Opinion
No. 70096/13.
05-30-2014
1644 BROADWAY LLC, Petitioner, v. Bienvenido JIMENEZ d/b/a Moca Deli Grocery, Respondent.
Stern and Stern Law Offices, Brooklyn, Attorney for Petitioner. Peter J. Pruzan, Esq. New York, Attorneys for Respondent.
Stern and Stern Law Offices, Brooklyn, Attorney for Petitioner.
Peter J. Pruzan, Esq. New York, Attorneys for Respondent.
Opinion
HARRIET L. THOMPSON, J.
On April 20, 2006, Keesha Fields executed a promissory note for the sum of the purchase price of the premises known as 1644 Broadway, Brooklyn, New York 11207 and granted the Lender, JP Morgan Chase Bank, NA, its successes and assigns, a first mortgage as security for the payment of the promissory note. During her ownership, Keesha Fields defaulted in the payment of the promissory note and the Lender, in accordance with the terms and conditions of the note and mortgage, commenced an action in the Supreme Court of the State of New York in the County of Kings to foreclose on the mortgage. The action was commenced by the filing of a Notice of Pendency and the service of the Summons and Verified Complaint.
JPMorgan Chase Bank, N.A. assigned the mortgage and note to Home Sales, Inc; then, subsequently, Home Sales, Inc. assigned said mortgage and note to Eastern Savings Bank, FSB. A Judgment of Foreclosure and Sale, dated September 19, 2012, was entered in the Supreme Court on behalf of Eastern Savings Bank, FSB which ordered and adjudged, inter alia, that the above-described property be sold in one parcel and in “as is” condition at a public auction at the footsteps of the courthouse located at 360 Adams Street, Brooklyn, New York.
In accordance with the Judgment of Foreclosure and Sale, a Referee was appointed by the court to give notice of the sale, to conduct the public auction, to offer said mortgaged lands and premises to the highest bidder and to sell said mortgage and land to the highest bidder as set forth in the court order.
Pursuant to the Judgment of Foreclosure and Sale, all rights, title and interest of Eastern Savings Bank, FSB, in consideration of the sum of $461,000.00, was transferred to the highest bidder at the public auction, namely, Abdul Salem Mohamed Mused.
According to the Referee's Deed, it appears that the Respondent, “MORA” DELI & GROCERY, located at 1644 Broadway, 1st Floor, Brooklyn, New York, was a named party in the foreclosure action. The aforementioned Referee's Deed, dated April 2, 2013 and recorded in the City Registry of the City of New York on April 22, 2013 under CRF No. 2013000158422 by a NYS title company, has the purported name of the Respondent on Schedule “B” annexed thereto.
On the same date, on April 2, 2013, Abdul Salem Mohamed Mused transferred all rights, title and interest in the subject premises to 1644 Broadway, LLC for no consideration and the deed was duly recorded on April 22, 2013 in the City Registry under CRF No. 2013000158423 by a NYS title company.
PROCEDURAL AND CASE HISTORY OF THIS SUMMARY PROCEEDING
On April 4, 2013, 1644 Broadway LLC, by Muhammed Ali, a “member”, executed a “Commercial 10–Day Notice after Foreclosure” seeking to recover possession of the commercial store and basement occupied by the Respondents and asserts the legal capacity to commence this proceeding.
The 10–Day Notice to Quit states that the landlord elects to terminate the occupancy of the commercial tenant and unless the commercial tenant vacates the subject premises by the effective date of April 25, 2013, the termination date, the Petitioner would commence summary proceedings pursuant to Article 7 of the RPAPL to remove all occupants from possession for holding over. The notice specifically states that it is served in compliance with RPAPL § 713[5] on the grounds that the property had been sold in foreclosure and the new owner seeks to recover possession of the subject premises.
Annexed to the “Commercial 10–Day Notice after Foreclosure” is a copy of the original Referee's Deed of Foreclosure certified pursuant to CPLR § 2105 by the closing attorney, Stanley Israel, Esq., dated April 2, 2013. Additionally annexed is a second deed, dated April 2, 2013, from the highest bidder, Abdul Salem Mohamed Mused to the Petitioner, 1644 Broadway LLC. This deed is a purported copy of the original recorded deed and does not contain any certification. The Affidavit of Service of Jessie Perez, a licensed Process Server, affirms that service was effectuated on April 8, 2013 by substituted service on “John Doe” who refused his name but was an employee authorized to accept service for the aforementioned corporation.
When the Respondents failed to voluntarily vacate, a Notice of Petition and Petition was allegedly served on the Respondents by substituted service on May 8, 2013, again, on “John Doe,” an employee authorized to accept service.
The petition was noticed to be heard on May 20, 2013 in Commercial Part 52. A review of the court record shows that this case was adjourned to July 2, 2013 for trial and for the Respondents to retain counsel. On June 4, 2013, the Respondents interposed a Notice of Appearance and Attorney Verified Answer, which avers the following affirmative defenses to the petition, to wit: improper service of process of the Notice to Terminate and the Notice of Petition and Petition; the Petitioner is not a party entitled to bring this proceeding pursuant to RPAPL § 713[5] ; the original deed delivered pursuant to the Judgment of Foreclosure and Sale was not “exhibited to the Respondent”; the Petition fails to state a cause of action; the purported certified deed is not properly certified and as an absolute defense, the Respondent is in possession with a valid written lease agreement.
The case was adjourned from July 2, 2013 to August 5, 2013 for trial in accordance with a Decision and Order of the Hon. Reginald Boddie. The contentions were that the Respondent had retained counsel too late and should be denied any adjournment.
The court file also shows that on August 1, 2013, the Respondent submitted an Order to Show Cause to the court returnable on August 1, 2013 seeking summary judgment pursuant to CPLR § 3212 and for a stay of the trial on August 5, 2013
In a two-attorney Stipulation, dated August 1, 2013, the parties agreed to a briefing schedule in which the Petitioner agreed to serve opposition papers on or before October 18, 2013 and the Respondent agreed to serve reply papers on or before October 30, 2013. In addition, both parties agreed to oral argument before the undersigned judge.
On the adjourn date of October 31, 2013, after oral argument, this matter was referred to the undersigned and submitted for a final disposition.
While sub judice, on February 5, 2014, the attorney for the Petitioner, Stern & Stern, Esqs., moved this court by Notice of Motion, returnable on February 14, 2014, for an Order to compel the Respondent to make interim payments of use and occupancy pending a determination of the summary judgment motion.
