Montgomery Trading Co. v Cho

[*1] Montgomery Trading Co. v Cho 2009 NY Slip Op 50267(U) [22 Misc 3d 135(A)] Decided on February 18, 2009 Appellate Term, First Department 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 February 18, 2009
APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT
PRESENT: McKeon, P.J., Schoenfeld, Heitler, JJ
570645/06.

Montgomery Trading Co., Petitioner-Landlord-Respondent,

against

John Cho and Julie Cho, Taqueria Mexicali, Respondents-Tenants-Appellants.

Tenants appeal from (1) a final judgment of the Civil Court of the City of New York, New York County (Analisa Torres, J.), entered February 17, 2006, after a nonjury trial, which awarded landlord possession and liquidated damages in the principal sum of $833,090.31 in a commercial holdover summary proceeding, and (2) a judgment (same court and Judge), entered August 28, 2006, after a hearing, which awarded landlord attorney's fees in the sum of $350,292.43.

Per Curiam.

Final judgment and judgment (Analisa Torres, J.), entered February 17, 2006 and August 28, 2006, affirmed, with one bill of $25 costs.

Pursuant to paragraph 9(c) of the governing commercial lease agreement, landlord could elect to terminate the tenancy after a fire rendered the demised premises "wholly unusable" (see Pig Restaurant, Inc. v Odelia Enters. Corp., 244 AD2d 196 [1997]). Once the lease was properly terminated, landlord was not barred from collecting the liquidated damages agreed to in the lease based on tenants' holding over after the termination of the lease (see Parsons & Whittemore, Inc. v 405 Lexington LLC., 299 AD2d 156 [2002], lv denied 99 NY2d 650 [2003]). The liquidated damages clause, providing for one-and-a-half times the existing rent in the event of a holdover, was not an unenforceable penalty. Tenants failed to establish that damages could be anticipated in 1998 when the lease was executed or that the amount fixed was plainly or grossly disproportionate to the probable loss (see Tenber Associates v Bloomberg L.P., 51 AD3d 573 [2008]).

Inasmuch as landlord prevailed on the central issue litigated at the seven-week bench trial, it was properly awarded attorney's fees (see Duane Reade v 405 Lexington, LLC., 19 AD3d 179 [2005]. We note that tenants do not challenge the reasonableness of the amount of the attorney's
fees award.

THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
Decision Date: February 18, 2009