135 PPW Owners LLC v Schwartz
Annotate this CaseDecided on November 10, 2004
Civil Court of the City of New York, Kings County
135 PPW OWNERS LLC, Petitioner,
against
INARA SCHWARTZ, RICHARD SCHWARTZ, "JOHN DOE" AND "JANE DOE", , Respondents.
78552/04
George M. Heymann, J.
Petitioner commenced this licensee holdover proceeding upon the ground that after the tenant of record, Leonard Schwartz, had died the respondents no longer had any rights to remain in the subject apartment. Mr. Schwartz died on February 8, 2004 and his rent stabilized lease does not expire until December 31, 2004.
The respondents are the wife and son of the deceased tenant, both of whom are seeking succession rights to the subject premises. The petitioner claims that the wife moved out of the apartment over a decade ago, prior to the death of her husband, and still maintains a separate residence at another location and that the son moved into said premises at or about the time of his father's death.
Petitioner moved this Court for various relief including, inter alia, striking respondents affirmative defenses; granting leave to conduct depositions upon oral examination and to obtain documentary evidence; and directing respondents to pay use and occupancy. Respondents cross-moved to dismiss the proceeding on the ground that the petitioner failed to join as a necessary party the estate of the deceased tenant of record and further opposes the relief sought in the petitioner's motion.
After conferencing this matter with counsel for both parties in an effort to reach a settlement of the entire case, they agreed that the only issue that the Court need address at this juncture is whether, since there exists an unexpired lease term, the failure to name the estate as a necessary party requires dismissal of the proceeding. Attempts to resolve this particular issue resulted in a stalemate. The respondent maintains the position that the law mandates dismissal under these circumstances, whereas the petitioner steadfastly insisted that a prior written statement to the landlord from the respondent, Inara Schwartz, that there was "no Estate of Leonard Schwartz" estopped the respondents from now seeking dismissal on that very basis.
On April 26, 2004, Mrs. Schwartz sent a letter to the petitioner-landlord which reads, [*2]in relevant part, as follows: "Please find enclosed a copy of the death certificate of my late husband Leonard Schwartz.
*** "I must inform you that there is no 'Estate of Leonard Schwartz'. At the time of his death the combined total of Leonard's personal checking and savings accounts did not equal the cost of one month's rent. Our two sons, Samuel and Richard Schwartz, the designated beneficiaries, are currently submitting the required birth and death certificates in order to the bank [sic] to recover the small sum. These accounts will then be closed." (Petitioner's Reply Affirmation, Exhibit A)
Based upon this statement, the petitioner asserts in its Reply Affirmation that: "[a]fter such representation by the deceased's wife, who now seeks rights to the apartment, it should not be petitioner's burden to petition the Surrogate's Court for the appointment of an appropriate fiduciary" (¶5); "[r]espondent should be estopped from making this argument" (¶6); and "[t]he facts at bar, may be of first impression, however, Inara Schwartz should not in one breath be able to make a representation and the next breath shield herself from the words she personally uttered." (¶11)(Emphasis in original)
In a recent decision, Malfis v. Cancel, NYLJ, 6/30/04, p. 21, col. 1, this Court stated: Generally speaking, licensee proceedings are appropriate for landlords seeking to gain possession from occupants who remain in premises after the tenant of record permanently vacates the premises. However, when the termination is the result of the death of the tenant of record, an important distinguishing factor that must come into play is whether or not the lease that was entered into between the landlord and the deceased tenant is still in effect or expired. In the former case, the landlord must sue the estate in order to gain possession, whereas to the latter, the estate is not a necessary party to any such proceeding.(Emphasis added) In Jane St. Co. v. Suttoni, NYLJ, 7/26/96, p. 21, col. 3 (AT1); 24 HCR 403A, the Appellate Term reversed the Civil Court for dismissing the petition for failing to join the estate as a necessary party. Following the death of the record tenant and the subsequent expiration of the rent stabilized lease, landlord commenced this holdover proceeding against respondent, who alleges succession rights. As any possessory claims of the estate terminated upon the termination of the lease (see, Joint Properties Owners, Inc. v. Deri, 113 AD2d 691) and as landlord has proceeded against the clear party in interest here, Civil Court erred in dismissing the petition for failure to join the estate as a necessary party (cf., Westway Plaza Assocs. v. Doe, 179 AD2d 408 [as lease had not terminated, estate was party in interest]). (Emphasis added)
