Opinion
Index No. 152656/2022
01-04-2023
Roosevelt Lee 38 LLC, Plaintiff, v. Golf & Wrobleski, CPA's, LLP, Defendant.
Smith, Carroad, Levy, Wan & Parikh, Commack, NY (Pragna Parikh of counsel), for plaintiff. Nathaniel Muller, P.C., New York, NY (Nathaniel Muller of counsel), for defendant.
Unpublished Opinion
Smith, Carroad, Levy, Wan & Parikh, Commack, NY (Pragna Parikh of counsel), for plaintiff.
Nathaniel Muller, P.C., New York, NY (Nathaniel Muller of counsel), for defendant.
GERALD LEBOVITS, J.
The following e-filed documents, listed by NYSCEF document number (Motion 001) 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32 were read on this motion for DISMISSAL.
In this commercial landlord-tenant action, plaintiff, Roosevelt Lee 38 LLC (Roosevelt), seeks rent allegedly owed by defendant, Golf & Wrobleski, CPA's, LLP, under a lease agreement between defendant and an earlier owner of the building. This is the second action brought by Roosevelt for this relief. In the first action, this court granted tenant's motion to dismiss without prejudice. (Roosevelt Lee 38 LLC v Golf & Wrobleski CPA's LLP, 2022 NY Slip Op 50194[U], at *3 [Sup Ct, NY County Mar. 11, 2022].) Tenant now moves to dismiss this action, contending that Roosevelt has not cured the defects identified in this court's prior decision. This court agrees. The motion to dismiss is granted.
Because that dismissal was without prejudice, Roosevelt's current action is not barred by claim preclusion. (Landau, P.C. v Larossa, Mitchell & Ross, 11 N.Y.3d 8, 13 & n 2 [2008].)
DISCUSSION
1. In the first action, this court noted that Roosevelt's submissions did not establish that Roosevelt had the right to sue tenant for back rent. That is, Roosevelt claimed that right under an assignment of leases from a prior owner of the building (Rich Realty Owner LLC). But tenant had leased the premises from a different LLC (Rich Realty LLC). Roosevelt's papers in the first action did not satisfactorily address this discrepancy.
As Roosevelt now explains it, the building was originally owned 50-50 by two LLCs, Rich Realty LLC and 215 Bush Realty LLC. Tenant entered into a lease with Rich Realty LLC in September 2007. In August 2008, Rich Realty LLC and 215 Bush Realty LLC sold the building to Rich Realty Owner LLC and 215 Bush Realty Owner LLC. In November 2008, Rich Realty Owner LLC and 215 Bush Realty Owner LLC sold the building to Roosevelt and executed an assignment of leases. Roosevelt says that as assignee of the original landlord, it may bring this rent-collection action against tenant. (See NYSCEF No. 21 at ¶¶ 5-9, 11.)
Roosevelt's position suffers from two fundamental problems. First, although Roosevelt has provided a copy of the sale deed memorializing the sale of the building from Rich Realty/215 Bush Realty to Rich Realty Owner/215 Bush Realty Owner (see NYSCEF No. 26), Roosevelt has not provided a copy of a corresponding assignment of leases from Rich Realty to Rich Realty Owner (or from 215 Bush Realty to 215 Bush Realty Owner). Roosevelt thus has not established that Rich Realty Owner had the right to assign it tenant's lease to begin with.
Second, as this court noted in its prior decision, the assignment of leases from Rich Realty Owner to Roosevelt does not identify the leases to which it applies. That agreement provides that it assigns Rich Realty Owner's rights and interests in "the leases and all amendments and modifications thereto set forth in Exhibit A" that were "made and entered into by the tenants of those spaces described on said Exhibit A" located at the premises being sold. (NYSCEF No. 28 at 2.) Exhibit A, however, does not list leases, leased premises within the building, or security deposits. Instead, it is a metes-and-bounds description of the parcel of land on which the building is located. (See id. at 6.)
The assignment agreement provides that Rich Realty Owner also assigned to Roosevelt the "security deposits listed in Exhibit A attached hereto." (See NYSCEF No. 28 at 2.)
