Opinion
SP 005182/09.
Decided July 29, 2010.
Petitioners Lake Park 135 Crossways Park Drive LLC and CLK-HP 135 Crossways Park Drive LLC ("Crossways") filed the instant Order to Show Cause on July 2, 2010 seeking an order directing the respondent, under-respondent and all occupants to provide Crossways access to the subject premises located at 135 Crossways Park Drive, Woodbury, NY, pursuant to Article 10.01 of the written Lease agreement between the parties. Crossways requested the order to inspect the premises in preparation for the next prospective tenant.
Pennisi, Daniels Norelli, LLP, Attorneys for Petitioner, Rego Park, New York, Ezratty, Ezratty Levine, LLP, Attorneys for Respondents, Mineola, New York.
The respondents Wheatley Capital, Inc. and EKN Financial Services, Inc. ("Wheatley") opposed the Order to Show Cause on July 19, 2010 and filed a cross-motion to dismiss the petition and recap legal fees, costs and disbursements. Crossways opposed the Cross-Motion on July 20, 2010.
On July 12, 2010, Wheatley provided Crossways access to the subject premises; Crossways subsequently requested that the Court allow them to withdraw the Order to Show Cause as moot.
FACTS PROCEDURAL HISTORY
Crossways brought a non-payment proceeding against Wheatley in 2009 with an initial return date of September 14, 2009. A stipulation of settlement was entered into on January 21, 2010 whereby Wheatley consented to the entry of a judgment of possession and a money judgment against only Wheatley Capital, Inc. and guaranteed by Louis Ottimo in the amount of $300,000.00. A warrant of eviction was issued forthwith; execution of the warrant was stayed until April 15, 2010 provided that Wheatley Capital, Inc. paid current rent due February, March and April, 2010.
Other terms were reached in the stipulation regarding a payment plan to satisfy the money judgment, Wheatley's security deposit, and resolution of pending litigation between the parties in the Supreme Court of Nassau County.
Two days prior to the vacate date, on or about April 13, 2010, Wheatley Capital, Inc. filed a petition for relief under Chapter 11 of Title 11 United States Code ("Bankruptcy Code"). Therefore, an automatic stay was issued preventing execution of the warrant issued by this Court.
According to a transcript of the bankruptcy proceedings on May 20, 2010, the parties agreed, in open court before the Honorable Dorothy Eisenberg, that:
The parties are going to enter into terms of what would be a possession agreement to permit the debtor to remain in possession through July 31st, 2010 conditioned upon certain payments to be made from the debtor to the landlord, which would be $40,000 upon the signing of a stipulation setting forth the terms of the possession agreement, which would hopefully be within the next two business days, $20,000 on June 1st, and $20,000 on June 20th.
If at any point in time those payments are not made, the movant landlord would be permitted to move forward immediately with the sheriff in Nassau County to execute the judgment and warrant from state court.
A written stipulation, if ever reached, was not provided to this Court.
Crossways or its assignee of rents received the $40,000.00 payment and the first $20,000.00 payment. It is in dispute as to whether the final $20,000.00 was made and neither party submits evidence to determine so.
The Honorable Dorothy Eisenberg signed an order on July 6, 2010 granting Crossways relief from the automatic stay to enforce its judgment and warrant of eviction.
CROSS-MOTION
Wheatley claims that Crossways' acceptance of "rent" at the last negotiated lease rate, along with Crossways' reference to the written lease in its Order to Show Cause demonstrates an intent or belief on the part of Crossways to reinstate the lease. Such actions by the landlord warrant a dismissal of the petition filed in 2009, along with vacating the judgment of possession and warrant of eviction, according to Wheatley.
Crossways opposes the Cross-Motion stating that the $20,000.00 payment accepted was an "occupancy" payment, not a "rent" payment, and that amount was never the negotiated lease amount. Further, Crossways' language used in its Order to Show Cause sought access to the subject premises, but asked the Court to preserve the status of the warrant of eviction.
"Rent" is to be distinguished from "use and occupancy." Landlord and Tenant Practice § 10:109 defines "use and occupancy":
When the parties do not hold a lease, or when a valid lease has terminated and the tenant adversely occupies the premises, the tenant must remit payment for the "use and occupancy" of the space based on the premises' fair-market value. Such payment is not "rent," but a means to prevent unjust enrichment to the occupant for its holding over. . .
A warrant of eviction was issued on January 21, 2010, thus terminating the tenancy ( Holy Props. v. Cole Prods., 87 NY2d 130, 637 NYS2d 964, 661 NE2d 694, 1995; Iltit Assoc. v. Sterner, 63 AD2d 600, 405 NYS2d 68 1 Dept., 1978). For any future payments to be considered rent as opposed to use and occupancy, the landlord must show intent to reinstate the tenancy ( DiGiglio v. Tepedino, 173 AD2d 763, 571 NYS2d 301 N.Y.A.D. 2 Dept., 1991).
Based on the language used in Crossways' Order to Show Cause and the agreement made in open court before the Honorable Dorothy Eisenberg, such intent did not exist. Therefore, rent was not paid and the tenancy was not revived. Wheatley's argument is without merit.
CONCLUSION
Crossways' Order to Show Cause is withdrawn as moot.
Wheatley's Cross-Motion is denied. Crossways may proceed to evict Wheatley from the subject premises pursuant to previously issued warrant. No further 72-hour notice is required if already served.
So Ordered: