Ministers, Elders and Deacons of Reformed Protestant Dutch Church of City of New York v. 198 Broadway, Inc.

• Decision Date: 15 August 1991
• Parties: MINISTERS, ELDERS AND DEACONS OF the REFORMED PROTESTANT DUTCH CHURCH OF the CITY OF NEW YORK, Petitioner (Landlord), v. 198 BROADWAY, INC., Respondent (Tenant), and Henry Modell and Co., Inc., and the Camera Barns, Inc., Respondents (Undertenants).
• Court: New York City Court

Page 543

579 N.Y.S.2d 543

152 Misc.2d 936

MINISTERS, ELDERS AND DEACONS OF the REFORMED PROTESTANT DUTCH CHURCH OF the CITY OF NEW YORK, Petitioner (Landlord), v. 198 BROADWAY, INC., Respondent (Tenant) and Henry Modell and Co., Inc., and the Camera Barns, Inc. Respondents (Undertenants).

Civil Court of the City of New York New York County, Part 52.

Aug. 15, 1991.

John L. Hardiman, Sullivan & Cromwell, New York City, for petitioner, The Ministers, Elders & Deacons of the Reformed Protestant Dutch Church.

Michael G. Shannon, Summit Solomon & Feldesman, New York City, for respondent, Henry Modell & Co., Inc.

Philip Smith, Smith & Shapiro, New York City, for respondent, The Camera Barns, Inc.

LOUISE GRUNER GANS, Judge:

This dispute between two New York City institutions, the venerable Reformed Protestant Dutch Church of the City of New York, and Henry Modell & Co., whose stores have for many years been a familiar city landmark, continues to provide legal challenges for judges and lawyers, although surely it has reached a point of diminishing returns for the litigants.

The essence of the dispute involves the efforts of Henry Modell and Co., (Modell), as subtenant of premises at 198 Broadway to exercise its option to renew its lease for an additional 21 year term in the face of the failure of 198 Broadway, Inc., the prime tenant, to exercise its right to renew the net lease on the continuation of which Modell's lease rights depended. Modell's right to renew its lease also affected the lease rights of The Camera Barns, Inc., an entity to whom Modell had subleased a portion of its leased premises. The Ministers, Deacons and Elders of the Reformed Protestant Dutch Church of the City of New York (the Church) own the 198 Broadway property and sought to evict Modell and The Camera Barns, Inc., from the premises.

During approximately 10 years of litigation, including two appeals to the Appellate Division, First Department and to the Court of Appeals, in addition to numerous other applications to those courts, as well as three appeals to the Appellate Term, First Department, actions in the Supreme Court and proceedings in this Court, Modell (and The Camera Barns in its wake) has consistently been the loser and the Church the winner. However, both Modell and The Camera Barns remained in possession of all or of a portion of the disputed premises till sometime in 1990.

The present decision involves the Church's claim for the payment by Modell and The Camera Barns of the reasonable value of the use and occupancy of the premises. The following summarizes the relevant procedural history of the case.

On January 29, 1980, the Petitioner Church, as Landlord, commenced a summary holdover proceeding in this court, against respondent 198 Broadway, Inc., as Tenant and Henry Modell and Co., Inc., and The Camera Barns, Inc., as Undertenants, following the expiration of their respective leases and subleases on January 15, 1980.

Respondent 198 Broadway, Inc., never filed an answer to the Petition. Respondents Modell and The Camera Barns served and filed their respective verified answers on or about February 5, 1980, and on or about October 14, 1980 Modell served and filed a verified amended answer.

Petitioner moved for summary judgment and to strike certain of Modell's defenses and Respondent Modell cross-moved for summary judgment and discovery. Following determination of these motions in Modell's favor by the Civil Court, the Appellate Term reversed, granting Petitioner's motion for summary judgment and denying Respondent Modell's cross-motion.

A Judgment finally determining the holdover proceeding was signed by Hon. Judge Ribaudo of the Civil Court and entered by the Clerk, on remittitur, with the notation, "As per order of Appellate Term of the Sup.Ct. First Dept." The Judgment was a Final Judgment of Possession in favor of Petitioner and against Respondents Tenant and Undertenants. In time the May 21, 1981 order of Appellate Term, First Department was affirmed by the Appellate Division, First Department, Modell v. The Dutch Church, 88 A.D.2d 511, 450 N.Y.S.2d 4 (1st Dep't 1982), and by the Court of Appeals, The Dutch Church v. Modell, 59 N.Y.2d 170, 464 N.Y.S.2d 406, 451 N.E.2d 164 (1983).

