MERVCO HOLDING LLC, Petitioner v. David GINDI & “John Doe”, Respondents.
BACKGROUND & PROCEDURAL HISTORY
Petitioner commenced this commercial summary holdover proceeding seeking to recover possession of the Store at 1268 St. Nicholas Avenue, New York, New York 10033 (Subject Premises), based on the allegation that respondent had executed a surrender agreement and no longer was entitled to possession of the Subject Premises.1
No predicate notice was served. The petition was filed on July 12, 2019. The notice of petition with proof of service was filed July 19, 2019. An initial court date was set for August 1, 2019. The petition alleges respondent entered possession pursuant to a written lease agreement, but surrendered possession on April 9, 2019 pursuant to an executed letter of surrender. It further alleges “(r)espondent subsequently retook possession of the premises and continues to operate his business at the premises after said surrender.”
Respondent appeared pro se and the proceeding was adjourned to August 27, 2019 to afford respondent an opportunity to retain counsel. Respondent filed an answer on August 26, 2019 stating that he was not served and that petitioner is not his landlord.
On August 27, 2019, respondent again requested an adjournment which was granted by the court, Respondent requested a long adjournment because of religious holidays and the proceeding was adjourned to October 8, 2019 for trial and marked final.
On October 8, 2019, petitioner moved for summary judgment. The motion was adjourned on more than one occasion to afford respondent an opportunity to submit opposition papers. Respondent submitted opposition papers in November 2019 and on December 20, 2019, the court (Baron, J) issued an order dismissing respondent's defenses, but denying petitioner summary judgment. The court held in pertinent part:
Petitioner's principal avers that “subsequent to the signing of the surrender agreement, I found respondent doing business in the premises.” It is not clear from the parties submissions how respondent has access to the premises and whether the keys were turned over, as stated in the surrender agreement․ Further, the parties dispute whether petitioner gave respondent permission to remain in the premises after signing the surrender agreement
On November 7, 2019, petitioner moved to restore the proceeding to the calendar and for use and occupancy. The motion was granted by the court (Baron, J) pursuant to a decision and order dated December 20, 2019, which restored the proceeding for trial on January 14, 2019, and otherwise denied the motion.
On January 14, 2019, this court held a jury trial and reserved decision.
FINDINGS OF FACT
Petitioner is the owner of the Subject Premises, pursuant to a deed dated April 17, 2007 (Ex 1). Respondent was the tenant of record of the Subject Premises, pursuant to a lease agreement dated January 16, 2019 (Ex 2) which runs for a term from February 1, 2019 through January 31, 2024.
Respondent decided he wanted to assign his lease agreement to a third party. Respondent approached petitioner about the assignment. The first individual proposed by respondent was not acceptable to petitioner based on a lack of credit history. A second related individual was proposed who had an acceptable credit history. Petitioner agreed to accept both individuals together as a new tenant. Instead of doing an assignment of the lease, the parties decided that petitioner and respondent would execute a surrender agreement, and simultaneously execute a new lease between petitioner and the new tenants.
On April 9, 2019, the parties all met in person. Petitioner and respondent executed a surrender agreement (Ex 3). The agreement stated in pertinent part:
Tenant gives possession of the leased premises and the keys to the Landlord. The Landlord accepts the keys and possession of the leased premises in the condition delivered.
Tenant has done nothing which would give anyone a claim against the leased premises.
Landlord releases Tenant and Tenant releases Landlord from the obligations of the lease.
However, both parties testified that in fact no keys were tendered upon execution of the surrender agreement. Petitioner's principal Mal Cohen (Mal) testified that he and respondent orally agreed that the keys would be tendered later that day to give respondent an opportunity to remove his belongings from the Subject Premises. Respondent testified that Mal agreed to allow him to remain in possession for a longer period of time to remove his belongings from the Subject Premises. The court finds that Petitioner and respondent agreed that respondent could remain in possession after execution of the surrender agreement but never agreed on the period of time that respondent could remain in possession.
At that same meeting, Petitioner executed a new lease agreement for the Subject Premises with the new tenants.2 Petitioner took a security deposit of three months rent and payment of the first month from the new tenants. Petitioner deposited these sums which were paid by check into petitioner's account. Respondent and the new tenants had agreed that the new tenants would pay respondent “key money” for the lease. Mal was aware that key money was being paid, but did not wish to be privy to the details of the amount being paid. After Mal executed a lease with the new tenants and took the payments, Mal left the room so that respondent and the new tenants could conclude their transaction.
