Dashnaw v Shiflett
Annotate this CaseDecided on October 4, 2005
City Court of Plattsburgh
Michael A. Dashnaw, dba ADIRONDACK APARTMENTS, Plaintiff,
against
Kevin Shiflett and, KASIE (ROOD) SHIFLETT, Defendants.
C-415-2002
Penelope D. Clute, J.
The Plaintiff sued the Defendants by Summons and Complaint dated July 24, 2002. He seeks (1) past due rent of $2375.00, (2) late charges of $5110.00 and (3) damages of $2061.54.
The Defendants had a one year written lease with their landlord Henry Dashnaw for the period September 1, 1998 to August 31, 1999. The late charges claims is based on a provision in that lease which states "13. Rent is due on the first day of the month, payable by the fifth of the month. Rent not received by the fifth day of the month will pay [sic] a late charge of $5.00 per day until all rents and late charges are paid in full."
According to the Plaintiff's Verified Complaint, the Defendants remained in the apartment after expiration of the lease. He alleges that they moved out in February 2000, but paid no rent in the months October, November and December 1999, nor January and February 2000. According to Exhibit C attached to the Plaintiff's November 5, 2002 Affidavit in Opposition to Motion to Vacate Default, Plaintiff claims that he is entitled to $5.00 per day for the period September 6, 1999 to July 24, 2002, when he commenced the instant lawsuit.
This Court issued a Decision and Order on March 27, 2003 finding that the facts of this case do not support a month to month tenancy within the meaning of Real Property Law §232-c, and further ruling that the Plaintiff is not entitled to recover any late fees. The Plaintiff appealed that ruling to County Court. In a Decision and Order dated December 15, 2003 affirming the vacatur of the default judgment, Judge McGill found that "the other issues raised on appeal are rendered moot by this decision."
By Decision and Order dated July 22, 2005, this Court ruled on several pending matters. With respect to the unresolved issue of Late Fees, the Court granted the parties until August 26, 2005 to submit legal memoranda on the validity of the late fee claim. Thereafter, the Court stated that it would render a written Decision and Order on that issue and set a pretrial conference date.
In the July 22, 2005 Decision and order, the Court advised the parties that "the legal issues [*2]appear to include, but are not limited to, (1) whether the expired lease provision for a $5 per day late feel applied to the time period in question (see e.g. Matter of Jaroslow v Lehigh Valley Railroad Co, 23 NY2d 991, 993, 298 NYS2d 999, 1000 (1969); (2) if so, whether the provision is unconscionable as a matter of law (see e.g. Spring Valley Garden Associates v Felmin Earle, 112 Misc 2d 786, 447 NYS2d 629 (County Ct, Rockland Co 1982) and (3) whether laches prevents Plaintiff from asserting this claim."
On August 26, 2005, the Plaintiff filed his Brief and Memorandum of Law, which the Court has carefully considered. The two cases which the Court brought to the parties' attention are not addressed by the Plaintiff. The Defendants did not file a legal memorandum.
Conclusions of Law
In the Jaroslow v LeHigh Valley RR Co. case, the Court of Appeals ruled in 1969 that § 232-c of the Real Property Law "changes the common-law rule relating to creation of a holdover tenancy. It provides that the mere holding over by a tenant whose term is longer than one month does not allow the landlord to create a holdover tenancy without his acceptance of rent from the holding over tenant." In that case, just as the instant case, "the landlord did not accept any rent and, indeed, none was offered." "Hence," the Court of Appeals declared, "no holdover tenancy was created and the landlord's remedy is limited to removal of the tenant and damages. . . . an action for nonpayment of rent. . . does not lie, there being no tenancy in fact or at law obligating the tenant for such rent."
There was no Summary Proceeding or other action for removal brought against the Defendants while they resided in the apartment. More than two years after they vacated the apartment, the instant action was brought for non-payment of rent, late charges and damages.
The facts of the instant case, as set forth by the Plaintiff, clearly include that the lease expired on August 31, 1999, and no new lease was signed. No rent was paid after September 1999. Plaintiff's August 26, 2005 Brief and Memorandum of Law contains many quotations from cases concerning creation of a month-to-month tenancy after expiration of a lease. All of these make clear that such month-to-month tenancy exists only when the landlord accepts rent from the tenant and only for the month in which the rent is accepted. That is not this case. The essence of Plaintiff's claim against the Defendants is that they did not pay rent after September 1999.
The Plaintiff's Brief and Memorandum of Law includes numerous quotes from papers submitted by Defendants' attorney arguing that they had a month-to-month tenancy but not a holdover tenancy. Whether there was a month-to-month tenancy is a question of law. In determining a matter of law, this Court is bound by the New York Court of Appeals, not by arguments of counsel or parties.
The facts presented include that the Defendants paid rent for September 1999, which was after their lease expired on August 31, 1999. The Plaintiff asks this Court to hold that one month of paying rent creates a month-to-month tenancy for later months in which they did not pay rent. That is not the law. A month-to-month tenancy is determined anew monthly; if rent is accepted by the landlord for a month, the tenant has the right to remain in residence for that month. But the next month's tenancy depends upon paying rent again.
When there is no lease and no rent paid, there is no tenancy. New York's highest court, the Court of Appeals, directly addressed this in Matter of Jaroslow v Lehigh Valley Railroad Co, [*3]supra. Under facts showing that a 21 year lease expired and no rent was paid thereafter, the Court of Appeals affirmed the lower court's dismissal of a petition for rent arrears. The Jarslow decision is short and to the point:
Section 232-c of the Real Property Law, Consol. Laws, c.50, [effective 9/1/1959] changes the common-law rule relating to creation of a holdover tenancy. It provides that the mere holding over by a tenant whose term is longer than one month does not allow the landlord to create a holdover tenancy without his acceptance of rent from the holding over tenant. The language in the statute 'unless an agreement either express or implied is made providing otherwise' refers only to extension of the duration of the holdover tenancy beyond a tenancy from month to month. In this case the landlord did not accept any rent and, indeed, none was offered. Hence, no holdover tenancy was created and the landlord's remedy is limited to removal of the tenant and damages, both incidental and for use and occupation. An action for nonpayment of rent, based on a notice purporting to fix a rent, never agreed upon by a tenant and never paid by tenant, does not lie, there being no tenancy in fact or at law obligating the tenant for such rent.
In the instant case, the proof before the Court shows that there was no agreement between the parties creating a holdover tenancy, and no rent was accepted or offered after September 1999. Based upon the Court of Appeals Jaroslow decision, this Court finds that there was no tenancy during the time period covered by the instant claim: October 1999-February 2000.
Consequently, as a matter of law, the Plaintiff cannot maintain an action for nonpayment of rent and his claim for $2375.00 in unpaid rent must be DISMISSED. Similarly, Jaroslow requires the conclusion that the Plaintiff cannot maintain an action for late charges, since as "there was no tenancy in fact or law obligating the tenant for such rent," there can be no obligation to pay late charges. His claim for $5110.00 in late charges must also be DISMISSED as a matter of law.
It is noted that several courts have addressed specific late fees, at times finding them to be excessive, unconscionable and unenforceable. In Spring Valley Garden Associates v Earle, 112 Misc 2d 786, 447 NYS2d 629 (Co Ct, Rockland Co 1982), a late fee of $50 if rent of $405 per month was over ten days late was found to be "liquidated damages and a penalty which cannot stand." That Court also ruled that the same late fee "is unconscionable and is void." A 5% per month late rent "surcharge," amounting to 60% per year was "unreasonable and confiscatory in nature and therefore unenforceable." 943 Lexington Avenue, Inc. v Niarchos 83 Misc 2d 803, 373 NYS2d 787 (App Term, 1st Dept 1975). A late charge equal to 4% per month, amounting to 49% per year "is clearly a penalty disproportionate to any probable loss. Accordingly, the court finds this provision of the lease unenforceable." Raanana Realty Corp. v Louis J. Rotondi Restaurant Corp., 1/9/91 NY Law Journal 23, col 3 (1st Judicial Dept, NY Co). Late fees of $32.50 per month on rent of $650 per month was struck down as unreasonable, excessive and unenforceable in Parkchester Apartments Co v Lewis, 4/22/98 NY Law Journal (1st Judicial Dept, Bronx Co).
In the instant case, the rent set forth in the Lease was $475 per month. The late charge of $5.00 per day beginning on the 6th of the month amounts to $125 per month, or 26.3%. The amount of late charges sued for is more than double the unpaid rent claim. As in the cases set forth above, this late charge is unreasonable, excessive and unconscionable as a matter of law. Therefore, this Court finds that lease provision to be void and unenforceable against the Defendants. [*4]
The claim for $2061.54 in damages remains. The Plaintiff has demanded a Jury Trial. A Pretrial Conference will be held on Wednesday, November 9, 2005 at 2:00 PM. The pro se Plaintiff and Defendants' counsel are directed to be present at that date and time. The Defendants may be present in person or available to their attorney by telephone.
NOW, therefore, for the reasons set forth above, it is hereby Ordered, Adjudged and Decreed that:
The Plaintiff's claim for unpaid rent of $2375.00 is DISMISSED.
The Plaintiff's claim for late charges of $5110.00 is DISMISSED.
It is further ORDERED that a pretrial conference shall be held at Plattsburgh City Court on November 9, 2005 at 2:00 PM.
ENTER:
PENELOPE D. CLUTE
City Court Judge
Dated: Plattsburgh, New York
October 4, 2005
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