Landlord-Tenant – Page 22 – New York Appellate Digest

Cooperatives, Landlord-Tenant, Negligence

MANAGER OF COOPERATIVE DID NOT HAVE A DUTY TO PROVIDE SECURITY IN EXTERIOR PUBLIC AREAS IN THIS THIRD PARTY ASSAULT CASE (FIRST DEPT).

The First Department, reversing Supreme Court, determined that the manager of a cooperative complex could not be liable for a third party assault occurring in exterior public areas:

Plaintiff Sander Palaj, and his wife suing derivatively, commenced this action to recover for personal injuries he allegedly sustained when he was shot outdoors in the co-operative complex known as Co-op City, which was managed by defendant Marion Scott Real Estate, Inc. at the time. However, a landowner’s duty to take minimal security precautions does not extend to exterior public areas, such as walkways and vestibules … . Palaj v Marion Scott Real Estate, Inc., 2019 NY Slip Op 00958, First Dept 2-7-19

February 7, 2019

Labor Law-Construction Law, Landlord-Tenant

DEFENDANT, AN OUT OF POSSESSION LESSEE OF THE PROPERTY WHERE PLAINTIFF WAS INJURED, WAS NOT AN OWNER WITHIN THE MEANING OF LABOR LAW 240 (1) AND 241 (6), DEFENDANT’S MOTION FOR SUMMARY JUDGMENT DISMISSING THOSE CAUSES OF ACTION WAS PROPERLY GRANTED (FOURTH DEPT).

The Fourth Department determined defendant demonstrated it was not an owner of the property where plaintiff was injured and therefore was entitled to summary judgment dismissing the Labor Law 240 (1) and 241 (6) causes of action. Defendant had leased the property from the state and then subleased the property to a non-party (EDGE). EDGE hired Jersen, the construction company for which the injured plaintiff worked:

It is well established that, for purposes of Labor Law §§ 240 (1) and 241 (6) liability, “the term owner’ is not limited to the titleholder of the property where the accident occurred and encompasses a [party] who has an interest in the property and who fulfilled the role of owner by contracting to have work performed for [its] benefit’ “… . ” [The owner] is the party who, as a practical matter, has the right to hire or fire subcontractors and to insist that proper safety practices are followed’ “… . Thus, “[t]he key factor in determining whether a non-titleholder is an owner’ is the right to insist that proper safety practices were followed and it is the right to control the work that is significant, not the actual exercise or nonexercise of control’ ” … . …

In his affidavit, Jersen’s project manager averred that defendant was neither a party to nor involved with the negotiation of the construction contract between EDGE and Jersen; the project manager never saw any employees or representatives of defendant on site during the project; Jersen employees were not permitted to take orders from anyone other than an authorized Jersen representative; and defendant had no authority or control over Jersen employees working on the project. Those averments are consistent with the construction contract, which defined EDGE as the “[o]wner” and Jersen as the “[c]ontractor,” and provided that Jersen, as the “[c]ontractor,” was solely responsible for instituting and supervising all safety precautions and protections. Contrary to plaintiffs’ contention, the mere fact that the sublease between defendant and EDGE required defendant’s approval of the plans and specifications for the project work does not raise a material issue of fact where, as here, defendant did not contract to have the project work performed and the sublease “did not vest [defendant] with authority to determine which contractors to hire, . . . control the [project] work or . . . insist that proper safety practices [be] followed’ ” … . Ritter v Fort Schuyler Mgt. Corp., 2019 NY Slip Op 00769, Fourth Dept 2-1-19

February 1, 2019

Landlord-Tenant, Negligence

THE LANDOWNER AND THE TENANT TAXI COMPANY HAD THE SAME PRINCIPAL, A HOSE WAS USED BY INDEPENDENT CONTRACTORS TO WASH THE TAXIS, PLAINTIFF ALLEGEDLY SLIPPED ON THE WATER FROM THE HOSE WHICH FROZE, THE LANDOWNER DID NOT ESTABLISH IT WAS AN OUT OF POSSESSION LANDLORD, THE LANDOWNER’S MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (FIRST DEPT).

The First Department, over a dissent, reversing Supreme Court, determined the landowner was not entitled to summary judgment in this slip and fall case. The principal of the property owner, 514 West, is also the principal of the tenant, Style, a taxi company. Independent contractors used a hose to wash the cars. Water from the hose froze and plaintiff allegedly slipped and fell on the ice. The First Department noted the close connection between 514 West and Style and found that 514 West did not establish it was on out-of-possession landlord:

514 West, which owns the building adjacent to the roadway in which plaintiff slipped and fell on ice, failed to make a prima facie showing of its entitlement to summary judgment, since the evidence it submitted raises genuine issues of fact about whether it created the dangerous condition … . For example, its principal, who is also the principal of codefendant Style Management Co., Inc. (Style), the taxi company housed at the building owned by 514 West, admitted that there is a hose attached to the building, which the independent contractors who work for the taxi company would use to wash the cars. It is water from this hose, which pooled in the street and then froze, that plaintiff allegedly slipped on. “It is . . . a general rule that an abutting owner is liable if, by artificial means . . . water from the property is permitted to flow onto the public sidewalk where it freezes”… . 514 West asserts that Style operated the hose, not it, thus absolving it of liability. However, 514 West fails to establish that it is an out-of-possession landlord; indeed, given the very close connection between 514 West and Style, which, again, have the same principal, it is not possible on this record to determine, as a matter of law, that the former is without liability as a landowner. Malik v Style Mgt. Co. Inc., 2019 NY Slip Op 00372, First Dept 1-22-19

January 22, 2019

Contract Law, Landlord-Tenant, Municipal Law, Negligence

IN THIS SLIP AND FALL CASE, THE PARKING LOT WAS THE SUBJECT OF A LICENSE AGREEMENT BETWEEN THE CITY AND THE ATHLETIC CLUB, NOT A LEASE, THEREFORE THE OUT OF POSSESSION LANDLORD DOCTRINE WAS NOT APPLICABLE, ALTHOUGH THE LICENSE AGREEMENT REQUIRED THE ATHLETIC CLUB TO MAINTAIN THE PARKING LOT, THE LICENSE AGREEMENT IMPOSED CERTAIN MAINTENANCE DUTIES ON THE CITY AS WELL, THE CITY’S SUMMARY JUDGMENT MOTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the defendant city did not demonstrate that it had relinquished control over the parking lot where plaintiff allegedly fell into an access pit. The access pit was exposed because a snow removal contractor pushed the cover off when plowing snow. The city had a license agreement with an athletic club, Fitmar, which required Fitmar to maintain the parking lot. Fitmar had hired the snow removal contractor. The city argued it was an out of possession landlord and the parking lot was solely Fitmar’s responsibility. The Second Department held that the parking lot was subject to a license agreement, not a lease, and therefore the out of possession landlord doctrine did not apply. The Second Department went on to find that the terms of the license agreement did not demonstrate as a matter of law that the city had relinquished control over the maintenance of the parking lot:

… [T]he license agreement granted Fitmar a license to use the premises, and not a leasehold interest … . Thus, the standard applied to out-of-possession landlords is inapplicable here … . Rather, the City, “as landowner, remains in presumptive control over its property and subject to the attendant obligations of ownership until it is found that control was relinquished” … .

The City failed to meet its prima facie burden of demonstrating that it relinquished control of the premises such that it owed no duty to the plaintiff to remedy the allegedly defective condition. While the license agreement assigned responsibility for maintenance of the premises, and specifically of the parking lot, to Fitmar, it vested the City with ultimate approval authority over Fitmar’s operating procedures. The City had unfettered access to the premises and could sponsor or promote its own special events at the premises. The agreement required a yearly inspection of the premises by the City to determine the extent of any repairs to be performed by Fitmar, and the City was permitted to inspect the premises at any time and direct Fitmar to undertake repairs. The City could maintain field personnel at the premises to observe the means and methods of anticipated construction work by Fitmar, and also reserved the right for the City to perform construction or maintenance work at the premises at any time. Fitmar’s former general manager testified at his deposition that the City conducted regular inspections of the premises, and that representatives of the Parks Department would often show up unannounced to conduct inspections. Agbosasa v City of New York, 2019 NY Slip Op 00250, Second Dept 1-16-19

January 16, 2019

Landlord-Tenant, Negligence

PLAINTIFF’S DECEDENT, WHO WAS DELIVERING MEALS ON WHEELS IN DEFENDANT’S BUILDING WHEN HE WAS ASSAULTED, ALLEGED THE ASSAILANT WAS AN INTRUDER WHO ENTERED THE BUILDING THROUGH A NEGLIGENTLY MAINTAINED ENTRANCE, THE LANDLORD’S DUTY TO PROTECT TENANTS EXTENDS TO GUESTS OF TENANTS, DEFENDANT’S MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court in this third-party assault case, determined the personal injury and wrongful death action against the landlord should not have been dismissed. Plaintiff’s decedent was delivering “meals on wheels” in the building when he was assaulted, allegedly by an intruder who allegedly entered the building through a negligently maintained entrance:

“Landlords have a common-law duty to take minimal precautions to protect tenants from foreseeable harm,’ including a third party’s foreseeable criminal conduct” … . This duty extends to the guests of a tenant … . A tenant or guest may recover damages, however, only on a showing that the landlord’s negligent conduct was a proximate cause of the injury… . “In premises security cases particularly, the necessary causal link between a landlord’s culpable failure to provide adequate security and a tenant’s injuries resulting from a criminal attack in the building can be established only if the assailant gained access to the premises through a negligently maintained entrance. Since even a fully secured entrance would not keep out another tenant, or someone allowed into the building by another tenant, plaintiff can recover only if the assailant was an intruder” … .

Here, the defendant established its prima facie entitlement to judgment of a matter of law by presenting evidence that the lock on the only entrance to 341 Dumont Avenue was operable on the day of the incident … . In opposition, however, the plaintiffs raised triable issues of fact as to whether the decedent’s assailant was an intruder who entered the building through a negligently maintained entrance … . Aminova v New York City Hous. Auth., 2019 NY Slip Op 00083, Second Dept 1-9-19

January 9, 2019

Fair Housing Act, Landlord-Tenant, Mental Hygiene Law, Municipal Law

HEARING WAS REQUIRED TO DETERMINE WHETHER A PERMANENT STAY OF EVICTION WAS A PROPER ACCOMMODATION FOR DISABLED TENANTS PURSUANT TO THE FAIR HOUSING ACT (FIRST DEPT).

The First Department, reversing (modifying) the Appellate Term, First Department, ruled that a hearing should be held to determine whether eviction proceedings should be permanently stayed. A guardian (GAL) had been appointed pursuant to Mental Hygiene Law article 81 for the disabled tenants who had not complied with stipulations for fumigation of the apartment to rid it of bed bugs. With the GAL’s help the apartment was eventually fumigated. Under the Fair Housing Act the tenants were entitled to accommodations for their disabilities. A hearing was required to determine whether a permanent stay of eviction was an appropriate accommodation:

Under the Fair Housing Act (FHA), as amended, it is unlawful to discriminate in housing practices on the basis of a “handicap” (42 USC § 3604[f][2][A]). Handicap is very broadly defined, and a person is considered handicapped and thereby protected under the FHA if he or she: 1. Has a physical or mental impairment that substantially limits one or more major life activities, or 2. Has a record of such impairment, or 3. Is regarded as having such an impairment.

