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 In New York City Economic Dev. Corp. v. Harborside Mini Storage, Inc., New York City sought possession of commercial space occupied by Harborside Mini Storage.
In 1989, the City of New York leased out the Bush Terminal Industrial Complex to Harborside Management's predecessor, for a 10-year term ending February of 1999.
In June of 1999, four months after its lease expired, Management entered into a sublease with Mini Storage's predecessor, U.S. Movers, which rented out a building within the Complex. Although Management negotiated a renewal with the City, and sued to declare that renewal effective, Management ultimately surrendered its interest to the City, which then leased the Complex to the New York City Economic Development Corporation (NYCEDC). Mini Storage thereafter remained in possession and paid rent directly to NYCEDC.
NYCEDC later filed an eviction case against Mini Storage alleging Management was only a "month-to-month tenant" when the sublease was executed. Mini Storage argued that its sublease had been "validated" by NYCEDC's acceptance of Mini Storage's rent payments. When the Kings County Civil Court found against Mini Storage, an appeal to the Appellate Term, Second Department, followed.
Since the City never executed a renewal lease, the AT2 concluded Management was nothing more than a month-to-month tenant and, as a subtenant, Mini Storage had no greater rights than those held by Management.
NYCEDC didn't "validate" the sublease by the mere acceptance of sublease payments, particularly in view of the parties' procedural history and interaction -- such as a Civil Court nonpayment stipulation which characterized Mini as a "monthly tenant," notices sent to Mini informing Mini that payments were accepted as "use and occupancy" rather than "rent," together with the fact NYCEDC neither sought nor collected a rent increase, as provided by the "sublease."
What a Mini mess!
 To download a copy of the Appellate Term's decision, please use this link: New York City Economic Dev. Corp. v. Harborside Mini Storage, Inc.
 In Holdridge/BK St., Inc. v. Lamson, Holdridge filed a nonpayment case against Richard Lamson, a commercial tenant.
When the New York County Civil Court granted relief in the landlord's favor, and awarded a final judgment of possession and a money judgment in the amount of $28,853, the tenant appealed to the Appellate Term, First Department.
Since the tenant was unable to offer an acceptable excuse for his failure to pay the rent, and the lease provided the space was to be used for commercial purposes only, the AT1 noted "to the extent that any portion thereof was unlawfully used for living purposes, it afforded no basis for relief to [the tenants] in this proceeding."
No napping at your desks, folks!
 To download a copy of the Appellate Term's decision, please use this link: Holdridge/BK St., Inc. v. Lamson
 In Singh v. Ramirez, Mohinder Singh filed a summary holdover proceeding against Anllir Ramirez.
Ramirez, a rent-stabilized tenant, was served with a notice to cure which alleged that he was in violation of his lease for subletting the unit without the owner's consent, and allowing the occupants to use the apartment for commercial purposes, namely "psychic and palm readings."
The Queens County Civil Court permitted Singh to withdraw that portion of the notice which referred to the subletting, and allowed him to proceed on his commercial-use claim. After the Civil Court awarded the landlord $2800 and possession of the space, Ramirez appealed to the Appellate Term, Second Department.
The AT2 reversed and dismissed the case, finding it "elementary" the predicate was unamendable and Singh was "bound by the notice served." The appellate court was of the opinion it was unfair to allow the landlord to rely on a nonresidential use theory, as "illegal subletting" was the original focus or thrust of the case.
We're betting Ramirez predicted that outcome.
 To download a copy of the Appellate Term's decision, please use this link: Singh v. Ramirez
 In 936 Second Ave. L.P. v. Second Corporate Dev. Co., Inc., Second Corporate Development Co. (Second) leased three adjoining buildings -- with 22 rent-regulated apartments and four retail stores -- to 936 Second Avenue by way of a 20-year net lease. The parties' agreement provided that if 936 exercised a renewal option, "the annual rent would be seven percent of the value of the [leased] premises as of the date of commencement of each successive 10-year period."
The document provided that if the parties couldn't agree on the property's value, they could each seek their own appraisal.
When a dispute arose, Second's appraiser valued the property at $7.1 million, 936's appraiser came back with $3.43 million -- with the latter expert having "considered the effect of the net lease on the value of the premises."
936 later filed suit asking a court to declare that the net lease and all its terms had to be considered when calculating the property's value. When the New York County Supreme Court disagreed with 936's position, the company appealed to the Appellate Division, First Department, which affirmed.
