Opinion
09-32574
11-12-2009
TAMMI L. MILLER, Plaintiff, v. MIKE BOYANSKI, Defendant.
TAMMI L. MILLER, Carthage, NY, PRO SE. MIKE BOYANSKI, Watertown, NY, PRO SE.
Facts
The parties entered into a written lease contract prepared by the defendant landlord. This six page, 34 paragraph agreement was signed on May 8, 2008, one of the terms of which provided for a termination date originally of 4/10/09 and was apparently altered subsequent to May 8, 2008 to reflect a termination date of 5/30/09—see paragraph 1(B).
In other paragraphs pertaining to the issues in this case, the lease provided for an $850 security deposit at paragraph 3 that under paragraph 3a is subject to forfeiture "if the lease is terminated" before the end of its term.
The plaintiff testified that the defendant was notified on or about 4/15/09 it was her intention to move out on 4/30/2009 rather than on 5/10/2009, the date she understood to be the end of the lease. She said that the defendant did not oppose this early termination request and the parties arranged for a final walk through on 4/28/09 so if there was any further clean-up of the leasehold it could be done before 5/1/09 when the water billing would be discontinued by the plaintiff. At that time the plaintiff agreed save for some minor clean-up by the plaintiff that was requested by the defendant as there were not other problems, the $850 security deposit would be immediately refunded.
The plaintiff testified that she completed the final clean-up and surrendered the premises to the landlord by 5/1/2009. She said that he re-rented the premises immediately on or about the first of May 2009 to new tenants. She said she subsequently made several contacts with the defendant concerning the return of her security deposit. On 5/12/09 she mailed a letter to the defendant outlining these efforts to have her $850 refunded and the various responses given her by the defendant (Ex-B).
The defendant supplied the Court with a copy of the lease agreement he drafted missing the front page (Ex-A). He argued that the actual termination date was 5/30/09 and not 5/10/09 as claimed by the plaintiff. He did not have the first page of the lease on which the term was listed, so he agreed to supply a copy of it immediately after Court as he had left it in his car. He did provide this first page to the court clerk and gave a copy to the plaintiff at that time—she wrote note indicating it was obvious "the date of termination has been clearly changed—he has written over the original date with 5/30/09..." (Ex-D).
The defendant argued he had a right to claim the $850 as being forfeited under paragraph 34 because the lease was terminated prior to the end of its term on 5/30/09 when the plaintiff gave him notice she would be leaving by 5/1/09.
Ambiguity Issue
LAW
In W.W.W. Associates, Inc. v Giancontier, 77 NY2d 157, 565 NYS2d 440, 566 NE2d 639, the Court stated,
a familiar and eminently sensible proposition of law is that, when parties set down their agreement in a clear, complete document, their writing should as a rule be enforced according to its terms. Evidence outside the four corners of the document as to what was really intended but unstated or misstated is generally inadmissible to add or vary the writing "[citations omitted]." id. p. 443
In all contracts "[t]here is implicit...an implied covenant of fair dealing and good faith." VanWalkenburgh, N & N Inc. v Hayden P. Co., 30 N.Y.34 34, 46, 300 NYS2d 329, 333, and, "[i]t is well settled that in order to form a binding contract, there must be mutual assent to the terms...thereof..." Gupta v University of Rochester, 57 AD2d 731, 395 NYS2d 566.
In Cheng v Madansky Leasing Co., Inc., 73 NY2d 453, 541 NYS2d 742, the Court as stated in BT Commercial Corp. v Blum, 170 AD2d 134, 572 NYS2d 10 at p.11 "[I]t is established that an ambiguity in a contract must be construed against the party who drafted it." In Malo v Gardino, 184 AD2d 872, 585 NYS2d 529 at p. 530 the Court said that "[W]hether a writing is ambiguous is a question of law to be resolved by the Court (VanWagner Adv. Corp. v S & M Enters., 67 NY2d 186, 191, 501 NYS2d 628...)...[I]f there is ambiguity in the terminology used, the equivocally can be resolved without reference to extrinsic evidence, the issue is to be determined as a question of law for the Court (Hartford Acc. & Ind. Co. v Wesolowski, 33 NY2d 169, 172, 350 NYS2d 895...)."
