11 Park Place LLC v ASAP Documents, Inc.

[*1] 11 Park Place LLC v ASAP Documents, Inc. 2019 NY Slip Op 50370(U) Decided on January 28, 2019 Civil Court Of The City Of New York, New York County Ramseur, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 January 28, 2019
Civil Court of the City of New York, New York County

11 Park Place LLC, Petitioner-Landlord,

against

ASAP Documents, Inc. d/b/a U.S. DOCUMENT RETRIEVAL SERVICE, Respondent-Tenant.



LT-074283/18



Petitioner

Shari S. Laskowitz, Esq.

Ingram Yuzek Gainen Carroll & Bertolotti, LLP

Respondent

Jesse B. Schneider, Esq.

Davis & Gilbert LLP
Dakota D. Ramseur, J.

In this commercial summary nonpayment proceeding, Petitioner/Landlord 11 Park Place LLC and Respondent/Tenant ASAP Documents, Inc. d/b/a U.S. Document Retrieval Service executed a lease and three subsequent amendments and/or extensions for 11 Park Place, Room 814, New York, New York (the "Premises") (Pet'r Exh 1, collectively the "Lease"). Upon Tenant's failure to pay base and additional rent pursuant to the Lease, Landlord served a three-day default notice and rent demand on Tenant on October 2, 2018 (Pet'r Exh 2). Upon Tenant's failure to respond to the default notice, Landlord commenced this proceeding six days later, on October 2, 2018 (Pet'r Exh 3). Respondent answered and interposed four affirmative defenses (Pet'r Exh 4).

Tenant now moves pursuant to CPLR 3211(a)(2) to dismiss for lack of subject matter [*2]jurisdiction (sequence 001). Landlord cross-moves pursuant to CPLR 3025(c) for leave to amend the Petition to include sums due to date and pursuant to CPLR 3212 for summary judgment on the Petition and to dismiss Tenant's affirmative defenses (sequence 002). For the reasons and to the extent below, Tenant's motion is denied, Landlord's cross-motion is granted in part, and judgment of possession, together with monetary judgment for the full amount sought, shall be entered in favor of Landlord.

DISCUSSION

I. Tenant's motion to dismiss (001)

In support of its motion to dismiss pursuant to CPLR 3211(a)(2) for lack of subject matter jurisdiction, Tenant argues that the Lease extended the predicate default notice/rent demand period from three to fifteen days, thereby rendering Landlord's three-day demand defective. In opposition, Landlord argues that the provisions relied upon by Tenant were conditional limitations permitting the Lease's termination, not provisions designed to enlarge the three-day notice period of RPAPL 711(2) applicable to this nonpayment proceeding.

RPAPL 711(2) provides that a summary proceeding may be maintained if

The tenant has defaulted in the payment of rent, pursuant to the agreement under which the premises are held, and a demand of the rent has been made, or at least three days' notice in writing requiring, in the alternative, the payment of the rent, or the possession of the premises, has been served upon him as prescribed in [RPAPL] 735.

A rent demand is jurisdictional and unamendable (Solack Estates, Inc. v Goodman, 102 Misc 2d 504, 505 [App Term 1979], affd, 78 AD2d 512 [1st Dept 1980]; Chinatown Apts. Inc. v. Chu Cho Lam, 51 NY2d 786, 787 [1980]). Tenant correctly states that a landlord may evict a tenant via summary non-payment proceeding filed after an oral demand or "at least" three days' written notice requiring payment or surrender of the premises, unless the parties explicitly agree otherwise (RPAPL § 711[2]; Oak Plaza LLC v Oak St. Check Cashing, Inc., 38 Misc 3d 1221(A) [NY Dist Ct Nassau County 2013]; see also Kulok v Riddim Co., L.L.C., 185 Misc 2d 195, 197 [Civ Ct NY County 2000] ["[W]here petitions allege personal or oral demands for rent, those facts, by themselves, suffice for pleading purposes."]; see also Lana Estates, Inc. v Natl. Energy Reduction Corp., 123 Misc 2d 324, 327 [Civ Ct Queens County 1984] ["Parties by their stipulations may in many ways make the law for any legal proceeding to which they are parties, which not only binds them, but which the courts are bound to enforce. They may stipulate away statutory and even constitutional rights."]; see also 626 E. 9 St. Hous. Dev. Fund Corp. v Collins, 185 Misc 2d 628, 631 [Civ Ct NY County 2000] ["Even in a rent-regulatory setting, the parties may negotiate terms of a lease that provide a tenant with greater rights than are otherwise required by law."]; see Hendrickson v. Lexington Oil Company Inc., 41 AD2d 672 [2d Dept 1973] [where a lease identifies a specific method for a demand for rent, the demand must be made according to the terms of the lease]).

