Esplanade Gardens, Inc. v Simms
Annotate this CaseDecided on June 6, 2016
Civil Court of the City of New York, New York County
Esplanade Gardens, Inc., Petitioner,
against
Bradford Simms, et al., Respondents.
74586/2015
Gutman, Mintz, Baker & Sonnenfeldt, P.C., New Hyde Park, for Petitioner.
Neighborhood Defender Service of Harlem, New York City, for Respondent Bradford Simms.
Michael L. Weisberg, J.
This is a holdover summary eviction proceeding premised on allegations that Respondents have engaged in nuisance conduct. Respondent Bradford Simms has moved pre-answer for an order dismissing the petition on the ground that the termination notice was vitiated when Petitioner accepted rent after termination of the tenancy but prior to commencement of this proceeding.[FN1]
The termination notice at issue terminated the tenancy on August 11, 2015. The notice of petition and petition were served by conspicuous place service and mailing on August 24th. Respondent allegedly tendered a check for August rent to the management office on or around August 6th. Respondent has submitted evidence that suggests that the check was deposited and that it cleared on August 18th.
Petitioner does not dispute that it accepted a check in August, that the check was for August rent, or that it deposited the check and the check cleared around August 18th. Instead, Petitioner alleges that its acceptance of the check was a mistake. It alleges that both Simms and his cousin (who also lives in the apartment and is named as a respondent) were on a "do not accept [payment]" list that is kept at the front desk of the building management office. The list has all the names of tenants or occupants involved in summary holdover proceedings.
Petitioner claims that the reason the check at issue was accepted was because it was drawn on the account of "Michelle Edwards." A copy of the check, annexed to Respondent's [*2]motion, confirms this. In the memo section of the check is written "B Simms/D Edwards," an account number of some type, and "12K," which is the apartment number of the subject premises.
Respondent alleges that he has paid his rent with checks drawn on Michelle Edwards account since 2011, the year his cousin, Darryl Edwards, moved into the apartment. Michelle Edwards is the mother of Darryl Edwards.
The leading case in the First Department regarding the acceptance of rent between termination of the tenancy and commencement of the proceeding is 205 East 78th St. Assocs. v Cassidy (192 AD2d 479 [1st Dept 1993]). Cassidy was a case based on alleged nonprimary residence. The landlord had accepted rent after the tenancy terminated by receiving the tenant's check and depositing it into the bank. Though the landlord immediately sent the tenant a letter explaining that its acceptance of the payment was "inadvertent" and that it intended to pursue the nonprimary residence claim, it did not return the rent payment. The Appellate Division reversed the Appellate Term and dismissed the petition. (Id.)
The Appellate Division did not provide an opinion with its order, but instead dismissed the petition "for the reasons stated by Gans, J., at Civil Court and McCooe, J. at the Appellate Term" (id.). Justice McCooe had dissented from the Appellate Term's decision and voted to affirm dismissal. His reasoning was straightforward. Though the landlord claimed that its acceptance and deposit of the rent payment was inadvertent, it did not explain the inadvertence nor did it return the payment. Therefore, "the landlord's acceptance and retention of the August rent nullified the termination date [of the notice]" and required dismissal of the petition for lack of an adequate notice (205 East 78th St. Assocs. v Cassidy, NYLJ, Sept. 27, 1991 at 21, col 4 [App Term, 1st Dept 1991]).
Cassidy clearly stands for the proposition that a notice of termination is nullified when the landlord accepts and retains the tenant's payment of rent after termination of the tenancy but prior to commencement of the holdover eviction proceeding. Cassidy has not been overturned or otherwise repudiated and is still binding precedent in the First Department. It was cited in 2005 by the Appellate Term, First Department in 184 West 10th Corp. v Westcott (8 Misc 3d 132[A], 2005 NY Slip Op 51150[U] [App Term, 1st Dept 2005]), in which the court affirmed dismissal of the petition where the landlord had accepted rent for three months after expiration of the notice of nonrenewal but prior to commencement of the proceeding.