On appeal to our state's highest court, the New York State Court of Appeals determined "valuations of land must take into consideration all encumbrances, including restrictions as to its use, unless there is a clear provision to the contrary." Since it impeded the property's "highest and best use," the net lease couldn't be disregarded. ["If the parties to a lease desire to exclude that encumbrance in valuing the property, they need only include language to that effect in their agreement. Indeed, courts have routinely enforced such provisions."]
We'll second that!
 To download a copy of the Court of Appeals' decision, please use this link: 936 Second Ave. L.P. v. Second Corporate Dev. Co., Inc.
 In Smith v. Costco Wholesale Corp., Marlene Smith was injured when she slipped and fell in a Costco bathroom.
While landowners must keep their property in a "reasonably safe condition," Smith was required to show that Costco had "active or constructive notice" of the danger and an adequate opportunity to address the situation.
After the Bronx County Supreme Court denied Costco's request to dismiss the case, the Appellate Division, First Department, sided with the company since Smith was unable to show the existence of these governing elements. (The company demonstrated that it cleaned and monitored the bathroom "regularly" and that no problems had been detected before or after the incident.)
Smith's reliance on "mere speculation," and her inability to identify what caused her fall, cost her a victory.
No bargains there.
 For a copy of the Appellate Division's decision, please use this link: Smith v. Costco Wholesale Corp.
 In Rios v. Carrillo, Maria Rios leased a residential apartment to Alfredo Carrillo for a period of two years. A year into that lease, Carrillo left the apartment, stopped paying rent, and claimed he did so with Rios' consent. Rios didn't agree and filed suit in 2003 seeking the monies due.
Since Rios hadn't demonstrated that she attempted to "mitigate" or reduce her damages by re-renting the space, advertising its availability and/or listing the apartment with real-estate brokers, the Queens County Supreme Court decided Rios wasn't entitled to the cash and dismissed her case.
On appeal, the Appellate Division, Second Department, reversed.
While Carrillo argued that a landlord should have a duty to take action, the AD2 found that "well-settled law in [New York] imposes no duty on a residential landlord to mitigate damages."
Relying on the Court of Appeals' decision in Holy Props. v. Cole Prods., 87 N.Y.2d 130, 637 N.Y.S.2d 964 (1995), the AD2 noted that unlike other contracts, "'leases have been historically recognized as a present transfer of an estate in real property,'" a sort of "hybrid" between a contract and a conveyance in land. Therefore, since landlords aren't required to re-rent or otherwise assist the tenant find a replacement during the lease term, Carrillo remained liable for all monies that accrued in his absence.
Only the Court of Appeals can mitigate that.
For a copy of the Appellate Division's decision, please use this link: Rios v. Carrillo
 In Nash v. Port Authority of N.Y. and N.J., the Port Authority got slammed for failing to take measures to improve security at the World Trade Center -- particularly its underground public parking facility -- despite warnings that an attack was likely to occur.
On February 26, 1993, terrorists drove into the WTC parking facility, armed with 1,500 pounds of dynamite set to explode within ten minutes. While the terrorists left unscathed, 6 people lost their lives and hundreds of others were injured.
For almost a decade prior, the Port Authority had received analysis foreshadowing the event. In 1984, Scotland Yard had been "appalled to hear" that the WTC still had "transient public parking directly underneath the Towers." In 1985, the Port Authority's Office of Special Planning issued a report concluding that it was not "merely possible, but 'probable,' there would be an attempt to bomb the World Trade Center." The report stressed the urgency of improving security by "screening entering vehicles for explosives." In 1986, an outside consulting firm, Science Applications International Corporation, offered an "Attack Scenario," which detailed the consequences of a WTC terrorist attack
Inexplicably, the Port Authority ignored all those warnings. When it was later sued, the entity argued it was under "no legally enforceable obligation to take any of the recommended precautions" and "the likelihood of the bombing ... was not shown."
When the New York County Supreme Court denied the Port Authority's motion to dismiss the case, an appeal to the Appellate Division, First Department, followed. The AD1 concluded the entity "failed in its capacity as a commercial landlord to meet its basic proprietary obligation to its commercial tenants and invitees to reasonably secure its premises, specifically its public parking garage, against foreseeable criminal intrusion."
While the attack was unprecedented, the Port Authority "had ample notice that a car bombing such as the one that occurred was not merely possible, but could very well occur if obvious, specifically identified vulnerabilities were not addressed." Particularly because the risks were so "monstrous," it was unreasonable for the Port Authority to refuse to "minimize the risk of harm from criminality upon its premises."
According to the AD1, implementation of those "target-hardening recommendations" would have triggered an "inconsequential" revenue loss when compared to the $100 million in income the Port Authority then received from its WTC tenants.
