Opinion
No. LT–90181/16.
02-10-2017
YORKE & SONS AUTO INC., Petitioner, v. SAMUEL IHERJIRIKA, Respondent.
Maria C. Corrao, Esq., Hawthorne, for Petitioner. Madu, Edozie & Madu, PC, by Uche Emelumadu, Esq., Bronx, for Respondent.
Maria C. Corrao, Esq., Hawthorne, for Petitioner.
Madu, Edozie & Madu, PC, by Uche Emelumadu, Esq., Bronx, for Respondent.
SABRINA B. KRAUS, J.
Recitation, as required by CPLR 2219(a), of the papers considered in the review of this motion of Respondent to dismiss:
| Papers/ | Numbered |
| Notice of Motion and Affidavits Annexed | 1–2 |
| Notice of Cross–Motion and Affirmation Annexed | 6–8 |
| Reply Affirmation | 12 |
| Exhibits | 3–5, 9–11 |
| Other: File L & T Index Number | 900106/17 |
BACKGROUND
This summary holdover proceeding was commenced by YORKE & SONS AUTO, INC. (Petitioner) against SAMUEL IHERJIRIKA (Respondent) seeking to recover possession of the Parking Lot located at 1000 Brook Avenue, Bronx, N.Y. 10451 (Subject Premises), based on the allegation that Respondent's lease for the Subject Premises has expired, and Respondent is no longer entitled to possession.
PROCEDURAL HISTORY
The Notice of Petition and Petition herein were issued on December 2, 2016, and the proceeding was initially returnable on December 15, 2016. On that date, Respondent appeared by counsel and the proceeding was adjourned to January 12, 2017.
On January 12, 2017, Respondent served and filed an answer and moved to dismiss the Petition based on CPLR § 3211. While the motion asserts various grounds for dismissal under CPLR 3211, they all relate to the fact that Petitioner as a corporation was dissolved by proclamation for failure to pay taxes in 2010, and therefore lacks capacity to maintain this proceeding.
On February 8, 2017, Respondent cross-moved for leave to substitute Regina Yorke, as Petitioner herein, and for leave to amend the petition to include "unpaid rent" for December 2016 and January 2017.
On February 8, 2016, the court heard oral argument and reserved decision. The motion and cross-motion are consolidated herein and determined as set forth below.
ALLEGED FACTS
Petitioner has been the tenant of record for the premises located at 1000 Brook Avenue, Bronx, New York since 2002. Petitioner asserts a written lease agreement for that premises, for a term through and including 2020, with Karen Realty Corp., as the lessor and owner. No copy of said lease is annexed to the motion papers. The premises leased by Petitioner from Karen Realty Corp, includes a parking lot, which is the Subject Premises in this proceeding.
On or about September 1, 2015, Petitioner and Respondent entered into a one page written agreement which provides:
TO WHOM IT MAY CONCERN:
Mr. Sammuel Ihejirka, rent payment is $3,000.00 monthly. Payment should be made in the beginning of each month, on the 1st.
One month security and one month rent MUST be paid on the 1st of September, 2015.
The Premises is for STORAGE ONLY
Tenant is responsible for any violation within their work area. Therefore worker will be responsible for violation payment.
The contract will expire on the 31st of August 2016.
Once the contract expires, if the worker has not found a place the worker will receive a 3 month extension with the same amount of the rent ($3,000.00) monthly.
Tenant is responsible for their OWN Work Compensation, Insurance Liability and Taxes.
(See Exhibit 4 to Cross Motion).
The document appears to be executed by Respondent and Regina Yorke as President of Petitioner.
Petitioner asserts that Respondent paid $3000 per month from September 2015 to June 2016, and since that date has paid nothing, but continues to occupy the Subject Premises and run his business from there.
Petitioner asserts that there is a pending summary nonpayment proceeding against her which Petitioner intends to resolve.
The court takes judicial notice that a summary nonpayment proceeding is pending under Index Number L & T 900106/17, in Part 52. In that proceeding the respondent is Regina Goddie–Yorke d/b/a Yorke & Sons Auto Inc. Respondent has appeared by counsel, but no answer has been served and no initial court date has yet been set.
Petitioner acknowledges that it was dissolved in 2010, but states that the President of the Corporation did not become aware of said dissolution until some later date. Petitioner asserts that in February 2016, New York State accepted an offer to compromise and entered into an agreement with Petitioner for the payment of the back taxes. Petitioner asserts that all payments pursuant to said agreement have been made. Petitioner annexes documents related to said agreement and payment.
Petitioner asks that the court deny the motion to dismiss, or in the alternative grant leave for Regina Yorke to be substituted herein as Petitioner.
DISCUSSION
Under Tax Law § 203(a)(7), the New York Secretary of State may dissolve a corporation that fails to pay taxes. In order to be restored to active corporate status, the corporation must pay all back taxes along with interest and penalties (id. ).
Once a corporation has been dissolved by proclamation for failure to pay taxes, absent subsequent reinstatement, the corporation is legally dead, and is no longer permitted to sue or be sued, except as specifically permitted by statute (De George v. Yusko, 169 A.D.2d 865 [3d Dept 1991] ; Brady v. State Tax Commn. of State of NY, 176 Misc. 1053 [1941] ; Moran Enters., Inc. v. Hurst, 66 AD3d 972 [2d Dept 2009] ; Brandes Meat Corp. v. Cromer, 146 A.D.2d 666 [2d Dept 1989] ).
In order to be reinstated, a corporation must file a certificate of payment of taxes, referred to in the statute as a certificate of consent (see e.g. Tax Law § 203–a [7 ]; Mem of N.Y. State Dept of Taxation and Finance, TSB–M–86[5] C, Sept. 15, 1986). This certificate annuls the dissolution and is obtainable, on request, after payment of delinquent taxes and required fees. This certificate would be prima facie evidence of reinstatement, but has not been provided by Petitioner. Nor does Petitioner allege that it has been reinstated.
However, if in fact reinstatement is imminent, there is no need to dismiss the underlying proceeding. Upon reinstatement, the statute provides for retroactive nullification of a corporate dissolution (Tax Law § 203–(a)(7), (8) ; Flushing Plaza Associates v. Albert 31 AD3d 494 ). Corporate rights and powers are reinstated nunc pro tunc as if the dissolution had never taken place (Id.). The court is not required to dismiss a lawsuit commenced by a dissolved corporation, if the corporation is subsequently reinstated (St. James Construction Corp. v. Long 253 A.D.2d 754 ).
Based on the foregoing, Respondent's motion to dismiss is granted only to the extent of staying this proceeding for a period of 120 days, to afford Petitioner an opportunity to become formally reinstated and provide proof of same. If Petitioner fails to move for restoration of this proceeding, with proof of reinstatement, within said period, then Respondent's motion to dismiss shall be deemed granted and the proceeding deemed dismissed.
Petitioner's cross motion to substitute Regina Yorke as Petitioner herein is denied. While Ms. Yorke is the President and sole shareholder of Petitioner, she has not provided evidence of any privity of contract with Respondent. Ms. Yorke is not the lessor of the Subject Premises, nor the alleged lessee with the building owner. Ms. Yorke therefor would lack standing in her individual capacity to maintain this proceeding against Respondent (RPAPL § 721 ). The cross-motion to amend the petition to include a claim for additional rents is also denied, Petitioner may not seek any relief in this court or proceeding until Petitioner has been reinstated.
This constitutes the decision and order of this court.