Arverne Ltd. Profit Hous. Corp. v Taft'S Dental, P.C.
Annotate this CaseDecided on April 19, 2019
Civil Court of the City of New York, Queens County
Arverne Limited Profit Housing Corporation, Petitioner-Landlord,
against
Taft's Dental, P.C., Respondent-Tenant.
LT-067131-18/QU
ANDERSON KILL P.C.
Counsel for Petitioner-Landlord
Arverne Limited-Profit Housing Corp.
1251 Avenue of the Americas
New York, New York 10020
Andrew J. Wagner, Esq.
KOSSOFF, PLLC
Counsel for Respondent-Tenant
Taft's Dental, P.C.
217 Broadway, Suite 401
New York, New York 10007
Steven Y. Steinhart, Esq.
John C.V. Katsanos, J.
I. Background
Petitioner-landlord Arverne Limited Profit Housing Corporation (the "Petitioner") is the owner and landlord of a premises leased to respondent-tenant Taft's Dental, P.C. (the "Respondent"). The term of the commercial lease (the "Lease") between Petitioner and Respondent expired on May 31, 2018 and Respondent subsequently remained in possession of the premises. Petitioner has identified FirstService Residential as the designated managing agent for the premises. The record does not indicate whether rent was solicited or paid for the months of June 2018 or July 2018, but Respondent asserts that the relationship was converted into a [*2]month-to-month tenancy after the term of the Lease expired. On or about June 29, 2018, Petitioner served the Respondent with a thirty-day notice of termination (the "30-Day Termination Notice"), stating that the Respondent now held the premises "under monthly hiring, effective July 31, 2018" and that the Respondent was required to "quit, vacate and surrender possession of the [p]remises to the Landlord, on or before July 31, 2018."
Respondent has submitted a bill dated July 26, 2018 (the "July 26, 2018 Bill") that was sent to Respondent from FirstService Residential. Although Respondent asserts that the July 26, 2018 Bill sought payment for August 2018 rent, the July 26, 2018 Bill does not specifically provide the purpose of the payment requested therein and simply states, in pertinent part: (1) a payment of $3,085.20 is owed by Respondent; (2) the payment is due on August 1, 2018; (3) that the payment sought is in reference to the premises at issue; and (4) payment must be sent to "ARVERNE LTD PROFIT c/o FirstService Residential New York." On July 31, 2018 , in response to the July 26, 2018 Bill, Petitioner electronically sent a payment of only $3,025.00 to First Service Residential New York, Inc. (the "July 31, 2018 Payment") and Respondent allegedly retained said payment.
Petitioner acknowledges the issuance of the July 26, 2018 Bill and acceptance of the July 31, 2018 Payment, but does not acknowledge that the payment was for August 2018 rent. Paragraph 40(d) of the Lease states that the monthly rent for the period from June 1, 2017 to May 31, 2018 was $1,512.60 and paragraph 56 of the Lease further provides that during a holdover period, Petitioner is owed "two (2) times the average basic net rent and additional rent which was payable by Tenant per month under [the Lease] during the last six (6) months of the term." Moreover, the record does not indicate whether Respondent was current in its payment obligations for the premises when the July 26, 2018 Bill was issued.
On or about August 2, 2018, Petitioner served its petition and notice of petition on Respondent. On or about August 24, 2018, Respondent filed a pre-answer motion to dismiss pursuant to CPLR 3211 (a) (10), CPLR 3211 (a) (1) and CPLR 3211 (a) (7). On October 31, 2018, prior to the parties appearing in Court to address Respondent's motion to dismiss, Respondent vacated and surrendered the premises at issue to Petitioner.
In accordance with the recitation requirement of CPLR 2219 (a), the Court considered the following: (1) Respondent's motion to dismiss, affirmation and attached exhibits; (2) Petitioner's affirmation in opposition to said motion and attached exhibits; (3) Petitioner's supplemental affirmation in opposition to said motion; (4) Respondent's reply affirmation in support of said motion and attached exhibit; and (5) Respondent's sur-reply affirmation in support of said motion. Defendant's motion to dismiss is denied as explained below.
II. Discussion
As a preliminary matter, while Petitioner filed the instant proceeding under its name as noted on the Lease, that is, "Arverne Limited Profit Housing Corporation," the Petitioner acknowledges that its correct entity name is "Arverne Limited-Profit Housing Corp." Pursuant to Rule 2001 of the Civil Practice Law and Rules ("CPLR"), the Court will disregard Petitioner's technical mistake because (1) Respondent never raised the mistake during this proceeding, (2) the mistake does not amount to a jurisdictional defect, and (3) Respondent's substantial rights are not prejudiced in any material way by such mistake.
