Opinion
LT-004824-10.
Decided March 17, 2011.
Silverman Acampora LLP, Attorneys for Petitioner, 100 Jericho Quadrangle, Jericho, New York 11753, 516-479-6313; Law Offices of Noel Munier, Attorneys for Respondent, Walt Whitman Atrium, 33 Walt Whitman Road, Suite 208, Huntington Station, New York 11746, 631-615-0003.
Petitioner-Landlord Triangle Properties #14 LLC (hereinafter "Triangle") commenced this holdover proceeding requesting final judgment awarding it possession of 1100 Shames Drive, Westbury, New York, and the issuance of a warrant to remove Respondents Compumed Billing Solutions LTD (hereinafter "Compumed") from possession thereof. Petitioner also seeks a money judgment for rent arrears in the amount of $11, 693.95 with interest from March 11, 2009, a final judgment awarding fair value and occupancy of the premises after May 31, 2010, and attorney's fees of at least $750.00.
In 2003, the parties entered into the lease agreement for said premises for a term of seven years and one month, commencing on May 1, 2003 expiring on May 31, 2010. Respondent remained in possession of the subject Premises until on or about September 16, 2010.
Petitioner's claims of damages are summarized in paragraph 6 of the Petition:
Prior to the expiration of said lease there was due to landlord from Respondent tenant as follows: $2,327.25 Late Fees; $4,493.00 School Tax; $2,061.38 General Tax $2,460.66 Insurance; $351.66 Security Deposit. Respondent tenant has defaulted in the payment thereof and the total rent in arrears as of the date hereof is $11,693.95. Respondent tenant also has defaulted in the payment of the fair value of the use and occupancy of the Premises after May 31, 2010.
A trial was held by this court on January 5, 2011. Richard Yaffe, the property manager of 1100 Shames Drive, Westbury, and a member of the Triangle Properties #14 LLC testified for the petitioner. On behalf of the Compumed, Steven Swartz, a vice president who oversees different teams, sales and marketing teams, and certain special project testified. Mr Swartz stated that it was his duty to review and analyze where the company was in 2009 into early 2010 and to make a determination whether they could continue utilizing space moving forward. He further testified that he became aware of the lease between Triangle and Compumed in the fourth quarter of 2009.
The Court must now determine the amount of rent and additional rent owed to the Petitioner; whether the lease and the Statute of Fraud bar the evidence produced at trial that an agreement was reached extending the Respondent's occupancy until September 2010; and whether the Petitioner is entitle to double the basic rent because the Respondent held over after the expiration of the lease.
Pertinent provisions of the lease agreement (Petitioner's exhibit 1) are:
36th Any item to be paid by Tenant as "additional rent", including such items as taxes, insurance or payments for other defaults shall be deemed rent and shall be paid by the Tenant within 10 days following the rendering of a bill for such item, and failure to do so shall be equivalent to default in the payment of rent and shall entitle Landlord to invoke any remedies as in the case of non-payment of rent.
20th The failure of the landlord to insist upon a strict performance of any of the terms, conditions and covenants herein, shall not be deemed a waiver of any rights or remedies that the Landlord may have, and shall not be deemed a waiver of any subsequent breach or default in the terms, conditions and covenants herein contained. This instrument may not be changed, modified, discharged or terminated orally.
55th In the event the Tenant shall remain in the premises after the expiration or termination of this Lease, Tenant shall not become a month-to-month tenant, but shall be deemed a hold over tenant, and shall pay to the landlord for use and occupancy of the premises a sum equal to two (2) times the basic annual rent reserved in this lease pro-rated on a 360-day year for the period during which Tenant remains in possession.
Petitioner alleges Respondent remained in possession of the subject premises as a holdover after the expiration of the May 1, 2003 lease. Respondent contends that the parties reached a new and separate agreement for Respondent to remain in possession of the subject premises beyond the date of termination of their original lease, on a month to month basis from June, 2010 through September 2010. Petitioner testified that during a dinner meeting held on or about March 3, 2010, the parties came to a "meeting of the minds" regarding Respondent remaining in possession of the subject premises through September 2010, and the terms for the same.
Petitioner argues the agreement reached by the parties is not binding as it was not memorialized in writing as required by subject lease provision 20 which states "This instrument may not be changed, modified, discharged or terminated orally."
The New York Statute of Frauds is codified at General Obligations § 5-701(a), and provides "an agreement, promise or undertaking that must be in writing is void unless it or some memorandum thereof, be in writing and subscribed by the party to be charged therewith."
The petitioner submitted a written document (Exhibit 3) which extended the term of the subject lease.
The memorandum states:
This Agreement is in connection with the Lease, dated February 12, 2003, between Triangle Properties #14, LLC, Landlord, and CompuMed Billing Solutions, Ltd., Tenant, for premises at 1100 Shames Drive — Suite 100, Westbury, NY 11590.
1. The Lease Term is extended to August 31, 2010.
This Agreement shall be null and void if not signed by Tenant and returned to Landlord By March 31, 2010.
All other terms and conditions of the Lease remain the same."
Petitioner contends that the written agreement outlining the terms of the Respondent's occupancy from June through August 2010 was sent to, but never returned by Respondent. The writing required the Respondent to return the written document to be effective. Petitioner, however, failed to prove at trial that the writing was mailed/sent to Respondent. Petitioner tried to prove mailing/sending of the writing by submitting proof of the mailing after the trial had ended, by letter, which is highly inappropriate. This correspondence will not be considered by the court.
