280-290 Collins Owners Corp. v McCaskill

[*1] 280-290 Collins Owners Corp. v McCaskill 2018 NY Slip Op 50800(U) Decided on June 4, 2018 City Court Of Mount Vernon Seiden, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 June 4, 2018
City Court of Mount Vernon

280-290 Collins Owners Corp., Petitioner,

against

Nancy McCaskill, Respondent.



3137-17



Gross & Stabile, LLP

Attorneys for Petitioner

9 West Prospect Avenue, Ste. 406

Mount Vernon, NY 10550

Raneri, Light & O'Dell, PLLC

Attorneys for Respondent

150 Grand Street, Suite 502

White Plains, New York 10601
Adam Seiden, J.

In this holdover summary proceeding, petitioner, 280-290 Collins Owners Corp., seeks to terminate the tenancy of respondent, Nancy McCaskill, an almost twenty-year shareholder of 280 Collins Avenue, Apt. 1A, Mount Vernon, New York, on the ground that respondent has violated the terms of her lease by installing a new washing machine into her apartment.

Respondent previously moved for dismissal of the instant action pursuant to CPLR § 3211(a)(7) for failure to state a cause of action. Petitioner opposed the motion and cross-moved for summary judgment seeking a judgment of possession for the apartment and the issuance of a warrant of eviction. In a Decision and Order dated February 5, 2018 the Court denied both respondent's motion and petitioner's cross-motion for summary judgment.

The matter was on for trial on April 12, 2018. On said date, rather than present testimony, the parties agreed to submit a Joint Statement of Facts and issues presented to the Court upon which its decision would be based as well as memoranda presenting their respective positions.

Pursuant to the Joint Statement of Facts, respondent purchased the shares allocated to [*2]subject apartment 1A at 280 Collins Avenue, Mount Vernon, New York in April 1998 with a washing machine installed and entered into possession pursuant to a proprietary lease. At some time during 2014, petitioner's Board of Directors duly enacted House Rule 21.

House Rule 21 states as follows:

The Board of Directors having determined that the plumbing systems

of the Buildings are not sufficiently robust to allow use of washing machines without damage to the plumbing and to other apartments, washing machines, dryers or combination washer/dryer machines are not permitted to be used or kept in any apartment.

As per the Joint Statement of Facts, the cooperative did not contact respondent regarding her specific washing machine after enactment of House Rule 21.

In 2017, respondent installed a new washing machine without notifying or obtaining permission from the cooperative ("First 2017 Washing Machine"). On June 9, 2017, the First 2017 Washing Machine caused a flood in the apartment. After the flood, the managing agent wrote to respondent demanding that she remove the washing machine. In communication dated July 19, 2017 from respondent's counsel, petitioner learned that respondent had installed the First 2017 washing machine after the enactment of House Rule 21 and that she had further permitted the manufacturer to replace the First Washing Machine with another new washing machine (the "Second 2017 Washing Machine"). Respondent refused to remove the Second 2017 Washing Machine after which petitioner moved to terminate respondent's proprietary lease. Since the incident on June 9, 2017, the Second Washing machine has been inspected by petitioner and appeared to be functioning normally.

The Joint Statement of Facts cites the following pertinent lease provisions:

