146 Mulberry St., LLC v Angelo of Mulberry St., Inc.
Annotate this CaseDecided on January 13, 2020
Civil Court of the City of New York, New York County
146 Mulberry Street, LLC, Petitioner-Landlord,
against
Angelo of Mulberry Street, Inc., , Respondent-Tenant.
L & T 63797/19
BEDFORD SOUMAS LLP
Attorneys for Petitioner
By: CYRIL K. BEDFORD, ESQ
112 Madison Avenue, 8th Floor
New York, New York 10016
212.257.5844
BALSAMO ROSENBLATT
Attorneys for Respondent
By: ZACHARY HALL, ESQ.
200 Schermerhorn Street
Brooklyn, New York 11201
718.858.7399
Sabrina B. Kraus, J.
BACKGROUND
Petitioner commenced this commercial summary nonpayment proceeding seeking to recover possession of the store on the ground floor and the basement at 146 Mulberry Street, New York, New York 10013 (Subject Premises), based on the allegation that Respondent has failed to pay rent due pursuant to the parties' lease agreement. There was a fire in the subject building in February 2018, and the primary issue at trial was when, if at all, respondent's obligation to pay rent commenced again after said fire.
PROCEDURAL HISTORY
Petitioner issued a rent demand dated May 23, 2019, seeking $137,766.87 alleged due for rent from March 25, 2019 through May 2019. The petition was filed on June 14, 2019. The notice of petition and proof of service were filed on June 24, 2019.
Respondent appeared by counsel and filed an answer on July 3, 2019, asserting five affirmative defenses and two counterclaims. The affirmative defenses included lack of personal jurisdiction, failure to state a cause of action, that the petition and rent demand are defective, and [*2]breach of warranty of habitability. The counterclaims are for loss of income and attorneys' fees.
An initial court date was set for July 18, 2019. On September 20, 2019, respondent moved for summary judgment. The motion was denied by the court (Samuels, J) pursuant to a decision and order dated December 11, 2019, which held that there were issues of fact as to when respondent's obligation to resume payment of rent became effective. The court set a trial date for January 8, 2020.
On January 8, 2020, this court held a bench trial and reserved decision.
FINDINGS OF FACT
Petitioner is the owner of 146 Mulberry Street, New York, New York pursuant to a deed dated October 23, 2015 (Ex 1). The grantor pursuant to that deed was 146 Mulberry, LLC . Respondent is the tenant of record of the Subject Premises pursuant to a lease dated July 9, 2013 between respondent and 146 Mulberry, LLC (Ex 3). While no assignment of the lease from 146 Mulberry, LLC to petitioner was submitted in evidence, it was uncontested that respondent attorned to petitioner and paid rent to petitioner pursuant to the lease from late 2015 through the date of the fire.
Article 9 of the lease provides:
(A) If the demised premises or any part thereof shall be damaged by fire or other casualty, Tenant shall give immediate notice thereof to Owner and this lease shall continue in full force and effect except as hereinafter set forth.(B) If the demised premises are partially damages or rendered partially unusable by fire or other casualty, the damages thereto shall be repaired by and at the expense of Owner and the rent, until such repair shall be substantially completed, shall be apportioned from the day following the casualty according to the part of the premises which is usable.( C) If the demised premises are totally damaged or rendered wholly unusable by fire or other casualty, then the rent shall be proportionately paid up to the time of the casualty and thenceforth shall cease until the date when the premises shall have been repaired and restored by Owner, subject to Owner's right to elect not to restore the same as hereinafter provided.......Unless Owner shall serve a termination notice as provided for herein, Owner shall make the repairs and restorations under the conditions of (b) and ( c) hereof, with all reasonable expedition subject to delays due to adjustment of insurance claims, labor troubles and causes beyond Owner's control. .... Tenant's liability for rent shall resume five (5) days after written notice from Owner that the premises are substantially ready for Tenant's occupancyThe building is a multiple dwelling and a valid multiple dwelling registration filed in July 2019 was submitted in evidence (Ex 2).
