Landlord & Tenant

AppDiv, First Dept

(3-2 decision; memorandum opinion; dissent by Tom, J.)

In landlords' proceeding to recover a rent-stabilized apartment for the personal use of their daughter, tenant appealed from the Appellate Term's affirmance of civil court's award of possession to landlords. A divided Appellate Division affirmed, holding that landlords had established sufficient good faith intention to have the daughter live in the apartment.

Landlords own a five-story walk-up building in which they occupy one apartment. They sought possession of another apartment for their daughter, contending that they needed the daughter's room in their own apartment to accommodate a brother and sister-in-law who were about to immigrate to the United States. Civil Court determined, based on the testimony of landlord's wife, that the couple had a genuine intent to use the apartment for their daughter, and entered a judgment for landlords. The Appellate Term affirmed, and tenant again appealed.

In affirming, the Appellate Division majority relied on the credibility assessment by the trial judge, who was in the best position to assess witness credibility. The majority also rejected the view that a proceeding for personal use could not be sustained without the testimony of the person who was scheduled to occupy the premises ' especially when tenant made no demand for testimony by that person at trial.

Justice Tom, dissenting, relied on the absence of any testimony that the daughter would occupy the apartment as her primary residence. In particular, he noted that the daughter had been a student out-of-state, and that the mother had testified only that the daughter came home 'as often as she could', but not that the apartment would be her primary residence. He concluded that absent testimony from the daughter, any finding that she would use the apartment as her primary residence would be mere speculation.

COMMENT

Appellate courts have always deferred to the trial court's factual determination that a landlord would not use the apartment as a primary residence for himself or his family. For example, in Khaner v. Gavin, 2006 NY Slip Op 50690U, the appellate court deferred to the trial court's determination that the landlord failed to establish the requisite good faith to recover his tenant's apartment in Manhattan for personal use as his primary residence. After observing the demeanor and comportment of the witnesses, the trial court determined that the landlord, a principal flutist with the Philadelphia Orchestra, primarily resided in Philadelphia and would continue to do so. The appellate court affirmed the trial court's determination since a fair interpretation of the record evidence, including the landlord's own deposition testimony, supported the lower court's finding. In Salazar v. Li, 2004 NY Slip Op 51058U, the appellate court again deferred to the trial court's determination that the landlord failed to establish the requisite good faith to recover the tenant's apartment. The housing judge found that the landlord did not offer a plausible or consistent account of her need for the apartment and that there were discrepancies between the landlord's trial testimony in the present case and in a prior occupancy proceeding.

Similarly, appellate courts have always deferred to the trial court's factual determination that the landlord would use the apartment as a primary residence for himself or his family. In Powers v. Babic, 177 A.D. 2d 432, the appellate court affirmed the trial court's determination that the landlord's father would use the apartment as his primary residence. The court noted that the record evidence amply supported the housing judge's determination, especially since the housing judge found the landlord's testimony credible and sincere with regard to his stated intended use of the tenant's apartment. And in Axelrod v. Duffin, 154 Misc. 2d 310 at 313, the appellate court deferred to the trial court's determination that the landlord intended to use the apartment for his family since the record evidence supported such a finding.

However, appellate courts will not defer to trial court determinations in personal use proceedings when the matter turns on questions of law. Thus, in Prochner v. Pancerz, 2006 NY Slip Op 51330U, the appellate court remanded a landlord's personal use proceeding since the lower court had limited the development of testimony pertaining to tenant's defense of retaliatory eviction. Real Property Law ' 223-b prohibits a landlord from evicting a tenant because the tenant filed a complaint against the landlord for violating a health or safety law. Even though the trial court determined that the landlord in Prochner had a genuine intention to occupy the apartment as his primary residence, the court reversed the determination, holding that tenant was entitled to more than the one-year time limit set by the trial court to present proof to establish the defense of retaliatory eviction.

Neighbor's Second Hand Smoke Can Constitute Breach of Warranty of Habitability

Poyck v. Bryant

NYLJ 9/1/06, p. 22, col. 1

Civil Ct., N.Y. Cty

(Hagler, J.)

In landlord's action to recover rent and late charges from tenant, landlord moved for summary judgment. The court denied landlord's motion, holding that tenant had raised questions of fact about whether second-hand smoke emanating from a neighboring apartment constituted a breach of the implied warranty of habitability, resulting in constructive eviction.

