Opinion
SP 6065/07.
Decided May 12, 2008.
Gleich, Siegel Farkas, Attorneys for Petitioner, Great Neck, New York.
Jack Posner, Esq., Attorney for Respondent, Garden City, New York.
The petitioner, W-3 Management Corporation, instituted this holdover proceeding requesting a final judgment awarding it possession of 666 Jerusalem Avenue, Uniondale, New York, the issuance of a warrant of eviction to remove the respondent, a judgment for use and occupancy in arrears, reasonable attorney's fees, and costs and disbursements. A non jury trial was held on March 27, 2008.
BACKGROUND
Petitioner entered into a lease with tenant Eliseo Beltran on October 1, 2005, which was to terminate on September 30, 2007. The tenant operated a business on the site under the name of Beltran Auto Repair a/k/a Beltran Automotive which, according to the lease, would sell and install tires and do automotive repair.
The lease provided the tenant with an option to extend the term of the lease with rent to be paid at the annual rent of $80,400.00 per annum for the period of September 1, 2007, until September 1, 2008. The lease originally provided a termination date of August 31, 2007, but this was crossed out and changed to September 31, 2007. Obviously the 31st should have been changed to the 30th. It is noted that the option date of September 1, 2007, listed in the rider, was not altered to reflect the change on the lease. The tenant did not exercise the option to extend the lease. Instead, the tenant held over until January 4, 2008.
According to the petition, W-3 Management Corporation sought to recover the following:
"8. Pursuant to said Lease agreement, there was due to Petitioner from Respondent the reasonable value of Respondent's use and occupancy as follows:
"9. Petitioner requests the Court award to Petitioner reasonable costs and disbursements for service of process and filing fees:
"10. Petitioner requests the Court award Petitioner reasonable attorneys fees as additional rent as set forth in the written rental agreement in an amount which Petitioner avers is a reasonable sum for the services rendered in connection with this proceeding of not less than: $1,700.00"
During trial, petitioner made an application to the Court to amend the petition to include use and occupancy for December 2007 and January 2008, which this Court granted. The total amount claimed including the amendment but not legal fees became $31,093.24.
Petitioner claims that respondent is entitled to money damages of $6,700.00 per month for use and occupancy. Respondent claims that the tenant is responsible at a rate of $5,047.00 per month, which was the monthly rent prior to the tenant becoming a holdover. Further, petitioner sought to recover use and occupancy for the entire month of January 2008, while respondent's counsel avers that since the keys were sent out of her office on the 4th the respondent objected to being charged for January. The final issue before the Court is the determination of reasonable attorney's fees.
DECISION
Use and occupancy is a recovery imposed by law upon a theory of quantum meruit. ( Phillips v. Cohen, 2002 WL 11311689, 2002 NY Slip Op 40235 ([App Term 9th 10th Jud Dists 2002]). Thus, a tenant is liable for the period of holding over based upon the reasonable value of such premises (74A NY2d Jur. Landlord Tenant, § 883 at 611-612).
The petitioner has the burden of establishing the reasonable and fair market value of the use and occupancy, which can be done by expert appraisal testimony and/or by reference to the lease itself. In 2641 Concourse Co. v. City University of New York, 137 Misc 2d 802,805 aff'd 147 AD2d 379, 538 NYS2d 446 (1st Dept 1989), the court stated:
The landlord has the burden of proving its damages including the reasonable value of use and occupancy. ( Beacway Operating Corp. v Concert Arts Socy., supra, 123 Misc 2d at 453, 474 NYS2d 227; Mercurius v Burke, 21 Misc 2d 201, 190 NYS2d 826.) Reasonable value is fair market rental and may be established by appraisal testimony based on comparable rentals or by reference to the rental history of the subject itself. ( New York Connecting R. R. Co. v Queens Used Auto Parts, 298 NY 830, 84 NE2d 144; Goelet v National Sur. Co., 249 NY 287, 164 NE 101; Earl v Nalley, 273 App Div 451, 78 NYS2d 92; Beacway Operating Corp. v Concert Arts Socy., supra, 123 Misc 2d at 454, 474 NYS2d 227; Rand Prods. Co. v Mintz, 69 Misc 2d 1055, 332 NYS2d 452, affd 72 Misc 2d 621, 340 NYs2d 444; see also, Merman v The Surrey, 106 Misc 2d 941.)
During the trial, the petitioner called several witnesses to establish its contention that $6,700.00 per month was a reasonable rate for use and occupancy of the premises. The first witness was Ray Waisler, the president of the petitioner. Mr Waisler testified as to the specifics of the lease. The lease provided that the tenant would pay a monthly amount of $6,700.00 if the option to extend was exercised for the period of September 1, 2007 through August 31, 2008. To further establish an appropriate rate for use and occupancy, the petitioner called David Sargoy, a commercial real estate broker for Brown, Harris, Stevens. Mr. Sargoy testified that, based upon other properties in the area, the sum of $6,700.00 a month was the reasonable and fair market value rent for the premises.
Petitioner is correct in its contention that the option rent expressed in the lease for the period involved is the best evidence of what the parties deemed appropriate value to be as opposed to the expired rent (See 2641 Concourse Co. v. City University of New York, supra at 808).
