RODRIGUEZ v. CURTIS CHANCE REALTY (2020)

ORDERED that the judgment is reversed, without costs, and the matter is remitted to the Civil Court for a new trial.

In this small claims action, plaintiff seeks to recover the principal sum of $565, which she paid to defendant real estate broker. At a nonjury trial, plaintiff and defendant's witness testified that, in connection with her prospective rental of an apartment, plaintiff had paid defendant a $500 "deposit." Plaintiff showed the court defendant's receipt, titled "deposit on apartment," for her payment of $500, which receipt included the notation:

"Amount of Account $804

Amount Paid $500

Balance Due $304"

Plaintiff also showed the court receipts she had received from defendant totaling $65, for a credit check, application fee, and credit report.

Plaintiff contended that she was entitled to the return of her $500 payment because she had never rented the apartment defendant had shown her. Defendant premised its entitlement to retain the $500 payment on the landlord's "acceptance" of plaintiff as a prospective tenant, by its offer to plaintiff of a lease. Besides plaintiff's receipts, the court also reviewed the application that plaintiff had filled out for a two-bedroom apartment,¹ an unsigned lease, and a letter from the manager or management company for the apartment which apparently approved plaintiff as a prospective tenant, as well as an agreement on the back of plaintiff's apartment application, which stated that defendant would be paid a "commission in the amount of 10% of one year's rent, when the applicant has been accepted for an apartment." All the exhibits were returned to the litigants. Following the trial, the Civil Court dismissed the action, upon a finding that defendant had earned a commission and that plaintiff's payment had constituted a partial payment of the commission.

In a small claims action, our review is limited to a determination of whether "substantial justice has ․ been done between the parties according to the rules and principles of substantive law" (CCA 1807; see CCA 1804; Ross v. Friedman, 269 AD2d 584 [2000]; Williams v. Roper, 269 AD2d 125, 126 [2000]).

Where a proposed lease is never executed and the tenant's application is, at most, an offer to lease, a deposit paid in anticipation of the lease agreement generally remains the property of the person who made the deposit (see Albert v. Margaretten, 2002 NY Slip Op 40269[U] [App Term, 2d Dept, 9th & 10th Jud Dists 2002]; see also Rivertower Assoc. v. Chalfen, 153 AD2d 196, 199 [1990]). Under the circumstances presented herein, if plaintiff's $500 deposit constituted a payment towards the rent or security deposit on an apartment she did not lease, she is entitled to a refund of that sum. However, the Civil Court's finding that plaintiff's $500 payment constituted a partial payment of defendant's commission apparently reflects the court's implicit conclusion that the statement "deposit on apartment" was ambiguous, and was intended to reflect that plaintiff had made a deposit towards the commission due upon the landlord's agreement to accept plaintiff as a tenant, as manifested by its offer to plaintiff of a lease.

There was no testimony as to the meaning of the expression "deposit on apartment," the purpose of plaintiff's $500 payment, or what 10% of the yearly rental as set forth in the lease amounted to. In the absence of the documentary evidence that was before the Civil Court, including, especially, the application for an apartment, whether generic or specific, we are unable to determine whether there was any basis for its conclusion that plaintiff's $500 payment constituted a partial payment of a commission in the sum of $804 and its finding that defendant, had in fact, earned a commission. A new trial is therefore required.

Accordingly, the judgment is reversed and the matter is remitted to the Civil Court for a new trial.

FOOTNOTES

1.   It cannot be determined from the trial transcript whether the application was for a generic two-bedroom apartment or the specific apartment for which the landlord had offered a lease.

ALIOTTA, P.J., ELLIOT and TOUSSAINT, JJ., concur.