Opinion
No. 2023-50051
01-11-2023
Tuck-It-Away at 135th Street Inc., Petitioner-Landlord, v. Tuck-It-Away Associates L.P., Respondent-Tenant, PEDIATRICS 2000 REAL ESTATE & commat; 135 LLC f/k/a PEDIATRICS 2000 ESTATE & commat; 185 LLC, CTOWN SUPERMARKETS, "JOHN DOE," "JANE DOE," and "XYZ CORP." Respondents-Undertenants.
For Respondent-Tenant: Phillips Nizer LLP For Respondent-Undertenant: Gordon Rees Scully Mansukhani, LLP
Unpublished Opinion
For Respondent-Tenant: Phillips Nizer LLP
For Respondent-Undertenant: Gordon Rees Scully Mansukhani, LLP
ILANA J. MARCUS, J.
Recitation, as required by CPLR 2219(a), of the papers considered in the review of this motion:
Mot. Seq. 001
Petitioner's Notice of Motion, Affidavit and Affirmation in Support, Memo of Law, Exhibits1
Respondent-Tenant's Affidavit and Affirmation in Opposition, Memo of Law, Exhibits2
Respondent-Undertenant's Affirmation in Opposition, Memo of Law 3
Petitioner's Reply Affirmation to Respondent-Tenant, Memo of Law 4
Petitioner's Reply Affirmation to Respondent-Undertenant, Memo of Law 5
Mot. Seq. 002
Respondent-Tenant's Notice of Cross Motion, Affidavit and Affirmation in Support, Memo of Law, Exhibits6
Respondent-Undertenant's Affirmation in Support, Memo of Law. 7
Petitioner's Affirmation in Opposition, Memo of Law, Exhibits 8
Respondent-Tenant's Reply Affirmation, Memo of Law9
Petitioner commenced this summary holdover proceeding against respondents, seeking possession of the premises located at 3320-3332 Broadway, Land and Improvements, County, City and State of New York 10031, (the "subject premises") based upon the allegation that respondent Tuck-It-Away Associates LLC ("respondent-tenant") failed to vacate the premises after petitioner terminated the lease as the result of numerous alleged lease violations. The petition seeks possession of the subject premises with the issuance of a warrant to remove respondents therefrom, a money judgment for use and occupancy, and attorney's fees.
In motion sequence 001, petitioner moves for summary judgment and dismissal of respondent-tenant's counterclaim and respondents' affirmative defenses. In support of the motion, petitioner submits the affidavit of Gerald Sprayregen, petitioner's president, and various exhibits. Both respondents oppose petitioner's motion and respondent-tenant submits the affidavit of Matthew Sprayregen, president of Tuck-it-Away Associates, LP, and various exhibits. Petitioner submits reply.
In motion sequence 002, respondent-tenant cross moves for summary judgment dismissing petitioner's petition. Respondent-tenant submits the affidavit of Matthew Sprayregen, president of Tuck-it-Away Associates, LP, and exhibits. Respondent-Undertenants join in respondent-tenant's cross motion. Petitioner opposes respondent-tenant's cross motion, to which respondent-tenant submits reply.
Petitioner focuses its motion for summary judgment on two disputes: whether the lack of a current valid certificate of occupancy for the building is a breach of the lease permitting petitioner to terminate the tenancy; and whether five active New York City Department of Buildings violations issued in 1990, 2011, 2011, 2013, and 2013, are breaches of the lease which permit petitioner to terminate the tenancy. For the reasons that follow, the court finds issues of fact exist as to both.
The following facts stem from strained familial relationship between a grandfather, Gerald Sprayregen, and his grandson, Matthew Sprayregen. Gerald Sprayregen is petitioner's president and Matthew Sprayregen is respondent-tenant's president (see G. Sprayregen Aff, ¶1; M. Sprayregen Aff, ¶1). Matthew Sprayregen became president of respondent-tenant after his father's passing in 2017 (see M. Sprayregen Aff, ¶6). Respondent-tenant operates a self-storage facility at the subject premises, which is one of many such facilities owned, leased and/or operated by members of the Sprayregen family, all under the name "Tuck-It-Away." (see M. Sprayregen Aff, ¶4). Matthew Sprayregen acknowledges that respondent-tenant's lease is below- market value and alleges that petitioner's motive to terminate the lease is to avoid leaving the below market asset as part of his grandfather's estate should he pass before the lease expires in 2040 (see M. Sprayregen Aff, ¶8). It is Matthew Sprayregen's understanding that if the lease is still in effect upon Gerald Sprayregen's passing, the estate may have to buy out the lease before it could sell the building, which is money that Gerald Sprayregen does not wish to indirectly bequeath to his grandson (see id.).
