Rhodes v Calhoun

[*1] Rhodes v Calhoun 2005 NY Slip Op 51565(U) [9 Misc 3d 1115(A)] Decided on September 29, 2005 District Court Of Nassau County, First District Cooper, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on September 29, 2005
District Court of Nassau County, First District

Naquia Rhodes and MARCUS RHODES, Plaintiffs,

against

Bridget Scott Calhoun and VERSIA L. SCOTT, Defendants.



4375/05

Alfred D. Cooper, J.

DECISION AFTER TRIAL

The within District Court plenary civil action was commenced by Marcus and Naquia Rhodes former tenants (hereinafter the plaintiffs) against Versia L. Scott and Bridget Scott-Calhoun the landlords (hereinafter the defendants). The plaintiffs in this action seek the return of their security deposit.

The plaintiffs' initiated this action by an endorsed complaint, and did not specify the sum of the security deposit. The defendants did not file a written answer to this plenary action. However, the defendants did appear in the action initially pro se, then subsequently by counsel for an adjournment, and finally, they appeared pro se at the trial.

The defendants' defense, interposed orally, in this action by the plaintiff to recovery of their security deposit, was and has been "offset" for alleged damages to the premises, allegedly caused by the plaintiffs. The defendants acknowledged they used the security deposited by the plaintiffs to pay for the cost of alleged repairs to the premises.

The Court conducted a bench trial of the issues, and makes the following findings of fact and conclusions of law.

FINDINGS OF FACT AND CONCLUSION OF LAW[*2]

The plaintiffs' initial written lease term for the premises, located at 18 Gertrude Street, Hempstead, New York, commenced on December 18, 2003 and terminated on December 31, 2004 [Pl. Exhibit 1 In Evidence]. The reserved monthly rent due was $1,950.00 per month, and the security deposit provided for was $3,000.00 [Pl. Exhibit 1 In Evidence]. The defendants acknowledged the receipt of the security deposit of $3,000.00 and $875.00 from the plaintiffs for December 2003 as well as January and February 2004 rent [Defts'. Exhibit B In Evidence]. The initial lease was dated December 18, 2003, signed by the defendant Versia Scott on December 15, 2003 [SIC]. The plaintiffs did not execute the lease but did attach two U.S. Postal money order "Customer Receipts" as evidence of tendering a total of $1,700.00 as a security deposit to defendant Bridget Scott. The defendants did acknowledged receipt of the $1,700.00 [Defts. Exh. B In Evidence].

The Court finds that on December 16, 2003 Jamie Morrison, the Section 8 Administrator at the Hempstead Housing Authority, executed the Housing Assistance Payments Contract, Housing Assistance Program (HAP) Section 8 Tenant Based Assistance Housing, Choice Voucher for the premises, 18 Gertrude Street, Hempstead, New York. The sole tenants listed on the HAP contract were Naquia S. Rhodes, Marcus Rhodes, and their three dependent children [Pl. Exh. 2 In Evid.]. This ten page contract pursuant to the U.S. Department of Housing and Urban Development, lease term commenced on December 15, 2003 and terminated on November 30, 2004.

The initial rent to be paid to the defendant, Versia Scott, was $1,928.0 per month. The Court finds that this federal housing assistance agreement superseded the parties' initial lease agreement, and commenced three (3) days prior to the parties' initial lease agreement, and provided for a monthly rent twenty-two ($22.00) dollars less the than the parties' initial lease. The Housing Assistance monthly payment to the defendant Versia Scott was $1,578.00, and the plaintiffs' monthly tenant's payment was $350.00 [Defts. Exh. B In Evid.].

On January 29, 2004, the plaintiff Naquia Rhodes caused the Nassau County Department of Social Services -Emergency Revolving Fund to issue a check in the sum of $1,800.00 for payment of the balance of the security deposit( Pls. Exh. 3 & 4 In Evid.). The defendants acknowledged receipt of same ( Defts. Exh. B In Evid.). The Court finds, the plaintiffs tendered and the defendants received a security deposit in the total sum of $3,000.00 pursuant to the initial lease agreement (Pls. Exh. 1 In Evid.) ( Defts. Exh. B In Evid.).

The defendants offered evidence at trial that they incurred the expenses of $980.00 to paint two(2) large bedrooms at the premises after the plaintiffs vacated; they had to repair the kitchen and dining rooms' light fixtures at $75.00 each; and they had to replace kitchen cabinet knobs @ $75, and to remove abandoned property of the plaintiffs' at a cost of $175.00. Further, the defendants alleged that the plaintiffs were responsible for damage to the premises caused by bursting of frozen pipes. The Court finds the bursting of pipes and the water damage occurred after the plaintiffs had vacated the premises after having given notice to the defendant Versia Scott of the date of their vacatur. The Court also finds [*3]that the defendants admittedly used the plaintiffs' security deposit, and that said deposit had not been segregated and numbered in a separate designed account or place as required by the General Obligation Law (GOL).