Yet in several other cases decided between 1999 and 2011, the Appellate Term did not follow Cassidy and reversed dismissal or affirmed denial of dismissal, despite their factual similarity.[FN2] In each of these cases the court introduced a standard not used or discussed by the Appellate Division in Cassidy: that dismissal was contingent on the tenant's having proven that the landlord intended to relinquish a known right (e.g. Beacon 109 223-225 LLC v Mon Sheng Wu, 32 Misc 3d 140[A], 2011 NY Slip Op 51570[U] [App Term, 1st Dept 2011]).[FN3] It is these decisions in which Petitioner grounds its opposition to Respondent's motion. Petitioner argues [*3]that it accepted Respondent's rent by mistake, that it never intended to reinstate Respondent's tenancy, and that any determination of the issue must wait for trial, at which Respondent must prove that Petitioner intended to reinstate the tenancy.
Cassidy does not discuss "the relinquishment of a known right" or the burden of proof. Instead, for this standard the Appellate Term has cited either of two decisions from the Court of Appeals that pre-date Cassidy: Sullivan v Brevard Assocs. (66 NY2d 489 [1985]) and Jefpaul Garage Corp. v Presbyterian Hosp. (61 NY2d 442 [1984]). These cases were not eviction proceedings brought by the landlord, but instead were declaratory judgment actions brought by the tenant or occupant.
Sullivan was the sister of the tenant of record in a rent stabilized apartment. The tenant of record had vacated and Sullivan wanted to succeed to the tenancy. But this was before the Rent Stabilization Code provided for the right to succeed by certain family members (in fact, it was the decision in Sullivan that led to the promulgation of that right), so Sullivan argued that the principles underlying a family member's right to succeed to a rent controlled apartment should equally apply to a rent stabilized apartment. The Court of Appeals rejected that argument. (Sullivan, 61 NY2d 442.)
Relevant here, Sullivan also argued that she was entitled to tenancy rights because the landlord accepted rent for the apartment by checks in her name. The Court rejected this argument as well, because "there is no evidence that, by simply accepting her checks, [the landord] intended to relinquish a known right" (id. at 495).
Jefpaul was similar, except in that case the plaintiff, Presbyterian Hospital, was already a tenant. The lease provided for a right to renew for a five-year period at Presbyterian's option, conditioned on Presbyterian's compliance with the lease terms. When Presbyterian attempted to exercise its option to renew Jefpaul refused, citing Presbyterian's nonpayment of rent. Jefpaul served a notice to cure for nonpayment of rent and illegal sublet. Presbyterian then commenced the declaratory judgment action and obtained a "Yellowstone" injunction. (Jefpaul Garage Corp., 61 NY2d 442.)
As described by the Court, "the issue is whether defendant's acceptance of rent during the term with knowledge of plaintiff's violations and without terminating the lease, assuming plaintiff had violated its terms, constituted a waiver of the violations as a matter of law and thus enabled plaintiff not only to remain in possession during the lease term but also to exercise the option to renew" (id. at 445). The Court held that the acceptance of rent, as a matter of law, did not constitute a waiver of the violations. "A waiver is the voluntary abandonment or relinquishment of a known right. It is essentially a matter of intent which must be proved" (id. at 446).
Reviewing Sullivan and Jefpaul in the context of an eviction proceeding highlights the difference between nullification (or vitiation) of the termination notice and permanent waiver of the landlord's right to object to certain conduct or to enforce some right. For example, where a landlord has terminated a tenancy based on allegations of conduct constituting nuisance, the landlord's acceptance of rent after termination but prior to commencement of the proceeding nullifies the effect of the notice and therefore require dismissal. But it does not necessarily follow that the landlord has permanently waived its right to object to the conduct and may not serve a new termination notice for the same conduct.
Such was the holding in Associated Realties v Brown (146 Misc 2d 1069 [Civ Ct, NY County 1990]), in which the Hon. Peter Wendt dismissed the petition but declined to find that [*4]the landlord had waived its right to object to the tenant's conduct. Judge Wendt distinguished between the requirements for establishing nullification and waiver thus:
For a landlord to waive its substantive right to object to a particular conduct on the part of a tenant, more than inadvertence is necessary. A waiver is the voluntary abandonment or relinquishment of a known right, and is not to be rotely inferred from the acceptance of rent in all circumstances (Jefpaul Garage Corp. v Presbyterian Hosp., 61 NY2d 442 [1984]; 85th Estates Co. v Goldberg, NYLJ, Feb. 14, 1986 at 12, col 4 [App Term, 1st Dept]). Here, the papers alone do not establish, without a trial, that landlord knowingly and voluntarily waived its right to demand a forfeiture of respondent's tenancy for the alleged conduct.However, it is has been the law in this jurisdiction that acceptance of rent after service of the notice of termination and before commencement of the proceeding, for a period after expiration of the notice, vitiates the notice [citations omitted]. The acceptance of rent for a period after expiration of the notice sends the tenant a message contrary to that contained in the notice . On the one hand landlord requires tenant to leave, and on the other, accepts rent for a period after surrender is demanded. This can easily imply to tenant that she need not surrender the premises, but may continue in possession. By such acceptance of rent for the period between expiration of the notice and commencement of the proceeding, landlord therefore nullifies the effect of the notice.(Id. at 1070-1071.)
