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ALTHOUGH THE BUILDING OWNER WAS AN ADDITIONAL INSURED ON THE LESSEE’S POLICY, THE INSURER HAD NO DUTY TO DEFEND AN ACTION STEMMING FROM A SLIP AND FALL IN THE BUILDING PARKING LOT, THE LEASE DID NOT CALL FOR MAINTENANCE OF THE PARKING LOT BY THE LESSEE.

The Second Department determined the insurer of a lessee had no duty to defend an action by plaintiff who slipped and fell in the parking lot of the building. The lease included no obligation to maintain the parking lot. Although the building owner was an additional insured on the lessee’s policy, the injury was not the result of a bargained-for risk:

An insurer’s duty to defend is “exceedingly broad”… . An additional insured is entitled to the same coverage as if it were a named insured … . “If any of the claims against an insured arguably arise from covered events, the insurer is required to defend the entire action” … . The phrase “arising out of” requires “only that there be some causal relationship between the injury and the risk for which coverage is provided” … . “[A]n insurer does not wish to be liable for losses arising from risks associated with a premises for which the insurer has not evaluated the risk and received a premium” … . Moreover, “[u]nambiguous provisions of an insurance contract must be given their plain and ordinary meaning” … . The interpretation of policy language is a question of law for the courts … .

Here, [the insurer] established its prima facie entitlement to judgment as a matter of law. The additional insured endorsement unambiguously provided that [the building owner] was an additional insured for liability “arising out of” the “ownership, maintenance or use” of the “premises leased” to [lessee]. [The lessee] leased only a portion of the building from [the owner], not the parking lot where the accident occurred, and it had no duty to maintain the parking lot. As such, there was no causal relationship between the injury and the risk for which coverage was provided, and [plaintiff’s] injury was not a bargained-for risk … . Atlantic Ave. Sixteen AD, Inc. v Valley Forge Ins. Co., 2017 NY Slip Op 04243, 2nd Dept 5-31-17

INSURANCE LAW (ALTHOUGH THE BUILDING OWNER WAS AN ADDITIONAL INSURED ON THE LESSEE’S POLICY, THE INSURER HAD NO DUTY TO DEFEND AN ACTION STEMMING FROM A SLIP AND FALL IN THE BUILDING PARKING LOT, THE LEASE DID NOT CALL FOR MAINTENANCE OF THE PARKING LOT BY THE LESSEE)/LANDLORD-TENANT (INSURANCE LAW, ALTHOUGH THE BUILDING OWNER WAS AN ADDITIONAL INSURED ON THE LESSEE’S POLICY, THE INSURER HAD NO DUTY TO DEFEND AN ACTION STEMMING FROM A SLIP AND FALL IN THE BUILDING PARKING LOT, THE LEASE DID NOT CALL FOR MAINTENANCE OF THE PARKING LOT BY THE LESSEE)/SLIP AND FALL (INSURANCE LAW, ALTHOUGH THE BUILDING OWNER WAS AN ADDITIONAL INSURED ON THE LESSEE’S POLICY, THE INSURER HAD NO DUTY TO DEFEND AN ACTION STEMMING FROM A SLIP AND FALL IN THE BUILDING PARKING LOT, THE LEASE DID NOT CALL FOR MAINTENANCE OF THE PARKING LOT BY THE LESSEE)

COMPLEX ISSUES ARISE IN RETROACTIVELY DETERMINING THE APPROPRIATE RENTAL AMOUNT FOR A RENT STABILIZED APARTMENT OCCUPIED BY THE SAME TENANTS SINCE 2000.

The First Department, in a full-fledged opinion by Justice Gische, dealt with complex issues relating to the appropriate rental amount for a rent stabilized apartment occupied by the same tenants since 2000:

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There are interlocking complex issues framed by this appeal involving plaintiffs’ claims that the apartment they have continuously rented for the last 16 years (apartment 5M), was improperly removed from rent stabilization. The overarching issue is whether the apartment should be restored to rent stabilization because defendant 72A Realty Associates L.P. (the Owner) deregulated the apartment pursuant to the luxury decontrol laws while it was simultaneously receiving tax incentives under the City’s J-51 program … . There can be little dispute that following Roberts v Tishman Speyer Props., L.P., (13 NY3d 270 [2009]) and its progeny applying Roberts retroactively … the subject apartment must be returned to rent stabilization as of 2000, when the Owner first treated the apartment as exempt. The thornier issues implicated by returning the apartment to rent stabilization concern the setting of the stabilized rent, the base date for, and the statute of limitations applicable to, the setting of such rent, and the possible imposition of treble damages and attorney fees. We agree with Supreme Court that plaintiffs are entitled to a declaration that the apartment was and still is subject to rent stabilization and that they are the rent-stabilized tenants thereof. We also agree with Supreme Court that the issues of the legal rent, as well as the issues of possible overcharge, treble damages and attorneys fees cannot be resolved on a motion for summary judgment. We disagree with Supreme Court only insofar as it held that the increases made to the rent-stabilized rent in 2000, based upon individual apartment improvements (IAIs) before the plaintiffs took occupancy, are subject to challenge on this record. Taylor v 72A Realty Assoc., L.P., 2017 NY Slip Op 04218, 1st Dept 5-25-17

LANDLORD-TENANT (COMPLEX ISSUES ARISE IN RETROACTIVELY DETERMINING THE APPROPRIATE RENTAL AMOUNT FOR A RENT STABILIZED APARTMENT OCCUPIED BY THE SAME TENANTS SINCE 2000)/RENT STABILIZATION (NYC) (COMPLEX ISSUES ARISE IN RETROACTIVELY DETERMINING THE APPROPRIATE RENTAL AMOUNT FOR A RENT STABILIZED APARTMENT OCCUPIED BY THE SAME TENANTS SINCE 2000)

TAKING IN AIRBNB CUSTOMERS IN A RENT-STABILIZED APARTMENT VIOLATED THE RENT STABILIZATION CODE (NYC), LESSOR ENTITLED TO TERMINATE THE ELDERLY 40-YEAR TENANT’S LEASE.

The First Department, reversing Supreme Court, over a two-justice dissent, determined plaintiff was entitled to terminate defendant’s lease of a rent-stabilized cooperative apartment for “subletting” to Airbnb customers. Defendant, an elderly 40-year tenant, took in Airbnb customers on 338 days over an 18-month period, realizing $12,000 more than 10% “profit” allowed for “subletting” under the Rent Stabilization Code:

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Defendant’s listing on the Airbnb website also provided (1) links for making reservations, (2) “check-in” and “check-out” times, (3) the financial penalty for untimely cancellation, and (4) reviews from numerous past guests.

Turning her rent-stabilized apartment into a single-unit tourist hotel in this fashion enabled defendant to earn substantial profits, far in excess of the legally permissible 10% premium. After Airbnb (to which the subtenants paid the rent) deducted its fees, the subletting generated total income of $33,592.00 for defendant. The stabilized rent she paid for the same 338 days (based on the aforementioned per-diem figure of $57.80) was only $19,536.40. Thus, defendant realized a 72% profit from her subletting — about seven times the 10% premium permitted for otherwise lawful sublets of furnished rent-stabilized apartments. Had defendant limited herself to the 10% premium permitted by the RSC, her aggregate revenue would have been $21,490.04 — about $12,000 less than her actual revenue of $33,592.00. Taking into account the lawful 10% premium (and ignoring the fact that the apartment was shared), defendant overcharged her 93 subtenants, in aggregate, by approximately 56% … . Goldstein v Lipetz, 2017 NY Slip Op 04070, 1st Dept  5-23-17

 

LANDLORD-TENANT (TAKING IN AIRBNB CUSTOMERS IN A RENT-STABILIZED APARTMENT VIOLATED THE RENT STABILIZATION CODE (NYC), LESSOR ENTITLED TO TERMINATE THE ELDERLY 40-YEAR TENANT’S LEASE)/RENT STABILIZATION CODE (NYC) (TAKING IN AIRBNB CUSTOMERS IN A RENT-STABILIZED APARTMENT VIOLATED THE RENT STABILIZATION CODE (NYC), LESSOR ENTITLED TO TERMINATE THE ELDERLY 40-YEAR TENANT’S LEASE)/AIRBNB  (TAKING IN AIRBNB CUSTOMERS IN A RENT-STABILIZED APARTMENT VIOLATED THE RENT STABILIZATION CODE (NYC), LESSOR ENTITLED TO TERMINATE THE ELDERLY 40-YEAR TENANT’S LEASE)

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TENANT ASSAULTED BY INTRUDER, QUESTIONS OF FACT ABOUT FORESEEABILITY, ADEQUACY OF SAFETY PRECAUTIONS, AND PROXIMATE CAUSE REQUIRED REVERSAL OF GRANT OF SUMMARY JUDGMENT TO DEFENDANTS.

