Tolou Realty Associates, Inc., Respondent, v. XYZ (2025)

ORDERED that, on the court's own motion, the notice of appeal from the decision dated August 23, 2023 is deemed a premature notice of appeal from the final judgment entered September 18, 2023 (see CPLR 5520 [c]); and it is further,

ORDERED that the final judgment, insofar as appealed from, is affirmed, without costs.

In this commercial nonpayment proceeding, landlord sought possession and rent arrears in the sum of $776,551.90. The parties' original lease agreement was amended in October 2014 (the 2014 lease). A previous commercial nonpayment proceeding had resulted in a so-ordered two-attorney stipulation of settlement dated January 28, 2021. The stipulation, in relevant part, required landlord to undertake certain repairs and stated that the parties "agree[d] to modify the lease, as per the terms of the recent emails as forth between the parties' counsel, which include[d] modification of rent due, two additional option periods of six years each, and other terms as discussed." After a nonjury trial, in a decision dated August 23, 2023, the District Court (Bronwyn Black-Kelly, J.) calculated arrears, based upon the 2014 lease, to be $721,002.87, and found that tenants were not entitled to an abatement of rent based on landlord's alleged failure to make repairs set forth in the January 2021 stipulation. A final judgment was entered on September 18, 2023 awarding landlord possession and $721,002.87.

Dolphin Diner Corp. (tenant) appeals from so much of the final judgment as was against it, arguing that it is entitled to a total abatement of rent based on landlord's alleged failure to make repairs set forth in the January 2021 stipulation. However, a tenant's "obligation to pay rent pursuant to a commercial lease is an independent covenant, and thus, cannot be relieved by allegations of a landlord's breach, absent an express provision to the contrary" (Universal Communications Network, Inc. v 229 W. 28th Owner, LLC, 85 AD3d 668, 669 [2011]). "[T]he obligation of a commercial tenant to pay rent is not suspended if the tenant remains in possession of the leased premises, even if the landlord fails to provide essential services" (Westchester County Indus. Dev. Agency v Morris Indus. Bldrs., 278 AD2d 232, 232 [2000] [internal quotation marks omitted]; see Soundview Cinemas, Inc. v AC I Soundview, LLC, 149 AD3d 1121, 1123 [2017]). Here, tenant remained in possession of the premises during the relevant period and does not point to any provision in the January 2021 stipulation of settlement providing for a rent abatement if landlord failed to make stated repairs.

Tenant alternatively argues that the court erred in calculating rent arrears from January 2021 through June 2023 pursuant to the terms of the 2014 lease. Tenant contends that the January 2021 stipulation of settlement created a modified lease with a new rent schedule. However, tenant failed to show that the stipulation modified the 2014 lease. While the stipulation provides that the lease was being modified "as per the terms of the recent emails," it did not include any of the material terms of a permanent lease amendment, such as the length of the lease, the amount of the new base rent, or the percentage of rent increases, and the "recent emails" were not offered at trial. Moreover, tenant failed to establish that the parties otherwise entered into a post-October 2014 amended lease. Thus the 2014 lease is still operative, and the rent was properly calculated according to that lease.

Accordingly, the final judgment, insofar as appealed from, is affirmed.

WALSH and CONWAY, JJ., concur.

GARGUILO, P.J., taking no part.

ENTER:

Paul Kenny

Chief Clerk

Decision Date: October 16, 2025