Petitioner is the owner and landlord of the subject premises. Respondent-tenant came into possession of the subject premises by entering into a 48-year written lease commencing on January 1, 1993, and expiring on December 31, 2040 (see NYSCEF Doc. No. 10 [lease]). The lease permits tenant to use the "Premises for any legal use" (id., Art 7). After approximately 27 years of tenancy, petitioner sent respondent-tenant a notice to cure dated December 6, 2019, listing several alleged lease violations (see NYSCEF Doc. No. 14 [notice to cure]). Petitioner demanded these violations be cured on or before January 13, 2020, or the lease would be terminated (see id.). By summons and complaint dated January 9, 2020, respondent-tenant commenced a Supreme Court action against petitioner seeking declaratory judgment and a Yellowstone injunction (see Tuck-It-Away Associates, LP v Tuck-It-Away at 135th Street, Inc., Ind. No. 650227/2020 [Sup Ct, New York Cty]).
By decision and order dated April 2, 2020, the Supreme Court granted respondent-tenant's application for a Yellowstone injunction, enjoining petitioner from terminating the lease while respondent-tenant sought to cure the alleged violations (see id. [NYSCEF Doc. No. 51]). Approximately two years later, by order dated February 16, 2022, the Supreme Court dismissed the action and lifted the Yellowstone injunction based upon the parties' failure to comply with their discovery obligations (see id. [NYSCEF Doc. No. 72]). Thereafter, petitioner sent respondent-tenant a notice of termination dated March 7, 2022, citing its December 6, 2019, notice to cure, and terminated the parties' lease effective March 17, 2022 (see NYSCEF Doc. No. 15 [notice to terminate]). Respondent-tenant did not vacate and surrender the subject premises. Petitioner commenced the instant action by notice of petition and petition dated March 25, 2022 (see NYSCEF Doc. Nos. 1, 2). To date, respondent-tenant and respondent-undertenants continue in possession.
In its petition, petitioner alleges that respondent-tenant failed to cure the defaults listed in the December 6, 2019, notice to cure, and that based upon such failure, petitioner terminated the lease effective March 17, 2022 (see NYSCEF Doc. No. 1, ¶¶9, 10). The petition fails to specify which 25 alleged defaults contained in the notice to cure were still outstanding as of the filing of the notice of petition and petition. By notice of motion dated July 6, 2022, petitioner moved this court for summary judgment, arguing that respondent-tenant has illegally occupied the subject premises for years without a valid certificate of occupancy and that six building violations remain active on record, in breach of Article 9 of the lease (see G. Sprayregen Aff, ¶¶5-9).
The six violations consist of five Department of Buildings violations (issue date: April 21, 1990 [construction]; September 16, 2011 [landmark]; September 16, 2011 [landmark]; September 16, 2013 [landmark]; September 16, 2013 [landmark]) and one Office of Administrative Trials and Hearings Environmental Control Board violation issued on February 25, 2004 (see NYSCEF Doc. Nos. 20, 21). Petitioner concedes the other defaults listed in its December 6, 2019, notice to cure were in fact cured (see G. Sprayregen Aff, ¶8). In its opposition, respondent-tenant provides proof that the 2004 Office of Administrative Trials and Hearings Environmental Control Board violation is closed (see NYSCEF Doc. Nos. 55, 56), and petitioner does not further address that violation in its reply affirmation or in opposition to respondent-tenant's cross motion for summary judgment. Consequently, the court will address the remaining five active Department of Buildings violations in its analysis.