The First Department, reversing Supreme Court, determined there were questions of fact precluding summary judgment in favor of the defendants in this action stemming from the assault of plaintiff-tenant by an intruder. The intruder entered the building by “piggy-backing” on an entering tenant. There was evidence this particular intruder had entered the building the same way on other occasions when he had harassed and assaulted women:

Given the existence of an issue of fact as to foreseeability, an issue of fact also exists whether defendants discharged their common-law duty to take minimal precautions to protect the tenants from the foreseeable harm… . In particular, in view of the previous incidents, issues of fact exist whether the security measures in place adequately protected female tenants from the risks posed and whether reasonable measures should have included, among others, warnings to tenants about the perpetrator, advising security staff of the perpetrator’s prior arrest in the complex, providing security staff and tenants with the perpetrator’s photograph, real-time monitoring of surveillance videos, or increasing the presence of lobby attendants, who were absent on the day of the assault. In other words, under the unique circumstances of this case, an issue is raised as to whether defendants, who had notice of this repeat intruder, took minimal security steps with respect to preventing his ability to easily access the interior of their buildings and attempt to sexually assault female tenants … .

Finally, an issue of fact exists whether any negligence on defendants’ part was a proximate cause of the assault … . The record shows that the perpetrator was able to gain entry into plaintiff’s building not as a guest but as an intruder; given defendants’ awareness of the practice of “piggy backing” in general and “piggy backing” by this perpetrator specifically, the tenant’s act of permitting the perpetrator to enter the building by “piggy backing” does not, as a matter of law, amount to a superseding intervening act that breaks the chain of causation between any deficient security and the assault on plaintiff … . Gonzalez v Riverbay Corp., 2017 NY Slip Op 04042, 1st Dept 5-18-17

NEGLIGENCE (TENANT ASSAULTED BY INTRUDER, QUESTIONS OF FACT ABOUT FORESEEABILITY, ADEQUACY OF SAFETY PRECAUTIONS, AND PROXIMATE CAUSE REQUIRED REVERSAL OF GRANT OF SUMMARY JUDGMENT TO DEFENDANTS)/ASSAULT (NEGLIGENCE, TENANT ASSAULTED BY INTRUDER, QUESTIONS OF FACT ABOUT FORESEEABILITY, ADEQUACY OF SAFETY PRECAUTIONS, AND PROXIMATE CAUSE REQUIRED REVERSAL OF GRANT OF SUMMARY JUDGMENT TO DEFENDANTS)/LANDLORD-TENANT (ASSAULT, NEGLIGENCE, TENANT ASSAULTED BY INTRUDER, QUESTIONS OF FACT ABOUT FORESEEABILITY, ADEQUACY OF SAFETY PRECAUTIONS, AND PROXIMATE CAUSE REQUIRED REVERSAL OF GRANT OF SUMMARY JUDGMENT TO DEFENDANTS)

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UNDISCLOSED PRINCIPAL CAN SUE ON A LEASE ENTERED INTO BY ITS AGENT.

The Second Department determined the owner of a parking lot (Berkshire) could assert cross claims against the lessee of the parking lot (Livingston), even though the lessee did not know the lease was entered into by an undisclosed agent of the owner. Plaintiff was injured in a slip and fall on the sidewalk adjacent to the parking lot. The owner cross-claimed for indemnification by the lessee:

Berkshire may enforce provisions of Livingston’s lease for the parking lot. An undisclosed principal may sue on a contract made in the name of its agent unless there is a showing of fraud … . Here, Livingston’s submissions confirmed that Berkshire owned the property that Livingston was renting, and that the lease was valid. Livingston does not assert that it would not have entered into the lease had it known then that Berkshire was, in fact, the owner. Although Livingston was not aware that Berkshire had authorized an agent to enter into the lease on its behalf, Livingston cannot escape liability on the contract by claiming ignorance of the undisclosed principal’s existence … . Simmons v Berkshire Equity, LLC, 2017 NY Slip Op 03208, 2nd Dept 4-26-17

