Summary
holding that a landlord who commingled the security deposit may not use the deposit to "offset . . . justifiable repair costs after the tenant vacates
Summary of this case from Hansen v. Lorenzo, 2009 NY Slip Op 52231(U) (N.Y. Dist. Ct. 10/30/2009)Opinion
November 20, 2001.
Order, Supreme Court, New York County (Marilyn Shafer, J.), entered January 17, 2001, which granted plaintiff's motion for partial summary judgment on its cause of action for return of a security deposit, and judgment, same court and Justice, entered February 1, 2001, pursuant thereto, unanimously affirmed, without costs.
Scott S. Greenspun, for plaintiff-respondent.
Norman Haber, for defendant-appellant.
Before: Nardelli, J.P., Williams, Mazzarelli, Lerner, Friedman, JJ.
Plaintiff's showing that defendants failed to give plaintiff written notice of the banking institution that held plaintiff's security deposit, in violation of General Obligations Law § 7-103(2), permitted an inference of commingling at the time of lease expiration, in violation of General Obligations Law § 7-103(1), that defendants failed to rebut (see, LeRoy v. Sayers, 217 A.D.2d 63, 68-69). As a result of such commingling, defendants forfeited any right they had to avail themsees of the security deposit "for any purpose", entitling plaintiff to its "immediate" return notwithstanding that plaintiff may itself have breached the lease (id., at 68). Thus, we reject defendants' argument that a tenant's right to a refund of a security deposit for commingling is subject to offset to the extent a landlord incurs justifiable repair costs after the tenant vacates. Plaintiff had a cause of action against defendants for conversion as soon as the deposit was placed in a commingled account, which cannot be defeated by defendants' post-lease use of the commingled deposit for repairs.
THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.