First Edition Composite, Inc. v. Wilkson

• Decision Date: 12 November 1991
• Citation: 177 A.D.2d 297,575 N.Y.S.2d 870
• Parties: FIRST EDITION COMPOSITE, INC., Plaintiff-Respondent, v. Gerald WILKSON, a/k/a Gerald Duval, et al., Defendants-Appellants.
• Court: New York Supreme Court — Appellate Division

Page 870

575 N.Y.S.2d 870

177 A.D.2d 297

FIRST EDITION COMPOSITE, INC., Plaintiff-Respondent, v. Gerald WILKSON, a/k/a Gerald Duval, et al., Defendants-Appellants.

Supreme Court, Appellate Division First Department.

Nov. 12, 1991.

Before MURPHY, P.J., and SULLIVAN, MILONAS, ROSENBERGER and ASCH, JJ.

MEMORANDUM DECISION.

Order, Supreme Court, New York County (Shirley Fingerhood, J.) entered June 27, 1990, which, inter alia, directed defendants to pay plaintiff retroactive and prospective use and occupancy, unanimously affirmed, with costs.

In September 1987, plaintiff entered into a contract to purchase from defendants an eight story warehouse building in which various tenants resided. Defendants occupied the seventh, eighth and part of the first floor. As part of the contract, defendants promised to have the building vacated by July 1, 1989, and to remove all outstanding violations by July 1, 1989. Defendants agreed to indemnify plaintiff against any claims relating to enforcement of the Loft Law. Defendants were permitted to remain in occupancy until July 1, 1989, rent free, and were also to be paid a managing fee.

While the closing of the sale occurred in October 1987, the building was not vacated and all the violations were not removed on July 1, 1989. In fact, defendants continued to occupy the first, seventh and eighth floors. Plaintiff notified defendants that it was rescinding the sale pursuant to its contractual right. However, defendants failed to repurchase the building as provided in the contract and plaintiff instituted this action. Notably, defendants stipulated that they would not take any action to enforce a purchase money mortgage plaintiff delivered to defendants for the building. Defendants asserted, as an affirmative defense that they were tenants entitled to protection under Article 7-C of the Multiple Dwelling Law ("MDL").

The IAS court ultimately determined that defendants owed plaintiff use and occupancy and rejected defendants' assertion that plaintiff was prevented from collecting use and occupancy since plaintiff had not registered the building with the Loft Board for residential occupancy.

Defendants contend that they are "residential occupants" of the building and are thus entitled to the protection of the Loft Law. While the Loft Law provides protection to "residential occupants" (see MDL § 286), it also provides a clear distinction between the rights to be afforded tenants and those to be afforded owners (see e.g. MDL § 285). The term "residential occupant" as opposed to "tenant" was formulated by the legislature since "tenant" was too narrow a term in the context of multiple dwellings. See Dworkin v. Duncan, 116 Misc.2d 853, 456 N.Y.S.2d 939 (N.Y.Civ.Ct.1982). However, "residential occupant" was not meant to encompass those in the situation of defendants who are essentially...