CONTRACT LAW (UNDISCLOSED PRINCIPAL CAN SUE ON A LEASE ENTERED INTO BY ITS AGENT)/AGENCY (UNDISCLOSED PRINCIPAL CAN SUE ON A LEASE ENTERED INTO BY ITS AGENT)/LANDLORD-TENANT (UNDISCLOSED PRINCIPAL CAN SUE ON A LEASE ENTERED INTO BY ITS AGENT)/NEGLIGENCE (SLIP AND FALL, UNDISCLOSED PRINCIPAL CAN COUNTERCLAIM AGAINST LESSEE BASED ON A LEASE ENTERED INTO BY ITS AGENT)/AGENCY (UNDISCLOSED PRINCIPAL CAN SUE ON A LEASE ENTERED INTO BY ITS AGENT)

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CRITERIA FOR A PRELIMINARY INJUNCTION NOT MET, ALLOWING PAYMENT OF REDUCED RENT DURING THE PENDING LANDLORD-TENANT DISPUTE WAS IMPROPER.

The Second Department, reversing Supreme Court, determined the criteria for issuance of a preliminary injunction were not met in this dispute between landlord and tenant. The court further noted that a preliminary injunction is designed to preserve the status quo and ordering the landlord to accept a reduced rent while the action was pending was not proper:

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… [W]e find that the Supreme Court improvidently exercised its discretion in granting the plaintiff preliminary injunctive relief staying termination of the lease, and in further directing the plaintiff to pay rent in the reduced sum of $10,000 per month in lieu of the full amount of rent due under the lease. Although the plaintiff may ultimately be successful on the merits, it failed to establish that it would suffer irreparable harm or that the balance of the equities favor an injunction since its alleged damages are compensable in money damages and capable of calculation … . Moreover, the plaintiff’s vague and conclusory allegations regarding its inability to pay the full rent under the lease were insufficient to establish irreparable injury … . Furthermore, the court went beyond preserving the status quo, which is the essence of a preliminary injunction, and impermissibly rewrote the terms of the lease by directing that the plaintiff be permitted to pay only part of the rent due under the lease while it continued to occupy the premises … . Soundview Cinemas, Inc. v AC I Soundview, LLC, 2017 NY Slip Op 03209, 2nd Dept 4-26-17

CIVIL PROCEDURE (CRITERIA FOR A PRELIMINARY INJUNCTION NOT MET, ALLOWING PAYMENT OF REDUCED RENT DURING THE PENDING LANDLORD-TENANT DISPUTE WAS IMPROPER)/LANDLORD-TENANT (CRITERIA FOR A PRELIMINARY INJUNCTION NOT MET, ALLOWING PAYMENT OF REDUCED RENT DURING THE PENDING LANDLORD-TENANT DISPUTE WAS IMPROPER)/PRELIMINARY INJUNCTION (LANDLORD-TENANT, CRITERIA FOR A PRELIMINARY INJUNCTION NOT MET, ALLOWING PAYMENT OF REDUCED RENT DURING THE PENDING LANDLORD-TENANT DISPUTE WAS IMPROPER)

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DEFENDANT ABUTTING LESSEE DID NOT AFFIRMATIVELY DEMONSTRATE ITS SNOW REMOVAL EFFORTS DID NOT EXACERBATE THE ICE-SNOW CONDITION IN THIS SIDEWALK SLIP AND FALL CASE, SUMMARY JUDGMENT PROPERLY DENIED.

The Second Department determined defendant (Chase) was not entitled to summary judgment in this abutting sidewalk slip and fall case. Although there was no statute or ordinance which imposed tort liability for failure to remove ice and snow on Chase as the abutting lessee, Chase did not affirmatively demonstrate that it did not exacerbate the ice-snow condition with its snow removal efforts:

The defendant J.P. Morgan Chase Bank, N.A. (hereinafter Chase), leased from [the owner] that portion of the building abutting the sidewalk. Under the terms of the lease and riders in effect at the relevant time, Chase was required to, inter alia, keep the sidewalks and curb in front of its premises clean and free from ice and snow. * * *