Tenant, relying on sections 17 and 59 of the Lease, argues that the parties intended to provide for a fifteen-, not three-, day default notice prior to commencement of any summary proceeding. Landlord argues that these provisions are conditional limitations permitting termination of the Lease upon default and Landlord's service of a fifteen-day notice, a remedy unavailable in a nonpayment proceeding. The Court agrees with Landlord's interpretation.

Section 17 of the Lease, entitled "Default," provides, in relevant part, that

If Tenant defaults in the payment of rent or additional rent , then , upon Landlord serving a written fifteen day notice [FN1]upon Tenant specifying the nature of said default and upon expiration of the applicable period provided above, if Tenant shall have failed to comply with or remedy such default, or if the said default or omission complained of shall be of a nature that the same cannot be completely cured or remedied within said five (5) day period,[FN2] and if Tenant shall not have diligently commenced curing such default within such fifteen-day period provided for above, and shall not thereafter with reasonable diligence and in good faith proceed to remedy or cure such default, then Landlord may serve a written five-days'[FN3] notice of cancellation of this lease upon Tenant, and upon the expiration of said five days, this lease and the term thereunder shall end and expire

Additionally, Section 59 of the Lease provides that:

If Tenant shall default in the payment of the rent [or additional rent], or any part of either, during any three months, whether or not consecutive, in any twelve (12) month period, and (i) such default continued for more than fifteen (15) days after written notice of such default by Landlord to Tenant, and (ii) Landlord, after the expiration of such fifteen (15) day grace period, served upon Tenant petitions and notice of petition to dispossess Tenant by summary proceedings in each such instance, then, notwithstanding that such defaults may have been cured prior to the entry of a judgment against Tenant, any further default in the payment of any money due Landlord hereunder which shall continue for more than fifteen (15) days after Landlord shall give a written notice of such default shall be deemed to be deliberate and Landlord may thereafter serve a written three (3) days' notice of cancellation of this lease and the term hereunder shall end and expire

Unless a statute or policy dictate otherwise, a written agreement defines the rights and obligations of the parties, particularly in the context of real property transactions negotiated at [*3]arm's length between sophisticated, counseled parties (Anita Babikian, Inc. v TMA Realty, LLC, 78 AD3d 1088, 1090 [2d Dept 2010], citing Abiele Contr. v New York City School Constr. Auth., 91 NY2d 1, 9 [1997]; see also Fiore v Oakwood Plaza Shopping Ctr., 78 NY2d 572, 581 [1991] ["Defendants were sophisticated parties involved in an arm's length commercial transaction .... The purchase price of the land alone was well in excess of $1 million, indicating the magnitude of the project."]). Where parties-particularly sophisticated, counseled parties-exclude a term, courts must conclude that the omission was intentional (Fundamental Long Term Care Holdings, LLC v Cammeby's Funding LLC, 20 NY3d 438, 445 [2013] ["And if it were, in fact, the case that the parties meant for fair market value to be due , this is not the sort of term these sophisticated, counseled parties would have reasonably left out of the option agreement."]). "The fundamental, neutral precept of contract interpretation is that agreements are construed in accord with the parties' intent," as expressed by "what they say in their writing" (Greenfield v Philles Records, Inc., 98 NY2d 562, 569-70 [2002]). Thus, a written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms (id.). Extrinsic evidence of intent may be considered only if the agreement is ambiguous, which is an issue of law for the courts to decide (id.). A contract is unambiguous if its language has "a definite and precise meaning, unattended by danger of misconception in the purport of the agreement itself, and concerning which there is no reasonable basis for a difference of opinion" (id.). "Extrinsic and parol evidence is not admissible to create an ambiguity in a written agreement which is complete and clear and unambiguous upon its face" (S. Rd. Assoc., LLC v Intern. Bus. Machines Corp., 4 NY3d 272, 278 [2005]).

