In the Matter of Dominic Casamento v. Juaregui

• Decision Date: 13 September 2011
• Citation: 929 N.Y.S.2d 286,88 A.D.3d 345,2011 N.Y. Slip Op. 06487
• Parties: In the Matter of Dominic CASAMENTO, respondent,v.Luis JUAREGUI, appellant.
• Court: New York Supreme Court — Appellate Division

88 A.D.3d 345

929 N.Y.S.2d 286

2011 N.Y. Slip Op. 06487

In the Matter of Dominic CASAMENTO, respondent,

v.Luis JUAREGUI, appellant.

Supreme Court, Appellate Division, Second Department, New York.

Sept. 13, 2011.

Steven De Castro, New York, N.Y., for appellant.Santo Golino, New York, N.Y., for respondent.JOSEPH COVELLO, J.P., DANIEL D. ANGIOLILLO, THOMAS A. DICKERSON, and SHERI S. ROMAN, JJ.ANGIOLILLO, J.

Real Property Law § 234, which governs residential leases, establishes an implied covenant providing a tenant with the right to recover an attorney's fee incurred in the successful defense of a summary proceeding to recover possession of a leasehold where the parties' lease provides for the landlord's recovery of an attorney's fee if successful in such litigation. The appeal before us concerns a tenant who successfully defended such a summary proceeding in the Civil Court, but was denied an award of an attorney's fee on his motion pursuant to Real Property Law § 234. The Appellate Term for the 2nd, 11th, and 13th Judicial Districts (hereinafter the Appellate Term) affirmed the order of the Civil Court, holding that the subject provision in the parties' lease did not trigger the statutorily implied covenant in the tenant's favor. We disagree with that view, and reverse the order of the Appellate Term, taking this opportunity to examine and reconcile an apparent conflict among the courts with respect to similarly worded lease provisions. We caution that the outcome of any claim pursuant to Real Property Law § 234 depends upon an analysis of the specific language of the lease provision at issue in each case.

Factual and Procedural Background

Luis Juaregui (hereinafter the tenant) entered into a lease for an apartment in Queens in a building owned by Dominic Casamento (hereinafter the landlord).¹ Under paragraph 7 of the lease, the tenant is permitted to make alterations only after obtaining the landlord's “prior written consent.” Under paragraph 10 of the lease, the tenant is liable for damages sustained and expenses incurred by the landlord “relating to any claim arising from any act or neglect of” the tenant. Paragraph 16 of the lease contains detailed provisions regarding the landlord's remedies in the event of the tenant's default. In pertinent part, that paragraph provides:

“A. Landlord must give Tenant written notice of default stating the type of default. The following are defaults and must be cured by Tenant within the time stated:

...

“(5) Failure to comply with any other term or Rule in the Lease, 10 days.

“If Tenant fails to cure the default in the time stated, Landlord may cancel the Lease by giving Tenant a cancellation notice ... Tenant continues to be responsible as stated in this Lease.

...

“C. If (1) the Lease is cancelled ..., Landlord may, in addition to other remedies, take any of the following steps: (a) peacefully enter the Apartment and remove Tenant and any person or property, and (b) use eviction or other lawsuit method to take back the Apartment.

“D. If this Lease is cancelled, or Landlord takes back the Apartment, the following takes place:

“(1) Rent and added rent for the unexpired Term becomes due and payable.

“(2) Landlord may relet the Apartment and anything in it ... Tenant stays liable and is not released except as provided by law.

“(3) Any rent received by Landlord for the re-renting shall be used first to pay Landlord's expenses and second to pay any amounts Tenant owes under this Lease. Landlord's expenses include the costs of getting possession and re-renting the Apartment, including, but not only reasonable legal fees, brokers fees, cleaning and repairing costs, decorating costs and advertising costs.”

The term “added rent,” as set forth in paragraph 16, is defined in paragraph 3 of the lease as “other charges to Landlord under the terms of this Lease” which the tenant “may be required to pay.”

On March 10, 2007, the landlord served the tenant with a notice to cure, alleging that the tenant violated paragraphs 7 and 10 of the lease “by physically assaulting landlord and making alterations to the bathroom and kitchen without the landlord's prior written consent.” The notice advised that, in the event of the tenant's failure to cure by March 22, 2007, the landlord would elect to terminate the tenancy in accordance with applicable law. The notice further advised: “pursuant to your lease you are responsible for legal fees incurred by the landlord with regard to the preparation and service of this Notice to Cure and any and all work done prior to and subsequently thereto, based upon your default under the lease.” On March 29, 2007, the landlord served a notice of termination of the lease effective April 12, 2007, citing the tenant's failure to cure, and advising the tenant that failure to quit would result in the commencement of appropriate proceedings to recover possession.