In Brown Bros. Elec. Constr. v Beam Constr. Corp., 41 NY2d 397, 400 the Court said an "attempt to interpret a contract so as to give realization to the parties' reasonable expectations" should be the guide. In doing so, "consideration must be given to the express words, the attendant circumstances, the situation of the parties and the objectives that they were striving to obtain." See Gillman v O'Connell, 176 AD2d 305, 574 NYS2d 573.
Contract Ambiguity
In Rentways, Inc. v O'Neill Milk & Cream Co., 308 NY 342, the Court noted "...the equally well-settled maxim that, where there is ambiguity in the terms of a contract prepared by one of the parties, it is consistent with both reason and justice that any fair doubt as to the meaning of its own words should be resolved against such party" (id. p. 348).
The Court in Van Wagner Advertising Corp. v S & M Enterprises, 67 NY2d 186, pointed out that "[W]hether or not a contract provision is ambiguous is a question of law to be resolved by a court (Sutton v East Riv. Bank, 55 NY2d 550, 554)" (id. p. 191). See also, Hartford Acc. & Ind. Co. v Wesolowski, 33 NY2d 169.
In Cheng v Modansky Leasing Co., 73 NY2d 454, the Court ruled that if a writing "...was ambiguous because it did not state [a term] explicitly, then its terms must be construed against the drafter..." (id. p. 460) citing Rentways, Inc., see also, In Re EWI, Inc., 208 BR 885.
In Dean Witter Reynolds v Espada, 959 F. Supp. 73, the Court observed,
Pursuant to long-established New York law, "if [a contract] was ambiguous because it did not state [a term] explicitly, then its terms must be strictly construed against the drafter." Cheng v Modansky Leasing Co., 73 NY2d 454, 460, 541 NYS2d 742, 539 NE2d 570(1989). The New York Court of Appeals explicitly relied on the Restatement of Contracts, which provides at Section 206: "In choosing among reasonable meanings of a promise or agreement or a term thereof, that meaning is generally preferred which operates against the party who supplies the words or from whom a writing otherwise proceeds." Restatement (Second) of Contracts Section 206 (1981). See also Rentways, Inc. v O'Neill Milk & Cream Co., 308 NY 342, 348, 126 NE2d 271 (1955) (relying on the "well-settled maxim that, where there is ambiguity in the terms of a contract prepared by one of the parties, it is consistent with both reason and justice that any fair doubt as to the meaning of its own words should be resolved against such party.") (citations omitted). Pursuant to New York Contract Law, a contract is ambiguous when its terms are reasonably susceptible to two or more interpretations. Diodato v Eastchester Development Corp., 111 AD2d 303, 489 NYS2d 293, 294 (2d Dept. 1985). See also Paine Webber, Inc. v Elahi, 87 F.3d at 600; In re Kam Kuo Seafood Corp., 76 Bankr. 297 (Bankrs. S.D.NY 1987). Id. pps. 82-83.
In BT Commercial Corp. v Blum, 175 AD2d 4, the Court stated, "It is established that an ambiguity in a contract must be construed against the party who drafted it (Lai Ling Cheng v Modansky Leasing Co., 73 NYS2d 454; Guardian Life Ins. Co. v Schaefer, 70 NY2d 888; Jacobson v Sassower, 66 NY2d 991; Rapid-American Corp. v Olympic Tower Assocs., 157 AD2d 589; Barclay Knitwear Co. v King'swear Enters., 141 AD2d 241, lv denied 74 NY2d 605)." Id. p. 44.
In W.W.W. Associates, Inc. v Giancontieri, 77 NY2d 157, "[A] familiar and eminently sensible proposition of law is that, when parties set down their agreement in a clear, complete document, their writing should as a rule be enforced according to its terms. Evidence outside the four corners of the document as to what was really intended but unstated or misstated is generally inadmissible to add to or vary the writing (see, e.g., Mercury Bay Boating Club v San Diego Yacht Club, 76 NY2d 256, 269-270; Judnick Realty Corp. v 32 W. 32nd St. Corp., 61 NY2d 819, 822; Long Is. R.R. Co. v Northville Indus. Corp., 41 NY2d 455; Oxford Commercial Corp. v Landau, 12 NY2d 362, 365)." Id. p. 162.
In Rasch's Landlord & Tenant, 4th Edition, 1998, Chapter 6 deals with "Construction of Leases." There it states "[A] lease, like any other contract, is to be enforced in accordance with the express intention of the parties to the lease" (id. p. 270). It goes on to state that the "...application of the rules of construction [do not differ] from those applicable to an ordinary contract" and "[I]f the interpretation of its language is necessary [those for the] construction of contracts are to be applied...the court will so construe a lease [so] as to carry out the intention of the parties [when] possible...for, the intent of the parties must be considered, and govern [citing Erie County v Buffalo Bills Division of Highword Services, Inc. (4th Dept.), 42 AD2d 922]" (id. p. 270).
It goes on to observe various rules of contract construction such as "...in case of doubt or ambiguity it must be construed most strongly against the party who prepared [the lease]...a lease drawn by the landlord is to be construed most strongly against him...a rule of construction...resorted to only when the words of the instrument are doubtful in meaning or susceptible of more than one construction" [citing Benderson v Wiper Ck. Corp. (4th Dept), 266 AD2d 903, Aff'd 95 NY2d 954] (id. pps. 277-278 and 2008 pocket part p. 35).
In Benderson v Wiper Check Inc., the Court stated:
"[T]he interpretation of an unambiguous written agreement is an issue of law for the court to determine (see, Chimart Assocs. v Paul, 66 NY2d 570, 571-572; Mallad Constr. Corp. v County Fed. Sav. & Loan Assn., 32 NY2d 285, 290-291). In reviewing such an agreement, it is the obligation of the court to examine the terms of the contract as a whole in order to determine the intent of the parties (see, Weiss v Weiss, 52 NY2d 170, 174; Little v Blue Cross, 72 AD2d 200, 203). Moreover, contract terms should be given their ordinary, popular and nontechnical meanings (see, Benderson Dev. Co. v Schwab Bros. Trucking, 64 AD2d 447, 456)." Id. p. 904.
Decision
Paragraph 34 states in part "At any time during this lease if lease is terminated full remainder of the lease term rent is due and security deposit will be forfeited." The legal issue is whether this provision in this lease is unconscionable under Real Property Law 235-c(1).
In Hovorka v Ingram, # 08-31700, Watertown City Court, 6/23/09, Harberson, J., NYLJ 7/14/09 (p. 33, col. 1) this Court stated:
In Rios v. Carrillo, 53 AD3d 111, the Court ruled that the "[W]ell-settled law in this state imposes no duty on a residential landlord to mitigate damages" [citing Holy Props. v Cole Products, 87 NY2d 130]...in Holy Props, the Court of Appeals placed great weight on the fact that the parties' lease expressly provided that [landlord] was under no duty to mitigate damages and that upon [tenant's] abandonment of the premises or eviction, it would remain liable for all monetary obligations arising under the lease' and therefore concluded that [if] the lease provides that the tenant shall be liable for the rent after eviction, the provision is enforceable' (87 NY2d at 134)" (id. p. 113).
The Carrillo Court having found that "...in the matter now before us, the lease between the parties provides that the [tenant] remains liable for the rent...a residential landlord is under no duty to mitigate damages where the terms of the lease do not indicate otherwise" (id. p. 114)—see also Maria Gordon v Eshaghoff, 2009 NY Slip Op 1945.
The lease at paragraphs 21 Default and 23 Abandonment reflects this remedy approved by the Court of Appeals in Holy Props. v Cole Products (supra ) and Rios v Carrillo (supra ) allowing the landlord at his election to claim the "full remainder of the lease term rent" due from the date of early termination and/or abandonment by the tenant until the lease's termination date.
However, in addition to this remedy available to the landlord when a tenant leaves a leasehold prior to the end of the lease in this lease contract drafted by the defendant, he also provides for the forfeiture of the $850 security deposit on top of the right to collect all rent due for the balance of the lease's term until the termination date under the agreement.