Landlord owns a condominium apartment in a building located at 22 West 15^th Street in Manhattan. Landlord leased the premises to tenant for a 2-year term beginning Jan. 1, 2001. In March 2001, new occupants moved into a neighboring apartment, and began smoking both in their own apartment and in the common hallway. Tenant complained to the super, who allegedly spoke to the new neighbors, but to no avail. Tenant then wrote a letter both to landlord and to the super, complaining of the condition and noting the health concerns of his wife, who was recovering from cancer. Landlord took no further action and, on Aug. 1, tenant wrote landlord a letter informing landlord that tenant would be vacating the apartment on Aug. 31 due to continuing health concerns over the second hand smoke. Landlord then brought this action, seeking to recover rent due under the lease. Tenant's answer asserted affirmative defenses and counterclaims for breach of the implied warranty of habitability and for constructive eviction.

In denying landlord's summary judgment motion, the court rejected landlord's contention that he could not be held liable for the action of persons over whom he had no control ” occupants of a neighboring apartment. Moreover, the court emphasized that landlord failed to demonstrate that he had taken any action to eliminate or alleviate the hazardous condition. In particular, landlord could have asked the condominium board to require the neighbors to ventilate their apartment, and to stop smoking in the hallways, especially because the Real Property Law mandates that condominium bylaws restrict the use and maintenance of units and common elements to 'prevent unreasonable interference with the use of respective units and of the common elements by several unit owners.' The court concluded that there were triable issues of fact about whether secondhand smoke breached the implied warranty or constituted constructive eviction, mandating denial of landlord's summary judgment motion.

Consequential Damages

West Broadway Glass Co. v. Namaskaar of Soho, Inc.

NYLJ 9/13/06, p. 23, col. 1

Civil Ct., N.Y. Cty

(Mendez, J.)

In landlord's nonpayment proceeding, tenant sought consequential damages for wrongful eviction, together with attorneys' fees. The court denied the motion, concluding that tenant had not demonstrated consequential damages, and that because the lease made no provision for attorneys' fees, tenant could not recover such fees.

When tenant began renovation work without securing the necessary permits, landlord sought and obtained an injunction against continued renovation on Jan. 31, 2005. Then, on Feb. 15, 2005, landlord brought the instant nonpayment proceeding. On March 3, landlord's agents changed the locks and kept the keys, effectively evicting tenant. On May 10, the court determined that this action wrongfully evicted tenant because landlord had not obtained a judgment of possession before locking tenant out. Landlord provided tenant with the keys on May 16. Tenant then sought consequential damages for the loss of value during the period the between March 3 and May 16. Tenant also sought attorneys' fees.

In holding that landlord was not entitled to consequential damages, the court emphasized that tenant's operation was already closed at the time of the eviction, so that tenant lost no business or income as a result of the eviction. The court also noted that tenant had been subject to a prior injunction for proceeding without permits, suggesting that landlord at least had a plausible justification for retaking possession. The court then emphasized that in the absence of statute or lease provision, a prevailing party is not entitled to attorneys' fees in litigation between landlord and tenant. Here, the lease made no provision for attorney's fees, so tenant was not entitled to fees.

COMMENT

When a landlord wrongfully evicts a tenant before the conclusion of the lease agreement, the tenant is entitled to recover damages equal to the value of the use and possession of the property, measured by the difference between the actual rental value of the property and the agreed upon rent. Thus, in Randall-Smith, Inc. v. 43^rd St. Estates Corp., 17 N.Y. 2d 99, the jury awarded such damages to a tenant forcibly evicted and prevented from engaging in his business. However, courts have declined to award damages to tenants not in actual possession of the property at the time of the wrongful eviction. For example, in Gold v. Schuster, 264 A. D. 2d 547, the court denied an award of damages to a sublessor who never moved his business into the commercial space he was subletting. In West Broadway, the court declined to award compensatory damages to the tenant, who was not using the property at the time of eviction because the property was under construction.

