Opinion
09-3 3045.
Decided January 24, 2011.
HRABCHAK, GEBO LANGONE, P.C., MARK GEBO, ESQ., GOETTEL, POPLASKI DUNN, PLLC, JASON POPLASKI, ESQ., ON BEHALF OF YNGH, JESSICA ROGERS, PRO SE.
This matter concerns disputes over a landlord-tenant contract. For reasons explained below, the Court finds that the lease in question was terminated by operation of law through the actions of the parties, thereby nullifying post-settlement litigation initiated by the landlord and his attorney aimed at collecting additional rents and damages.
Facts
On August 23, 2008, the parties entered into a lease (prepared by Petitioner YNGH LLC) at the Butternut Hill apartment complex in Gouverneur running from August 15, 2008 to September 30, 2009. The terms included a $750 security deposit and $750 per month for rent. Jessica Rogers, who signed the lease, and her fiancé, William Charamut, were the tenants (Respondents, Charamut/Rogers). While Mr. Charamut never signed the lease, the parties agree he acted as Ms. Rogers' legal agent throughout this matter.
The parties' relationship was far from harmonious. Mr. Charamut, in uncontradicted testimony before this Court, said that habitability problems plagued the apartment, including black mold, defective electrical outlets and a faulty front door lock. The management company's ongoing failure to address these issues prompted Charamut/Rogers to contact Gouverneur's building code enforcement office, and eventually, to withhold their March 2009 rent in protest. Management responded by issuing a three-day notice to pay or vacate the apartment, at which point they paid the March rent.
Shortly thereafter, the parties apparently settled the matter when Mr. Charamut phoned Peter Hoffman, the complex's owner, and informed him that he and Ms. Rogers would be out of the apartment by April 1, 2009. They agreed to pay March's rent and did so. When Mr. Charamut asked about return of the security deposit, Mr. Hoffman insisted on retaining the security deposit as damages for, as Mr. Charamut described it, "breaking the lease".
Even though Charamut/Rogers vacated the apartment on April 1, YNGH commenced a summary proceeding in Gouverneur Town Court for non-payment of rent on March 12, 2009.
At the date set for appearance of the parties, however, the respondents learned that the matter had been adjourned to a date to be determined. Thereafter, Mark Gebo, counsel for YNGH, contacted Mr. Charamut in an attempt to settle the case. The details of their conversation are disputed. According to Mr. Gebo, he and Mr. Charamut agreed that both parties would settle the matter without prejudice whereby Respondents would return the apartment keys (as yet unreturned) and withdraw their court papers and YNGH would withdraw its court papers. Mr. Gebo memorialized his understanding of the agreement in a letter to the
Gouverneur Town Court dated May 19, 2009, which provides in relevant part:
On May 18, 2009, I spoke with Mr. Charamut who purported to speak for both himself and Ms. Rogers on this issue. It was determined that we would both withdraw whatever papers we have filed with the Court without prejudice. It would effectively end the pending matter in the Court but leave the parties with all their rights and defenses intact.
(Letter of Mark G. Gebo, May 19, 2009).
Mr. Charamut's account is not as clear cut. Testifying before this Court during a hearing November 15, 2010, Mr. Charamut seemed to indicate that he understood that the matter had been dismissed without prejudice:
That conversation was what, what the letter states that we'll, if both parties agree, we'll discontinue the proceedings in Gouverneur and, as long as I return the keys to his office . . . And that both, both parties will be free to, and I, I asked Mr. Gebo, I asked if, you know, if this was it or, and he informed me, you know, proceedings could continue later on, but the initial Gouverneur would be dismissed.
However, Charamut's description of his understanding changed later on in the hearing to indicate that he believed that dismissal of the Gouverneur matter was to occur with prejudice.
THE COURT: You're, were you given a choice to go back to Gouverneur Town Court and present your other issues?
MR. CHARAMUT: No, no your Honor. That, that was, the last words of the conversation, you know, it will be dismissed and we can, it was either go our separate ways or we'll just both part ways, and then that was the end of it.
Moreover, Mr. Charamut maintained that he understood the matter was to be dismissed with prejudice when testifying at the continuation of the same hearing on December 1, 2010.
