Gold v. Schuster

• Decision Date: 02 September 1999
• Citation: 694 N.Y.S.2d 646,264 A.D.2d 547
• Parties: DAVID GOLD, Appellant,<BR>v.<BR>ABRAHAM SCHUSTER et al., Respondents.
• Court: New York Supreme Court — Appellate Division

264 A.D.2d 547

694 N.Y.S.2d 646

DAVID GOLD, Appellant,

v.ABRAHAM SCHUSTER et al., Respondents.

Decided September 2, 1999.

Concur — Ellerin, P. J., Tom, Lerner, Buckley and Friedman, JJ.

In July 1993 defendants/landlords entered into a lease with 80-29 Jamaica Avenue Restaurant Corp. (Tenant) on commercial premises located in a building at 881 Tenth Avenue for a term of 11 years. At the same time, and with the consent of defendants/landlords, the lease was assigned by Tenant to plaintiff to secure a loan of $180,000 and plaintiff, in turn, again with the consent of defendants/landlords, sublet the premises back to Tenant. According to plaintiff, he also took a security interest in furnishings and other personal property located on the premises.

Apparently, Tenant never paid any rent under the lease and, three months later, on or about October 6, 1993, defendants/ landlords commenced summary non-payment eviction proceedings against Tenant in the Civil Court, Housing Part, in New York County. Plaintiff was not served with the petition or otherwise joined in the non-payment proceeding.

On November 3, 1993, Tenant signed a stipulation agreeing to pay all rental arrears and other amounts that Tenant owed to defendants/landlords. The stipulation also provided: "5. Tenant consents to Final Judgment of possession and a money judgment in the amount of $18,540.00 and the forthwith issuance of the warrant of eviction, execution thereof being stayed so long as Tenant fully complies herewith. In the event that Tenant defaults hereunder, Landlord can execute on the warrant on ten (10) days prior written notice to Tenant's attorney by regular mail or FAX * * * during which time Tenant may cure any such default." A copy of the stipulation was forwarded to plaintiff on November 5, 1993.

The warrant of eviction issued on or about November 16, 1993 and, upon the failure of Tenant to pay the rental arrears or otherwise comply with the stipulation, the defendants/ landlords served Tenant with a "72 Hour Notice" on November 30, 1993.

On December 3, 1993, Tenant filed a petition for Chapter 11 Bankruptcy, bringing into play the automatic stay provisions of Bankruptcy Code (11 USC) § 362. Pursuant to defendants/ landlords' motion, on January 24, 1994, the United States Bankruptcy Court for the Southern District of New York modified the automatic stay to allow defendants/landlords to proceed in the Civil Court with respect to all rights that they had against Tenant, and directed Tenant to pay defendants/ landlords $4,635 per month from December 3, 1993 to the date it vacated the premises or was evicted.

Plaintiff, as assignee of the lease, moved in the Civil Court to vacate the warrant of eviction alleging, among other things, that the lease had been assigned to him and the premises then subleased back to Tenant with the consent of defendants/ landlords and that the summary proceeding was wrongfully commenced without notice to him. Civil Court denied the motion. Plaintiff thereupon appealed to the Appellate Term, where he was granted a stay of the warrant of eviction pending appeal conditioned upon his deposit of $18,540 with the Civil Court and payment of rent or use and occupancy at a rate of $4,635 per month for the months of December, to and including, April 1994.

Plaintiff neither deposited the amount of rental arrears into court nor paid rent or use and occupancy for December through April, and the warrant of eviction was executed by the City Marshal on April 27, 1994. According to plaintiff's affidavit, "the defendants changed the locks and removed all of the furnishings and/or personal belongings in which I held a security interest".

By order entered March 15, 1995, the Appellate Term reversed the Civil Court order denying plaintiff's motion to vacate the warrant of eviction upon the ground that plaintiff, as the named assignee of Tenant, was a necessary party to the underlying commercial non-payment proceeding and should have been served with the rent demand notice, the notice of petition, and the petition.

Plaintiff then commenced this action seeking treble damages under RPAPL 853 for defendants/landlords' purported wrongful eviction of him. His damage claim is based on allegations that he suffered a loss of $180,000 due to Tenant's failure to repay the loan. After joinder of issue, plaintiff moved for summary judgment and defendants/landlords cross-moved for, inter alia, leave to amend their answer to include additional affirmative defenses and for judgment on those defenses. Supreme Court, inter alia, granted defendants/landlords' motion to amend their answer to assert a Statute of Limitations defense and granted the motion to...