The movant on a motion for summary judgment must make a prima facie showing of entitlement to judgment as a matter of law by tendering sufficient evidence to eliminate any material issues of fact from the case (see Winegrad v New York Univ. Med. Ctr., 64 N.Y.2d 851, 853 [1985]; Zuckerman v City of New York, 49 N.Y.2d 557, 562 [1980]). CPLR 3212(b) provides that a summary judgment motion must be supported by an affidavit of a person with knowledge of the facts, as well as other admissible evidence (see JMD Holding Corp. v Congress Fin. Corp., 4 N.Y.3d 373, 384-85 [2005]). Once such a showing is made, "the burden shifts to the party opposing the motion for summary judgment to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action" (Alvarez v Prospect Hosp., 68 N.Y.2d 320, 324 [1986], citing Zuckerman v City of New York, 49 N.Y.2d at 562). To meet this burden, the opposing party must "lay bare his proofs and make an evidentiary showing that there exists genuine, triable issues of fact" (Oates v Marino, 106 A.D.2d 289, 291 [1st Dept 1984]).
Petitioner's Motion (Mot. Seq. 001)
The Certificate of Occupancy
Turing first to petitioner's argument regarding the lack of a current certificate of occupancy, the parties agree that no current valid certificate of occupancy exists for the subject premises (see NYSCEF Doc. No. 12 [respondent-tenant's answer], p.11, ¶50). It is also undisputed that the lease does not contain an express provision requiring tenant to possess or acquire a certificate of occupancy to operate. However, the lease does state the tenant shall use the "Premises for any legal use" (NYSCEF Doc. No. 10, Art 7). The lease defines "Tenant's Use" as "any use permitted by law and not a nuisance" (id., p.3, ¶1.11), and requires tenant, "at its sole cost and expense, [to] promptly observe and comply in all material respects with all Authorities (including zoning laws and building codes)" (id, p.9, ¶9.2).
The subject premises was built prior to January 1, 1938 (see NYSCEF Doc. No. 66 [1934 certificate of occupancy]). The building's most recent certificate of occupancy was temporary in nature, was issued on June 9, 1983, and expired ninety days later on September 9, 1983 (see NYSCEF Doc. No. 58 [1983 temporary certificate of occupancy]). The 1983 certificate of occupancy authorized the cellar be used as a boiler room, the first floor north be used for storage, the second floor south be used as a medical office, the second floor north be used as stores, offices and loading berth, and the third floor be used as a school (see id.). Prior to 1983, it appears a permanent certificate of occupancy was issued in 1971, which authorized the cellar be used as a boiler room, the first floor south be used as a supermarket, the first floor north be used for storage, the second floor south be used as a medical office, the second floor north be used as stores, offices, and loading berth, and the third floor be used as a school (see NYSCEF Doc. No. 71 [1934 certificate of occupancy]). The 1971 certificate of occupancy does not indicate on its face that it was superseded, revoked or vacated.
Of all the Department of Buildings violations complained of by petitioner in its 2019 notice to cure, none cite to the lack of a valid certificate of occupancy to use or occupy the subject premises. Moreover, the one certificate of occupancy violation referenced in this matter (see NYSECEF Doc. No. 18, p.5, fnt.4) was dismissed by the Office of Administrative Trials and Hearings after a hearing on November 14, 1991 - little more than a year before respondent-tenant entered into the lease at issue on January 1, 1993. Noticeably, nothing in petitioner's affidavit or other proof establishes that it ever made any effort to obtain another certificate of occupancy since the 1983 temporary one expired ten years before entering the parties' lease (see NYSCEF Doc. No. 58), or that its efforts to obtain one where thwarted by respondent-tenant's actions.
Tuck-It-Away Associates, LP v Tuck-It-Away at 135th Street, Inc., Ind. No. 650227/2020 (Sup Ct, New York Cty) (NYSCEF Doc. No. 34).
New York City Administrative Code 28-118.1 mandates: "No building or open lot shall be used or occupied without a certificate of occupancy issued by the commissioner" (NYC Admin Code 28-118.1). The Code states that it "shall be unlawful to... occupy, use or operate any building, structure, premises,... in conflict with or in violation of any of the provisions of this code" (NYC Admin Code 28-201.1). Section 28-118.4.1 of the Code requires that the "application for a certificate of occupancy shall be made by or on behalf of the owner of the building or open lot; and if made by a person other than the owner, the application shall be accompanied by a signed statement of the applicant stating that the applicant is authorized by the owner to make the application" (NYC Admin Code 28-118.4.1).
