Terner v Brighton Foods, Inc.

[*1] Terner v Brighton Foods, Inc. 2010 NY Slip Op 50895(U) [27 Misc 3d 1225(A)] Decided on May 14, 2010 Civil Court Of The City Of New York , Kings County Sweeney, J. 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 May 14, 2010
Civil Court of the City of New York , Kings County

Sarah Terner, Michelle Felix, and Rubin Rolnick, Petitioners,

against

Brighton Foods, Inc., Respondents, LMNI, INC, EUROPEAN LINES, HENRY ISHAY and ALLA LEVY, Respondent-Undertenants,



70896/09



Petitioner's Attorney: Domenick Napolitano, Esq.

351 Court Street

Brooklyn, NY 11231

Tel.: (718)522-1377

Attorney for appearing respondents:

Mishaan, Dayon & Lieblich

by Ken Lieblich, Esq.

1370 Broadway, Suite 802

New York, NY 10018

Peter P. Sweeney, J.

The pivotal questions presented in this summary holdover petitioner are whether petitioners, as prior owners, had standing to commence the proceeding, and if not, whether respondents were estopped from asserting petitioners' lack of standing as a defense under Ferber v. Salone Moderne, Inc.,174 Misc 2d 945 [App Term, First Dept, 1997]. For the reasons stated below, the Court finds that petitioners did indeed lack standing. Further, the Court finds that Ferber did not bar respondents from asserting lack of standing as a defense.

Factual Background:

Petitioners commenced this summary holdover proceeding seeking to recover possession of 1133 Brighton Beach Avenue, Brooklyn, New York alleging that respondents failed to cure certain substantial violations of their leaseholds following the service of a notice to cure. Petitioners alleged in their petition that they were authorized to institute and maintain the [*2]proceeding as "owners and landlords." Respondent Brighton Foods, Inc., the alleged overtenant, did not appear in the proceeding and is in default. Respondents LMNI, Inc., European Lines, Henry Ishay and Alla Levy, the alleged undertenants, did appear in the proceeding and alleged in their answer the affirmative defense that petitioners lacked standing to commence the proceeding.

Due to the default of Respondent Brighton Foods, Inc., an inquest was held, and over petitioners' objection, counsel for the alleged undertenants was allowed to participate. At the inquest, the uncontroverted evidence established that on April 20, 2009, approximately three weeks prior to the commencement of the proceeding, petitioners transferred their interest in the premises to AARUB Inc. The record is devoid of any evidence indicating a continuing relationship between petitioners and the new owners. Certainly, no evidence was introduced indicating that petitioners retained an estate in the premises following the transfer. At no time was any motion made to substitute AARUB Inc. as the proper party in interest.Following the inquest, respondents Lmni, Inc., European Lines, Henry Ishay and Alla Levy moved to dismiss the proceeding arguing, amongst other things, that the petitioners as prior owners of the premises lacked standing to commence the proceeding. Petitioners opposed the motion arguing that under Ferber v. Salone Moderne, Inc ., 174 Misc 2d 945 [App Term, First Dept, 1997], respondents were estopped from challenging petitioners' ownership of the premises and their right to bring the proceeding. Petitioners further argued that they made out a prima facie case at the inquest and are entitled to a judgment of possession.

Analysis:

It is axiomatic that a summary proceeding commenced by a party without the requisite standing must be dismissed (Metropolitan Realty Group v. McSwain, 27 Misc 3d 1216[A] [N.Y.City Civ.Ct., 2010, Lebovits J.] ). RPAPL § 721 enumerates the classes of persons who may maintain a summary proceeding, and it was incumbent upon petitioners to allege and prove that they fit into one of these classes.

In their petition, petitioners alleged that they were the owners and landlords of the premises. The unrefuted evidence, however, established that approximately three weeks before they commenced the proceeding, they had transferred their interests in the premises to AARUB, Inc. No evidence was introduced demonstrating that petitioners retained an estate in the land after the transfer and no attempt was make to substitute AARUB, Inc. as the proper party in interest. Simply stated, petitioners failed to demonstrate that they fit into any of the categories set forth in RPAPL § 721. Accordingly, petitioners, as the prior owners of the premises, lacked standing to commence the proceeding and are not entitled to a judgment of possession (see, Besmanoff v. Allen, 143 Misc 2d 309, 309 [App Term, 9th & 11th Jud Dists, 1989][FN1], Muzio v. [*3]Rogers, 20 Misc 3d 143[A][App Term, 9th & 11th Jud Dists, 2008]; Durand v. Simmons, 16 Misc 3d 133 [A] [App Term, 9th & 11th Jud Dists, 2007][FN2]; Boyd v. Auchterlonie, 17 Misc. 728 [1896] ).

