255 Butler Assoc. LLC v 255 Butler LLC
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255 Butler Assoc. LLC v 255 Butler LLC 2021 NY Slip Op 32208(U) November 8, 2021 Supreme Court, Kings County Docket Number: Index No. 511560/15 Judge: Leon Ruchelsman Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [*FILED: 1] KINGS COUNTY CLERK 11/08/2021 03:19 PM NYSCEF DOC. NO. 1036 INDEX NO. 511560/2015 RECEIVED NYSCEF: 11/08/2021 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KINGS: CIVIL TERM: PART 16 - -.- - -- -- - --- - -.-- - - - - - ----.. -.--- -- - - - - ·. - .- --x 255 BUTLER ASSOCIATES LLC, Plaintiff, Decision and order Index No, 511560/15 - against - 255 BUTLER LLC, ARIEL AKKAD a/k/a ARIEL ACCAD, NATHAN AKKAD a/k/a NATHAN ACC::AD, SOLOMON AKKAD ·a I k/ a SOLOMON ACCAD, and BENJAMIN AKKA,D a/k/a BENJAMIN ACCA,D,, Defendants, --•----------.- .-•-•--R. •---..------... --.------x November •.~ , 2 021 PRESENT: HON. LEON RUCHELSMAN The plaintiff has moved seeking to modify the use and occupancy stipulation to direct that all future payments should be paid to escrow instead of the landlord. the motion. The defendants oppose Papers were submitted by the parties and after reviewing all the arguments this court now makes the following determination. In 255 Butler AssociatesLLC v. 255 Butler LLC, 173 AD3d 651 [2d Dept., 2018] the Appellate Division:, reversing an order of this court, held there was "no basis" to modify the stipulation to reduce the use and occupancy required to be paid each month. First, the Appellate Division explained the plaintiff had- failed to demonstrate it would be unjust or inequitable to enforce the stipulation according to its terms. spec-ifically, the Appel.late Division pointed out that it was erroneous to conc1µde the property ha.d no value as long a 9 a notice of default remained in. th.e property b'ec.a:use such art analysis only considered the "value 1 of 5 [*FILED: 2] KINGS COUNTY CLERK 11/08/2021 03:19 PM NYSCEF DOC. NO. 1036 INDEX NO. 511560/2015 RECEIVED NYSCEF: 11/08/2021 to the plaintiff of using and occupying the subject property after the lease was purportedly terminated, instead of considering the fair market rental value of the subject property; namely, the amount that a prospective commercial tenant would be willing to lease the subject property from the defendant" (id). The Appellate Divisiqn concluded that any notice of default did not encumber the property as to render the fair market value at zero and consequently reinstated the mori.thly payments of $111,041.66. The plaintiff now argues that since that decision there has been a summary judgement determination that the notices were improperly filed, resolving the issue of fault and that the only outstanding issue is the damages to which the plaintiff is entitled. To facilitate the ability to collect "a refund or rent t:.tedit" as acknowledged by t:he Appellate Division, the plaintiff seeks to modify the stipulation to pay the use and occupancy into escrow instead. The defendant argues that since the summary judgement decision dated October 5, 2019 concluding the defaults were improperly filed the notices. have "effectively" been removed (see, Affirmation in Opposition, 'JI 10). The defendant asserts there has bee.n no e:vidence presented whether the plaintiff made any efforts to develop the property since tha.t date. The qourt cannot.verify wtie-i:.p.er in fact the property could have been 2 2 of 5 [*FILED: 3] KINGS COUNTY CLERK 11/08/2021 03:19 PM NYSCEF DOC. NO. 1036 INDEX NO. 511560/2015 RECEIVED NYSCEF: 11/08/2021 developed since then, however, the failure to even: address these arguments militates against the plaintiff . Neverthel ess, the defendant argues the Appellate Division: already ordered the temporary placement of the use and occupancy into escrow pending the appeal and the failure to continue that expedient necessari ly means the Appellate Division rejected its availabil ity. However, no precedent ial value can: be drawn prohibitin g escrow payments now because the Appellate Division Only approved of them pe'nding appeal. There is no merit to the argument that permitting escrow payments at this juncture is implicitly prohibite d by an order issued under c:ompletel y different circumsta nces. The defendant s note that '' if the Appellate Division thought that a continued escrow was the way to go, they could easily have so provided in the June 5 Decision" (see, Affirmatio n in Oppositio n, page 6J. However, an interim decision pendin.g appeal can hardly be a basis to deny the request at this time. Further, the defendant s argue the plaintiff has failed to present any evidence it would be unjust or inequitab le to amend the stipulatio n :ahd that the Appellate Division has already ruled in this regard. H.owever, the Appellate Division' s determina tion concerned the relief granted not requiring any payments at all. The plaintiff 's request is simply to direct the payments to an alternate destinatio n securing the funds pending the trial. 3 3 of 5 The [*FILED: 4] KINGS COUNTY CLERK 11/08/2021 03:19 PM INDEX NO. 511560/2015 NYSCEF DOC. NO. 1036 RECEIVED NYSCEF: 11/08/2021 defendants equate paying the funds to escrow as not paying them at all. There is no basis for such a stark comparison. Therefore., similarly, the arguments the plaintiff is attempting to relieve itself of obligations contained in the stipulation is likewise inappropriate. The plaintiff is not seeking to alter the amount of any of the payments. Rather, as noted, the plaintiff is merely seeking to place the funds into escrow to allow a more flexible collection strategy if they prevail upon the damages trial. Further, the defendants argue the plaintiff has mischaracterized the scope of the upcoming trial and that it is not "just" about damages but there are substantive elE=ments as well. This decision will not address that contentious issue which will no doubt be decided prior to the trial. Nor does that issue have anything really to do with the relief sought here. Lastly, the defendants argue there is no reason for this relief since the plaintiff has ample recourse to any funds in the form Qf rent abatements should they prevq.il. Further, the de·fendants note the property is sufficiently collateralized to support any award that might ensue. In any event, considering the large sums already paid to the defendants during the years of ongoing litigation in this case .a few months of use and occuparicy being placed .in escxow can hardly be deemed an intoleraple hardshJp. 4 4 of 5 [*FILED: 5] KINGS COUNTY CLERK 11/08/2021 03:19 PM NYSCEF DOC. NO. 1036 INDEX NO. 511560/2015 RECEIVED NYSCEF: 11/08/2021 This is particularly true sinc:e the trial is scheduled to commence next month and should be concluded shortly thereafter. A decision on the trial should likewise be issued promptly. This modification of the stipulaticm is warranted considering: all the facts of this case. Therefore, the plaintiff's motion seeking to place the use a11d occupancy payments into escrow commencing with the next monthly payment is granted. The escrow shall be placed in an account with a recognized title insurance company. So ordered. ENTER: DATED: November 8, 2021 Brooklyn N.Y. .~PfN Hon. Leon R~helsman JSC 5 5 of 5
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