We would like to know the names of the state officials who placed New Yorkers' lives in needless jeopardy, all in the interest of capital preservation and revenue generation.
Lady Liberty's light should shine bright on them, as they stand before us in shame.
To download a copy of the Appellate Division's decision, please use this link: Nash v. Port Authority of N.Y. and N.J
 In Tower Ins. Co. of N.Y. v. Lin Hsin Long Co., Tower wanted a court to rule that it wasn't obligated to defend or indemnify Lin Hsin Long Co. -- known as Hunan Ritz Restaurant -- in connection with a personal injury suit filed against the establishment.
When it received notice some nine months after Charlotte Theodoratos fell in defendant's place of business, Tower filed its own lawsuit contending that, since neither Lin Hsin nor Theodoratos timely notified the insurer of a possible claim, Tower wasn't responsible for the payment of any sums found due to Theodoratos.
After the New York County Supreme Court denied Tower's motion for relief in its favor, the insurer appealed to the Appellate Division, First Department, which agreed Tower hadn't been given notice of the accident within a "reasonable period of time."
While Lin Hsin argued that it didn't contact Tower because it didn't believe there would be a claim, the AD1 was of the opinion the restaurant wasn't in a position to make that kind of assessment. (The AD1 also found Theodoratos' counsel failed to exercise "due dilgence" when he merely urged the restaurant to notify its carrier.)
A lone dissenter -- Justice Andrias -- didn't believe Theodoratos or her attorney did anything wrong, and that the governing standard should have been less stringently applied to an injured party (rather that the insured).
If the Court of Appeals doesn't intervene, this Tower will be insurmountable.
To download a copy of the Appellate Division's decision, please use this link: Tower Ins. Co. of N.Y. v. Lin Hsin Long Co.
 In Sanatass v. Consolidated Investing Co., Inc., Christopher Sanatass was injured while installing an air conditioning unit in a building owned by Consolidated Investing.
C2 Media (C2) -- a tenant in Consolidated's building -- agreed not to make any changes to the premises without the owner's written consent. Yet, C2 secretly hired Sanatass's employer to install an air-conditioning unit and, because of faulty lifts, Sanatass was "nearly crushed."
Sanatass sued Consolidated under a New York State law which imposes "strict liability" on building owners when laborers employed to perform services are injured. Consolidated argued that since its tenant didn't have permission to make these repairs, C2 was solely responsible for Sanatass's damages. The New York County Supreme Court agreed with that position, as did the Appellate Division, First Department.
On appeal to our state's highest court, the New York State Court of Appeals looked to the Labor Law's legislative history and found the statute clearly intended to hold building owners responsible for most on-site accidents which result in a laborer's injuries. As a result, Consolidated was unable to "escape strict liability" even though it had no "notice or control over the work ordered by its tenant."
In a dissent, Judge Smith rejected such a "literal, mechanical" application of the law and was of the opinion the majority was inappropriately treating the building owner as an "insurer" and wrongfully holding it responsible for the tenant's misconduct.
The law's "strict liability" standard is quite frigid, wouldn't you agree?
To download a copy of the Court of Appeals' decision, please use this link: Sanatass v. Consolidated Investing Co., Inc.
 In Swiderska v. New York University, Eugenia Swiderska sued New York University pursuant to Labor Law section 240(1) for injuries she sustained while cleaning some large dorm windows.
Before undertaking the task, Eugenia supposedly asked for a ladder but was told to use the existing furniture. While standing on a bed, Eugenia fell and suffered "multiple fractures and other injuries."
When the New York County Supreme Court dismissed her case -- finding Eugenia was engaged in "routine maintenance" and thus not covered by the law -- she appealed to the Appellate Division, First Department, which affirmed.
When the case reached our state's highest court, the New York State Court of Appeals concluded that Eugenia was entitled to relief in her favor, particularly since she had been subjected to an "elevation-related risk" when directed to climb upon furniture to perform her job and wrongfully denied "a ladder, scaffold or other safety device."
Looks like Eugenia will be the one cleaning up here!
To download a copy of the Court of Appeals' decision, please use this link: Swiderska v. New York University
 In Greenstein v. R & R of G.C., Inc, Pamela Greenstein was injured when she slipped and fell in a Wendy’s restaurant.