The Respondent moves for leave under CPLR § 3212(b) seeking judgment as a matter of law and the dismissal of the petition. The Respondent asserts that the Petitioner is not Abdul Salem Mohamed Mused, the highest bidder at the foreclosure sale, and is therefore not a proper party to bring this proceeding. In addition, the Respondent argues that the Petitioner, 1644 Broadway LLC does not have standing to maintain the proceeding. Next, the Respondent attacked the sufficiency of the claims in the predicate notice that the certified deed was “exhibited” to the Respondent. In the supporting Affidavit of BIENVENIDO JIMENEZ, the Respondents claim that the original deed was never exhibited to him or to an authorized agent of the business. Additionally, the Respondent states that the attorney certification is defective based on the fact that “no page of the copy of deed bares a certification.” (Affirmation of Peter Pruzan, Esq., at ¶ 14). Lastly, the Respondent states that the petition fails to state a cause of action, but does not articulate the basis for such claim.
Most importantly for purposes of this motion, in the supporting Affidavit by BIENVENIDO JIMENEZ, in paragraph 2, and as shown in Respondent's Exhibit 3 to the motion, there is a commercial lease agreement dated September 1, 2013 between Harold Willis, as Landlord, and BIENVENIDO JIMENEZ, as Tenant, that commenced on October 1, 2013 and terminates on September 30, 2023. Standing on this lease, the Respondents contend that BIENVENIDO JIMENEZ and the restaurant may not be evicted in this type of proceeding because he has a lease, was not named in the foreclosure action to terminate his leasehold interest and hence, the lease is still effective and the case should be dismissed.
The Petitioner, in opposition, asserts that Muhammed Ali, as President of the Petitioner–Corporation, presented the deed personally to the Respondent after the purchase of the premises. He claims to have displayed the deed to the person working behind the counter of the store and was informed that the owner was in Santo Domingo. He also attests to exhibiting the deed to the Respondent in this proceeding on a later date. The Petitioner disputes the fact that the Respondent was not named in the foreclosure action and asserts that the Notice of Pendency, clearly missing from the exhibits, named the Respondent in the action.
The Petitioner also attacks the validity of the lease. The Petitioner specifically states that the Respondent's claim of a 20–year lease fails because his lease was never recorded and therefore, not effective against a good faith purchaser for value (Affidavit of Muhammed Ali at ¶ 17).
In reply, the Respondents assert that the deed was not exhibited, and, if so, was exhibited to an unnamed individual and a counterperson; those individuals are not authorized to accept service on behalf of the Respondent. The Respondent indicates that his attorney notified the Petitioner of the inadvertent omission of the Notice of Pendency to no avail. The Respondent presents an Amended Notice of Pendency in the underlying foreclosure action. It clearly does not explicitly name the Respondents as parties to the action. The Respondent relies on RPL § 1311 which provides that in a mortgage foreclosure action, any party that has an interest or an estate in the property must be named and served as necessary parties in a foreclosure action to effectively terminate their rights to possession and any leasehold interest in that property. The Respondent attests that, based on the failure to name and serve the Respondent in the foreclosure action, that the leasehold tenancy was not extinguished by the action and he still has rights to possession of the commercial unit.
Additionally, the Respondent claims that although the lease is for a term exceeding 3 years and constitutes a conveyance which may be recorded (Real Property Law § 290 ), the same statute, namely, RPL § 291 provides that an unrecorded conveyance is void only as against a subsequent good faith purchaser for value. The Respondent argues that actual possession of the real estate is sufficient notice to all the world of the existence of any right which the person in possession is able to establish. The Respondent claims that the Petitioner is not a good faith purchaser for value-drawing this court's attention to the Petitioner's deed which explicitly states that the transfer was for “zero consideration” as part of the conveyance to the Petitioner here. For all of these reasons, the Respondent's claim that there are no questions of fact which require a trial and judgment should be granted to him accordingly.
The Petitioner now moves for the payment of use and occupancy pendente lite. The Petitioner Muhammed Ali asserts that the fair market rental value of the Respondent's leasehold interest is $3,500.00 monthly. He asserts that since he assumed ownership of the subject premises, in April 2013, the Respondent has never paid use and occupancy for the subject premises. On the other hand, he claims that he has faithfully paid for all of the essential services to the property including gas, electric, heat and hot water, hazard insurance, real estate taxes and water and sewer charges. The Petitioner also asserts that notwithstanding the lease presented by the Respondent for a lower amount of monthly rent, no use and occupancy has been paid since the pendency of the proceeding and Respondent should be required to pay use and occupancy pendente lite.
PROCEDURAL AND SUBSTANTIVE LAW
The Respondent moves this court for summary judgment. Since summary judgment is a drastic remedy and requires a high standard proof, a brief articulation of the statutory and case authority should be reviewed.
CPLR § 3212(b) provides that “the motion for summary judgment shall be granted if, upon all the papers and proof submitted, the cause of action or defense shall be established sufficiently to warrant the court as a matter of law in directing judgment in favor of any party “[T]he motion shall be denied if any party shall show facts sufficient to require a trial of any issue of fact. If it shall appear that any party other than the moving party is entitled to a summary judgment, the court may grant such judgment without the necessity of a Cross–Motion.” It has been well-settled that on a Motion for summary judgment, “the movement must submit evidentiary proof in admissible form which establishes that she is entitled to judgment as a matter of law, and to defeat the Motion, the opponent must produce evidentiary proof in admissible form sufficient to require a trial of material questions of fact on which she rests her claim or must demonstrate acceptable excuse for his failure to meet the requirements of tender in admissible form.” (Zuckerman v. City of New York, 49 N.Y.2d 557, 562 (1980) ; Giuffrieda v. Citibank Corp., 100 N.Y.2d 72 [2003] ).) Any failure to make that showing requires denial of the motion regardless of the adequacy of the opposing papers (see Vega v. Restani Construction Corp., 18 NY3d 499, 502 [2012].
Once the moving party makes a prima facie showing, then and only then does the burden shift to the opposing party to produce sufficient evidentiary proof to establish the existence of material factual issues (see Alvarez, 68 N.Y.2d 324; Zuckerman v. City of New York, 49 N.Y.2d 557, 562 [1980] ). It is incumbent on the Defendant “to assemble, lay bare and reveal his or her proof in order to show that their defenses are real and capable of being established at trial It is insufficient to merely set forth averments of factual or legal conclusions. [Internal citation omitted].” The evidence presented by the non-moving party “must be viewed in the light most favorable to the non-moving party.” (see Vega, 18 NY3d 503 [internal quotation marks omitted] ). Thus, to defeat the summary judgment motion, the opposing party must show that there is a material question of fact that requires trial (CityFinancial Co. (De) v. McKenny, 27 AD3d 224, 226 [1st Dept., 2006] ; Machinery Funding Corp. v. Stan Loman Enterprises, Inc., 91 A.D.2d 528 (1st Dept., 1982) ; See also Tabor v. Logan, 114 A.D.2d 897, 895 (2d Dept., 1985) ; Santiago v. Filstein, 35 AD3d 184, 185–186 (1st Dept., 2006) ; Mazurek v. Metropolitan Museum of Art, 27 AD3d 227, 228 (1st Dept., 2006) ; Smalls v. AJI Industry Inc., 10 NY3d 733, 735 (2008) ; Melendez v. Parkchester Medical M.D. Servs., P.C., 76 AD3d 927 [1st Dept., 2010] ). If there is any doubt as to the existence of a triable fact, the motion for summary judgment must be denied. Rotuba Extruders v. Ceppos, 46 N.Y.2d 223, 231 (1978).