If the building existed prior to January 1, 1938, it may be:
legally used or occupied without a certificate of occupancy... and subject to the provisions of section 28-102.4 (continuation of lawful existing use), may continue to be used or occupied without a certificate of occupancy... pursuant to the requirements of section six hundred forty five of the New York city charter, this code and other applicable laws and rules provided there is no change in the existing use or occupancy classification of the building, open lot or portion thereof.(NYC Admin Code 28-118.3.4). Additionally, unless temporary in nature, a "certificate of occupancy has no expiration date" (New York City Department of Buildings, Property or Business Owner, Certificate of Occupancy, https://www.nyc.gov/site/buildings/property-or-business-owner/certificate-of-occupancy.page). However, a certificate of occupancy may be revoked or vacated upon application of the commissioner (see NYC Admin Code 28-118.17). A temporary certificate of occupancy may be issued by the commissioner, "provided that the subject portion or portions of the building may be occupied and maintained in a manner that will not endanger public safety, health, or welfare" (NYC Admin Code 28-118.15). Unlike a permanent certificate of occupancy, "[t]he commissioner shall set a time period during which the temporary certificate of occupancy is valid" (id.).
Here, issues of fact remain regarding whether respondent-tenant breached its lease by not obtaining a current certificate of occupancy for the building. The plain language of the Administrative Code mandates the owner of the premises obtain the certificate of occupancy (see NYC Admin Code 28-118.4.1; Progressive Image Gruppe, Inc. v 162 Charles St. Owners, Inc., 272 A.D.2d 66 [1st Dept 2000]; Jordache Enterprises, Inc. v Gettinger Assocs., 176 A.D.2d 616 [1st Dept 1991]). However, New York City Administrative Code section 28-118.4.1 also permits another to apply for a certificate of occupancy "on behalf of" the owner, so long as "the application [is] accompanied by a signed statement of the applicant stating that the applicant is authorized by the owner to make the application."
Petitioner's affidavit, the lease, or other proof submitted by petitioner does not establish that it gave respondent-tenant the authorization to make such application (see Port Morris Distillery Inc. v Sengdara LLC, 2019 NY Slip Op 32897(U) [Sup Ct, New York Cty, Aug 09, 2019]). Likewise, nothing in respondent-tenant's affidavit or other proof establishes that petitioner did not give it such authorization. Assuming without deciding that respondent-tenant must have obtained a valid certificate of occupancy in order to comply with the terms of the lease, such authorization from the petitioner would be necessary before respondent-tenant could even apply for one.
Contrary to petitioner's argument, this is not a situation like that in Bon LLC v Fook Luk Realty Inc., 128 A.D.3d 503 (1st Dept 2015), where the court held the landlord was not required to obtain a certificate of occupancy permitting the tenant to use the space as a cabaret (a use permitted by the lease) because the facts established that the owner was "unable to create a second means of egress for the upper floors" (id. at 504). Furthermore, petitioner is incorrect in asserting that respondent-tenant conceded in the Supreme Court action that it needed to obtain a valid certificate of occupancy in order to be in compliance with the terms of its lease. In that action, through Matthew Sprayregen, respondent-tenant averred that "[t]he certificate of occupancy, dated June 9, 1983 ([NYSCEF Doc. No. 19]), has never impeded use of the Premises, including when it was owned and operated as a self-storage business by landlord. Nonetheless, Tenant has retained an architect, John Ferrano..., to review the certificate of occupancy for the Premises and advise the Tenant" (NYSCEF Doc. No. 16, ¶33). Additionally, Matthew Sprayregen also stated that its engineer's "report references issues with the Certificate of Occupancy, which Plaintiff is working to resolve for the benefit of the Landlord (NYSCEF Doc. No. 18, p.5, fnt.4). These statements do not amount to confessions of liability by respondent-tenant for lacking a valid certificate of occupancy for the building.
