Grand Liberte Co-op., Inc. v. Bilhaud
| Decision Date | 22 October 1984 |
| Citation | 487 N.Y.S.2d 250,126 Misc.2d 961 |
| Parties | GRAND LIBERTE COOPERATIVE, INC., Petitioner-Landlord-Appellant, v. Alain BILHAUD, Respondent-Tenant-Respondent. |
| Court | New York Supreme Court — Appellate Term |
Finkelstein, Borah, Schwartz, Altschuler & Goldstein, P.C., New York City (Burton R. Ross, New York City, of counsel), for petitioner-landlord-appellant.
Baden Kramer Huffman Abbey & Brodsky, P.C., New York City (Steven H. Mosenson, New York City, of counsel), for respondent-tenant-respondent.
Before HUGHES, J.P., and RICCOBONO and PARNESS, JJ.
Final judgment entered December 29, 1983 (Lehner, J.) reversed, with $10 costs, tenant's motion for summary judgment denied, petitioner's cross motion for summary judgment granted, and final judgment of possession directed in favor of petitioner.
Tenant is the assignee of a proprietary lease for an art gallery at 96 Grand Street, Manhattan. The lease provided at paragraph 29:
"If upon, or at any time after the happening of any of the events mentioned in subdivisions (a) to (i) ... the Lessor shall give to the Lessee a notice stating that the term hereof will expire on a date at least five days thereafter, the term of this lease shall expire on the date so fixed in such notice as fully and completely as if it were the date herein definitely fixed for the expiration of the term, and all right, title and interest of the Lessee hereunder shall thereupon wholly cease and expire, and the Lessee shall thereupon quit and surrender the floor to the Lessor, it being the intention of the parties hereto to create hereby a conditional limitation ..." (emphasis added).
One of the events enumerated as the subject of a conditional limitation was a default by the tenant in the payment of rent which was not cured within ten days after written notice from the landlord (subdivision [d] ).
Previous holdover proceedings brought against the present tenant predicated upon nonpayment of rent were settled by stipulation, the last settlement occurring in February 1983. That stipulation amended the proprietary lease to provide that any and all monies payable under the lease due on the first day of each month were deemed payable no later than the fifth day (paragraph 1[a] ). Paragraph 1[b] further provided:
"If tenant defaults in sub-paragraph [a] or on any other term or condition of the lease requiring the payment of rent, additional rent, maintenance or other charges then the lease shall terminate on its own terms five (5) days after a notice of termination has been served to tenant and only after said default has remained uncured for ten (10) days after the service upon tenant of a notice specifying the default."
A notice to cure was served on July 7, 1983, alleging a default in the payment of rent and additional security in the total sum of $1600. The default was not cured, the tenancy was terminated effective August 24, 1983 pursuant to a notice of termination, and holdover proceedings were commenced September 7, 1983. Upon respective motions for summary judgment, a strictly legal question was presented to the Civil Court--to wit, whether a default in payment of rent can be treated as a conditional limitation so as to permit recovery of commercial premises in a holdover proceeding. The court concluded, inter alia, that the creation of a conditional limitation based on a rent default is unenforceable as violative of public policy because it vitiates the statutory right to cure defaults in nonpayment expressed in RPAPL § 751, subd. 1. Accordingly, the petition was dismissed without prejudice to the maintenance of nonpayment proceedings.
We reverse. Where a lease between commercial parties contains a conditional limitation for nonpayment of rent, it shall be enforced in the absence of a showing of fraud, exploitive overreaching or other unconscionable conduct on the part of the landlord (Matter of Birnbaum v. Yankee...
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...held to apply only to summary proceedings brought to enforce a condition subsequent that terminates a lease. Grand Liberte Cooperative, Inc. v. Bilhaud, 126 Misc.2d 961, 963-64, 487 N.Y. S.2d 250, 252 (Sup.Ct.App.Term 1984) (per curiam). In contrast, the provision is inapplicable when a les......
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