Sections 17 and 59 are, as Landlord argues, more accurately read as conditional limitations permitting the Lease's termination, albeit setting different conditions. That is, Section 17 provides that, upon Tenant's rent default, Landlord may, upon lengthier notice than is normally provided in summary proceedings, merely terminate the Lease. Section 59 is similar, but contemplates numerous conditions: upon Tenant's default during "any three months" in any twelve-month period and fifteen days' notice of a petition and notice of petition and a further default and further notice, only then would the Lease terminate. Focusing only upon Section 59's fifteen-day notice period without considering the litany of the other conditions would impermissibly render the 15-day requirement superfluous.

Courts analyzing similar provisions have interpreted them as conditional limitations authorizing either termination upon lengthier notice or commencement of a summary proceeding upon the standard, statutory three-day period. For example, then-Judge (now Justice) Billings addressed the following lease provision:

Tenant shall not be deemed to be in default pursuant to this Lease by reason of its failure to pay rent unless Owner shall give Tenant notice of such failure and Tenant fails to cure such failure to pay rent within five days thereafter upon service of the notice to cure and expiration of the five days without a cure, the lease will terminate (Frost Equities Co., LLC. v New York [*4]Brasserie Ltd., 5 Misc 3d 1004(A) [Civ Ct NY County 2004]).

Judge Billings interpreted this as a conditional limitation permitting termination upon certain conditions including, as relevant both there and in this case, nonpayment of rent (id.). If the landlord elected termination, the petitioner was required to serve a five-day notice which, absent a cure, would terminate the lease and justify a holdover proceeding if the tenant failed to vacate (id.). Judge Billings ultimately found that, despite possessing the option of termination upon five-day notice, the landlord nevertheless elected to commence a nonpayment proceeding, "the very antithesis of declaring respondent's default and terminating the lease" (id.; cf. Oak Plaza LLC, 38 Misc 3d 1221(A) ["If Tenant defaults in fulfilling any of the covenants of this lease other than the covenants for the payment of rent or additional rent..." [emphasis added]; cf. Grabino v Howard Stores Corp., 110 Misc 2d 591, 591-92 [Civ Ct Kings County 1981] [holding the lease provision at issue to be a condition subsequent, not a conditional limitation, where the provision's five-day notice period could pass yet the lease would not expire except "at the option of the landlord"]). Because the landlord elected to commence a nonpayment proceeding, affording the tenant the "all important right to honor the lease and pay any judgment for rent, to avert a warrant of eviction and keep the rental agreement in effect," compliance with the statutory three-day notice period was sufficient (Frost Equities, 5 Misc 3d 1004(A)]).

