Empire State Bldg. Co., L.L.C. v EAI Consulting & Trading, Inc.
Annotate this CaseDecided on July 11, 2007
Civil Court of the City of New York, New York County
The Empire State Building Company, L.L.C., Petitioner(s)/Landlord(s),
against
EAI Consulting & Trading, Inc., Respondent(s)/Tenant(s).
057169 CVN 2007
Attorneys for petitioner:
Norris, McLaughlin & Marcus, P.A.
By: Dean M. Roberts, Esq.
Attorneys for respondent
Robert J. Feldman, Esq.
By: Robert Feldman, Esq.
Manuel J. Mendez, J.
In this commercial landlord and tenant proceeding for the non-payment of rent, the petitioner has made a motion seeking an Order from this Court, striking the Respondent's Demand for a Trial by Jury, as well as, striking the affirmative defenses and counterclaims in the respondent's answer, in their entirety. The respondent opposes the motion, and voluntarily discontinues , without prejudice, the First and Fourth Counterclaims which allege rescission and declaratory judgment as they are being alleged in another action currently pending in the Supreme Court, New York County. The respondent alleges in the opposition that the discontinuance of the First and Fourth Counterclaims obviates that aspect of the motion papers that seeks dismissal of the counterclaims and related affirmative defenses. The respondent is seeking to have the remaining counterclaims and affirmative defenses remain in effect [*2]as well as his demand for trial by jury.
LEGAL ANALYSIS
Waivers of jury trials are valid and enforceable in a commercial setting in New York. Estate of Greenberg, 425 NYS2d 909 {102 Misc 2d 308} (1st Dep't 1979). Respondent alleges that the jury waiver clause in paragraph 5 of the parties' lease is invalid because it implicates the jury waiver bar in Real Property Law 259-c and because the terms of the provision were too complicated for Respondent to understand.
Real Property Law 259-c, states,
"...any provision in a lease, executed after the effective date of
this act, that a trial by jury is waived in any action, proceeding or
counterclaim brought by either of the parties thereto against the other
in any action for personal injury of property damage is null and void."
NY CLS Real P § 259-c.
The case, Import Alley of Mid-Island v. Mid-Island Shopping Plaza, Inc., 103 AD2d 797 (NY App. Div. 1984), held an adversary may not wait until the eve of trial to strike a jury demand by asserting a jury waiver clause. However, the Appellate Division, First Department took a different stance on the issue in A.J. Fritschy Corporation v. Chase Manhattan Bank, 36 AD2d 600 (NY App. Div. 1971), stating that while it is preferable that the motion to strike a jury demand be made within a reasonable time, the motion can be made at any time before trial so long as the delay does not unduly prejudice the other side. This result is not inconsistent with the Appellate Division, Second Department's decision in Import Alley, 103 AD2d 797, , supra , as the adversary in that case would have been unduly prejudiced. The United States District Court for the Southern District of New York, in addressing the decision of Import Alley,103 AD2d 797 , supra , aptly pointed out,
"...had the court granted the motion to strike the jury demand,
the case would have been placed at the bottom of the non-jury calendar
and plaintiff would have been compelled to wait until the case rose to
the top of the non-jury calendar. The delay and resulting unfair
prejudice to the plaintiff was at the heart of each of these decisions
to deny motions to strike plaintiff's jury demand."
[*3]
National Westminster Bank v. Ross, 130 B.R. 656 (S.D.NY 1991).
The CPLR §3011(9), mandates that a reply must be served when a counterclaim is asserted, the issue at bar is governed by Section 907(2) of the New York City Civil Court Act, which states,
"...the plaintiff may reply to a counterclaim but shall not be required
to do so except by court order. If the plaintiff elects voluntarily to
reply, he shall do so within ten days after service of the answer
containing the counterclaim. In the absence of a reply the allegations
of the counterclaim shall be deemed denied by the plaintiff."
NY CLS NYC Civil Ct. Act § 907 .
A petitioner should not be obligated to reply or move to strike to assert an affirmative defense for the same reason, that it is not obligated to reply to a counterclaim. 1050 Tenants Corp. v. Lapidus, 2005 NY Slip Op 51455U ( NY Misc. 2005). Furthermore, CPLR 3018(b), discussing affirmative defenses, states, "a party shall plead all matters which if not pleaded would be likely to take the adverse party by surprise." 1 New York Civil Practice: CPLR P § 3018.
A clause in the lease which provides that a party to the lease may not assert any counterclaims which would amount to a set-off or abatement in the rent in a summary proceeding, is generally enforced. Bomze v. Jaybee Photo Suppliers, Inc., 117 Misc 2d 957 (NY Misc. 1983). However, there is an exception as to counterclaims that are "inextricably interwoven" with the original claim. Issues raised in the counterclaim have been found to relate directly upon the landlord's right to possession, "...they are said to be intertwined in the summary proceeding issues and should be disposed of in one proceeding." Sutton Fifty-Six Co. V. Fridecky, 461 NYS2d 14 {93 AD2d 720} (1st Dep't 1983).
In Amdar Co. v. Hahalis, 145 Misc 2d 987 ( 1990), it was determined that damages arising from the landlord's alleged negligent elevator maintenance and breach of contract were not inextricably interwoven with the petitioner's claim for rent and should have been severed. An exception to the decision in Amdar, 145 Misc 2d 987, supra , is found in, Ring v. Arts Int'l, Inc., 2004 NY Slip Op 24558 (NY Misc. 2004), wherein the Court stated,
"The principal example of a counterclaim within this exception in a commercial [*4]nonpayment proceeding is respondent's second counterclaim of actual or constructive eviction, to offset the obligation to pay rent, because the claim is inextricably intertwined with the nonpayment of rent."
