Smart Coffee, Inc. v. Sprauer

• Decision Date: 08 January 2021
• Docket Number: L & T 58994/20
• Citation: 71 Misc.3d 193,140 N.Y.S.3d 376
• Parties: SMART COFFEE, INC., Petitioner, v. Michelle SPRAUER, Leonardo Gil, Queenswood Newstand LLC, John Doe, Jane Doe and XYZ Corp., Respondents.
• Court: New York Civil Court

71 Misc.3d 193

140 N.Y.S.3d 376

SMART COFFEE, INC., Petitioner,

v.Michelle SPRAUER, Leonardo Gil, Queenswood Newstand LLC, John Doe, Jane Doe and XYZ Corp., Respondents.

L & T 58994/20

Civil Court, City of New York.

Decided on January 8, 2021

Attorneys for Parties: Jimmy Wagner, Esq., Attorney for Petitioner, SMART COFFEE, INC., 2055 Flatbush Ave, Brooklyn, NY 11234, Office: 929-477-8889

Blake Abrash, Esq., Mordente Law Firm LLC, Attorneys for Respondents, 160-29 Union Turnpike, Fresh Meadows, NY 11366, Ph: (718)969-9200, Fax: (718)969-0707

Sally E. Unger, J.

On December 3 and 14, 2020, this Court conducted a bench trial in the instant proceeding. The Court had ample opportunity to observe and assess the demeanor and credibility of the witnesses and carefully reviewed and considered all exhibits admitted into evidence.

Factual Background

The petitioner Smart Coffee, Inc., (hereinafter "petitioner" or "Smart Coffee") is the lessee of a newsstand situated at 9100 59th Avenue, Elmhurst, NY 11373 (hereinafter "subject premises"). The subject premises is located across the street from Queens Center Mall (hereinafter "the Mall"), the largest mall in the region. The respondent, Michelle Sprauer (hereinafter respondent or "Sprauer") is the commercial lessor. The respondent, Leonardo Gil (hereinafter "Gil") is the current month to month tenant in occupancy of the subject premises, together with "Jane Doe", who was revealed at trial as Destinee Julia Sanchez (hereinafter "Sanchez").

Sprauer as landlord and Smart Coffee as tenant entered into a written lease agreement at the behest of Arthur Mavashev (hereinafter "Mavashev"), a co-owner of petitioner's business for the subject premises for a one-year term, commencing November 1, 2019 and ending November 1, 2020 (hereinafter "lease") with an initial monthly base rent of $1,000.00. The lease was submitted by petitioner. It is a document drafted by Sprauer and faxed to Mavashev by Sprauer. While the corporate petitioner is named as the tenant in the lease, Mavashev's name was typewritten on the signature page and signed by Mavashev in his name. The lease was executed by both parties and acknowledged by a notary public.

In mid-March 2020, the Corona virus referred to as Covid-19, became a full-fledged global pandemic, which resulted in a governmental shut down of nonessential services, based upon Executive Order 202.8, effective in the evening of March 22, 2020. When Smart Coffee's representatives noticed the Mall was shut down, they thought it prudent to shut down as well and did. This had a direct impact on the petitioner's ability to pay its rent. The petitioner last paid its rent in March 2020.

For many months, Mavashev and Sprauer engaged in a series of text messages concerning the petitioner's tenancy and the payment of rent, or more accurately, the nonpayment of rent, in the midst of the Corona virus pandemic. In those text messages, Mavashev advised the respondent that she would get the rent once they were able to pay, reminded her that in the midst of the pandemic they were unable to conduct their business and were losing income due to the NYS Governor's Executive Order. Furthermore, Mavashev informed Sprauer she would be engaging in illegal activity under the terms of the EO's if she were to enter the subject premises without their permission and remove their possessions. To underscore his objection to her potential illegal conduct, Mavashev told her that they would commence a lockout proceeding if she did so.

The respondent consistently maintained that, "I need my rent money if you cannot pay the money that you owe me you have to leave the premises that's it". "If you do not leave you will not be able to get your stuff". These statements were made by text message when only one month's rent was due. Sprauer's perspective was that the Executive Orders were irrelevant. The only issue of any relevance was when and how much rent the petitioner was going to pay her. When Mavashev advised Sprauer that if she entered the subject premises without his permission, he would contact the police and report her breaking and entering, Sprauer's tune changed. At that point, she claimed she was concerned that the newsstand must be cleaned. However, the refrain continued, "This is my business and I'm giving you the right to stay there and now I'm not giving you the right anymore you're not paying me any rent get out."