No specific diagnosis is necessary for a person to be “handicapped” and protected under the statute. In fact, the determination may even be based upon the observations of a lay person … . The appointment of an article 81 guardian for tenants sufficiently establishes that these tenants are “handicapped” within the meaning of the FHA, leading us to consider whether they are entitled to a reasonable accommodation. What is “reasonable” varies from case to case, because it is necessarily fact-specific … . The overarching guiding factor, however, is that a landlord is obligated to provide a tenant with a reasonable accommodation if necessary for the tenant to keep his or her apartment. The ” refusal to make reasonable accommodations in rules, policies, practices, or services, when such accommodations may be necessary to afford [the handicapped individual] equal opportunity to use and enjoy a dwelling'” is a discriminatory practice… . A landlord does not have to provide a reasonable accommodation if it puts other tenants at risk, but should consider whether such risks can be minimized … . Matter of Prospect Union Assoc. v DeJesus, 2018 NY Slip Op 09016, First Dept 12-27-18

December 27, 2018

Contract Law, Landlord-Tenant

LEASE INCLUDED AN EXPRESS PROVISION ALLOWING TENANT TO WITHHOLD RENT IF THE PREMISES IS DAMAGED AND NOT REPAIRED, THEREFORE WITHHOLDING RENT WAS NOT AN ELECTION OF REMEDIES AND THE TENANT COULD WITHHOLD RENT AND SUE FOR DAMAGES (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined that an express lease provision allowed the tenant to withhold rent when the property is damaged, and therefore the withholding of rent did not constitute an election of remedies:

The second affirmative defense stated that the tenant elected a remedy by not paying rent, and therefore the tenant is not entitled to damages. However, the lease contained an express provision that the tenant could withhold rent if the premises were damaged and not repaired. Generally, a tenant’s duty to continue to pay rent is not suspended if the tenant remains in possession of the leased premises, even if the landlord breaches its obligations under the lease, unless there is an express provision in the lease declaring the circumstances under which the tenant may withhold rent … . Such an express provision was present here. Therefore, the withholding of rent was not an election of remedies. Fifth Line, LLC v Fitch, 2018 NY Slip Op 08630, Second Dept 12-19-18

December 19, 2018

Contract Law, Corporation Law, Landlord-Tenant, Limited Liability Company Law

ALTHOUGH THE PLAINTIFF LIMITED LIABILITY COMPANY DID NOT EXIST AT THE TIME THE LEASE WAS SIGNED, DEFENDANT TOOK POSSESSION OF THE PROPERTY, UNDER THE DOCTRINE OF INCORPORATION BY ESTOPPEL, DEFENDANT CANNOT ESCAPE LIABILITY FOR BREACH OF THE LEASE (SECOND DEPT).

The Second Department determined that the doctrine of incorporation by estoppel was properly applied in this breach of contract (lease) case. Although plaintiff limited liability company did not exist at the time the lease was signed, defendant took possession of the property. Defendant was therefore estopped from escaping liability under the lease based on the nonexistence of plaintiff limited liability company:

“Since a nonexistent entity cannot acquire rights or assume liabilities, a corporation which has not yet been formed normally lacks capacity to enter into a contract”… . However, a corporation may be deemed to exist and possess the capacity to contract pursuant to the doctrine of incorporation by estoppel … . The doctrine of incorporation by estoppel, or corporation by estoppel, is based on the principle that “one who has recognized the organization as a corporation in business dealings should not be allowed to quibble or raise immaterial issues on matters which do not concern him [or her] in the slightest degree or affect his [or her] substantial rights” … . TY Bldrs. II, Inc. v 55 Day Spa, Inc., 2018 NY Slip Op 08345, Second Dept 12-5-18

