Opinion
2013-02-1
ANDRADA OWNERS CORP., Petitioner–Landlord v. Chi Lee DiGRAZIA, Respondent–Tenant.
Brill & Meisel by Michael J. Willner, Esq., New York, Attorneys for Petitioner. Collins Dobkin & Miller LLP by Timothy L. Collins, Esq., New York, Attorney for Respondents.
Brill & Meisel by Michael J. Willner, Esq., New York, Attorneys for Petitioner. Collins Dobkin & Miller LLP by Timothy L. Collins, Esq., New York, Attorney for Respondents.
SABRINA B. KRAUS, J.
This summary holdover proceeding was commenced by ANDRADA OWNERS CORP. (Petitioner) against CHI LEE DIGRAZIA (Respondent) seeking possession of 139 East 30th Street, Apt 1B New York, N.Y. 10016 (Subject Premises) based on the allegation that Respondent, the proprietary lessee, had breached her obligations under the proprietary lease.
The proceeding was resolved pursuant to a stipulation of settlement in May 2011 (Stipulation). Pursuant to a decision and order issued by this court on October 1, 2012 Respondent was found to have breached the stipulation and Petitioner was awarded a final judgment of possession. Respondent moved the Appellate Term to issue a stay pending appeal. That motion was denied by the Appellate Term on December 19, 2012 (2012 N.Y. Slip Op 94053(U)).
Respondent now moves this court to set an undertaking pursuant to CPLR 5519(a)(6) asserting that she is entitled to an automatic stay. Petitioner argues that the denial by the Appellate Term is binding on the parties and precludes Respondent's application, and that Respondent's likelihood of success on appeal is minimal. Petitioner moves this court for an order amending the judgment to include “John Doe” and “Jane Doe,” fixing the fair market use and occupancy for the Subject Premises at $2000 per month, and awarding Petitioner attorneys fees and past due use and occupancy.
The motions are consolidated for joint disposition.
APPLICABILITY OF CPLR 5519(A)(6) TO THIS PROCEEDING
CPLR 5519(a)(6) provides that “Service upon the adverse party of a notice of appeal ... stays all proceedings to enforce the judgment or order appealed from pending the appeal ...” where:
the appellant or moving party is in possession or control of real property which the judgment or order directs be conveyed or delivered, and an undertaking in a sum fixed by the court of original instance is given that the appellant or moving party will not commit or suffer to be committed any waste and that if the judgment or order appealed from, or any part of it, is affirmed, or the appeal is dismissed, the appellant or moving party shall pay the value of the use and occupancy of such property ... from the taking of the appeal until delivery of possession of the property;
There is no appellate authority directly on point which holds that this provision is applicable to summary holdover proceeding. Mountbatten Equities v. Tabard Press Corp., (87 Misc.2d 861) was a commercial holdover proceeding, where the Civil Court held that a stay pursuant to CPLR 5519(a)(6) was appropriate in a commercial holdover proceeding. That decision was affirmed by the Appellate Term (88 Misc.2d 831) however, in the Appellate Term decision, CPLR 5519(a)(6) which is discussed in detail in the Civil Court decision, is not mentioned. Instead, the Appellate Term based its holding on CPLR § 2201. The Appellate Term held in pertinent part:
Petitioner concedes that in a commercial holdover summary proceeding a court is empowered to grant a reasonable stay (see also CPLR 2201; CCA 212; NYCRR 2900.21(d); 2 Rasch, New York Law of Landlord and Tenant Summary Proceedings, 1411; Matter of Pepsi Cola Met Bottling Co., Inc.v Miller, 50 Miac2d 40 ... Novick v. Hall, 70 Misc.2d 641 ... ). At bar, the interests of the parties and the public interest uniquely involved were carefully reviewed by Special Term. On review of the record we find that Special Term properly exercised its discretion.
Thus, even though the Appellate Term affirmed the decision of the trial court, the statutes and case law cited by the Appellate Term only address a discretionary stay by the court, and none of it addresses whether 5519(a)(6) is applicable to summary proceedings. It is unclear if Mountbatten should be read as holding that the automatic stay is not applicable, or if the court felt it need not reach that issue given the applicability of a discretionary stay. The decision also makes reference to exceptional circumstances, and has since been cited by the Appellate Term, and other courts, as being applicable to discretionary stays and/or unusual circumstances (see e.g. City of New York v. Falcone, 160 Misc.2d 234;660 Riverside Drive Aldo Associates LLC v. Marte, 178 Misc.2d 784;170 West 85 Street HDFC v. Jones, 176 Misc.2d 262;Bethlehem Baptist Church v. Trey Whitfield School, 2003 N.Y. Slip Op 50927(U)).
Similarly, in Mully v. Drayn, 37 A.D.2d 901, the Appellate Division, Fourth Department affirmed a stay issued by a trial court, however, the trial court had issued the stay and fixed an undertaking pursuant to CPLR 5519(a)(6), and the Appellate Division affirmed by finding the application was not pursuant to CPLR 5519(a)(6), but pursuant to CPLR 5519(c) and complied with the requirements of that provision.