Denial of summary judgment motions thus occurs “where the facts are in dispute, where conflicting inferences may be joined from the evidence or where there are issues of credibility (Benutatos v. Comferford, 78 AD3d 750, 752 [2010] [internal quotation marks omitted]”; see also Peerless Ins. Co. v. Allied Bidg. Prods. Ct., 15 AD3d 373, 374 [2005] [denial of summary judgment required on developing “any doubt as to the existence of a triable issue, or where the material issue of fact is arguable” [internal quotation marks and citations omitted] ).
In deciding such motions, it is often repeated that “[t]he court's function on a motion for summary judgment is to determine which material factual issues exist, not resolve such issues.” (Ruiz v. Crypton, 71 AD3d 1112, 1115 [2010] [internal quotation marks omitted] ).
It is well settled authority in New York that a court may grant relief on a motion which was not specifically requested as long as it is not dramatically unlike the relief sought, the proof supports it and the court is satisfied that no one is prejudiced by it (Shaw v. RPA Assoc., LLC., 75 A.D.2d 634, 906 N.Y.S.2d 574;HCE Assoc., v. 3000 Watermill Lane Realty Corp., 173 A.D.2d 774, 570 N.Y .S.642;see also Gefferner v. Mercy Med. Center, 83 A.D3d 998, 922 N.Y.S.2d 470 [AD, 2nd Dept., 2011] where it was determined that the Supreme Court did not improperly direct the plaintiff to provide authorizations under HIPAA although neither party moved for such relief.
In this case, having presented the procedural framework in this case, the substantive issues alleged by the parties in their papers must be subject to examination.
In this state, when a Petitioner files an affidavit of service that alleges proper service of process, the Respondent must plead a sufficiently detailed and specific statement to be entitled to a hearing on service of process. Bear v. Lipson, 194 A.D.2d 787, 599 N.Y.S.2d 618 (2d Dept.1993) ; Carlino v. Cook, 126 A.D.2d 597, 511 N.Y.S.2d 38(2d Dept.1987) ; Skyline Agency, Inc. v. Ambros, Coppotelli, Inc., 117A.D.2d135, 502N.Y.S.2d479(2nd Dept.1986); Bideppi v. Salter, 108A.D.2d890, 485N.Y.S.2d772(2nd Dept.1985); Colon v. Beekman Downtown Hospital, 11 1A.D.2d 841, 490 N.Y.S.2d 581(2d Dept.1985).The lack of specificity, for example, that the Petitioner has not satisfied the reasonable application standard of Section 735 of the RPAPL is insufficient to require a traverse hearing. Slater v. Congress of Racial Equality, Inc., 48 A.D.2d 622, 367 N.Y.S.2d 789(1st Dept.1975); Clarkson Arms, Inc. v. Arabatiz, July 3, 1991, NYLJ. 23, Col. 6 (App. Term 1st Dept.); Greiff v. Liebman, Feb. 10, 1988, NYLJ, Par. 6 Col 4(App. Term 1st Dept.).
It has also been firmly established that the mere claim of improper service of process without more is insufficient to rebut an affidavit of service in proper form. Nussbaum Resources v. Gill Martin, 195 Misc.2d 145, 756 N.Y.S2d 408 (N.Y. Civ.Ct.,2003)citing Dr. De Zeto v. Bruhn, 57 N.Y.S.2d 875, 50 1 N.Y.S .2d 801,Hindes v. 2461 Realty, 169 A.D.2d 629, 564 N.Y.S.2d 763 (1st Dept., 1999) ; Frankel v. Schilling, 149 A.D.2d 658, 540 N.Y.S.2d 469 (2nd Dept.,1989). See also the more recent cases of First Ave. Owners Corp v. Riverwalk Garage Corp., 6 Misc.3d 439, 442 (Civ Ct, N.Y. County 2004) and Am. Sav. & Loan Assn. V. Twin Eagles Bruce, 208 A.D.2d 446 (1st Dept) finding that a mere denial of receipt of service is insufficient to rebut the presumption of proper service created by properly executed affidavit of service and a conclusory denial not accompanied by further probative facts does not require a traverse hearing
In addition to the lack of specificity, the answer must contain a sworn statement by the Respondent. If the answer contains the affirmation of the attorney only and not the party, it has been long ago held that an attorney's affirmation has no probative value and is insufficient as a matter of law. Zuckerman v. City of New York, 49 N.Y.2d 55; Banchik v. Ruggieri, Nov 18, 1998, NYLJ (p.29, col.4). Thus, an unverified answer without the personal knowledge of a party is a ity and is worthless (Hasbrouc v. City of Gloversville, 102 A.D.2d 905 (3rd Dept.1984) ).
In this case, the Respondent was allegedly served with what has been termed a “Commercial 10–Day Notice after Foreclosure” by substituted service pursuant to RPAPL § 735(2). To determine the efficacy of such pleadings and service, the Respondent raises three issues for resolution. The first issue is whether a certified copy of the Foreclosure Deed was personally “exhibited” to the Respondents as prescribed by RPAPL § 713[5]. The second is whether the certification under CPLR § 2105 is deficient. The third is the propriety of the party that instituted this proceeding.
Since this is a summary proceeding, we should start with RPAPL § 713. This section entitled “Grounds where no Landlord and Tenant relationship exists” provides, in pertinent part as follows: A special proceeding may be maintained under this article after a 10–Day Notice to Quit has been served upon the Respondent in the manner prescribed in Section 735 upon the following grounds: 5. The property has been sold in foreclosure and either the Deed delivered pursuant to such sale, or a copy of such Deed, certified as provided in the Civil Practice Law and Rules, has been exhibited to him”.
In regard to the exhibition of the deed, the general rule in this state is that the Referee's Deed must be presented to the occupant(s) in possession by physically going to the premises and showing them the deed or it must be served on them by personal service only with the Notice to Quit. This is a harsh reading of the statute and some courts have rightly deviated from this restrictive interpretation.