Respondent asserts three grounds for dismissal: (1) Petitioner's 30-Day Termination Notice was defective because it was not served pursuant to the terms of the Lease; (2) Petitioner failed to include two necessary parties, Dr. Lyuba Taft and Mr. Eugene Taft, in this proceeding; [*3]and (3) Petitioner issued the July 26, 2018 Bill and retained payment of said bill after service of the 30-Day Termination Notice, but before the commencement of this proceeding.
A. 30-Day Termination Notice
Respondent's argument that this case must be dismissed because the 30-Day Termination Notice was improperly served is incorrectly raised under its argument to dismiss pursuant to CPLR 3211 (a) (10). CPLR 3211 (a) (10) concerns dismissal based on the absence of a party in an action before the court—not the jurisdictional issue of a landlord's obligations for serving a notice of termination prior to the commencement of an action (compare CPLR 3211 [a] [10] with City of New York v. Torres, 164 Misc 2d 1037, 1039 [App Term, 1st Dept 1995] (noting that termination notice is a jurisdictional predicate for the eviction of a month-to-month tenant)). Nevertheless, the Respondent failed to establish that the 30-Day Termination Notice was improperly served.
Respondent claims that Petitioner was obligated to serve the 30-Day Termination Notice pursuant to the terms of the Lease and further claims that said notice was improperly served because it was addressed to TAFT'S DENTAL, P.C. without an attention line to Dr. Lyuba Taft and Mr. Eugene Taft. The provision of the Lease at issue is paragraph 60 ("Paragraph 60") under the section entitled "Notices," which provides in pertinent part:
All notices required or desired to be given hereunder by either party to the other shall be deemed given if sent by certified mail or registered mail, return receipt requested, postage prepaid [ ] or personal delivery. Notices to the respective parties shall be addressed as follows: [ ]If to Tenant:TAFT'S DENTAL P.C.Attn: Dr. Lyuba Taft andMr. Eugene Taft"Because equity abhors forfeitures of valuable leasehold interests, courts have required strict compliance with the termination provisions of leases," and failure to serve notice in the precise manner prescribed in the lease may result in dismissal (Metro. Transp. Auth. v. Cosmopolitan Aviation Corp., 99 AD2d 767, 768 [2d Dept 1984]). Paragraph 60 applies to "notices required or desired to be given hereunder by either party" (emphasis added). The Court construes paragraph 60 as applicable principally to notices given pursuant to or under the Lease itself, as opposed to statutory notices (compare Four Star Holding Co. v. Alex Furs, Inc., 153 Misc 2d 447, 448 [App Term, 1st Dept 1992] (distinguishing between notices or statements given pursuant to or under the lease itself and statutory notices) with Bogatz v. Extra Touch Intl., Inc., 179 Misc 2d 1029, 1033-1034 [Civ Ct, Kings County 1999] (discussing termination notice served pursuant to the default provisions of the lease at issue)). To the extent that the parties intended to adopt notice requirements at variance with New York's Real Property Actions and Proceedings Law ("RPAPL"), their intent to do so should have been expressly stated in the Lease (see Four Star Holding, 153 Misc 2d at 448).
Here, the Lease does not address statutory termination notices and does not address service of a termination notice after the term of the Lease ends. Petitioner asserts the 30-Day Termination Notice was statutory notice and it was not bound by the service provisions of the Lease. Respondent does not deny Petitioner's claim that, following the expiration of the Lease, the relationship between the parties was converted to a month-to-month tenancy. RPAPL 232-a [*4]requires a thirty-day statutory termination notice to commence a holdover proceeding against a month-to-month tenant, and further provides that the thirty-day notice under its provisions must be served pursuant to RPAPL 735 (see RPAPL 232-a ("No monthly tenant, or tenant from month to month, shall hereinafter be removed from any lands or buildings in the city of New York on the grounds of holding over his term unless at least thirty days before the expiration of the term the landlord or his agent serve upon the tenant, in the same manner in which a notice of petition in summary proceedings is now allowed to be served by law, a notice in writing . ") (emphasis added); RPAPL 735 [1] ("Service of the notice of petition and petition shall be made by personally delivering them to the respondent; or by delivering to and leaving personally with a person of suitable age and discretion who resides or is employed at the property sought to be recovered, a copy of the notice of petition and petition . ") (emphasis added)). RPAPL 735 provides that service to a respondent is sufficient.
