Opinion
064434/10.
Decided April 5, 2011.
Tziona Dahari, self-represented, Plaintiff.
O'Brien Manister, P.C., Attorney for Defendant Daniil Libov, Hicksville, New York, Defendant.
In this action by plaintiff to recover rent and damages from a tenant and former tenant, defendant former tenant moved to dismiss all claims against himself on the grounds of CPLR 3211 (a) (1) and (a) (7), due to the existence of a release. For the reasons set forth below, the motion is granted.
Plaintiff is the owner and landlord of the premises, a private house, located at 1916 East 29th Street, Brooklyn, New York. It is undisputed that plaintiff and defendant Daniil Libov signed a lease on June 22, 2009, for a one year period effective July 1, 2009 through June 30, 2010, for monthly rent in the amount of $2,600. On February 18, 2010, plaintiff executed a lease with Libov's mother, defendant Faina Libova, effective March 1, 2010 through February 28, 2011, for the same premises. This lease provided for rent in the amount of $2,600 monthly from March 1, 2010 through June 30, 2010, and $2,750 monthly from July 1, 2010 through June 30, 2011. Thereafter, on February 24, 2010, plaintiff and her husband signed a release effectively terminating Daniil Libov from the obligations of his lease effective March 1, 2010, and indicating the rent was current through February 2010. Plaintiff now alleges that defendant Faina Libova failed to pay and seeks to set aside the release.
Plaintiff commenced the instant case against Libov and his mother seeking $25,000 as follows: rent due with interest from July 7, 2009, loss of use of property in the amount of $5,000, and property damage for $5,000 with interest from July 7, 2009. In response, defendant Daniil Libov moved to dismiss the complaint, pursuant to CPLR 3211 (a) (1) and (a) (7), as against himself, on grounds of the documentary evidence and failure to state a cause of action. The Court heard oral argument on March 18, 2011.
Plaintiff appeared without counsel after declining the court's offer of time to obtain such and filed no papers in opposition to defendant's motion. Plaintiff avers that when the release was executed, Libov represented that he would no longer reside in the premises and move to New Jersey. She further avers that Libov nevertheless continued to reside at the premises with his mother and made such arrangement knowing his mother would be judgment proof. Plaintiff does not assert that Libov was responsible for any property damage, although she alleged such in the complaint. Simply stated, plaintiff alleges she was misled as to Libov's intentions and that he misrepresented same. Libov denies that he still resides at the premises (affidavit of defendant at 3), and argues the release must stand since it is clear and unambiguous.
Under New York law, a release is treated similar to a contract( Litvinov v Hodson , 74 AD3d 1884 , 1885 (4th Dept 2010); Restatement [Second] of Contracts § 284, comment c). The party seeking to void a release must establish fraud, mutual mistake, duress or illegality ( Toledo v West Farms Neighborhood Housing Dev. Fund, Co., Inc., 34 AD3d 228, 229 [1st Dept 2006] citing Mangini v McClurg, 24 NY2d 556, 563; Cahill v Regan, 5 NY2d 292, 299). The rules of interpretation of contracts are equally applicable to releases (Restatement [Second] of Contracts § 284, comment c). Thus, where a release is broad and not restricted the court will usually give full effect to the release in accordance with the intent of the parties even if they fail to list all of the possible claims that might be covered by the document ( Touloumis v Chalem, 156 AD2d 230, 232 [1st Dept 1989]).
This is true because releases are viewed as a form of settlement. New York has a strong public policy of encouraging resolution of disputes, and the courts will interpret and uphold releases consistent with this policy ( Calavano v. New York City Health Hosps. Corp., 246 AD2d 317, 318 [1st Dept 1998] citing Rocanova v Equitable Life Assur. Socy., 83 NY2d 603, 616). A release may not be treated lightly ( Calavano, 246 AD2d at 319). A release "is a jural act of high significance and should never be converted into a starting point for new litigation except under circumstances and under rules which would render any other result a grave injustice" ( Calavano, 246 AD2d at 319 quoting Mangini, 24 NY2d at 563; see also Rocanova, 83 NY2d at 616). Therefore, A release will not be deemed invalid even in the absence of consideration or a seal (General Obligations Law § 15-303).
