d 358, 373 [2009]). "[T]he sole criterion is whether the pleading states a cause of action, and if from the four corners factual allegations are discerned which taken together manifest any cause of action cognizable at law a motion for dismissal will fail" (Guggenheim v Ginzberg, 43 N.Y.2d 268, 275 [1977]). In a summary eviction proceeding, the "four corners" of the petition include any required predicate notices that are annexed and incorporated by reference (see Jewish Bd. of Family & Children Services Inc. v S.B., 73 Misc.3d 956, 963 [Civ Ct, Bronx County 2021]; see also 200 W. 112th St. HDFC v 1842 7th Ave. Delicatessen Corp., 30 Misc.3d 1216[A], 2011 NY Slip Op 50101[U], *2 [Civ Ct, NY County 2011] ["Failure to set forth facts in the petition regarding service of the predicate notices renders the petition deficient"]).
Respondent submits an affidavit of its principal stating that a payment was made and accepted by petitioner-landlord on October 18, 2023, in the period of time between the September notice of termination's stated lease expiration (September 29, 2023) and before commencement of the proceeding. Respondent argues that the acceptance of the payment vitiated that notice of termination.
Although "a trial court may use affidavits in its consideration of a pleading motion to dismiss," such affidavits "are not to be examined for the purpose of determining whether there is evidentiary support for the pleading" (Rovello v Orofino Realty Co., Inc., 40 N.Y.2d 633, 635 [1976]). Consequently, affidavits submitted from a defendant "will almost never warrant dismissal under CPLR 3211" (Lawrence v Miller, 11 N.Y.3d 588, 595 [2008]) "unless [they] establish conclusively that plaintiff has no cause of action" (Rovello, 40 N.Y.2d at 636). Accordingly, the Court finds that respondent's motion to dismiss for failing to state a cause of action must be denied to the extent it rests on evidence of both a purported September termination notice and its mid-October payment - these facts and arguments go beyond the facial sufficiency of the petition with respect to the predicate notices and how they were served, with which respondent does not take issue (cf. 200 W. 112th St. HDFC, 2011 NY Slip Op 50101[U]; McKay v Farquharson, 75 Misc.3d 1223[A], 2022 NY Slip Op 50646[U] [Civ Ct, Queens County 2022]). Rather, to consider the payment and the implications of it in this summary proceeding, as discussed extensively by both sides, the Court finds that it would be more appropriate to convert the motion as one for summary judgment and/or summary determination, as requested by petitioner in the cross motion.
Pursuant to CPLR 409 (b), the court "shall make a summary determination upon the pleadings, papers and admissions to the extent that no triable issues of fact are raised" (see Matter of Gonzalez v City of New York, 127 A.D.3d 632, 633 [1st Dept 2015]). "The standards governing motions for summary judgment are applicable to special proceedings generally, of which the summary proceeding to recover possession of real property is a species" (Brusco v Braun, 199 A.D.2d 27, 31-32 [1st Dept 1993] [internal citations omitted], affd 84 N.Y.2d 674 [1994]). It is, therefore, "the court's duty to search the record and make summary determinations where appropriate" (McKay, 2022 NY Slip Op 50646[U] at *3; see New 110 Cipriani Units, LLC v Bd. of Mgrs. of 110 E 42nd St. Condominium, 166 A.D.3d 550, 551 [1st Dept 2018] ["The court had the power to dismiss the complaint upon a search of the record, as on a motion for summary judgment"]; see also Fourth Hous. Co., Inc. v Bowers, 53 Misc.3d 43, 44-45 [App Term, 2d, 11th & 13th Jud Dists 2016]).
Petitioner established its prima facie case for judgment of possession as petitioner submitted the deed to the subject property, which establishes petitioner's ownership of the premises (NYSCEF Doc No 17); a copy of the lease between the parties (NYSCEF Doc No 18); the certified multiple dwelling registration (NYSCEF Doc No 19); rent ledger (NYSCEF Doc No 20), and copies of the notice of petition, petition, notice of default and notice of termination, and affidavits of service (NYSCEF Doc No 21). This documentation is supported by an affidavit from Michael Shah, a principal and managing member of petitioner Delshah 60 Ninth LLC, who attests through personal knowledge and upon review of the relevant rental records that respondent defaulted on its lease obligations by failing to pay rent. The annexed documents establish that respondent held the subject premises pursuant to a lease agreement with petitioner, which obligated the payment of rent to petitioner.
Petitioner also established that it served the 5-day default notice and the October termination notice prior to the filing of the instant petition, and that respondent failed to cure its default or vacate the premises before the noticed dates. The Court finds that petitioner has established its prima facie case for judgment of possession as a matter of law. Indeed, there is no dispute that the August 4, 2023 default notice and the October termination notice were not defective or improperly served in accordance with the lease (see generally Bogatz v Extra Touch Intl., 179 Misc.2d 1029, 1029-35 [Civ Ct, Kings County 1999]).
Rather, in opposition, respondent argues that the petition is defective in light of petitioner's acceptance of the $105,000.00 payment after the September termination notice was served and prior to commencement of the instant petition. However, neither side submits proof regarding the service of the September termination notice. Assuming arguendo, that the September termination notice was properly served and was sufficient enough to terminate the lease as of the date stated therein (September 29, 2023), then respondent claims that the proceeding may not be maintained in light of landlord's acceptance of rent on October 18, 2023. Specifically, respondent argues that petitioner was required to serve a new notice of default and waived the claimed default.
