708 Kings Highway Corp. v. C.L.B. Check Cashing Inc.

Civil Court of the City of New York
Index Number
103726/U9
County of Kings
Part
52
708 KINGS HIGHWAY CORPORATION,
Petitioner
(Landlord)
DECISION/ORDER
Recitution. us required by CPLR §221 ') (a), of the
I'"pcr~ considered in the review of this Motion
Papers
against
C.LB. CHECK CASHING. INC..
Respondent (Tenant)
Numbered
Notice of Motion and Affidavits Annexcd..
Order La Show Calise.
Answering Affidavits..
Replying Affidavits
, .. , .. , .. ,
Exhibits..
Supplemental Affidavits/M emoranda of Law..
I -2
2-3
_-,--4 __
Various
5 -7
KINGSTON CHECK CASHING CORP..
YISSACHAR SUGAR a/k/a BARRY SUGAR, XYZ.
INC., JOHN DOE AND JANE DOE,
Respondents
(Occupants)
Store Premises
708 Kings Highway
Brooklyn, New York 11223
Upon the foregoing cited papers and after oral argument, respondent's motion for summary
judgment is denied and petitioner's cross-motion for summary judgment is granted for the following
reasons:
Petitioner-landlord commenced the underlying holdover petition against respondent-tenant
and respondents-occupants
after they failed to surrender the premises within 30 days of the purported
expiration of the lease. A final judgment of possession was issued only against respondent-tenant
C.L.B. Check Cashing, Inc. ec.L.B.) and the proceeding was severed as to all other respondents.
Respondent -occupants (Kingston Check Cashing Corporation (Kingston) and its president Yissachar
Sugar a/k/a Barry Sugar) now move for summary judgment pursuant to CPLR§ 3212, seeking to
dismiss the petition on the grounds that C.L.B. properly assigned the lease to Kingston, who then
exercised an optionto extend, and that Kingston is, therefore, lawfully in possession of the premises,
Petitioner cross-moves for summary judgment pursuant to CPLR§ 3212 seeking a final judgment
of possession and a warrant of eviction against the respondent, and requesting that the matter be set
down for a hearing to determine the actual use and occupancy owed by the respondent through the
date of the judgment.
Background and Procedural History
Petitioner entered into a written lease with C.L.B. for a 10 year term, beginning August 1,
1999 and ending July 31, 2009. (Petitioner's
Exhibit
"E" - "the lease").
The lease included an
option provision to extend the term for five years (i.e. until July 31, 2014), provided certain
conditions were met by the tenant. (Jd. Para. #54). On or about January 30, 2003, respondent
Kingston began occupying the premises.
On or about April 20, 2009, petitioner instituted a petition for non-payment of rent against
C.L.B. Check Cashing, Inc. A final judgment of possession and a warrant of eviction issued
therefrom. However, Mr. Sugar tendered certain payments to petitioner, and Kingston was permitted
to remain in possession of the premises.
On or about December 1, 2009 petitioner instituted the
instant holdover petition based upon respondents failure to surrender possession upon the expiration
of the lease term.
The Parties 'Contentions
In support of its motion, respondent-occupant submits the affidavit of Yissachar Sugar a/k/a
Barry Sugar. First, Mr. Sugar seeks to have the petition dismissed against him individually on the
grounds that Kingston Check Cashing Corporation is the sole tenant and he has never personally
been a tenant in the premises. Second, Mr. Sugar asserts that on or about January 30,2003, C.L.B.
sublet and later assigned its lease to Kingston, and that from that time on Kingston was the sole
tenant in the premises. Mr. Sugar further asserts that petitioner-landlord has been inside the store
numerous times and was fully aware that Kingston is the sale occupant of the premises.
Furthermore, Mr. Sugar contends that Kingston has paid rent directly to petitioner for seven years.
According to Mr. Sugar, Kingston Check Cashing Corporation was not aware of the filing
of the April 2009 non-payment action, and only became aware of it when the City Marshal arrived
and changed the locks to the premises.
According to Mr. Sugar he then paid Ms. Schwartz
$14,698.72 to allow Kingston to remain in possession ofthe premises. Mr. Sugar contends that any
landlord-tenant relationship with C.L.B. was terminated when the City Marshal came with the
warrant of eviction on June 26, 2009. Moreover, Mr. Sugar appears to contend that by paying
petitioner to allow Kingston to remain in possession, Kingston thereby stepped into C.L.B.' s shoes
and assumed C.L.B. 's rights under the lease, including the option to extend the lease. Mr. Sugar
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claims that on two separate occasions he sent notices to petitioner on behalf of Kingston exercising
the lease option to extend the term of the lease.
Petitioner contends that respondents Kingston and its president Mr. Sugar are unauthorized
occupants of the premises and that they gained admittance through C.L.B. without petitioner's
consent. Furthermore, petitioner argues, C.L.B.'s lease expired on July 31,2009, and that C.L.B.
and those purporting to act on its behalf failed to surrender the premises to petitioner for more than
30 days, thereafter, necessitating the instant proceeding.
