319 Fifth Ave. Realtyv.319 Smile Corp.

Appellate Term of the Supreme Court of New York, First DepartmentNov 24, 2008
570773/07 (N.Y. Misc. 2008)
570773/072008 N.Y. Slip Op. 52348


Decided November 24, 2008.

Tenant appeals from a final judgment of the Civil Court of the City of New York, New York County (Geoffrey D. Wright, J.), entered January 9, 2007, after a nonjury trial, which awarded possession to landlord in a commercial holdover summary proceeding. Tenant also appeals from an order (same court and Judge), dated November 9, 2007, which directed it to pay use and occupancy at the rate of $83,964.66 per month.

Final judgment (Geoffrey D. Wright, J.), entered January 9, 2007, and order (Geoffrey D. Wright, J.), dated November 9, 2007, affirmed, with one bill of $25 costs.

PRESENT: McKeon, P.J., Davis, Heitler, JJ.

The record evidence amply supports a determination that tenant defaulted in its performance under the governing commercial lease agreement by, inter alia, failing to "close" pending work permits for several years and by failing to cure the multiple violations issued against the subject premises by the Department of Buildings. Nor did tenant demonstrate that it proceeded to remedy its defaults "with reasonable diligence and good faith" as required under paragraph 17 of the lease agreement. Tenant's mere retention of an engineer within the specified 15-day cure period did not, on this record and without more, establish the requisite diligence, particularly given the engineer's candid concession at trial that the contemplated remedial work was not diligently undertaken and tenant's failure to adequately explain the substantial temporal delay involved.

The liquidated damages clause, providing for use and occupancy at two times the rent in the event of a holdover, was not an unenforceable penalty since damages could not be anticipated in 1997 when the lease was executed, and the amount fixed was not plainly or grossly disproportionate to the loss ( see Tenber Assoc. v Bloomberg, LP, 51 AD3d 573).