In February 2018, there was a fire in the subject building. The fire did not start in the Subject Premises, but started on the first floor adjacent to the Subject Premises.
Linz Rong Zheng (LZ) testified for petitioner. LZ is a bookkeeper employed by Veracity Management, the management company for the subject building. LZ testified that in addition to the Subject Premises there are 16 residential units in the building. Through LZ's testimony, Petitioner submitted a rent ledger in evidence and asserted that through January 2020, there is a total of $414,056.62 in arrears. The base monthly rent pursuant to the lease was $29,263.23 through July 2019, and $30,141.13 from August 2019 forward. LZ testified that respondent is in [*3]possession of the Subject Premises.
Bonaventura Aprea a/k/a Rino (Rino) testified for respondent. Rino testified that his family has operated a business in the Subject Premises since the 1970s, but that from the late 80s through 2017 he was not involved with the business. In 2017, Rino's father died and from August 2017, Rino was at the Subject Premises at least five to six times per month, although he also runs another restaurant in Brooklyn.
Rino testified that the primary reason respondent has not resumed paying rent is that there is no gas in the Subject Premises, and he can not operate the restaurant without gas. Rino submitted a "Customer's Gas Service Assessment Letter" that he received from Con Edison (Ex B). The letter is dated September 12, 2019, and appears to detail equipment respondent needs to install prior to the resumption of gas service.
Rino also testified that on or about October 31, 2019, there was a leak in the kitchen , and some leaks in the dining room and that when it rains hard, water comes into the Subject Premises. Rino also testified that there are leaks in the windows.
Rino acknowledged that his contractors have been working in the Subject Premises and that they poured a new concrete floor in the kitchen of the Subject Premises.
Rino acknowledged that there was no fire damage to the kitchen of the Subject Premises , but stated that there was water damage as a result of the fire.
Rino acknowledged receiving petitioner's demand to resume payment of rent on or about March 18, 2019 (Ex 5).
Petitioner did work to restore the Subject Premises. Petitioner was also going to sheetrock the Subject Premises, but at respondent's request, petitioner did not install the sheetrock, and instead paid respondent's contractor to install the sheet rock. Rino stated he was not involved in these decisions and his contractor worked out the sheet rock issue with petitioner's contractor.
Respondent also called David Marshall (DM) as a witness. DM is employed as a Foreman by MBD Development, a construction company hired by respondent to do work in the Subject Premises after the fire. DM took over working on the Subject Premises once petitioner's contractors had done their work and delivered the Subject Premises as a "box" for respondent's contractor to do the sheet rock and complete the interior. DM testified that the work has not been completed, because there is no gas in the Subject Premises. DM testified that he did sheet rock in the Subject Premises. DM never notified petitioner or its agents about any leak in the Subject Premises and does not communicate with petitioner or its agents.
DM acknowledged that gas piping was installed by petitioner. DM testified that Con Edison came to the building and told him that gas could not be restored because of outstanding violations, but the court discounts this hearsay testimony which was not otherwise supported by admissible evidence, in particular respondent did not submit any documentary evidence showing any outstanding violations. It was uncontested at trial that gas was restored to the residential units in the building.
DM testified that respondent has not yet taken delivery of the kitchen appliances necessary for the restaurant.
Petitioner called Aaron Jacob Dana (Dana) as a rebuttal witness. Dana was employed as a managing agent for the Subject Premises by Veracity Management Company from November 2017 through September 2019.
Dana testified that by March 2019, petitioner had done all necessary work to the Subject [*4]Premises, except for the sheet rock, which was not done by Petitioner's contractor at respondent's request. Dana testified that respondent had advised they wanted to wait on the sheet rock so they could install their own lines behind the walls, and in the summer of 2019, petitioner agreed to respondent's request to pay respondent's contractor to do the sheet rock. Dana confirmed that gas piping was installed by petitioner.
Dana testified that, in the Spring or Summer of 2019 there were some leaks in the Subject Premises, but that petitioner replaced the roof and that stopped the leaks.