Mr. Charamut also testified that he returned the keys to Mr. Gebo by certified mail but never received a copy of Mr. Gebo's May 19th letter.
Little time passed before YNGH sought the proverbial second bite at the apple. It filed a small claims complaint in this Court August 11, 2009, seeking $4,926 in damages arising from Respondents' alleged violation of the lease agreement as of March 1, 2009.
The matter finally came to hearing on November 15, 2010, at which Ms. Rogers failed to appear. The Court determined that because Mr. Charamut never signed the lease in question, he was improperly named in the action and, accordingly, dismissed the action against him.
However, Mr. Charamut remained as a witness and acted as Ms. Rogers' agent. The Court was set to enter a default judgment against her and proceeded to adduce evidence regarding damages through the testimony of Andrew Allen, Butternut Hill's property manager. The Court asked Mr. Charamut to offer evidence regarding the alleged damages, during which he described the apparent settlement with Mr. Hoffman and conversation with Mr. Gebo. It became apparent to the Court at this point that Mr. Gebo had become a witness in the matter and the Court therefore advised him to retain counsel to handle the balance of the case. The hearing was then adjourned to December 15, 2010.
YNGH's objected to Mr. Charamut's testimony on grounds that no party called him as a witness. This objection is groundless, given that the Court may call witnesses in order to render substantial justice. ( See McKinney's UCCA § 1804 ("The court shall conduct hearings upon small claims in such manner as to do substantial justice between the parties according to the rules of substantive law and shall not be bound by statutory provisions or rules of practice, procedure, pleading or evidence, except statutory provisions relating to privileged communications and personal transactions or communications with a decedent or mentally ill person.")).
New York's Rules of Professional Conduct generally forbid an attorney from acting "as an advocate before a tribunal in a matter in which the lawyer is likely to be a witness on a significant issue of fact. . . ." New York Rules of Professional Conduct, Rule 3.7 [a].
At the hearing's continuation, Ms. Rogers at last appeared but declined to testify. Mr. Gebo also returned, now represented by counsel. Mr. Gebo testified that he had contacted Mr. Charamut to try to settle the case and that the two had arrived at the agreement memorialized in the May 19th letter discussed above. The Court invited the parties to brief the matters presented by this case and received from Mr. Gebo a "Memorandum of Law" January 10, 2010. Respondents filed nothing.
Mr. Gebo's decision to negotiate with the unrepresented Mr. Charamut, while not inconsistent with New York's Professional Conduct Rules ( see 4.3, Comment [2], [ 22 NYCRR Part 1200]), nonetheless illustrates the problems that may occur when attorneys do so. Besides becoming a witness in the matter, Mr. Gebo created misunderstanding instead of resolution. Advising unrepresented persons to retain counsel is usually the safer course. ( See, e.g., LR Credit 21 LLC v Paryshkura, ___ NYS 2d ___, 2010 WL 5576187 [Nassau Dist Ct 2010] ( quoting Becker v Lamont, 13 How Pr 23 [Sup Ct, NY County 1855] (recognizing the power of courts to relieve parties from stipulation obligations because of adversaries "who might take undue advantage' of them."); Robinson v Finkel, 194 Misc 2d 55, 74 n 14 [Sup Ct, NY County 2002] ( citing former Code of Professional Responsibility, DR 7-104 [former 22 NYCRR 1200.35], superseded by the New York Rules of Professional Conduct in 2009 [ 22 NYCRR Part 1200]) (doubting the propriety of Housing Authority attorneys' practice of persuading unrepresented tenants to enter stipulations settling disputes and waive hearing rights).
Discussion
I.
The issue presented is whether the initial agreement between Charamut/Rogers and Mr. Peters terminated the lease and with it any further obligations of the parties. The Court finds, applying the standard of substantial justice, that it did. ( See McKinney's UCCA § 1804, supra at note 1, and Commentary ("This is a fluid criterion, and sometimes substantial justice is found by turning the judicial face slightly away from the technical rule of substantive law."); Johnson v Timmerman, 92 Misc 2d 626, 629 [Jefferson County Ct 1978] ("The Legislature, in adopting UCCA s 1804 has abolished the requirement that Small Claims Part be bound by such procedural statutes. The primary obligation of such a court is to render substantial justice' so long as the Court adheres to substantive law.")).
