Opinion
SP 05672/08.
Decided March 19, 2009.
Motion by respondents for partial summary judgment upon their affirmative defenses of estoppel and laches are DENIED, without prejudice to their renewal at the trial of these non-payment proceedings.
The papers before the Court present triable issues respecting the petitioner landlord's entitlement to pursue non-payment claims for back-due rent which accrued during the pendency of an unsuccessful holdover proceeding.
The Court need not recite the history of the parties' dispute at any length. In September 2007, the landlord served termination notices upon each of the respondents, claiming that their month-to-month tenancies were being terminated effective October 31, 2007. Payments by respondents of their November 2007 rent were returned by the landlord with letters noting "we will no longer accept any payments." Nevertheless, in holdover proceedings brought by the landlord shortly thereafter, it included a claim for "use and occupancy as of November 1, 2007."
In response, an action was commenced in Supreme Court by the tenants challenging the termination. Between November 29, 2007, and March 20, 2008, the landlord was temporarily enjoined from pursuing the holdover proceedings. By order issued March 20, 2008, the Supreme Court lifted the TRO when it denied a preliminary injunction. However, on April 29, 2008, Justice Covello of the Appellate Division signed an Order to Show Cause temporarily staying the holdover proceedings once again.
The holdover proceedings were thereupon withdrawn by the landlord as part of a stipulation with counsel for respondents, dated May 30, 3008, through which each of their tenancies were "retroactively restored" as if termination notices "had never been served."
As permitted by the stipulation, the landlord then served a six month change of use notice upon respondents on June 12, 2008, advising respondents that their tenancies would now be terminated effective December 31, 2008. Additionally, on June 16, 2008, the landlord served rent demand notices upon respondents, demanding "past due" rent from November 1, 2007 to June 30, 2008. A second set of rent demand notices were served upon respondents in August 2008, demanding "past due" rent from November 1, 2007 to August 31, 2008. According to petitioner's counsel, the second set of rent demands were served to eliminate any issues respecting the sufficiency of service of the earlier demands. Upon respondents' failure to tender back-due rent as demanded, petitioner filed in the instant proceedings seeking eviction of respondents on grounds on non-payment.
Respondents' motion for partial summary judgment rests upon their affirmative defenses of estoppel and laches. Their argument is supported by tenant affidavits stating, in sum and substance, that respondents (a) did not pay rent to their landlord "because [the landlord] told [tenants] in November 2007 that it would no longer accept [tenant's] rent payments"; (b) that respondents, persons of modest means, used the rent money they would have otherwise paid "on many other things" since November 2007; (c) that respondents "simply do not have all that money to pay the amount demanded" by the landlord in these proceedings ($7,650.00 per tenant, covering back due rent which accrued between November 1, 2007 and October 31, 2008); (d) that the landlord's rent demand was part of its "scheme to get [tenants] evicted from the [mobile home] park"; (e) that respondents "received no notice of petitioner's desire to begin accepting rent again" from November 2007 until some time in June 2008; (f) that "if petitioner had alerted [tenants] soon after its November 2007 letter that it had changed its mind and would accept rent again," respondents "could have paid such rent" and they "would not now be facing the burden of paying . . . a huge amount in the thousands of dollars"; (g) that when advised by their attorney that respondents "must start paying rent again" in November 2008, they sent "the required amount" to their landlord, and their rent checks had cleared; (h) that petitioner "carefully waited until rent ha[d] built up" to a point where respondents "can no longer pay the entire amount"; and (i) that "[t]he current proceedings are nothing but a scheme for petitioner to accomplish what it could not accomplish last year: the termination of my tenancy."
Petitioner, in turn, argues that it "rejected and returned the November 2007 rent payment[s] simply because the law required [it] to do so." According to petitioner's counsel, it risked losing the right to litigate the holdover proceeding if it accepted rent payments. Moreover, petitioner notes that the holdover proceedings were promptly filed, but respondents did "everything possible to delay an adjudication of their tenancies on the merits . . ." In the face of that delay, attributable to respondents, petitioner contends that it "did not delay, unreasonabl[y] or otherwise," its pursuit of unpaid rent.