Respondent wanted petitioner to agree to install a new floor, but petitioner did not agree as the floor was not damaged by the fire and was in poor condition prior to the fire as it was very old and had deteriorated with several decades of wear and tear. Dana testified that respondent put in a concrete floor because the floor was sagging and uneven, and that this was not done with petitioner's consent.
The court found Dana to be a credible witness.
Petitioner also called Edmond Li (Li) as a witness. Li was primarily called to testify that Petitioner never consented to respondent pouring a concrete floor in the Subject Premises.
DISCUSSION
The court finds that Petitioner established its prima facie case at trial. The court finds that Petitioner established Respondent has been in possession of the Subject Premises since at least March 2019. Respondent failed to establish any of its five affirmative defenses at trial.
No evidence was submitted by respondent on its first affirmative defense of lack of service. No testimony was elicited on this issue, and the court finds that the affidavits of service are valid on their face.
The second, third and fourth affirmative defenses are dismissed as the court finds that the petition is neither vague nor conclusory, that the pleadings do set forth a cause of action, and that there is no defect in the rent demand.
The fifth affirmative defense is dismissed as the warranty of habitability is not applicable to a commercial tenancy [RPL § 235-b(1)].
Respondent's first counterclaim for damages for loss of income is dismissed as respondent presented no evidence of damages or the amount of lost income at trial.
The court finds that Petitioner did substantially restore the Subject Premises effective March 2019 . Petitioner's evidence in this regard was almost entirely unrebutted.
The primary issues raised by respondent were a lack of gas and leaks.
It is uncontested that the alleged leaks had nothing to do with the fire and occurred in the summer of 2019, after Petitioner had done the work to restore the premises. Moreover, it is uncontested that Petitioner replaced the roof after in 2019, after respondent complained of the leaks and that there was no damage to the roof from the fire.
To the extent that Rino alleged leaks came back in the fall of 2019, it is acknowledged that this was unrelated to the fire and assuming arguendo such condition does exist, it is not a basis for respondent to with hold rent as the lease requires that rent be paid without set off (see eg Article 43 of the rider to the parties lease). Any damages for this alleged breach of lease would have to be asserted in a separate plenary action.
The remaining contention of respondent is that the Subject Premises were not substantially repaired because there is currently no gas in the Subject Premises. There was no credible evidence showing that the lack of gas in the Subject Premises is due to Petitioner's failure to perform any necessary work. In fact it is uncontested that gas was restored to the [*5]residential units in the building. Respondent failed to show any alleged outstanding violations exist for the building preventing them from having Con Ed turn on the gas, nor was Con Ed subpoenaed by Respondent to offer any evidence about what needs to be done for gas to be restored to the Subject Premises.
The obligation to pay rent pursuant to a commercial lease is an independent covenant, not relieved by allegations of a landlord's breach, absent an express provision to the contrary (Universal Commc'ns Network, Inc. v. 229 W. 28th Owner, LLC, 85 AD3d 668, 669).
The court finds that Petitioner had substantially restored the Subject Premises as of March 2019 in compliance with the lease agreement between the parties, and that respondent's obligation to pay rent resumed within five days of service of the written notice which Rino acknowledged receiving.
Respondent did not otherwise challenge any of the charges sought herein.
Petitioner seeks a judgment for $414,056.00 representing all rent and additional rent due through January 2020. However, the petition sought $167,030.10 as all rent due through June 2019. Of said amount a written demand was only served for $137,766.87.
Petitioner failed to move to amend the petition to date at trial, and as such petitioner is limited to the amount for which a written demand was made [NYCHA v Sinclair 21 Misc 3d 133(A)].
CONCLUSION
Based on the foregoing,
IT IS ORDERED that Petitioner is awarded a final judgment of money and possession in the amount of $ 137,766.87 for all rent and additional rent due through May 2019, issuance of the warrant is stayed five days for payment. The warrant may execute on Marshal's notice; and
IT IS FURTHER ORDERED that Respondent's defenses and counterclaims are dismissed.
This constitutes the decision and order of this Court.
Dated: New York, New York
January 13, 2020
Hon. Sabrina B. Kraus, JCC
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