Richard G. Roseetti, LLC v Werther
Annotate this CaseDecided on March 24, 2005
City Court of Albany
Richard G. Roseetti, LLC, Plaintiff,
against
Robert D. Werther, Defendant.
COM 04-0293
Judith Vener
Richard G. Roseetti, LLC
Plaintiff, pro se
1202 Troy Schenectady Road
Latham, New York 12110
Michael P. Friedman, Esq.
Attorney for Defendant
P.O. Box 69
Delmar, New York 12054
Gary F. Stiglmeier, J.
Plaintiff commenced this Commercial Claims action to recover $3,150.00 as damages pursuant to a default penalty provision in the lease between the parties. Defendant filed two counterclaims. A trial was held on February 8, 2005. The Court makes the following findings of fact:
On March 4, 2004, the defendant signed a lease agreeing to rent an apartment from the plaintiff beginning on May 1, 2004 and ending on April 30, 2005. The monthly rental amount was $1,575.00. The lease included a default provision, paragraph No.23, which states as follows:
"If, for any reason, Tenant defaults under the terms of this Lease, Tenant will be held responsible for two (2) months' rent and loss of security deposit along with any additional damage charges, or for the rental amount of the unexpired term of the Lease agreement. These fees shall become immediately due and payable, together with any fees incurred by the Landlord to collect such fees."[*2]
Defendant sent plaintiff a notice, dated October 3, 2004, notifying plaintiff that he would be moving out of the apartment by October 11, 2004 and paying his October rental payment. Defendant vacated the apartment on October 5, 2005. He moved out leaving no damages to the apartment. However, he did not have the carpeting professionally cleaned upon his departure, as required under item #5 of the security deposit section of the lease. The lease calls for a $75.00 charge upon tenant's failure to have the carpets professionally shampooed. Defendant paid the utility bill covering the months of October and November 2004. Plaintiff re-rented the apartment for $1,850.00 per month starting on November 29, 2004. Plaintiff retained defendant's $1,500.00 security deposit.
The defendant raises several defenses to plaintiff's claim. Defendant argues that since the plaintiff is a Limited Liability Company (hereinafter "LLC") and not a corporation, partnership or association, plaintiff does not have the right to bring a commercial claims action. UCCA § 1801-A states, in pertinent part, that a commercial claim includes "any cause of action for money only ... provided that ... the claimant is a corporation, partnership or association ...". The issue before the court is whether an LLC should be considered a corporation, partnership or association within the meaning of the statute, and thereby be allowed to bring commercial claims in this court.
A similar issue has come up in the courts of New York State regarding whether an LLC must appear by attorney in an action other than a small claims action. CPLR § 321(a) states in pertinent part that a "party ... may prosecute or defend a civil action in person or by attorney, except that a corporation or voluntary association shall appear by attorney ...". The Nassau County District Court ruled that LLCs must appear by an attorney as they "have the attributes of a voluntary association with corporate limited liability protection and therefore should be treated as such for purposes of CPLR § 321(a). Monte Carlo, LLC v Yorro, NYLJ May 7, 2003, p.25, col.2(2003); See also Tierra West Apts. LLC v Bobadilla, NYLJ April 21, 1999, p.25, col.3(CivCt1999). Using similar reasoning, it is this court's position that since an LLC has the attributes of a voluntary association with corporate limited liability protection, this court will treat an LLC as an entity which is a cross between an association and a corporation. Since both an association and a corporation are permitted to file a commercial claim, then an LLC may file a commercial claim as well.
While there is no appellate case law directly on point regarding this issue, a search for applicable appellate case law by the court revealed an action entitled North4ORE Realty LLC v Bishop, 2 AD3d 1184, 770 NYS2d 193 (3rd Dept 2003). The Third Department of the Appellate Division reviewed that commercial claims action on appeal and affirmed the County Court's ruling that awarded $2,475.00 to plaintiff North4ORE Realty LLC after an earlier appeal by the plaintiff. While the Third Department did not directly rule on the issue of whether an LLC was permitted to file a commercial claim, by allowing an LLC to recover in a commercial claims action, it is this court's position that the Court implicitly did not find that it was an issue.
For all the foregoing reasons, it is this court's ruling that it is proper for an LLC to commence a commercial claims action under Article 18-A of the UCCA.
A second defense raised by the defendant is that the plaintiff re-rented "the premises ... and therefore has mitigated its damages and cannot seek such damages from the defendant". A tenant is liable for rent for the period of the lease, even if the tenant vacates the premises prior to the expiration of the lease. However, it is the general rule in New York that when a residential tenant vacates the premises prior to expiration of the lease, the landlord is under an obligation to take reasonable steps to mitigate his damages. [*3]
Courts have generally followed the rule that "the tenant will only be liable for such items of loss as the landlord could not have avoided by reasonable effort, without undue risk, expense or humiliation. Parkwood Realty Co. v Marcano, 77 Misc 2d 690, 353 NYS2d 623 (NYC Civ Ct 1974). Under this principle, the landlord has an obligation to attempt to re-rent the apartment for the remainder of the term of the lease after the tenant abandons the space. Paragon Industries, Inc. v Williams, 122 Misc 2d 628, 473 NYS2d 92 (App Term 1983); Forty Exchange Co. v Cohen, 125 Misc 2d 475, 479 NYS2d 628 (NYC Civ Ct 1984). In this case, there is an express clause in the lease relating to damages resulting from defendant's default under the terms of the lease. However, this clause is equivocal, as it provides a penalty of two months rent plus the security or the remainder of the rent for the unexpired term of the lease should the tenant default; apparently leaving landlord the choice of which penalty to pursue should the tenant default.
Section 1804-A of the Uniform City Court Act sets forth the procedure to be followed when conducting a Commercial Claims trial. The Court is required "to do substantial justice between the parties according to the rules of substantive law..."[U.C.C.A. § 1804-A; See Also, Blair v. Five Points Shopping Plaza, Inc., 51 AD2d 167, 379 N.Y.S.2d 532 (3d Dept 1976)]. The party bringing a claim, however, does bear the burden of proving his/her case (establishing a prima facie case). The claimant must produce enough evidence to allow the Court to rule in that party's favor.
In the instant action, the Court finds that the defendant is liable to the plaintiff for his breach of the lease. However, given the equivocal nature of the default clause in the lease, this court holds that the plaintiff had a duty to mitigate damages pursuant to the cases previously cited. The defendant was responsible for November's rent of $1575.00, as the plaintiff was not able to re-rent the premises immediately. Defendant is also liable for the $75.00 carpet cleaning charge, as he did not produce a receipt for professionally cleaning the carpets. Neither plaintiff or defendant is awarded attorneys fees in this action. Therefore, judgment shall enter in favor of the plaintiff and against the defendant in the sum of $1,650.00 less the $1,500.00 security deposit, together with the $20.00 filing fee paid by the plaintiff, for a total judgment of $170.00.
So ordered.
Dated at Albany, New York
March 24, 2005
____________________________________
Gary F. Stiglmeier
Albany City Court Judge
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