Additionally, the Court in Reckson Operating Partnership, L.P. v LJC Corp., (17 Misc 3d 138(A) [App Term 2007]), examined a similar provision:

(i) If Tenant shall default in the payment when due of any installment of rent or in the payment when due of any additional rent, and such default shall continue for a period of ten (10) days after notice by Landlord to Tenant of such default;

* * *

Then upon the occurrence, at any time prior to or during the Demised Term, of any one or more of such Events of Default, Landlord, at any time thereafter, at Landlord's option, may give to Tenant a five (5) days' notice of termination of this lease and, in the event such notice is given, this lease and the Demised Term shall come to an end and expire (whether or not said term shall have commenced) upon the expiration of said five (5) days with the same effect as if the date of expiration of said five (5) days were the Expiration Date

The Reckson court found that the provision required a 10-day notice only if landlord elected to treat tenant's nonpayment of rent as an "Event of Default" and therefore terminate the lease (id.). The court noted, however, that the provision did not require landlord to treat tenant's nonpayment of rent as an "Event of Default" or foreclose landlord from maintaining a nonpayment proceeding "without serving a 10-day notice"; that is, to utilize the standard three-day statutory notice (id.). Significantly, that court distinguished Hendrickson v Lexington Oil Co. (41 AD2d 672 [2d Dept 1973]), where the subject lease therein required the giving of a 10-day notice "before the landlord shall be entitled to commence any proceeding" (emphasis added). Unlike the provision in Hendrickson, which explicitly required 10-day notice to commence any proceeding-including summary proceedings-the Reckson court found that its [*5]subject provision did not contain any such requirement (Reckson, 17 Misc 3d 138[A]; see also Retail Prop. Tr. v Charles David of California, 40 Misc 3d 1238(A) [NY Dist Ct Nassau County 2013] [citing Reckson and holding that the standard, statutory three-day rent demand was sufficient because "[t]he lease did not specify a notice period for commencing a nonpayment proceeding]).

Here, there is no reason to doubt that this lease was negotiated at arm's length between two sophisticated commercial parties represented by counsel. The Court must therefore conclude that any omission was intentional, and that the parties intended the RPAPL to chart the parties' procedural course for summary nonpayment proceedings. That is, had the parties intended to explicitly include a provision extending the standard three-day notice period, they could have done so rather than including lengthier time periods in provisions which explicitly authorize the Landlord's lease termination upon the satisfaction of certain conditions.

Accordingly, the Lease permits Landlord several options: should Landlord desire to preserve the landlord-tenant relationship, Landlord could comply with RPAPL 711 and commence a non-payment summary proceeding upon the requisite three-day notice. Should, however, Landlord have desired to terminate the tenancy, Landlord could have accomplished its aim through lengthier (fifteen days') notice (see Harris v Timecraft Indus., Inc., 132 Misc 2d 386, 389 [Civ Ct Kings County 1986] ["A nonpayment proceeding and a holdover proceeding are mutually exclusive remedies. The former acknowledges the continuation of the tenancy and seeks to enforce its terms."]). Because Landlord chose to commence a summary nonpayment proceeding and preserve the tenancy, the three-day notice was sufficient. Accordingly, Tenant's motion to dismiss is denied.

II.Landlord's cross-motion for summary judgment (002)

As an initial matter, Landlord's motion to amend the Petition to include rent owed to date is granted. Pursuant to CPLR 3025(c), "[t]he court may permit pleadings to be amended before or after judgment to conform them to the evidence, upon such terms as may be just ." "In the absence of prejudice or surprise resulting directly from the delay in seeking leave, such applications are to be freely granted unless the proposed amendment is palpably insufficient or patently devoid of merit" (Nyahsa Services, Inc., Self-Ins. Tr. v People Care Inc., 156 AD3d 99, 102 [3d Dept 2017]). Here, similar requests are routinely granted, and Tenant does not-and, indeed, could not reasonably-allege surprise or prejudice. Accordingly, the Petition is deemed amended to include rent and additional rent due and owing through December 2018 in the amount of $49,335.37 (Pet'r Exh 1).