For example, tn Community Mortgage Bankers v. Mercado, 192 Misc.2d 704, 749 N.Y.S.2d 303, the court held that the statutory requirements for issuance of a Writ of Assistance were not met with service of a certified copy of the Deed for the premises purchased at foreclosure sale since it had not been exhibited to the occupants who were served by substituted service. Notwithstanding the fact that a certified copy of the deed was served on the Defendant Mercado by personal service and on her by substituted service for all of the other occupants, the Court deemed it insufficient under the law. The court looked to the definitions of exhibition in Black's Law Dictionary and in Webster's Dictionary. The court tried to use the common sense definition of the word by insisting that the deed must be actually presented for view of the document and/or to hold the document out. “It is the opinion of the court that the certified copy of the document had not been exhibited as that word is commonly used and understood to the occupants who received it by substituted service”. Accordingly, the Plaintiff did not meet the statutory requirements for issuance of a Writ of Assistance and the motion was denied. In addition, it was held reversible error and inadequate for an annexation of the deed to an Order to Show Cause which authorized service of the moving papers on the Defendant's attorney. (Lincoln First Bank v. Polishuk, 86 A.D.2d 652, 446 N.Y.S.2d 399;Lincoln Savings Bank v. Warren, 156 A.D. 510, 548 N.Y.S.2d 783 (A.D.2d Dept., 1989) ).
For the opposite view, see GRP AG Reo 2004–I, LLC v. Freedman, 8 Misc.3d 317, 792 N.Y.S.2d 819 (2005) that found that “a Writ of Assistance is sought pursuant to RPAPL § 221, has no requirement of exhibiting the deed or a certified copy. Case law has established a requirement of somehow exhibiting the deed. The procedures and that of RPAPL § 713[5] is discussed in Mortgage Foreclosures in New York by Bruce J. Bergman in Chapter 18. Petitioner maintains that there is no recorded case in New York requiring personal delivery of a deed other than Colony and that it would frustrate the eviction procedure by respondents secreting or otherwise making themselves unavailable for service. In effect, a higher standard of service would be required for said notice than service of the Notice of Petition and Petition itself”.
The Freedman court made a distinction between the two procedural methods of gaining possession. The court was clear and the case law even clearer that a Writ of Assistance is discretionary and no such discretion lies in a summary proceeding. More importantly, unlike a summary proceeding, the Writ of Assistance is not available against a person not a party to the foreclosure proceeding. Suffice to say, any reasonable person could conclude that there's a different standard and requirements that would be imposed by the courts against a petitioner who seeks to evict an occupant, not a party in a foreclosure proceeding, in a summary proceeding. Based on that analysis the court held that the service of the 10–Day Notice with a certified copy of the Deed annexed thereto served upon an occupant, by personal delivery or substituted service, satisfied RPAPL § 713[5].
In addition, in Deutsche Bank National Trust Co. v. Resnik, 24 Misc.3d 1238(A), 2009 WL2527297 (N.Y. Dist. Ct.), Judge Fairgrieve, relying, in part, on Freedman, supra, and the rationale therein, found that personal delivery to the Respondent Mark Resnik as well as substituted service on him for all of the other residents of the Notice of Petition and Petition with the certified deed attached thereto was sufficient to satisfy the statutory requirements of RPAPL § 713[5]. The court, in relying on Novastar Mortgage, Inc. v.. Michael Laforge, et al., 12 Misc.3d 1179(A), 824 N.Y.S.2d 764 (Sup.Ct., Greene County, 2006), found that there is no requirement of personal exhibition of the Referee's Deed and to import one would “create a higher standard of care for the notice and the deed than is needed for the Notice of Petition and Petition” in an eviction proceeding. (Bergman, N.Y. Mortgage Foreclosure, supra, Sec. 33.02[2] [2006].)
At the Appellate Term, 2nd, 11th and 13th Judicial Districts, in Home Loan Servs, Inc. v. Moskowitz, 31 Misc.3d 39, 920 N.Y.S.2d 569 (2011), after tracking and interpreting RPAPL § 713[5], it was held that the service, by nail and mail, of the 10–Day Notice to the mortgagors to quit, which attached a copy of the Referee's Deed for the property sold in foreclosure, was not sufficient to satisfy the requirement that the deed be exhibited to the mortgagors within the meaning of the statute governing evictions. The Appellate Term confirmed that “while this statute provides that a Notice to Quit may be served in the same manner as a Notice of Petition and Petition, it does not make the same provision for the Referee's Deed. Instead, the statute specifically requires that the deed be exhibited to the Respondents. In our view, and in light of strong policy prohibiting unlawful evictions, (see Generally Bill Jacket, L.1981, ch. 467), attaching a copy of the Referee's Deed to a 10–Day Notice to Quit served by “nail and mail” was insufficient to satisfy the requirements of exhibition of the Deed pursuant to RPAPL § 713 [5 ]. (See Colony Mortgage Bankers, 192 Misc.2d 704, 747 N.Y.S.2d 303 [Sup.Ct., Westchester County, 2002] ; but see Novastar Mortgage, Inc. v. Laforge, 12 Misc.3d 1179(A), 824 N.Y.S.2d 764 (Sup.Ct., Greene County, 2006) [discussing a Writ of Assistance]; Deutsche Bank National Trust Co. v. Resnik, 24 Misc.3d 1238(A), 2009 WL2527297 (N.Y. Dist. Ct.); GRP AG Reo 2004–I, LLC v. Freedman, 8 Misc.3d 317, 792 N.Y.S.2d 819 (2005) ). The courts reversed the lower court order and dismissed the petition”
In a strikingly similar case to the case at bar, Niff Properties LLC v. Willins, 41 Misc.3d 370, 970 N.Y.S.2d 865 (Dist. Ct., Nassau County, 2013), a case of first impression at that time, the court grappled with whether the exhibiting to the Respondent of a deed by which the Petitioner acquired title (not the deed of foreclosure) satisfied the requirements of RPAPL § 713[5]. The court ruled that the failure to exhibit the Referee's Deed to the Respondents constituted a fatal error requiring dismissal without prejudice to renew upon compliance with the applicable law. In reviewing the history of the above cases relied on in this analysis and in its own proper analysis, the Court found that the Petitioner should have exhibited the Referee's Deed to the Respondent as required by RPAPL § 713[5], not the current owner's deed. He said that “[t]his court understands Petitioner's logic in exhibiting the deed from which it derived title to Respondent. However, this court is bound to follow the language of RPAPL § 713[5] as written. Petitioner may choose to exhibit both deeds to Respondent in order to avoid another claim by Respondent that the law was not complied with.” In light of those facts, the court was duty bound to dismiss the petition.
As stated above, the next issue involves the certification of the Deed(s). CPLR § 2105 provides that “where a certified copy of a paper is required by law, an attorney admitted to practice in the courts of the state may certify that it has been compared by him with the original and found to be a true and complete copy. Such a certification, when subscribed by such attorney, has the same effect as if made by a clerk.”
