Opinion
Index No.: SCNY 16427/19-101, 19-2
03-31-2020
Ian M. SWENSON, Claimant v. WESTMINSTER MANAGEMENT, LLC and 118-120 East Fourth Owner, LLC, Defendants
IAN SWENSON, Claimant Pro Se BALSAMO ROSENBLATT & HALL, P.C., Attorneys for Defendants, By: Samara Geller, Esq., 200 Schermerhorn Street, Brooklyn, New York 11201
IAN SWENSON, Claimant Pro Se
BALSAMO ROSENBLATT & HALL, P.C., Attorneys for Defendants, By: Samara Geller, Esq., 200 Schermerhorn Street, Brooklyn, New York 11201
Sabrina B. Kraus, J.
BACKGROUND
Plaintiff commenced this action seeking a judgment in the amount of $5000 based on defendants' failure to return his full security deposit for Apt. 4A at 120 East 4th Street, New York, New York 10011 (Subject Premises).
On March 11, 2020, the parties appeared ready for trial, and the court held a bench trial and reserved decision.
FINDINGS OF FACT
Two witnesses testified at the trial, claimant and Carlos Perez (Perez), who testified for defendants. Claimant also submitted a trial book consisting of emails and other relevant documentation (Ex 2).
Claimant and Nicholas Gallagher were the tenants of record of the Subject Premises, pursuant to a written lease dated October 10, 2018 (Ex 1), which listed 118-120 East Fourth Owner LLC as the landlord. Westminster Management LLC is the managing agent for the landlord. The lease ran for a term from October 12, 2018 through August 31, 2019, at a monthly rent of $4000.00 per month. Payment of rent was by deduction from claimant's bank account, and such payments were submitted to Westminster Management LLC (Ex 2, Tab 7).
Although the defendant was named as Westminster Management the documents at trial show the proper name of the defendant is Westminster Management LLC and the caption is amended to conform to the proof offered at trial.
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The broker that rented the Subject Premises was Allen Zapadinsky (AZ) (see par 42 of lease).
In May 2019, Claimant called AZ to ask about an early surrender, but he was not able to reach AZ, so he called Westminster Management. Claimant spoke with a woman, at Westminster, who directed him to speak with AZ to arrange an early surrender. Claimant spoke with AZ, and advised AZ that both he and his roommate were taking the bar exam on July 30 and July 31, and wished to surrender the Subject Premises on August 1, 2019. AZ indicated he would try and find new tenants to take over as of August 1, 2019.
Claimant and his roommate moved out mid July 2019. Claimant testified that on August 1, 2019, they "surrendered" the Subject Premises, however, he acknowledged he did not surrender the keys to the landlord, and testified that he believes his roommate left the keys in the Subject Premises on August 1, 2019. Defendant acknowledged receipt of possession of the Subject Premises as of July 31, 2019, pursuant to defendant's move out inspection form (Ex C).
On August 4, 2019, the landlord billed claimant for August 2019 rent and it was automatically deducted from Claimant's bank account.
Claimant seeks additional damages, because the landlord did not return his security deposit until September 13, 2019, and the landlord deducted $375.00 from the amount that was returned. Claimant alleged that no explanation was provided for the reduced amount returned as security, and that this was a willful breach of the new law governing the return of security deposits, which claimant alleged entitled him to punitive damages.
Perez testified that AZ is a broker that works with defendants. Perez testified that AZ tried to find a new tenant for the Subject Premises, so that claimant and his roommate could be released from the lease effective August 1, 2019, but that AZ was not able to do so. Perez testified that the security deposit was returned within 14 days of the end of the lease, and that the landlord deducted $250.00 for a "move-out fee" pursuant to paragraph 44 of the lease between the parties, and an additional $125.00 was deducted because claimant and his roommate had left furniture in the Subject Premises after they moved. Defendants had their own employees remove the furniture that was left and did not incur any additional costs beyond the employees' salary for the removal of same.
While on direct Perez testified that AZ lacks authority to negotiate early termination of leases, on cross-examination he acknowledged that, when tenants want to vacate early, defendants refer them to AZ, and will agree to the early termination if AZ gets them a replacement tenant.
DISCUSSION
Article 18 of the New York City Civil Court Act§ 1804 requires courts in small claims actions, "to do substantial justice between the parties...".
The court does not find that an enforceable agreement was entered between the parties for the early termination of the lease. Rather, the court finds that the agreement was that if a new tenant was found to take over August 1, 2019, then claimant and his roommate would have been released. However, no such tenants were found (see Ex A), as such claimant was properly charged for rent for August 2019.
NY Gen. Oblig. Law § 7-108 governs the return of security deposits in non-regulated units. It provides in pertinent part:
(b) The entire amount of the deposit or advance shall be refundable to the tenant upon the tenant's vacating of the premises except for an amount lawfully retained for the reasonable and itemized costs due to non-payment of rent, damage caused by the tenant beyond normal wear and tear, non-payment of utility charges payable directly to the landlord under the terms of the lease or tenancy, and moving and storage of the tenant's belongings.
The statute further provides:
e) Within fourteen days after the tenant has vacated the premises, the landlord shall provide the tenant with an itemized statement indicating the basis for the amount of the deposit retained, if any, and shall return any remaining portion of the deposit to the tenant. If a landlord fails to provide the tenant with the statement and deposit within fourteen days, the landlord shall forfeit any right to retain any portion of the deposit.
It is undisputed in this case that no such itemized statement was provided to claimant and his roommate within 14 days of the end of their lease. As such, the landlord was not entitled to retain the security deposit. Additionally, although defendant submitted a move-out inspection form there was no move-out inspection that took place pursuant to the statute ( GOL § 7-108(d) ), rather the landlord did the "inspection" on its own, after it was aware that the tenants had vacated. This is evidenced by the fact that only a representative from the landlord's office signed off on the form (Ex C).
Finally the statute provides:
(g) Any person who violates the provisions of this subdivision shall be liable for actual damages, provided a person found to have willfully violated this subdivision shall be liable for punitive damages of up to twice the amount of the deposit or advance.
NY Gen. Oblig. Law § 7-108 (McKinney).
Claimant asks this court to award punitive damages in this action.
As to the $125.00, which was not returned because claimant left furniture in the Subject Premises, the court does not find punitive damages are appropriate, because it is undisputed that claimant and his roommate left furniture in the Subject Premises, and a deduction for the removal of same is provided for in the statute.
However, as to the $250.00 "move-out" fee provided for in the lease, the court agrees that punitive damages are appropriate, as even if defendants had provided a list in a timely manner this would not have been an allowable deduction under the statute and it appears to be defendant's practice to deduct this from the leases of all residential tenants, which is clearly an intentional act.
The court finds that $500.00 in punitive damages are appropriate, in addition the claimant is entitled to the return of the $375.00 of the security deposit that was not returned.
Based on the foregoing the clerk is directed to enter judgment in favor of claimant against defendants in the amount of $ 875.00 plus costs.
This constitutes the decision and order of this court.