Relatedly, the proof submitted in support of and in opposition to the instant motion does not eliminate the factual question of whether another certificate of occupancy is even required for the subject premises. The building at issue existed prior to January 1, 1938 (see NYSCEF Doc. No. 66 [1934 certificate of occupancy]). As such, pursuant to section 28-118.3.4 of the Administrative Code, a certificate of occupancy may not be required for the subject premises to be used or occupied (see NYC Admin Code 28-118.3.4). Notably, of all the Department of Buildings violations complained of by petitioner in its 2019 notice to cure, none cite to the lack of a valid certificate of occupancy. Additionally, the one certificate of occupancy violation brought to this court's attention was dismissed by the Office of Administrative Trials and Hearings after a hearing in 1991. The facts and circumstances of that hearing are unknown to this court. However, when compared to the 1934 certificate of occupancy, which indicates it was "superseded by C.O. 36597," the 1971 certificate of occupancy has no such marking, nor does it indicate that it was revoked or vacated by the commissioner at any time. A question remains as to whether the 1971 certificate of occupancy is still valid after the 1983 temporary certificate of occupancy expired.
The Active Violations
As to the five active Department of Building violations issued in 1990, 2011, 2011, 2013, and 2013, respectively. The violations consist of (1) a September 16, 2013, warning letter from the New York City Landmarks Preservation Commission ("LPC") regarding alterations made to the storefront and the replacement of doors without a permit; (2) a September 16, 2013, warning letter from the LPC regarding the replacement of an awning at the easternmost West 135th storefront without a permit; (3) a September 16, 2011, summons from the LPC regarding the alterations of an awning at the easternmost West 135th storefront without a permit; (4) a September 16, 2011, summons from the LPC regarding the alterations to windows without a permit; and (5) an April 21, 1990, Department of Buildings violation for construction (see NYSCEF Doc. Nos. 20, 55).
The 1990 violation pre-dates the parties' lease. Therefore, issues of fact remain whether that violation is the responsibility of respondent-tenant. However, all other violations were levied while respondent-tenant occupied the premises.
Again, the parties' lease states the tenant shall use the "Premises for any legal use" (NYSCEF Doc. No. 10, Art 7), defines "Tenant's Use" as "any use permitted by law and not a nuisance" (id., p.3, ¶1.11), and requires tenant, "at its sole cost and expense, [to] promptly observe and comply in all material respects with all Authorities (including zoning laws and building codes)" (id, p.9, ¶9.2). The lease further defines "Authorities" as "all laws, orders, ordinances, regulations or requirements of the United States, state, county or other local governmental or quasi-governmental authorities or any department, office, bureau or agency or any of the forgoing now existing or hereafter created" (id., p.1, ¶1.2).
Petitioner asserts that these active violations cause respondent-tenant to be in violation of section 9.2 of the parties' lease, in that respondent-tenant is not observing and complying in all material respects with the laws, orders, ordinances, regulations and requirements of the LPC/Department of Buildings. Respondent-tenant does not explicitly deny petitioner's assertion, but instead, argues that there is no record of fines to pay or repairs to make, that if done, would clear the violations; and nonetheless, the alleged breaches are outside the six-year statute of limitations for contract claims pursuant to CPLR 213(2). Respondent-undertenant joins respondent-tenant's opposition and argues that the open violations are technical in nature and despite their active status, New York courts typically refuse to terminate tenancies in the absence of extreme and compelling evidence of a material breach of lease, which petitioner fails to establish.
Respondent-tenant's arguments in opposition are unavailing. First, a simple search of the New York City Landmarks Preservation Commission website provides step-by-step instructions regarding what to do if your property is issued a landmark violation (see New York City Landmark Preservation Commission: Violations: Correct a Violation, https://www.nyc.gov/site/lpc/violations/correct-violation.pageNo.:~:text=If%20a%20Warning%20Letter%20has,noncompliance%20with%20an%20LPC%20permit [accessed Jan. 10, 2023]). Upon receipt of a warning letter, you are directed to submit an application to the LPC to address the conditions (see id.). If you do not properly address and/or remediate the condition with a valid LPC permit, a summons may be issued (see id.). Respondent-tenant provides no information whether it undertook such actions and the results, if any.