The issues regarding the certification have often turned on the originality of the signature of certification. In S & K Properties, LLC v. Wynn, NYLJ, 2/18/2004, at p. 24, col.3, it was held that a facsimile of an attorney's signature is not acceptable concerning certification of the deed; Vista Surgical Supplies, Inc. v. Traveler's Ins. Co., 50 AD3d 778, 860 N.Y.S.2d 532 (2d Dept., 2008), finding that “a facsimile of a physician's signature was not acceptable because these reports failed to comply with CPLR § 2016 since they were not subscribed and affirmed but merely contained facsimiles of the physician's signature without any indication as to who placed them on the reports nor are there any indicia that the facsimiles were properly authorized” On these facts, it was concluded that a facsimile signature is a jurisdictional defect rendering a 10–Day Notice to Quit void and the dismissal of the petition; see also Curity Pacific National Trust Co. v. Cuevas, 176 Misc.2d 846, 675 N.Y.S.2d 500 [Civ.Ct., Kings County, 1998] finding that a facsimile of a signature cannot comport with the requirements of CPLR § 2105 and thus, defeats the application of RPAPL § 713[5]. “The legislature did not intend to allow a mere facsimile of an attorney's signature to suffice where a certified copy is required by the Civil Practice Law and Rules. RPAPL § 713 [5 ] requires the deed certified, in accordance with CPLR, to be published to the Respondents. The 10–Day Notice to Quit failed to contain a deed, properly certified, therefore, the 10–Day Notice to Quit was faulty”. (Id. at 502–503).
The next rule of law that requires attention by this Court is based on the grounds that under New York Law in a foreclosure action, an occupant who is not joined as a party to the foreclosure action, is not bound by the judgment of foreclosure, and more significantly for this proceeding, does not extinguish any leasehold interest. More explicitly for the analysis in this proceeding, RPAPL § 1311 requires that the Plaintiff in a foreclosure action join as a party Defendant, any person “who's interest has been claimed to be subject and subordinate to the Plaintiff's Lien.” Under the aforementioned statute, these necessary and vital parties include “every person having an estate or interest in possession in the property as tenant in fee”, as well as all junior lien-holders (RPAPL § 1311[1] ). Deeply rooted in this statute and well-settled by case precedent, tenants are clearly necessary parties to a foreclosure action (6820 Ridge Realty, LLC v. Goldman, 263 A.D.2d 22, 701 N.Y.S.2d 69 [App. Div., 2d Dept., 1999] ; Polish Nat'l Alliance v. White Eagle Hall Co., 98 A.D.2d 400, 470 N.Y.S.2d 642 (2d Dept., 1983) ; Flushing Savings Bank v. CCN Realty, 73 A.D.2d 945, 424 N.Y.S.2d 27 (2d Dept., 1980). Additionally, see Rockaway Improvement, LLC v. Danco Transmission Corp., 9 Misc.3d 210, 801 N .Y.S.2d 138 (Civ.Ct., Kings County, 2005) in which the Hon. Dolores Thomas found, in pertinent part, the actual or constructive notice of foreclosure alone was insufficient to bind the tenant which had not been named or served with the results of the foreclosure proceeding. As Judge Thomas stated so fittingly “the “rationale” of joinder of tenants and junior lien-holders “derived from the underlying objectives of foreclosure actions to extinguish the rights of redemption of all those who have a subordinate interest in the property and to vest complete title in the purchaser at the judicial sale.” Thus, the absence of a necessary party in a foreclosure action leave the party's rights unaffected by the judgment and sale and the foreclosure sale may be considered void as to the omitted party. (Empire Savings Bank v. Towers Co., 54 A.D.2d 574, 387 N.Y.S.2d 138;see also Scharaga v. Schwartzberg, 149 A.D.2d 578, 579, 540 N.Y.S.2d 451;Polish Nat'l Alliance of Brooklyn v. Right Eagle Hall Co., 98 A.D.2d 400, 406, 470 N.Y.S.2d 642;Greenpoint Savings Bank v. Defour, 162 Misc.2d 476, 618 N.Y .S.2d 169 ); see also Marine Midland Bank v. Freedom Rd. Realty Assoc., 203 A.D.2d 538, 611 N.Y.S.2d 34 [2d Dept., 1994].
It is often claimed by the Appellate courts, and generally adopted by other courts in this state, that the failure to name and serve occupants in possession constitutes a denial of due process that requires judicial intervention. Due process requires that notice be given and an opportunity to be heard before one's interest in property may be adversely affected by any judicial process. The enforcement of a Writ of Assistance, for example, against one who was not joined as a party to a foreclosure proceeding, as a matter of fact and law, violates due process. (See Gibbs v. Kensey, 170 A.D.2d 1049, 566 N.Y.S.2d 117,County Federal Savings & Loan Assn. v. First PA Realty Corp., 29 A.D.2d 675, 287 N.Y.S.2d 615, aff'd 23 N.Y.2d 680, 295 N.Y.S.2d 931, 243 N.E.2d 149.) Of equal significance, “the interest of an occupant of the mortgaged premises who was not served remains unaffected by the foreclosure” (Empire Savings Bank v. Towers Co., 54 A.D.2d 574, 387 N.Y.S.2d 138;see also Scharaga v. Schwartzberg, 149 A.D.2d 578, 579, 540 N .Y.S.2d 451;Polish Nat'l Alliance of Brooklyn v. Right Eagle Hall Co., 98 A.D.2d 400, 406, 470 N.Y.S.2d 642;Greenpoint Savings Bank v. Defour, 162 Misc.2d 476, 618 N.Y.S.2d 169 ). See also Nationwide Assoc., Inc. et al. v. Brunn, 216 A.D.2d 547, 629 N.Y.S.2d 769 (App.Div., 2d Dept., 1995) holding that the enforcement of a Writ of Assistance against tenant and occupant of a foreclosed building would violate due process and thus, they were not bound by foreclosure judgment and the trial court was not required to amend the pleadings to name tenant and occupant after entry of judgment. (USCA Constitutional Amendment 14; McKinney's CPLR 1001(a)1003, 2001, 3025(b).)
With equal importance at this juncture, there are claims that the purported lease agreement offered by the Respondents as a complete defense to this eviction proceeding, must be recorded since it is an instrument that conveys real property for a term in excess of three years. For some guidance with this issue, legal notice must be taken of Article 9 of the Real Property Law, and the intention of the Legislature of the legal impact of recording instruments affecting real property. The definitional sections of Article 9 are important to our case. The term “real property” as described in RPL § 290(1), includes land, tenements and hereditament and chattels real, except a lease for a term not exceeding three years. Furthermore, § 3 provides that a “conveyance” includes every written instrument, by which any estate or interest in real property is created, transferred, mortgaged or assigned, or by which the title to any real property may be affected except a Will, a Lease for a term not exceeding 3 years, and Executor Contract for the sale or purchase of land and any instrument containing a power to convey real property as the agent or attorney for the owner of such property ...
With equal emphasis, RPL § 291 requires that “a conveyance of real property, within the state, may be recorded in the office of the Clerk of the County where such real property is situated every such conveyance not so recorded is void as against any person who subsequently purchases or acquires by exchange or contract to purchase or acquire by exchange the same real property or any portion thereof or acquires, by assignment, the rent to accrue thereon in good faith and for valuable consideration and is void against the lien upon such real property or any portion thereof if such contract is made in good faith and is first duly recorded”.