With respect to the branch of Landlord's cross-motion seeking summary judgment on the Petition and to dismiss Tenant's affirmative defenses pursuant to CPLR 3212, summary judgment is a drastic remedy that should not be granted where there exists a triable issue of fact (Integrated Logistics Consultants v Fidata Corp., 131 AD2d 338 [1st Dept 1987]). On a summary judgment motion, the court must view all evidence in a light most favorable to the non-moving party [*6](Rodriguez v Parkchester South Condominium Inc., 178 AD2d 231 [1st Dept 1991]). The moving party must show that as a matter of law it is entitled to judgment [Alvarez v Prospect Hosp., 68 NY2d 320 324 [1986]).

The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case (Winegrad v New York Univ. Med. Ctr., 64 NY2d 851 [1985]). After the moving party has demonstrated its prima facie entitlement to summary judgment, the party opposing the motion must demonstrate by admissible evidence the existence of a factual issue requiring a trial (Zuckerman v City of New York, 49 NY2d 557 [1980]). The First Department recently held that a plaintiff seeking summary judgment succeeded in making "a prima facie showing for rent arrears accruing. . .by submitting the original lease. . .and a detailed statement documenting outstanding rent arrears" (Dee Cee Assoc. LLC v 44 Beehan Corp., 148 AD3d 636, 641 [1st Dept 2017]).

Landlord has met its prima facie burden by demonstrating: (1) that it has a possessory right to the Premises, which are situated in New York County and not a multiple dwelling or otherwise subject to rent regulation; (2) that Tenant occupies the Premises; (3) that the Lease required Tenant to pay rent and additional rent; (4) that Tenant failed to pay rent and additional rent from August 2018 onward; and (5) that Landlord properly commenced this proceeding (Pet'r/Stempel Aff 3, et seq., Exhs 1-3). To the extent that Tenant's arguments in opposition to Landlord's motion are limited to the same arguments regarding the notice period and do not substantively challenge Landlord's assertions supporting the Petition and seeking dismissal of the affirmative defenses, Landlord is entitled to summary judgment.

Finally, Landlord's request for fees is denied because Landlord has failed to identify any provision in the Lease, or any other justification, which would justify deviation from the well-settled rule that "the successful party in litigation may not recover attorneys' fees, except where authorized by the parties' agreement, statutory provision or court rule" (Chase Manhattan Bank, N.A. v Each Individual Underwriter Bound to Lloyd's Policy No. 790/004A89005, 258 AD2d 1, 4 [1st Dept 1999]; U.S. v Dunkel, 927 F2d 955, 956 [7th Cir 1991] ["Judges are not pigs, hunting for truffles buried in briefs."]).

CONCLUSION/ORDER

For the above reasons, it is hereby

ORDERED that Respondent's motion to dismiss (001) is DENIED; and it is further

ORDERED that Petitioner's cross-motion to amend and for summary judgment on the Petition and to dismiss Respondent's affirmative defenses (002) is, apart from the branch seeking attorneys' fees, GRANTED; and it is further

ORDERED that the Clerk of Court shall enter monetary judgment for Petitioner in the amount of $49,335.37, plus interest from October 5, 2018; and it is further

ORDERED that the Clerk of Court shall enter possessory judgment for Petitioner, warrant to issue forthwith with execution stayed five days; and it is further

ORDERED that Petitioner shall, within one day of receipt, serve a copy of this order with notice of entry upon Respondent.

This constitutes the decision and order of the Court.

Dated: January 28, 2019

New York, NY

__________________________

Dakota D. Ramseur, J.C.C.

CPLR 2219(a) Recitation

Motion and affidavits, Exhibits1-2, 3

Opposition/Cross-motion, Exhibits4-6, 7-11

Reply, Memo of Law, Exhibits12 Footnotes

Footnote 1: "[F]ive (5) days" is stricken and replaced with fifteen (Lease 17.1).

Footnote 2: This "five-day" period was the only time limitation in this subparagraph not stricken and replaced (see Lease 17.1-17.4).

Footnote 3: "[T]hree (3) days" is stricken and replaced by five (Lease 17.4).