OSBORNE v. MOUTAFIS

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Supreme Court, Appellate Term, New York.

William OSBORNE, Respondent, v. Peter MOUTAFIS, Appellant.

Decided: January 27, 2005

Present:  RUDOLPH, J.P., ANGIOLILLO and COVELLO, JJ. Scheyer & Jellenik, Nesconset (Stephen R. Jellenik of counsel), for appellant. Cahn & Cahn, LLP, Melville (Daniel K. Cahn of counsel), for respondent.

Appeal by tenant from a final judgment of the Justice Court, Town of Riverhead, Suffolk County (R. Ehlers, J), entered September 30, 2003, granting landlord possession and the principal sum of $11,400.

Final judgment unanimously affirmed without costs.

 Landlord commenced the instant commercial summary holdover proceeding to recover possession of the premises.   Absent the parties' contrary intent, the purchase contract, executed before the commercial lease expired, merged the landlord-tenant relationship into that of vendor-vendee in possession (Barbarita v. Shilling, 111 A.D.2d 200, 201-202, 489 N.Y.S.2d 86 [1985];  Neuhaus v. McGovern, 195 Misc.2d 613, 614, 758 N.Y.S.2d 461 [App. Term, 9th & 10th Jud. Dists. 2002] ), barring the commencement of a summary proceeding against the vendee, the equitable owner (74A N.Y. Jur. 2d, Landlord and Tenant § 697) and the legal owner may not demand use and occupancy (Mendoza v. Rodriguez, 127 A.D.2d 635, 636, 511 N.Y.S.2d 660 [1987];  Jacobs v. Andolina, 123 A.D.2d 835, 836, 507 N.Y.S.2d 450 [1986] ).   The merger did not occur in this case because the parties continued the landlord-tenant relationship, as evidenced, inter alia, by tenant's uninterrupted payment of rent, albeit on a newly-formed corporate account, and by the terms of a conference order, issued in connection with tenant's then-pending Suffolk County Supreme Court action for specific performance of the contract (which landlord declared terminated after tenant failed to obtain the required financing by the closing date), conditioning the renewal of a stay on tenant's payment of “use and occupancy” and utility fees “as heretofore paid.”   Upon tenant's alleged violation of a condition of the stay, landlord properly commenced the herein action (RPAPL 711).

 The court properly rejected tenant's claim that the holdover proceeding failed to name and serve the corporation, a party in possession.   The corporation's occupancy of the premises to be conveyed would not, standing alone, imply a landlord-tenant relationship between it and the vendor (1 Dolan, Rasch's Landlord and Tenant-Summary Proceedings § 4:3, at 174 [4th ed.] ), and tenant failed to prove that landlord acceded to such a relationship (Jacobs v. Andolina, 123 A.D.2d at 836, 507 N.Y.S.2d 450).   Tenant admits he executed the purchase contract in his personal capacity and sued landlord for specific performance in his own name, not as the representative of a corporate-tenant in possession.   Tenant's application for a restraining order sought, inter alia, to compel landlord to accept rental payments from tenant, not the corporation, and the conference order specified that landlord may retain all “ rent” or use and occupancy payments previously tendered “without prejudice.”   Thus, the fact that after forming the corporation, tenant elected to pay the rent/use and occupancy and utilities from a corporate account and landlord accepted those payments was insufficient to establish a landlord-tenant relationship between landlord and the corporation.