1250 Broadway, 27th Floor New York, NY 10001

COURT CUTS BENNIGAN'S A BREAK

Even when things look pretty bleak for a tenant, and an eviction is imminent, a court retains the power to vacate the warrant and can allow the tenant to remain in possession of commercial or residential space for "good cause shown." [RPAPL section 749(3)]

In Mack-Cali So. W. Realty Assoc., LLC v. Benni's I, LLC , the tenant, Benni's I, LLC (doing business as "Bennigan's"), conceded that it owed its landlord $126,224.59 in rent for the period February 14, 2003 through July 6, 2005, and signed a stipulation of settlement outlining the payment terms. Months later, as a result of Benni's failure to comply with the agreement's terms, the City Court of Yonkers (Westchester County) awarded the landlord a money judgment for all unpaid rent in the amount of $183,719.77, granted a final judgment of possession and issued a warrant of eviction as against the tenant. Benni's later moved by Order to Show Cause to stay the eviction and vacate the court's determination alleging that the judgment incorrectly included "disputed taxes." Upon signing of the stay request, the court directed the tenant to deposit $60,000 into court. After a subsequently scheduled hearing, the court denied the tenant's motion, ordered the release of the $60,000 to the landlord, and stayed the eviction for an additional 14 days.

Within that two week period, tenant remitted the balance of the judgment amount ($123,969.77) and again asked the court to vacate the final judgment of possession and warrant of eviction based upon the tenant's full and complete payment of all sums which had been found to be due.  Although the landlord objected to the request, the court granted relief in the tenant's favor, finding "good cause" to reinstate the tenancy.

On appeal, the Appellate Term, 9th and 10th Judicial Districts, concurred with the District Court, noting as follows:

In our view, the court could properly determine that good cause existed to vacate the warrant (RPAPL 749 (3)). "The law abhors a forfeiture of a lease ...." Here, the court found that tenant had paid the judgment in full. In addition, tenant has allegedly paid more than $2.5 million in rent over the four years of its tenancy, employs more than thirty people, who would be harmed by execution of the warrant, and stands to lose a long-term lease and its investment in the premises. Although full payment of a judgment is not grounds to vacate the judgment, in these circumstances it was not an abuse of discretion for the court to vacate the nonpayment warrant in order to prevent a forfeiture of the leasehold ....

So, for now, it looks like we can still all get together at Bennigan's.

For a copy of the Appellate Term's decision, please use this link: Mack-Cali So. W. Realty Assoc., LLC v. Benni's I, LLC

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