Greenstein alleges that she slipped and fell on a greasy spot near the joint's condiment section. When the Nassau County Supreme Court granted Wendy's request to dismiss the case, Greenstein appealed to the Appellate Division, Second Department, which reversed and reinstated the case. The AD2 was of the opinion that Wendy’s failed to establish it neither created nor had actual or constructive notice of the condition that caused the fall. Apparently, the restaurant manager’s testimony was inadequate because he hadn’t been present on the day of the incident and lacked personal knowledge as to what had transpired. Wendy’s evidence didn’t exclude the possibility that the greasy spot (where Greenstein allegedly fell) had been caused by an employee’s use of the wrong mop shortly before the accident. Does this make Wendy’s a greasy spoon? To download a copy of the Appellate Division’s decision, please use this link: Greenstein v. R & R of G.C., Inc
 In Connolly v. Peninsula Group, The Peninsula Spa was sued after Glenn Connolly was injured while receiving personal-training instruction.
“Cardoso,” the personal trainer, was aware of Connolly’s limited shoulder mobility, and, despite the latter’s complaints, Cardoso supposedly insisted that his client perform a modified version of a “lateral pulldown.” During the course of that exercise, Connolly felt a sharp snap in his shoulder and later learned that a piece of steel, inserted into his shoulder from a prior surgery, had dislodged. Since Connolly had signed a form releasing the spa from any liability in the event of injury, the New York County Supreme Court granted Peninsula’s motion to dismiss the case. On appeal, the Appellate Division, First Department, reversed. The AD1 noted that, “Although the language of the release was clear and unambiguous, it [was] void as against public policy inasmuch as the training sessions [Connolly] received were ancillary to the recreational activities offered by the spa.” Bet someone else felt a sharp snap after that. To download a copy of the Appellate Division’s decision, please use this link: Connolly v. Peninsula Group
 In Xiotis Rest. Corp. v. LSS Leasing Ltd. Liab. Co., Xiotis sought to obtain a “Yellowstone” injunction against LSS Leasing.
A “Yellowstone” allows a tenant to stop the running of the time-period delineated in a landlord’s default notice while the merits of the parties' dispute are being litigated. (The remedy is intended to allow a tenant to address the default(s) while avoiding a termination of the tenancy and forfeiture of a lease.) To secure this special injunction, a tenant must demonstrate that: “1) it holds a commercial lease; 2) it has received from the landlord a notice of default; 3) its application for a temporary restraining order was made prior to expiration of the cure period and termination of the lease; and 4) it has the desire and ability to cure the alleged default by any means short of vacating the premises.” When the Queens County Supreme Court granted Xiotis’ request, LSS appealed to the Appellate Division, Second Department, arguing that the tenant had not satisfied the governing elements. The AD2 disagreed and concluded that Xiotis had timely received a temporary restraining order and sufficiently demonstrated it had the ability and desire to address the alleged defaults (thus entitling it to the awarded equitable relief). There’s no X’ing out Xiotis, just yet! To download a copy of the Appellate Division’s decision, please use this link: Xiotis Rest. Corp. v. LSS Leasing Ltd. Liab. Co.
 In Holy Spirit Assn. for the Unification of World Christianity v. World Harmony Found., Inc., The World Harmony Foundation (Harmony) leased property from The Holy Spirit Association for the Unification of World Christianity (The Holy Spirit).
Although its lease expired on November 30, 2007, on December 1, 2007, Harmony sent a check for a month’s rent to The Holy Spirit hoping to create a month-to-month tenancy. The Holy Spirit deposited the check twice, but it bounced each time due to insufficient funds. When The Holy Spirit brought a holdover proceeding in the New York County Civil Court, Harmony asked the court to dismiss the case, arguing that The Holy Spirit’s rent acceptance, and its retention of the check, were enough to create a month-to-month tenancy. The Civil Court was unmoved by the disharmony and characterized it as “well settled that tender of a check, for an amount due, is not valid when there are insufficient funds on which the negotiable instrument is drawn.” Since “no real or actual payment occurred,” The Holy Spirit’s eviction proceeding was allowed to proceed to trial. Say AMEN to the power of The Holy Spirit! 
To download a copy of the Civil Court’s decision, please use this link: Holy Spirit Assn. for the Unification of World Christianity v. World Harmony Found., Inc.
 In Piazza v. Regeis Care Ctr., LLC, Nancy Piazza sued Regeis Nursing Home for “failing to maintain a safe environment” after she was attacked by a sibling while visiting their mother at the Home.
Since Regeis had been warned of her brother’s drug problems and requests had made (both orally and in writing) that he be banned from the facility, Piazza claimed the Home could have prevented the assault. Regeis countered that the letter and warnings only put them on notice of her brother’s drug abuse and “unsavory” disposition, but never about any violent tendencies. The Bronx County Supreme Court granted Regeis’ motion to dismiss the case based on Piazza’s failure to express discomfort with her brother’s presence prior to the assault and -- because he had never previously attacked a family member -- the confrontation wasn't foreseeable. In view of her failure "to raise any triable issues of fact as to whether she was lulled into any false sense of security” after giving Regeis those warnings, the Appellate Division, First Department, affirmed the suit's dismissal. In other words, Regeis reigned Supreme, while Piazza suffered a knock out. 
