Bostany v Trump Org. LLC

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Bostany v Trump Org. LLC 2015 NY Slip Op 02908 Decided on April 7, 2015 Appellate Division, First Department Published by New York State Law Reporting Bureau pursuant to Judiciary Law ยง 431. This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided on April 7, 2015
Friedman, J.P., Acosta, Moskowitz, Richter, Kapnick, JJ.
602627/08 14726A 14726

[*1] John P. Bostany, Plaintiff-Appellant,

v

Trump Organization LLC, et al., Defendants-Respondents.



Profeta & Eisenstein, New York (Fred R. Profeta, Jr., of counsel), for appellant.

Newman Ferrara LLP, New York (Jonathan H. Newman of counsel), for respondents.



Judgment, Supreme Court, New York County (Milton A. Tingling, J.), entered August 1, 2014, awarding defendants the total sum of $587,915.47, unanimously affirmed, without costs. Order, same court and Justice, entered on or about December 10, 2013, after a bench trial, to the extent it awarded attorneys' fees to defendants and referred the issue to a referee, unanimously reversed, without costs, on the law, and the award of attorneys' fees vacated.

The trial court correctly concluded that plaintiff failed to prove his damages. Plaintiff's testimony was refuted in part by defendants' log of visitors to the premises, and otherwise failed to establish that plaintiff was " substantially and materially deprive[d] ... of the beneficial use and enjoyment of the premises'" (Pacific Coast Silks, LLC v 247 Realty, LLC, 76 AD3d 167, 172 [1st Dept 2010], quoting Barash v Pennsylvania Term. Real Estate Corp., 26 NY2d 77, 83 [1970]).

Furthermore, in calculating damages, the court properly rejected the testimony of plaintiff's witness regarding any diminution in the value of the premises, particularly as to sublessees, since he had never visited the premises, had limited experience in commercial real estate, and admitted that he was not qualified to value the space for purposes of subleasing, which plaintiff maintained was 79% of the space. The remaining evidence did not suffice to prove the diminution in value.

While the court did not separately address the claim of partial constructive eviction, plaintiff sought the same damages for partial constructive eviction as for breach of the covenant of quiet enjoyment. Thus, any separate damages award would have been duplicative (see Phoenix Garden Rest. v Chu, 245 AD2d 164, 166 [1st Dept 1997]). Indeed, plaintiff acknowledges that on these facts the same damages calculation applies to both claims (see Bostany v Trump Org. LLC, 88 AD3d 553 [1st Dept 2011]).

The court erred in awarding defendants attorneys' fees. The lease and rider allow for defendants to recover attorneys' fees but not for defending against their failure to make repairs. Moreover, defendants were not the prevailing party. Although they largely prevailed in obtaining unpaid rent, they did not obtain the judgment of eviction they sought, and the court found them [*2]liable on all plaintiff's claims, and awarded abatements to plaintiff on two of his claims (see Sykes v RFD Third Ave. I Assoc., LLC, 39 AD3d 279 [1st Dept 2007]; Mosesson v 288/98 W. End Tenant's Corp., 294 AD2d 283, 284 [1st Dept 2002]).

THIS CONSTITUTES THE DECISION AND ORDER

OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: APRIL 7, 2015

CLERK



Primary Holding

Reversed and Vacated in Part. Plaintiff Bostany sought to recoup over $1,000,000 in rent paid to Trump. Trump hotly disputed that the floods occurred at the Trump Building. Bostany produced evidence and live witnesses in a 7 month trial. The Court found in favor of Bostany, ruling that there were holes in the roof that Trump had a duty to repair. Bostany did not come forward with adequate records of the leases for his subtenants and was only awarded $45,000. Trump had been seeking over $2,000,000 in attorneys fees which the Appellate Court did not need to reach after it determined that Bostany prevailed. The Appeals Court concluded that Bostany was awarded Judgment on liability on all his claims.

Facts

Plaintiff Bostany leased the entire top floor in Defendant's Trump Building on Wall Street. Over 6,000 Square Feet. Leaks and floods due to holes in the old roof of the building caused subtenants to break their leases with Bostany.

While he withheld approximately $340,000 for a 14 month period, Bostany sought reimbursement of over $1,000,000 that Bostany had already paid to Trump Organization

Issues & Holdings

Issue: Is the Tenant John Bostany the winner when the Judge ruled that Trump breached the contract, even though Bostany is awarded very little money damages on his claims for losses due to the floods?
Holding: Yes. The Appellate Court overruled Judge Tingling on that issue and held that Bostany was the winner.
This deprived Trump of $2 Million in attorneys fees he was trying to get on a contract provision that allowed the winner to get fees.

Case Commentary

The prevailing party analysis remains critically important as it is a precursor to enforcement of an attorneys fee clause found in many leases today which awards attorneys fees to the prevailing party in any dispute. Here Trump Organization was seeking over $2,000,000 in attorneys fees.

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