Case Notes

Cater appealed the judgment, and that appeal is still pending, so the sale of the property remains in limbo. Meanwhile, Cater brought a brand new summary proceeding – the one at issue in the case under discussion here — seeking rental arrears of $319,200 dating back to 2011. Village Auto countered with a motion for dismissal on the basis that it believed Cater was collaterally estopped from relitigating the issues that had already been decided in the default judgment against her.

The court here, citing to Matter of Abady, 22 AD3d 71 (1st Dept. 2005), explained that the doctrine of collateral estoppel requires a showing of two things: 1) an identical issue having been decided in a prior action; and 2) that the party being precluded from bringing the second action had a full and fair opportunity to contest the prior determination. And, as further stated in Abady, while the matter must be actually litigated and determined in a prior action for collateral estoppel to apply, “[a]n issue is not actually litigated if 'there has been a default, a confession of liability, a failure to place a matter in issue by proper pleading or even because of a stipulation' (quoting Kaufman v. Eli Lilly & Co., 65 NY2d 449 (1985)).” But Abady also explained that there was one exception to this rule: Collateral estoppel may apply to a party who is not heard in the prior action if that party deliberately refused to defend or litigate the claim that is the subject of the preclusion request. Did this exception apply to Cater, the court asked?

In this case, the answer was no, because Cater had asked the Appellate Division for a stay of the order for specific performance of the sale and the court had granted that stay motion, so the matter was not finally decided. The question of rents to be paid while the appeal progressed was not addressed by the appellate court, yet Village Auto continued in possession of the property. So, while the rents due prior to the summary dismissal could not be newly adjudicated, those coming due post-dismissal could. “The facts demonstrate that Village Auto has occupied the premises without paying rent and for the taxes due. The document dated July 16, 2018, from the Office of Nassau Office Treasurer, states that $176,718.62 is owed for taxes. As such, the property is in danger of being sold for nonpayment of taxes,” stated the court. The court noted that the landlord/tenant relationship continues until issuance of eviction, which terminates the tenant's obligation to pay rent (see, Licini v. Graceland Florist Inc., 32 AD3d 825 (2d Dept. 2006); however, in this case no eviction had yet occurred. Because of this, the court determined that landlord Cater was entitled to collect rent to cover her expenses and it denied Village Auto's motion to dismiss her claim seeking such.

No Meeting of the Minds in Forged Lease

A New York court has found in favor of a landlord who sought his tenant's eviction after alleging that the tenant had materially altered the parties' lease without consent and had forged the landlord's initials purporting to show his agreement to the tenant using the property for commercial purposes. Rufrano v. Yovino, 2018 NY Slip Op 51251-2018.

Michael Yovino had rented the property in question on a month-to-month basis from Dr. Frederick Rufrano's aunt for many years. With the knowledge and consent of Rufrano and his aunt, the property had been used as a social club, and Yovino had sometimes held barbecues for the club's members in the yard. Over the years, the ownership and management of the property shifted from the aunt to Rufrano.

Unfortunately, an elderly club member suffered injuries while at the property. After he made a claim, Rufrano lost his insurance. In order to obtain new insurance, Rufrano had to change the term of the lease to a term of years and was further required to have the tenant carry insurance on the small commercial space naming Rufrano as the secondary insuree. Therefore, when entering into the seven-year lease that became the subject of this litigation, Rufrano included this insurance as a tenant requirement, writing of it in in large-block hand-written text on the first page of the document and in item 28 of the lease, which pertained to insurance.

The parties met and signed the lease, with Rufrano agreeing to a small change (concerning damages and the changing of lightbulbs) that was written in at Yovino's request. Rufrano testified that he initialed this one addition to the lease. Because there was no copy machine available and the tenant asked to keep a copy of the lease, Rufrano agreed to allow Yovino to keep the original with the proviso that he make a copy and send the lease to Rufrano. This never happened.

After entering into the lease, Yovino began using the property for a number of commercial purposes, including for throwing barbecues as a commercial venture. He also began amassing furniture and appliances on the property for the purpose of running a flea market. Rufrano then sought to evict his tenant, which Yovino alleged was not because he was using the property for non-agreed-upon purposes but because the landlord saw opportunities for obtaining more money by using the property in a different manner.

In court proceedings seeking eviction, the landlord claimed that the lease document had been altered without his consent. In fact, at some point, changes were made to the lease to indicate that Yovino had been granted permission to use a larger portion of the premises for commercial purposes. These changes were initialed, but Rufrano testified that the initials were not placed there by him and that he had not agreed to the changes. The court was therefore charged with deciding which party was telling the truth as to the changes that authorized commercial use of much of the property.

The court came down on Rufrano's side, noting that Yovino's testimony made no sense in several respects, including his assertion that the parties had agreed he could use much of the leased property for commercial purposes. The court stated, “Yovino's fixation on developing the yard for his various commercial ventures were at odds with the limited use that Rufrano and his aunt had allowed; i.e., barbecues for the social club members. Given Yovino's's fixation on expanding his usage of the yard on lot 2, it is logical that he devised a scheme to get Rufrano to sign the lease twice, inform him he would subsequently mail him the original and then, after Rufrano left, obsessively add numerous clauses granting him the right to use the yard for commercial use. Had the parties actually agreed upon the commercial use of the premises, it would have been written once in clear bold letters on the first page of the lease.” The court also credited Rufrano's handwriting expert's testimony that Rufrano's initials were forged over Yovino's expert's testimony to the contrary.

Because the court found that Yovino had unilaterally changed the terms of the lease and had forged three of four sets of initials therein, it also concluded that there had been no meeting of the minds, so that no agreement had actually been made. “Since no lease exists,” stated the court, it granted Rufrano's request for a warrant of eviction and judgment of possession.

— Janice Inman, Editor-in-Chief