To download a copy of the Appellate Division’s decision, please use this link: Piazza v. Regeis Care Ctr
 In LoGiudice v. Silverstein Properties, Inc., Carl LoGiudice was employed by a third party as a building maintenance contractor at a building owned by Silverstein Properties. Apparently, LoGiudice was injured at work when he tripped and fell over a curled-up rain mat left by another contractor.
After LoGiudice filed suit, Silverstein moved to dismiss the case, arguing that it didn't have notice of the alleged defect. When the New York County Supreme Court denied the motion, Silverstein appealed to the Appellate Division, First Department. Since the building was open to the public, the AD1 found that Silverstein "had a nondelegable duty to provide the public, including third-party [contractors], with reasonably safe means of ingress and egress, and can be held vicariously liable for any negligence by a third-party defendant that caused the entrance to become unsafe.” Since “[i]ssues of fact exist as to whether, inter alia, the mat made the entrance to the building unsafe,” the AD1 agreed that Silverstein’s motion had been properly denied. Talk about taking it to the mat! 
To download a copy of the Appellate Division’s decision, please use this link: LoGiudice v. Silverstein Properties, Inc.
 Even though he noticed the vehicle some 100 feet ahead, Pinto was distracted by someone calling out his name and managed to walk directly into a bright yellow forklift.
When the Bronx County Supreme Court dismissed his personal injury case, Pinto appealed to the Appellate Division, First Department, which affirmed. (According to the AD1, Pinto’s inattentiveness was the sole reason for his injuries.) While he knew that the ice cream company would park its forklift on the sidewalk, Pinto claimed that the practice violated state law -- Vehicle and Traffic Law § 1202(a)(1)(b). But since he hadn’t raised that issue in his complaint, or any other of the underlying papers, the AD1 was quite frigid to its consideration. Talk about getting hit with a forklift in the road! To download a copy of the Appellate Division’s decision, please use this link: Pinto v Selinger Ice Cream Corp.
 In Frazier v. City of New York, John Frazier filed suit against the City of New York Department of Parks and Recreation, the New York Mets, and Harvard Maintenance, Inc., to recover damages for personal injuries he incurred while enjoying a day at Shea Stadium.*
Frazier was allegedly injured when he slipped and fell on a ballpark ramp. He testified that “after [he] fell, he saw a reddish streak on the ramp and a ketchup-like substance on his shoes.” And, while Frazier’s wife did not witness the incident, she testified that “about an hour before the accident, she saw a messy white condition consisting of a portion of a crushed hot-dog bun, ketchup, and mustard on the ramp, as well as a hot-dog, a hot-dog bun, and two napkins” right where Frazier fell. Frazier alleged that he slipped on that mess. When the defendants filed motions to dismiss the case, the Queens County Supreme Court sided with them. On appeal, the Appellate Division, Second Department, held that “[a] defendant who moves for summary judgment in a slip-and-fall case has the initial burden of making a prima facie showing that it neither created the hazardous condition nor had actual or constructive notice of its existence for a sufficient length of time to discover and remedy it.” In this case, the AD2 found that the defendants had neither created the condition nor had actual or constructive knowledge of its existence. Frazier offered no evidence in opposition. The court also found that Frazier’s contention that “the defect which had caused him to fall was the remnant of the mess that his wife had seen an hour before his accident [was] purely speculative.” As a result, the AD2 affirmed the lower court’s dismissal. Yet another one hit right out of the park. To download a copy of the Appellate Division’s decision, please use this link: Frazier v. City of New York ________________________ *Frazier sued against multiple defendants, all of whom have responsibility over the sports facility. The City owns the stadium and leases it to the Mets, while Harvard Maintenance assists with the Stadium's maintenance.
In World Monuments Fund, Inc. v. Ninety-Five Madison Co., Ninety-Five Madison Co. (“NFM”) entered into a lease which provided that "possession of the premises should be given to [World Monuments] upon lease signing, but no later than May 1, 2000, and that rent should commence three months after lease signing, but no later than August 1, 2000.” Of course, the lease was not signed, nor was possession given to World Monuments, by May 1, 2000. When NFM sought to recover the rent arrears, the New York County Supreme Court sided with World Monuments and concluded that the tenant was entitled to a three-month credit. On appeal, the AD1 examined the lease and agreed, noting that NFM had neither billed nor sued World Monuments for the months at issue; inaction which further supported the lower court’s finding that World Monuments was entitled to the concession. How monumental was that? To download a copy of the Appellate Division’s decision, please use this link: World Monuments Fund, Inc. v. Ninety-Five Madison Co.
 In Dell Inc. v. GJF Construction, the rules of suretyship came to Dell’s rescue in a convoluted case involving the recovery of unpaid rent.
Trinity Centre LLC owns a structure bordering the World Trade Center site. In October of 1995, Trinity leased three floors of its building to Plural, Inc., for a term ending on June 30, 2006. In 2002, at Plural’s request, Trinity leased two of Plural’s floors to GJF Construction Corporation until June 30, 2007 -- one year beyond the Plural’s original lease expiration date. This arrangement created a new lease between Trinity and GJF, and amended the existing lease with Plural. Under the terms of that new agreement, and because GJF was leasing the space at less rent than Plural had originally agreed to pay, Plural paid the difference between the new and old rental amounts each month. The contract also provided that Plural would be responsible for GJF’s unpaid rent. And, if GJF defaulted, Trinity’s rights were assigned to Plural, creating a surety relationship. On June 28, 2002, Dell executed a guaranty agreement obligating itself to Plural’s lease-related responsibilities. The document provided, among other things, that “Guarantor [Dell] will pay the Landlord [Trinity] any delinquent rent.” In August of 2004, GJF stopped paying rent and, on February 13, 2005, vacated the space, claiming that the premises were unusable since they had been permeated with toxins after the 9/11 attacks on the World Trade Center. Because Plural was liable for GJF’s unpaid rent and Dell had guaranteed Plural’s obligations, Trinity filed suit against Dell with the New York County Supreme Court. After paying Trinity $1,358,058.34, Dell then commenced litigation claiming GJF was required to reimburse Dell for the monies remitted to Trinity. The New York County Supreme Court found that, through the rules of subrogation, Dell had all the rights Trinity would have had to enforce the GJF’s lease. And, because GJF’s liability continued through June of 2007, and Dell had no obligation to mitigate damages, Dell could rightly seek to recover the monies paid to Trinity. The court dismissed GJF’s claims regarding the site’s toxic conditions since there is no “warranty of habitability” for commercial properties, and GJF leased the premises in “as is condition.” Additionally, GJF’s arguments were foreclosed by the fact that it entered into the lease after the September 11 attacks, and was aware of the conditions which existed at the time of the lease’s execution. In the absence of a triable issue of fact, Dell’s application for a money judgment in the amount of $1,358,058.34, and for an award of its legal fees and costs, was granted by the Supreme Court. As this case clearly demonstrates, you can expect hell if you mess with Dell. To download a copy of the Supreme Court's decision, please use this link: Dell Inc. v. GJF Construction ------------------------------ Dell Inc. and Dell Marketing USA were represented by Nicholas Caputo of Robinson Brog Leinwand Greene Genovese & Gluck, P.C.. Defendant GJF Construction Corp. was represented by Henry Bergman of Moses & Singer.
 In Fa Wah Management, Inc. v. Alvarrez, “Fa Wah” Management (“FWM”) started a holdover summary proceeding against Zoilo Gavilan “Alvarrez,” who was doing business as Juquiliuta Bar & Restaurant.
FWM terminated Alvarrez’s lease, after Alvarrez failed to pay several months' rent. When negotiations for a new lease proved unproductive, the parties entered into two successive stipulations, which required Alvarrez to pay FWM certain sums of money for "use and occupancy" and to provide FWM proof of insurance on or before April 4, 2006. When he defaulted and an inquest was held by the Kings County Civil Court, FWM “established a prima facie case, including proof of [Alvarrez’s] original rent default,” and possession was awarded to the landlord. On appeal, the Appellate Term, Second Department, affirmed. Alvarrez’s main defense was that the pleadings in the case -- the Notice of Petition and Petition -- were fatally defective, because FWM’s true name was “Fai Wa,” rather than “Fa Wah,” and Alvarrez’s last name was really spelled “Alvarez.” Notwitstanding those gaffes, the AT2 was of the opinion, that the tenant “was not, and could not reasonably have been confused by these minor errors.” Alvarrez further asserted on appeal that since he had eventually obtained the required insurance, enforcement of the stipulation would prove to be inequitable. But the AT2 was unmoved. Since that claim was unsubstantiated, and more importantly, not in the record, it could not be considered on appeal. Discerning no irregularity, the AT2 directed Fa Wah (or “Fai Wa”) to proceed with the eviction ForthWith. 