Second, respondent-tenant fails to establish the alleged breaches are time barred by the statute of limitations. Leases are contracts (see 78th & Park Corp. v Hochfelder, 262 A.D.2d 204 [1st Dept 1999]). A breach of contract claim is subject to a six-year statute of limitations (CPLR 213[2]). The general rule is that claim accrues "at the time of the breach, not on the date of discovery of the breach" (Yarbro v Wells Fargo Bank, N.A., 140 A.D.3d 668 [1st Dept 2016]). Respondent-tenant bears the burden of establishing the breaches are time-barred (see Trustees of Columbia Univ. in City of New York v Gwathmey Siegel & Assocs. Architects, 167 A.D.2d 6 [1st Dept 1991]).
"The continuous wrong doctrine is an exception to the [six-year statute of limitations and] is usually employed where there is a series of continuing wrongs and serves to toll the running of a period of limitations" (Henry v Bank of Am., 147 A.D.3d 599 [1st Dept 2017] [citations omitted]). A respondent's alleged violation of its "contractual obligations to comply with the law... amounts to a continuous or recurring wrong" (1050 Tenants Corp. v Lapidus, 289 A.D.2d 145 [1st Dept 2001]). "In such circumstances, the wrong is not referable exclusively to the day the original wrong was committed; rather, a cause of action accrues anew every day" (id.). Violations of a city's zoning ordinances were found by the Court of Appeals to be "a continuing violation of law so long as the unlawful operation continues" (Marcus v Village of Mamaroneck, 283 NY 325 [1940]; see also Stalis v Sugar Creek Stores, Inc., 295 A.D.2d 939 [4th Dept 2002] [violation of provision of parties' lease that required "'code compliance' with respect to the [property's] septic system" found to be a continuing wrong]).
Section 9.2 of the parties' lease imposes an ongoing contractual duty on respondent-tenant to "promptly observe and comply in all material respects with all Authorities (including zoning laws and building codes)" (NYSCEF Doc. No. 10, ¶9.2). Section 9.1 requires respondent-tenant to keep the premises in good order and repair and makes tenant "responsible for all capital repairs or replacements and all normal maintenance and repair of the Building" (id., ¶9.1). Because respondent-tenant has not established their compliance with the aforementioned lease provisions, it fails to meet its burden of establishing that the breach of lease claim is time-barred by the statute of limitations.
However, respondent-undertenant's argument establishes issues of fact that require a trial to resolve. Since 1900, the Court of Appeals has stressed the principle that in New York, the law abhors a forfeiture (see Mooney v Byrne, 163 NY 86 [1900]; Zaid Theatre Corp. v Sona Realty Co., 18 A.D.3d 352 [1st Dept 2005]). Where a tenant substantially complies in performing the necessary work to remove all the violations levied against the property, the court may dismiss petitioner's petition despite the technical breaches (see Ogden v Hamer, 268 AD 751 [1st Dept 1944]). Similarly, here, "the covenants were substantially performed and no injury resulted to the landlords for the failure to comply strictly, the tenant is not to be held for their breach" (id.).
The lease at issue commenced in 1993, and was set to expire 48 years later in 2040. For approximately 27 years, respondent-tenant timely paid rent and additional rent to petitioner (see M. Sprayregen Aff, ¶15). During that time, respondent-tenant expended time and money improving the leasehold premises (see id., ¶14). Despite accruing approximately 44 Department of Buildings violations and 23 Office of Administrative Trials and Hearings violations from 1993 to 2019 (see NYSCEF Doc. No. 55), respondent-tenant avers that to its knowledge, petitioner never once sent it a notice to cure until mailing the predicate notice for the instant proceeding on or about December 6, 2019 (see M. Sprayregen Aff, ¶23). Once put on notice, respondent-tenant cleared all but five Department of Buildings violations - four of which are technical violations from the LPC for failing to obtain a permit and the other pre-dates the commencement of the parties' lease (see NYSCEF Doc. No. 55). Given respondent-tenant's tenure on the premises, and its proven willingness to clear the Department of Buildings and Office of Administrative Trials and Hearings violations, the court declines to grant petitioner summary judgment at this juncture, permitting respondent-tenant more time to work to resolve the five outstanding Department of Buildings violations before trial.