At one point, Sprauer tried to analogize that the petitioner's situation was the same as hers, but reverted to the same intolerant persona and said,

You know what [Arthur] I am in the same situation you are whether we sign the lease or not this is not normal circumstances and you are not working with me I don't care about no lease no court will care about no lease you[r] [lease] went out the window. I don't need you I'm not getting any money from you.

When Mavashev responded by reminding Sprauer, "We signed and notarized a legal lease", she did not deny the existence of the written and acknowledged lease at that time. Her reply was "I understand that but there's no more there's nothing illegal about anything that we're going through are you going to pay me April or not"?

On April 15, 2020, Sprauer continued with her ultimatums. This time, she became more specific. In a lengthy text message that day, Sprauer told Mavashev she was giving him until May 1st to pay her rent for April and May i.e., $2,000.00, or he would no longer be permitted to occupy her newsstand. Mavashev repeated that he would seek legal recourse for an illegal eviction if she were to continue along her threatened path by entering the subject premises and removing his inventory. And again he reminded Sprauer of the existence of the signed lease. Once again, she did not deny its existence. Instead, she discounted its legitimacy presumably, because the rent had not been paid for April and May.

On May 4, 2020, Mavashev sent the following text message, "You have entered my newspaper stand without my permission and illegally changed the locks". Still he tried to reason with her and give her an opportunity to reverse her misdeeds. "Tomorrow if you don't put all my stuff back I would have to call the cops". Obviously, he was seeking restoration to the subject premises. Courthouse proceedings were considerably reduced for several months, though some activity continued. Ultimately, this proceeding was commenced on October 9, 2020.

The Trial

Sanchez was the first witness called by the petitioner. Her testimony was brief, but credible. Sanchez established that she and Gil currently occupy the subject premises pursuant to an oral month to month tenancy. They took possession in mid-September 2020 from Sprauer after having answered an advertisement on "Craig's List". She is not involved in the day-to-day activities of the newsstand and has only visited when it was necessary to pay a bill or re-stock the merchandise for sale.

Mavashev testified as an owner of the petitioner's business. He and his co-owner, Ricardo Torres (hereinafter "Torres"), rented the subject premises to run a combined newsstand and integrated technology enterprise. In addition to running a newsstand from the subject premises, petitioner also operated a delivery business for customers of the Mall. When stores in the Mall across the boulevard received orders for merchandise, the petitioner delivered the merchandise to the customers. Mavashev also testified that he executed the lease with Sprauer.

Due to the Mall shut down, Mavashev therefore believed he was required to shut down by the Governor's mandate as well. Mavashev attempted to speak with Sprauer about the need to shut down the newsstand, but her response from the beginning was that if he didn't pay the rent, she would have it cleaned out. She continually demanded that her keys be returned. Mavashev attempted to reason with Sprauer and told her once the newsstand was operational again, she would receive the rent.

She varied her excuses of why she needed to enter the subject premises and Mavashev told her there was no need to enter, because the newsstand was not operational. During the course of these conversations, Sprauer told Mavashev that she would be changing the locks.

Then about a month after the Jewish holiday of Passover, Mr. Torres visited the subject premises and was unable to enter. The locks had been changed. This time frame is borne out by the text messages between Sprauer and Mavashev, which were entered into evidence. At that point, the petitioner was in rental arrears for $2,000.00, representing rent for the months of April and May 2020.

Once the locks were changed, on May 4, 2020, Mavashev sent Sprauer the text which confirmed she acted on her earlier threats. "You have entered my newsstand without my permission and illegally changed the locks. Tomorrow if you don't put all my stuff back I would have to call the cops." When Mavashev asked Sprauer to put the petitioner back in possession, she responded by telling him she had another tenant who was going to pay a higher rent.

On Mavashev's cross examination, Sprauer's attorney relied upon the lease, which Sprauer claimed did not exist, to put forth an argument that Sprauer was justified in changing the locks, because the rent had not been paid. Sprauer's counsel also tried to assert that the petitioner was not the proper party to maintain this litigation, because Mavashev signed the lease without reference to Smart Coffee or his corporate office in it. In essence, Sprauer claimed Mavashev executed the lease in his individual capacity, not on behalf of Smart Coffee. Through cross examination, Sprauer's counsel was able to ascertain that the petitioner did not exercise its option to renew the lease. The option would have expired approximately 4 months after Sprauer had changed the locks without petitioner's permission, i.e. September 1, 2020.

Mr. Torres testified briefly. His testimony was focused on the items which were inside the subject...