Respondent never vacated the Subject Premises and never surrendered the keys to the Subject Premises to Petitioner. Respondent testified in a vague manner that he and the new tenants never consummated the deal for key money, and Respondent's position at trial was that the surrender agreement executed is therefore invalid because he did not receive the intended consideration for giving up his lease.
Mal took no action to take back possession from respondent until approximately two months later, in June 2019, when the petition for the prior holdover proceeding was filed.
After trial the proceeding is dismissed pursuant to RPAPL § 741(4), because the petition failed to state the facts upon which the proceeding is based, and because petitioner failed to prove a cause of action. Additionally, there was no motion at trial to conform the facts alleged in the petition to the evidence offered at trial.
Critical in this regard is the allegation as to possession. The petition asserts that Respondent surrendered possession and the keys on April 9, 2019 and subsequently “retook possession of the premises”.
The uncontested evidence at trial is that this never occurred. Respondent never surrendered possession or the keys and remained in possession undisturbed despite having executed the surrender agreement.
If the facts were as alleged in the petition, and respondent had surrendered possession including the keys, and then re-entered possession without permission or right, respondent would essentially be a squatter and the proceeding would be subject to dismissal for failure to state a cause of action as no notice to quit was served (RPAPL § 713(3)).
Although there is no reference in the pleadings as to which provision of the RPAPL the petition is based on, the only holdover proceeding that could be brought against respondent without service of a predicate notice is upon expiration of the lease term pursuant to RPAPL § 711(1). This would be a proceeding brought upon the natural expiration of the lease and a grounds for a summary holdover proceeding where a landlord tenant relationship exists.
A surrender is “the restoring and yielding up of an estate for life or for years to him who has the immediate estate in reversion or remainder, whereby the lesser estate is merged in the reversion or remainder (See Rasch, New York, Landlord & Tenant [2nd ed.] Sec. 854).” A surrender of a lease involves and connotes a reconveyance of the term by a tenant to his landlord, who accepts such reconveyance, thereby causing the lease to end before its natural expiration. (Id.)
The type of surrender that occurred here was an express surrender by the tenant of the remainder of its lease term. An express surrender involves a mutual agreement between the landlord and the tenant that the lease be terminated (Wasserman v. Ewing, 270 AD2d 427). Since a surrender is the giving up by a tenant of his or her term to the landlord, upon acceptance of the surrender, the term merges with the reversion, and the lease and relationship of landlord and tenant are necessarily terminated (74A NY Jur. 2d Landlord and Tenant § 939).
Since petitioner agreed to allow respondent to remain in possession after the execution of the surrender agreement and the termination of the lease, for an unspecified amount of time, respondent became a tenant at will. A person who enters upon property by permission of the owner for an indefinite period, even without the reservation of rent, is considered to be a tenant at will (Stauber v. Antelo, 163 AD2d 246).
RPL § 228 governs termination of a tenancy at will and provides in pertinent part:
A tenancy at will ․ however created, may be terminated by a written notice of not less than thirty days given in behalf of the landlord, to the tenant, requiring him to remove from the premises; which notice must be served, either by delivering to the tenant or to a person of suitable age and discretion, residing upon the premises, or if neither the tenant nor such a person can be found, by affixing it upon a conspicuous part of the premises, where it may be conveniently read. At the expiration of thirty days after the service of such notice, the landlord may re-enter, maintain an action to recover possession, or proceed, in the manner prescribed by law, to remove the tenant, without further or other notice to quit.
As noted above no predicate notice was served by petitioner herein. As such the proceeding must be dismissed.
Contrary to respondent's contentions at trial, the court finds that the surrender agreement executed between the parties is valid and binding. However, the proceeding is dismissed for the reasons stated above.
This constitutes the decision and order of this Court.
1. A prior holdover proceeding was commenced against respondent under Index No L & T 61554, which was dismissed by Judge Baron after a traverse hearing pursuant to a decision and order dated July 11, 2019.
2. Neither party submitted a copy of the lease with the new tenants at trial, however, the court notes that a copy was annexed to respondent's opposition papers to petitioner's summary judgment motion. Since the lease was not submitted at trial, the court does not consider the document in rendering its decision after trial.
Sabrina B. Kraus, J.
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