Montgomery Trading Co. v Cho
Annotate this CaseDecided on February 17, 2006
Civil Court of the City of New York, New York County
Montgomery Trading Co., Petitioner,
against
John Cho AND JULIE CHO, Respondents.
(L&T) 87842/02
Analisa Torres, J.
In this commercial holdover proceeding, Montgomery Trading Co., petitioner, seeks a judgment of possession and a money judgment against John Cho and Julie Cho, respondents. Petitioner also seeks attorneys fees and costs.
I conducted a seven week bench trial which commenced on July 19, 2004 and included a site inspection.
The following witnesses testified for petitioner: Jacob Dyckman, Zenon Wieczorek, Lolita Ali, Joseph Sage, Donald Eng, Brian Hegarty, Demetrius Perkins, Stephen Latzman, Susan Steinman, Mariann McAleavey, Jerome Konsker and Gordon Konsker.
Respondents called: Mario Smith, Julie Cho, Soon Lee, Soon Ok Kim, Chong K. Ho, Sung Ho Shin, David Salamon, John Cho, Emmanuel Holzer, John Machado, Young Choe and Haggun Lee.
Having considered all the evidence, I rely primarily on the credible testimony of: John Machado, an expert in determining the cause and origin of fires; Young Choe, a master electrician with a college degree in electrical engineering; Jerome Konsker, a master electrician with 45 years of professional experience; David Salamon, a New York University educated engineer who has worked on hundreds of fire damaged buildings; and Susan Steinman, landlord's bookkeeper. I also credit the testimony of Jacob Dyckman, landlord's principal and a partner in the law firm that represents landlord; Lolita Ali, a secretary at landlord's attorney's office; and Demetrius Perkins, who also works at that firm.
FACTS
Petitioner is the owner of the real property located at the northwest corner of Eighth Avenue and 55th Street in Manhattan. The building, a multiple dwelling, is known as 931 Eighth Avenue and 301 West 55th Street. It has street level commercial space and residential apartments above.
By lease dated February 1, 1998, between petitioner, as landlord, and respondents, as tenant, landlord leased to tenant a ground floor store and a portion of the basement for the "operation of a modern delicatessen, including the sale of fruits and vegetables." The term commenced on February 1, 1998 and was to end January 31, 2008. [*2]
During the time period relevant to landlord's claims, John Cho and Julie Cho resided at 933 Eighth Avenue, a contiguous building owned by landlord.
On November 11, 2001, at about 2:00 p.m., a fire broke out at 931 Eighth Avenue, in the northeast corner of the basement, on the Eighth Avenue side of the building. It was caused by a short circuit in faulty wiring located in a disconnect box. The fire destroyed some of the building's electrical equipment leading from the cellar to the store, requiring an overhaul of the interior electrical system.
Prior to the fire, power flowed from the street into the building's basement through underground cables. In response to the fire, Con Edison deactivated the cables, leaving the building and its neighbor to the north, 933 Eighth Avenue, without electricity. Within three days, landlord's electrical contractor restored temporary power to 931 and 933, by running a feed from the building located at 935 Eighth Avenue. The borrowed service provided sufficient electricity for heat and lighting in public hallways and the apartments -but not enough to operate the deli.
Two days after the fire, Con Edison extracted the old cables from conduits beneath Eighth Avenue. Machado testified that although the Con Edison wiring was fully functional, it would not have been prudent, for safety reasons, to leave the original cables in place. Con Edison restored permanent power in June 2003.
With respect to the structural elements of the building, the fire affected about 20 feet of the portion of the cellar facing Eighth Avenue. In that area, some of the wooden joists, columns and floor planks which comprise the basement ceiling and the street level floor were fire damaged and require replacement. Firefighters cut two two foot holes into the south side of the ground floor; the floor in those areas must be replaced. The storefront and adjacent sidewalk need repair. On the first floor, a portion of the walls suffered smoke damage. Some tin ceiling tiles on the ground floor require replacement.
Young Choe, tenant's electrical contractor, testified that it would take three electricians two weeks to complete the interior service repairs, i.e., installation of the end box, meter panels and switch chest, at a cost of $15,000. Installation of lighting fixtures, equipment wiring and outlets, would take four electricians one month and cost an additional $25,000. Before commencing, the contractor would have to obtain a permit from the Department of Buildings and file a work request with Con Edison. Upon completion of the job, Con Edison must inspect and approve. Securing the permits and final approval would add at least two weeks to the work. Choe stated that the electrical installation could not start, however, until the repairs on the structural elements of the building are completed.
David Salamon, tenant's engineer, opined that the store could remain open, while construction work is underway. He proposed erecting a temporary wall that would separate the non-fire damaged portion of the deli from the damaged area. Salamon failed to explain, however, how temporary electrical power would be supplied to the premises.
In a January 16, 2002 letter, Jacob Dyckman advised tenant that certain personal property in the store must be removed in order for electricity to be restored. Dyckman stated that if the items were not removed within three days, landlord would terminate the tenancy. John Cho attempted to comply, but was injured when a portion of the ground floor partially collapsed.
By letter dated January 31, 2002, landlord's attorney notified tenant that landlord intended to terminate the lease as of February 8, 2002, because the premises are wholly unusable. The [*3]letter, addressed to John Cho and Julie Cho at 933 Eighth Avenue, was sent by certified mail and Federal Express. On February 4, 2002, Julie Cho signed the certified receipt.
In a letter dated February 5, 2002 and signed by Jacob Dyckman, landlord notified tenant that "[p]ursuant to [p]aragraph 9 of the lease, we hereby elect to terminate the [l]ease effective February 8, 2002 . . . you are required on or before February 8, 2002 to forthwith quit, surrender and vacate the [p]remises." On February 5, 2002, Lolita Ali, Dyckman's secretary, typed the letter, sealed the envelope and took it to the firm's mail room. A U.S. Postal Service certified mail receipt, postmarked February 5, 2002, at the Grand Central Station post office, indicates that the letter was mailed to John Cho and Julie Cho at their home address. In addition, on February 7, 2002, Zenon Weiczorek, the superintendent at 933 Eighth Avenue, personally handed the letter to Julie Cho at tenant's apartment door.
On February 8, 2002, tenant filed a summons and complaint against landlord in Supreme Court, New York County. In paragraphs 7 through 9 of the complaint verified by John Cho, he denominates the January 31st and February 5th letters as "the Notice to Terminate'" and admits that the letters were served on tenant.
The Chos remain in possession of the premises and have the only key.
LAW
A lease provision that permits a landlord to terminate a tenancy if the premises are rendered wholly unusable by fire, is enforceable. Mawardi v. Purple Potato, Ltd., 187 AD2d 569 (1992); Ji-Jae Corp. v. Agyeman-Duah, 189 Misc 2d 595 (App Term, 2d Dept 2001).
Paragraph 9 of the lease states that landlord may terminate the tenancy, if the premises are "rendered wholly unusable" by fire: [Landlord] may elect to terminate this lease by written notice to tenant given within 90 days after such fire . . . specifying a date for the expiration of the lease, which date shall not be more than 60 days after the giving of such notice . . ."
Paragraph 27 describes the manner in which notices shall be given: a . . . notice or communication which [landlord] may desire or be required to give to [t]enant, shall be deemed sufficiently given or rendered if, in writing, delivered to [t]enant personally or sent by registered or certified mail addressed to [t]enant at the building of which the demised premises form a part or at the last known residence address or business address of [t]enant or left at any of the aforesaid premises addressed to [t]enant, and the time of the rendition of such bill or statement and of the giving of such notice or communication shall be deemed the time when the same is delivered to [t]enant, mailed, or left at the premises as herein provided.
Paragraph 68 states that if tenant fails to surrender the premises upon the termination of the lease, landlord may recover liquidated damages, for each month and portion of a month that tenant holds over, in an amount equal to one and a half times the aggregate of the rent and additional rent payable during the last month of the term.
Paragraph 19 provides that if landlord prevails in a proceeding arising from tenant's default, landlord is entitled to reasonable attorneys fees and costs.
DISCUSSION
The premises were rendered wholly unusable on November 11, 2001. As a direct result [*4]of the fire, Con Edison cut off power to the building. Because landlord could not supply sufficient temporary electricity to the store, tenant's business could not remain open. Moreover, work on the interior electrical system could not be undertaken, until the structural repairs were completed. And, even if, as tenant proposes, the fire damaged portion of the premises were walled off while repairs were being made, tenant fails to demonstrate how temporary power would be provided.
Under the circumstances, landlord was entitled to terminate the lease, pursuant to paragraph 9.
Landlord's February 5, 2002 termination notice, sent by certified mail to John Cho and Julie Cho at their last known residence, is legally sufficient, because it satisfies the requirements of paragraphs 9 and 27 of the lease.
I reject tenant's argument that the February 5th notice is invalid on the ground that two separate envelopes were not addressed to and served upon John Cho and Julie Cho, for the reasons stated in Rose Assoc. v. Bernstein (138 Misc 2d 1044, 1047 [Civ Ct NY County 1988]). Moreover, on February 8, 2002, in his verified complaint John Cho conceded service of the termination notice. In addition, the notice was personally served on tenant by the building superintendent, albeit on February 7, 2002.
Tenant's reliance on ATM One, LLC v. Landaverde (2 NY3d 472 [2004]) is misplaced. This commercial holdover proceeding does not concern "matters of statutory and regulatory interpretation" (Landaverde, 2 NY3d at 476).
I have considered tenant's remaining arguments and find them without merit.
Pursuant to paragraph 68 of the lease, landlord is entitled to liquidated damages in the amount of $833,090.31. This amount represents one and one-half times the monthly rent payable under the lease for the annual period ending January 31, 2002 (1.5 times $11,910.72), multiplied by the number of months (or portions of a month) that tenant illegally held over (49 months), plus rent owed by tenant from November 1-11, 2001 ($3,970.24), less insurance proceeds recovered by landlord for lost rent ($46,317.85).
Landlord has prevailed in this proceeding and may recover attorneys fees and costs, under paragraph 19 of the lease. The parties are directed to appear at 9:30 a.m., on March 27, 2006, in Bronx Supreme Court, 215 East 161st Street, Room 3-1C, for an attorneys fees hearing.
CONCLUSION
Petitioner is awarded a judgment of possession of the premises and the issuance of a warrant of eviction. Considering the length of the tenancy, execution of the warrant is stayed for
20 days from the date of filing of this decision with notice of entry.
This constitutes the decision and order of the court.
DATED:
________________________
Analisa Torres, JCC
[*5]
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