Landlord & Tenant

Tenant Defaults Did Not Entitle Landlord to Terminate

Gettinger Associates, LLC v. Kamber & Co.

NYLJ 2/25/13, p. 19, col. 3

AppDiv, First Dept.

(memorandum opinion)

In an action by subtenants for a declaration that they were not in default, and for a permanent injunction against any action by landlord to cancel or terminate the sublease, landlord appealed from Supreme Court's grant of declaratory and injunctive relief to the subtenant. The Appellate Division modified, holding that landlord had not waived its right to enforce tenant's defaults, but also holding that the defaults did not entitle landlord to terminate the sublease.

Article 7 of the sublease agreement prohibited subtenant from spending more than $50,000 on repair work to the building's fa'ade without providing plans or a performance bond. Article 6 of the lease prohibits a tenant from assigning the sublease without landlord's approval while in default of other provisions of the sublease. Subtenant apparently made improvements to the building in violation of the provisions of Article 7. When landlord provided notice of these defaults, subtenants brought this action, and Supreme Court concluded that landlord's course of conduct manifested an intent to abandon or relinquish its right to enforce the defaults. Landlord appealed.

The Appellate Division first concluded that landlord had not evinced any intent to abandon its right to enforce the Article 7 defaults. But the court went on to hold that landlord had unreasonably delayed seeking to enforce the defaults ' with the exception of two defaults where the Appellate Division concluded that the delay in providing notice was not unreasonable. Those two involved subtenant's interior renovation of a first-floor deli and a remodeling of tenant space on the tenth floor of the building. The Appellate Division held, however, that although tenant's action constituted breaches of a substantial obligation of the tenancy, the breaches were not material, and therefore did not entitle landlord to terminate the sublease. The court then concluded that subtenant's breaches triggered the Article 6 prohibition on assignment. The court, however, held that forfeiture based on the improper assignment was unwarranted, especially because subtenant has asserted its willingness and ability to cure their default.

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Receiver's Lease to New Tenant Precludes Wrongful Eviction

Sunset Caf, Inc. v. Metts Surf & Sports Corp.

NYLJ 2/15/13, p. 28, col. 5

AppDiv, Second Dept.

(memorandum opinion)

In an action by former tenant against current tenant for wrongful ejectment, former tenant appealed from Supreme Court's award of summary judgment to the current tenant. The Appellate Division modified, holding that Supreme Court should have dismissed the complaint rather than converting current tenant's motion to dismiss into a motion for summary judgment, but otherwise affirmed, holding that current tenant's lease constituted documentary evidence warranting dismissal of the complaint.

In 2008, landlord leased the subject premises to the former tenant. The following year, mortgagee foreclosed on a mortgage, naming both landlord and former tenant as defendants in the foreclosure action. In the foreclosure action, Supreme Court appointed a receiver, and authorized the receiver to rent out the premises. The receiver then leased to current tenant for one year. Former tenant then brought this action against current tenant for wrongful ejectment.' Supreme Court awarded summary judgment to current tenant.

In modifying to dismiss the complaint, the Appellate Division emphasized that the lease executed by the court-appointed receiver constituted documentary evidence establishing a defense as a matter of law to the wrongful ejectment action. Because current tenants entered into possession under color of a duly executed lease, they could not have withheld the premises from former tenant by unlawful means, as required by RPAPL 853 (the wrongful ejectment statute). For the same reasons, the court dismissed former tenant's trespass claim.

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Tenant Defaults Did Not Entitle Landlord to Terminate

Gettinger Associates, LLC v. Kamber & Co.

NYLJ 2/25/13, p. 19, col. 3

AppDiv, First Dept.

(memorandum opinion)

In an action by subtenants for a declaration that they were not in default, and for a permanent injunction against any action by landlord to cancel or terminate the sublease, landlord appealed from Supreme Court's grant of declaratory and injunctive relief to the subtenant. The Appellate Division modified, holding that landlord had not waived its right to enforce tenant's defaults, but also holding that the defaults did not entitle landlord to terminate the sublease.

Article 7 of the sublease agreement prohibited subtenant from spending more than $50,000 on repair work to the building's fa'ade without providing plans or a performance bond. Article 6 of the lease prohibits a tenant from assigning the sublease without landlord's approval while in default of other provisions of the sublease. Subtenant apparently made improvements to the building in violation of the provisions of Article 7. When landlord provided notice of these defaults, subtenants brought this action, and Supreme Court concluded that landlord's course of conduct manifested an intent to abandon or relinquish its right to enforce the defaults. Landlord appealed.

The Appellate Division first concluded that landlord had not evinced any intent to abandon its right to enforce the Article 7 defaults. But the court went on to hold that landlord had unreasonably delayed seeking to enforce the defaults ' with the exception of two defaults where the Appellate Division concluded that the delay in providing notice was not unreasonable. Those two involved subtenant's interior renovation of a first-floor deli and a remodeling of tenant space on the tenth floor of the building. The Appellate Division held, however, that although tenant's action constituted breaches of a substantial obligation of the tenancy, the breaches were not material, and therefore did not entitle landlord to terminate the sublease. The court then concluded that subtenant's breaches triggered the Article 6 prohibition on assignment. The court, however, held that forfeiture based on the improper assignment was unwarranted, especially because subtenant has asserted its willingness and ability to cure their default.

'

Receiver's Lease to New Tenant Precludes Wrongful Eviction

Sunset Caf, Inc. v. Metts Surf & Sports Corp.

NYLJ 2/15/13, p. 28, col. 5

AppDiv, Second Dept.

(memorandum opinion)

In an action by former tenant against current tenant for wrongful ejectment, former tenant appealed from Supreme Court's award of summary judgment to the current tenant. The Appellate Division modified, holding that Supreme Court should have dismissed the complaint rather than converting current tenant's motion to dismiss into a motion for summary judgment, but otherwise affirmed, holding that current tenant's lease constituted documentary evidence warranting dismissal of the complaint.

In 2008, landlord leased the subject premises to the former tenant. The following year, mortgagee foreclosed on a mortgage, naming both landlord and former tenant as defendants in the foreclosure action. In the foreclosure action, Supreme Court appointed a receiver, and authorized the receiver to rent out the premises. The receiver then leased to current tenant for one year. Former tenant then brought this action against current tenant for wrongful ejectment.' Supreme Court awarded summary judgment to current tenant.

In modifying to dismiss the complaint, the Appellate Division emphasized that the lease executed by the court-appointed receiver constituted documentary evidence establishing a defense as a matter of law to the wrongful ejectment action. Because current tenants entered into possession under color of a duly executed lease, they could not have withheld the premises from former tenant by unlawful means, as required by RPAPL 853 (the wrongful ejectment statute). For the same reasons, the court dismissed former tenant's trespass claim.

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