CORPORATION LAW (INCORPORATION BY ESTOPPEL, ALTHOUGH THE PLAINTIFF LIMITED LIABILITY COMPANY DID NOT EXIST AT THE TIME THE LEASE WAS SIGNED, DEFENDANT TOOK POSSESSION OF THE PROPERTY, UNDER THE DOCTRINE OF INCORPORATION BY ESTOPPEL, DEFENDANT CANNOT ESCAPE LIABILITY FOR BREACH OF THE LEASE (SECOND DEPT))/LIMITED LIABILITY COMPANY LAW (INCORPORATION BY ESTOPPEL, ALTHOUGH THE PLAINTIFF LIMITED LIABILITY COMPANY DID NOT EXIST AT THE TIME THE LEASE WAS SIGNED, DEFENDANT TOOK POSSESSION OF THE PROPERTY, UNDER THE DOCTRINE OF INCORPORATION BY ESTOPPEL, DEFENDANT CANNOT ESCAPE LIABILITY FOR BREACH OF THE LEASE (SECOND DEPT))/CONTRACT LAW (INCORPORATION BY ESTOPPEL, ALTHOUGH THE PLAINTIFF LIMITED LIABILITY COMPANY DID NOT EXIST AT THE TIME THE LEASE WAS SIGNED, DEFENDANT TOOK POSSESSION OF THE PROPERTY, UNDER THE DOCTRINE OF INCORPORATION BY ESTOPPEL, DEFENDANT CANNOT ESCAPE LIABILITY FOR BREACH OF THE LEASE (SECOND DEPT))/LANDLORD-TENANT (INCORPORATION BY ESTOPPEL, ALTHOUGH THE PLAINTIFF LIMITED LIABILITY COMPANY DID NOT EXIST AT THE TIME THE LEASE WAS SIGNED, DEFENDANT TOOK POSSESSION OF THE PROPERTY, UNDER THE DOCTRINE OF INCORPORATION BY ESTOPPEL, DEFENDANT CANNOT ESCAPE LIABILITY FOR BREACH OF THE LEASE (SECOND DEPT))/ESTOPPEL (INCORPORATION BY ESTOPPEL, ALTHOUGH THE PLAINTIFF LIMITED LIABILITY COMPANY DID NOT EXIST AT THE TIME THE LEASE WAS SIGNED, DEFENDANT TOOK POSSESSION OF THE PROPERTY, UNDER THE DOCTRINE OF INCORPORATION BY ESTOPPEL, DEFENDANT CANNOT ESCAPE LIABILITY FOR BREACH OF THE LEASE (SECOND DEPT))

December 5, 2018

Landlord-Tenant, Lien Law

LANDLORD, BY THE TERMS OF THE LEASE WHICH REQUIRED THE TENANT TO DO RENOVATION WORK, IS DEEMED TO HAVE CONSENTED TO THE WORK, THE CONTRACTOR THEREFORE HAD A VALID MECHANIC’S LIEN WITH RESPECT TO THE LANDLORD (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Wilson, determined the landlord (COR), by the terms of the lease which required work on the premises to be done by the tenant restaurant (Peaches), consented to the work. Therefore the contractor who did the work had a valid mechanic’s lien with respect to the landlord:

The language of the lease agreement not only expressly authorized Peaches to undertake the electrical work, but also required it to do so to effectuate the purpose of the lease—that is, for Peaches to open the restaurant for business and operate it continuously, seven days a week, during hours specified by COR. Furthermore, the detailed language makes clear that COR was to retain close supervision over the work and authorized it to exercise at least some direction over the work by reviewing, commenting on, revising, and granting ultimate approval for the design drawings related to the electrical work. We therefore conclude that, under our prior precedents, the terms of the lease agreement between COR and Peaches, taken together, are sufficient to establish COR’s consent under Lien Law § 3. Ferrara v Peaches Cafe LLC, 2018 NY Slip Op 07925, CtApp 11-20-18