In order for a Lease to be valid against subsequent purchasers, the aforementioned section requires that it be recorded. If it is not recorded, it is void as against any person who subsequently purchased or acquired the property. There is one exception: when a subsequent purchaser for value has actual notice of a tenancy, the failure to record the lease with the term of 3 or more years will neither impact the lease nor the tenancy. The rationale for such exception is that actual possession of real estate is notice to all the world of the existence of any right which the person in possession is able to establish (Wardell v. Older, 70 A.D.2d 1008, 1009, 418 N.Y.S.2d 196,quoting Erlich v. Hollingshead, 275 App. Div. 742, 87 N.Y.S.2d 682 ; see Phelan v. Brady, 119 N.Y. 587, 597–592, 23 N.E. 1109;Northway v. Bosch, 199 A.D.2d 654, 605 N.Y.S.2d 135). The actual possession that will be deemed by the courts to constitute an equivalent to actual notice must be “inconsistent with the title of the apparent owner by the record.” (Holland v. Brown, 140 N.Y. 344, 348, 35 N.E. 577 [citations omitted ]. See also Hi–Rise Laundromat Equipment Co. v. Matrix Properties, Inc., 96 A.D.2d 930, 466 N.Y.S.2d 375 [A.D.2d Dept., 1983] where the Appellate Division held that an agreement between the occupant and former owner of the property was a lease rather than a license and therefore, the failure of the occupant to record the lease rendered the lease void as against any person who subsequently purchased or acquired the property. In order for the lease to be valid against subsequent purchasers, RPL § 291 requires that it be recorded. If Plaintiff failed to record the lease, it is “void as against any person who subsequently purchases or acquires” the real property (Real Property Law § 291 ).
In addition, in Jackson v. Robergeau, 1 Misc.3d 131(A), 2003 WL23191095 (N.Y. Supp.App. Term, 2003), the Appellate Term in upholding the lower court determination found that the lease, which was for a term of 5 years, was a conveyance under the recording statutes (RPL § 291 ) and that it was void because the tenant did not record it. The Appellate Term specifically noted that “the Landlord was a bonafide purchaser and that Defendant failed to record said lease which was for a term greater than 3 years (RPL § 291 ). Thus, the lease was unenforceable against landlord”. In a very interesting case by the name of 1426 46 Street LLC v. Klein, 60 AD3d 740, 876 N.Y.S.2d 425, the court found, contrary to the Supreme Court, that a tenant who had a 99 year lease to the second floor apartment was a necessary party to the foreclosure action and consequently, a judgment of foreclosure and sale did not extinguish their tenancy rights, although the lease had not been recorded until after the judgment in the action. The court found that there were multiple questions of fact including whether the predecessor in title was a good faith purchaser who took title without actual or constructive notice of the tenant's unrecorded lease interest; whether the predecessor in title had actual or constructive notice of the unrecorded lease prior to the filing of the Notice of Pendency and whether the lease was revived by attornment. The court precluded summary judgment as a matter of fact and law.
Lastly, it is important to be reminded that an unrecorded interest in a conveyance is not defeated if the Plaintiff in the foreclosure action knew of it prior to the filing of the Notice of Pendency. See Fakishacy v. Thomson, 204 A.D.2d 959, 612 N.Y.S.2d 276 (App.Div., 3d Dept., 1994) for a more detailed discussion regarding constructive notice of leases and the prior owner's actual possession of the premises as a tenant held not to provide notice of the lease. The case made it clear that although possession will be the equivalent to actual notice, the record must present evidence that is so inconsistent with the title of the apparent owner that notice will be presumed. Such is a question of fact to be determined at trial.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
Based on the above, this Court has evaluated the supporting documentary evidence in the respective motions and makes the following findings of facts and conclusions of law.
The Respondent has not produced sufficient admissible evidence to sustain its burden of proof for summary judgment. Contrary to the arguments of the Respondents, there are multiple questions of fact regarding the purported “exhibition” of the foreclosure deed and the other deed to the Respondents.
Although not requested by the either party, this Court, in its discretion, can limit the issues of fact for trial and may grant summary judgment to the non-moving party without the necessity of a cross motion. (CPLR 3212(b) ; CPLR 3212(g). Under these facts, the Court finds that the Respondent is not entitled to a traverse hearing as a matter of law. The answer is not verified by a party with actual knowledge but instead verified by the attorney for the Respondent, and lacks sufficient specificity sufficient to warrant a traverse hearing. (First Ave. Owners Corp v. Riverwalk Garage Corp., 6 Misc.3d 439, 442 (Civ Ct, N.Y. County 2004) ; Am. Sav. & Loan Assn. v. Twin Eagles Bruce, 208 A.D.2d 446 (1st Dept) ; Zuckerman v. City of New York, 49 N.Y.2d 55; Banchik v. Ruggieri, Nov 18, 1998, NYLJ (p.29, col.4); (Hasbrouc v. City of Gloversville, 102 A.D.2d 905 (3rd Dept.1984) ).
The denial of a traverse hearing is not so different from the summary judgment relief requested by the Respondents. The Court finds that the proof supports this conclusion and finds no prejudice to either side. The Petitioner will save the cost and expense of a full traverse hearing and the Respondent retains the other defenses in the answer except as state below. (Shaw v. RPA Assoc., LLC., 75 A.D.2d 634, 906 N.Y.S.2d 574;HCE Assoc., v. 3000 Watermill Lane Realty Corp., 173 A.D.2d 774, 570 N.Y.S.642;Gefferner v. Mercy Med. Center, 83 A.D3d 998, 922 N.Y.S.2d 470 [AD, 2nd Dept., 2011] ).
However, the Petitioner is required to produce the Process Server to offer testimony as to the facts and circumstances of service on “John Doe” at the premises. The issues at the hearing is a narrow one: the nature and substance of the conversation, if any, between the Process Server and the “John Doe” allegedly authorized to accept service and the production of the certified mail receipts to prove completion of service pursuant to RPAPL § 735(2) since they are not contained in the court file. No other issues are relevant to the facts in the case. The Respondents then may produce their witnesses, if any, to rebut these contentions.
