Summary
In Wilsdorf v. Fairfield Northport Harbor, LLC, 34 Misc 3d 146(A), 950 N.Y.S.3d 494 (App. Term 9th & 10th Jud. Dists. 2012), the Appellate Term for the 9th and 10th Judicial Districts held (in a small claims action seeking to recover a security deposit and late fee payments) that "the provision in the lease charging plaintiff late fees of 10% of the monthly rent [is] unenforceable as a penalty, since it clearly disproportionate to any loss that defendant may incur."
Summary of this case from 56-11 94TH St. Co. v. JaraOpinion
No. 2010–3084 S C.
2012-01-24
Arthur W. WILSDORF, Jr., Respondent, v. FAIRFIELD NORTHPORT HARBOR, LLC, Appellant.
Appeal from a judgment of the District Court of Suffolk County, Third District (C. Stephen Hackling, J.), entered December 14, 2009. The judgment, after a nonjury trial, awarded plaintiff the principal sum of $5,000, plus interest from August 1, 2007 and costs, and dismissed defendant's counterclaim.
Present: NICOLAI, P.J., MOLIA and IANNACCI, JJ.
ORDERED that the judgment is modified by providing that interest to verdict is to be computed from August 13, 2009; as so modified, the judgment is affirmed, without costs.
In this small claims action, plaintiff, defendant's former tenant, seeks to recover a security deposit and late fee payments totaling $5,000. Defendant counterclaimed to recover the sum of $1,944 for rent due. At a nonjury trial, plaintiff established that he had paid defendant a security deposit in the sum of $3,080 and that he had paid defendant late fees in excess of $2,000 pursuant to a provision in the lease which assessed late fees of 10% of the monthly rent. After trial, the District Court awarded plaintiff the principal sum of $5,000, plus interest from August 1, 2007 and costs, and dismissed defendant's counterclaim.
In our view, the award to plaintiff of the principal sum of $5,000 and the dismissal of defendant's counterclaim rendered substantial justice between the parties in accordance with the rules and principles of substantive law (UDCA 1804, 1807). The evidence adduced at trial established that plaintiff was entitled to a refund of the security deposit. The District Court found that plaintiff had surrendered possession of the premises by the lease's expiration date, i.e., July 31, 2009, a finding which we leave undisturbed. Consequently, contrary to defendant's contention, plaintiff was not responsible for rent and/or use and occupancy for any days in August 2009. In addition, we find that the provision in the lease charging plaintiff late fees of 10% of the monthly rent is unenforceable as a penalty, since it is clearly disproportionate to any loss that defendant may incur ( see Sandra's Jewel Box v. 401 Hotel, 273 A.D.2d 1 [2000] ).
However, pursuant to CPLR 5001, interest to verdict should not have been computed from August 1, 2007, as the claim asserted in this small claims action did not accrue on that date. Rather, based on the record presented, we find that the appropriate date from which interest should be computed ( seeCPLR 5001[b] ) is August 13, 2009, the date this small claims action was commenced ( seeUDCA 1803).
The judgment should be modified accordingly.