Proprietary Lease Paragraph 13:The Lessor has adopted House Rules which are appended hereto, and the Directors may alter, amend or repeal such House Rules and adopt new House Rules. This lease shall be in all respects subject to such House Rules which, when a copy thereof has been furnished to the Lessee, shall be taken to be part hereof, and the Lessee hereby covenants to comply with all such House Rules and see that they are faithfully observed by the family, guests, employees and subtenants of the Lessee. Breach of the House Rules shall be a default under this lease. The Lessor shall not be responsible to the Lessee for the nonobservance or violation of House Rules by any other lessee or person.Proprietary Lease Paragraph 18(c):If, in the Lessor's sole judgment, any of the Lessee's equipment or appliances shall result in damage to the building or poor quality or interruption of service to other portions of the building, or overloading of, or damage to facilities maintained by the Lessor for the supplying of water, gas, electricity or air conditioning to the building, or if any such appliances visible from the outside of the building shall become rusty or discolored, the Lessee shall promptly, on notice from the lessor, remedy the condition and, pending such remedy, shall cease using any appliances or equipment which may be creating the objectionable condition.Proprietary Lease Paragraph 31:If upon, or at any time after, the happening of any of the events mentioned in subdivisions (a) to (I) inclusive of this Paragraph 31, and in paragraph 17(b), as to the right by lessor to [*3]terminate this lease the Lessor shall give to the Lessee a notice stating that the term hereof will expire on a date at least five days thereafter, the term of this lease shall expire on a date so fixed in such notice as fully and completely as if it were the date herein definitely fixed for the expiration of the term, and all right, title and interest of the Lessee hereunder shall thereupon wholly cease and expire, and the Lessee shall hereupon quit and surrender the apartment to the Lessor, it being the intention of the parties hereto to create hereby a conditional limitation, and thereupon the Lessor shall have the right to re-enter the apartment and to remove all persons and personal property therefore, either by summary dispossess proceedings, or by any suitable action or proceeding at law or in equity, or by force or otherwise, and to repossess the apartment in its former estate as if this lease had not been made and no liability whatsoever shall attach to the Lessor by reason of the exercise of the right of re-entry, repossession and removal herein granted and reserved:Proprietary Lease Paragraph 31(e):If the Lessee shall be in default in the performance of any covenant or provision hereof other than the covenant to pay rent, and such default shall continue for thirty days after written notice from the Lessor.

Petitioner contends that its inaction with regard to respondent's preexisting washing machine did not create a vested right for respondent to use washing machines in her apartment in perpetuity. Petitioner further contends that the Board is within their powers to alter, amend, and repeal House Rules pursuant to Paragraph 13 of the Proprietary Lease and could amend the House Rules to require removal of all washing machines. Petitioner further contends that its inaction with regard to the pre-existing washing machine did not amount to a waiver of House Rule 21 regarding the new washing machines installed by respondent.

In opposition, respondent contends that her use of the washing machine in her unit, in contravention of House Rule 21, is permitted based upon a grandfathering rule. Respondent further contends that assuming arguendo that the Court finds that the respondent's use of the washing machine is a violation of the Proprietary Lease, such violation is not a breach of a substantial obligation of the Proprietary Lease and thus, cannot be a basis for termination of the lease. Lastly, respondent argues that if the Court does find the respondent to be in breach of a substantial obligation of the proprietary lease that respondent is entitled to a post-judgment opportunity to cure.

It is undisputed from the Joint Statement of Facts that the respondent was permitted by the petitioner, for more than three years, to keep the pre-existing washing machine despite the enactment of House Rule 21. It is also undisputed that in 2014 the Board did not contact respondent regarding her particular washing machine after the enactment of House Rule 21. As such, despite the enactment of House Rule 21, respondent was allowed to possess a washing machine in her apartment. There was, however, no agreement between the parties regarding the respondent's right to purchase a new washing machine in the event of the disrepair of the washing machine which was present at the time respondent took possession of the premises. Petitioner seeks removal of the new washing machine which respondent installed without notifying or obtaining permission from the cooperative after House Rule 21 was enacted. Once petitioner became aware of the new washing machine petitioner timely demanded that respondent remove the washing machine as per required by House Rule 21.

The Court of Appeals has determined that in the context of cooperative residential dwellings, the business judgment rule provides that a court should defer to a cooperative board's determination "so long as the board acts for the purposes of the cooperative, within the scope of its authority and in good faith. 40 West 67th Street v Pullman, 100 NY2d 147 (2003); Matter of Levandusky v One Fifth Avenue Apt. Corp., 75 NY2d 530 (1990). Moreover, it has been held that a cooperative's house rule prohibiting the installation of washing machines and dryers in individual apartments is an appropriate exercise of a cooperative's board's authority where said rule was promulgated because of concerns for the welfare of the cooperative as a whole. Konigsberg v 333 E. 46th St. Apt. Corp., 2016 NY Slip Op 31180(U) (Sup Ct NY Cty, June 21, 2016)(holding that the fact that the tenants were allowed to keep a previously approved washer/dryer for 20 years before the new house rule was adopted, did not prevent the cooperative board from enforcing the new house rule when the tenants sought to install new appliances); Cannon Point v Abeles, 160 Misc 2d 30 (App Term, 1st Dept)(holding that the fact that the tenants were permitted to maintain their appliances with the apparent knowledge of various building employees did not preclude the cooperative's board from establishing and enforcing a specific house rule prohibiting the installation of washers and dryers in individual apartments); see also, Horwitz v 1025 Fifth Ave., Inc., 7 AD3d 461 (1st Dept)(holding that a cooperative was entitled to enforce its house rules with respect to the removal of an awning irrespective of whether the awning was permissible at the time it was installed since the cooperative's current house rules prohibited the awning).