Administrative Code of the City of New York § 7-210 imposes a nondelegable duty on a property owner to maintain and repair the sidewalk abutting its property, and specifically imposes liability upon certain property owners for injuries resulting from a violation of the code provision … . In slip-and-fall cases on snow or ice, the general rule is that ” [t]he owner or lessee of property abutting a public sidewalk is under no duty to remove ice and snow that naturally accumulates upon the sidewalk unless a statute or ordinance specifically imposes tort liability for failing to do so'” … . “In the absence of a statute or ordinance imposing tort liability on the lessee, it can be held liable only if it, or someone on its behalf, undertook snow and ice removal efforts which made the naturally-occurring conditions more hazardous” …

Here, there was no statute or ordinance which imposed tort liability on Chase for the failure to maintain the sidewalk abutting its leased portion of the premises. However, Chase failed to make a prima facie showing that it was free from negligence. Chase failed to eliminate triable issues of fact as to whether it undertook snow and ice removal efforts to clear the sidewalk on the date of the subject accident, or whether any snow and ice removal efforts undertaken by it created or exacerbated the icy condition which allegedly caused the plaintiff to fall … . Ramjohn v Yahoo Green, LLC. 2017 NY Slip Op 03028, 2nd Dept 4-19-17

NEGLIGENCE (DEFENDANT ABUTTING LESSEE DID NOT AFFIRMATIVELY DEMONSTRATE ITS SNOW REMOVAL EFFORTS DID NOT EXACERBATE THE ICE-SNOW CONDITION IN THIS SIDEWALK SLIP AND FALL CASE, SUMMARY JUDGMENT PROPERLY DENIED)/LANDLORD-TENANT (SIDEWALK SLIP AND FALL, DEFENDANT ABUTTING LESSEE DID NOT AFFIRMATIVELY DEMONSTRATE ITS SNOW REMOVAL EFFORTS DID NOT EXACERBATE THE ICE-SNOW CONDITION IN THIS SIDEWALK SLIP AND FALL CASE, SUMMARY JUDGMENT PROPERLY DENIED)/SLIP AND FALL (DEFENDANT ABUTTING LESSEE DID NOT AFFIRMATIVELY DEMONSTRATE ITS SNOW REMOVAL EFFORTS DID NOT EXACERBATE THE ICE-SNOW CONDITION IN THIS SIDEWALK SLIP AND FALL CASE, SUMMARY JUDGMENT PROPERLY DENIED)/SIDEWALKS (SLIP AND FALL, DEFENDANT ABUTTING LESSEE DID NOT AFFIRMATIVELY DEMONSTRATE ITS SNOW REMOVAL EFFORTS DID NOT EXACERBATE THE ICE-SNOW CONDITION IN THIS SIDEWALK SLIP AND FALL CASE, SUMMARY JUDGMENT PROPERLY DENIED)

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LIQUIDATED DAMAGES PROVISION IN THIS LEASE AGREEMENT WAS AN UNENFORCEABLE PENALTY.

The Second Department, reversing Supreme Court, determined the liquidated damages portion of a lease agreement was unenforceable. Here the complaint alleged that defendant did not vacate the leased premises on time and sought holdover damages:

“[W]hether a clause represents an enforceable liquidation of damages or an unenforceable penalty is a question of law, giving due consideration to the nature of the contract and the circumstances”‘ … . An enforceable liquidated damages clause is “an estimate . . . of the extent of the injury that would be sustained as a result of breach of the agreement,” thereby embodying “the principle of just compensation for loss” … .

Here, the defendant demonstrated, prima facie, that the amended agreement imposed an unenforceable penalty, and the plaintiff failed to raise a triable issue of fact in opposition. The damages section of the amended agreement provided the plaintiff with a remedy for the whole extent of any injury that would be sustained as a result of a holdover, “in addition to” the sum of $5,000 per day in liquidated damages. The liquidated damages clause therefore is not “an estimate . . . of the extent of the injury that would be sustained” … , but rather an unenforceable penalty … . 555 W. John St., LLC v Westbury Jeep Chrysler Dodge, Inc., 2017 NY Slip Op 02769, 2nd Dept 4-12-17

CONTRACT LAW (LIQUIDATED DAMAGES PROVISION IN THIS LEASE AGREEMENT WAS AN UNENFORCEABLE PENALTY)/LANDLORD-TENANT (LIQUIDATED DAMAGES, LIQUIDATED DAMAGES PROVISION IN THIS LEASE AGREEMENT WAS AN UNENFORCEABLE PENALTY)/LIQUIDATED DAMAGES (LIQUIDATED DAMAGES PROVISION IN THIS LEASE AGREEMENT WAS AN UNENFORCEABLE PENALTY)

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FAIR MARKET RENT APPEAL PROPERLY DISMISSED.