In Hovorka this Court stated:
Is forfeiture of security deposit a liquidated damage?
In Rasch's Landlord and Tenant, 4th Ed., edited by Hon. Robert Dolan, 1998, Chapter 13 deals with "Deposit to secure performance of lease."
In his commentary Judge Dolan states that "[A] deposit of money...to secure...performance of the conditions and covenants of the lease on the tenant's part to be performed may constitute a penalty...sometimes called a security; or the deposit may constitute liquidated damages [and] [i]t is important to ascertain the nature of the deposit" (id. 572, Vol.1).
He observes that if the "deposit is determined to be liquidated damages for a stipulated breach...then, upon the occurrence of such breach, the deposit is forfeited...as the full measure of the tenant's liability for such breach" (id); and "...any further claims of the landlord for damages by reason of such breach...are extinguished and no action can be brought for the return of the deposit" (id).
He goes on to state that "...if a deposit is determined to be a penalty, rather than liquidated damages, then it is merely security, or indemnity, for performance" and in the event a tenant "breaches his agreement, the landlord is not confined to the deposit for his remedy" (id. p. 573).
The commentary observes that when determining the nature of the deposit as either a penalty or liquidated damages "the Courts will invariably interpret the lease as of its date, and notice of its breach" (id. p. 754).
In Pattern Jury Instructions, 2d Edition, 2008, Vol. 2, at the chapter concerning landlord-tenant at PJI 6:2 dealing with liquidated damage clauses the commentary stated "...a lease provision fixing damages in the event of a breach is enforceable...a landlord is precluded from recovering actual and compensatory damages sustained as a result of the breach of the lease, even though the stipulated sum may be less than the actual damages" (id. pps. 1156-1157).
In LeRoy v. Sayers, 217 AD2d 63, the Court stated at pages 69-70:
On the issue of the enforceability of the lease's liquidated damages clause, we agree with the IAS Court's determination that the clause provides for a penalty. As the Court of Appeals has noted, "[l]iquidated damages constitute the compensation which, the parties have agreed, should be paid in order to satisfy any loss or injury flowing from a breach of their contract. (Wirth & Hamid Fair Booking v. Wirth, 265 NY 214, 223.) In effect, a liquidated damage provision is an estimate, made by the parties at the time they enter into their agreement, of the extent of the injury that would be sustained as a result of breach of the agreement." (Truck Rent-A-Ctr. v Puritan Farms 2d, 41 NY2d 420, 423-424.) Contracting parties may agree to such clauses provided they are neither unconscionable nor contrary to public policy. (Supra, at 424; Mosler Safe Co. v Maiden Lane Safe Deposit Co., 199 NY 479, 485.) The utility of liquidated damages clauses is manifest in those cases where calculation of the amount of actual loss is difficult, if not impossible; in such case, the parties may agree in advance of the breach or default as to the amount of damages to be paid thereupon, rather than requiring proof and an assessment thereof in some future proceeding. (Truck Rent-A-Ctr. v Puritan Farms 2d, supra, at 424.) In determining the enforceability of a liquidated damages clause, courts should consider "the surrounding circumstances and the apprehension of damage that existed in the minds of the parties at the time the contract was made." (36 NY Jur 2d, Damages, Section 156, at 267.)
A liquidated damages provision "will not be enforced if it is against public policy to do so and public policy is firmly set against the imposition of penalties or forfeitures for which there is no statutory authority." (Truck Rent-A-Ctr. v Puritan Farms 2d, 41 NY2d ___, supra, at 424). "Generally whenever the damages flowing from a breach of a contract can be easily established or where the damages fixed are plainly disproportionate to the injury the stipulated sum will be treated as a penalty." (Seidlitz v Auerbach, 230 NY 167, 173-174.) The purpose of such a clause is not to provide just compensation but, rather to secure performance "by the compulsion of the very disproportion." (Truck Rent-A-Ctr. v Puritan Farms 2d, supra, at 424.) The promisor, fearing the punitive financial havoc that would befall him, would continue to perform, or the promisee, in the event he did not, would realize a reward far beyond his actual loss. In either event, an injustice would be done. Thus, the rule has evolved that a liquidated damages clause will be enforced if the sum stated is reasonably proportionate to the loss anticipated and the amount of actual loss would be difficult if not impossible to calculate. (Supra, at 425.) Whether a contractual provision is enforceable presents a question of law for the court. (Mosler Safe Co. v Maiden Lane Safe Deposit Co., 199 NY ___, supra, at 485.) Applying the foregoing principles to the facts at hand, we agree with the IAS Court's determination that the amount stipulated to as liquidated damages does not bear a reasonable relation to the actual amount of probable damage that would befall defendant in the event of plaintiff's default before taking possession and, thus, that it constitutes a penalty.