The issue splitting doctrine is in place to prevent double recovery and "unreasonable harassment". Siegel, NY Prac § 220.
The covenant of quiet enjoyment, is implied in every lease. As stated in Mack v. Patchin, 42 NY 167 (NY 1870), "In such cases, the rule generally applied in England and in this country is to restore to the purchaser all he has paid or advanced." Id. The breach of the covenant of quiet enjoyment would absolve the tenant from having to pay rent.
A landlord may not absolve himself of his own negligence is correct. NY CLS Gen Oblig § 5-321. Counterclaims for negligence and breach of contract have been held not to be inextricably intertwined with a landlord's claim for rent and should thus be severed. Amdar Co. v. Hahalis, 145 Misc 2d 987 ( NY Misc. 1990).
CONCLUSION
The fact that RPL 259-c bars the right to a jury from being waived
in personal injury and property damage actions does not mean that Petitioner should be forced to submit to a jury trial after it contractually obtained the right to avoid one. Although the opposition papers allege that Respondent is a comparatively small organization and that its officers are of Chinese origin, Respondent stops short of contending that its officers were unable to read or understand basic English. Furthermore, the fact that the clause effects a waiver of the right to a jury trial "to the fullest extent of the law," should not be interpreted as language that is too complicated to be understood by a layperson. That the Respondent was waiving the right to a jury in at least some instances should have been apparent in the lease. In the case at bar, Respondent is not alleging any undue prejudice. The opposing papers simply state that the delay in filing the motion to strike Respondent's jury demand will "wrongfully upset" Respondent's reasonable expectations and disrupt orderly and efficient court practice. The Court need not reach the question of whether such harm would be sufficient to deny Petitioner' s motion, as Respondent's claim of harm seems untenable. Respondent agreed to a lease with an explicit jury waiver provision and should not be heard to claim that he could reasonably have expected a jury trial.
Respondent's contention that Petitioner's failure to serve a reply bars it from [*5]asserting any affirmative defenses to respondent's counterclaims is incorrect. While the Respondent would read NY CLS NYC Civil Ct. Act § 907 as allowing the Petitioner to assert only a general denial, having the Petitioner waive the right to assert any affirmative defenses contradicts the most sensible reading of the statute. Respondent, having waived the right to assert certain counterclaims in the lease itself, should not be able to claim that it has been surprised by the Petitioner's assertion of the terms of the lease.
Respondent's second counterclaim is for damages caused by the Petitioner's breach of the lease. As a defense, petitioner asserts the clause in the lease which provides that the Respondent may not assert any counterclaims which would amount to a set-off or abatement in the rent in a summary proceeding. While Petitioner relies on Amdar, 145 Misc 2d 987, , supra , the facts of that case are distinguishable in that,the Respondent alleges that it has been partially actually evicted and/or partially constructively evicted from approximately sixty-five percent of the leased premises. This differs from Amdar, 145 Misc 2d 987, supra , because, there was no actual or constructive eviction alleged in that case. Thus, Respondent's counterclaims and affirmative defenses for partial actual and constructive eviction shall not be stricken.
Petitioner's contention that Respondent's eighth and ninth affirmative defenses, alleging partial actual and constructive eviction, should be denied based on the "issue splitting doctrine" is also without merit. At this point in time, none of the issues in this case have been decided in the Supreme Court action. Here we have a summary proceeding initiated by Petitioner, not a case of unreasonable harassment or a strategic maneuver on the part of Respondent to obtain double recovery. The doctrine is thus inapplicable here.
Respondent's affirmative defenses for failure of consideration and lack of consideration are inextricably intertwined with Petitioner's claim. If there is no consideration given in exchange for the rent, then the rent cannot be owed. Respondent's third affirmative defense is that Petitioner breached the covenant of quiet enjoyment, which is implied in every lease. The breach of the covenant of quiet enjoyment would absolve the tenant from having to pay rent and the defense is thus inextricably intertwined with Petitioner's claim.
Respondent's third counterclaim for negligence and affirmative defense of breach of contract shall be stricken. Respondent's contention that a landlord may not absolve himself of his own negligence is correct. However, Respondent would not be precluded from having its day in court on these issues, it would simply be precluded from asserting [*6]them in a summary proceeding. Respondent's counterclaim for negligence shall thus be dismissed.
Respondent's fifth affirmative defense, that the prior action that is pending in the Supreme Court, New York County compels dismissal of this proceeding because that lawsuit seeks relief unavailable in this proceeding shall be stricken. Respondent will not be precluded from obtaining the relief he seeks in the Supreme Court action if he is so entitled.
Accordingly, the Respondent's Demand for a Trial by Jury is stricken. The Respondent's second counterclaim alleging damages caused by the Petitioner's breach of the lease and partial actual and constructive eviction remains, and Respondent's third counterclaim alleging negligence will be stricken. The Respondent's fourth, fifth and fourteenth affirmative defenses are dismissed. The Respondent's first, second, third, sixth through thirteenth and the fifteenth and sixteenth affirmative defenses remain. The parties shall appear at Part 52, room 1166, of this Courthouse on the first day of August 2007 to schedule a date for trial.
The foregoing shall constitute the Decision and Order of the Court.
Dated: July 11, 2007
Manuel J. Mendez
Judge, Civil Court
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