This Court finds the testimony of the witnesses to be credible and, based upon the above, the petitioner has established that $6,700.00 a month is the reasonable value for the respondent's use and occupancy of the premises for the months of October, November, and December of 2007 and January of 2008.
The next issue before the Court is whether the tenant is liable for use and occupancy for the entire month of January 2008 or just up to January 4, 2008, the date when possession of the premises was turned over to petitioner.
Petitioner claims that respondent is liable for use and occupancy for the entire month of January 2008.
". . . . . . . a surrender and acceptance will not discharge a tenant from liability for rent which fell due before the acceptance of the surrender, even though such rent is payable in advance for a period extending beyond the acceptance of the surrender." (2 Dolan, Rasch's Landlord Tenant-Summary Proceedings § 26:36 at 311)
However, the above applies to rent and not necessarily use and occupancy. When use and occupancy is sought, then the Court has the discretion to apportion the amount owed for use and occupancy based upon the date of surrender. In Wahl v. Warren, 19 Misc 3d 130A [App Term 9th 10th Jud Dists, 2008]), the Appellate Term stated:
Furthermore, contrary to the court's determination, the rule against apportionment which applies to rents does not apply to use and occupancy ( Maron v. Liebenow, NYLJ, June 22, 1994 [App Term, 9th 10th Jud Dists 1994], Elliot v. Polny, 132 Misc 2d 236 [1986]; see also Hoppenstein v. Street Beat Sportswear, NYLJ, Apr. 16,1996 [App Term, 1st Dept]). Thus, defendants are liable for use and occupancy only for 19 days in November, or for 19/30 of $775, which is $490.87.
In Rasch's Landlord Tenant, Hon. Robert F. Dolan, Summary Proceedings, § 10:9, at 453 [4th ed] the following appears:
The measure of damages for wrongfully holding over is the reasonable rental value of the premises for the period possession is withheld, that is, the value of the use and occupation for the premises for the period possession is withheld. Where a tenant wrongfully holds over, he may be relieved of liability for use and occupation by tendering vacant possession of the premises and the keys to the landlord, from the time of the tender.
Applying the above, the petitioner is entitled to 4 days for the holdover based upon a value of $6,700.00 for the month or $864.51.
The last issue before the Court is whether this Court should only consider the amount of attorney's fees sought in the petition or the amount requested in the "Statement of Legal Fees "when no formal amendment has been made".
Pursuant to paragraph Twentieth of the lease, tenant is liable for its attorney fees and disbursements:
If the Tenant shall at any time be in default hereunder, and if the Landlord shall institute an action or summary proceeding against the Tenant based upon such default, then the Tenant will reimburse the Landlord for the expense of attorneys' fees and disbursements thereby incurred by the Landlord, so far as the same are reasonable in amount. Also so long as the Tenant shall be a tenant hereunder the amount of such expenses shall be deemed to be "additional rent" hereunder and shall be due from the Tenant to the Landlord on the first day of the month following the incurring of such respective expenses.
The petition sought $1,700.00 in legal fees and $160.00 for disbursements. During trial, petitioner's attorney introduced his "Statement of Legal Fees" in the amount of $8,157.50, with disbursements of $205.10. There was extensive discussion concerning the legal fees owed by respondent, but no formal amendment was made to increase the amount sought in the petition to the sums reflected in the "Statement of Legal Fees".
In New York City Housing Authority v. Winkler, 175 Misc 2d 1018(App Term, 2nd Dept 1998), the court deemed the pleading amended to confirm to the proof presented at trial. The court held the following:
However, the failure to make the required allegation does not require reversal. All the facts concerning the grievance proceeding were proven at trial and occupants suffered no prejudice as a consequence of landlord's failure to plead these facts in the petition. Under the circumstances, we deem the pleading amended to conform to the proof ( see, CPLR 3026; Villas of Forest Hills Co. v. Lumberger, 128 AD2d 701, 513 NYS2d 116; Birchwood Towers No. 2 Associates v. Schwartz, 98 AD2d 699, 469 NYS2d 94).
See also Blenheim LLC v. Il post LLC , 14 Misc 3d 735 , 827 NYS2d 620 (NY Civ Ct 2006) supporting court's power to deem petition amended to confirm to the proof presented.
There is no prejudice to respondent if the court amends the amounts of attorney's fees, because the respondent had a full and fair opportunity to contest the legal fees and disbursements claimed. Even though no formal amendment was made to the pleading (petition), this Court has the power to deem the petition amended to increase the amount of attorney's fees and disbursements sought from $1,700.00 and $160.00 respectively to $8,157.50 and $205.10 for disbursements for a total of $8,362.60.
Based upon the evidence presented, the Court awards petitioner the sum of $5,000.00 for legal fees and disbursements of $205.10.
CONCLUSION
Petitioner is awarded damages as follows:
$205.10
(A) September rent $1,347.46 October use and occupancy $6,700.00 November use and occupancy $6,700.00 December use and occupancy $6,700.00 January use and occupancy $864.51 Legal fees $5,000.00 Disbursements TOTAL $27,517.07Accordingly, petitioner may enter judgment against respondent in the sum of $27,517.07.
So Ordered: