August 13, 2013
3 EAST 54TH STREET NEW YORK, LLC, A New York Limited Liability Company, Plaintiff,
PATRIARCH PARTNERS, LLC, Petry Media Corp., Petry Television, Inc., and Blair Television, Inc., Defendants. No. 600176/09.
This decision has been referenced in a table in the New York Supplement.
Donald A. Harwood, Esq., Harwood Reiff, LLC, New York City, for plaintiff.
Daniel Schnapp, Esq., Fox Rothschild LLP, New York City, for defendants.
BARBARA JAFFE, J.
Plaintiff moves pursuant to CPLR 3212 for an order granting it summary judgment on the issue of liability against all defendants but Patriarch Partners, LLC., and granting it a money judgment. Plaintiff also moves pursuant to CPLR 3103 and 3211 for an order dismissing defendants' affirmative defenses. Defendants oppose.
I. FACTUAL BACKGROUND
In December 1999, defendants leased from Third Building Companies, LLC, plaintiff's predecessor-in-interest, the fourth through seventh, part of the ninth, and the eleventh floors of the commercial office building located at 3 East 54th Street, in Manhattan for a term through and including December 31, 2015. (N.Y.SCEF 252).
Pursuant to the lease, plaintiff was required to maintain the premises in a clean and comfortable manner, to maintain and operate the heating, ventilation, and air-conditioning systems, and to empty and clean all waste receptacles. (N.Y.SCEF 260). Defendants allege that beginning in June 2008, there arose garbage removal issues, and that during the winter, the air-conditioning was on and the restrooms lacked hot water, that in December 2008, they thus stopped paying rent, and that in January 2009, they vacated the premises and signed a new lease for commercial office space elsewhere. (N.Y.SCEF 245, 246).
After several defendants were dismissed from the case, the only causes of action against the remaining defendants are breach of contract and unpaid rent. In their answer, defendants raise the following affirmative defenses: (1) failure to state a claim; (2) constructive eviction; (3) unclean hands; (4) plaintiff's breach of the lease; and (5) plaintiff's breach of the covenant of good faith and fair dealing. (N.Y.SCEF 244).
On July 26, 2012, Steven Berlin, the chief financial officer for Petry Holding, Corp., testified at an examination before trial that defendants stopped paying rent in December 2008 because they could no longer afford it, and acknowledged that although he may have complained to plaintiff about garbage collection in the building, defendants did not abandon any portion of the premises because of it. (N.Y.SCEF 245).
By affidavit dated December 5, 2012, Berlin states that in the six or seven months before defendants vacated the premises, garbage was not being removed from the premises, resulting in " an uncomfortable work environment." (N.Y.SCEF 259).
According to the deposition testimony of defendants' subtenants, who remained in the premises after defendants vacated, the air-conditioning was turned on in the winter, making the premises cold, for several years there was only cold water in the bathroom, the garbage was never picked up, and the offices were never cleaned or vacuumed. (N.Y.SCEF 255-258).
II. SUMMARY JUDGMENT ON LIABILITY
A party moving for summary judgment under CPLR 3212 must make a prima facie showing of entitlement to judgment as a matter of law by demonstrating that " the cause of action or defense has not merit." ( People ex rel. Spitzer v. Grasso, 50 A.D.3d 535, 544 [1st Dept 2008] ). " Mere conclusions, expressions of hope or unsubstantiated allegations or assertions are insufficient." ( Zuckerman v. City of New York, 49 N.Y.2d 557, 562  ).
Plaintiff contends that defendants admit the lease and their failure to pay rent since December 2008, and observes that as defendants did not abandon the premises as a result of the alleged conditions, they could not have been constructively evicted. Plaintiff also maintains that it has established that the amount of base rent and additional rent owed is $19,451,811.75. (N.Y.SCEF 252).
In opposition, defendants argue that plaintiff erroneously calculated the additional rent and that its calculation of damages does not account for its security deposit. They assert that issues of material fact remain as to their claim of constructive eviction as plaintiff disrupted their use and enjoyment of the building by repeatedly failing to remove garbage. (N.Y.SCEF 260).
In reply, plaintiff maintains that defendants have admitted to its calculation of the base rent owed from December 2008 through October 2012, which totaled $14,673,179.56, and that it properly retained the security deposit and applied it to damages other than the overdue base and additional rent. It again disparages defendants' defense of constructive eviction, pointing to Berlin's deposition testimony that defendants left the premises because they could no longer afford to pay the rent. (N.Y.SCEF 264).
1. Constructive eviction defense
A tenant is constructively evicted when " although there has been no physical expulsion or exclusion of the tenant, the landlord's wrongful acts substantially and materially deprive the [tenant] of the beneficial use and enjoyment of the premises." (74 N.Y. Jur 2d, Landlord and Tenant § 294  ). When a landlord brings an action for unpaid rent, a tenant may assert constructive eviction as a defense ( see Minjak Co. v. Randolph, 140 A.D.2d 245 [1st Dept 1988] ), and must establish that " the landlord's wrongful acts substantially and materially deprive the tenant of the beneficial use and enjoyment of the premises," and that the tenant actually abandoned possession of all or part of the property ( Barash v. Pennsylvania Terminal Real Estate Corp., 26 N.Y.2d 77, 83 ; 74 N.Y. Jur 2d, Landlord and Tenant § 294).
