Warren Murray Prop. Owner, LLC v Hexner
Annotate this CaseDecided on January 29, 2016
Civil Court of the City of New York, New York County
Warren Murray Property Owner, LLC, Petitioner-Landlord,
against
Jonathon Hexner, D/B/A, JERRY RIGGS, INC., A/K/A, J. RIGGS FINE ART, Respondent-Tenant, -and- "XYZ CORP.," "JOHN DOE," and "JANE DOE," Respondents-Undertenants.
LT-075681-15/NY
Petitioner's Counsel
Bruce Weiner, Esq.
Warshaw Burstein, LLP
555 Fifth Avenue
New York, NY 10017
Respondent's Counsel
Michael Kozek, Esq.
Ween & Kozel, LLC
150 Broadway
New York, NY 10038
Paul A. Goetz, J.
Recitation, as required by CPLR § 2219(a), the following papers were considered on the motion(s):
PapersNumbered
Respondent's notice of motion to dismiss or stay, affidavit, affirmation, exhibits and memorandum of law1
Petitioner's cross-notice of motion for summary judgment, to dismiss affirmative defenses and for use and occupancy, affidavits, affirmation and exhibits2
Respondent's affirmation in opposition to the cross-motion and in further support of respondent's motion, affidavits and exhibits3
Petitioner's reply affirmation in support of cross-motion and exhibits4
PAUL A. GOETZ, J.C.C.
Upon the foregoing cited papers, Respondent's motion to dismiss or stay the proceeding and Petitioner's cross-motion for summary judgment are decided as follows:
Petitioner, Warren Murray Property Owner, LLC, ("Petitioner") initiated this commercial holdover proceeding on September 11, 2015, after Respondent, tenant, Jonathon Hexner ("Respondent") failed to vacate the premises located on the third floor of 71-73 West Broadway, New York, New York 10007, pursuant to a Notice of Termination ("Termination Notice"). Respondent interposed an answer on October 2, 2015, asserting, inter alia, the affirmative defenses, that Petitioner waived the termination of Respondent's tenancy by accepting rent after the termination of Respondant's tenancy and before commencement of this holdover proceeding, that he is seeking coverage under Article 7-C of the Multiple Dwelling before the New York City Loft Board ("Loft Board") and that he filed a declaratory judgment action in Supreme Court seeking a declaration that the premises are covered by the Rent Stabilization Law.
The Notice of Termination, dated April 30, 2015, was served on Respondent by regular and certified mail and by overnight delivery (FedEx) on May 1, 2015. The Termination Notice purportedly terminates Respondent's tenancy effective August 31, 2015, pursuant to a provision in the lease allowing the landlord (Petitioner's predecessor-in-interest) to terminate the lease upon entering into contract of sale for the building of which the premises is a part. Ownership to the building was conveyed to Petitioner by deed dated May 5, 2015, by the party with whom Respondent entered into a lease for the premises, Murray Warren Associates, LLC. The lease for the premises is for a three year term commencing on July 1, 2013 and ending on June 20, 2016. Paragraph 2 of the lease states that the "tenant shall use and occupy the demised premises for artist studio/office space. No Residential use is allowed at any time."
Respondent's Motion to Dismiss or Stay the Proceeding
Respondent moves to dismiss or stay the proceeding pursuant to Civil Practice Law and Rules ("CPLR") section 3211(a)(4) on the grounds that there is prior a proceeding before the Loft Board and a prior action in Supreme Court.
Prior Proceeding Before the Loft BoardAfter the Termination Notice was served, but before this proceeding was commenced, Respondent filed a Loft Board Coverage Application ("Application") with the Loft Board on August 6, 2016. The Application seeks interim multiple dwelling status for the premises pursuant to Multiple Dwelling Law ("MDL") section 281(1), (4) or (5) ("Loft Law").
CPLR section 3211(4) allows a party to move for dismissal where "there is another action pending between the same parties for the same cause of action in a court of any state or the United States; the court need not dismiss upon this ground but [*2]may make such order as justice requires[.]"