Respondents' Affirmative Defenses
Petitioner moves to strike all of respondents' affirmative defenses. On a motion to dismiss affirmative defenses pursuant to CPLR 3211, the petitioner has the burden to demonstrate the defenses are without merit as a matter of law (see 534 E. 11th St. Hous. Dev. Fund Corp. v Hendrick, 90 A.D.3d 541, 541 [1st Dept 2011]). "In deciding a motion to dismiss a defense, the [respondent] is entitled to the benefit of every reasonable intendment of the pleading, which is to be liberally construed" (id.). Thus, a "defense should not be stricken where there are questions of fact requiring trial" (id.). However, where affirmative defenses merely plead conclusions of law without any supporting facts, the affirmative defenses should be dismissed pursuant to CPLR 3211(b) (see 170 W. Vil. Assoc. v G & E Realty, Inc., 56 A.D.3d 372, 372-373 [1st Dept 2008]).
Respondents' first affirmative defense alleges petitioner fails to state a claim upon which relief can be granted. For the reasons set forth in this decision, this affirmative defense stands and will be resolved at trial.
Respondents' second affirmative defense alleges petitioner's petition is barred by the doctrine of waiver and estoppel. "A party, or one in privity with a party, is collaterally estopped from relitigating an issue identical to one that was necessarily decided against it in a prior action provided there was a full and fair opportunity to contest the prior determination" (P.W.B. Enterprises, Inc. v Moklam Enterprises, Inc., 221 A.D.2d 184 [1st Dept 1995]). For the simple fact that no other court has decided the issues presented in the instant matter, respondents have no claim of estoppel, and thus, this portion of the defense is struck. However, the portion of the defense alleging waiver stands in light of the facts contained in both parties' affidavits and other proof submitted in support of and in opposition to the instant motions. This issue is preserved for trial despite the no-wavier clause found in the parties' 48 year lease (see Kenyon & Kenyon v Logany, LLC, 33 A.D.3d 538 [1st Dept 2006] ["the existence of a nonwaiver clause does not in itself preclude waiver of a contract clause"]).
Respondents' third affirmative defense alleges petitioner's claims are barred by the doctrine of unclean hands. "The doctrine of unclean hands is only available where [petitioner] is guilty of immoral or unconscionable conduct directly related to the subject matter and the party seeking to invoke the doctrine is injured by such conduct" (Frymer v Bell, 99 A.D.2d 91 [1st Dept 1984]). Given the facts stated in respondent-tenant's affidavits and the alleged underlying motive of petitioner in bringing this suit, petitioner failed to demonstrate that this defense is without merit as a matter of law. Therefore, the defense stands.
Respondents' fourth affirmative defense alleges that petitioner failed to acknowledge that the alleged defaults were cured. For the reasons set forth below in deciding respondent-tenant's motion for summary judgment, this affirmative defense is dismissed. The only remaining alleged defaults to be resolved at trial are those argued for in support of petitioner's motion for summary judgment - the lack of a certificate of occupancy and the active Department of Buildings violations.
Respondents' fifth affirmative defense alleges that petitioner's claims are time-barred by the statute of limitations. This affirmative defense is dismissed as discussed above.
Respondent-Tenant's Counterclaim
Petitioner moves to dismiss respondent-tenant's counterclaim, which seeks declaratory judgment from this court stating that respondent-tenant is not in default of the parties' lease. "Declaratory relief is not available in the Civil Court" (BLF Realty Holding Corp. v Kasher, 183 Misc.2d 953 [App Term, 1st Dept 2000]). As such, respondent-tenant's counterclaim is dismissed.
However, the court's dismissal of the counterclaim is not to be interpreted as a finding in favor of petitioner that respondent-tenant is in default of the lease. That issue will be determined at trial.
