1250 Broadway, 27th Floor New York, NY 10001

$30,000 FOR BAGELS?

North Main St. Bagels (NMSB), located out in Easthampton, New York, closed its doors back in October 1997, but didn't surrender its space since it was in the midst of negotiating a sale of the business.

Even though it was no longer actively operating, NMSB left its equipment in its space, maintained electrical service, and continued to pay its rent. Landlords Robert and Shirley Duncan -- dissatisfied with the status quo -- entered the premises, "illegally" evicted the tenant, and relet the space to another.

Although the landlords had been found guilty of a trespass and wrongful eviction, the Suffolk County Supreme Court awarded the tenant nominal damages — a single, solitary dollar — for the inconvenience and damage suffered.

On appeal, the Appellate Division, Second Department, disagreed with the outcome and awarded the tenant $30,000, together with prejudgment interest from the date of the wrongful eviction.

The appellate court explained that in this kind of case, "[t]he measure of compensatory damages for wrongful eviction is the value of the unexpired term of the lease over and above the rent the lessee must pay under its terms together with any actual damages flowing directly from the wrongful eviction including lost profits and a loss of personal property." Since the "replacement lease" was at the same rent which NMSB had paid to its landlords, no compensatory damages were owed for the value of the unexpired term. However, the court found that the tenant was entitled to compensation for the loss of its personalty.

NMSB introduced testimony that its equipment was valued at approximately $30,000, after depreciation. Since that testimony went unrebutted at trial, the appellate court concluded that $30,000 more appropriately compensated for the loss.

.

"That's some bite!"

For a copy of the Appellate Division's decision, please use the following link: North Main St. Bagel Corp. v Duncan II

For a copy of the Appellate Division's earlier decision in this case, please use the following link: North Main St. Bagel Corp. v Duncan I

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