ABERA CORP v. SMITH (2020)

Recitation, as required by CPLR § 2219(a), of the papers considered in the review of this motion:

Upon the foregoing papers, the Decision and Order on this motion are as follows:

Abera Corp., the petitioner in this proceeding (“Petitioner”) commenced this summary proceeding against Artina Smith, the respondent in this proceeding (“Respondent”), seeking a money judgment and possession of 122 Fenimore Street, Apt. D2, Brooklyn, New York (“the subject premises”) on the ground of nonpayment of rent. Respondent now moves to dismiss or, in the alternative, for summary judgment or, in the alternative, to amend her answer.

The record on this motion practice shows no dispute of fact that an entity other than Petitioner is the fee owner of the building in which the subject premises is located (“the Building”). However, in opposition to the motion, Petitioner shows a document purporting to be a net lease (“the Lease”) that the owner of the Building (“the Owner”) executed with Petitioner as the lessee.¹ Petitioner also shows in opposition fully-executed leases between the parties.

While some authority supports the proposition that evidence of a landlord/tenant relationship between parties in a summary proceeding dispenses with the need to prove ownership, Tacfield Assoc., LLC v. Davis, 43 Misc 3d 129(A)(App. Term 2nd Dept. 2014), Mirra v. Pattee, 19 Misc 3d 142(A) (App. Term 2nd Dept. 2008), 100 Apt. Assoc., Inc. v. Estavillo, 18 Misc 3d 67, 68 (App. Term 2nd Dept. 2007), Halle Realty Co. v. Abduljaami, 42 Misc 3d 148(A)(App. Term 1st Dept. 2014), a lessor lacking the requisite estate to lease still cannot be a proper petitioner in a summary proceeding. Metropolitan Realty Group v. McSwain, 27 Misc 3d 1216(A)(Civ. Ct. NY Co. 2010). “One cannot transfer what he [or] she doesn't possess.” Redhead v. Henry, 160 Misc 2d 546, 548 (Civ. Ct. Kings Co. 1994). Accordingly, the Lease must convey an adequate estate in order for Petitioner to have standing to commence this proceeding.

A net lease can confer upon the net lessee the standing to be a petitioner in a summary proceeding if the net lease passes exclusive control of the demised premises to the lessee. Women's Interart Ctr., Inc. v. N.Y.C. Econ. Dev. Corp., 97 AD3d 17, 21 (1st Dept. 2012), leave to appeal dismissed, 20 NY3d 1034 (2013). A “total nature” of a document purporting to be a net lease satisfactorily demonstrates such passage of exclusive control when it imposes upon the lessee the responsibility for all expenses arising from the property, including the costs of repairs, utilities, insurance, and leasing; when the document requires the lessee to indemnify the lessor; when the lease grants the lessee sole authority to maintain legal actions against tenants; and when the lease does not narrowly circumscribe the lessee's authority over the demised premises. Id. at 21-22.

Respondent argues that the Lease does not amount to a net lease, as the Lease does not authorize Petitioner to sublease the premises, collect rent, or commence summary proceedings against the occupants of the Building. Be that as it may, the Lease has a thirty-year term, the Lease charges Petitioner with the responsibility for payment of all taxes, water and sewer charges, and utilities, requires Petitioner to indemnify the Owner, and confers sole responsibility upon Petitioner for any repairs, including structural repairs and for removal of any violations of any codes, the very provisions that pass exclusive control of the Building to Petitioner. Id., Ouattara v. NY State Div. of Hous. & Cmty. Renewal, 2019 NY Slip Op. 33195(U), ¶¶ 15-16 (S. Ct. NY Co.).

In the light of the Lease's other indicia of Petitioner's exclusive control of the Building, the Lease's silence on Petitioner's authority to sublease the subject premises does not eliminate fact issues so as to entitle Respondent to dismissal or summary judgment, particularly as any lessee enjoys an unrestricted right to assign or sublet demised premises in the absence of a lease prohibition. Mann Theatres Corp. v. Mid-Island Shopping Plaza Co., 94 AD2d 466, 470 (2nd Dept. 1983), aff'd for the reasons stated, 62 NY2d 930, 933 (1984), Ilfin Co. v. Shattan, N.Y.L.J. Nov. 22, 1982 at 13:6 (App. Term 1st Dept.). As Respondent has not eliminated issues of fact that the Lease confers standing upon Petitioner to maintain this proceeding, Audthan LLC v. Ahmed, 66 Misc 3d 135(A)(App. Term 1st Dept. 2019), Audthan LLC v. Guira, 66 Misc 3d 134(A)(App. Term 1st Dept. 2019), the Court denies Respondent's motion to dismiss and for summary judgment.

As Petitioner's affirmation and affidavit did not oppose Respondent's motion to amend her answer, the Court grants the motion to amend the answer and deems the proposed amended answer annexed to the motion to be the amended answer.

The Court restores this matter for all purposes to the part F calendar on August 12, 2020 at 10:30 a.m.

This constitutes the decision and order of this Court.

FOOTNOTES

1.   An affiant in opposition to the motion avers that he is an officer in both corporate entities that constitute Owner and Petitioner and therefore demonstrates that he has the personal knowledge necessary to render the evidence admissible for purposes of consideration on this summary judgment motion.

Jack Stoller, J.