801 South Fulton Ave. Corp. v. Radin

• Decision Date: 21 March 1988
• Docket Number: No. 1,No. 2,1,2
• Citation: 138 A.D.2d 561,526 N.Y.S.2d 143
• Parties: 801 SOUTH FULTON AVENUE CORP., Appellant, v. Burton RADIN, et al., Respondents. (Action) 801 SOUTH FULTON AVENUE CORP., Appellant, v. VICTORY CONTAINER CORP., et al., Respondents. (Action)
• Court: New York Supreme Court — Appellate Division

Page 143

526 N.Y.S.2d 143

138 A.D.2d 561

801 SOUTH FULTON AVENUE CORP., Appellant, v. Burton RADIN, et al., Respondents. (Action No. 1)

801 SOUTH FULTON AVENUE CORP., Appellant, v. VICTORY CONTAINER CORP., et al., Respondents. (Action No. 2)

Supreme Court, Appellate Division Second Department.

March 21, 1988.

Lehrman, Kronick & Lehrman, White Plains (Arnold S. Kronick, of counsel), for appellant.

Berman & Murray, New York City (Thomas C. Murray, Jr., of counsel), for respondents.

Before MANGANO, J.P., and BRACKEN, KOOPER and SPATT, JJ.

MEMORANDUM BY THE COURT.

In two consolidated actions to recover unpaid rent, the plaintiff appeals, as limited by its brief, from so much of a judgment of the Supreme Court, Westchester County (Marbach, J.), dated June 13, 1986, as dismissed the plaintiff's complaints in Action Nos. 1 and 2, after a nonjury trial.

ORDERED that the judgment is affirmed insofar as appealed from, with costs.

The trial court erred in holding that defendant Mount Vernon Container Corp. (hereinafter Mount Vernon) was released from any liability for rent when the plaintiff, the landlord, settled its claim with the occupant, Coordinated Containers Corp. (hereinafter Coordinated) and released it. The plaintiff explicitly reserved its rights against Mount Vernon when it released Coordinated in a document which formed an integral part of the settlement between the plaintiff and Coordinated in a prior proceeding (see, General Obligations Law § 15-104). The only exception to the effectiveness of such an explicit reservation of rights is when the obligee attempts to reserve such rights against an obligor which is only secondarily liable as a surety (General Obligations Law § 15-103; see, Werner, Shared Liability: An Alternative to the Confusion of Joint, Several, and Joint and Several Obligations, 42 Albany L Rev 1, 15 [1977] ). We conclude that Mount Vernon's liability was not limited in this way. Although the document whereby Coordinated took occupancy of the premises was called an "assignment", under the entirety of the circumstances here, this arrangement was a sublease, since Mount Vernon retained an interest in the premises and indeed, with the landlord's participation and consent, subsequently sublet the same premises under the same lease to another company after Coordinated had ceased its occupancy. These circumstances, rather than the name given to the arrangement, are dispositive in determining the nature of the arrangement (Rasch, NY Landlord and Tenant § 178 [2d ed]; New Amsterdam Casualty Co. v. National Union Fire Ins. Co., 266 N.Y. 254, 258, 194 N.E. 745; Herzig v. Blumenkrohn, 122 App.Div. 756, 107 N.Y.S. 570). As the tenant, Mount Vernon remained liable for the lease obligations, including payment of rent (Rasch, NY Landlord and Tenant §§ 232, 233 [2d ed] ). Mount Vernon remained directly liable to the landlord based on its own contractual obligations, rather than derivatively to Coordinated's obligations ( e.g., Iorio v. Superior Sound, 49 A.D.2d 1008, 374 N.Y.S.2d 76; Spitz v. Nunn, 34 Ohio.App. 397, 171 N.E. 117; see, Rasch, NY Landlord and Tenant § 216...