Landlord & Tenant

Licensee Has No Wrongful Eviction Claim

When Harry Met Linda, LLC v. Rogers Investments NV LP

NYLJ 8/17/11, p.31, col. 2

Supreme Ct., N.Y. Cty.

(Mills, J.)

In a licensee's wrongful eviction action, landlord moved to dismiss for failure to state a claim. The court granted landlord's motion, holding that the licensee had no right to possession and that landlord had not engaged in self-help.

In 2007, landlord leased the subject premises, which included a theater, to tenant. In 2008, landlord brought a proceeding against tenant for nonpayment of rent. Tenant ultimately consented to issuance of a warrant of eviction, but enforcement was stayed upon tenant's compliance with an agreed-upon schedule for payment of rent arrears. In November 2009, tenant licensed the leased premises to licensee, and licensee began using the premises on Sept. 6, 2010. Licensee opened a play on Oct. 10 of that year.
Meanwhile, tenant failed to comply with its obligations under the settlement agreement with landlord, and the city marshal executed the warrant of eviction on Oct. 13. Licensee then brought this action against landlord, contending that landlord had ejected licensee forcibly and/or by unlawful means, making it impossible for licensee to present its play, or to obtain possession of the property necessary to present the play elsewhere. Licensee relied on RPAPL 853. Landlord moved to dismiss.

In dismissing the complaint, the court first held that a licensee, unlike a tenant, acquires no possessory interest in property, and is subject to ouster without legal process. The court also noted that the licensee was not a party to the commercial lease, and held that a non-party cannot recover treble damages in an action for unlawful eviction. Finally, the court turned to licensee's argument that even a party that does not have a superior right to possession can assert a wrongful eviction claim based on a forcible entry and detainer. The court held, however, that this kind of claim is only available when a landlord has exercised self-help, not where, as in this case, the city marshal has executed a valid warrant of eviction.

COMMENT

RPAPL ' 853 provides a cause of action for forcible entry or detainer. The statute provides, “if a person is disseized, ejected, or put out of real property in a forcible or unlawful manner,” or if a person has been kept out of his property by force, threat or by unlawful means, he may recover treble damages in an action against the wrongdoer.

In cases like When Harry Met Linda LLC, where the landlord evicts plaintiff after a judicial proceeding, with the help of a city marshal, wrongful eviction claims fail because eviction clearly is not “wrongful.” However, the more critical question is when a landlord does not use a marshal and resorts to some level of self-help, who has standing to bring an unlawful eviction claim?

Courts are more likely to decide that a party has standing to bring a wrongful eviction claim if the occupant's interest is not terminable at will. For example, in Park v. Automotive Realty Corp, 1998 WL 40199, where plaintiff rented booth space in a mall, the court held that “License Agreement for Booth Space” in question was a lease rather than a license. The court reasoned that even though the agreement was labeled a “license,” because the agreement was assignable and the occupant's interest was not terminable at will by the grantor, the occupant's interest should be a considered a lease. Therefore, the occupant was a tenant with a possessory interest who was entitled to bring a wrongful eviction claim.

By contrast, where the governing agreement is terminable at will, courts are more likely to find that the agreement is a mere license, barring a wrongful eviction claim. For example, in P & A Bros. v. N.Y. Dept. of Parks and Recreation, 184 A.D.2d 267, the First Department determined that the plaintiff, who had obtained a permit from the Parks Department allowing use of the property, was a licensee and therefore not entitled to bring a wrongful eviction action. The court emphasized the fact that the Parks Department's permits were terminable at will by the Parks Commissioner and further, that the permit itself provided that it could be revoked.

Landlord's Active Involvement Can Override Non-Waiver Clause

W. C. Vicky Inc. v. Haddad

NYLJ 9/2/11, p. 27, col. 3

AppTerm. 9th & 10th Districts

(memorandum opinion)

In commercial landlord's holdover proceeding, tenant appealed from City Court's order dismissing tenant's affirmative defenses and awarding landlord a judgment of possession. The Appellate Term modified to reinstate tenant's affirmative defenses and to strike the award of a final judgment of possession, holding that tenant had raised question of fact about whether landlord or landlord's predecessor had waived provisions in the lease agreement.

In 2006, tenant entered into a 10-year lease with landlord's predecessor. The following year, landlord acquired the building through a foreclosure proceeding and began accepting rent from tenant. In 2009, landlord sent tenant a notice of its intent to terminate, alleging several defaults. Later that year, landlord brought this holdover proceeding, alleging that several defaults had not been cured. Among those defaults was placement of a refrigerator compressor, without landlord's consent, in an area not leased to tenant. Tenant asserted as an affirmative defense that the compressor had been in place for years before tenant entered into possession, and that both the past and current landlord had accepted rent with knowledge of the alleged defaults. Landlord, however, argued that the nonwaiver clause in the lease precluded any finding of waiver by the current or past landlord. Yonkers City Court agreed and awarded a final judgment of possession to landlord.

