Opinion
LT-708-19/BA
06-30-2020
ANTHI NEW NEOCRONON CORP., Petitioner, v. COALITION OF LANDLORDS, HOMEOWNERS & MERCHANTS, INC., Respondent.
Gerard Glass & Associates, P.C., Attorneys for Petitioner, 72 East Main Street, Suite 3, Babylon, New York 11702 Somer & Heller, LLP, Attorneys for Respondent, 5036 Jericho Turnpike, Suite 301, Commack, New York 11725
Gerard Glass & Associates, P.C., Attorneys for Petitioner, 72 East Main Street, Suite 3, Babylon, New York 11702
Somer & Heller, LLP, Attorneys for Respondent, 5036 Jericho Turnpike, Suite 301, Commack, New York 11725
C. Stephen Hackeling, J. It is ORDERED that the Petitioner's motion to reargue the cross motion for summary judgment pursuant to CPLR 3212, is granted.
The Respondent chose to appeal this Court's decision concerning personal jurisdiction dated May 15, 2020 rather than join the Petitioner in seeking reargument.
Reargument
The fundamental premise of granting summary judgment is the absence of a disputed issue of fact; which must be resolved at trial. See Alvarez v. Prospect Hosp. , 68 N.Y.2d 320, 508 N.Y.S.2d 923, 501 N.E.2d 572 (N.Y. 1986) ; Winegrad v. New York Univ. Med. Ctr., 64 N.Y.2d 851, 487 N.Y.S.2d 316, 476 N.E.2d 642 (N.Y.1985) ; Zuckerman v. City of New York, 49 N.Y.2d 557, 427 N.Y.S.2d 595, 404 N.E.2d 718 (N.Y. 1980).
After commencement of this action, and unbeknownst to the parties and the Court, the Supreme Court entered a decision dated May 12, 2020 which involved identical issues raised in the Petitioner's application for summary judgment, which this Court decided by order dated May 15, 2020. The legal doctrines of "res judicata", "claim preclusion" and "law of the case" bar this Court from relitigating the factual and legal issues decided by Justice Luft. See Josey v. Goord , 9 N.Y.3d 386, 849 N.Y.S.2d 497, 880 N.E.2d 18 (N.Y. 2007) ; Reilly v. Reid, 45 N.Y.2d 24, 407 N.Y.S.2d 645, 379 N.E.2d 172 (N.Y. 1978) ; Matter of Union Indem. Ins. Co. of N.Y., 67 A.D.3d 469, 893 N.Y.S.2d 513 (N.Y. A.D. 1st Dept. 2009) ; Federated Dept. Stores Inc. v. Moitie, 452 U.S. 394, 101 S.Ct. 2424, 69 L.Ed.2d 103 (S. Ct. 1981). The Supreme Court's decision moots the contested factual issues and legal arguments raised in this Court's action and therefore necessitates reargument of Petitioner's cross motion, which is granted.
Executive Order Stay
The threshold issue presented is the Respondent's contention that the New York State Governor's Executive Order #202.28 dated May 7, 2020 and the implementing Judicial Administrative Order #45-20 dated May 29, 2020 stays initiation or enforcement of any residential or commercial landlord/ tenant proceeding until August 20, 2020. The exact wording of same in relevant part is:
"There shall be no initiation of a proceeding or enforcement of either an eviction of any residential or commercial tenant, for nonpayment of rent or a foreclosure of any residential or commercial mortgage for nonpayment of such mortgage, owned or rented by someone that is eligible for unemployment insurance or benefits under state or federal law or otherwise facing financial hardship due to the COVID-19 pandemic for a period of sixty days beginning on June 20, 2020" (Emphasis added).
This May 7, 2020 amended Executive Order is different from the original Executive Order #202.8 dated March 20, 2020 which provided in relevant part.
"There shall be no enforcement of either an eviction of any tenant residential or commercial, or a foreclosure of any residential or commercial property for a period of ninety days." (Emphasis added).
Clearly #202.8 was broader than #202.28, as "eviction of any tenant" encompasses both "nonpayment" and "holdover" summary proceedings. Executive Order #202.28 succinctly narrows the purview of the stay to "nonpayment" proceedings only. As the subject proceeding is a "holdover" proceeding; no stay is applicable .