This court's prior decision, noting this discrepancy, raised the possibility that an additional exhibit, listing the leases being assigned, had been inadvertently omitted. (See Roosevelt Lee 38 LLC, 2022 NY Slip Op 50194[U], at *2.) Roosevelt now disclaims that explanation. Roosevelt's counsel represents in an affirmation that the assignment agreement filed with the court is the complete document. (NYSCEF No. 20 at ¶ 21.) If so, it is not clear that the assignment from Rich Realty Owner/215 Bush Realty Owner to Roosevelt could validly convey the assignors' interest in any particular lease within the building (whether tenant's or otherwise). At a minimum, Roosevelt has not put forward evidence indicating that the assignment agreement did assign to it tenant's lease (and the right to collect rent owed under that lease).
Roosevelt attempts to get around this problem through what is effectively an estoppel argument. That is, Roosevelt contends that tenant impliedly conceded that Roosevelt was its rightful landlord by having "made payments directly to [Roosevelt] during its tenancy, as evidenced by the statement of account" attached to Roosevelt's papers. (NYSCEF No. 21 at ¶ 10 [affidavit of Roosevelt's principal]; see also NYSCEF No. 20 at ¶ 22 [affirmation of Roosevelt's counsel] [claiming that tenant "validated the Assignment and Assumption of the lease agreement by [Roosevelt], as [tenant] has clearly made rent payments to [Roosevelt]," which assertedly could not have occurred absent an assignment].) But the statement attached to Roosevelt's papers is dated June 22, 2021- i.e., after tenant vacated the premises. (See NYSCEF No. 30 at 1.) That statement also does not contain any information about how tenant made rent payments, or to whom. This is not merely an academic distinction. If, for example, tenant made rent payments only to the same property manager who had served as the counterparty to the underlying lease (see NYSCEF No. 14 at 1), those payments, standing alone, would not amount to recognition of Roosevelt's right, in particular, to act as landlord and collect rent from tenant.
In short, Roosevelt's complaint in its second action, and its opposition to tenant's opposition to the motion to dismiss, has not cured the capacity-to-sue problems that this court identified in Roosevelt's first action. Nor has Roosevelt provided a basis to conclude that it could establish its right to sue tenant if granted still a third opportunity.
Even if this court were to assume that Roosevelt is the proper party to bring this action, the complaint is subject to dismissal with respect to more than half of the $120,333.66 claimed by Roosevelt in unpaid rent, use & occupancy (U & O), and fees. The statute of limitations bars Roosevelt's claim to approximately $52,000 of that total, which accrued more than six years before the filing of the complaint on March 28, 2022. (See NYSCEF No. 30 at 21 [invoice showing outstanding balance as of March 29, 2016].) A further $22,000 claimed by Roosevelt represents U & O, accruing at twice the last monthly rent over the four-month period in spring 2021 after Roosevelt served the notice terminating tenant's month-to-month tenancy. (See id. at 35.) But neither Roosevelt's complaint nor its opposition to the motion to dismiss identify any reason why double-rent U & O would permissibly approximate the fair-market rental value of the premises over that period. (See RPL § 220; see also Split Rock Devs., LLC v Zartab, Inc., 135 A.D.3d 845, 846 [2d Dept 2016] [discussing calculation of U & O].) At most, the lease provides that should tenant remain in possession of the premises after the lease expired, the landlord can opt to treat it as a month-to-month tenant at twice the last rent charged under the lease. (NYSCEF No. 14 at 16 ¶ 57.04.) But here, after the lease expired in November 2012, tenant paid the last monthly rent (not double rent) under a month-to-month tenancy for eight years before Roosevelt terminated that tenancy in early 2021. (See NYSCEF No. 30 at 11-34 [invoice reflecting monthly rent payments from November 2012 through January 2021].) In these circumstances, Roosevelt does not have a cause of action for double-rent U & O.
Accordingly, it is
ORDERED that tenant's motion to dismiss Roosevelt's complaint is granted, and the action is dismissed, with costs and disbursements to be taxed by the Clerk upon the submission of an appropriate bill of costs; and it is further
ORDERED that tenant serve a copy of this order with notice of its entry on Roosevelt and on the office of the County Clerk, which shall enter judgment accordingly.