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Chronic Nonpayment Not Subject to 15-Day Cure Period; Chronic Nonpayment is Treated Differently from Occasional Nonpayment

The First Department explained the legal principles which apply to chronic nonpayment of rent as follows:

…[P]laintiff chronically failed to pay its rent, having forced defendant to bring 10 nonpayment proceedings over the last seven years. This is a breach of a substantial obligation under the lease…, and is a type of default that plaintiff cannot cure within the 15-day cure period provided for in the lease …. Accordingly, plaintiff was properly denied a Yellowstone injunction, since that relief requires a showing that plaintiff is able to cure….  Defendant was not limited to a nonpayment proceeding under the term of the lease that provided for such proceedings for nonpayment. Chronic nonpayment is a violation of a different type than occasional nonpayment. Nor can plaintiff rely on any defect of the notice of default, since no such notice is even necessary for an action based on chronic nonpayment….  Definitions Personal Fitness Inc v 133 E 58th St LLC, 2013 NY Slip Op 04892, 1st Dept 6-27-13

 

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Court’s Limited Role Re: Contract with Arbitration Clause Explained

In determining a dispute involving a lease must be resolved in arbitration, the Fourth Department explained the court’s limited role in this context:

Plaintiff …. commenced this action pursuant to RPAPL article 15 seeking, inter alia, “to compel the determination of claims to the real property described herein,” and defendant moved to compel arbitration under the lease and to stay the action. Supreme Court properly granted the motion. “Where parties have entered into an agreement containing a broad arbitration provision, the question of whether the arbitration clause governs a particular aspect of the controversy, as well as the determination of the merits of the dispute, are matters within the exclusive province of the arbitrator”….“Once it appears that there is, or is not[,] a reasonable relationship between the subject matter of the dispute and the general subject matter of the underlying contract, the court’s inquiry is ended. Penetrating definitive analysis of the scope of the agreement must be left to the arbitrators whenever the parties have broadly agreed that any dispute involving the interpretation and meaning of the agreement should be submitted to arbitration”…. Thus, contrary to plaintiff’s contention, it is not entitled to a judicial determination with respect to the continued force and effect of the lease, i.e., “the ultimate issue in this case” …, before submitting the matter to arbitration.  Gray v Talisman Energy USA Inc, 534, 4th Dept, 6-14-13

 

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“Negligent Ownership and Maintenance” vs “Negligent Abatement” Causes of Action in Lead-Paint Case

In a lead-paint damages case, the Fourth Department determined the landlord was entitled to summary judgment on the cause of action alleging negligent ownership and maintenance (lack of notice), but was not entitled to summary judgment on the cause of action alleging negligent abatement of the hazard:

To establish that a landlord is liable for a lead-paint condition, a plaintiff must demonstrate that the landlord had actual or constructive notice of, and a reasonable opportunity to remedy, the hazardous condition” … .Defendant met his burden of establishing that he had no actual or constructive notice of the hazardous lead paint condition prior to an inspection conducted by the county department of health, and plaintiff failed to raise a triable issue of fact… .. Contrary to defendant’s contention, however, the court properly denied that part of his cross motion seeking summary judgment dismissing the second cause of action, which alleges negligent abatement of the lead-based paint hazard. Defendant failed to establish his prima facie entitlement to judgment as a matter of law with respect to that cause of action.  Pagan v Rafter, 210, 4th Dept, 6-14-13

 

Relationships Among Subtenancy, Prime Tenancy and Landlord Explained

The Second Department explained the relationships among a subtenancy, the prime tenancy and the landlord as follows:

“As a general rule, where a landlord and prime tenant enter into an agreement to voluntarily terminate the paramount lease, the subtenant becomes the immediate tenant of the original lessor, and the interest of the subtenant and terms of the sublease continue as if no termination had occurred”…. “However, because a sublease is dependent upon and limited by the terms and conditions of the paramount lease from which it is carved, a subtenancy may be terminated by the expiration of the term of the prime tenant, or a re-entry by the landlord for a condition broken”….  380 Yorktown Food Corp v 380 Downing Dr, LLC, 2013 NY Slip Op 04327, 2nd Dept, 6-12-13

 

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Out-Of-Possession Landlord Not Liable for Missing Light in Stairwell

The Second Department determined the out-of-possession landlord could not be liable for a missing light in a stairwell, the alleged cause of plaintiff’s fall:

“An out-of-possession landlord’s duty to repair a dangerous condition on leased premises is imposed by statute or regulation, by contract, or by a course of conduct”… . Here, the defendant established its entitlement to judgment as a matter of law by establishing that it was an out-of-possession landlord, that it was not contractually obligated to maintain the lighting at the premises or repair the alleged hazardous condition, that it did not endeavor to perform such maintenance, and that it did not violate any relevant statute or regulation… . Grimaldi v 221 Arlington Realty, LLC, 2013 NY Slip Op 03969, 2nd Dept, 6-5-13

SLIP AND FALL

 

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Notice Element of Lead-Paint Injury Cause of Action Explained

In affirming the denial of summary judgment in a lead-paint injury case, the Third Department explained the “notice” elements as follows:

With respect to notice, “[i]t is well settled that in order for a landlord to be held liable for injuries resulting from a defective condition upon the premises, the plaintiff must establish that the landlord had actual or constructive notice of the condition for such a period of time  that, in the exercise of reasonable  care, it should  have been corrected” …. In this context, constructive notice may  be demonstrated by a showing “that the landlord (1) retained a right of entry to the premises and  assumed  a duty to make  repairs, (2) knew  that the apartment was constructed at a time before lead-based interior paint was banned, (3) was aware that paint was peeling on the premises, (4) knew of the hazards of lead-based paint to young children and (5) knew that a young child lived in the apartment” … . Derr v Fleming, 515399, 3rd Dept, 5-9-13

 

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Plaintiff Was Unable to Demonstrate Landlord Had Knowledge of Presence of Lead Paint​

Plaintiff’s inability to demonstrate the defendant had actual or constructive notice of the presence of lead paint in defendant’s building, in the face of defendant’s deposition testimony about his lack of knowledge, justified the dismissal of the lead-paint-injury complaint.  The Third Department explained:

“[I]n order for a landlord to be  held liable for injuries resulting from a defective condition upon the premises, the plaintiff must establish that the landlord had actual or constructive notice of the condition for such a period of time that, in the exercise of reasonable care, it should have been corrected” ….To  establish constructive notice in the context of a lead paint case, the plaintiff must show “that the landlord (1) retained a right of entry to the premises and assumed a duty to make repairs, (2) knew that the apartment was constructed at a time before lead-based interior paint was banned,  (3) was aware  that paint was  peeling on  the premises, (4) knew of the hazards of lead-based paint to young children and (5) knew that a young child lived in the apartment” … . Hines v Double D and S Realty Management Corp, 515635, 3rd Dept, 5-2-13

 

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Criteria for Negligence on Part of Out-of-Possession Landlord with Limited Right of Reentry​

In dismissing a personal injury action stemming from plaintiff’s fall down a two-step interior stairway, the First Department explained the liability criteria for an out-of-possession landlord with limited right to reenter:

As out-of-possession landlords, with a limited right to reenter, they could only be liable for negligence “based on a significant structural or design defect that is contrary to a specific statutory safety provision” …. The only condition alleged on appeal to serve as a predicate for [defendant’s] potential liability involves the riser heights of the steps. Even if the alleged Building Code provision, which concerns uniformity, were applicable and had been violated, the same would not constitute a significant structural or design defect and could not serve as a basis for liability against [defendant]. Drotar v Sweet Thing, Inc, 2013 NY Slip Op 03180, 1st Dept, 5-2-13

SLIP AND FALL

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Class Certification Properly Granted; Rent Overcharge and Attorney’s-Fees Claims Did Not Seek “Penalties” In Violation of CPLR 901

The First Department affirmed the grant of class certification in a landlord-tenant action finding that plaintiff’s rent overcharge claim and attorney’s-fees claim did not seek “penalties” in violation of CPLR 901.  There was a dissent.  The First Department wrote:

Although plaintiff did not waive her right to reimbursement for alleged overcharges and interest, these claims did not render her action an action for a penalty for purposes of CPLR 901(b), even though such recovery is denominated a penalty by the RSL [Rent Stabilization Law], because they lack a punitive, deterrent and litigation-incentivizing purpose ….

Nor did the attorneys’ fees request seek a penalty, as the general right to attorneys’ fees in landlord-tenant proceedings (Real Property Law § 234) does not apply to administrative proceedings …, and the RSL provision should be understood as having the same nonpunitive purpose as the statute applicable to actions and summary proceedings. Notably, the reference in Rent Stabilization Code (9 NYCRR) § 2526.1(d) to attorneys’ fees as an “additional penalty,” while otherwise not dispositive, is absent from the attorney fee provision in the legislatively enacted RSL. Gudz v Jemrock Realty Co, LLC, 2013 NY SlipOp 02814, 1st Dept, 4-25-13

 

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Class Certification Should Have Been Granted; Plaintiffs Waived Statutory Treble Damages

The First Department reversed the dismissal of a putative class action by tenants against a landlord alleging the landlord deregulated the apartments while receiving tax incentive benefits from the city.  Because the tenants waived the statutory treble damages provision, the First Department determined that the case no longer involved “penalties” and was therefore not precluded by CPLR 901.  In a full-fledged opinion by Justice Andrias, the First Department wrote:

Pursuant to CPLR 901(b), “[u]nless a statute creating or imposing a penalty, or a minimum measure of recovery specifically authorizes the recovery thereof in a class action, an action to recover a penalty, or minimum measure of recovery created or imposed by statute may not be maintained in a class action.” However, even where a statute creates or imposes a penalty, the restriction of CPLR 901(b) is inapplicable where the class representative seeks to recover only actual damages and waives the penalty on behalf of the class, and individual class members are allowed to opt out of the class to pursue their punitive damages. … . * * * Rent Stabilization Code (9 NYCRR) § 2520.13, which states that “[a]n agreement by the tenant to waive the benefit of any provision of the RSL or this Code is void,” does not require a different result. “[P]laintiffs are seeking to waive their entitlement to treble damages unilaterally, not through agreement. Thus, allowing the class action to proceed would not frustrate the RSC’s purpose of [avoiding] situations whereby the landlord attempts to circumvent the [RSC’s] benefits” … . Downing v First Lenox Terrace Assoc, 2013 NY Slip Op 02853, 1st Dept, 4-25-13

 

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