Retail Prop. Trust v Lynda Ton Ltd.
Annotate this CaseDecided on November 29, 2010
District Court of Nassau County, First District
The Retail Property Trust, Petitioner(s)
against
Lynda Ton Ltd. d/b/a NAIL PRO, Respondent(s)
SP 005783/10
Braff, Harris & Sukoneck, Attorneys for Petitioner, 305 Broadway, 7th Floor, New York, New York 10007, 212-599-2085;
Agulnick & Gogel, LLC, Attorneys for Respondent, 305 Broadway, Suite 1100, New York, New York 10007, 212-233-9500.
Scott Fairgrieve, J.
In this holdover proceeding, Petitioner seeks to obtain a final judgment of eviction, awarding to the Petitioner possession of the premises known as "Nail Pro," located at Roosevelt Field Mall, 630 Old Country Road, Store No. 1148, Garden City, New York, 11530. Petitioner also requests judgment for money owed, pursuant to the lease, in the amount of $13,339.54. The named Respondent, Lynda Ton, Ltd., has not responded to the petition. Instead, the current tenant, Van "May" Tran Weinstein, has responded.
Before this court is Van "May" Tran Weinstein's (hereinafter referred to as "the Movant") motion to dismiss the petition. She claims that the petition should be dismissed due to improper service since the Respondent named is not her but the original tenant, "Lynda Ton, Ltd." Movant also claims that improper service occurred because Petitioner served a 3-day notice to quit rather than a 30-day notice; since rent was accepted for September and October, it established a month-to-month tenancy after the lease termination date of August 31, 2010.
Petitioner contends that Movant's motion should be denied on several grounds: one, that Movant does not have standing to bring a motion since she did not receive possession of the premises through a proper assignment approved by the Petitioner in writing; two, that since Movant was not a legal tenant, there is no need to serve a 30-day notice upon her and thus the 3-day notice was sufficient; and three, the lease states that the acceptance of rent does not waive any previous breaches of the lease, and landlord's right to sue to remove Movant from the premises.
In 2000, Petitioner and the named Respondent, Lynda Ton, Ltd., entered into a [*2]10-year lease of the premises, set to expire on August 31, 2010. Sometime in the beginning of 2007, named Respondent Lynda Ton, Ltd. transferred its assets and its lease to another corporation, PTA Property, Ltd. On February 1, 2007, PTA Property, Ltd. then sold all assets of the business known as Nail Pro upon the Terms and Conditions contained in the lease to Movant for $175,000. Movant alleges that she was never informed that she should have made the transaction contingent upon Petitioner's consent to the assignment of the lease. Still, Movant took possession of premises with full disclosure of her tenancy to Petitioner. She sent checks to the Petitioner right after the transfer was made for the monthly rent and taxes. Movant also sent Petitioner a user report of sales. All of these checks and reports were submitted and accepted by Petitioner each month for over three years without incident.
On April 1, 2010, Petitioner sent Movant a proposal for the renewal of the lease for seven (7) years. This proposal was only addressed to Movant, not to the named Respondent. After Movant submitted financial documents to Petitioner, Petitioner's proposal was withdrawn. After obtaining legal counsel, on June 2, 2010, Movant offered to have her husband be the guarantor for the renewal. The Petitioner responded on August 6, 2010 that a new tenant was expected to move in once the original lease terminated on August 31, 2010
On August 25, 2010, Movant sent a rental check to Petitioner, which was accepted. Movant also sent a rental check to Petitioner on September 18, 2010, which was accepted. Before the second check was sent and accepted, Movant received a 3 day notice to quit, addressed to Lynda Ton, Ltd., d/b/a Nail Pro, from Petitioner. Movant did not surrender the premises and thus Petitioner filed a holdover summary proceeding to evict Movant. Petitioner named Lynda Ton, Ltd. as the respondent, but served Movant with the notice of petition and petition both at the premises and at her home.
Petitioner contends that the Movant is illegally in possession of the premises due to the named Respondent's violation of the lease's assignment clause. Section 13.1 of the lease states that:
Tenant shall not sell, assign, mortgage, pledge or in any manner transfer this Lease or any interest therein, nor sublet all or any part of the Premises[ ] without Landlord's prior written consent in each instance which consent shall not be unreasonably withheld.