Arguably, vitiation of a predicate notice of nonrenewal based on a claim of nonprimary residence is equivalent to a waiver of the type at issue in Sullivan and Jefpaul, at least for a rent stabilized tenancy. This is because, unlike with allegations of nuisance or breach of lease, the landlord cannot simply serve a new notice and then commence a new case, but must first serve a renewal lease and then wait to serve a new notice of nonrenewal. The landlord has, in effect, relinquished its right to contest the tenant's nonprimary residence during the prior lease period and has been compelled to enter into a new lease agreement contrary to its professed intentions.
For whatever reason, this view was implicitly rejected by the Appellate Division, First Department in Cassidy. But it is the basis of the recent decision of the Appellate Division, Second Department in Matter of Georgetown Unsold Shares, LLC v Ledet (130 AD3d 99 [2d Dept 2015]), which was also based on a claim of nonprimary residence. Explicitly disagreeing with Cassidy, the Second Department held that:
[A] landlord's acceptance of unsolicited rent after the expiration of a lease does not, standing alone, amount to a voluntary relinquishment of the right to contest a tenant's possession on the basis that the leasehold is not the tenant's primary residence. Since the very essence of a waiver is the intentional relinquishment of a known right, a waiver cannot be created via negligence, oversight, or thoughtlessness.(Id. at 105 [citations omitted].) In Georgetown, the record was "devoid" of evidence that would establish that by accepting the tenant's rent check the landlord intended to relinquish its right to proceed on its renewal notice and so dismissal was premature (id.).
But Georgetown has not elided the standards for nullification of a termination notice and waiver of a claim in the Second Department and its holding would seem limited to proceedings based on nonprimary residence. This conclusion is drawn from the decision two months later of [*5]the Appellate Term for the Second, Eleventh, and Thirteenth Judicial Districts in 92 Bergenbrooklyn, LLC v Cisarano (50 Misc 3d 21 [App Term, 2d, 11th & 13th Jud Dists 2015]). That case was a holdover eviction proceeding based on termination of an unregulated, month-to-month tenancy. The lower court dismissed the petition based on the landlord having accepted rent after termination of the tenancy but prior to the commencement of the proceeding. The Appellate Term affirmed, without citing or discussing Georgetown or the standard for waiver. (Id.)
Read together the decisions in Georgetown and Bergenbrooklyn provide appellate confirmation of Judge Wendt's parsing of nullification and waiver in Brown. They stand for the proposition that acceptance of rent after termination but prior to commencement of the proceeding may not be sufficient, as a matter of law, to establish waiver of a claim of nonprimary residence, but is sufficient to nullify a termination notice in holdover proceedings not based on nonprimary residence. That is, in the Second Department there are two different standards applied when considering the effect of the acceptance of rent after termination of the tenancy: one for those cases based on nonprimary residence and one for those that are not. In the First Department, the Appellate Division did not apply the waiver standard to the facts in Cassidy. Therefore, and the conflicting decisions of the Appellate Term notwithstanding, a tenant arguing for vitiation of a termination notice need not prove that the landlord intended to relinquish a known right when it accepted rent after termination but prior to commencement of the proceeding. While that is certainly the standard to be applied when a tenant argues that the landlord has permanently waived its right to object to the conduct complained of, that is not Respondent's argument here.
This court is required by Cassidy to dismiss the petition because the termination notice has been vitiated by Petitioner's acceptance of rent (including deposit of the check) after termination of the tenancy. Although Petitioner attempts to do one better than petitioner in Cassidy and explain the nature of its mistake, it explanation is unavailing. First, almost two weeks passed in between its "mistaken" acceptance of the check and its deposit of the check into the bank. Although hypothetically its mistake in initially accepting the check may be explained, that does not explain why Petitioner then deposited the check instead of returning it, or even after depositing the check failed to refund the money to Respondent.