If a month-to-month tenancy requiring statutory notice did not exist at the time the 30-Day Termination Notice was served, the Court notes that a holdover relationship after a lease expires by its own terms does not require statutory notice prior to a holdover proceeding (see 620 Dahill, LLC v. Berger, 51 Misc 3d 4, 5 [App Term, 2d Dept, 11th & 13th Jud Dists 2016]), and the Lease does not purport to require termination notice after the term of the Lease expired. If termination notice is not required under statute or the provisions of a lease, the method of the notice's service is immaterial.
Accordingly, Respondent has failed to establish that Petitioner was obligated to serve the 30-Day Termination Notice pursuant to Paragraph 60. Notably, Respondent does not deny that Petitioner served the 30-Day Termination Notice pursuant to the provisions of RPAPL 735 or that Respondent received the said notice.
B. Necessary Parties
Respondent fails to establish that Dr. Lyuba Taft and Mr. Eugene Taft are necessary parties to this action. CPLR 3211 (a) (10) provides that "[a] party may move for judgment dismissing one or more causes of action asserted against him on the ground that . . . the court should not proceed in the absence of a person who should be a party." The Court's analysis of whether a party should be joined is governed by CPLR 1001 (a), which provides that a party should be joined if (1) "complete relief is to be accorded between the persons who are parties to the action," or (2) the unnamed party might be "inequitably affected by a judgment in the action." CPLR 1001 should be liberally construed, and the Court is afforded broad latitude in determining whether parties are to be added (see Gross v. BFH Co., Inc., 151 AD2d 452, 452 [2d Dept 1989]). Dismissal for failure to join a necessary party should be granted only as a last resort (see Matter of Redhook/Gowanus Chamber of Commerce v. New York City Bd. of Stds. & Appeals, 5 NY3d 452, 459 [2005]). The compulsory joinder provisions of the CPLR are intended to "implement a requisite of due process—the opportunity to be heard before one's rights or interests are adversely affected" (Mahinda v. Board of Collective Bargaining, 91 AD3d 564, 565 [1st Dept 2012]).
In the current matter, the Lease clearly identifies Respondent as the only named tenant in the Lease. In particular, the first paragraph of the Lease states:
Agreement of Lease, made this 16 day of May in the year 2003, between ARVERNE LIMITED PROFITED HOUSING CORPORATION [ ] party of the first part, hereinafter referred to as OWNER, and TAFT'S DENTAL, P.C. Attn: Dr. Lyuba Taft and [*5]Mr. Eugene Taft party of the second part, hereinafter referred to as TENANT.(emphasis added)
The first paragraph of the Lease expressly states there are only two parties to the Lease, specifically, Petitioner as owner and Respondent as tenant. The first paragraph's reference to Dr. Taft and Mr. Taft is merely indicative of proposed recipients of communications with the Respondent, which is a legal entity. Tellingly, the signature pages of the Lease identify Respondent as the tenant, and Dr. Taft only signed the Lease on behalf of Respondent—Dr. Taft did not sign the Lease in her personal capacity and Mr. Taft did not sign the Lease in any capacity. Additionally, the heading of the rider to the Lease solely refers to Respondent as the tenant and does not refer to Dr. Taft or Mr. Taft.
Moreover, Petitioner has been in possession of the subject premises since October 31, 2018 and the issue of possession is currently moot. The outstanding issues in this matter concern monetary relief sought against Respondent for use and occupancy, costs and disbursements and attorney's fees. Complete monetary relief can be pursued by Petitioner against Respondent, and Respondent has failed to establish otherwise. Respondent has not cited to any legal authority that Dr. Taft is a necessary party based solely on her status as an officer of Respondent and failed to sufficiently explain Mr. Taft's relationship with Respondent, let alone his interest in the current matter. Accordingly, Respondent has not established that Dr. Taft and Mr. Taft must be joined for complete relief to be accorded between the parties.
Furthermore, although Dr. Taft is an officer of Respondent, and even assuming Mr. Taft is some form of employee, Respondent has also failed to establish that either would be inequitably affected by a judgment because there is no evidence that a judgement in favor of either Petitioner or Respondent would result in their personal liability (Morris v. New York State Dept. of Taxation & Fin., 82 NY2d 135, 141-142 [1993] ("While complete domination of the corporation is key to piercing the corporate veil, especially when the owners use the corporation as a mere device to further their personal rather than the corporate business, such domination, standing alone, is not enough; some showing of a wrongful or unjust act toward plaintiff is required"); see also Enriquez v. Home Lawn Care and Landscaping, Inc., 49 AD3d 496, 497 [2d Dept 2008] (finding joinder of party appropriate where alleged facts, if proven true, could subject the party to personal liability)).