In modifying, the Appellate Term held that when a landlord is actively involved in a tenant's defaults, landlord's behavior can override a nonwaiver clause in a lease. Here, tenant's allegation that the prior landlord delivered the premises to her in its current condition created a triable issue about whether the reasonable expectations of the tenant and the prior landlord were to allow the current placement of the compressor.

COMMENT

When a lease includes a specific nonwaiver clause, a tenant will not succeed on a claim that landlord has waived a breach explicitly mentioned in the non-waiver clause. For instance, in Excel Graphics v. CFG/AGSCB, 1 A.D.3d 65, because the lease included a specific nonwaiver clause, the First Department upheld the landlord's right to evict tenant for subletting the premises without consent, even though landlord had listed subtenants in the building directory, and had accepted rent with knowledge of the tenant's breach. The court emphasized that the non-waiver clause provided that listing tenants in the directory and acceptance of rent “shall not be deemed consent to sublet.” The court noted that the tenant's claims of waiver were negated by the explicit provisions of the lease, and that the landlord's actions did not rise to the level of active involvement in tenant's breaching conduct.

Even with a specific nonwaiver clause, if the landlord actively authorizes tenant to breach the lease requirement mentioned in the non-waiver clause, courts sometimes decide that the landlord has been so complicit with the breaching behavior that it would be inequitable to permit landlord to rely on the non-waiver clause. For example, in Simon & Son Upholstery, Inc. v. 601 West Associates, LLC, 268 A.D.2d 359, the First Department held that the landlord's express oral grant of permission to use the premises as a photography studio constituted waiver of the lease provision that limited use of the premises to upholstery manufacturing. The lease had specified the hours of the elevator service, and contained a specific nonwaiver clause that required landlord's written consent for new uses of the premises. The court, however, focused on landlord's oral grant of permission, and on landlord's acceptance of payment from tenant for after-hours elevator service provided to accommodate the photography studio. Moreover, the court held that landlord's waiver bound a successor landlord because the new landlord was aware of the conversion.,

By contrast, in the case of a general nonwaiver clause, mere lack of protest coupled with acceptance of rent for a prolonged period of time may constitute waiver. In P & D Cards and Gifts, Inc. v. Matejka, 150 A.D.2d 660, the Second Department held that the landlord was precluded from terminating the assignee's lease based on the assignor's failure to make a $1500 security deposit. The court observed that the landlord accepted additional security deposit from the new tenant, and collected rent for a period of more than 40 months without effort to terminate the lease based on the alleged breach. Since the lease only contained a general nonwaiver clause that did not refer to acceptance of rent, the landlord waived his right to terminate the lease.

Loft Landlord May Evict Tenant Who Did Not Use Premises As Primary Residence

Glynn v. 177 West 26th Street Realty Corp.

NYLJ 8/24/11,

Supreme Ct., N.Y. Cty.

(Rakower, J.)

In loft tenant's action staying eviction proceedings against him and seeking restitution from landlord for improvements he had made, landlord sought summary judgment dismissing the complaint. The court granted the motion in part and denied it in part, holding that tenant was not entitled to retain possession of apartments it was leasing out to others, but that questions of fact remained about whether tenant continued to occupy one of the apartments as his primary residence.

Tenant had been leasing nine units in the loft building in the period between 1988 and 1994. All of the leases expired by 1998. In July 2010, landlord served nine 30-day notices to terminate tenant's possession of the apartments. Landlord claimed that tenant had sublet each of the units to others for more than ten years, and does not use any of them as his primary residence. Tenant conceded that he rented out eight of the units, but contended that he maintains the ninth as his primary residence. Tenant brought this action to stay all eviction proceedings, and to obtain restitution for expenditures made to maintain and improve the apartments.

The court awarded landlord summary judgment on its counterclaim for possession of eight apartments, noting that there were no disputed issues of fact. With respect to the ninth unit, the court noted testimony by a person who had sublet the unit from tenant for 10 years, and who asserted that tenant generally rented the unit like a hotel unit, and stayed in the apartment only sporadically, but nevertheless concluded that disputed questions of fact precluded summary judgment. The court also held that questions of fact precluded summary judgment on tenant's claim that landlord had made an agreement with tenant to compensate him for improvement made to the units.