It is well known, however, that when a landlord knowingly accepts rent without any effort to terminate the lease, an inference that the landlord has chosen to hold the tenant to the lease and therefore waived any violation is justified. Lee v. Wright, 108 AD2d 678, 485 NYS2d 543 (1st Dep't 1985). See Jefpaul Garage Corp. v. Presbyterian Hosp., 61 NY2d 442, 448 ("[T]he option rests with the landlord to recognize the violation and terminate the tenancy. If [the landlord] chooses to ignore it and accepts rent with knowledge of the tenant's violation, [the] acceptance evidences his waiver"). In Lee, [*3]supra, the Appellate Term concluded that the landlord's acceptance of rent for four years without any effort to terminate the tenancy constituted a waiver of the landlord's right to object to the tenant's continued occupancy of the premises. Similarly, in this case, the Petitioner accepted rent from the Movant for over three years prior to this action. The acceptance of rent by Petitioner establishes that Petitioner waived any right to object to the Movant as a tenant and/or sub-lessee . Id. at 447.
Petitioner contends that the lease contains a non-waiver clause that would allow it to bring this action against Movant, even if it accepted rent. Section 24.1 of the lease states that:
[n]o waiver by Landlord or Tenant of any breach of any term, covenant, or condition hereof shall be deemed a waiver of the same or subsequent breach of the same or any other term, covenant, or condition. The acceptance of rent by Landlord shall not be deemed a waiver of any earlier breach by tenant of any term, covenant, condition hereof, regardless of Landlord's knowledge of such breach when such rent is accepted. No covenant, term, or condition of this Lease shall deemed waived by Landlord or Tenant unless waived in writing."
However, "it is well settled that parties to a lease may waive a non-waiver clause where the reasonable expectations of both parties under the lease have been modified by subsequent actions of the parties." Ray & W Cut Inc. v. 240 West 37 LLC, 22 Misc 3d 1103(A), 2008 WL 5448997, *2.
To successfully show that such a waiver of rights occurred, the Movant must show that Petitioner voluntarily abandoned its known rights through clear acts, showing that reasonable expectations of both parties were supplanted by subsequent actions. See Jefpaul, supra. This Court finds that the Movant has shown adequate evidence, uncontradicted by Petitioner, of Petitioner's voluntary abandonment of its right to terminate Movant's tenancy and to enforce that termination. Id. Unlike in 38-40 Brooklyn Holding, the waiver here is "unmistakably manifested" 38-40 Brooklyn Holding LLC v. Pasta Italiana, Inc., 26 Misc 3d 1226(A), 2010 WL 653973 *2 (N.Y.Dist.Ct. 2010)
(citing Ess v. Vee Acoustical & Lathing Contr. V. Prado [Prato] Verde, 268 AD2d 332, 702 NYS2d 38(1st Dep't 2000)). Movant demonstrated that Petitioner has accepted rental checks, addressed to Petitioner, for over three years without terminating Movant's tenancy at the premises. Movant also forwarded monthly sales reports without incident during that time. Furthermore, Petitioner mailed a proposed renewal of the lease to Movant personally. All of these actions taken by the Petitioner show that the Petitioner waived the non-waiver clause and the assignment clause in the lease. The Movant became the tenant rather than the subtenant. Thus, Petitioner's failure to name Movant as the respondent is grounds for dismissal because Movant had assumed the status as the prime tenant by the factors set forth herein. See B. Boman & Co., Inc. v. Professional Data Management, Inc. 218 AD2d 637, 631 NYS2d 19 (1st Dep't 1995).
[*4]
Also, the Petitioner created a month-to-month tenancy by negotiating and accepting rent payments after the lease expired. A month-to-month tenancy can be created at the expiration of the original lease "upon petitioner's continued acceptance of rent." Joyous Holdings, Inc. v. Volkswagen of Oneonta, Inc., 128 AD2d 1002, 513 NYS2d 841 (3d Dep't 1987). Indeed, if a tenant is served with a predicate termination notice, it "may defend on the ground that the landlord vitiated the notice by accepting rent for the post-termination period." 38-40 Brooklyn Holding, supra (citing 205 E. 78th St. Assoc. v. Cassidy, 192 AD2d 479, 598 NYS2d 699 (1st Dep't, 1993). Here, the Petitioner accepted rent for September and October of 2010, even though the lease was set to expire August 31, 2010. Thus, Movant was entitled to 30 days notice of this proceeding, which she did not receive. This creates insufficient notice upon Movant for this proceeding.
Movant's motion to dismiss is granted. Petitioner's claims are dismissed without prejudice.
So Ordered:
/s/ Hon. Scott Fairgrieve
DISTRICT COURT JUDGE
Dated:November 29, 2010
CC:Agulnick & Gogel, LLC
Braff, Harris & Sukoneck
SF/mp
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