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Avalon Riverview I, LLC, Appellant v. Riverview Restaurant

New York Supreme and/or Appellate Courts SUPREME COURT, APPELLATE TERM, SECOND DEPARTMENT, 2d, 11th and 13th JUDICIAL DISTRICTS


January 14, 2013

AVALON RIVERVIEW I, LLC, APPELLANT, --
v.
RIVERVIEW RESTAURANT, INC. FORMERLY KNOWN AS YTT, LLC,
RESPONDENT,
-AND- "XYZ CORP.," UNDERTENANT.

Appeal from an order of the Civil Court of the City of New York, Queens County (Leslie J. Purificacion, J.), entered March 7, 2011.

Avalon Riverview I, LLC v Riverview Rest., Inc.

Decided on January 14, 2013

Appellate Term, Second Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and will not be published in the printed Official Reports.

PRESENT: PESCE, P.J., WESTON and RIOS, JJ

The order, insofar as appealed from, conditionally granted the branch of tenant's motion seeking to stay the execution of a warrant in a holdover summary proceeding.

ORDERED that the order, insofar as appealed from, is affirmed, without costs.

In this commercial holdover proceeding premised on the chronic nonpayment of rent, landlord appeals from so much of an order of the Civil Court as stayed the execution of a warrant for 10 days to allow tenant time to cure a default in making payment required by a stipulation of settlement.

In 2008, tenant agreed to a final judgment of possession and a warrant of eviction which would be stayed through 2023 provided that tenant remain current in its rent and ancillary obligations. When tenant missed various payments, landlord sought to accelerate the execution of the warrant. Tenant moved to stay the execution of the warrant, and to vacate the final judgment and warrant. The court denied the branch of the motion seeking vacatur, but stayed the execution of the warrant on condition that tenant satisfy the outstanding arrears. Landlord appeals from so much of the order as conditionally granted tenant a stay, and we affirm.

It is well settled that the enforcement of a court-ordered stipulation of settlement is "subject to the supervision of the courts" (Malvin v Schwartz, 65 AD2d 769, 769 [1978], affd 48 NY2d 693 [1979]), especially where the enforcement of the stipulation would be unjust or inequitable (Ribner v Ribisi,10 Misc 3d 144[A], 2006 NY Slip Op 50130[U] [App Term, 9th & 10th Jud Dists 2006]). Here, tenant has expended significant sums to renovate the premises and it employs a staff of over 20 employees. Moreover, a forfeiture of a leasehold, where a tenant has offered to make a landlord whole, is to be avoided (J.N.A. Realty Corp. v Cross Bay Chelsea, 42 NY2d 392 [1977]).

Accordingly, the order, insofar as appealed from, is affirmed.

Pesce, P.J. and Rios, J., concur.

Weston, J., dissents in a separate memorandum.

Weston, J., dissents and votes to reverse the order, insofar as appealed from, and deny the branch of tenant's motion seeking to stay the execution of the warrant in the following memorandum:

This commercial holdover proceeding was commenced after landlord had terminated the tenancy in May 2008, pursuant to the terms of the lease, based upon, among other things, tenant's failure to pay rent. In June 2008, the parties entered into a two-attorney stipulation, in which it was agreed that landlord would have a final judgment of possession, that a warrant would issue, which would be stayed until August 31, 2023, and that, among other things, use and occupancy would be paid on the first day of every month in the amounts set forth in the stipulation, with increases included every two years. Upon tenant's default, landlord had the right to accelerate the execution of the warrant on three days' written notice. In November 2010, landlord served such a notice, and tenant moved to stay the execution of the warrant, and to set aside the final judgment and warrant. Tenant alleged, in conclusory fashion, that it was up to date on all payments, and provided photocopies of the front of several checks. Landlord demonstrated, in opposition to the motion, that five of the checks that had been issued by tenant had been returned for insufficient funds, beginning in May 2009. Indeed, while tenant had submitted a photocopy of the front of a check for October 2010 rent, landlord demonstrated that this very check had been returned for insufficient funds. Landlord also demonstrated that, for nine months after the rent had increased pursuant to the terms of the stipulation, tenant had failed to tender rent in the increased amount. Landlord further alleged that tenant was $32,917.60 in rent arrears. In reply, tenant alleged that it had replaced the first of the five bounced checks with a certified check, but did not rebut landlord's allegations regarding the other four checks or claim to have replaced them. Finding that tenant had largely complied with the terms of the stipulation, the Civil Court granted the branch of tenant's motion seeking to stay the execution of the warrant on condition that tenant make all payments due under the stipulation within 10 days of the date of the order, in addition to ordering tenant to make other payments.

Settlement stipulations are favored and will not be undone absent proof that the settlement was obtained by fraud, collusion, mistake, accident or other ground sufficient to invalidate a contract (see e.g. Hallock v State of New York, 64 NY2d 224 [1984]; Matter of Frutiger, 29 NY2d 143 [1971]). Here, tenant's defaults went to the heart of the proceeding and settlement, and the court should have refused to excuse the defaults (see 175 E. Parkway Assoc. v Baptiste, 31 Misc 3d 138[A], 2011 NY Slip Op 50767[U] [App Term, 2d, 11th & 13th Jud Dists 2011]; M & B Lincoln Realty Corp. v Lubrun, 4 Misc 3d 129[A], 2004 NY Slip Op 50668[U] [App Term, 2d & 11th Jud Dists 2004]). Contrary to tenant's argument, its loss of possession is not a forfeiture, but merely the contracted for consequences of its noncompliance with the stipulation (see Chelsea 19 Assoc. v James, 67 AD3d 601, 602 [2009]; Hotel Cameron, Inc. v Purcell, 35 AD3d 153, 155 [2006]). Moreover, plaintiff's proof of payment -- two checks that were returned for insufficient funds -- can hardly be considered substantial compliance. Having twice negotiated a stipulation of settlement with the benefit of counsel, plaintiff cannot argue that the terms of the stipulation were unjust or inequitable.

Accordingly, I would reverse the order, insofar as appealed from, and deny the branch of tenant's motion seeking to stay the execution of the warrant.

Decision Date: January 14, 2013

20130114

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