To download a copy of the Appellate Term’s decision, please use this link: Fa Wah Management, Inc. v. Alvarrez
 Often times, it’s not just a matter of leaving space when a lease has expired. The premises must be left in good condition and usually -- but not always -- restored to the condition they were in prior to the tenant having taken occupancy (“reasonable wear and tear” excepted).
That lease-end requirement is often a bone of contention, as was demonstrated by the case of American Real Estate Holdings Ltd. Partnership v. Citibank, N.A. American Real Estate Holdings (“American”) filed suit against Citibank to recover damages for the latter’s breach of a lease-related covenant to repair the premises which the financial institution had occupied. Although Citibank vacated the premises at the end of its lease, and American later sold the building to another party, American still filed suit against its former tenant alleging breach of the parties’ agreement. When the New York County Supreme Court denied the bank’s motion to dismiss, an appeal to the Appellate Division, First Department, ensued. The AD1 agreed that a dismissal was inappropriate, since Citibank had apparently violated its repair obligation, and the landlord was entitled "damages to be measured by reasonable costs." However, the AD1 did grant dismissal as against Citigroup, Inc. -- Citibank’s parent corporation -- because Citigroup had never been a party to the governing lease agreement. Will Citibank suffer a major withdrawal? (God bless American!) To download a copy of the Appellate Division’s decision, please use this link: American Real Estate Holdings Ltd. Partnership v. Citibank, N.A.
 In 115 E. 9th St. Retail v. STA Travel, Inc., 115 E. 9th St. Retail filed a nonpayment case against its tenant, STA Travel, Inc. (STAT). At issue was STAT’s failure to pay its real-estate tax escalation and water and sewer charges.
After the New York County Civil Court awarded the landlord $37,545.84 in rent arrears, STAT appealed to the Appellate Term, First Department. The AT1 found that STAT could not challenge the landlord’s real-estate tax escalation, as the tenant had “failed to object to landlord's annual real estate tax escalation statements within 45 days of their issuance” as required by the parties’ lease agreement. As for the payment of the water and sewer charges, STAT did not contest their “reasonableness” or claim they were "inflated." Rather, the tenant argued that since the landlord had not received bills from the City for the water and sewer charges STAT was not required to remit payment. Without a lease provision which supported the tenant’s position, the AT1 was of the opinion that the objection lacked a meritorious basis. And that’s STAT. To download a copy of the Appellate Term’s decision, please use this link: 115 E. 9th St. Retail v. STA Travel, Inc.
 Because New York is such a "great mosaic," you can expect to encounter people from all walks of life with varying degrees of proficiency with the "mother tongue."
Each and every day, attorneys are in litigation with tenants who lack fluency in English. If a summary proceeding, like a nonpayment or holdover proceeding, is started against such a tenant, must the pleadings be translated as an accommodation to the recipient (in order to avoid challenges to the service effort or to the proceeding's maintenance)? According to a Judge of the New York County Civil Court, that question can be answered with a resounding no. In 240 West 37 LLC v. Star NY Fashion, Inc., the commercial tenant allegedly violated the lease's insurance coverage requirements. In an interesting fall-back position, the tenant's counsel challenged the court's jurisdiction on the grounds that the individual who had received the notice of petition and petition (on behalf of the corporate tenant) was not fluent in English and "did not know what was handed to her." Here's how the Judge disposed of that argument: Certain types of notices, and pleadings in consumer collection cases require pleadings to be in English and Spanish [N.Y.C.C.A. § 401 [d]. The Respondent does not cite any law or rule that has the same requirement for Chinese, whether in a plenary or summary proceeding. I have found no such law or rule. As noted in a case from Illinois, discussing the matter of NUEZ V. DIAZ, 101 Misc2d 399, 421 NYS2d 770, "There is a relative dearth of published opinions defining the contours of "suitable discretion," but it is clear that the amount of discretion necessary to satisfy the rule is rather low." [FLOWERS v. KLATICK, Not Reported in F.Supp.2d, 2004 WL 2005814 (N.D.Ill.)] The Respondent has elected to do business in the City of New York, where English is the predominate language. The petition was signed on October 9, 2007, the answer is dated October 18, evincing an almost spontaneous response. Under such circumstances, the Respondent cannot be said to have prejudiced.
As to the dispute's merits, since the court was of the opinion that the tenant had failed to secure the required amount of liability coverage (only $1Mill rather $2Mill was provided to the landlord), and no timely cure of that default was effected, summary judgment was awarded in the owner's favor. Of course, the decision suggests that the outcome "might" have been different had the tenant failed to respond to the pleadings. Interesting, no? (By the way, the tenant should expect the Notice of Eviction to be in English.) To view a copy of the Civil Court's decision, please use this link: 240 West 37 LLC v. Star NY Fashion, Inc.
Here's a case which proves that you can't believe everything you'll find in a lease.  In Gellis v. Marshak, Denise Gellis filed a lawsuit against her landlord, disputing a provision which provided that should she remain in possession of her space after her sublease expired, her monthly rent would increase threefold -- from $8,000 to $24,000.
The New York County Civil Court sided with the landlord, Harvey Marshak, and awarded him $71,646 on his counterclaim for damages. On appeal, the Appellate Term, First Department, reversed. The AT1 found that "[a]s of the commencement date of the sublease, the parties could not reasonably have believed that the stipulated sum would be fair compensation for [Gellis’] failure to timely surrender possession,” and concluded that “the true purpose of the provision was to secure performance ‘by the compulsion of the very disproportionate ... rather than to provide a reasonable assessment of probable damages.’” Since it lacked a correlation to the landlord's actual damages, the trebling of the rent was viewed as a penalty, and found to be unenforceable. 'Tis the reason (and the season) to be trepidatious about these particular Clauses. To view a copy of the Appellate Term’s decision, please use this link: Gellis v. Marshak
 Insurance disputes are pretty common in the landlord-tenant arena, and a tenant's noncompliance with its coverage obligations (as dictated by the governing lease) could have severe ramifications and lead to the tenancy's termination.
In Tag 380, LLC v. ComMet 380, the lease contained the following requirement: "insurance on the building against loss or damage by fire and against loss or damage by other risks included under the standard Extended Coverage Endorsement as presently adopted for use with the New York Standard Fire Insurance Policy in an amount not less than the then full insurable value of the Building, with a deductible of not more than $50,000."
The Extended Coverage Endorsement (“ECE”), in effect in 1989 (when the lease was executed), "included causes of loss resulting from hazards in addition to fire, such as smoke, explosion, riot and civil commotion and "actual physical contact of an aircraft or vehicle with the property." Excluded were such hazards as nuclear reaction and radioactive contamination, war (including insurrection or civil war) and "hostile and warlike action" undertaken "by any government or sovereign power (de jure or de facto) or by any authority maintaining or using military, naval or air forces," including action "by an agent of any such government, power, authority or forces." Back in 2002, a question arose as to whether the acts of "loosely structured" terrorists, unassociated with any particular government or military force, were encompassed or excluded events. While the excluded risks included “acts of war,” such as hostility by a sovereign nation or by a “standing military force,” the ECE did not address “ad hoc paramilitary action” by individuals unaffiliated with an organized military. Nor did the language encompass autonomous political or religious factions. Plainly and simply, the endorsement didn’t address terrorists acts. As a result, Tag 380 started a case in the New York County Supreme Court positing that it was not obligated to maintain terrorism coverage under its lease. The building’s landlord countered that such an obligation did exist and also sought compensatory damages together with attorneys' fees incurred in defending the action. The Supreme Court found that Tag 380 had a duty to obtain insurance that included terrorism coverage and awarded the owner damages for the premiums it paid for such coverage, as well as attorney’s fees. The court reasoned that “unless specifically enumerated in the exclusions section of the policy,” a fire insurance policy must cover all losses that result from fire, “even if such losses are caused by terrorism.” On appeal the Appellate Division, First Department, modified the outcome, finding that the ECE only encompassed the enumerated perils, and not their underlying causes, and that the lower court had erroneously conflated the two concepts. While the ECE may have afforded protection for a particular kind of loss associated with terrorism (such as an aircraft striking a building), that did not support the lower court's conclusion that coverage for all types of terrorist acts was intended, regardless of the precipitating cause, and that to find otherwise would violate the “venerable principle” that contracting parties should not be liable for obligations “not reasonably within their contemplation at the time of contract.” TAG! (You’re it!) To download a copy of the Appellate Division's decision, please use this link: Tag 380, LLC v. ComMet 380
 Sixteen years is a long time for a rent strike, but that's how long it's taken the case of Solow v. Tanger to reach resolution. (And, it still may not be over, if further appeals are taken.)
The New York County Supreme Court originally awarded the landlord legal fees in the amount of $652,141.94, plus interest calculated from April 4, 2004. On appeal, that award was reduced by the Appellate Division, First Department, to $290,737. Even though the case was a "contentious and protracted landlord-tenant dispute," the AD1 was of | | |