The determination of respondent Modell's appeal to the Court of Appeals on June 9, 1982 was followed by two successive motions in the Civil Court to vacate the October 30, 1981 Final Judgment of Possession on the basis of newly discovered evidence. Both motions to vacate were ultimately denied and in May, 1990 Petitioner moved for a trial of its use and occupancy claim. Modell responded with a motion to dismiss the claim and the motion was ultimately submitted to this court for determination. One of the grounds for the motion, in which Respondent The Camera Barns joins, is lack of privity between Petitioner and Respondent-Undertenants. As to this ground, Modell and The Camera Barns contend that the lack of privity, as a matter of law, bars recovery of use and occupancy against them in a summary proceeding. ¹

Modell and The Camera Barns argue that in the absence of a landlord-tenant relationship, petitioner may not recover use and occupancy directly from them, as subtenants, in a summary proceeding. Respondents cite 14 Second Avenue Realty Corp. v. Anne Steven Corp., 16 A.D.2d 751, 227 N.Y.S.2d 278 (1st Dep't 1962), aff'd 12 N.Y.2d 919, 238 N.Y.S.2d 99, 188 N.E.2d 404 (1963); and Glickman v. Glenwood-Syosset Appliances Corp., 45 Misc.2d 655, 257 N.Y.S.2d 498 (App.T., 2d Dep't 1965), neither of which involved summary proceedings.

Pursuant to RPAPL 741(5), an award of use and occupancy against Respondents Modell and The Camera Barns is within the scope of the Civil Court's authority in a summary proceeding. In 1976, RPAPL 741(5) was amended to add to the relief that may be demanded in a petition, a request "... for a period of occupancy during which no rent is due [a judgment] for the fair value of use and occupancy of the premises." (Laws 1976, Chapter 302, Section 1). Prior to the 1976 amendment of RPAPL 741(5), the Civil Court lacked authority to award use and occupancy in a summary holdover proceeding, whether privity existed between the parties or not. Seminole Housing Corporation v. M & M Garages, Inc., 47 A.D.2d 651, 364 N.Y.S.2d 26 (2d Dep't 1975). It was the Court in Seminole who recommended the amendment to "avoid circuity of action." Id. at 651, 364 N.Y.S.2d 26. While Seminole involved several landlords' efforts to collect use and occupancy from their tenants, Section 741(5) as amended does not restrict to tenants the category of persons who may be required to pay use and occupancy. Using only the neutral terms, "petitioner" and "respondent," RPAPL 741(5) on its face applies equally to summary proceedings where a landlord-tenant relationship exists, RPAPL 711, and where it does not, RPAPL 713. ²

As to the substantive issue whether privity of contract or estate is essential to an award of use and occupancy, the nature of the legal relationship between the parties required to support an award of use and occupancy has typically been considered in two distinct factual settings. Disputes incidental to the purchase and sale of real property provide one such setting and involve use and occupancy claims between vendor and vendee either where the vendor fails to relinquish possession after transfer of title, Preston v. Hawley, 139 N.Y. 296, 34 N.E. 906 (1893), or, where the vendee is in possession before closing and it develops that the contract of purchase and sale will not be completed, Castle v. Armstead, 168 App.Div. 466, 153 N.Y.S. 266 (2d Dep't 1915). ³

The decision in 14 Second Avenue Realty Corp. v. Anne Steven Corp., 16 A.D.2d 751, 227 N.Y.S.2d 278, aff'd 12 N.Y.2d 919, 238 N.Y.S.2d 99, 188 N.E.2d 404 (1963), on which respondents rely, involved "a vendor/vendee situation." Glickman v. Glenwood-Syosset Appliances Corp., 45 Misc.2d 655, 257 N.Y.S.2d 498 (App.T.2d Dept.1965). The law governing claims for use and occupancy in these situations has held up without significant change since the 19th century. Because of the expectation that payment for occupancy of premises in vendor/vendee situations would be provided for in the contract of purchase or at closing, and because of inconsistency between the vendor/vendee and the landlord-tenant relationships, Preston v. Hawley, supra; Barbarita v. Schilling, 111 A.D.2d 200, 201-202, 489 N.Y.S.2d 86 (2d Dep't 1985), in these situations, proof of a landlord-tenant relationship (i.e. some agreement to pay rent, either expressed or implied) has consistently been required as a condition of an award of use and occupancy. Preston v. Hawley, supra; 14 Second Avenue Realty Corp. v. Anne Steven Corp., supra; Barbarita v. Schilling, supra; Mendoza v. Rodriguez, 127 A.D.2d 635, 511 N.Y.S.2d 660 (2d Dep't) app. den. 70 N.Y.2d 612, 523 N.Y.S.2d 496, 518 N.E.2d 7 (1987). The source of this requirement can be traced in part to Real Property Law Section 220, and its predecessor statutes, Section 190 of the Real Property Law of 1896 and 1 Revised Statutes, 748 Section 26, which authorize an action for use and occupation only on the basis of an "agreement." Preston v. Hawley, supra at 298; Lamb v. Lamb, 146 N.Y. 317, 323, 41 N.E. 26 (1895).

The other context in which the existence of privity as a condition for an award of use and occupancy has been a recurring issue is that of disputes between a landlord, or other holder of superior title to real property, and a non-tenant third party in possession of the premises. Most frequently, the third party is a subtenant, but the category has included, for example, trespassers claiming title by adverse possession, New York Connecting Railroad Company v. Queens Used Auto Parts, Inc., 298 N.Y. 830, 84 N.E.2d 144 (1949); the purchaser of personal property stored in the landlord's premises, Rand v. Mintz, 69 Misc.2d 1055, 332 N.Y.S.2d 452, aff'd 72...