The Court rejects petitioners' contention that under Ferber, respondents were estopped from asserting petitioners' lack standing of standing as a defense. In Ferber, a summary non-payment proceeding, the petitioner leased commercial premises to the respondent tenant in his own name as "Owner." Petitioner warranted that he was authorized to execute the lease, to grant the subject leasehold estate, and that he had indefeasible and marketable fee simple title. Actual title of the premises, however, was in the name of petitioner's wife, petitioner having conveyed title to her in 1979 for "estate planning" purposes. The trial court dismissed the proceeding on the ground that petitioner did not have good title. The Appellate Term reversed holding that since tenant defaulted in the payment of rent pursuant to the agreement under which the premises were held, "a summary proceeding for possession may be brought by the landlord or lessor' (RPAPL § 721, subd. 1; § 711, subd. 2)" (Ferber, supra at 946). The Court went onto hold that "[q]uestions of title or ownership are not litigated in summary proceedings (id., citing Mason v. Foxcroft Village, Inc., 67 AD2d 1012, 1013 [3rd Dep't 1979]; Matter of Mahshie v. Dooley, 48 Misc 2d 1098, 1100 [1965] ). Notably, the petitioner's wife in Ferber ratified petitioner's authority to enter into leases, including the particular lease with the respondent and waived any claim for rent due under the lease (id.). Here, unlike in Ferber, title to the premises were transferred to another entity after respondents were granted possession. Further, it was not established that the new owner authorized the petitioners to continue leasing the property to the respondents. While Ferber may stand for the proposition that "a tenant cannot dispute his or her landlord's title after the tenant has accepted possession from such landlord and while still enjoying such possession" (Eleven Fifteen Joint Venture v. LIU Imports, Inc., 2000 NY Slip Op. 40025[U], 2000 WL 33952042

[N.Y.City Civ.Ct., 2000] ), it should not be interpreted so as to preclude a tenant from asserting that the landlord who granted him possession lacked standing to commence a summary proceeding where the unrefuted evidence established that the landlord transferred his interest in the property after the tenant had been granted possession. The case law makes this clear (see, Besmanoff, supra ., Muzio, supra ., Durand, supra ., Boyd, supra .).

Further, while it is true that under Ferber, title to a premises cannot be affirmatively established in a summary proceeding (see also, Muzio, supra .), courts have held that "a question [*4]of title can properly be raised as a defense to the proceeding" (id., citations omitted ). In Muzio, a case almost directly on point, thepetitioners commenced a nonpayment summary proceeding in June 2005, claiming to be the owners of the premises in question. The trial court found that petitioners had been divested of title to the property in question as of May 5, 2004 when the property was conveyed to another party as a result of a tax sale. In affirming the trial court's dismissal of the proceeding, the Appellate Term held that "[a]fter the conveyance of the property . . . petitioners were no longer the "landlord[s] or lessor[s]. . . and they thus lacked standing to maintain this proceeding. Consequently, the court below properly dismissed the proceeding" (id.)( citations omitted ).

Conclusion:

In sum, the court finds that the petitioners lacked standing to maintain the proceeding, and that respondents were not estopped for asserting petitioners' lack of standing as a defense.

The Court has considered petitioners' remaining arguments and finds them to be without merit.

Accordingly, it is hereby

ORDERED that the petition is hereby DISMISSED.

This constitutes the decision and order of the Court.

Dated: May 14, 2010_________________________________

PETER P. SWEENEY

Civil Court Judge



Footnotes

Footnote 1: In Besmanoff, the Court stated: "[i]n view of tenant's undisputed assertion on appeal that landlord has sold the premises, which assertion is supported by documentary evidence, and in view of the fact that no substitution of parties has been made, the petition must be dismissed upon an appropriate application by the tenant in the court below."

Footnote 2:In Durand, the Court stated that the "court below properly dismissed [a] holdover summary proceeding upon tenants' motion since tenants submitted a referee's deed, issued following a foreclosure on the petitioner's property, showing that the petitioner was not the owner of the property at the time the proceeding was commenced."