II.
New York recognizes the doctrine of surrender by operation of law, by which parties to residential and commercial leases may be deemed, through their actions, to have terminated those leases. ( Riverside Research Institute v KMGA, Inc., 68 NY2d 689, 691-692; Ford Coyle Properties, Inc. v 3029 Avenue V Realty, LLC , 63 AD3d 782, 782 [App Div 2009]; 2 NY Landlord Tenant Incl Summary Proc § 26:6 (4th ed). Such surrender occurs when the parties to a lease both do some act so inconsistent with the landlord-tenant relationship that it indicates their intent to deem the lease terminated . . . As distinguished from an express surrender, a surrender by operation of law is inferred from the conduct of the parties . . .Whether a surrender by operation of law has occurred is a determination to be made on the facts.
Riverside at 691-692 (internal citations omitted).
Here, a series of acts by the parties clearly dissolved the landlord-tenant relationship, beginning with the landlord's failure to address the quite serious habitability issues (mold, faulty electrical sockets and a broken lock) plaguing the apartment. As noted above, such failure prompted Charamut/Rogers to withhold the March 2009 rent in protest, which they paid only after the landlord served them with a three-day notice to pay or vacate. At that, point, Charamut/Rogers notified the landlord that they were moving out by April 1 and inquired about the security deposit, to which Mr. Hoffman replied he was keeping their security deposit as damages for breaching the contract.
Breach of the warranty of habitability occurs, inter alia, when residential tenants "are subjected to any conditions which would be dangerous, hazardous or detrimental to their life, health or safety." Real Prop Law § 235-b [1]. The Court needn't reach the issue of whether or not a breach of the warranty occurred (though it appears one quite likely did) because it is enough, for purposes of finding surrender by operation of law occurred, to note the landlord's ongoing failure to correct serious safety problems in the apartment.
Indeed, Mr. Hoffman's actions, might, under the contract, be construed as his cancellation of the lease. Paragraph 10, which addresses "Fire and Damages", provides as follows: "Tenant(s) must give landlord immediate notice (within 12 hours) in case of FIRE or ANY other damages to the Premises. Landlord will have the right to repair the damage within a reasonable time or cancel this Lease. If Landlord repairs, Tenant(s) shall pay rent only to the date of the fire or damage and shall start to pay rent again when the Premises become usable. Landlord may cancel the Lease by giving Tenant(s) three (3) days' written notice. The Term shall be over at the end of the third day and all rent shall be paid to the date of the damage" Lease at ¶ 10 (emphasis in original).
These actions cancelled the lease and, with it, any further rent obligations Rogers had pursuant to it. ( See Deer Hills Hardware, Inc. v Conlin Realty Corp., 292 AD2d 565, 565 [App Div 2002] (surrender by operation of law relieved tenant of further rent liability). Moreover, it is apparent that Hoffman was content to settle any claims for damages besides rent by keeping the $750 security deposit. And the fact that the Respondents retained their keys until Mr. Gebo later requested them is of no moment, given that retention or surrender of keys doesn't equal retention or surrender of possession. ( See Schnee v Jonas Equities, Inc., 103 Misc 2d 625, 626-627 [Civ Ct, Kings County 1980] ("The return of the keys by the tenant is not sufficient by itself [to effectuate surrender] and must be accompanied by an act of acceptance such as a resumption of possession for the landlord's benefit."); In re Estate of Barnes, 37 Misc 2d 833, 836 [Sur Ct, NY County 1962] ("The mere sending of the keys to the landlord does not amount to a surrender and acceptance."); 2 NY Landlord Tenant Incl Summary Proc § 26:16 (4th ed) ("On the other hand, if the keys are not surrendered, this fact alone is not conclusive that the premises have not been surrendered."); see also Ford Coyle Properties, Inc. at 782 ("The mere retention of keys to the premises by the landlord after the tenant has returned them does not alone constitute a surrender by operation of law. . . .")).
Accordingly, the Court finds that this matter was concluded before it ever reached litigation.
III.
The Case is dismissed.
This Opinion shall serve as the Judgment and Order of the Court.