Petitioner argues Respondent is not entitled to stay because "if Tenant were genuinely seeking to contest the termination of his commercial lease . . . the proper course would have been to move for a preliminary injunction in the Supreme Court . . ." Petitioner also asserts that Respondent does not meet the criteria for granting a preliminary injunction ("probability of success on the merits, danger of irreparable injury in the absence of an injunction and a balance of equities in [ ] favor" of the movant. [CC Vending Inc. V Berkeley Educational Services of New York, Inc., 74 AD3d 559, 560 (1st Dept 2010) lv denied 16 NY3d 705 (2011)] (citation omitted)].
However, the First Department rejected this argument in a case similar to this proceeding in Wong v Gouverneur Gardens Housing Corp., 308 AD2d 301 [1st Dept 2003]). In Wong, the plaintiff, a Mitchell-Lama tenant, was served with predicate notice of eviction on the grounds that she was in violation of the terms of her occupancy agreement and New York City regulations because her application and tenancy were not approved by the New York City Department of Housing Preservation and Development ("HPD"), the City agency charged with overseeing Mitchell-Lama cooperatives and rentals. (Id. at 302). Supreme Court granted the plaintiff-tenant a preliminary injunction and the First Department reversed. (Id.).
In holding that the administrative scheme contemplates an initial review by HPD, the First Department reasoned that [t]he doctrine of primary jurisdiction is intended to coordinate the relationship between courts and administrative agencies to the end that divergence of opinion between them not render ineffective the statutes with which both are concerned, and to the extent that the matter before the court is within the agency's specialized field, to make available to the court in reaching its judgment the agency's views concerning not only the factual and technical issues involved but also the meaning of the statute administered by the agency" (Id.).
In Eli Haddad Corp. v Cal Redmond Studio (102 AD2d 730 [1st Dept 1984]), the First Department upheld the Supreme Court's granting of stay pending a determination by the Loft Board in an ejectment action because whether the premises was covered by the Loft Law was "within the special competence of the Loft Board and application of the doctrine of primary jurisdiction mandates a stay pending disposition of the issue at the administrative level by the agency with the responsibility for determining whether the building meets the definition of interim multiple dwelling' . . ." (Id. [emphasis provided]; accord Matter of Jo-Fra Prop., 27 AD3d 298, 299 [1st Dept 2006] [observing that [a]ssuming judicial jurisdiction concurrent with the Loft Board, resort to the courts should be withheld in deference to the Loft Board's expertise.").
Here, Respondent has an application pending before the Loft Board requesting a determination as to whether the premises are covered by the Interim Multiple Dwelling Law. Under the controlling authority discussed above, application for a preliminary [*3]injunction is not the appropriate course of action, nor should the Court dismiss this proceeding because of the pending Application. Rather under Eli Haddad Corp and Jo-Fra Prop. the Court is required to stay the proceeding .
Accordingly, Respondent's application to dismiss based on the pending application before the Loft Board is denied, and its application for a stay is granted.
Prior Action in Supreme Court
It is long recognized that Civil Court is the strongly preferred forum for resolving landlord-tenant disputes. (Simens v Darkish, 105 AD3d 686 [1st Dept 2013]; Brecker v 295 Central Park West, Inc., 71 AD3d 564, 565 [1st Dept 2010]; Cox v J.D. Realty Associates, 217 AD2d 179 [1st Dept 1995]). Whether or not a tenancy is covered by the Rent Stabilization Law may be raised and resolved in a summary proceeding. (Cf. Towers Hotel Investors Corp. v Davis, 42 NY2d 923 [1977]; Gracecor Rlty. Co. v Hargrove, 160 Misc 2d 963 [App T 1st Dept 1994]). Indeed, "[o]nce a summary proceeding has been commenced in Civil Court where complete relief can be afforded to the tenant, there is no further basis for invoking the equitable jurisdiction of Supreme Court." (Brecker, 71 AD3d at 565). Therefore, the Respondent's pending declaratory judgment action is not a basis upon which to grant a stay or to dismiss since he can raise his claim that the premises are covered by the Rent Stabilization Law and can be afforded complete relief in this Court.
Accordingly, Respondent's motion to dismiss or for a stay based on the Supreme Court action is DENIED.
Petitioner's Cross-Motion for Summary Judgment and to Dismiss Respondent's Second Through Seventh Affirmative Defenses
Respondent's second through seventh affirmative defenses relate to Respondent's claim that the premises are covered either under the Loft Law or the Rent Stabilization Law. Because there is a material issue of fact created by Respondent's moving and opposition papers as to whether Respondent's tenancy is covered under the Loft Law or the Rent Stabilization Law, Petitioner's motion for summary judgment and to dismiss Respondent's second through seventh affirmative defenses is denied. (Accord Eli Haddad Corp, 102 AD2d at 730).
