Opinion
22727
November 21, 2002.
Appeal from orders of the Civil Court of the City of New York, New York County (Eileen A. Rakower, J.), dated February 28, 2002 and March 14, 2002, which denied the nonparty tenant's motion to vacate a default judgment in a nonpayment summary proceeding.
Horing Welikson Rosen, P.C., Forest Hills (Leonard R. Kaplain of counsel), for appellants.
Mandel, Resnik Kaiser, P.C., New York City (Jerry A. Montag of counsel), for Gran Sabana Corp., N.V., respondent.
PRESENT: HON. WILLIAM P. McCOOE, J.P., HON. PHYLLIS GANGEL-JACOB, HON. MARTIN SCHOENFELD, JJ.
Nonparty KG Food Market, Inc. appeals from orders of the Civil Court, New York County, dated February 28, 2002 and March 14, 2002 (Eileen A. Rakower, J.) denying its motion to vacate a default judgment in a nonpayment summary proceeding.
Appeal from order dated February 28, 2002 (Eileen A. Rakower, J.) dismissed, without costs, as academic.
Order dated March 14, 2002 (Eileen A. Rakower, J.) reversed with $10 costs, appellant's motion to vacate the default judgment is granted, and the matter is remanded for further proceedings on the petition consistent with this decision.
The default judgment must be vacated because of landlord's failure to name and join a necessary party, appellant KG Food Market, Inc. KG, the tenant under a commercial lease for the sale of fancy groceries and other items, sold its assets and assigned the lease to respondent Midtown Gourmet Food Market, Inc. Simultaneously, the lease was reassigned back to KG, which then subleased the premises to Midtown for a term of ten years. Landlord consented to these transactions in writing. The subsequent commencement of nonpayment proceedings solely against Midtown — a subtenant — without joining KG, was ineffective to terminate KG's tenancy rights since KG continued as tenant of record and sublessor pursuant to the reassignment and sublease (see, Rasch's Landlord Tenant, 4th ed., § 38:16; § 38:17; Poole v Pellati, 251 A.D.2d 480).
Civil Court recognized these controlling principles, but declined to afford any relief to KG in this proceeding on the ground that it had filed a certificate of corporate dissolution. However, this filing did not defeat KG's possessory interest. Generally, a lease to a corporation is not terminated by the dissolution of the corporation and, unless the lease so provides, the rights and obligations thereunder are not extinguished by the corporation's dissolution (see, Matter of Goldberg v Harwood, 216 A.D.2d 152, affd 88 N.Y.2d 911). Until dissolution is complete, the corporation continues to hold title to assets (see, Wells v Ronning, 269 A.D.2d 690, 692). On this record, where details of the corporate dissolution are not set forth, it cannot be said that KG has forfeited its rights under the pre-existing lease. Accordingly, the matter is remanded to Civil Court for proceedings on the nonpayment petition, at which KG shall be joined as a party respondent.
KG was granted leave to pursue its claims in a plenary action.
The court notes that reletting of the premises was stayed by Civil Court pending determination of this appeal.