Petitioner contends that the term of the lease was never properly modified or extended. In
support of its position petitioner points out that its lease with C.L.B. expressly forbids assignments
without prior written consent from the landlord. The lease also provides that the petitioner could
accept rent from any occupant of the premises and apply it to the tenant's account without thereby
creating a new tenancy or acknowledging the assignment. Finally, petitioner notes that the option
was conditioned on C.L.B. not having defaulted under the lease which it did in failing to pay rent
on numerous occasions.
Summary Judgment Standard
The proponent of a motion for summary judgment must make a prima facie showing of
entitlement to judgment as a matter of law by offering sufficient evidence to demonstrate the absence
of any material issues of fact. (Alvarez v. Prospect Hospital, 68 NY2d 320 [1986]).
If such a
showing is made, the burden shifts to the opposing party to produce proof in admissible form
sufficient to establish the existence of material issues of fact requiring trial. (Zuckerman v. City of
New York, 49 NY2d 557, 562 [1980]).
Discussion
The Court of Appeals has held that "[i]t is axiomatic that a contract is to be interpreted so
as to give effect to the intention of the parties as expressed in the unequivocal language employed ...
This rule has even greater force in the context of real property transactions,
'where commercial
certainty is a paramount concern,' and where ...the instrument was negotiated between sophisticated,
counseled business people negotiating at arm's length." (Wallace v. 600 Partners Co., 86 NY2d 543
[1995] quoting W.W.W. Assocs. v. Giancontieri, 77 NY2d 157 [1990]; Chelsea 19 Association v.
Games, 67 AD3d 601 [1st Dept 2009]). The terms of the lease clearly prohibited the assignment
3
without prior written approval from the petitioner.
(The lease, Para. 11). Respondents do not
contend that such written approval was ever obtained. The lease clearly provided that petitioner
could accept rent from any occupant of the premises and apply it against the tenant's account,
without creating a tenancy or otherwise acknowledging the validity of a sublease or assignment. (ld.)
The lease also stated that the mere acceptance of rent by the petitioner would not constitute a waiver
of any of the provisions of the lease,unless such provisions were expressly waived by the landlord
in writing. (ld.) Respondent does not contend that any such waiver was signed. Furthermore, the
fact that the checks accepted by petitioner from Kingston all contain the notation "without prejudice
Kingston Check Cashing Corp. is not a tenant of 708 Kings Highway" indicates that petitioner never
intended to permit Kingston to take over the lease from CL.B.
Both parties acknowledge that while an attempt was made to execute the warrant of eviction,
an agreement was reached whereby some payment was tendered by Mr. Sugar to petitioner and
Kingston was permitted to remain in possession of the premises subject to monthly payments
thereafter.
Furthermore, the fact that petitioner continued to accept rent and initiated a holdover
proceeding upon termination of the lease term would appear to indicate petitioner's intention to
reinstate the original lease. (see Di.Glio v. Tepedino, 173 AD2d 763 [2d Dept 1991] [acceptance of .
rental payments and commencement of holdover proceeding after tenant refused to vacate upon
expiration of lease effectively revived previously existing landlord-tenant relationship after warrant
of eviction issued]). However, even if, as respondent argues, the warrant of eviction terminated the
landlord-tenant relationship between petitioner and respondent CL.B., it does not follow that a new
tenancy was then created whereby Kingston replaced CL.B. as the tenant under the existing lease.
Given the prohibition on assignments in the lease, and petitioner's acceptance of checks from
Kingston only "without prejudice," it seems clear that Mr. Sugar's payment was considered by
petitioner to have been made on behalf of CL.B., restoring the existing lease between petitioner and
CL.B.
In any case, there is no contention that a new lease was created between Kingston and
petitioner. The court also notes that in recounting an exchange with petitioner in his Affirmation in
Opposition, Mr. Sugar appears to admit that even he believed there was no lease in existence
between Kingston and petitioner.
Even assuming, arguendo, that there was a valid assignment and respondent, Kingston, had
4
the right to exercise the option under the contract, respondent has not adequately demonstrated that
he exercised the option in accordance with the contract terms, that is, not less than 90 days prior to
the expiration of the lease term. Although respondent contends that it attempted to exercise the
option on March 5, 2009, thepostmark on the envelope submitted by respondent as proof of its intent
to exercise the option is dated May 7,2009. That date is less than 90 days prior to the expiration of
the lease term on July 31, 2009, and indicates that even if the option were otherwise available to
respondent, it was not properly exercised.
For the foregoing reasons, respondent's motion for summary judgment is denied. Petitioner's
cross-motion for summary judgment is granted.
Judgment of possession is awarded to petitioner
and a warrant of eviction shall issue forthwith.
The case is set down for hearing in Part 62 to
determine what, if any, use and occupancy is owed to petitioner, and what items within the property
belong to respondent and may be removed from the premises. The date and time of the hearing will
be arranged by this court.
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July 30, 2010
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Devin P. Cohen, J.C.C
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