Ripple's of Clearview, Inc. v. Le Havre Associates

• Citation: 452 N.Y.S.2d 447,88 A.D.2d 120
• Parties: RIPPLE'S OF CLEARVIEW, INC., Appellant, v. LE HAVRE ASSOCIATES, a New York Partnership, Respondent.
• Decision Date: 19 July 1982
• Court: New York Supreme Court Appellate Division

Page 447

452 N.Y.S.2d 447

88 A.D.2d 120

RIPPLE'S OF CLEARVIEW, INC., Appellant, v. LE HAVRE ASSOCIATES, a New York Partnership, Respondent.

Supreme Court, Appellate Division,

Second Department.

July 19, 1982.

Carb, Luria, Glassner, Cook & Kufeld, New York City (M. William Scherer, New York City, of counsel), for appellant.

Dreyer & Traub, New York City (Richard E. Hershenson, New York City, of counsel), for respondent.

Before MOLLEN, P. J., and NIEHOFF, RUBIN and BOYERS, JJ.

MOLLEN, Presiding Justice.

Plaintiff is a catering establishment in Whitestone, New York. It took occupancy under a sublease agreement dated March 20, 1963, which was modified in 1963 and 1972. The sublease term ran to February 28, 1983, with an option to renew until April 30, 1998. These lease agreements were subordinate to first and second mortgages on the premises.

In 1974, the holder of the first mortgage commenced a mortgage foreclosure action. A receiver was appointed who proceeded to collect $1,000 per month rent from plaintiff, under protest. Thereafter, an action was commenced by Formet Associates to foreclose the second mortgage. The action to foreclose the second mortgage proceeded to judgment and Formet Associates was the purchaser at the foreclosure sale. Subsequent to the foreclosure sale, the receiver appointed in the first foreclosure action continued to collect rent from plaintiff. Immediately upon termination of the receivership, at midnight, June 30, 1976, Formet Associates sold the property to defendant Le Havre Associates. Plaintiff paid $1,000 per month rent to defendant's managing agent through September, 1976, at which point it agreed to an increase in rent to $2,500 per month, retroactive to July, 1976.

In May, 1981, defendant served a 30-day notice on plaintiff electing to terminate the alleged month-to-month tenancy as of June 30, 1981. On or about June 29, 1981, plaintiff commenced the instant action against defendant. Plaintiff sought a declaration that its tenancy was governed by the terms of the March 20, 1963 sublease, as amended and modified, or, in the alternative, that defendant is estopped from terminating the tenancy on less than 18 months' notice.

Plaintiff's first cause of action was predicated on the theory of attornment. An attornment has been defined as the act of a tenant "putting a person in the place of another as his landlord" (see Austin v. Ahearne, 61 N.Y. 6, 15). When a tenant attorns to a new landlord, the tenant continues to hold upon the same terms as he held with his former landlord. We find that the facts in the instant case did not establish an attornment within the ambit of subdivision 3 of section 224 of the Real Property Law, which provides that a tenant may attorn "a purchaser at foreclosure sale." Although plaintiff was paying the receiver a monthly rent that might have been predicated on the 1972 lease modification, it does not necessarily follow that plaintiff thereby attorned to the purchaser, Formet Associates, or the present owner, defendant. Plaintiff never paid any rent to Formet. Although plaintiff concedes that the receivership did not extend to the Formet foreclosure, it contends that it attorned to Formet since the receiver used the money paid to him to defray obligations that Formet had assumed when it purchased the property. Case law clearly provides that a receiver is an officer of the court and cannot be considered the agent of the owner or mortgagee (Jamaica Sav. Bank v. Florizal Realty Corp., 95 Misc.2d 654, 407 N.Y.S.2d 1016; S & H Bldg. Materials Corp. v. European American Bank & Trust Co., 104 Misc.2d 249, 428 N.Y.S.2d 140; Kaplan v. 2108-2116 Walton Ave. Realty Co., 74 A.D.2d 786, 425 N.Y.S.2d 817). In light of the fact that the receiver was appointed to act solely with regard to the first foreclosure action, there could be no finding of attornment absent evidence of control by Formet Associates over the receiver. Furthermore, we find that the $2,500 monthly rent paid by plaintiff to defendant was not derived from the terms of the underlying lease.

In view of the foregoing, we conclude that Trial Term correctly found that the payment of rent after the foreclosure sale did not result in an attornment.

Plaintiff's second cause of action was predicated on the theory of promissory estoppel. Plaintiff asserts that based upon the representations made at a November 7, 1975 meeting, Formet's and Le Havre's actions thereafter, and plaintiff's reliance in conducting its catering business and maintaining and improving the premises, Trial Term should have found that defendant was estopped from terminating the tenancy on less than 18 months' notice.

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