Licensee Has No Wrongful Eviction Claim

When Harry Met Linda, LLC v. Rogers Investments NV LP

NYLJ 8/17/11, p.31, col. 2

Supreme Ct., N.Y. Cty.

(Mills, J.)

In a licensee's wrongful eviction action, landlord moved to dismiss for failure to state a claim. The court granted landlord's motion, holding that the licensee had no right to possession and that landlord had not engaged in self-help.

In 2007, landlord leased the subject premises, which included a theater, to tenant. In 2008, landlord brought a proceeding against tenant for nonpayment of rent. Tenant ultimately consented to issuance of a warrant of eviction, but enforcement was stayed upon tenant's compliance with an agreed-upon schedule for payment of rent arrears. In November 2009, tenant licensed the leased premises to licensee, and licensee began using the premises on Sept. 6, 2010. Licensee opened a play on Oct. 10 of that year.
Meanwhile, tenant failed to comply with its obligations under the settlement agreement with landlord, and the city marshal executed the warrant of eviction on Oct. 13. Licensee then brought this action against landlord, contending that landlord had ejected licensee forcibly and/or by unlawful means, making it impossible for licensee to present its play, or to obtain possession of the property necessary to present the play elsewhere. Licensee relied on RPAPL 853. Landlord moved to dismiss.

In dismissing the complaint, the court first held that a licensee, unlike a tenant, acquires no possessory interest in property, and is subject to ouster without legal process. The court also noted that the licensee was not a party to the commercial lease, and held that a non-party cannot recover treble damages in an action for unlawful eviction. Finally, the court turned to licensee's argument that even a party that does not have a superior right to possession can assert a wrongful eviction claim based on a forcible entry and detainer. The court held, however, that this kind of claim is only available when a landlord has exercised self-help, not where, as in this case, the city marshal has executed a valid warrant of eviction.

COMMENT

RPAPL ' 853 provides a cause of action for forcible entry or detainer. The statute provides, “if a person is disseized, ejected, or put out of real property in a forcible or unlawful manner,” or if a person has been kept out of his property by force, threat or by unlawful means, he may recover treble damages in an action against the wrongdoer.

In cases like When Harry Met Linda LLC, where the landlord evicts plaintiff after a judicial proceeding, with the help of a city marshal, wrongful eviction claims fail because eviction clearly is not “wrongful.” However, the more critical question is when a landlord does not use a marshal and resorts to some level of self-help, who has standing to bring an unlawful eviction claim?

Courts are more likely to decide that a party has standing to bring a wrongful eviction claim if the occupant's interest is not terminable at will. For example, in Park v. Automotive Realty Corp, 1998 WL 40199, where plaintiff rented booth space in a mall, the court held that “License Agreement for Booth Space” in question was a lease rather than a license. The court reasoned that even though the agreement was labeled a “license,” because the agreement was assignable and the occupant's interest was not terminable at will by the grantor, the occupant's interest should be a considered a lease. Therefore, the occupant was a tenant with a possessory interest who was entitled to bring a wrongful eviction claim.

By contrast, where the governing agreement is terminable at will, courts are more likely to find that the agreement is a mere license, barring a wrongful eviction claim. For example, in P & A Bros. v. N.Y. Dept. of Parks and Recreation, 184 A.D.2d 267, the First Department determined that the plaintiff, who had obtained a permit from the Parks Department allowing use of the property, was a licensee and therefore not entitled to bring a wrongful eviction action. The court emphasized the fact that the Parks Department's permits were terminable at will by the Parks Commissioner and further, that the permit itself provided that it could be revoked.

Landlord's Active Involvement Can Override Non-Waiver Clause

W. C. Vicky Inc. v. Haddad

NYLJ 9/2/11, p. 27, col. 3

AppTerm. 9th & 10th Districts

(memorandum opinion)

In commercial landlord's holdover proceeding, tenant appealed from City Court's order dismissing tenant's affirmative defenses and awarding landlord a judgment of possession. The Appellate Term modified to reinstate tenant's affirmative defenses and to strike the award of a final judgment of possession, holding that tenant had raised question of fact about whether landlord or landlord's predecessor had waived provisions in the lease agreement.

In 2006, tenant entered into a 10-year lease with landlord's predecessor. The following year, landlord acquired the building through a foreclosure proceeding and began accepting rent from tenant. In 2009, landlord sent tenant a notice of its intent to terminate, alleging several defaults. Later that year, landlord brought this holdover proceeding, alleging that several defaults had not been cured. Among those defaults was placement of a refrigerator compressor, without landlord's consent, in an area not leased to tenant. Tenant asserted as an affirmative defense that the compressor had been in place for years before tenant entered into possession, and that both the past and current landlord had accepted rent with knowledge of the alleged defaults. Landlord, however, argued that the nonwaiver clause in the lease precluded any finding of waiver by the current or past landlord. Yonkers City Court agreed and awarded a final judgment of possession to landlord.

