Opinion
570584/09.
Decided August 30, 2010.
Tenant, as limited by its briefs, appeals from those portions of an order of the Civil Court of the City of New York, New York County (Debra Rose Samuels, J.), entered June 23, 2009, which granted those branches of landlord's motion seeking dismissal of tenant's affirmative defenses and partial summary judgment, and set the matter down for a hearing to determine use and occupancy for September and October 2008 and the amount of reasonable attorneys' fees owed to landlord in a holdover summary proceeding.
PRESENT: Schoenfeld, J.P., Shulman, Hunter, Jr., JJ.
Order (Debra Rose Samuels, J.), entered June 23, 2009, insofar as appealed from, affirmed, with $10 costs.
In March 1999, tenant entered into a 10-year written lease agreement, originally expiring on February 28, 2009, for the subject commercial premises with landlord's predecessor in interest. The lease contained a "liquidated damages" clause establishing the use and occupancy to which landlord would be entitled if tenant held over. The "liquidated damages" clause provided that landlord was entitled to "a sum equal to the greater of the (i) fair market rental at the expiration of the term and (ii) the highest annual rent and additional rent which was payable by Tenant per month under th[e] lease."
In 2001, landlord's predecessor in interest and tenant, by a written agreement, modified the March 1999 lease. Under that agreement, tenant relocated to a different floor of the building in which the originally demised premises were situated; all other terms of the tenancy remained the same. Several years later (in 2006), landlord's predecessor in interest and tenant entered into another agreement modifying the lease, shortening the term of the lease by six months and requiring tenant to vacate the demised premises by August 31, 2008. An estoppel letter, dated May 31, 2007 that was signed by a general partner of tenant, confirmed that the lease was to expire on August 31, 2008 and acknowledged that the monthly rent for the demised premises was $4,000.
In May 2007, landlord purchased the building. Tenant's then-attorney, by a letter dated April 9, 2008, notified landlord that tenant intended to vacate the premises on or before August 31, 2008. Tenant's then-attorney's letter included the following enclosures: a copy of the March 1999 lease (which contained the "liquidated damages" clause), a copy of the 2001 modification agreement and the May 2007 estoppel letter.
In September 2008, landlord commenced this holdover summary proceeding to recover possession of the demised premises, as well as use and occupancy and attorneys' fees, after tenant held over. Tenant answered the petition, and ultimately vacated the premises on or about October 31, 2008. Having recovered possession of the demised premises, landlord subsequently moved for summary judgment seeking, among other things, recovery on its claim for use and occupancy for the months of September and October 2008. As to its claim for use and occupancy, landlord relied upon the "liquidated damages" clause of the March 1999 lease, which provided that landlord was entitled to "fair market rental at the expiration of the [lease]," which, according to landlord, afforded it a recovery of $36,666.67 per month during the holdover period. Tenant opposed the motion, arguing, among other things, that the March 1999 lease upon which landlord relied was not the governing lease agreement. Rather, tenant claimed that two leases were signed in March 1999 by landlord's predecessor in interest and tenant, one that contained the "liquidated damages" clause discussed above, and another containing a provision prescribing a formula to calculate use and occupancy, a formula that reduced significantly the amount of use and occupancy sought by landlord, and that the latter lease governed the tenancy. Civil Court granted landlord's motion and set the matter down for a hearing on the amount of use and occupancy owed to landlord under the "liquidated damages" clause of the lease propounded by landlord, as well as the amount of attorneys' fees.
As is undisputed, the "fair market rental" was greater than "the highest annual rent and additional rent which was payable by Tenant per month under th[e] lease."
Civil Court properly granted summary judgment to landlord on the issues of tenant's liability for use and occupancy. Landlord made a prima facie showing that tenant vacated the premises two months after the lease expiration date, that the March 1999 lease agreement it propounded governed the tenancy and, pursuant to that lease, that landlord was entitled to use and occupancy at "fair market rental." In opposition, tenant failed to raise a triable issue regarding whether a different lease agreement governed the tenancy. Notably, the claim of tenant's general partner that another version of the March 1999 lease — one with a "liquidated damages" clause far more favorable to tenant than the lease propounded by landlord — was executed by the parties and governs the tenancy is unsupported by any competent evidence. Critically, tenant did not proffer the alleged other lease — a document pivotal to the resolution of the issues in this case — and failed to explain the unavailability of that document or to demonstrate that its unavailability was not due to bad faith on the part of tenant ( see Schozer v William Penn Life Ins. Co. of NY, 84 NY2d 639, 644; see also Glatter v Borten, 233 AD2d 166). We note in this connection that tenant neither identified the last known custodian of the purported alternate lease nor established that it conducted a diligent search for the document ( see Schozer, supra). Therefore, no triable issue exists as to the applicability of the "liquidated damages" clause contained in the lease submitted by landlord.
We decline tenant's invitation to deem its answer to include an "offset" for its unreturned security deposit, and note that tenant, if so advised, may seek leave to amend its answer before nisi prius to assert such a claim.
We have considered tenant's remaining arguments and find them to be without merit.
THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
I concur.