The Petitioner's able counsel also advances the argument that the Office of Court Administration Administrative Order # 45-20 suspends all eviction proceedings. (Exhibit D in Respondent's Affirmation in Opposition). Said order specifically cites to Executive Orders 202.8, 202.14 and 202.28 as authority for implementation of Administrative Order 45-20. The Judicial Administrative Order dated May 28, 2020 purports to expand the eviction stay beyond the Governor's Executive Order 202.28 dated May 7, 2020 which imposed only a stay on "nonpayment" proceedings. The subject proceeding is a "holdover" proceeding.
A Judicial Administrative Order may only be procedurally supplemental in nature. It would be an unconstitutional usurpation of the Legislative and Executive prerogatives and powers for a Judicial Administrative Order to seek to contradict, limit, or expand an Executive Order such as #202.28 which was implemented via Sec. 29(a) of the Executive Law. While the Office of Court Administration is well within its rights to deploy its personnel resources to contend with the pandemic emergency as it sees fit, it cannot countermand the authority granted under Executive Order #202.28 to this Court to grant relief via the instant application.
The Court notes in the nature of dicta; that even if the #202.28 order did include a stay of "holdover proceedings", that it would not be enforceable as it fails to comport with Sec. 29(a) of the Executive Law which requires the Governor to precisely state what statute or regulation is being suspended and limits such Executive Order suspension to thirty (30) days. This order #202.28 suspension presently exceeds 100 days (without the benefit of extensions) and makes no reference to any specific statutes in the RPL and RPAPL that are being suspended. As such it is invalid and of no legal import. Holdover Proceeding
New York Executive Law Sec. 29(a)(1) provides: 1. Subject to the State Constitution, the federal statutes and regulations, the Governor may by executive order temporarily suspend any statute, local law, ordinance, or orders, rules or regulations, or parts thereof, of any agency during a state disaster emergency. 2. Suspensions pursuant to subdivision one of this section shall be subject to the following standards and limits, which shall apply to any directive where specifically indicated: (a) no suspension or directive shall be made for a period in excess of thirty days, provided, however, that upon reconsideration of all of the relevant facts and circumstances, the Governor may extend the suspension for additional periods not to exceed thirty days each. (b). No suspension or directive shall be made which is not in the interest of the health or wealth of the public and which is not reasonably necessary to aid the disaster effort... (c) Any such suspension order shall specify that statute, local law, ordinance, order, rule or regulation or part thereof to be suspended and the terms and conditions of the suspension. (Emphasis added).
Premised upon the Supreme Court's holding that the Respondent's August 9, 2002 Agreement and Rider (which purports to give it a purchase option) is unenforceable; the Court must now reconsider the Petitioner's application for summary judgment which was previously denied after finding the existence of a factual dispute.
The Petitioner avers that there are no unresolved factual disputes. The Respondent's opposition papers, in paragraph #8, concede service of the Notice to Quit and assert that Justice Luft incorrectly decided issues of fact and assert that new issues of fact arise out of an amended answer filed in its papers which raises the affirmative defense of "breach of warranty of habitability". The Court summarily rejects the Respondent's contention that the "warranty of habitability" affirmative defense infuses this proceeding with new factual disputes. A year old original Answer may not be unilaterally amended without leave of the Court or consent of all parties pursuant to the provisions of New York CPLR Secs. 3024(c) and 3025(a). Even if an amendment was authorized; the New York RPL Sec. 235-b "warranty of habitability" defense is not available to "commercial" premises. See, Solow v. Wellner, 86 N.Y.2d 582, 635 N.Y.S.2d 132, 658 N.E.2d 1005 (N.Y. 1995) ; Witherbee Court Assocs. v. Greene , 7 A.D.3d 699, 777 N.Y.S.2d 200 (N.Y. A.D. 2d Dept. 2004). The subject premises are commercial, not residential. The defense of breach of the warranty of habitability is also not applicable in holdover proceeding. Goethals Mobile Park, Inc. v. Staten Island Meadowbrook Park Civ. Assoc. , 208 A.D.2d 896, 618 N.Y.S.2d 409 (N.Y.A.D. 2d Dept. 1994). "Res Judicata"
The Supreme Court found that the Respondent's purchase option Rider was unenforceable. Justice Luft made the following findings of fact in her May 12, 2020 decision which were:
"On July 19, 2005, S & A and the Coalition entered into a "Lease Extension and Amendment Agreement" regarding the August 1, 2001 lease of office space at 28 E. Main Street. The terms of this agreement provide for a four-year extension of the lease commencing August 1, 2005 and terminating July 31, 2009, with an option to extend for one additional year. This lease extension provided for plaintiff to pay monthly rent in the amount of $1,581.0 for the first year, with annual increments culminating in $1,830.00 in the fourth year and $1,922.00 for the option year, plus an
additional 10% each year for state and village taxes. The Lease Extension and Amendment Agreement is explicitly signed for S & A by Steven Paoubis, and for the Coalition by Paul Palmieri, President.
