622 THIRD AVENUE COMPANY LLC v. HYATT LEADER LTD (2024)

Order, Supreme Court, New York County (Verna L. Saunders, J.), entered May 17, 2023, which insofar as appealed from, granted plaintiff's motion for summary judgment against defendant in the amount of $220,504.17 plus interest and costs, dismissed defendant's second affirmative defense, and denied defendant's cross-motion for summary judgment in its favor, as limited by the briefs, unanimously affirmed, with costs.

Defendant Hyatt Leader Ltd., f/k/a R.W. Davis & Company leased the 34th floor of a building owned by plaintiff 622 Third Avenue Company, LLC, located at 622 Third Avenue in Manhattan.  Defendant claims that it ceased operations in March 2020 because of the Covid–19 pandemic and ultimately abandoned the premises in April 2020.  In its complaint plaintiff alleged that defendant breached the lease by failing to pay rent beginning in July 2020, and sought unpaid rent through the end of the lease term.

Defendant asserts that it surrendered the premises by operation of law (Riverside Research Inst. v. KMGA, Inc., 68 N.Y.2d 689, 691–692, 506 N.Y.S.2d 302, 497 N.E.2d 669 [1986]).  However, it provided no evidence that plaintiff acted in a manner that was inconsistent with the landlord-tenant relationship (see 9–11 Stanton St. Realty Corp. v. Stanton St. Cleaners, Inc., 222 A.D.3d 570, 572, 203 N.Y.S.3d 15 [1st Dept. 2023]).  Instead, plaintiff's December 2, 2020 letter accepting defendant's surrender specifically stated that it was without prejudice to seeking damages for unpaid rent.

Further, the court properly dismissed the second affirmative defense of estoppel and waiver because defendant did not present evidence that plaintiff made a clear and unambiguous promise to relieve it of its rent obligations if defendant surrendered the premises and that defendant acted in reliance on that promise (see Matter of Shondel J. v. Mark D., 7 N.Y.3d 320, 326, 820 N.Y.S.2d 199, 853 N.E.2d 610 [2006]).  The Rent Demand sent by plaintiff to defendant included an offer to relieve defendant from its rent obligations under the lease if it surrendered the premises by October 15, 2020.  It was undisputed that defendant did not surrender by that deadline and only agreed to surrender the premises and returned the keys on November 18, 2020 (see 99 Realty Co. v. Eikenberry, 242 A.D.2d 215, 216, 660 N.Y.S.2d 583 [1st Dept. 1997]).

We have considered defendant's remaining arguments and find them unavailing.