When a release is clear and unambiguous, courts are constrained to enforce it. Further, "[t]he [New York] parole evidence rule forbids proof of an oral agreement that might add or vary the terms of a written contract that was intended to embody the entire agreement between the parties" ( Stage Club Corp. v West Realty Co., 212 AD2d 458, 459 [1st Dept 1995] citing Fogelson v Rackfay Constr. Co., 300 NY 334, 338 [1950]). Only when the release is ambiguous with respect to its scope and meaning, is a question of fact presented requiring resort to extrinsic evidence to discern the parties' intent( Stage Club Corp., 212 AD2d at 459, citing Smith v Slocum, 71 AD2d 1058, 1059 [4th Dept 1979]).
Here, the release states as follows:
To whom it may concern:
As agreed to by landlords Orit Hindi and Tziona Dahi and tenant Daniil Libov on February 18th 2010, the lease for 1916 East 29th St, Brooklyn, NY 11229 will no longer be in effect starting March 1st, 2010, and Daniil Libov is released from obligations of this lease. The original lease was effective from July 1st 2009 until June 30th 2010. Rent was paid for February 2010 and Daniil Libov has no further obligations relating to this premises.
The document is signed by plaintiff, her husband, and defendant Libov. It is dated February 24, 2010.
The Court finds the release is a clear and unambiguous statement of the parties' intention to release defendant Libov from his obligations under the lease dated June 22, 2009. It is also specific in indicating that Libov's rent was current through the date of the release, and he has no further obligations relative to the premises. Thus, it cannot be said that there is ambiguity in the language of this release.
Further, to void a release, as here, plaintiff must establish the mistake or fraud. Mistake can be either mutual or unilateral. ( Gould v Board of Educ. of the Sewanhaka Cent. High School Dist., 81 NY2d 446, 453). "As a general rule, where a mistake in contracting is both mutual and substantial, there is an absence of the requisite meeting of the minds' to the contract and relief may be provided in the form of rescission" ( County of Orange v Grier, 30 AD3d 556, 556-57 [2d Dept 2006] quoting Sunlight Funding Corp. v Singer, 146 AD2d 625, 626). However, "[t]he mutual mistake must exist at the time the agreement was entered into and must be substantial" ( Orange, 30 AD3d at 557, quoting Gould, 81 NY2d at 453). "The effect of rescission is to declare the contract void from its inception and to put or restore the parties to the status quo'" ( Orange, 30 AD3d at 557 quoting Schwartz v Natl. Computer Corp., 42 AD2d 123, 125; Gould, 81 NY2d at 453; Wiseman v Bondy Scloss, 230 AD2d 465, 468 [1st Dept 1997]).
Here, plaintiff entered into a lease with the new tenant on February 18, 2010, six days prior to executing the release with Libov on February 24, 2010. Plaintiff acted in a manner to protect her interest in receiving rent without interruption and continued occupancy of the apartment. Plaintiff seeks to challenge the release, but not the lease itself from which she stands to benefit. Defendant Libov denies any mistake. The Court finds there was no lack of mutual agreement at the time the release was entered into, and therefore no mutual mistake.
The Court may also rescind a contract based on unilateral mistake, but only when there is no prejudice to the other party and the parties can be returned to status quo ( See Broadway-111th Street Assoc. et al. v Morris, 160 AD2d 182, 184 [1st Dept 1990], citations omitted). Such equitable relief is typically given only where the mistake of one party would result in the unjust enrichment of the other( Van Curler Dev. Corp. v City of Schenectady, 59 Misc 2d 621, 627 [Sup Ct, Schenectady County 1969] citing Rosenblum v Mfrs. Trust Co., 270 NY 79).
Plaintiff here alleges she was not aware that Libova (mother) would refuse to pay rent and Libov (son) would remain at the premises. The possibility of a tenant's failure to pay rent is unfortunately a risk all landlords assume, and itself not justification for voiding a release. The fact Libov visits and sometimes spends nights at his mother's home, even if true, should also have been anticipated. These facts do not warrant rescission on the basis of Libov's failure to disclose his anticipated visits and overnight stays, nor can the status quo be restored in light of the lease between plaintiff and Libova and her current possession of the apartment. Therefore, plaintiff's request to set aside the release on the ground of unilateral mistake is denied.