Accordingly, Petitioner's cross-motion for summary judgment and to dismiss Respondent's second through seventh affirmative defenses is DENIED.
Petitioner's Motion to Dismiss Respondent's First Affirmative Defense
Respondent's first affirmative defense avers that Petitioner accepted rent subsequent to the termination of his tenancy and before the date of the petition and for [*4]a period after this proceeding was commenced.
A landlord's acceptance of rent for a period subsequent to the termination date set forth in a termination notice and prior to the commencement of the holdover proceeding (the "window period") may vitiate the termination notice. (see 433 West Assoc. v Murdock, 276 AD2d 360, 361 [1st Dept 2000]; 205 East 78th St. Assoc. v Cassidy, 192 AD2d 479 [1st Dept 1993]; PCV/St LLC v Finn, 2003 WL 21203337, 2003 NY Misc LEXIS 595 [App T 1st Dept 2003]).
However, where, as here, the lease includes an unambiguous nonwaiver clause, an affirmative defense based on acceptance of rent during the window period is defeated. (250 West Broadway Rlty Corp. v FFE LLC, 23 Misc 3d 126 [App T 1st Dept 2009]; Dennis & Jimmy's Food Corp. v Milton Co., 99 AD2d 477 [2nd Dept 1984]).
Accordingly, Petitioner's cross-motion to dismiss Respondent's first affirmative defense is GRANTED.
Petitioner's Cross-Motion for Use and Occupancy
Petitioner seeks use and occupancy in an amount not less than the last rate set forth in the lease. The lease sets the rent at $2,450 starting July 1, 2015 until to the expiration of the lease on June 30, 2016. Respondent did not oppose this portion of Petitioner's cross-motion.
Real Property Actions and Proceedings Law ("RPAPL") section 745(2)(a) requires that upon a landlord's application, the Court is to direct payment or deposit in Court of all post Petition use and occupancy and all sums as they become due when the case has been pending for thirty days or more after the parties first appearance less any adjournments requested by the landlord. The parties first appeared in this proceeding on September 16, 2015, and the Court file does not indicate that any of the adjournments were requested by Petitioner.
Since more than thirty days have elapsed since the parties first appeared in court and there is no indication that any of the adjournments were requested by Petitioner, Petitioner's motion for use and occupancy is granted. (72A Rlty Assc. L.P. v Mercado, 46 Misc 3d 59 [App T 2014] [ observing "landlord's unopposed motion for issuance of rent deposit order should have been granted, where more than 30 days have elapsed since the parties' first court appearance herein, and, so far as known, no adjournments were requested by landlord"]; accord Eli Haddad Corp., 102 AD2d at 730 [(a case that predates RPAPL § 745(2)(a)] directing payment of use and occupancy while case stayed pending Loft Board determination.).
Based on the foregoing, it is hereby
ORDERED Respondent's motion to dismiss is DENIED; and it is further
ORDERED Respondent's motion for a stay pending a decision by the Loft Board is GRANTED and the case is marked off the calendar and may be restored by notice of motion by either party; and it is further
ORDERED Respondent's motion for a stay pending a decision by the Supreme Court on Respondent's declaratory judgment action is DENIED; and it is further
ORDERED Petitioner's motion for summary judgment is DENIED; and it is further
ORDERED Petitioner's motion to dismiss Respondent's second through seventh affirmative defenses is DENIED; and it is further
ORDERED Petitioner's motion to dismiss Respondent's first affirmative defense is GRANTED; and it is further
ORDERED Petitioner's motion for use and occupancy is GRANTED, all unpaid use and occupancy from the date this proceeding was commenced shall be paid by Respondent directly to Petitioner by February 20, 2016, at the rate of $2,450.00 per month and shall be paid directly to Petitioner each month thereafter according to the terms of the lease; and it is further
ORDERED any relief requested by either party not directly addressed herein has been considered by the Court and is DENIED.
This constitutes the Decision and Order of the Court.
Dated: January 29, 2016
ENTER:
_____________________________________
PAUL A. GOETZ, J.C.C.
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