Petitioner further argues that respondents cannot prevail in their claim that they were unaware that petitioner would be making a claim against them for unpaid rent. It contends that "nothing in the record" supports "this bald self serving claim," and notes, "most significant[ly]", that the holdover petitions included demands for "use and occupancy from November 1, 2007."
Based upon the papers submitted, the Court cannot conclude, as a matter of law, that respondents established their entitlement to judgment on their defenses of estoppel and laches. But their averments, if credited at trial, could lead to findings that may justify relief to the tenants, in substantiated part, with respect to the back-due rent claimed.
The Court notes, at the outset, that RPAPL § 711 expressly permits a landlord to accept rent after a holdover proceeding is commenced, and further provides that such acceptance shall neither terminate the proceeding nor affect a Court's ability to grant an award of possession. See City of Mt. Vernon v. Brooks, 121 Misc 2d 881 (City Ct. City of Mt. Vernon, 1983); accord, Blenheim Trading Corp. v. Zitomer Pharmacy, Inc., NYLJ 1/16/91, p. 22, col. 5 (Civ.Ct. NY Co. 1991); United Artists Corp. v. No 731 7th Avenue Rest., Inc., 75 Misc 2d 717, 718-9 (Civ.Ct. NY Co. 1973).
Consequently, irrespective of whether the landlord was correct in its position that acceptance of rent in November 2007 might prejudice its ability to pursue the holdover proceeding that it commenced shortly thereafter, compare Roxborough Apt. Corp. v. Becker, 176 Misc 2d 503 (Civ.Ct. NY Co. 1998), there was no legal impediment to service of a rent demand upon respondents after commencement of the holdover proceedings. See City of Mt. Vernon v. Brooks, supra, quoting United Artist Corp. v. No 731 7th Avenue Rest, Inc., supra; see also Rasch, NY Landlord and Tenant, § 30.2 (citing cases).
In these circumstances, at least with respect to the demand for rent that would otherwise have been due and owing between November 2007 and June 2008, the Court concludes that further factual development is required in order to determine whether the respondents' defenses can be established. Under a well-settled body of precedent, a defense of laches involving "stale" demands for rent may be recognized in equity to defeat all or part of a non-payment proceeding. See Rasch, supra, § 43.33 and cases cited; see also Zenica Realty Corp. v. Masterandrea, 123 Misc 2d 1 (Civ.Ct. NY Co. 1984); 269 Assoc. v. Yerkes, 113 Misc 2d 450 (Civ.Ct. NY Co. 1982). Generally, a tenant raising a laches defense involving a "stale" rent demand "has the burden of proving that the landlord deliberately delayed in bringing the summary proceeding with eviction as the goal; that the tenant has been prejudiced by the delay; and that the tenant has no resources to pay the large amount of arrears." Rasch, NY Landlord and Tenant, supra, § 43.33. "As a general rule, where more than three months' rent is sought, a presumption is created, shifting to landlord the burden of establishing diligence in bringing the proceeding." Id.
That said, the tenants have little justification, apart from technicalities, for their failure to pay rent which accrued from the date the landlord advised them in writing that payment of rent again had to be made. The equitable doctrines cited by the tenants do not appear to apply with respect to rent accruing from June 2008, when the landlord attempted to serve rent demand notices upon the tenants, and the defenses most certainly do not apply to rent that has been demanded from August 2008.
In sum, the defenses raised by respondents have not been proven as a matter of law, but under the circumstances they remain in the case for consideration at trial. These issues, among others, can and should be fully explored through testimony by petitioner's witnesses and respondents' witnesses at trial. If counsel for either side conclude that an attorney involved in the case is likely to be called as a witness for either side, the Court should be advised, in writing, immediately.
Finally, the parties are directed to appear for a pre-trial conference on Monday, April 6, 2009, at 2:00 p.m., to address any remaining pre-trial issues.
SO ORDERED: