557-563 Hous. Dev. Fund Corp. v Howard
Decided on July 27, 2010
APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT
PRESENT: McKeon, P.J., Shulman, J.
557-563 Housing Development Fund Corporation, Petitioner-Landlord-Respondent,
Haslyn A. Howard, Respondent-Tenant-Appellant.
Tenant appeals from an order of the Civil Court of the City of New York, New York County
(Timmie Erin Elsner, J.), dated November 24, 2008, which granted landlord's motion to "clarify"
a provision of a stipulation of settlement in a holdover summary proceeding.
Order (Timmie Erin Elsner, J.), dated November 24, 2008, affirmed, with $10 costs.
Tenant resided in a cooperative apartment situated in a Housing Development Fund Corporation building owned by landlord. The City of New York served as the sponsor of the cooperative offering plan. The tenancy was governed by a proprietary lease executed by the parties, as well as landlord's certificate of incorporation and a security agreement.
Landlord commenced this summary holdover proceeding against tenant, claiming that tenant had illegally sublet the apartment to another individual. The parties entered into a written stipulation of settlement resolving the proceeding. Pursuant to the stipulation, which awarded landlord a possessory judgment, tenant was afforded an opportunity to find a suitable purchaser for the unit and sell it. The stipulation also provided, in relevant part, that "[r]espondent[-tenant] shall pay legal fees to the petitioner[-landlord] incurred in this proceeding in an amount that is reasonable ... The sum of legal fees may be deducted from the sale proceeds." In the event no sale occurred, tenant was required to reimburse landlord for the legal fees it incurred. Tenant, an attorney who appeared pro se, was allocuted by the court as to the terms of the stipulation, to which tenant assented. The stipulation was contingent upon landlord's approval of it, since landlord's attorney, who signed the stipulation on landlord's behalf, requested such a condition.
Two days after the stipulation was executed, landlord's attorney sent a letter to tenant informing him that landlord accepted the terms of the stipulation, but wanted to confirm landlord's interpretation of the legal fees provision of the stipulation. Specifically, landlord wanted confirmation that, in the event of a sale of the unit, the legal fees contemplated by the stipulation would be paid from tenant's portion of the sale proceeds. Notably, under the documents governing the tenancy, any profits generated by the sale of the unit were required to be distributed in the following manner: 40% to the City, 30% to landlord and 30% to tenant. The governing documents prohibited, with limited exceptions not pertinent here, pre-allocation [*2]deductions. Therefore, according to landlord's interpretation of the legal fees provision, in the event of a sale of the unit, the profits resulting from the sale would be allocated as outlined above and tenant would pay landlord's legal fees from his allotted share; neither the City nor landlord would pay any portion of the legal fees. Tenant did not respond to this letter, and landlord subsequently moved, in effect, for an order confirming its interpretation of the stipulation and to enforce it. Civil Court agreed with landlord's interpretation, and granted its motion to "clarify." Tenant now appeals, and we affirm.
Initially, we reject tenant's contention that the stipulation is unenforceable on the ground that there was no meeting of the minds between the parties with respect to the material terms of the stipulation, since the written stipulation and the transcript of the stipulation proceedings, including the court's allocution of tenant (see generally Schieck v Schieck, 138 AD2d 691 ), demonstrate that the parties did agree on all material terms (see generally TAJ Intern. Corp. v Edward G. Bashian & Sons, Inc., 251 AD2d 98 ).
We also reject tenant's contention that the stipulation is unenforceable because landlord failed to satisfy a condition precedent to the formation of a binding agreement. Although landlord's approval of the terms of the stipulation was a condition precedent to the formation of a binding settlement (see generally Oppenheimer & Co., Inc. v Oppenheim, Appel, Dixon & Co., 86 NY2d 685 ), landlord satisfied that condition when it communicated to tenant that it consented to the stipulation as proposed. That landlord sought confirmation that its interpretation of the legal fees provision was correct does not lead to a contrary conclusion, since landlord was merely seeking to confirm that the parties shared the same interpretation of the legal fees provision.
Lastly, Civil Court correctly interpreted the legal fees provision as requiring tenant to pay for such fees from his portion of the profits of the sale, since that is the only reasonable interpretation of the stipulation (see generally Greenfield v Philles Records, Inc., 98 NY2d 562 ). The stipulation obligated tenant, and only tenant, to pay landlord's legal fees; the stipulation did not suggest that any other person or entity was required to do so in whole or in part. Additionally, tenant's interpretation of the legal fees provision that, in the event of a sale, the fees would be paid before the requisite allocation of profits was made, thereby resulting in the City and landlord contributing toward the legal fees tenant owed to landlord, is both unreasonable and absurd (see Farrell Lines, Inc. v City of New York, 30 NY2d 76 ; Aron v Gillman, 309 NY 157 ). It is unreasonable because the documents governing the tenancy, including landlord's certificate of incorporation and the security agreement, forbid such a pre-allocation deduction; it is absurd because it would require the sponsor of the cooperative and the landlord to subsidize tenant's contractual obligation to reimburse landlord. Tenant's interpretation is also absurd because it would result in tenant being solely responsible for landlord's legal fees if no sale were to occur, but only partially responsible for those fees if a sale did occur.
THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
Decision Date: July 27, 2010