ISSUE

The legal issue(s) for the Court to determine here are, whether the plaintiffs are entitled to the return of their security deposit in whole or in part, or whether the defendants were entitled to use the security deposit as a set-off for alleged damages to the premises, and retain of the security deposit tendered by and on behalf of the plaintiffs.

THE LAW

It is well settled that a surrender of a leasehold must be accepted by the landlord or its authorized agent to be effective and thereby release the tenant from liability for further rent obligations (see, Barkley v. McClue, 25 Misc 738 [1899]); (see, Hubell v. Van Coenan, 190 Misc 194,74 N.Y.S.2d 704, [1947]).

Pursuant to the General Obligation Law §7-103(1): "A security deposit" shall continue to be the money of the person making such deposit or advance and shall be held in trust by the person with whom such deposit or advance shall be made and shall not be mingled with the personal moneys or become an asset of the person receiving the same. The rule against commingling of a security deposit with a landlord's own funds was reaffirmed by this court in Levy v. Taninbaum (NYLJ, Dec. 24, 1997, at 23, col 6 [App Term, 9th & 10th Jud. Dists.), wherein it was stated: " A landlord holding a security deposit under a lease covering the rental of real property does so in the capacity of a trustee (Glass v. Janbach Properties, Inc. 73 AD2d 106,108 [1980]), The landlord owes a duty not to commingle the deposit with his own funds, and upon breach of that duty, he forfeits his right to avail himself of the deposit for any purpose (Matter of Perfection Technical Services Press, 22 AD2d 352, 356, aff'd 18 NY2d 644 [1965]). Commingling of security deposit funds with a landlord's personal funds is a conversion and the tenant has an immediate right to recover the funds (LeRoy v. Sayers, 217 AD2d 63, 68, citing Sommers v. Timely Toys, 209 F2d 342 [2nd Cir 1954]; 74 NY Jur 2d Landlord and Tenant, Sec, 604)." Finnerty, etal v. Freeman, 176 Misc 2d 220, 221 [1998].

ANALYSIS

Here, the plaintiffs' written lease agreement expired by its own terms on November 30, 2004. The evidence adduced at trial reveals that the plaintiffs remained in possession of the subject premises with the consent of the defendants until January 1, 2005. Further, [*4]the defendants were advised and on notice as to the plaintiffs' date of surrender. It is undisputed that all rent was paid to the defendants through December 2004. Finally, the plaintiffs were in possession of new premises as of January 2005, and the defendants' acknowledged that plaintiffs had surrendered the subject premises by their letter to the plaintiffs dated January 25, 2005 [Defts. Exh. A. In Evid.]. Consequently, the plaintiffs were released from all obligations under the lease agreement with the defendants once the defendants had accepted the plaintiffs' surrender of the premises in early January 2005, and the plaintiffs had no further liability for rent to the defendants. (see, Berkley v. McClue, supra); (see, Hubell v. Van Coenan, supra).

The evidence adduced at trial further revealed, the defendants failed to give the plaintiffs written notice of the banking institute that held plaintiffs' security deposit, in violation of G.O.L. §7-103(2), permitting an inference of commingling at the time of the expiration of the lease in violation of G.O.L. §7-103(1), that defendants failed to rebut. Dan Klores Associates, Inc. v. Abramoff, 288 AD2d 121, 733 N.Y.S.2d 388, 389 [2001]. The evidence adduced at trial revealed that not only did the defendants fail to account for the location of the deposit of the plaintiffs' security deposit but they retrained it and utilized it for their own obligations thereby, entitling the plaintiff to an immediate right to same as a result of the defendants' breach of its trust of the security deposit, and giving rise to an inference of commingling same (Leroy v. Sayers, supra).

CONCLUSION

The Court finds the plaintiffs were and are entitled to recover the full sum of their security deposit as a result of the defendants failure to account for the security deposit and commingling the plaintiffs' deposit with their own fund ( Matter of Perfection Technical Services Press, supra). The Court finds further, the defendants have no claim to the security deposit. As to the alleged damages to the premises, the Court finds the expenses incurred by the defendants for painting, repair of light fixtures, and to repair or replace cabinet knobs, absent evidence of the condition of the areas painted, and the items repaired or replaced prior to the plaintiffs' tenancy, these items are to be treated as normal wear and tear after the plaintiffs' vacatur.

The Court awards the plaintiffs a money judgment against the defendants in the sum of $3,000.00 with interest from January 5, 2005.

This constitutes the decision and judgment of this Court.

So ordered:

[*5]

DISTRICT COURT JUDGE

Dated: September 29, 2005

cc:Naquia Rhodes, Pro se

Marcus Rhodes, Pro se

Bridget Scott Calhoun, Pro se

Versia L. Scott, Pro se