19 Steven Lane Corp. v Kovar
Annotate this CaseDecided on March 22, 2012
District Court of Nassau County, First District
19 Steven Lane Corporation, Petitioner(s),
against
Jason Kovar aka JASON S. KOVAR, MANDA KOVAR, Respondent(s).
LT-005290-11
REPRESENTATION:
James O. Guy, Esq., Attorney for Petitioner, 49 Spice Mill Boulevard, Clifton Park, NY 12065, 518-320-7136; A. Bernard Frechtman, Esq., Attorney for Respondent,305 Broadway - 14th Floor, New York , NY 10007, 212-580-7402.
Scott Fairgrieve, J.
Hearing Decision
The Respondents Jason Kovar and Manda Kovar, move pursuant to CPLR 4401 for an order dismissing the petition on the grounds Petitioner, 19 Stevens Lane Corporation, lacks standing to commence these proceedings.
Petitioner commenced a non-payment proceeding on September 16, 2011. The petition named 19 Steven Lane Corporation as the owner and landlord of 19 Stevens Lane, Great Neck, County of Nassau, New York, 11023 ("the Premises"). The petition alleged Respondents came into possession of the premises pursuant to a written lease dated March 1, 2011, and remained in possession of said premises. Attached to the petition was a copy of the lease between the parties that indicated Petitioner as the landlord and Respondents as the tenants.
The issue to be determined is whether Petitioner has standing to commence this non-payment proceeding against Respondents. This issue, having been considered by the Court during trial, will be reviewed de novo.
The Court rejects the Petitioner's argument that Respondents waived their right to challenge standing by not asserting the defense in a pre-answer motion to dismiss, or as a pleading in the answer. Respondents' Verified Answer, as filed with the Court October 4, 2011, paragraph "9" explicitly states "Petition was issued by a person lacking in authority to commence the proceeding." Respondents have therefore not waived this defense. [*2]
Respondents offer as support for their motion, a copy of the Quitclaim Deed to the Premises and a copy of the incorporation filing receipt issued by the New York Secretary of State for 19 Stevens Lane Corporation, submitted by Petitioner at trial.
The Quitclaim Deed transferred the Premises from Moussa Yeroushalmi and Farzaneh Yeroushalmi to 19 Stevens Lane Corporation on December 10, 2010. The Filing Receipt for 19 Stevens Lane Corporation indicates the "Exist Date" as January 26, 2011.
"Upon the filing of the certificate of incorporation by the department of state, the corporate existence shall begin...." NY Bus. Corp. Law § 403 (McKinney), On December 10, 2010, the day the Premises was transferred to Petitioner, Petitioner did not exist (certificate of incorporation filed January 26, 2011). "As a general rule, a purported entity which is not yet in legal existence cannot take title to real property." In re Hausman, 51 AD3d 922, 923, 858 N.Y.S.2d 330, 332 (2008) aff'd, 13 NY3d 408, 921 N.E.2d 191 (2009) citing Kiamesha Dev. Corp. v. Guild Props., 4 NY2d 378, 389, 175 N.Y.S.2d 63, 151 N.E.2d 214.
In Kiamesha, the court held that a non-existent entity could not take title and any rights transferred were void. See also Liotta v. L & L Associates Holding Corp., 23 Misc 3d 1124(A), 886 N.Y.S.2d 67 (Sup. Ct. 2009).
Pursuant to RPAPL § 721(1) a proceeding may be brought by a landlord or lessor. "Implicit in the use of the words 'landlord or lessor' in RPAPL § 721 is that such person has in fact the right or authority to transfer an estate to another for a definite or indefinite period of time." Redhead v. Henry, 160 Misc 2d 546, 547, 610 N.Y.S.2d 433, 434 (Civ. Ct. 1994). In Redhead, the court dismissed the summary proceeding because: Accordingly as the petitioners herein have failed to show a right or the authority to lease the premises they have failed to prove they are in fact the landlord or lessor as predicated by RPAPL § 721 and have therefore failed to prove their prima facie case. Petition dismissed without prejudice. This constitutes the decision and order of the court.
