THE LEASING HOTLINE

A sublessor sued a sublessee for damages resulting from the sublessee's failure to vacate the subleased premises at the expiration of the sublease. The sublessee argued that he was a month-to-month tenant. The sublessor argued that the sublessee had no greater rights than the sublessor under the prime lease, which had expired. Thus, argued the sublessor, the sublessee had no legal basis to create a month-to-month tenancy. The court noted that this argument was not raised in the sublessor's motion for summary judgment and thus was not properly raised on appeal. It nevertheless considered the argument and disagreed with the sublessor. The court reasoned that even if the prime lease had terminated, a tenancy by sufferance still could have been created, legitimizing the sublessee's continued occupation of the premises. The sublessor had received and retained a rent check. He deposited the check and made no attempt to refund the payment until after the sublessee raised the defense of the creation of a month-to-month tenancy in an eviction proceeding. Furthermore, the sublessor argued for the first time on appeal, and with no factual support, that it inadvertently had deposited the check. The court, therefore, affirmed the trial court's denial of the sublessor's motion for summary judgment and dismissed the complaint.

International Business Machines Corp. v. Joseph Stevens & Co., LP, 2715, 2716, N.Y. App. Div., 1st Dept., December 31, 2002.