Additionally, while Petitioner's explanation as to why it initially accepted the check has the veneer of reasonableness, it does not withstand closer scrutiny. By all accounts it was Respondent, not Michelle Edwards, who personally delivered the check to the management office. And though the check certainly bore the name "Michelle Edwards," it also clearly delineated the names of Respondents and the apartment number of Respondents' apartment. Finally, it is undisputed that Respondent has paid rent with checks drawn on Michelle Edwards account since 2011. In light of all these facts, it is difficult to conceive of any but the most narrow set of circumstances under which Petitioner would succeed in rejecting payment of a tenant with whom it is in litigation.
Cassidy did not necessarily create an absolute rule that acceptance of rent post-termination but pre-commencement requires dismissal. It seems to have left room for inadvertent acceptance of rent, where the explanation of inadvertence is reasonable and where the rent was refunded to the tenant. That is not the case here. By accepting and retaining rent for a period after termination of the tenancy after termination of the tenancy, but before commencement of the proceeding, Petitioner has most definitely not waived its right to object to the conduct [*6]complained of and seek eviction based on that conduct. But it has nullified the termination notice, and as such the petition is dismissed.
Dated:June 6, 2016
_________________________________
Hon. Michael L. Weisberg
APPENDIX
Name/CitationOrderFacts
Gottlieb v Scaringi,
NYLJ, July 8, 1999 at 26, col 6affg denial of dismissalLandlord accepted two rent payments after termination, prior to commencement (unknown grounds)
Shared Equities v Roselle,
NYLJ, Mar. 30, 2001 at 20, col 1revg dismissalTenant repeatedly tendered and landlord repeatedly returned rent after termination. One rent payment was not returned (nonprimary residence).
Goldman v Becraft,
6 Misc 3d 135(A), 2001 NY Slip Op 50152(U)revg dismissalLandlord accepted payments of December and January rent prior to December 29 termination (nonprimary residence).
West Waverly Equities Group v Lieff, 190 Misc 2d 280 (2001)revg dismissalLandlord accepted one rent payment after termination, prior to commencement (nonprimary residence).
PCV/ST LLC v Finn,
2003 NY Slip Op 50897(U)affg denial of dismissalLandlord accepted three months of rent after termination, prior to commencement (nonprimary residence).
184 West 10th Corp. v Westcott, 8 Misc 3d 132(A), 2005 NY Slip Op 51150(U)affg dismissalLandlord accepted three months of rent after termination, prior to commencement (nonprimary residence).
Metropolitan Ins. and Annuity Co. v Hartman, 11 Misc 3d 140(A), 2006 NY Slip Op 50665(U)revg dismissalLandlord accepted one rent payment after termination, prior to commencement (nonprimary residence).
Beacon 109 223-225 LLC v Mon Sheng Wu, 32 Misc 3d 140(A), 2011 NY Slip Op 51570(U)affg denial of dismissalLandlord accepted one rent payment after termination, prior to commencement (nonprimary residence). Footnotes
Footnote 1:Respondent alleges that vitiation of the termination notice deprives this court of subject matter jurisdiction. While service of a valid notice of termination is an essential element of Petitioner's prima facie case and failure to satisfy that element is a defense, it does not implicate the court's subject matter jurisdiction (see 433 West Assocs. v Murdock, 276 AD2d 360 [1st Dept 2000]). However, the court will overlook the incorrect designation as another ground applies and there is no prejudice to Petitioner (see Dean R. Pelton Co., Inc. v Moundsville Shopping Plaza, Inc., 173 AD2d 201 [1st Dept 1991]).
Footnote 2:In one of those cases, PCV/ST LLC v Finn (2003 NY Slip Op 50897[U] [App Term, 1st Dept 2003]), the court held dismissal was not warranted even though landlord accepted rent for three months after expiration of the notice of nonrenewal but prior to commencement of the proceeding, chalking the landlord's acceptance up to the fact that it managed many apartments and used a computer system to send out rent bills. Two years later, in Westcott, the Appellate Term affirmed dismissal where the landlord accepted rent for three months after expiration of the notice of nonrenewal but prior to commencement of the proceeding.
Footnote 3:A table of relevant post-Cassidy decisions of the Appellate Term, First Department is annexed hereto.
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