In this lease the provisions at paragraph 34 (read together with paragraphs 21 and 23) stating two remedies available to the landlord if due to abandonment and/or early termination of the lease by the tenant, i.e., forfeiture of the $850 security deposit as well as the tenant being liable for the balance of the rent due until the date the lease agreement ended by its terms taken separately appear to be allowable under New York law. However, when these remedies are imposed in conjunction with each other rather than an election of remedies available to the landlord does this lease term become unconscionable under Real Property Law 235-c(1)?
A review of the lease's terms pertaining to the security deposit does not indicate the security deposit is held as security to cover costs for repairs and/or past due rent or other fees imposed by the lease terms — Paragraph 18 specifically deals with the number of pets that may be kept on the premises and a $150 non-refundable pet deposit was imposed for each animal to cover any repairs and/or cleaning related to keeping pets on the premises.
It is clear that the pet deposit is not collected as part of the general security deposit on the lease of the premises but rather is specifically tailored to cover any consequences as a result of having animals living in the apartment. The Court finds that the non-refundable deposit of $150 is a liquidated damage to cover any wear and tear of whatsoever kind and nature arising from having pets in the premises.
The Court finds that the $850 security deposit being subject to forfeiture under paragraph 34 "if the lease is terminated" represents in the Court's opinion not a "liquidated" damages, but rather, a penalty based on the decision in LeRoy v Sayers.
In this lease the landlord as allowed under its terms can recover any past due rent as well as rent due on the balance of the term in the event the tenant either defaults and/or abandons the leasehold as provided under the lease terms at paragraphs 21 and 23 of the lease contract (Holy Properties v Cole Products [supra ]). These terms provide the landlord with a complete remedy for any financial loss arising from the tenant's failure to meet the rent obligations of this lease contract. Taken together with the non-refundable pet deposit the Court finds the landlord has adequate remedies against the tenant to recover any losses arising from a breach of this agreement.
In LeRoy the Court stated:
A liquidated damages provision "will not be enforced if it is against public policy to do so and public policy is firmly set against the imposition of penalties or forfeitures for which there is no statutory authority." (Truck Rent-A-Ctr. v Puritan Farms 2d, 41 NY2d ___, supra, at 424). "Generally whenever the damages flowing from a breach of a contract can be easily established or where the damages fixed are plainly disproportionate to the injury the stipulated sum will be treated as a penalty." (Seidlitz v Auerbach, 230 NY 167, 173-174.) The purpose of such a clause is not to provide just compensation but, rather to secure performance "by the compulsion of the very disproportion." (Truck Rent-A-Ctr. v Puritan Farms 2d, supra, at 424.) The promisor, fearing the punitive financial havoc that would befall him, would continue to perform, or the promisee, in the event he did not, would realize a reward far beyond his actual loss. In either event, an injustice would be done. Thus, the rule has evolved that a liquidated damages clause will be enforced if the sum stated is reasonably proportionate to the loss anticipated and the amount of actual loss would be difficult if not impossible to calculate. (Supra, at 425.) Whether a contractual provision is enforceable presents a question of law for the court. (Mosler Safe Co. v Maiden Lane Safe Deposit Co., 199 NY ___, supra, at 485.) Applying the foregoing principles to the facts at hand, we agree with the IAS Court's determination that the amount stipulated to as liquidated damages does not bear a reasonable relation to the actual amount of probable damage that would befall defendant in the event of plaintiff's default before taking possession and, thus, that it constitutes a penalty.
