Kings 2115 Linden Realty, LLC v Four Corners Auto Repair Corp.
Annotate this CaseDecided on July 29, 2013
District Court of Nassau County, First District
Kings 2115 Linden Realty, LLC, Petitioner(s)
against
Four Corners Auto Repair Corp., Respondent(s)
LT-002492-13
Dicrescio & Trivedi, LLP, Attorney for Petitioner, 400 Jericho Turnpike, Suite 318, Jericho, N.Y. 11753, 516-470-1379;
Harvey L. Woll, Esq., Attorney for Respondent, 305 Broadway, 14th Floor, New York, N.Y. 10007, 646-374-6301.
Scott Fairgrieve, J.
Petitioner commenced this holdover proceeding against Respondent to recover possession of 2115 Linden Boulevard, Elmont, New York.
The holdover Petition alleges that there exists a 5 year Lease which commenced on October 1, 2009, and ends December 2014. The Lease was entered into by Petitioner's predecessor Tyree Realty Co., LLC and Respondent for use of the premises as a repair shop, office, outside parking and storage. It is alleged that the Lease expired on April 29, 2013 because Respondent defaulted on paying taxes which is additional rent. Petitioner accelerated all sums due under the lease due to said default.
Petitioner seeks possession and a money judgment for $156,238.42.
Respondent filed an answer dated May 21, 2013.
Petitioner served a Ten Day Notice to Cure Default, dated March 12, 2013, upon Respondent demanding the sum of $13,038.42 for real estate taxes pursuant to paragraph 4(b) of the lease as follows: General real estate taxes ($41,768.68) July to December 2012:$20,884.34General real estate taxes base year 2008-2009 half year:$14,541.38Increase in real estate taxes from base year:$6,342.9640% pro-rata share due from tenant July 2012-December 2012:$2,537.19General real estate taxes ($43,796.76) January to June 2013:$21,898.38Increase in real estate taxes from base year 2008-2008 half year:$14,541.3840% pro-rata share due from tenant January 2013 to June 2013:$2,942.80School real estate taxes ($62,870.02) July to December 2012:$31,435.01School real estate taxes base year 2008-2008 half year:$23,723.88Increase in school real estate taxes from base year:$7,711.1340% pro-rata share due from tenant July to December 2012:$3,084.45School real estate taxes ($64,817.63) January to June 2013:$32,408.82School real estate taxes base year 2008-2009 half year:$23,723.88Increase in school real estate taxes from base year:$8,684.9440% pro-rata share due from tenant January to June 2013:$3,473.98Legal fees:$1,000.00
Thereafter, Petitioner sent Respondent a Ten (10) Day Notice of Termination, dated April 10, 2013, directing Respondent to vacate by April 21, 2013. Additionally, Petitioner accelerated all rent and additional rent pursuant to Paragraph 23(b)(ii) of the lease, because of the failure to pay the taxes claimed to be owed.
Respondent submitted a motion for failure to state a cause of action on the grounds that:
(1)The alleged notice of termination is deficient and ineffective.
(2)The Petitioner failed to comply with the Lease provisions governing Respondent's obligations for payment of additional rent.
Respondent alleges that Paragraph 4(b) of the Lease allows it to pay the taxes monthly [*2](1/12) over the course of the year. Paragraph 4(b) states: 4(b)In addition to the Base Rent, Tenant shall pay to Landlord its Pro Rata Share of all increases in real estate taxes and assessments (collectively "Taxes") levied against the premises in excess of the base year. Tenant shall pay to Landlord monthly, in addition to the Basic Rent and on the same day provided in Article 4(a), 1/12 thereof. Landlord shall have the right, but not the obligation, to appeal or contest any Taxes and Tenant shall pay its Pro Rata Share of Landlord's costs for the contest or appeal which costs, shall in no case ever exceed any tax savings. For purposes of this Lease, the base year shall mean the Town's Real Estate Taxes from December 1, 2008 - November 30, 2009.
Respondent contends that Petitioner did not comply with the terms of Paragraph 4(b) because Petitioner did not provide Respondent with the proper increase in taxes which would allow Respondent to pay the increase in equal installments over the course of a year. Instead, Petitioner demanded payment of taxes all at once. Respondent's arguments are summarized in paragraphs 25 and 26 in the Affirmation of Harvey L. Woll, dated June 5, 2013: 25.The same legal principles require the dismissal of the petition in the case at bar. While the Lease in this case provides that the Base Rent is to be paid without a bill or demand being necessary, Additional Rent — consisting of the increase in real estate taxes — is the subject of a separate paragraph and its payment (in 12 equal monthly installments over the course of each year) obviously requires that the landlord inform the tenant about the increases in a timely manner so that the tenant can pay such Additional Rent in 12 equal monthly installments along with the Base Rent, in accordance with the Lease.26.The Petition in this case not only fails to allege that the Landlord complied with such a condition precedent to enable the Tenant to pay one-twelfth of the Additional Rent along with the payment of the Base Rent, but the Notice to Cure and the Notice of Termination indicate that all increased taxes (totaling $12,308.42 plus $1,000.00 in Legal Fees), were demanded all at once. [footnote omitted].