In the case at bar, respondent acknowledges in the Joint Statement of Facts that House Rule 21 was duly enacted. As such, respondent does not dispute that the Board was within its authority to enact House Rule 21. The language of House Rule 21 itself states that said rule was enacted after the Board of Directors made a determination the plumbing system of the cooperative buildings are not sufficiently robust to allow the use of washing machines in the individual apartments. As such, it is apparent that House Rule 21 was enacted by the board for the well being of the cooperative as a whole, within the scope of its authority and in good faith. Moreover, Paragraph 13 of the Proprietary Lease clearly states that the House Rules are incorporated into the lease and that the cooperative's board of directors have the authority to alter, amend or repeal such House Rules and adopt new House Rules. Based upon the foregoing, the petitioner was within its rights to demand that respondent remove the Second Washing Machine since its installation and use in respondent's apartment violated House Rule 21 and to seek to terminate the respondent's Proprietary Lease since respondent failed to comply once proper notice of her default was served upon her.

The Court notes that respondent's contention that her use of a washing machine was not a breach of a substantial obligation of the lease is without merit. Paragraph 13 of the Proprietary Lease specifically states that the Lessee covenants to comply with all such House Rules and that breach of the House Rules shall be a default of the lease. As such, by the explicit language of the lease, respondent's use of the Second Washing machine was a breach of a substantial obligation. Moreover, as noted above, it has been held that the business judgment rule should be applied when a cooperative board is seeking enforcement of its lease terms and house rules. Matter of Levandusky v One Fifth Avenue Apt. Corp, supra; see 111 Tenants Corp. v Stromberg, 168 Misc 2d 1014 (Civ Ct NY Cty 1996)(holding that a proprietary lessee's argument that her lease could [*4]not be terminated based upon her failure to comply with the "key rule" because it was not a substantial obligation does not apply in the context of a cooperative lease).

Additionally, there is no evidence that the petitioner waived its right to enforce House Rule 21. The Proprietary Lease, which was submitted as an exhibit attached to petitioner's previous motion for summary judgment, contains a non-waiver provision designated as Paragraph 26 [FN1] . Moreover, a waiver is the voluntary abandonment or relinquishment of a known right. Jefpaul Garage Corp. v Presbyterian Hospital, 61 NY2d 442, 446 (1984). The record indicates that petitioner sought to enforce House Rule 21 when they were made aware that respondent purchased and installed a new washing machine for her apartment.

Accordingly, the Court finds that respondent is in default of the Proprietary Lease due to respondent's installation and use of the Second Washing Machine, which is in violation of House Rule 21.

Respondent has until June 22, 2018 to cure her default and remove the Second Washing Machine from her apartment. The Court hereby orders the respondent to allow petitioner to inspect the subject premises on June 25, 2018 at 11:00 am to ensure that the washing machine has been removed from the premises. In the event that respondent has not cured her default and removed the washing machine by the inspection date, petitioner may file an Affirmation of Default with the Court, within ten (10) days of the inspection date, seeking a judgment of possession and for the issuance of a warrant of eviction forthwith.

With respect to petitioner's request for attorney fees, the Court further directs petitioner to submit an affirmation for attorney fees with the Court within thirty (30) days of the date of this decision.

This constitutes the Decision and Order of this Court.

Dated: June 4, 2018

Mount Vernon, New York

HON. ADAM SEIDEN

Associate City Judge of Mount Vernon Footnotes

Footnote 1:Proprietary Lease Paragraph 26: The failure of the Lessor to insist, in any one or more instances, upon a strict performance of any of the provisions of this lease, or to exercise any right or option herein contained, or to serve any notice, or to institute any action or proceeding, shall not be construed as a waiver, or relinquishment for the future, of any such provisions, options or rights, but such provision, option or right shall continue and remain in full force and effect. The receipt by the Lessor of rent, with knowledge of the breach of any covenant hereof, shall not be deemed a waiver of such breach, and no waiver by the Lessor of any provision hereof shall be deemed to have been made unless in writing expressly approved by the Directors.