The court is not persuaded by Respondent's argument that the Deed has not been exhibited to the Respondent based on the presentation of the Referee's Deed and the subsequent deed on service of the 10 day notice. As provided in Niff Properties LLC v. Willins, 41 Misc.3d 370, 970 N.Y.S.2d 865 (Dist. Ct., Nassau County, 2013) this summary proceeding would have to be dismissed had the only deed presented been the deed which transferred the property from the highest bidder at the foreclosure sale to the Petitioner of the action. Here, the Landlord–Petitioner has gone beyond the standard articulated by Willins Court since both deeds were presumably presented and/or exhibited to the Respondents on two separate occasions prior to the commencement of the proceeding and then upon service of the Notice to Quit. If both deeds were in fact exhibited as described in the supporting affidavit in opposition and affidavits of services, it is the opinion of this court that the Petitioner exceeded its statutory obligations and substituted service herein would be valid. Niff Properties LLC v. Willins, 41 Misc.3d 370, 970 N.Y.S.2d 865 (Dist. Ct., Nassau County, 2013) ; Deutsche Bank National Trust Co. v. Resnik, 24 Misc.3d 1238(A), 2009 WL2527297 (N.Y. Dist. Ct.); Novastar Mortgage, Inc. v. Michael Laforge, et al., 12 Misc.3d 1179(A), 824 N.Y.S.2d 764 (Sup.Ct., Greene County, 2006) ; GRP AG Reo 2004–I, LLC v. Freedman, 8 Misc.3d 317, 792 N.Y.S.2d 819 (2005). Provided that the Petitioner can substantiate those claims, the Petitioner shall overcome any statutory impediments to dismissal of this proceeding based on jurisdictional grounds.
Additionally, the Respondent has not persuaded this court that the irregularities in the attorney certification are fatal. The Respondent has not made any of the above arguments, such as the signature is not an original signature or the signature thereon is a facsimile signature or any argument of like persuasion. (See Vista Surgical Supplies, Inc. v. Traveler's Ins. Co., 50 AD3d 778, 860 N.Y.S.2d 532 (2d Dept., 2008) ; Curity Pacific National Trust Co. v. Cuevas, 176 Misc.2d 846, 675 N.Y.S.2d 500 (Civ.Ct., Kings County, 1998) ). The Respondent has not presented any statutory or case authority to support the proposition that the deed, itself, must have the certification stamp on it. The Court does, in fact, believe that it would be the best course of action but is not required. A review of the certifications from the City Registry shows that the certification is normally on the last page of the document; but as here, the Clerk of the Court placed the certification on the first page. Since the deed was submitted to Title Vest for recordation purposes, it would not be unreasonable for the Petitioner's Attorney to annex his certification on a separate page. The Court further does not find this practice a deviation from the customary practices and procedures in the real estate industry.
As to the second deed, there was no requirement that the deed contain any certification, however, the Petitioner is required to certify the deed for the introduction of the deed in evidence for trial (unless the original deed is produced) under the normal certification process with the County Clerk and/or pursuant to CPLR § 2105 if the Petitioner elects certification by that option. This court finds that notwithstanding the omission of the specific statutory provision, namely CPLR § 2105 in the certification, it is proper and valid under the law. Any claims by the Respondent is without merit.
Furthermore, as to the naming and serving of the Respondents in the foreclosure action, the court also finds that there are questions of fact. A perusal of the Referee's Deed of recordation, Schedule “B” explicitly names “Mora” Deli & Groceries as the first floor occupant of the subject premises. Presumably there is a misspelling in the name of the Respondent; however, notwithstanding this fact, the deed does state the name and proper address of the demised premises. There is a question of fact as to whether the Summons and Complaint as well as the first Notice of Pendency, which has not been presented to the court, named and served the first floor commercial tenant.
In addition, the title company would not have created a fictitious name, “Mora Deli & Groceries” as stated in the Schedule “B” if there was no evidence presented to the title company requiring the inclusion of that name as part of Schedule “B”. The title company is a disinterested party. The title company generally performs two acts: recordation of real estate transactions and provides title insurance. Under these fact, the title company's acts are reliable and this Court shall give the recorded deed some weight as possible evidence that the Respondent was a party to the foreclosure action. Neither party has presented admissible evidence to prove that the Respondent was or was not named and served in the foreclosure action.
Additionally, in the case at bar, the Respondent has submitted as Exhibit “3” a copy of a lease for the subject premises. A review of the lease calls into question its authenticity. Most notably, and certainly questionable, this purported lease, dates back to 2003, states a monthly rent of $1,400.00. It also provides that “[t]he tenant is to pay $2,000.00 once the deal is closed and has the new store lease”. The dates of execution and notarization are inconsistent. The lease appears to be executed and acknowledged before the notary public on the 10th day of September, 2003; a different date from the date of the lease and the alleged date of the rider thereto. More compelling, we should not forget that the deed of foreclosure showed Keesha M. Fields as the owner of the subject premises. So having that knowledge, the first question of fact is who is Harold Willis and what authority did he have, if any, to execute a 20–year Lease for the subject premises? What relationship, if any, did Keesha M. Fields have with Harold Willis?
Also, and purely speculation, which is inappropriate for any Court, it appears that this lease may be for the purchase of the store and may not be a lease at all. It looks like a new lease was supposed to be given between the parties after possibly a sale of the store.
Even more problematic, the lease between the parties is for a period of 20 years with no increases in the base rent of $1,400.00. Such a leasehold interest is highly suspect and is a complete deviation from the customary increases in a typical commercial lease and definitely raises questions of fact as to its validity. Just as amazing, the court finds it incredulous that such a valuable leasehold interest is allegedly NOT recorded by the Respondents. This very fact that the Respondents did not seek to protect such a “sweetheart deal” raises questions of fact as to their good faith and credibility.
As discussed above, the general rule is that actual possession of real estate is notice to all the world of the existence of any right which the person in possession is able to establish. (Wardell v. Older, 70 A.D.2d 1008, 1009, 418 N.Y.S.2d 196, quoting Erlich v. Hollingshead, 275 App.Div. 742, 87 N.Y.S.2d 682 ; see Phelan v. Brady, 119 N.Y. 587, 597–592, 23 N.E. 1109;Northway v. Bosch, 199 A.D.2d 654, 605 N.Y.S.2d 135). There is a genuine material question of fact as to whether the original Mortgagee and its assignees contained in their mortgage and title insurance that the policy excepted the rights of person in possession explicitly the commercial tenant. Were there Estoppel Certificates to establish the rights to equipment and other property in the commercial premises? Although it may not be a common practice for banks to conduct physical inspections of the premises prior to foreclosure, the lending institutions may be on notice of the nature and extent of the occupants in possession. Thus, the Mortgagees may be chargeable with the same notice as the Petitioner may also be charged here.
The last question of fact and law which has not been resolved by either party is does the recording statute protect the Petitioner herein as a good faith transferee of all rights, title and interest of the highest bidder at foreclosure.
The Respondent has failed to produce any evidence to resolve these material questions of fact and therefore, for all of the foregoing reasons stated above, the Respondent's motion for summary judgment is denied in its entirety.