Thus, Respondents argue that since Petitioner did not properly acquire title, Petitioner cannot commence this proceeding.
Petitioner argues that Respondents are estopped from denying its title. The Court agrees that application of estoppel is applicable. Respondents entered into the lease with Petitioner when it was fully incorporated even tough Petitioner was not in existence at the time of transfer of the title. Respondent occupied the premises pursuant to the said lease and thus acquired an economic benefit from the relationship. Respondent is estopped from denying Petitioner's title. [*3]
In Boslow Family Ltd. Partnership v. Glickenhaus & Co., 7 NY3d 664, 2006 NY Slip Op 09321 (2006), the Court of Appeals invoked the doctrine of estoppel where plaintiff had not complied with the Partnership Law with respect to its formation when it entered into the contract with defendant to provide investment services. The Court invoked the doctrine of estoppel to prevent defendant from denying the validity of the contract because: It is undisputed that plaintiff had not complied with the Partnership Law's mandatory formation requirements at the time it entered into the agreement and commenced this suit. Defendant, however, does not dispute that it derived a benefit from the agreement and that the investment services provided were not dependent in any way on the nature of the plaintiff as a limited partnership. We hold, therefore, that defendant is estopped from denying the partnership's validity (see City of Buffalo v. Balcom, 134 NY 532, 534-536 [1892]; Mayor of City of NY v. Sonneborn, 113 NY 423, 426 [1889]).
In Rubenstein v. Mayor, 41 AD3d 826, 839 N.Y.S.2d 170 (2nd Dept. 2007), the court invoked the doctrine of estoppel involving a lease, when at the time of execution of same, the petitioner was not in existence, because the certification of incorporation had not yet been filed with the Secretary of State. The court reasoned that defendant recognized the plaintiff's existence and cannot be heard to complain when it obtains an economic benefit: A corporation, however, may also be deemed to exist, and thus possess the capacity to contract, pursuant to the doctrine of incorporation by estoppel (see Boslow Family Ltd. Partnership v. Glickenhaus & Co., 7 NY3d 664, 827 NYS2d 94, 860 NE2d 711; Sacks v. Anne Realty Co., 131 Misc 117, 119, 225 NYS 370). That doctrine is based on the principle that "one who has recognized the organization as a corporation in business dealings should not be allowed to quibble or raise immaterial issues on matters which do not concern him in the slightest degree or affect his substantial rights" (Boslow Family Ltd. Partnership v. Glickenhaus & Co., supra at 668, 827 NYS2d 94, 860 NE2d 711 [internal quotation marks omitted]).
In Rasch's Landlord & Tenant including Summary Proceedings, Hon. Robert Dolan, explains the application of the doctrine of estoppel in Section 5:8. It is well settled that a tenant who has once acknowledged his landlord's title, and taken and held possession under him, and who has not surrendered his lease, nor been evicted from the premises, and who can prove no fraud against the landlord nor any transfer of the latter's title after the lease began, is precluded from denying that the landlord, under whom [*4]he has so held and claimed, is the owner of the property.
This estoppel continues until the Respondent surrenders possession of the premises.
The estoppel doctrine is further explained in Rasch, supra, Section 5:10. It is the general rule that a tenant is estopped to deny his landlord's title while he remains in possession, and until he surrenders the possession to the landlord. Thus, a tenant cannot, in an action involving the possession of the leased premises, controvert the title of his landlord or assert any rights adverse to that title, or set up any inconsistent right to change the relation existing between himself and his landlord, without first delivering up to the landlord the premises acquired by virtue of the agreement between themselves. The estoppel of a tenant in possession continues at least until his term expires, but if he continues in such possession after the expiration of the term, the estoppel continues.
Based upon the foregoing, this Court holds that Respondents are estopped from denying Petitioner's title and thus Petitioner may maintain this summary proceeding.
This matter is set down for immediate trial for April 30, 2012, at 9:30 a.m.. This is a firm date for trial.
So Ordered:
/s/ Hon. Scott Fairgrieve
DISTRICT COURT JUDGE
Dated:March 22, 2012
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