Petitioner's Request for Attorney's Fees
"The American Rule provides that attorney's fees are incidents of litigation and a prevailing party may not collect them from the loser unless an award is authorized by agreement between the parties, statute or court rule" (Baker v Health Mgmt. Sys., Inc., 98 N.Y.2d 80 [2002] [citations omitted]). Here, the parties' lease states that the landlord shall have:
The right to begin a suit for the collection of rent, as it accrues pursuant to the terms of this Lease, and damages (including, without limitation, reasonable attorneys' fees and the cost of renovating the Premises) without entering into possession of said Premises or cancelling this Lease.(NYSCEF Doc. No. 10, ¶13.2[a][ii]). Here, a prevailing party has yet to be declared. Therefore, petitioner's request for attorney's fees is denied as premature and the issue is preserved for trial.
Notably, petitioner did not commence this action to collect past due rent, as it accrued pursuant to the terms of the parties' lease. Petitioner commenced this action as a holdover proceeding after it terminated the lease as a result of respondent-tenant's alleged failure to cure certain breaches, none of which allege the failure to pay rent. Petitioner argues that if it is declared the prevailing party, it is entitled to attorney's fees because it is seeking a money judgment for use and occupancy and cites paragraph 13.2(a)(ii) of the lease in support. That paragraph, as fully set forth above, permits for the recovery of attorney's fees when the landlord brings suit for the collection of rent. Use and occupancy is not rent (see Timur on 5th Ave., Inc. v Rec. Explosion, Inc., 290 A.D.2d 221 [1st Dept 2002]; Eighteen Assocs., LLC v Nanjim Leasing Corp., 257 A.D.2d 559 [2d Dept 1999]). Furthermore, the parties' lease defines both "additional rent" and "basic rent," and neither definition includes payments for use and occupancy upon the termination of the lease (see NYSCEF Doc. No. 10, ¶¶1.1, 1.3).
Respondents' Motion (Mot. Seq. 002)
Respondent-Tenant's Motion for Summary Judgment
Respondent-Tenant moves for summary judgment dismissing petitioner's petition. Petitioner concedes all defaults listed in its December 6, 2019, notice to cure, except the lack of a certificate of occupancy and the five active Department of Buildings violations, were cured prior to bringing this action (see G. Sprayregen Aff, ¶8). Furthermore, respondent-tenant, through the affidavit of Matthew Sprayregen and other admissible evidence, tendered sufficient evidence eliminating all material issues of fact regarding the following alleged violations in the notice to cure: removing an exterior wooden gravity tank, failure to maintain the elevators, failure to maintain the heating system, failure to maintain the sprinkler system, and failure to maintain proper insurance. Petitioner did not address any of these arguments in its opposition and failed to produce any proof sufficient to establish the existence of unresolved material issues of fact. As such, respondent-tenant's motion for summary judgment is granted to the extent that all claims contained in the December 6, 2019 notice to cure, except those claims relating to the lack of a certificate of occupancy and the five open Department of Buildings violations, are dismissed.
Accordingly, it is
ORDERED that the branch of petitioner's motion (Mot. Seq. 001) seeking summary judgment is denied; it is further
ORDERED that the branch of petitioner's motion (Mot. Seq. 001) seeking dismissal of respondents' affirmative defenses is granted to the extent that respondents' fourth and five affirmative defenses are dismissed, and the portion of respondents' second affirmative defense arguing estoppel is dismissed; and is otherwise denied; it is further
ORDERED that the branch of petitioner's motion (Mot. Seq. 001) seeking dismissal of respondent-tenant's counterclaim is granted and respondent-tenant's counterclaim is dismissed; it is further
ORDERED that the branch of petitioner's motion (Mot. Seq. 001) seeking an award for attorney's fees is denied as premature and the issue is preserved for trial; it is further
ORDERED that respondent's cross motion (Mot. Seq. 002) for summary judgment is granted to the extent that all claims contained petitioner's December 6, 2019 notice to cure, except those claims relating to the lack of a certificate of occupancy and the five open Department of Buildings violations, are dismissed; and is otherwise denied; and it is further
The parties shall appear for conference at the Civil Court, 111 Centre Street, Part 52, New York, New York 10013, on January 31, 2023, at 11:00 am. The clerk of the court is directed to place the matter on the calendar before any judge of this court.
This constitutes the decision and order of this court.