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CIVIL COURT WHICH AWARDED RENT ARREARS IN THE EVICTION PROCEEDING DID NOT HAVE SUBJECT MATTER JURISDICTION OVER THE CLAIM FOR RENT DUE FOR THE REMAINDER OF THE LEASE (POST-EVICTION); THEREFORE THE ACTION IN SUPREME COURT FOR THE POST-EVICTION RENT AS LIQUIDATED DAMAGES WAS NOT BARRED BY THE DOCTRINE OF RES JUDICATA (FIRST DEPT).

The First Department, reversing Supreme Court, determined the doctrine of res judicata did not apply to this action for rent due as liquidated damages. Although the eviction proceeding in Civil Court awarded defendant the rent arrears, Civil Court did not have subject matter jurisdiction over the claim for the rent due for the remainder of the lease term (post-eviction). Therefore the rent-as-liquidated-damages claim could be brought in Supreme Court:

This action, in which plaintiff seeks the recovery of rent arrears, is not barred by the doctrine of res judicata, as plaintiff could not have sought relief for its current claims in the Civil Court eviction proceeding. Although the rent arrears claim arises out of the same transaction as the claim for future rent … , res judicata is inapplicable where the plaintiff could not seek a particular remedy in the first action because of a limitation on a court’s subject matter jurisdiction, and plaintiff wishes to seek that remedy in the second action … .

The liquidated damages clause in the lease expressly provided that plaintiff was under no duty to mitigate damages by re-letting the premises and further provided that, even if Levant was evicted, it was to remain liable for its monetary obligations under the lease … . However, Civil Court, which determined the eviction proceeding, is “without authority to address a claim for the balance of rent due” as liquidated damages … . Thus, once plaintiff had been awarded judgment in the summary proceeding, the parties’ relationship as landlord and tenant ended and whatever monetary liability Levant may have had to plaintiff at that point “was no longer in the nature of rent, but was in the nature of contract damages” … . Prospect Resources Inc. v Levant Capital N. Am., Inc., 2025 NY Slip Op 02169, First Dept 4-15-25

Practice Point: Here the court which handled the eviction proceedings did not have subject matter jurisdiction over the claim for post-eviction rent as liquidated damages. Therefore the doctrine of res judicata did not preclude the suit for the post-eviction rent in Supreme Court.

 

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