Mr Yaffe and Mr Swartz both testified to a conversation in early March 2010, regarding Respondent staying over beyond the terms of the subject lease. The parties determined both the duration of time that Respondent would remain in possession of subject Premises, and the rent to be paid during that time, which is confirmed by the writing. The writing made by Petitioner is admissible to prove that the parties did in fact make an oral agreement to allow Respondent to remain in possession after expiration of the Lease. See Karel v. Clark, 129 AD2d 773, (2nd Dept 1987), wherein the court held:
When a written agreement provides that it cannot be changed orally, a subsequent written amendment or modification, as in this case, may be effective if signed by the party against whom enforcement is sought (General Obligations Law § 15-301; DFI Communications v. Greenberg, 41 NY2d 602, 394 NYS2d 586, 363 NE2d 312, rearg. denied 42 NY2d 910, 397 NYS2d 1029, 366 NE2d 1365).
In the case at bar, the writing created by Petitioner confirms the oral agreement. Petitioner's testimony and admission into evidence of aforementioned writing, authenticated the written document. (Fisch, on NY Evidence § 103 [2d Ed]).
Credible testimony at trial indicates Respondent relied on the oral agreement reached between the parties when it remained in possession of the subject premises until mid September of 2010. Thus, Petitioner is estopped from invoking the clause against oral modifications. See Rose v. Spa Realty Associates, supra, wherein the court stated:
There is, however, another qualification to the mandates of section 15-301. Analytically distinct from the doctrine of partial performance, there is the principle of equitable estoppel. Once a party to a written agreement has induced another's significant and substantial reliance upon an oral modification, the first party may be estopped from invoking the statute to bar proof of that oral modification (see e.g., Zolar Pub Co. v. Doubleday Co., 529 F2d 663, 667-668, cf. Imperator Realty Co. v. Tull, 228 NY 447, 453; Thomson v. Poor, 147 NY 402, 409-410; Gray v. Met Contr. Corp., 4 AD2d 495, 497; The Savage is Loose Co. v. United Artists Theatre Circuit, 413 F Supp 555, 559).
Additionally, the oral modification between the parties was executed. In Rose v. Spa Realty Assoc., 42 NY2d 338 the court held the following:
"Apart from statute, a contract once made can be unmade, and contractual prohibition against oral modification may itself be waived." (Beatty v. Guggenheim Exploration Co., 225 NY 380, 387-388). Thus, section 15-301 nullifies only executory oral agreements. Once executed, the oral modification may be proved." (e.g., Velveray Corp. v. Jolo Plastics Corp., 19 AD2d 69, 70=71, 241 N.Y.S.2d 377, 378-379, aff'd. 13 NY2d 1165, 247 N.Y.S.2d 389, 196 N.E.2d 738; Semerad, Practice Commentary, McKinney's Cons. Laws of NY, Book 23A, General Obligations Law, § 15-301, p. 588; see generally 10 N.J.Jur., Contracts, § 404.)"
It is therefore the determination of this Court that Respondent was in possession of the subject Premises pursuant to the terms of the new agreement reached with Petitioner in March, 2010, and is subject to the terms therein. Whether a new contract was formed, or Respondent' s relied on Petitioner's offer to their detriment, the finding of the court remains the same.
Also applicable to the case at bar is the doctrine set forth by the court in John Street Leasehold LLC v. F.D.I.C., 196 F3d 379 (C.A. 2 [NY]., 1999):
However, even where it is provided that modifications must be in writing and signed, New York will enforce oral modifications in two circumstances-where there has been (1) partial performance or (2) reliance-but only where the subsequent performance or reliance is "unequivocally referable to the modification."
This holding is applicable in the case at bar because there was partial performance by the Respondent staying in possession and offering to pay the amounts owed pursuant to the oral agreement.
Damages
The lease between Petitioner and Respondent provides for a doubling of the rent if Respondent holdover . Such clauses in commercial leases are enforceable (see White Plains Plaza Realty, LLC. v. Town Sports Intl. LLC. , 79 AD3d 1025 (2nd Dep't, 2010) holding penalty clause doubling rent enforceable "in commercial transactions negotiated between sophisticated parties"). However, Petitioner is not entitled to this element of damage because Petitioner did not request same in its pleading, and no request was made to amend the pleading in order to add this claim of damages, at trial. Furthermore, this clause doubling the monthly payment is not enforceable because respondent remained in possession of the subject premises as per the terms of the said subsequent agreement.
Petitioner has requested additional rent in arrears against Respondent in the amount of $11, 693.95. No documentation or credible evidence supporting these claims was presented to the court. Petitioner's request for $11, 693.95 is therefore denied.
Furthermore, ¶ 36 of the subject Lease requires payment from Respondent 10 days following the rendering of a bill for such items. Petitioner presented no evidence that such bills were rendered in compliance with the terms of said lease. Therefore Petitioner's request for these fees, is denied.
Even though Petitioner totally failed to prove use and occupancy due after May 31, 2010, this court will allow the damages below based upon Respondent's admissions during trial of owing approximately $6,500.00 a month for June, July and August totaling $19,500.00, plus $3,250.00 for half of September for a total of $22,750.00. On page 67 of the transcript, Respondent's attorney states:
". . . all the parties agreed that should Compumed, should [sic] they stay beyond May 31, they would have to stay until September where the rate would be approximately $6,500 a month, reflecting a base monthly rent fee of $5,900 with the incidental fees that usually attend every monthly statement that is — and that there would be a follow-up conversation, which all the parties agreed took place."
Respondent is entitled to a credit of $11,380.00 for the security held by Petitioner as stipulated between the parties.
Conclusion
Petitioner is awarded a judgment of possession with no stay on the warrant. Petitioner is awarded a money judgment in the sum of $22,750.00 less the security deposit of $11,380.00 for a total amount of $11,370.00.
No other damages are awarded because no other damages have been proved.
So Ordered: