170 EAST 77TH LLC LLC 170 LLC 170 LLC 170 LLC 170 LLC 170 LLC v. “John Doe” and “Jane Doe”, Respondents-Undertenants. (2006)

This summary holdover proceeding seeks to terminate the tenancy of Respondent, based upon lease expiration of an unregulated apartment.   Respondent moves to dismiss the petition based upon the allegation of waiver.   Respondent alleges that Petitioner gave a written demand for rent as well as accepted rent from Respondent, after the date of the termination of tenancy and prior to commencement of the proceeding.   Respondent also seeks dismissal of the petition based upon Petitioner's alleged improper service of the termination notice.   Petitioner cross-moves to dismiss Respondent's affirmative defenses and counterclaims and seeks summary judgment.

Respondent's Motion to Dismiss

 Respondent asserts the Petitioner billed for, demanded and accepted January 2006 rent from Respondent after the alleged service of the Notice of Termination, (which sought to terminate the tenancy effective December 31, 2005) and prior to commencement of this proceeding.   Respondent alleges that Petitioner held the January 2006 rent check for over six weeks, thereby vitiating the termination notice and creating a new month-to-month tenancy.   Courts have held that the retention of a rent check after the termination of the tenancy and before the commencement of a holdover proceeding constitutes a waiver of the termination of tenancy and requires dismissal of a holdover proceeding.   See, Roxborough Apartment Corp. v. Becker, 176 Misc.2d 503, 673 N.Y.S.2d 814 (N.Y. Civ.Ct.1998). Retention of a rent payment by a landlord without immediately returning the monies or explaining the inadvertence in not promptly returning the payment, constitutes grounds to terminate the predicate notice.   See, 205 East 78th Street Associates v. Cassidy, 192 A.D.2d 479, 598 N.Y.S.2d 699 (AT 1st Dept.1993), reversing on dissent of McCooe J., N.Y.L.J., Sept. 27, 1991, p. 21, col. 4 (AT 1st Dept.).   However, the court must look to the individual facts of each case prior to making such a determination.

In this case, it is undisputed that Respondent sent Petitioner two rent checks after service of the termination notice and prior to commencement of the proceeding.   The first check dated 1/1/06, representing December 2005 rent, was immediately rejected by Petitioner and returned to Respondent in a letter dated January 6, 2006.   See Petitioner's Exhibit H annexed to Cross-Motion.   The letter states:  “Please be further advised that my client is not able to accept this rent at this time due to the fact that you have been served with a Thirty (30) Day Notice of Termination that expired on December 31, 2005.”   Thereafter, it is undisputed that Respondent tendered a second check to Petitioner for January 2006 rent dated 1/4/06.   Neither party is able to confirm the date the second check was received by petitioner's office.

Respondent alleges that Petitioner held on to the “second” check for over six weeks, thereby creating a waiver and vitiating the termination notice.   However, correspondence between counsel for the two parties confirm that ongoing conversations around this “second check” occurred during the mid to later part of January 2006.   Petitioner annexes a facsimile cover sheet dated 1/25/06, addressed to Respondent's counsel, attached a copy of the second check which his client “had just received” and requested Respondents' counsel consent to deposit the check.   See Exhibit I of Cross-Motion.   A second facsimile cover sheet from Petitioner's attorney, also dated 1/25/06 and addressed to Respondent's counsel, attached a proposed stipulation of adjournment and indicated “Per your email, my client will hold the rent check that I faxed to you until I hear back from you after you speak with your client.”   See Exhibit J of Cross-Motion.   A facsimile cover sheet from Respondent's attorney of the same date states:  “I cannot reach my client so I cannot make any agreement at this time.   Please send the stipulation with respect to the adjournment.   I will deal with rent and/or use and occupancy when I reach my client.”   See Exhibit K of Cross-Motion.   Petitioner's counsel annexes yet another correspondence to Respondent's attorney dated 1/27/ 06.   In a facsimile of that date, he attaches a copy of a so ordered and executed stipulation of adjournment and again refers to the second check, by stating, “Please call me about the Jan. rent check.”   See Exhibit L of Cross-Motion.   In a final correspondence regarding the second rent check, Petitioner's attorney, by letter dated 2/17/06, finally returns the check and states:  “I am returning this check because in our last telephone conversation, you would not consent to allow my client to deposit this check.   The return of this check is without prejudice to my client seeking use and occupancy for the month of January in the future.”   See Exhibit M of Cross-Motion.

 Respondent alleges that acceptance of rent after the expiration of the lease creates a new month-to-month tenancy.   See, In re. T.R. Acquisition Corp., 309 B.R. 830 (S.D.N.Y.2003) A landlord's acceptance of rent from a tenant after the tenant's lease expires, but prior to the commencement of a holdover proceeding, does not, by itself, prove a knowing and willing relinquishment of a previously served Termination Notice.   The courts have described a waiver as a “voluntary abandonment of a known right.”   See, Jefpaul Garage v. Presbyterian Hosp., 61 N.Y.2d 442, 474 N.Y.S.2d 458, 462 N.E.2d 1176 (1984).   Petitioner's clear rejection of the first rent check for December 2005, coupled with ongoing dialogue between counsel for both parties about the status of the “second check” over a period of a few weeks, in no way constitutes a “voluntary abandonment” of Petitioner's intent to terminate the tenancy.   Accordingly, the portion of the motion seeking to dismiss the petition based on acceptance of a rent check and waiver is denied.

 Respondent also seeks dismissal of the petition based upon receipt of a rent bill for January 2006 rent.   While it is undisputed that Petitioner billed Respondent for January 2006 rent, Petitioner is able to offer a reasonable explanation for this error.   If the landlord can prove that the acceptance of rent was inadvertent and that rent was promptly returned, a holdover proceeding may survive a motion to dismiss.   See PCV/ST LLC v. Finn, N.Y.L.J. 5/16/03 18:1, 2003 WL 21203337 (AT 1st Dept.).   Petitioner explains that the bill was an inadvertent error by an independent contractor, resulting in a computer generated bill mistakenly being sent to Respondent for January use and occupancy.   Petitioner explains that its agents and affiliates own and manage approximately sixty buildings and receive approximately five-hundred checks each month representing rental checks for all the buildings.   Additionally, Petitioner's conduct does not constitute a waiver.   This conduct includes the prompt return of the December rent, ongoing correspondence with Respondent's attorney regarding the “second check” and immediate return of the check once Respondent's counsel communicated to Petitioner's attorney that his client would not consent to allow Petitioner to accept the check.   Accordingly, Respondent's first affirmative defense alleging waiver based on acceptance of rent after termination of the tenancy and prior to commencement of the proceeding, is hereby dismissed.

 Respondent also seeks dismissal based upon the allegation of improper service of the termination notice.   Respondent cites Matter of ATM One, LLC v. Landaverde, 2 N.Y.3d 472, 779 N.Y.S.2d 808, 812 N.E.2d 298 (2004) to support her argument that the failure to add five days to the mailing of the termination notice deems it defective, thereby, requiring dismissal.   Landaverde dealt with a ten day notice to cure served upon a rent stabilized tenant, where the only method of service was mailing.   There, the Court of Appeals held that owners who elect to serve a notice to cure by mail must compute the date certain by adding five days to the 10-day minimum cure period.

Lower courts are divided on whether the rule set forth in Landaverde is applicable to other types of notices.   The rule has been extended to notices to cure in Mitchell Lama housing.   See Southbridge Towers, Inc. v. Frymer, 4 Misc.3d 804, 781 N.Y.S.2d 207 (Civ.Ct. N.Y. Co.2004).   The lower courts are split on whether Landaverde is applicable to Golub notices.   Lower courts have held that the Landaverde rule is applicable to a Golub notice in the following cases.   See Lynch v. Dirks, N.Y.L.J., 1/5/05 19:3 (Civ.Ct. N.Y. Co.), and Shoshany v. Goldstein, N.Y.L.J., 2/9/05, 18:3 (Civ.Ct. N.Y. Co.).   Also see KSLM Columbus Apartments v. Bonnemere, 8 Misc.3d 1026(A), 806 N.Y.S.2d 445 (Civ.Ct. N.Y. Co.2004) and Gnan v. Crawford, n.o.r. L & T 73194/04, in both cases the lower courts held that the Landaverde holding should not be expanded to apply to service of a Golub notice.   The KSLM Court reasoned that the Landaverde holding was limited solely to notices to cure, particularly since cure periods are generally of a short duration.

Respondent relies heavily on Wing Lee Realty Inc. v. Man Yee Yon, 9 Misc.3d 1104(A), 806 N.Y.S.2d 449 (Civ.Ct. N.Y. Co.2005).   The court held that Petitioner was required to add an additional five days to a notice to quit which had been served by conspicuous place service.   It further ruled that since conspicuous place service requires a mailing, then the five day period set forth in Landaverde was required.   It should be noted that the subject apartment in Wing Lee was rent regulated.

This case involves an unregulated apartment where a termination notice pursuant to RPL § 232-a must be served in the same manner as the notice of petition and petition pursuant to RPAPL § 735.   Petitioner is correct in its argument that neither Landaverde nor Wing Lee pertain to service of a 30 day notice of termination pursuant to RPAPL § 735, as in the case before this court.   A review of the court file reveals that Petitioner complied with conspicuous place service pursuant to RPAPL § 735(1) and that service was complete pursuant to RPAPL § 735(2) upon proof of filing the affidavit of service with the clerk of the court.   This court does not find that the Landaverde rule which applies to service by “mail only” is applicable in service by mail after conspicuous place service.   Accordingly, Respondent's motion to dismiss based on failure to add five extra days for mailing after conspicuous place service is denied and respondent's first affirmative defense of improper service is hereby dismissed.

Based on the above, Respondent's motion to dismiss the proceeding is denied.   Petitioner's cross-motion to dismiss Respondent's affirmative defenses and counterclaims is granted.   Since all of Respondent's defenses and counterclaims are dismissed there are no issues of fact to be tried.   Therefore, Petitioner's motion for summary judgment is granted.

This case is restored to the Part G calendar for June 29, 2006 at 2:15 pm for an attorney's fees hearing.

This constitutes the decision and order of this Court.

PAM JACKMAN-BROWN, J.