The First Department, in a full-fledged opinion by Justice Gische, affirmed the dismissal of an Article 78 petition seeking a ruling on the status of petitioners’ apartment and the legality of the rent:

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The disputes before us arise from the Fair Market Rent Appeal (FMRA) petitioners filed with respondent New York State Division of Housing and Community Renewal (DHCR), implicating both the regulatory status of their apartment and the legality of the rent they were charged from the time they first took occupancy in 2010.

The DHCR decision being challenged in this article 78 proceeding denied the FMRA as untimely because it was filed more than four years after the apartment was no longer subject to the rent control laws following the death of the previous tenant in 2004. DHCR rejected petitioners’ contention that the applicable statute of limitations should be disregarded because the owner had engaged in fraud. DHCR also rejected petitioners’ claim that the owner’s late notices and/or registrations had extended the time period within which petitioners could file an FMRA challenging the owner’s efforts to set an initial rent following the apartment’s removal from rent control. Finally, on the merits, DHCR concluded that petitioners were not entitled to either a rent-regulated apartment or regulated rent because in 2010, when they first took occupancy, the apartment was no longer receiving any J-51 tax benefits and had become vacant at a time when the legal vacancy rent clearly exceeded $2,000 per month, an amount sufficient to make it high-rent/vacancy, “luxury” decontrolled … . Matter of Park v New York State Div. of Hous. & Community Renewal, 1st Dept 4-6-17

 

LANDLORD-TENANT (FAIR MARKET RENT APPEAL PROPERLY DISMISSED)/MUNICIPAL LAW (NYC, FAIR MARKET RENT APPEAL PROPERLY DISMISSED)/FAIR MARKET RENTAL APPEAL (NYC, LANDLORD-TENANT, FAIR MARKET RENT APPEAL PROPERLY DISMISSED)

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KILLING OF PLAINTIFF IN HER OFFICE WAS NOT FORESEEABLE BY THE BUILDING OWNERS OR TENANTS.

The First Department determined the death of plaintiff in her office (caused by nonparty Tarloff) was not foreseeable and the building owners and tenants could not therefore be liable in negligence:

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Even though the building contained a psychiatric suite, defendants had no duty to protect decedent from the violent actions of third parties, including former patients like Tarloff; such actions were not foreseeable, given the absence of prior violent criminal activity by Tarloff or other third parties in the building … .

Even assuming that defendants had a duty to provide “minimal precautions” … , that duty was satisfied by the provision of 24/7 doorman coverage, surveillance cameras, controlled building access, and functioning locks on the doors of the office suite and decedent’s personal office … . It is purely speculative that additional security measures — such as announcing visitors, installing an office intercom or buzzer, or keeping the office doors locked after hours — would have prevented Tarloff from killing decedent.

Any claims that the door man was negligent in failing to recognize Tarloff’s suspicious behavior was not a proximate cause of decedent’s death because it was still not foreseeable that Tarloff was about to engage in a murderous rampage. Tarloff’s conduct was a superceding cause severing the causal chain. Given that the attack was targeted and premeditated, it is “unlikely that any reasonable security measures would have deterred [Tarloff]” … . Faughey v New 56-79 IG Assoc., L.P., 2017 NY Slip Op 02608, 1st Dept 4-4-17

 

NEGLIGENCE (KILLING OF PLAINTIFF IN HER OFFICE WAS NOT FORESEEABLE BY THE BUILDING OWNERS OR TENANTS)/ASSAULT (NEGLIGENCE, KILLING OF PLAINTIFF IN HER OFFICE WAS NOT FORESEEABLE BY THE BUILDING OWNERS OR TENANTS)/FORESEEABILITY (KILLING OF PLAINTIFF IN HER OFFICE WAS NOT FORESEEABLE BY THE BUILDING OWNERS OR TENANTS)

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