In modifying, the Appellate Term held that when a landlord is actively involved in a tenant's defaults, landlord's behavior can override a nonwaiver clause in a lease. Here, tenant's allegation that the prior landlord delivered the premises to her in its current condition created a triable issue about whether the reasonable expectations of the tenant and the prior landlord were to allow the current placement of the compressor.

COMMENT

When a lease includes a specific nonwaiver clause, a tenant will not succeed on a claim that landlord has waived a breach explicitly mentioned in the non-waiver clause. For instance, in Excel Graphics v. CFG/AGSCB, 1 A.D.3d 65, because the lease included a specific nonwaiver clause, the First Department upheld the landlord's right to evict tenant for subletting the premises without consent, even though landlord had listed subtenants in the building directory, and had accepted rent with knowledge of the tenant's breach. The court emphasized that the non-waiver clause provided that listing tenants in the directory and acceptance of rent “shall not be deemed consent to sublet.” The court noted that the tenant's claims of waiver were negated by the explicit provisions of the lease, and that the landlord's actions did not rise to the level of active involvement in tenant's breaching conduct.

Even with a specific nonwaiver clause, if the landlord actively authorizes tenant to breach the lease requirement mentioned in the non-waiver clause, courts sometimes decide that the landlord has been so complicit with the breaching behavior that it would be inequitable to permit landlord to rely on the non-waiver clause. For example, in Simon & Son Upholstery, Inc. v. 601 West Associates, LLC, 268 A.D.2d 359, the First Department held that the landlord's express oral grant of permission to use the premises as a photography studio constituted waiver of the lease provision that limited use of the premises to upholstery manufacturing. The lease had specified the hours of the elevator service, and contained a specific nonwaiver clause that required landlord's written consent for new uses of the premises. The court, however, focused on landlord's oral grant of permission, and on landlord's acceptance of payment from tenant for after-hours elevator service provided to accommodate the photography studio. Moreover, the court held that landlord's waiver bound a successor landlord because the new landlord was aware of the conversion.,

By contrast, in the case of a general nonwaiver clause, mere lack of protest coupled with acceptance of rent for a prolonged period of time may constitute waiver. In P & D Cards and Gifts, Inc. v. Matejka, 150 A.D.2d 660, the Second Department held that the landlord was precluded from terminating the assignee's lease based on the assignor's failure to make a $1500 security deposit. The court observed that the landlord accepted additional security deposit from the new tenant, and collected rent for a period of more than 40 months without effort to terminate the lease based on the alleged breach. Since the lease only contained a general nonwaiver clause that did not refer to acceptance of rent, the landlord waived his right to terminate the lease.

Loft Landlord May Evict Tenant Who Did Not Use Premises As Primary Residence

Glynn v. 177 West 26th Street Realty Corp.

NYLJ 8/24/11,

Supreme Ct., N.Y. Cty.

(Rakower, J.)

In loft tenant's action staying eviction proceedings against him and seeking restitution from landlord for improvements he had made, landlord sought summary judgment dismissing the complaint. The court granted the motion in part and denied it in part, holding that tenant was not entitled to retain possession of apartments it was leasing out to others, but that questions of fact remained about whether tenant continued to occupy one of the apartments as his primary residence.

Tenant had been leasing nine units in the loft building in the period between 1988 and 1994. All of the leases expired by 1998. In July 2010, landlord served nine 30-day notices to terminate tenant's possession of the apartments. Landlord claimed that tenant had sublet each of the units to others for more than ten years, and does not use any of them as his primary residence. Tenant conceded that he rented out eight of the units, but contended that he maintains the ninth as his primary residence. Tenant brought this action to stay all eviction proceedings, and to obtain restitution for expenditures made to maintain and improve the apartments.

The court awarded landlord summary judgment on its counterclaim for possession of eight apartments, noting that there were no disputed issues of fact. With respect to the ninth unit, the court noted testimony by a person who had sublet the unit from tenant for 10 years, and who asserted that tenant generally rented the unit like a hotel unit, and stayed in the apartment only sporadically, but nevertheless concluded that disputed questions of fact precluded summary judgment. The court also held that questions of fact precluded summary judgment on tenant's claim that landlord had made an agreement with tenant to compensate him for improvement made to the units.