On March 14, 2019, Anthi, which has purchased the subject premises from S & A, served the Coalition with a 90 day notice to quit the office space at 28 E. Main Street. On May 1, 2019, the Coalition notified S & A/Anthi in writing of its intent to purchase the premises in accord with the 2002 Rider. On June 20, 2019, Anthi commenced a holdover/summary proceeding to recover possession in District Court. The complaint does not address the period between July 31, 2010, the termination of the 2005 Lease Extension and Amendment Agreement, and April 1,2014, the purported commencement date of the lease "extension" reflected in the 2002 Rider". (Emphasis added).
The Supreme Court expressly chose not to consider whether the 2010-2015 lease, which contained an integrated writings merger clause, was a forgery. While the parties dispute whether there was a forgery, this issue is not relevant to the determination of this action and is not a triable issue of fact precluding an award herein. This Court need not decide same as it is undisputed that both leases terminated by their own terms either in 2015 or in 2010. Accordingly, the rights of the parties are governed by New York State RPL Sec. 232-c which provides:
Where a tenant whose term is longer than one month holdover after the expiration of such term, such holding over shall not give to the landlord the option to hold the tenant for a new term solely by virtue of the tenant's holding over. In the case of such holding over by the tenant, the landlord may proceed, in any manner permitted by law, to remove the tenant, or, if the landlord shall accept rent for any period subsequent to the expiration of such term, then, unless an agreement either express or implied is made providing otherwise, the tenancy created by the acceptance of such rent shall be a tenancy from month to month commencing on the first day after the expiration of such term. Emphasis added.
When a written lease expires, a month to month tenancy on the same terms as those in the original lease is implied. City of New York v. Pennsylvania R.R. Co., 37 N.Y.2d 298, 372 N.Y.S.2d 56, 333 N.E.2d 361 (N.Y.1975) ; McClenan v. Brancato Iron & Fence Works, 282 A.D.2d 722, 724 N.Y.S.2d 438 (N.Y.A.D. 2d Dept. 2001) ; Priegue v. Paulus, 43 Misc.3d 135(A), 2014 WL 1622924 (App. Term 9th & 10th Dists. 2014). A month to month tenancy, by its nature, is renewable by the parties' conduct, i.e., by continued payment and acceptance of agreed-upon amounts each month. When the parties no longer agree to continue the relationship, either party can terminate it. However, if the tenant does not voluntarily surrender, the owner must serve a statutory notice of termination at least 30 days before expiration of the monthly term, as a condition precedent to bringing a holdover proceeding. See RPL Sec. 232-a & c; Weiden v. 926 Park Avenue Corp., 154 A.D.2d 308, 546 N.Y.S.2d 595 (N.Y.A.D. 1st Dept. 1989) ; 1400 Broadway Associates v. Henry Lee & Co. , 161 Misc.2d 497, 614 N.Y.S.2d 704 (N.Y. Civ. Ct. 1994).
Absent the purchase option Rider, the record presented clearly establishes that the parties were in a holdover month to month tenancy, which was terminated by the service of a greater than thirty day notice to quit. This establishes that Petitioner's prima facie cause of action under New York's Real Property Law. It is undisputed that the Coalition consistently paid $2,700.00 per month via check from April 7, 2014 through at least December 2018. (See Exhibit E in Respondent's Affirmation in Opposition dated November 5, 2019). Likewise said proof establishes that the parties agreed to substitute the Petitioner Anthi New Neocronon Corp. as the landlord. The Supreme Court established as fact the service of a ninety (90) day Notice to Quit and the expiration of the parties written lease agreements. Accordingly, the Petitioner is entitled to summary judgment as a matter of law, and a granting of a "judgment of possession" and "warrant of eviction". However, this Court cannot enter a money judgment for use and occupancy in this proceeding as same was not demanded in the underlying petition. The right to bring a plenary proceeding to recover the $40,000.00 plus of accruing use and occupancy is preserved without prejudice.