Finally, one Appellate Division decision references the applicability of the 5519(a)(6) stay in a summary proceeding, without directly ruling on the applicability. In Miller, Mannix & Pratt PC v. Krolick and DeGraff, PC, 144 A.D.2d 845, the Third Department, noted that the tenant had obtained a stay pursuant to CPLR § 5519(a)(6) and that the county court had fixed an undertaking, but held that the appeal was moot, where the premises had been vacated and a plenary action for use and occupancy had been commenced.
Despite the lack of appellate authority directly on point, many trial courts have held that the CPLR § 5519(a)(6) is applicable to summary proceedings [Brown v. 99 Sutton LLC, 2002 N.Y. Slip Op 40223(U);AK Estates v. 454 Central Corp. LLC, 32 Misc.3d 1233(A); Matter of Oleck v. Pearlman, 49 Misc.2d 202;EZ–CR Corp. v. CR Restaurant RT 97 Corp., ––– N.Y.S.2d ––––, 2012 N.Y. Slip Op 22400;Wilber v. Abare, 138 Misc.2d 754].
Moreover, the language of the statute itself suggests that it should be applicable to summary proceedings, and it has been held that the purpose of this statutory provision is to protect landlords from further economic loss during the pendency of an appeal (In re New York State Urban Development Corp., 166 Misc.2d 909, 911).
The Court holds that CPLR § 5519(a)(6) is applicable to judgments issued pursuant to a summary holdover proceeding. The Court holds additionally that it is applicable when the subject premises is a cooperative (Baranello v. 700 Shore Road Waters Edge Inc, 159 Misc.2d 1040;Emigrant Mortgage Co v. Greenberg, 34 Misc.3d 1236(A)).
EFFECT OF PRIOR DENIAL BY APPELLATE TERM OF STAY
PENDING APPEAL PURSUANT TO 5519(C)
Petitioner argues that Respondent should be precluded from seeking an undertaking and the benefit of the automatic stay, because Respondent already sought a discretionary stay at the Appellate Term, which was denied on December 19, 2012 (2012 N.Y. Slip Op 94053(U)). However, denial of a discretionary stay does not bar a litigant from seeking an undertaking to effectuate the automatic stay (Rubin v. Rubin, 305 A.D.2d 198;Corcillo v. Martut Inc, 43 N.Y.2d 792;AK Estates v. 454 Central Corp. LLC, 32 Misc.3d 1233(A)). The Court holds that the prior denial by the Appellate Term of Respondent's request for a discretionary stay does not preclude Respondent's application for an undertaking.
THE UNDERTAKING
As noted above, the purpose of the undertaking is to prevent the landlord from suffering further loss pending appeal. Petitioner argues it is entitled to fair market use and occupancy from the date of the breach of the stipulation forward. Respondent asserts that use and occupancy should be determined based on maintenance and other charges due pursuant to the lease. The court finds that use and occupancy is properly set by requiring payment of maintenance and additional charges as due under the proprietary lease. Petitioner failed to provide legal authority for its position that use and occupancy should be set at a fair market rate in the case of termination of the proprietary lease, the lease agreement between the parties, which does address the requirement to be responsible for use and occupancy post termination, does not provide for a fair market use rate, and the goal of preventing waste through an undertaking is met by the continued payment of charges due. Moreover, the court's decision did not award a judgment after trial, but rather a judgment pursuant to a breach of the parties stipulation of settlement. No where in that stipulation of settlement did Petitioner preserve the right to seek fair market use and occupancy in the event of a default. Thus the court directs that continued payment of all charges due under the proprietary lease, including maintenance and charges which constitute additional rent, are required by Respondent as a condition of the stay. In the event Respondent has failed to pay any past due use and occupancy same is to be paid within 10 days of this order. In the event Respondent defaults on her obligation to make ongoing payments as due, Petitioner may move to vacate the stay.
However, the undertaking must also safeguard Petitioner for the attorneys' fees incurred in this litigation. Petitioner asserts it has already incurred more than $110,346.26 in attorneys fees in this proceeding from March 2010 through September 2012 in litigation in this proceeding. Attorneys' fees are due as additional rent to Petitioner both pursuant to the proprietary lease, as the prevailing party in this proceeding and pursuant to the terms of the stipulation between the parties.
Respondent challenges the reasonableness of the amount of fees sought. The matter is set down for a hearing on February 20, 2013 in Part R, at 9:30 am to determine the amount of fees Respondent is entitled to. The amount of reasonable fees determined to be due shall either be deposited with the clerk of the court as an undertaking, or in the form of an obligation by a surety ( Morgan v.. Morgan, 2 Misc.3d 1011(A)).
CONCLUSION
The motion to set an undertaking pursuant to CPLR 5519(a)(6) is granted as provided above. Petitioner's motion for fair market use and occupancy is denied. That part of Petitioner's motion seeking entry of a judgment as against John Doe and Jane Doe based on the court's decision after trial is granted without opposition. The clerk shall enter a judgment of possession. Petitioner's motion for fees is granted to the extent provided for above.
This constitutes the decision and order of this Court.