The Court finds, then, as a matter of law that because the $850 was posted solely as an amount to be forfeited if the lease was terminated and for no other purpose under the terms of the contract drafted by the landlord is "disproportionate to the injury [and] the stipulated sum will be treated as a penalty" (id. p. 69).
Furthermore the Court finds that as the landlord chose to use "and" between his remedies in paragraph 34 giving him the $850 as well as any other damages arising from the contract termination rather than using "or" giving him a choice of one remedy to sue for breach of contract or accept the $850 as a liquidated damage, such an ambiguity "...must be construed against the drafter...must be strictly construed against the drafter" (Cheng v Modansky Leasing Co. (supra, p. 460).
Thus, when these remedies outlined at paragraph 34 are co-joined by its plain terms making the $850 forfeiture a penalty the Court finds the clause (paragraph 34) under Real Property Law 235-c(1) is unconscionable. In such case Section 235-c(1) has various remedies under R.P.L. 235-c(1) including "[limiting] the application of any unconscionable clause so as to avoid any unconscionable result." In this case the Court finds that by limiting the remedy at paragraph 34 to collecting contract damages involving nonpayment of rent after the termination of the contract until the end of the original lease terms and requiring the refund of the $850 "security" deposit will avoid an "unconscionable result."
The next issue revolves around the circumstances involving the conduct of the parties in April and May 2009 at the time the tenant moved out prior to the original date provided for on the lease; and, what that original date was according to the lease terms—5/10/09 or 5/30/09. A review of the lease and the actions of the parties during this period of time is in order to resolve this issue.
The plaintiff testified that she told the landlord on 4/15/09 she would be leaving the leasehold by April 1, 2009 rather than 5/10/09, the date she assumed was the last day of the lease term. She testified that the defendant agreed to this 4/15/09 and agreed to refund the $850 security deposit after a walk through scheduled for 4/28/09—a date set by the plaintiff as she expected to terminate the power bill as of 5/1/09 because she wanted to do any clean-up requested after the walk through before 5/1/09 when the power bill would be terminated in her name.
She said that after the 4/28/09 walk through, save for a few minor points about the premises condition (she corrected) the landlord said he was satisfied and the security deposit would be returned. The defendant agreed in Court that the premises were left in an acceptable condition by the plaintiff. She said the defendant promised to mail a check for the security deposit immediately. Thereafter when the check did not arrive after 4/1/09 she made several calls to the defendant about when the $850 was to be expected and each time she was put off by the defendant saying the check was "in the mail."
On 5/12/09 she sent a letter to the defendant (Ex-B) outlining the events from the time she advised the defendant she was leaving until 5/12/09 at which point she still had not been given the $850 due her by the defendant's own promise. This letter written contemporaneously with the events surrounding the termination of the lease during April 2009 before she left and May 2009 after she left reflects in reliable and accurate detail the interaction of the parties at that time in support of her trial testimony.
The defendant testified that he elected to hold the $850 because she did not give him 30 days' notice of her intent to leave before 5/30/09 having given him notice on or about 4/15/09 when the plaintiff said that the termination date was not 5/30/09 in the agreement . The defendant who had provided the Court with pages 2-6 of the lease said the first page would show the 5/30/09 date. He produced his missing page he had left in his car before Court (Ex-C). The plaintiff objected in writing to it saying it was clear the termination date was altered from 4/10/09 to 5/30/09 (Ex-B).
The plaintiff also informed the Court that immediately after the parties made the 4/28/09 walk through the defendant had new tenants see the premises while she was there and these people were moved into the leasehold as of 5/1/09. She further testified that if the defendant had argued the notice issue before she left she would have merely remained there until 5/10/09 until the end of the lease term to avoid forfeiture of the $850 as provided at paragraph 34. The defendant agreed that he commenced a new lease with different tenants as of 5/1/09 and did not claim he lost any rent for May of 2009 because the tenant left 4/30/09.
The credible evidence shows that the parties agreed to a surrender termination of this lease agreement.