Although they claim they were constructively evicted, defendants do not explain how their use of the premises was affected by plaintiff's alleged failure to remove garbage or provide hot water or to turn off the air-conditioning, apart from alleging that the garbage removal issue created an " uncomfortable working environment ." Defendants have thus failed to establish that they were unable to use the premises for their intended purposes while they were tenants, nor have they demonstrated that they were partially constructively evicted from the premises. ( See Pacific Coast Silks, LLC v. 247 Realty, LLC, 76 A.D.3d 167 [1st Dept 2010] [tenant failed to show that lack of elevator service actually caused it to be deprived of intended use of premises during that period]; Holy Props., Ltd., L.P. v. Kenneth Cole Prods., Inc., 208 A.D.2d 394 [1st Dept 1994], affd on other grounds 87 N.Y.2d 130  [although defendant claimed it was constructively evicted due to alleged deteriorating conditions in premises, no proof offered to demonstrate that conditions were substantial or amounted to material deprivation of its beneficial use and enjoyment of premises]; Arpino v. Cicciaro, 38 Misc.3d 129[A], 2012 N.Y. Slip Op 52392[U] [App Term, 9th & 10th Jud Dists 2012] [finding that there was no partial constructive eviction where tenant claimed that landlord's failure to provide adequate heat reduced his ability to use his workshop during colder months; as tenant used workshop for its intended purpose albeit for reduced amount of time during colder months, there was no abandonment]; see also 127 Restaurant Corp. v. Rose Realty Group, LLC, 19 A.D.3d 172 [1st Dept 2005] [claims of partial actual or constructive eviction not viable as tenant remained in full possession of leased premises]; Cut-Outs, Inc. v. Man Yun Real Estate Corp., 286 A.D.2d 258 [1st Dept 2001], lv denied 100 N.Y.2d 507 [constructive eviction not proven as plaintiff did not contend that business was ever actually interrupted, that it lost business, or otherwise suffered any loss related to landlord's actions]; Broadway 36th Realty, LLC v. London, 29 Misc.3d 1238 [A], 2010 N.Y. Slip Op 52192[U] [Sup Ct, New York County 2010] [notwithstanding alleged inconvenience in having non-working freight elevator, tenant failed to show lack of elevator service deprived it of beneficial enjoyment or actual possession of premises] ).
Moreover, the tenant must have been constructively evicted or forced to abandon the premises " due to the landlord's acts in making [the premises] unusable by the tenant" or " by the landlord's actions." (Minjak Co., 140 A.D.2d at 245). Thus, to the extent that defendants claim that they were actually constructively evicted and forced to abandon the premises when they moved out, they must show that their abandonment was due to the landlord's actions.
Having only offered testimony that they moved out because they could no longer afford the rent, defendants have failed to demonstrate that they were constructively evicted due to defendants' actions. ( See M.Y. Realty Corp. v. Atlantic First Fin. Corp., 19 A.D.3d 156 [1st Dept 2005] [affirmative defense of constructive eviction properly dismissed as conditions alleged by tenant were not cause of its abandonment of premises]; Cut-Outs, Inc., 286 A.D.2d at 262 [claimed problems with heating system had little to do plaintiff's decision to vacate premises] ).
Defendants also inexplicably waited more than six months before moving out, and thus, have not established that they abandoned the premises within a reasonable time. ( See M.Y. Realty Corp., 19 A.D.3d at 156 [defendant failed to abandon with reasonable promptness]; Heilbrun v. Aaronson, 116 NYS 1096 [App Term, 1st Dept 1909] [delay of seven months constituted waiver of defense of constructive eviction]; Kent v. Ward, 111 NYS 743 [App Term, 1st Dept 1908] [six months was unreasonable delay]; compare Incredible Christmas Store-New York, Inc. v. RCPI Trust, 307 A.D.2d 816 [1st Dept 2003] [tenant's delay in vacating premises not unreasonable as matter of law as attempts were made initially to resolve dispute without litigation] ).
2. Plaintiff's proof of damages
Defendants raise triable issues as to plaintiff's claimed damages, and thus summary judgment on damages is inappropriate. ( See 186-90 Joralemon Assoc. v. Dianzon, 161 A.D.2d 329 [1st Dept 1990] [court properly denied plaintiff's motion for summary judgment as evidence insufficient to establish that calculation of damages was accurate] ).
III. DISMISSAL OF AFFIRMATIVE DEFENSES
Plaintiff asserts only that defendants' remaining affirmative defenses are conclusory and unsupported by any evidence. Defendants do not address plaintiff's argument except to the extent of contending that their constructive eviction defense may also be stated as a breach of lease defense, in that plaintiff's failure to provide garbage removal services and hot water constitute a violation of the lease terms.
Given defendant's specific contentions that plaintiff failed to provide defendants with services required by the lease, they have established that this defense has merit. ( See Lincoln Plaza Tenants Corp. v. MDS Props. Dev. Corp., 169 A.D.2d 509 [1st Dept 1991] [tenant's counterclaims based on landlord's obligations to provide utility services and hookups should not have been dismissed in light of factual disputes]; Union City Union Suit Co., Ltd. v. Miller, 162 A.D.2d 101 [1st Dept 1990], lv denied 77 N.Y.2d 804  [tenant entitled to damages based on landlord's failure to provide essential services as required by lease]; Ciraolo v. Miller, 138 A.D.2d 443 [2d Dept 1988] [tenant entitled to compensatory damages for landlord's failure to provide services] ).
Accordingly, it is hereby
ORDERED, that plaintiff's motion for summary judgment is granted to the extent of dismissing defendants' first, second, third, and fifth affirmative defenses.