Petitioner's reliance on Carnegie Management Co., Oppenheimer, 2001 WL 1673567 (AT 1st Dept.), for the proposition that the respondents are the real parties in interest and that it was unnecessary to name the estate is to no avail in the case at bar, and, in fact, said case actually [*3]reinforces the respondent's contentions. In Carnegie, supra, the deceased tenant of record had a lease that was to expire on November 30, 1999. Prior to his death in September, 1999, he executed a two year lease renewal that would become effective on December 1, 1999 and expire on November 30, 2001. The petitioner commenced a licensee holdover in February, 2000. The trial court dismissed the proceeding on the basis that the lease renewal prior to the deceased's death extended the term of the lease requiring the naming of the estate as a necessary party. In a divided opinion, the Appellate Term reversed, holding that the estate was not a necessary party "...as any possessory claim it had must be reasonably deemed to have terminated upon the expiration of the last lease in effect during the lifetime of the tenant of record i.e., on November 30, 1999." The court found that the tenant's election to renew the lease would not dictate a contrary result having died before the commencement of that term. As a result, the court concluded that the respondent, daughter of the deceased, was the real party of interest and her claim for succession could be properly adjudicated in that proceeding. The dissenting judge agreed with the lower court that the tenant's exercise of his option to renew his lease did not create a new lease but merely prolonged the original lease for a further period and, thus, was one entire term rather than two separate lease terms. As a result, since the tenant of record died before November 30, 2001, "...the unexpired lease term passed as personal property to his estate (citation omitted) and his estate was therefore a necessary party to this eviction proceeding (citation omitted)."
Regardless of the divergence of opinion between the majority and the dissent in Carnegie, supra, as to what constitutes a lease term, the one thing that is perfectly clear is the fact that while the lease term is in effect it is mandatory that the estate be joined as a necessary party in a licensee proceeding. In the instant matter, as noted above, the lease does not expire until December 31, 2004.
With respect to the respondent's letter to the petitioner, it is not clear whether its content was gratuitous or in direct response any inquiry by management regarding any "estate". As respondent is
a lay person and was writing the letter without the benefit of counsel she may not have understood the legal implication of what constitutes an "estate". As her statement demonstrates, it was her belief that because there was virtually no money in her late husband's bank accounts, no estate existed. If anything, this should have put the petitioner on notice that it would have to either seek the appointment of an estate in Surrogates Court, or ride out the remainder of the lease term before commencing this proceeding. Having elected not to do either, the petitioner put itself at risk of having this matter dismissed. This is especially so where the law views the "estate" not simply as the financial status of the deceased, as the respondent herein did, but includes the decedent's interest in the premises for the remainder of the lease term, for whatever period that may be. As a practical matter, with only seven weeks left to the expiration of the lease, it would appear to be unreasonable for the petitioner to now be placed in the position of having to either seek the appointment of a fiduciary to wrap up the estate or to commence a new proceeding. However, based on the case law cited above, it would be an abuse of discretion for this Court to arbitrarily carve out an exception to legal precedent solely because the lease term is virtually at an end. At what point should a court draw that line: a few days; a few weeks; a few months? Whether the law should contain a provision that if a tenant of record dies with only a [*4]brief period remaining in an unexpired lease term the petitioner could be relieved of its obligation to apply for and/or name an estate in these proceedings is strictly within the province of Legislature to decide.
Accordingly, for the reasons set forth above, the respondent's cross motion is granted and the petition is dismissed without prejudice.
This constitutes the decision and order of the Court.
Dated: November 10, 2004
GEORGE M. HEYMANN, J.H.C.
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