Lastly, the Petitioner moves for the payment of use and occupancy pendete lite. It would appear that the courts in dealing with this issue of the payment of use and occupancy during the pendency of a summary proceeding should be determined on a case by case basis. Under the old rule of law in the this county, the court looked to determine the party that caused the delay in the case. (See Classic Properties L.P v. Martinez, NYLJ, 5/312/95, p 26, col. 4 (Civ Ct, N.Y. Cty). See also Hung–Thang, Inc. v. Doktori, NYLJ 10/28/93, p. 27, col 4 (AT 1st Dept), in which it was held that the record indicates that the tenant had not sought any adjournments, moved to stay the proceeding or otherwise sought the favor of the court; indeed, any delay of the trial in this matter was sought by the Petitioner. Also see the matter of 85th Estates Company v. Kalsched, NYLJ, 5/18/92, p. 27, col. 4 (A.T. 1st Dept.) the Appellate Term determined that the Civil Court did not abuse its discretion in denying interim use and occupancy where the tenants “were not shown to have sought a stay or adjournment of the proceeding (RPAPL Section 745, sub. 2), or to have otherwise engaged in dilatory practice.” See also Tribeca Equity Partner LP v. Ezcura, NYLJ, 3/27/96, p. 25, col. 1; 300 East 34th Street Co. v.. Paleias, NYLJ, 6/20/97, pg. 25, col. 5.
Recently, however, in this department, the Appellate Term stated that “in our view the competing interest of the parties are more equitably balanced by directing the tenant to pay use and occupancy as it accrues pending resolution of the proceeding. (Eli Haddad Corp. v. Cal Redmond Studio. ) The tenant retains legal possession of the apartment and the landlord is required to maintain essential services While the Civil Court must direct the payment of use and occupancy upon the second request by the tenant of an adjournment (RPAPL 745[2] ), the absence of any adjournment request does not preclude such an order where the summary proceeding is otherwise delayed by motion practice or disclosure”. 300 East 34th Street Co. v. Paleias, NYLJ, 6/20/97, pg. 25, col. 5. Where the Court grants use and occupancy, neither side suffers prejudice; the Respondent would have been paying rent if such proceeding had not been commenced. Moreover, “since the Respondent continues to benefit from the space and services, equity should be served and the Petitioner should receive some consideration for the use of that space. It is only because rent must be rejected during that critical period between termination, commencement of the action and continuance of the proceeding that a tenant could get the impression that rent and/or use and occupancy does not have to be paid. This false impression does not benefit the tenant and the rent could accrue to a level that the tenant may not be able to pay despite the result of the underlying proceeding.”
Furthermore, “the obligation to pay for use and occupancy does not arise from an underlying contract between the landlord and the occupant but “rather, an occupant's duty to pay the landlord for its use and occupancy of the premise is predicated upon the theory of quantum meruit”, and is “imposed by law for the purposes of bringing about justice without reference to the intention of the party” (Rand Products Co. v. Mintz, 72 Misc.2d 621, 340 N.Y.S.2d 444, Williston, Contracts, Section 3A, at 13 [3rd Ed.1961] ).” See also the recent Matter of Bethlehem Baptist Church v. Trey Whitfield School, 2003 WL21262379 (N.Y. City Civ.Ct.) in which the tenant filed an appeal from a denial of discovery in a holdover proceeding and the Petitioner, subsequently, moved to require the appellant to pay the fair market value for use and occupancy pending the appeal. The court modified its order to reflect that the Petitioner is entitled to use and occupancy for the fair and reasonable value of the premises during the period of such use and occupancy (See RPL § 222, RPAPL § 749(3) ; see Beachway Operating Corp. v. Concert Arch Society, Inc., 123 Misc.2d 452, 474 N.Y.S.2d 222 “the lease amount probative but not conclusive”) and set the matter down for a hearing to determine the amount of the use and occupancy. The court reasoned that “[i]t is within the sound discretion of the court to award reasonable use and occupancy for the premises occupied during the pendency of the appeal. In relying on the rationale in Montbatten Equities v. Tabard Press Corp., 87 Misc.2d 861, 386 N.Y.S.2d 785, aff'd, 88 Misc.2d 831, 390 N.Y.S.2d 513, the court issued a stay to give either side an opportunity to appeal. In doing so the court ordered that “in the interim and thereafter until further order of the court, tenant shall pay to landlord as and for a reasonable use and occupancy”
In 61 W. 62nd Owners Corp. v. Harkness Apt. Owners Corp., 173 A.D.2d 372, 373, 570 N.Y.S.2d 8 [Sup Ct, NYC] the Court granted a Yellowstone Injunction to the Respondents on the condition that they post an undertaking and pay future use and occupancy to the landlord (emphasis added). The Respondent appealed and the Appellate Division determined that “the [lower] court [did not] error in granting judgment for “use and occupancy” or in conditioning the issuance of the Yellowstone injunction upon future payments of “use and occupancy” (citing Calvert v. Le Tam Realty Corp., 118 A.D.2d 426, 499 N.Y.S.2d 89); the amount of the undertaking was not excessive, but was rationally related to the quantum of damages which Plaintiff would sustain in the event that Defendant is later determined not to have been entitled to the injunction” The matter of 61 W. 62nd Owners Corp. v. Harkness Apt. Owners Corp., supra, was cited as precedent by the court in Bethlehem Baptist Church v. Trey Whitfield School, supra, as authority for the court to modify its order to reflect the requirement of the payment of use and occupancy as a condition to stay the proceeding pending the appeal.
In this case, the Petitioner's motion for use and occupancy pendente lite is denied without prejudice to renew upon proper papers. The Petitioner seeks use and occupancy in the amount of $3,500.00 and has not presented any evidentiary proof from a broker and/or real estate agent that the fair market value for the subject premises is $3,500.00. It is not sufficient for the Petitioner member, Mr. Ali, to state this fact summarily without any supporting evidence.
Based upon the fact that the owner has been required to make payments for real estate taxes, water and sewer charges, hazard insurance and to provide essential services to the subject premises, the Petitioner should not be prejudiced and is entitled to post petition use and occupancy. Suffice to say, the fact that a landlord and tenant are involved in a summary proceeding does not absolve the tenant from paying for the space and services received as an incident of the tenancy. Corris v. 129 Front Co., 85 A.D.2d 176, 447 N.Y.S.2d 480 (1st Dept.1982). Despite this finding, there is a question of fact as to the amount of the use and occupancy and insufficient evidence has been presented to make a finding of the amount of use and occupancy. Nevertheless, since the court date for a limited traverse hearing and trial, if appropriate, is in the immediate future, the Petitioner may make such application with evidentiary proof on the next court date.
For all of the foregoing reasons, the Respondent's motion for summary judgment is denied in its entirety and the Petitioner's motion for use and occupancy is denied without prejudice to renew as stated above.
This proceeding is hereby restored to the Calendar in Commercial Part 52 for May 13, 2014 for the limited traverse hearing as stated above, and for trial, if appropriate, on the merits and shall be referred to the undersigned judge.
The Respondent shall serve a copy of this Decision and Order on the Petitioner attorney within 30 days of entry of this decision and order by the Clerk of the Court and shall file proof of service thereof with the Clerk of the Court within 30 days thereafter.
A courtesy copy of this Decision and Order shall be mailed to the attorneys for the respective parties.
This constitutes the decision and order of this Court.