Tenants are also entitled to recover consequential damages, such as lost profits and improvements to the property, if tenant proves those damages with sufficient certainty. In Snow v. Pulitzer, 142 N.Y. 263, where landlord's destruction of a part of his building resulted in a determination that tenant's candy store premises had become unsafe, tenant, who had a history of profitable business recovered the profits he would have realized had he been able to remain in the leased space for the continuation of the lease. However, in Suffolk Sports Center v. Bell Construction Corp., 212 A.D. 2d 241, the court declined to award lost profits to the owner of a new business because tenant's limited fiscal history made the valuation of lost profits too speculative. The court held that estimates of profits based on other businesses were not sufficient to support an award of lost profits with respect to tenant's new business. Courts more often award consequential damages for loss of improvements and additions to the leasehold, because valuation of these items is less speculative. Thus, in Marina Bay Club, Inc. v. Cannizzaro, 105 A.D. 2d 1114, the court found that improvements the tenant made to the property increased the property's value, and held that the cost of those improvements should be included in the tenant's recovery. Similarly, in Fisher v. Queens Park Realty Corp., 41 A.D. 2d 547, the court included in the calculation of damages the value of appliances and decorations installed by the tenant in a leased apartment.

Real Property Actions and Proceedings Law ' 385 provides for the trebling of damages in instances of forcible or wrongful evictions. However, courts have construed the award of treble damages under this provision to be discretionary and will generally treble damages in instances in which the eviction is threatening to personal or physical safety. Thus, in Lyke v. Anderson, 147 AD2d 18, in which the landlord disconnected his tenant's utilities and vandalized the tenant's home, the court awarded treble damages. Courts may not award treble damages when the tenant is also at fault, as in Mannion v. Bayfield Development Co., 134 Misc. 2d 1060, in which the court declined to treble damages for a tenant who had not received or responded to demands for payment of rent because the tenant had failed to provide the landlord with the address at which the tenant received mail.

Courts may also award punitive damages in cases in which the wrongful eviction is motivated by malice or in which the landlord acts in such a reckless manner as to disregard the safety of others. In Williams v. Llorente, 115 Misc. 2d 171, the court found that a landlord who invaded and looted a tenant's home was liable for both treble and punitive damages. Courts will not award punitive damages absent a finding of recklessness or malice. In H & P Research, Inc. v. Liza Realty Corp., 943 F. Supp. 328, a landlord discarded the tenant's belongings following a dispute, but 'quickly realized his mistake' and allowed the tenant to reoccupy the premises. The court awarded damages for the possession of the property and damage to personal belongings, and treble damages but declined to award punitive damages.

Landlords Established Good Faith Intention of Daughter's Personal Use

Horsford v. Bacott

NYLJ 8/21/06, p. 31, col. 3

AppDiv, First Dept

(3-2 decision; memorandum opinion; dissent by Tom, J.)

In landlords' proceeding to recover a rent-stabilized apartment for the personal use of their daughter, tenant appealed from the Appellate Term's affirmance of civil court's award of possession to landlords. A divided Appellate Division affirmed, holding that landlords had established sufficient good faith intention to have the daughter live in the apartment.

Landlords own a five-story walk-up building in which they occupy one apartment. They sought possession of another apartment for their daughter, contending that they needed the daughter's room in their own apartment to accommodate a brother and sister-in-law who were about to immigrate to the United States. Civil Court determined, based on the testimony of landlord's wife, that the couple had a genuine intent to use the apartment for their daughter, and entered a judgment for landlords. The Appellate Term affirmed, and tenant again appealed.

In affirming, the Appellate Division majority relied on the credibility assessment by the trial judge, who was in the best position to assess witness credibility. The majority also rejected the view that a proceeding for personal use could not be sustained without the testimony of the person who was scheduled to occupy the premises ' especially when tenant made no demand for testimony by that person at trial.

Justice Tom, dissenting, relied on the absence of any testimony that the daughter would occupy the apartment as her primary residence. In particular, he noted that the daughter had been a student out-of-state, and that the mother had testified only that the daughter came home 'as often as she could', but not that the apartment would be her primary residence. He concluded that absent testimony from the daughter, any finding that she would use the apartment as her primary residence would be mere speculation.

COMMENT

Appellate courts have always deferred to the trial court's factual determination that a landlord would not use the apartment as a primary residence for himself or his family. For example, in Khaner v. Gavin, 2006 NY Slip Op 50690U, the appellate court deferred to the trial court's determination that the landlord failed to establish the requisite good faith to recover his tenant's apartment in Manhattan for personal use as his primary residence. After observing the demeanor and comportment of the witnesses, the trial court determined that the landlord, a principal flutist with the Philadelphia Orchestra, primarily resided in Philadelphia and would continue to do so. The appellate court affirmed the trial court's determination since a fair interpretation of the record evidence, including the landlord's own deposition testimony, supported the lower court's finding. In Salazar v. Li, 2004 NY Slip Op 51058U, the appellate court again deferred to the trial court's determination that the landlord failed to establish the requisite good faith to recover the tenant's apartment. The housing judge found that the landlord did not offer a plausible or consistent account of her need for the apartment and that there were discrepancies between the landlord's trial testimony in the present case and in a prior occupancy proceeding.