While accepting rent may vitiate the purported termination notice (see Esplanade Gardens, Inc. v Simms, 51 Misc.3d 1228[A], 2016 NY Slip Op 50851[U], *5 [Civ Ct, NY County 2016] ["acceptance of rent after termination but prior to commencement of the proceeding... is sufficient to nullify a termination notice in holdover proceedings not based on nonprimary residence"]; see, e.g., 184 W. 10th Corp. v Westcott, 8 Misc.3d 132[A], 2005 NY Slip Op 51150[U] [App Term, 1st Dept 2005]; see also South Brooklyn Railway Co. v Heung Man Lau, __ Misc.3d __, 2024 NY Slip Op 24139, *8-9 [Civ Ct, Kings County May 7, 2024]), "it does not necessarily follow that the landlord has permanently waived its right to object to the conduct and may not serve a new termination notice for the same conduct" (Esplanade Gardens, Inc., 2016 NY Slip Op 50851[U] at *3; see also Montgomery Trading Co. v Cho, 3 Misc.3d 133[A], 2004 NY Slip Op 50436[U], *1 [App Term, 1st Dept 2004] [stating, in dicta, that even a "landlord's demands for rent, without any tender of payment by tenants, did not constitute a revival of the landlord-tenant relationship or manifest an intention to 'relinquish a known right'"], quoting Sullivan v Brevard Assoc., 66 N.Y.2d 489, 495 [1985]).
Here, there is no dispute that the August 4, 2023 default notice was valid and accurately set forth the respondent's default in paying rent. Respondent cites no reason why the October termination notice cannot serve as the predicate notice for this proceeding, which was based on the same existing default in failing to pay rent as set forth in the August 4, 2023 default notice (cf. TSS-Seedman's, Inc. v Elota Realty Co., 72 N.Y.2d 1024, 1026-27 [1988] [where landlord accepted all rents, previously withheld, and later served termination notices, the Court found the notices were "ineffective" because they were "sent at a later time when there were no outstanding rental defaults "] [emphasis added]).
Respondent relies on Troiano v 55 Ehrbar Tenants Corp. (168 Misc.2d 907 [Sup Ct., Nassau County 1996]), which the Court finds distinguishable. The landlord/co-op in Troiano served a notice terminating the parties' agreement because the shareholder/tenant allegedly defaulted in paying a sublet fee, but the landlord continued to accept all maintenance payments beyond the termination date, and then served another termination notice later that year (id.). Importantly, there was no proof that a "Notice to Cure Defaults" was ever served upon the tenant-shareholder and neither the first nor second termination notice referred to any "Notice to Cure Defaults" (id. at 907-908). However, that notice and a 30-day cure period were expressly required by the lease prior to serving a termination notice (id. at 909). Here, the August 4, 2023 default notice was valid and provided time to cure the default. Although respondent argues that a second default notice was required, the Court does not see any such language in the parties' lease that would require one and respondent does not cite to any other legal authority inferring the same.
Accordingly, the Court finds that petitioner demonstrated its entitlement to judgment of possession and respondent failed to raise an issue of fact requiring trial.
As for that branch of the motion and petition seeking monetary relief (base rent, use and occupancy), the Court finds petitioner established entitlement to the same based on the Shah affidavit, rent ledger and terms of the parties' lease. Additionally, the Court is permitted to grant "amendment of the petition to include all rent that has accrued following the commencement of the proceeding" (36 Main Realty Corp. v Wang Law Off., PLLC, 49 Misc.3d 51, 54 [App Term, 2nd, 11th and 13th Jud Dists 2015]). Article 50 of the lease expressly provides for the recovery of attorneys' fees. As respondent failed to oppose these branches of the motion, the requested relief is granted.
Accordingly, it is hereby ORDERED that respondent's motion to dismiss the complaint is denied; and it is further
ORDERED that petitioner's cross-motion for summary judgment is granted to the extent set forth herein; and it is further
ORDERED that the Clerk is directed to enter a final judgment granting the holdover petition and awarding possession of the premises-i.e., a portion of the ground floor of 60 Ninth Avenue, New York, New York 10011 located in the building known as 60 Ninth Avenue in Manhattan (as shown in Exhibit A to the petition) -to petitioner DELSHAH 60 NINTH LLC against THE CHELSEA WINERY, LTD., along with a money judgment in petitioner's favor and against respondent THE CHELSEA WINERY, LTD. in the amount of $ 485,937.50, representing rent and use and occupancy through January 31, 2024, with costs and disbursements in the amount of $50.00; and it is further
ORDERED that a warrant of eviction shall be issued forthwith, without stay. The earliest execution date of the warrant is May 24, 2024; and it is further
ORDERED that the petition is discontinued against "XYZ CORP." without prejudice; and it is further
ORDERED that the issue of attorneys' fees due pursuant to the parties' lease is severed and shall be scheduled for a hearing on June 13, 2024 at 2:15 PM in Part 52, located in Room 772 of 111 Centre Street.
This constitutes the decision and order of the Court.