Surrender Termination of Agreement
In Riverside Research Institute, et al v KMGA, 68 NY2d 689, the Court stated:
"A surrender by operation of law 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 (Harris v Hiscock, 91 NY 340, 344; 2 Rasch, Landlord and Tenant Section 859 [2d ed]; see, Gray v Kaufman Dairy & Ice Cream Co., 162 NY 388). As distinguished from an express surrender, a surrender by operation of law is inferred from the conduct of the parties (Bedford v Terhune, 30 NY 453, 463; Rasch, op. cit. Section 859). Whether a surrender by operation of law has occurred is a determination to be made on the facts. We must determine whether the Appellate Division's finding that there was a surrender or Trial Term's findings that there was not more nearly comports with the weight of the evidence (Cohen and Karger, Powers of the New York Court of Appeals Section 112 [rev ed]).
Review of the record establishes that defendant, acting in response to plaintiff's request, gave plaintiff advance written notice that it was about to vacate the premises pursuant to an earlier "understanding." Plaintiff thereafter physically assisted defendant in departing and billed defendant for nominal damages sustained in the move. These facts support the inference drawn by the Appellate Division that a surrender by operation of law has occurred." Id. pps. 691-692.
In NY Real Property Rasch's Landlord and Tenant, Vol. 2, Ch. 26 deals with termination of leases by surrender and acceptance.
The commentary observes that "there are two kinds of surrender of a lease...express surrender [or] surrender by act or operation of law" (id. p. 283). It defines express surrender of a lease as "...one voluntarily made by the express mutual agreement of the parties to a lease, and expressly manifests an intention to reconvey the leasehold to the landlord...it is essential that there be a mutual agreement between the landlord and tenant that the lease terminate [citing Bedford v Terhune, 30 NY 453] (id. p. 283): In Bedford the Court stated "[I]t will be seen that in all cases a mutual agreement between the lessor and the original lessee that the lease terminates, must be shown. It is not necessary that the agreement should be express; it may be inferred from the conduct of the parties" (id. p. 463).
The Court based upon the statements of the plaintiff and defendant finds this was a "mutual agreement of the parties to a lease...expressly manifesting any intention to recover the leasehold to the landlord" and; furthermore, the Court finds that it was not necessary that the agreement...be express; it may be inferred from the conduct of the parties" (Bedford v Terhune, supra, p. 463).
The acceptable evidence shows that the landlord agreed to the 4/30/09 termination date as evidenced by his comments during the 4/28/09 walk through testified to by the plaintiff and affirmed by the defendant. In addition, there was a "surrender by operation of law...when the [defendant landlord] did...[an] act inconsistent with the landlord-tenant relationship...indicating [his] intent to deem the lease terminated" (Riverside Research Institute v KMGA, supra, p. 691-691). He terminated the tenant's occupancy of the apartment on 5/1/09 when he rented the leasehold to new tenants giving them possession thus alienating the plaintiff's right of possession under the 5/8/08 lease. The lease, then, having been terminated the surrender termination agreement as outlined above as a matter of fact and law, the Court finds there was no violation of paragraph 34 requiring a forfeiture of the $850.
General Business Law Section 349In Blend v Castor, 2009 NY Slip Op 52098 (u), NYLJ 10/1/09, p. 30, col. 1, the Court stated:
General Business Law Section 349 has been found to apply to leases of residential property (Frazier v Priest, 141 Misc 2d 775 and Meyerson v Prime Realty Services, LLC, 7 Misc 3d 911). GBL 349(a) states that "deceptive acts or practices in the conduct of any business...in this state are declared unlawful."
This Court concluded in Castor that "[T]his decision shall serve as a warning to landlords who refuse to refund a security deposit, many of whom see these deposits as a lease improvement fund to do maintenance on their building and who have no intention to return it at the end of a lease on a pretext the tenant owes the money to the landlord under the lease contract when in fact none is due," having found a violation of GBL 349(a).
The Court went on to rule there was "clear and convincing evidence" the landlord in Castor never intended to return the security deposit before assessing damages under GBL 349(h) along with a judgment for the security deposit.