Similarly, appellate courts have always deferred to the trial court's factual determination that the landlord would use the apartment as a primary residence for himself or his family. In Powers v. Babic, 177 A.D. 2d 432, the appellate court affirmed the trial court's determination that the landlord's father would use the apartment as his primary residence. The court noted that the record evidence amply supported the housing judge's determination, especially since the housing judge found the landlord's testimony credible and sincere with regard to his stated intended use of the tenant's apartment. And in Axelrod v. Duffin, 154 Misc. 2d 310 at 313, the appellate court deferred to the trial court's determination that the landlord intended to use the apartment for his family since the record evidence supported such a finding.

However, appellate courts will not defer to trial court determinations in personal use proceedings when the matter turns on questions of law. Thus, in Prochner v. Pancerz , 2006 NY Slip Op 51330U, the appellate court remanded a landlord's personal use proceeding since the lower court had limited the development of testimony pertaining to tenant's defense of retaliatory eviction. Real Property Law ' 223-b prohibits a landlord from evicting a tenant because the tenant filed a complaint against the landlord for violating a health or safety law. Even though the trial court determined that the landlord in Prochner had a genuine intention to occupy the apartment as his primary residence, the court reversed the determination, holding that tenant was entitled to more than the one-year time limit set by the trial court to present proof to establish the defense of retaliatory eviction.

Neighbor's Second Hand Smoke Can Constitute Breach of Warranty of Habitability

Poyck v. Bryant

NYLJ 9/1/06, p. 22, col. 1

Civil Ct., N.Y. Cty

(Hagler, J.)

In landlord's action to recover rent and late charges from tenant, landlord moved for summary judgment. The court denied landlord's motion, holding that tenant had raised questions of fact about whether second-hand smoke emanating from a neighboring apartment constituted a breach of the implied warranty of habitability, resulting in constructive eviction.

Landlord owns a condominium apartment in a building located at 22 West 15^th Street in Manhattan. Landlord leased the premises to tenant for a 2-year term beginning Jan. 1, 2001. In March 2001, new occupants moved into a neighboring apartment, and began smoking both in their own apartment and in the common hallway. Tenant complained to the super, who allegedly spoke to the new neighbors, but to no avail. Tenant then wrote a letter both to landlord and to the super, complaining of the condition and noting the health concerns of his wife, who was recovering from cancer. Landlord took no further action and, on Aug. 1, tenant wrote landlord a letter informing landlord that tenant would be vacating the apartment on Aug. 31 due to continuing health concerns over the second hand smoke. Landlord then brought this action, seeking to recover rent due under the lease. Tenant's answer asserted affirmative defenses and counterclaims for breach of the implied warranty of habitability and for constructive eviction.

In denying landlord's summary judgment motion, the court rejected landlord's contention that he could not be held liable for the action of persons over whom he had no control ” occupants of a neighboring apartment. Moreover, the court emphasized that landlord failed to demonstrate that he had taken any action to eliminate or alleviate the hazardous condition. In particular, landlord could have asked the condominium board to require the neighbors to ventilate their apartment, and to stop smoking in the hallways, especially because the Real Property Law mandates that condominium bylaws restrict the use and maintenance of units and common elements to 'prevent unreasonable interference with the use of respective units and of the common elements by several unit owners.' The court concluded that there were triable issues of fact about whether secondhand smoke breached the implied warranty or constituted constructive eviction, mandating denial of landlord's summary judgment motion.

Consequential Damages

West Broadway Glass Co. v. Namaskaar of Soho, Inc.

NYLJ 9/13/06, p. 23, col. 1

Civil Ct., N.Y. Cty

(Mendez, J.)

In landlord's nonpayment proceeding, tenant sought consequential damages for wrongful eviction, together with attorneys' fees. The court denied the motion, concluding that tenant had not demonstrated consequential damages, and that because the lease made no provision for attorneys' fees, tenant could not recover such fees.