On April 18, 2007, the landlord commenced this summary holdover proceeding in the Civil Court, Queens County, alleging that the tenant had continued in possession without the landlord's permission beyond the date set forth in the notice of termination. The tenant filed an answer alleging that he had not assaulted the landlord, but that the landlord had intentionally assaulted him with a truck and was facing criminal charges. With respect to the alleged alterations to the apartment, the tenant claimed that, in 1999, the apartment sustained damage from a flood, and that the landlord refused to make repairs for seven years, resulting in dangerous and unhealthy conditions. In 2006 the tenant allegedly asked for and received the landlord's oral permission to undertake the repairs, and the landlord inspected the work and expressed satisfaction with it. Further, the tenant counterclaimed for rent abatement under a theory of breach of warranty of habitability and sought dismissal of the landlord's petition to recover possession of the leasehold and an award of costs and a reasonable attorney's fee.

The Civil Court (Katz, J.) deemed the issue of assault not within its jurisdiction and, in October 2007, held a trial on the sole issue of the tenant's alleged unauthorized alterations. On February 7, 2008, the Civil Court issued a written decision and order. According to the Civil Court's summary of the testimony, the landlord denied that he had failed to make necessary repairs, and claimed that he learned from a neighbor that the tenant was undertaking a complete renovation of the bathroom, not merely repairs, without his permission. The tenant testified to the contrary that, in 1999, the bathroom was completely damaged by a leak from above, and that the landlord had ignored several requests to make repairs. The Civil Court took judicial notice of a prior proceeding between the parties from 2001, which established the existence of 10 building code violations, including damage to the walls and ceiling of the bathroom and kitchen. The Civil Court found that the tenant “had conditions in his apartment in 2001 that the landlord failed and refused to repair and, over the passage of time, the conditions became so bad the tenant had no choice but to do the repairs himself.” Accordingly, the Civil Court dismissed the landlord's petition, holding that “[t]he landlord cannot use his own failure to make repairs as a sword to evict the tenant.”

In the same month that the Civil Court issued its determination, February 2008, the tenant commenced a separate action against the landlord in the Supreme Court, Queens County, to recover damages for personal injuries he allegedly sustained as a consequence of the landlord's assault. In July 2008 the parties reached a settlement, pursuant to which the landlord paid the tenant the sum of $10,000, and the tenant agreed to release the landlord “from the personal injury and assault action only of Index Number 4885/2008 filed in Supreme Court, Queens County” and “[i]n particular for bodily injuries sustained on February 27, 2007.”

In November 2008 the tenant filed a motion in the Civil Court, seeking an award of an attorney's fee. The tenant cited Real Property Law § 234 (hereinafter section 234), contending that paragraph 16 of the parties' lease triggered the implied statutory covenant in his favor. The landlord opposed the motion, contending that paragraph 16 simply permitted him to recoup the costs of re-renting the apartment in the event of the tenant's default, not the costs of instituting a summary holdover proceeding and, thus, the implied covenant in favor of the tenant under section 234 did not arise. ² In reply, the tenant argued that the landlord's demand for an award of an attorney's fee in his notice to cure should be deemed an admission that the parties' lease authorized such an award. The landlord argued that, to the contrary, the notice to cure did not create a right to an award of an attorney's fee beyond the lease provision, which authorized an award of an attorney's fee only in the specific situation, not applicable here, where the landlord re-lets the apartment.

On January 27, 2009, the Civil Court (Badillo, J.) denied the tenant's motion, holding that the language of paragraph 16(D)(3) of the lease “is triggered by the vacatur of the apartment and the expenses involved in a reletting” and that the “lease does not contain any language for legal fees for broad breach circumstances.” The tenant appealed from that order and, on January 29, 2010, the Appellate Term affirmed, writing:

“After prevailing in this holdover summary proceeding, tenant sought an award of attorney's fees based on Real Property Law § 234 and paragraph 16(D) of the lease, which provides that the landlord may deduct his costs of getting possession and re-renting the apartment, including attorney's fees, from the rents received upon a reletting following a cancellation of the lease. As the subject clause ‘is not the type of provision covered by Real Property Law § 234’ ( Oxford...