Respondent further alleges that Petitioner has negated the termination of the tenancy by the exercise of the acceleration clause. Petitioner contends that Respondent's argument concerning the acceleration clause is without basis and does not extend the Lease and does not invalidate the Notice of Termination.
Decision
This court agrees with Respondent that this summary proceeding should be dismissed. It is clear that Petitioner failed to properly inform Respondent of the increase in taxes due so as to permit Respondent to pay equal installment of taxes pursuant to Paragraph 4(b). Failure to comply with this condition precedent to trigger Respondent's obligation to pay the tax increases on a monthly basis requires dismissal.
In Redmont Realty Co. v. GG 105 Yellowstone Co. (2001 WL 1729690, 2001 NY Slip Op 40585 (U) [App Term, 2nd & 11th Jud Dists 2001]), the Court held that the tenant was not [*3]obligated to pay the increase in common area costs and insurance premiums because the landlord failed to comply with the condition precedent of providing proper notice: As such, the lease provides that the landlord's ability to recover said charges is conditioned upon the landlord providing the tenant, within 60 days after expiration of the calendar year, with, inter alia, copies of receipted bills or other proof of payment and a statement setting forth a detailed calculation of the tenant's pro rata share (see, Bijan Designor for Men v. Fireman's Fund Ins. Co., 264 AD2d 48, 51-52). Since the landlord did not comply with the conditions precedent, pursuant to terms of the lease, the tenant was not obligated to pay its pro rata share of common area costs and insurance premiums (see, Walton v. Eastern Analytical Labs, 246 AD2d 532; Winfield Capital Corp. v. Mahopac Auto Glass, 208 AD2d 715).
The Court in Weisblatt v. Schwimmer (249 AD2d 297, 670 NYS2d 891 [2nd Dept 1998]) dismissed the landlord's attempt to impose liability on the tenant for real estate taxes and common operating costs because the landlord failed to establish that timely notice was given to tenant. Proper notification was held to be a condition precedent which requires dismissal if landlord failed to comply with its notice obligations which occurred in the case at bar: It is apparent from this record that the landlord failed to satisfy conditions precedent to the tenant's obligation to pay these charges. Accordingly, the tenant is not obligated to pay those charges, and the defendants' counterclaim for these charges must be dismissed (see, Walton v. Eastern Analytical Labs, 246 AD2d 532, 667 NYS2d 407; Winfield Capital Corp. v. Mahopac Auto Glass, 208 AD2d 715, 617 NYS2d 499; Woodlaurel Inc. v. Wittman, 199 AD2d 497, 606 NYS2d 39).
Dismissal was also granted in Walton v. E. Analytical Labs (246 AD2d 532, 667 NYS2d 407 [2nd Dept 1998], supra) wherein the landlord failed to properly notify the tenant of the additional rent due (increase in operating expenses) which was a condition precedent before liability could be imposed upon the tenant for payment of same.
Similarly, in Winfield Capital Corp. v. Mahopac Auto Glass, Inc. (208 AD2d 715, 617 NYS2d 499 [2nd Dept 1994], supra) the Court upheld the dismissal of the complaint because the landlord failed to notify the tenant of the additional rents due under the lease's tax escalation clause by the date required by the lease.
Based upon the above, it is clear that Petitioner here failed to provide proper notice (condition precedent) to Respondent of its obligation to pay the increase in taxes (additional rent) in equal installments on an annual basis. Instead, Petitioner seeks to collect all the taxes at once contrary to the clear language of Paragraph 4(b) of the Lease.
Thus, since there is no default by Respondent, there is no right by Petitioner to accelerate all sums due under the lease.
This court notes that it does not have jurisdiction in a summary proceeding to entertain the claim for accelerated rent which must be brought in a plenary action. (see Ross Realty v. V & A Fabricators, 42 AD3d 246, 836 NYS2d 242 [2nd Dept 2007]; Van Duzer Realty Corp. v. Globe Alumni Student Assistance Assn., Inc., 102 AD3d 543, 959 NYS2d 39 [1st Dept 2013]).
Conclusion[*4]
1.This summary proceeding is dismissed because Petitioner failed to comply with its obligation (condition precedent) to properly inform Respondent of its obligations to pay the additional rent and taxes.
2.There is no basis to accelerate sums under the lease because there was no default.
3.The District Court is without jurisdiction to entertain accelerated rent/additional rent in a summary proceeding.
So Ordered:
/s/ Hon. Scott Fairgrieve
DISTRICT COURT JUDGE
Dated:July 29, 2013
cc:Harvey L. Woll, Esq.
DiCrescio & Trivedi, LLP
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