When tenant began renovation work without securing the necessary permits, landlord sought and obtained an injunction against continued renovation on Jan. 31, 2005. Then, on Feb. 15, 2005, landlord brought the instant nonpayment proceeding. On March 3, landlord's agents changed the locks and kept the keys, effectively evicting tenant. On May 10, the court determined that this action wrongfully evicted tenant because landlord had not obtained a judgment of possession before locking tenant out. Landlord provided tenant with the keys on May 16. Tenant then sought consequential damages for the loss of value during the period the between March 3 and May 16. Tenant also sought attorneys' fees.

In holding that landlord was not entitled to consequential damages, the court emphasized that tenant's operation was already closed at the time of the eviction, so that tenant lost no business or income as a result of the eviction. The court also noted that tenant had been subject to a prior injunction for proceeding without permits, suggesting that landlord at least had a plausible justification for retaking possession. The court then emphasized that in the absence of statute or lease provision, a prevailing party is not entitled to attorneys' fees in litigation between landlord and tenant. Here, the lease made no provision for attorney's fees, so tenant was not entitled to fees.

COMMENT

When a landlord wrongfully evicts a tenant before the conclusion of the lease agreement, the tenant is entitled to recover damages equal to the value of the use and possession of the property, measured by the difference between the actual rental value of the property and the agreed upon rent. Thus, in Randall-Smith, Inc. v. 43^rd St. Estates Corp., 17 N.Y. 2d 99, the jury awarded such damages to a tenant forcibly evicted and prevented from engaging in his business. However, courts have declined to award damages to tenants not in actual possession of the property at the time of the wrongful eviction. For example, in Gold v. Schuster, 264 A. D. 2d 547, the court denied an award of damages to a sublessor who never moved his business into the commercial space he was subletting. In West Broadway, the court declined to award compensatory damages to the tenant, who was not using the property at the time of eviction because the property was under construction.

Tenants are also entitled to recover consequential damages, such as lost profits and improvements to the property, if tenant proves those damages with sufficient certainty. In Snow v. Pulitzer, 142 N.Y. 263, where landlord's destruction of a part of his building resulted in a determination that tenant's candy store premises had become unsafe, tenant, who had a history of profitable business recovered the profits he would have realized had he been able to remain in the leased space for the continuation of the lease. However, in Suffolk Sports Center v. Bell Construction Corp., 212 A.D. 2d 241, the court declined to award lost profits to the owner of a new business because tenant's limited fiscal history made the valuation of lost profits too speculative. The court held that estimates of profits based on other businesses were not sufficient to support an award of lost profits with respect to tenant's new business. Courts more often award consequential damages for loss of improvements and additions to the leasehold, because valuation of these items is less speculative. Thus, in Marina Bay Club, Inc. v. Cannizzaro, 105 A.D. 2d 1114, the court found that improvements the tenant made to the property increased the property's value, and held that the cost of those improvements should be included in the tenant's recovery. Similarly, in Fisher v. Queens Park Realty Corp., 41 A.D. 2d 547, the court included in the calculation of damages the value of appliances and decorations installed by the tenant in a leased apartment.

Real Property Actions and Proceedings Law ' 385 provides for the trebling of damages in instances of forcible or wrongful evictions. However, courts have construed the award of treble damages under this provision to be discretionary and will generally treble damages in instances in which the eviction is threatening to personal or physical safety. Thus, in Lyke v. Anderson, 147 AD2d 18, in which the landlord disconnected his tenant's utilities and vandalized the tenant's home, the court awarded treble damages. Courts may not award treble damages when the tenant is also at fault, as in Mannion v. Bayfield Development Co., 134 Misc. 2d 1060, in which the court declined to treble damages for a tenant who had not received or responded to demands for payment of rent because the tenant had failed to provide the landlord with the address at which the tenant received mail.

Courts may also award punitive damages in cases in which the wrongful eviction is motivated by malice or in which the landlord acts in such a reckless manner as to disregard the safety of others. In Williams v. Llorente, 115 Misc. 2d 171, the court found that a landlord who invaded and looted a tenant's home was liable for both treble and punitive damages. Courts will not award punitive damages absent a finding of recklessness or malice. In H & P Research, Inc. v. Liza Realty Corp., 943 F. Supp. 328, a landlord discarded the tenant's belongings following a dispute, but 'quickly realized his mistake' and allowed the tenant to reoccupy the premises. The court awarded damages for the possession of the property and damage to personal belongings, and treble damages but declined to award punitive damages.