C. July 31, 2018 Payment
Defendant has failed to establish that dismissal should be granted pursuant to CPLR 3211 (a) (1) and CPLR 3211 (a) (7) based on Petitioner's acceptance of payment of the July 31, 2018 Payment. As previously noted, when a former tenant adversely remains in possession of a premises after the expiration of the lease term, a landlord may commence a holdover proceeding without issuing a notice of termination (see 620 Dahill, LLC v. Berger, 51 Misc 3d 4, 5 [App Term, 2d Dept, 11th & 13th Jud Dists 2016]). However, if a month-to-month tenancy is created after a lease expires by its own terms (see, e.g., RPAPL 232-c; Logan v. Johnson, 34 AD3d 758, 759 [2d Dept 2006] (month-to-month tenancy was created where tenant continued to reside at landlord's premises after written lease expired and tenant continued to pay rent, which landlord accepted)), statutory termination notice is a predicate notice to the commencement of a holdover proceeding and a defective termination notice provides a tenant with a defense against the proceeding (see RPAPL 232-a; Chinatown Apts., Inc. v. Chu Cho Lam, 51 NY2d 786, 788 [1980]).
If a statutory termination notice is served to end a month-to-month tenancy, an acceptance of rent for the period after the effective date of termination pursuant to the termination notice, but prior to service of a notice of petition and petition, will vitiate the termination notice and give rise to a new month-to-month tenancy (see RPAPL 232-c; 92 Bergenbrooklyn, LLC v. Cisarano, 50 Misc 3d 21, 24-26 [App Term, 2d Dept, 11th & 13th Jud Dists 2015]; see also Scarborough Manor Owners Corp. v. Robson, 57 Misc 3d 24, 26-28 [App Term, 2d Dept, 9th & 10th Jud Dists 2017]). Here, the effective date of termination pursuant to the 30-Day Termination Notice was July 31, 2018 and if Petitioner accepted rent for the month of August 2018, the 30-Day Termination Notice would be void (see Bergenbrooklyn, 50 Misc 3d at 26).
The evidence submitted by the Defendant fails to conclusively establish a defense based on Petitioner's alleged acceptance of the July 31, 2018 Payment (see Carlson v. American Intl. Group, Inc., 30 NY3d 288, 298 [2017] ("Under CPLR 3211 (a) (1), a dismissal is warranted only if the documentary evidence submitted conclusively establishes a defense to the asserted claim as a matter of law") (citation omitted)). Although Petitioner alleges that the July 26, 2018 Bill was a solicitation for August 2018 rent, the face of the July 26, 2018 Bill does not make any reference to rent and there is no indication or allegation that the July 26, 2018 Bill falls within the standard practice and procedure for the solicitation of rent between the parties. Respondent's assertion that the July 26, 2018 Bill was specifically a solicitation made by Petitioner for August 2018 rent—rather than a solicitation for some other amount owed—is predominantly based on conclusory statements offered by Dr. Lyuba Taft. As the documentary evidence submitted fails to establish that the July 26, 2018 Bill was a solicitation for August 2018 rent, the documentary evidence submitted also fails to establish that the July 31, 2018 Payment of said bill was, in fact, for August 2018 rent.
Additionally, Petitioner asserted in its petition for this matter that "[n]o monies for rent and/or 'use and occupancy' have been accepted for the period after July 31, 2018" and this Court finds that Petitioner has adequately pled causes of action under the RPAPL (see Shebar v. Metro. Life Ins. Co., 25 AD3d 858, 859 [3d Dept 2006] ("On a motion to dismiss for failure to state a claim, the court must afford the complaint a liberal construction, accept as true the allegations contained therein, accord the plaintiff the benefit of every favorable inference and determine only whether the facts alleged fit within any cognizable theory")).
III. Conclusion
Based on the foregoing, it is hereby ordered that Respondent's motion to dismiss Petitioner's holdover proceeding pursuant to CPRL 3211 (a) (10), CPLR 3211 (a) (1) and CPLR 3211 (a) (7) is denied in its entirety.
This constitutes the decision and order of the Court.
Dated: April 19, 2019
Jamaica, New York
________________________
Hon. John C.V. Katsanos
Judge, Civil Court
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