LIEN LAW (LANDLORD, BY THE TERMS OF THE LEASE WHICH REQUIRED THE TENANT TO DO RENOVATION WORK, IS DEEMED TO HAVE CONSENTED TO THE WORK, THE CONTRACTOR THEREFORE HAD A VALID MECHANIC’S LIEN WITH RESPECT TO THE LANDLORD (CT APP))/LANDLORD-TENANT (LIEN LAW, (LANDLORD, BY THE TERMS OF THE LEASE WHICH REQUIRED THE TENANT TO DO RENOVATION WORK, IS DEEMED TO HAVE CONSENTED TO THE WORK, THE CONTRACTOR THEREFORE HAD A VALID MECHANIC’S LIEN WITH RESPECT TO THE LANDLORD (CT APP))/MECHANIC’S LIEN (LANDLORD-TENANT, LANDLORD, BY THE TERMS OF THE LEASE WHICH REQUIRED THE TENANT TO DO RENOVATION WORK, IS DEEMED TO HAVE CONSENTED TO THE WORK, THE CONTRACTOR THEREFORE HAD A VALID MECHANIC’S LIEN WITH RESPECT TO THE LANDLORD (CT APP))

November 20, 2018

Contract Law, Landlord-Tenant

PROPRIETARY LEASE PROVISION ALLOWING THE LANDLORD TO RECOVER ATTORNEY’S FEES EVEN WHEN THE LANDLORD IS IN DEFAULT IS UNCONSCIONABLE AND UNENFORCEABLE (FIRST DEPT).

The First Department determined that a provision in a lease which required the petitioner tenant to pay the respondent landlord’s attorney’s fees even where the landlord was in default was unenforceable as unconscionable. Petitioner tenant had sued the landlord for failure to transfer shares in an apartment in accordance with petitioner’s husband’s wishes:

In 2012, petitioner’s husband, who owned the shares to another apartment in the building, agreed to transfer his shares to petitioner. Petitioner paid a transfer fee to respondent so that it would transfer the shares to her. She later sued respondent for default of the lease agreement and for statutory violations because respondent had not transferred the shares to her husband’s apartment to her. Respondent answered petitioner’s complaint and asserted a counterclaim for attorneys’ fees under paragraph 6(7)(c). * * *

… [W]we find that an attorneys’ fees provision which provides that the tenant must pay attorneys’ fees if it commences an action against the landlord based upon the default of the landlord is unconscionable and unenforceable as a penalty. Paragraph 6(7)(c) of the proprietary lease permits the landlord to recover attorneys’ fees when the tenant brings an action against the landlord even when the landlord is in default. To enforce such a provision would produce an unjust result because it would dissuade aggrieved parties from pursuing litigation and preclude tenant-shareholders from making meaningful decisions about how to vindicate their rights in legitimate instances of landlord default. Matter of Krodel v Amalgamated Dwellings Inc., 2018 NY Slip Op 07531, First Dept 11-8-18

LANDLORD-TENANT (CONTRACT LAW, PROPRIETARY LEASE PROVISION ALLOWING THE LANDLORD TO RECOVER ATTORNEY’S FEES EVEN WHEN THE LANDLORD IS IN DEFAULT IS UNCONSCIONABLE AND UNENFORCEABLE (FIRST DEPT))/CONTRACT LAW (LANDLORD-TENANT, LEASE, CONTRACT LAW, PROPRIETARY LEASE PROVISION ALLOWING THE LANDLORD TO RECOVER ATTORNEY’S FEES EVEN WHEN THE LANDLORD IS IN DEFAULT IS UNCONSCIONABLE AND UNENFORCEABLE (FIRST DEPT))/LEASE (CONTRACT LAW, UNCONSIONABILITY, PROPRIETARY LEASE PROVISION ALLOWING THE LANDLORD TO RECOVER ATTORNEY’S FEES EVEN WHEN THE LANDLORD IS IN DEFAULT IS UNCONSCIONABLE AND UNENFORCEABLE (FIRST DEPT))/UNCONSIONABILITY (LANDLORD-TENANT, CONTRACT LAW, LEASE, PROPRIETARY LEASE PROVISION ALLOWING THE LANDLORD TO RECOVER ATTORNEY’S FEES EVEN WHEN THE LANDLORD IS IN DEFAULT IS UNCONSCIONABLE AND UNENFORCEABLE (FIRST DEPT))

November 8, 2018