Patchogue Assocs. v. Sears, Roebuck & Co.

• Decision Date: 11 June 2012
• Citation: 2012 N.Y. Slip Op. 22160,951 N.Y.S.2d 314,37 Misc.3d 1
• Parties: PATCHOGUE ASSOCIATES, Appellant, v. SEARS, ROEBUCK AND CO., Respondent.
• Court: New York Supreme Court — Appellate Division

37 Misc.3d 1

951 N.Y.S.2d 314

2012 N.Y. Slip Op. 22160

PATCHOGUE ASSOCIATES, Appellant,

v.SEARS, ROEBUCK AND CO., Respondent.

Supreme Court, Appellate Term, New York.

9th and 10th Judicial Districts.

June 11, 2012.

Rosenberg Calica & Birney LLP, Garden City (Robert M. Calica, Edward M. Ross and Judah Serfaty of counsel), for appellant.

Lynch Rowin LLP, New York City (Marc Rowin and Jennifer Chavez of counsel), for respondent.

PRESENT: IANNACCI, J.P., NICOLAI and MOLIA, JJ.

Appeal from an order of the District Court of Suffolk County, Sixth District (Stephen L. Ukeiley, J.), dated October 27, 2010. The order, insofar as appealed from as limited by the brief, upon a motion by tenant for summary judgment dismissing the petition and for the release to it of funds held in escrow representing rent for the period after July 30, 2010, and upon a cross motion by landlord for summary judgment directing the release to it of all funds held in escrow and directing that such release constituted the satisfaction of tenant's default in payment of rent, and, in effect, for leave to withdraw so much of the petition as sought an award of possession, and upon deeming the petition amended to include rent through October 2010, dismissed landlord's claim for rent for August 2010 through October 2010 and awarded landlord a money judgment for rent for the period from August 2008 through July 2010 only.

ORDERED that the order, insofar as appealed from, is affirmed, without costs.

After this nonpayment summary proceeding was transferred to the Supreme Court to be joined with a plenary action instituted by tenant, the Supreme Court ordered tenant to pay monthly rent in the sum of $11,719 to be held in landlord's attorney's escrow account. Upon the dismissal of tenant's Supreme Court action, the proceeding was transferred back to the District Court. Thereafter, tenant notified landlord by letter dated July 30, 2010 that, effective on that date, it was removing from the undeveloped premises and relinquishing its interest as tenant. The letter stated that, as a matter of law, the lease was thereby cancelled. Tenant consented to the release to landlord of the escrowed funds, with the exception of a sum representing rent for August 2010 which, it stated, should be returned to tenant, in full satisfaction of tenant's obligation to pay rent under the lease. Landlord sent a responsive letter rejecting the surrender. Tenant thereafter continued to pay rent into landlord's attorney's escrow account.

Tenant moved for summary judgment dismissing the petition on the ground that the lease had terminated on July 30, 2010 and directing that any sums held in escrow for rent after July 30, 2010 be released to tenant. Landlord cross-moved for summary judgment directing the release to it of all funds held in escrow, directing that such release constituted the satisfaction of tenant's default in payment of rent, and, in effect, allowing the withdrawal of so much of the petition as sought an award of possession. By order entered October 27, 2010, insofar as appealed from as limited by the brief, the District Court, upon deeming the petition amended to include rent through October 2010, dismissed the claims for rent for August 2010 through October 2010 and awarded landlord a money judgment for rent arrears from August 2008 through July 2010 only. An inquest was ordered to determine the amount of rent owed. The District Court found that, by submitting the July 30, 2010 letter, tenant had “unequivocally demonstrated” that it had surrendered possession. The court stated that its determination was based upon a rule that “where the surrender occurs subsequent to the commencement of a summary proceeding to recover possession of real property, the landlord-tenant relationship can be terminated by the tenant's actual surrender of the premises.” The court relied upon Cornwell v. Sanford, 222 N.Y. 248, 118 N.E. 620 [1918], under which the commencement of a summary proceeding gives a tenant “an option to consider the lease cancelled and to vacate the premises” ( Sno–Wite, Inc. v. Gerald Operating Corp., 271 App.Div. 314, 317, 65 N.Y.S.2d 9 [1946];see also Swerdlow v. Harrow, 213 App.Div. 521, 522, 210 N.Y.S. 265 [1925] ).

Landlord argues that Cornwell is inapplicable to modern nonpayment summary proceedings (RPAPL 711[2] ), the commencement of which, landlord claims, is “indicative of an intent to approve and continue the lease, and an intent not to accept any surrender.”

The Legislature created summary proceedings in 1820 in order to give landlords a “simple, expeditious and inexpensive means of regaining possession of [a] premises in cases where the tenant refused upon demand to pay rent, or where he wrongfully held over without permission after the expiration of his term” ( Dolan v. Linnen, 195 Misc.2d 298, 309, 753 N.Y.S.2d 682 [Civ. Ct., Richmond County 2003], quoting Reich v. Cochran, 201 N.Y. 450, 454, 94 N.E. 1080 [1911] ). While, initially, it could be determined that rent was due and unpaid in a summary proceeding, no money judgment for rent could be awarded. It was not until 1924 that an amendment to the Civil Practice...