Plaintiff's allegations of fraud also fail. Fraud must be alleged in the pleading with particularity, pursuant to CPLR 3016. Plaintiff here does not assert fraud in a pleading. Further, under New York law, to establish fraudulent inducement, "the plaintiff must prove a misrepresentation or a material omission of fact which was false and known to be false by defendant, made for the purpose of inducing the other party to rely upon it, justifiable reliance of the other party on the misrepresentation or material omission, and injury" ( Lama Holding Co. v Smith Barney, 88 NY2d 413, 421; Century 21 v Woolworth Co., 181 AD2d 620, 625 [1st Dept 1992]). "An action for rescission of a contract [release here] based on fraud, unlike a cause of action for damages on the same ground, does not require that scienter either be pleaded or proved. Even an innocent misrepresentation is a sufficient ground for rescission" ( Albany Motor Inn and Rest., Inc. v Watkins, 85 AD2d 797, 798 [3d Dept 1981] citing Brodsky v Nerud, 68 AD2d 876, 877 [2d Dept 1979]). To rescind the release on the ground of fraud, plaintiff must establish with detailed and specific evidence that a false material representation was made and she relied on the representation to her detriment ( Albany Motor Inn and Rest., Inc., 85 AD2d at 798; Touloumis, 156 AD2d at 230, 232-33).
Here, plaintiff failed to prove the misrepresentation, that she relied on the misrepresentation to her detriment, or that it was substantial. Moreover, plaintiff's efforts in seeking to rescind the release are vitiated by the fact that she voluntarily entered into a new lease with Libova prior to executing the release with Libov, and did not seek to challenge that agreement. Therefore, her claim of fraud in the inducement fails.
The Court also notes plaintiff never sought rescission of the lease with Libova, although she sought to hold Libov liable for same. As a general rule, one who is not a party to a lease and in possession of the leasehold premises may not be held liable for rent of the premises. Simply put, in order for the landlord to maintain a proceeding for rent against a respondent, "the relationship of the landlord to the respondent must involve both privity of contract, based on the agreement between the parties, and privity of estate, based on the transfer of interest in the real property" (Scherer and Fisher, Residential Landlord-Tenant Law in New York § 7:73; New Amsterdam Cas. Co. v Natl. Union Fire Ins. Co., 266 NY 254, 259-60 [1935]). Here, with regard to Libov, there is neither privity of contract nor privity of estate. Therefore, on these facts, Libov may not be held responsible for the rent effective March 1, 2010, even absent the release.
A motion to dismiss a complaint pursuant to CPLR 3211 (a) (1) based on documentary evidence "may be appropriately granted only where the documentary evidence utterly refutes plaintiff's factual allegations, conclusively establishing a defense as a matter of law" ( Schwartz Supply Source v Redi Bag USA , LLC, 64 AD3d 696 , 696, 2009 NY Slip Op 05956 [2d Dept 2009] quoting Goshen v Mutual Life Ins. Co. of NY, 98 NY2d 314, 326; citing see Leon v Martinez, 84 NY2d 83, 88; Long v Allen AME Transp. Corp. , 43 AD3d 1114 ; Sheridan v Town of Orangetown, 21 AD3d 354; Scadura v Robillard, 256 AD2d 567). Here, plaintiff's complaint seeking, inter alia, rent from Libov is defeated by the release tendered to him. Therefore, the motion to dismiss on the ground of the documentary evidence is granted.
Further, "Where as here, evidentiary material has been considered in support of a motion to dismiss a complaint pursuant to CPLR 3211 (a) (7), the court must determine whether the proponent of the pleading has a cause of action, not whether the proponent has stated one" ( Zurich Depository v Iron Mtn. Info. Mgt., Inc. , 61 AD3d 750 , 751, 2009 NY Slip Op 02991 [2d Dept 2009] citing see Guggenheimer v Ginsberg, 43 NY2d 268, 275; Steiner v Lazzaro Gregory, 262 AD2d 596, 597; Meyer v Guinta, 262 AD2d 463, 464). "If the documentary proof disproves an essential allegation of the complaint, the dismissal pursuant to CPLR 3211 (a) (7) is warranted even if the allegations, standing alone, could withstand a motion to dismiss for failure to state a cause of action" ( Zurich Depository, 61 AD3d at 751 quoting Peter F. Gaito Architecture, LLC v Simone Dev. Corp. , 46 AD3d 530 ). Accordingly, the Court finds, on these facts, plaintiff cannot prevail. Therefore, the motion to dismiss on the ground of failure to state a cause of action is also granted.
Accordingly, after oral argument and without written opposition by plaintiff, defendant Libov's motion to dismiss the complaint as against himself is granted in entirety. This constitutes the decision and order of the Court.