There is credible "clear and convincing" evidence in this case as well the defendant had no intention of returning the $850 security deposit.
The Court finds that the following conduct of the defendant amounted to "deceptive acts and practices prohibited under GLB 349(a)."
As heretofore ruled in this decision the parties entered into a written lease agreement on 5/8/09 that by its written terms at paragraph 1. "Commenced" on 5/10/08. These terms were on page 1 of the six page lease prepared by the landlord. At trial the landlord offered a copy of the lease, missing page 1, and advised the Court page 1 had been accidentally left in his car. He offered pages 2 to 6 as part of his defense that he was able to keep the $850 because the manner the tenant terminated the lease as provided for at paragraph 34 on page 5. However, in order to ascertain when the lease terminated by its terms one could only make such a determination by reviewing page 1 where the termination date was listed.
The plaintiff testified she had moved into the premises on 5/10/08, gave the landlord notice in April 2009 she intended to vacate the leasehold by 4/30/09 on or before 4/15/09 and that the landlord said this was agreeable to him so long as she completed some clean-up of the premises. She testified that a walk through was completed on 4/28/09 during which the landlord requested some additional minor clean-up and told her at that time the $850 security deposit would be mailed to her.
The plaintiff surrendered the premises to the landlord as of 4/30/09 and the next day the landlord allowed a new tenant to take possession of the leasehold. The landlord testified that while he agreed the clean-up was adequate on 4/28/09 after the premises was returned to him and did not deny he installed a new tenant in it on 5/1/09, he argued he had a right to keep the $850 under the terms of the lease because the tenant had not given an appropriate termination notice. He argued that the lease did not expire by its written terms until 5/30/09 and not 5/10/09 as argued by the tenant. He maintained that notwithstanding the fact he had re-rented the premises on 5/1/09 to a new tenant at the same monthly rental amount he could still keep the $850 security deposit under the terms of paragraph 34 of the lease. He agreed he would supply this Court with page 1 of the lease which would support his contention that the lease' termination date was 5/30/09 and not before that date.
When this paper (Ex-C) was given the Court after he went to his car to retrieve it, paragraph 1 stated the agreement "shall commence on" with a blank space on which to list the date in which was handwritten "5-10-08." In the same paragraph at "B" the pre-printed wording stated "The termination date shall be on" with another blank space to enter a date. In this space the handwritten date was 5-30-09. Yet, it was pointed out by the plaintiff that it had clearly been changed (Ex-D).
A review by the Court of this agreement (Ex-C) clearly shows the original date of 4/30/09 had been altered by writing a "5" over the "4" easily discernible to the naked eye. Taken together with the fact the defendant unequivocally promised the plaintiff a return of her $850 on 4/28/09 without any mention of keeping it due to her failure to terminate the agreement as outlined at paragraph 34, that he immediately re-rented the premises on 5/1/09 to a new tenant, that subsequent to 5/1/09 he continued to promise the plaintiff the $850 would be "in the mail" (Ex-B) without raising the termination agreement and only for the first time raising this defense after the plaintiff commenced this action to return the $850 security deposit (an argument based on the contract terms listed on page 1 of the lease that was not supplied to the Court until requested when only page 2-6 were submitted at the time of the Court hearing), this Court concludes the defendant never intended to refund the $850 security deposit to the plaintiff.
The Court finds that this defendant engaged in deceptive conduct by failing as promised to return the $850 to the plaintiff on 4/28/09 and thereafter on the ground he was allowed to keep the $850 under paragraph 34 of the lease based upon a 5/30/2009 termination date and by submitting an altered page one of the lease on which the 4/30/2009 date was changed to 5/30/2009 to the Court to support this prevarication amounts to unlawful deceptive acts and practices prohibited under GBL 349(a). Furthermore the Court finds the credible evidence shows that the defendant by his conduct "willfully or knowingly violated this section" (349(h)) and in its discretion as to provided therein awards in addition to the $850 refund of the security deposit, $1,000 due to the defendant's egregious behavior in this case.
The plaintiff is awarded $850 together with $1,000 in damages along with costs of $20.00. This shall serve as the judgment and order of the Court.