Opinion
LT 082314/18/KI
03-01-2019
ER BUTLER & CO., INC., Petitioner, v. WYETH, INC., "John Doe", Respondent.
For plaintiff: Barry S. Schwartz Esq., 119 West 57th Street, Suite 813, New York, NY 10019 For defendant: Douglas Fromme Esq., Douglas Fromme P.C, 462 Seventh Avenue, 12th Floor, New York, NY 10018
For plaintiff: Barry S. Schwartz Esq., 119 West 57th Street, Suite 813, New York, NY 10019
For defendant: Douglas Fromme Esq., Douglas Fromme P.C, 462 Seventh Avenue, 12th Floor, New York, NY 10018
Odessa Kennedy, J.
Recitation, as required by Civil Practice Law and Rules (CPLR) § 2219(a), of the papers considered in the review of this Motion:
Papers Numbers
Notice of Motion and Affidavits 1, 2
Cross-motion and Replying Affidavits 3, 4
Reply Affirmation and Opposition to Cross-motion 5
Reply Affirmation in Support of Cross-Motion 6
Exhibits
Other
In a commercial holdover proceeding, respondent tenant moves in a pre-answer motion to dismiss landlord's "monetary claim" pursuant to CPLR 3211(a)(1) and (7). Petitioner landlord cross moves for summary judgement pursuant to CPLR 3211(c), seeking final judgment of possession, warrant of eviction, monetary judgment in the amount of $ 120,775.58 for rent arrears, $ 212,358.62 for real estate taxes, $ 15,882.20 per month for use and occupancy, and a hearing to determine landlord's attorney fees.
The parties entered into a one-year lease agreement regarding a commercial space which required tenant to pay landlord rent, real estate taxes and attorney fees resulting from tenant's noncompliance. The lease expired in 2004, after which, the tenant continuously occupied the premises to date, pursuant to a month to month tenancy which was created by operation of law. Landlord claims the tenancy ended on August 31, 2018, pursuant to a "3-day notice of termination."
In the petition, landlord seeks, inter alia , final judgment of possession, monetary judgment in the sum of $ 127, 317.48, for rent arrears from October 26, 2016 until August 31, 2018, fair market value of use and occupancy, and $ 7500 for attorney fees. In the instant cross motion, landlord further seeks a hearing to assess attorney fees and an additional $ 212,358.20 for unpaid taxes.
In opposition, tenant contends that after the lease expired in 2004, it never agreed to pay rent, real estate taxes, or attorney fees in accordance with the terms of the expired lease.
While a motion for summary judgement may be made after the issue has been joined ( CPLR 3212(a) ), a Court may convert pre-answer motion to dismiss to a motion for summary judgment, if movant submits evidence that could properly be considered in a summary judgement motion ( CPLR 3211(c) ) and demonstrates that its motion exclusively presents a purely legal question. ( Mihlovan v. Grozavu , 72 NY2d 506, 531 N.E.2d 288 [1988] ).
In the case at bar, the issue has not been joined. Moreover, landlord fails to provide proof in admissible form in support of its motion, which is required in a motion for summary judgment. Rather, landlord bases its monetary claim on a "rent ledger," which it claims contains tenant's itemized rent arrears and "finance charges," without establishing the foundational requirements of CPLR 4518(a). Nor does landlord make any attempt to authenticate emails annexed to the moving papers or the relevance of some dating back to 2003.
Further notable, Landlord fails to establish that the monetary claim involves a purely legal issue. ( CPLR 3211(c) ). Landlord contends that a month to month tenancy was created after the expiration of the lease, and that tenant implicitly agreed, to pay rent pursuant to the terms of the lease. However, it is well-settled that in a month to month tenancy, created after expiration of the lease, a tenant is not liable to pay the rent specified in the expired lease, absent proof of a contract between the parties. ( 1400 Broadway Associates v. Henry Lee & Co. , 161 Misc 2d 497, 614 N.Y.S.2d 704 [Civ Ct, NY County 1994] ).
Moreover, landlord may not unilaterally bind tenants to a payment not bargained for ( Eshaghian v. Adams , 28 Misc 3d 1215[a], 957 N.Y.S.2d 635 [Civ Ct, NY County, 2010] ) or at a rate where there is no longer a meeting of the minds ( 1400 Broadway Associates v. Henry Lee & Co. , 161 Misc 2d 497, 614 N.Y.S.2d 704 [Civ Ct, NY County 1994] ).
In the instant matter, landlord's monetary claim, with the exception of use and occupancy, is based on the unproven premise, that after the lease expired, tenant agreed to pay rent and real property taxes in the amount specified in the lease.
Both sides concede that the parties did not enter into a written contract to extend the terms of the expired lease or a written contract to agree to the rent specified in the lease. Tenant further unequivocally denies having agreed to pay rent, taxes or legal fees pursuant to the terms of the expired lease.
Moreover, the lease itself, according to the tenant, further proves that the tenant did not agree to pay rent after its expiration, pursuant to the lease. Specifically, under the lease's "Survival Clause," tenant contends it is liable to pay rent only until the lease expires, unless tenant opts to extend the lease for at maximum "one year."
Based on the foregoing, there are factual issues as to the amount of rent the tenant agreed to pay after the lease expired.
Moreover, the instant proceeding is one of holdover and not for nonpayment. Unlike nonpayment proceedings where petitioner seeks to recover rent arrears, the essential purpose of a holdover is to seek final judgment of possession and use and occupancy for the period after the termination of the tenancy, based on the fair market value of the premises. ( RPAPL 745(5) ).
While a court in a holdover proceeding, which is statutorily expeditious, may order a tenant to pay use and occupancy dating back to before the proceeding commenced, it can only do so, if the amount of arrears is not in dispute. If a case involves material issues of fact as to the rent amount, it would appear that a plenary action is the more appropriate forum to resolve the issues through meaningful discovery.
To maintain the monetary claim, landlord must prove the existence of an agreement that was in effect "at the time the proceeding is commenced," (265 Realty LLC v. Ramos , 39 Misc 3d 150[A], 975 N.Y.S.2d 370 [App Term, 2d Dept 2013] to pay the specific rent amount sued for (See , W. 161 LLC v. Reynolds , 43 Misc 3d 1209[A], 990 N.Y.S.2d 441 [Civ Ct, New York County 2014] ; Underhill Ave. Realty, LLC v. Ramos , 49 Misc 3d 155[A], 29 N.Y.S.3d 850 [App Term, 2d Dept 2015] ).
In the instant matter, the rent arrears for the period of two years before the tenancy was terminated is in dispute. If the landlord wishes to recover rent pursuant to the terms of an expired contract, it must commence a plenary action where the parties would have the opportunity to engage in discovery to resolve the factual issues. ( Ross Realty v. V & A Fabricators Inc. , 42 AD3d 246, 836 NYS2d 242 [2d Dept 2007].
Moreover, landlord may not recover charges other than rent, including real estate charges in a summary proceeding absent a valid lease deeming the charge as an "additional rent." ( Ross Realty v. V & A Fabricators Inc. , 42 AD3d 246, 836 NYS2d 242 [2d Dept 2007] ). Similarly, landlord may not recover attorney fees from a losing tenant unless expressly authorization under valid lease.
Based on the foregoing reasons, and landlord's failure to establish that the parties agreed to extend the terms of the expired lease, tenant's motion to dismiss the monetary action with the exception of use and occupancy is granted without prejudice to the landlord to seek monetary recovery in a plenary action.
This decision constitutes the order of the court.