Opinion
LT-002567-11.
Decided August 31, 2011.
Borah, Goldstein, Altschuler, Nahins Goidel, P.C., Attorneys for Petitioner, New York, New York.
Law Offices of Joseph J. Giordano, Esq., Attorneys for Respondent, Jericho, New York.
The following named papers numbered 1 to 4 submitted on this Motions on July 27, 2011
papers numbered
Notice of Motion and Supporting Documents 1, 2 Order to Show Cause and Supporting Documents Opposition to Motion 3 Reply Papers to Motion 4Petitioner commenced this holdover proceeding to evict Respondents Angelo S. Tamburo and Ysable M. Tamburo and their subtenants Vanessa Brown and Latoya Brown.
Petitioner is the proprietary lessor and owner/landlord of the premises located at 124 Smith Street, Freeport, New York. Respondents became the owner of the shares for Apt. 2K, 124 Smith Street, Freeport, New York on or about September 9, 2004.
Respondents applied to the Board of Directors for approval to sublet apartment 2K to Vanessa Brown and Latoya Brown. The sublet was approved by the letter dated February 4, 2010 which approved the sublet for one year. The letter of approval stated that "all renewals must be approved by the board."
Paragraphs 13 and 14 of the Proprietary Lease provide that 2K can only be occupied by Lessee's family but may be sublet to another upon Board approval, which consent cannot be unreasonably withheld:
13. The Lessee shall not, without the written consent of the Lessor on such conditions as Lessor may prescribe, occupy of use the apartment or permit the same or any part thereof to be occupied or used for any purpose other than as a private dwelling for the Lessee and members of the Lessee's family, but no apartment may be occupied by more than one (1) family at a time without the written consent of Lessor. As used herein, members of the family shall include: spouse, parents, children, parents-in-law, brothers, sisters, grandchildren or no more than three persons unrelated by blood or marriage. The term "spouse" as used herein shall also include a member of the same or opposite sex with whom the Lessee actually resides. In addition to the foregoing, the apartment may be occupied from time to time by guests of the Lessee for a period of time not exceeding one month, unless a longer period is approved in writing by the Lessor, but no guests may occupy the apartment unless one or more of the permitted adult residents are then in occupancy or unless consented to in writing by the Lessors.
14. Except as provided in Paragraph 37 and 38 of this lease, the Lessee shall not sublet the whole or any part of the apartment or renew or extend any previously authorized sublease, unless consent thereto shall have been duly authorized by a resolution of the Directors (which consent shall not be unreasonably withheld) or given writing by a majority of the Directors, or, if the Directors shall have failed or refused to give such consent, then by lessees owning at least 66 2/3% of the then issued and outstanding shares of the Lessor. Consent by lessees as provided for herein shall be evidenced by written consent or by affirmative vote taken at a meeting called for such purpose. Any consent to subletting may be subject to such conditions as the Directors or lessees, as the case may be, may impose, except that the Directors (acting as a Board) may not impose unreasonable conditions.
Letters dated October 6, 2010 and October 26, 2010 were sent by Petitioner's Management Company — Carlton Management to the subtenants concerning desisting "tremendous amount smoke emanating from your apartment" which is a "fire hazard."
On January 26, 2011, Petitioner notified Respondents that it was not going to extend the sublease of the subtenants and notified Respondents that the subtenants had to vacate. The subtenants didn't vacate. Thereafter, Petitioner sent a Notice to Cure, dated February 28, 2011, which informed Respondents that they had until March 25, 2011, to cure the default or face termination of their lease.
On March 28, 2011, Petitioner sent Respondents a Notice of Termination of Tenancy, terminating the lease as of April 7, 2011.
Respondents assert in their answer with counterclaim, dated May 15, 2011, the following two affirmative defenses:
As and for a First Affirmative Defense
3. Petitioner breached the proprietary lease between the parties by arbitrarily and capriciously withholding approval and consent of the sublet of respondents-shareholders subject apartment in violation of said lease.
As and for a Second Affirmative Defense
4. Petitioner's withholding of approval and consent of the sublet of respondents-shareholders subject apartment to respondents-occupants without reason or justification is fraudulent in that petitioner knew it would not continue approval of the sublease at the time it initially approved it and respondents-shareholders relied upon that false promise to continue said approval to its detriment.
The Court notes that the parties via stipulation dated July 27, 2011, withdraw the counterclaims asserted in the answer without prejudice.
The Court rejects Respondent's claims that Petitioner acted arbitrarily or committed fraud. Respondents purchased the cooperative in 2004. There is no mandatory obligation in the Proprietary Lease for the Petitioner to approve a sublet. Paragraph 14 in the Proprietary Lease is clear that subletting is subject to the approval of the Board subject to "which consent shall not be unreasonably withheld."
The Court finds that the Petitioner acted appropriately in not approving the sublet and there is no violation of the business judgment rule. The Board approved the Brown's sublet, but this was subject to only a period of one year. The letter of approval for the sublet specifically states that any renewal of the sublet must be approved by the Board. The Board exercised its business judgment in not approving the renewal. The affidavit of Respondent Angelo Tamburo, dated July 11, 2011, does not deny that smoking was being done by his subtenants; there are no affidavits from the Browns denying the smoking.
The actions of the Board were appropriate and subject to the business judgment rule which this Court finds no reason to vacate. See Matter of Levandusky v. One Fifth Avenue Apartment Corp., 75 NY2d 530, 554 NYS2d 807 (1990).
In Rosenberg v. Riverwood Owners, Inc., 304 AD2d 547, 756 NYS2d 900 (2nd Dept 2003), the court upheld the Board's refusal to approve the sublet. The Board disapproved the sublet because of its subtenant's financial situation. The Board's consent to the sublet could not be unreasonably withheld. The plaintiff claimed that the Board breached the proprietary lease and its fiduciary duty to her as a shareholder.
The Supreme Court's granting of summary judgment to the landlord was upheld because:
The Supreme Court properly concluded that no question of fact exists with respect to the Board's refusal to approve the plaintiff's proposed sublease ( see Chambers v. 15 Beach Owners, 221 AD2d 400, 633 NYS2d 1016; cf. Minoff v. Irvington Estates Owners, 232 AD2d 616, 648 NYS2d 1000). Its determination was made after due consideration of each applicant's submission ( cf. Ludwig v. 25 Plaza Tenants Corp., 184 AD2d 623, 584 NYS2d 907). Its withholding of consent had a legitimate relationship to the welfare of the cooperative and was therefore reasonable ( see Matter of Levandusky v. One Fifth Av. Apt. Corp., 75 NY2d 530, 554 NYS2d 807, 553 NE2d 1317).
In the case at bar, Petitioner acted for the legitimate welfare of the cooperative and thus its actions were reasonable. See also Chambers v. 15 Beach Owners, Inc., 221 AD2d 400, 633 NYS2d 1016 (2nd Dept 1995).
Based upon the foregoing, Petitioner is granted summary judgment awarding it possession of the premises with no stay of warrant.
Conclusion
Petitioner is granted a judgment of possession with no stay of the warrant.
This matter is set for an assessment of damages for September 7, 2011 at 11:00 a.m. when Petitioner will produce a person with knowledge and the appropriate business records.
All affirmative defenses asserted in answer are dismissed with prejudice.
So Ordered.