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HEWAT v. JIM DUFFY LLC, 2017 NY Slip Op 51378(U) (2017)

Court: Supreme Court of New York Number: innyco20171021459 Visitors: 5
Filed: Sep. 27, 2017
Latest Update: Sep. 27, 2017
Summary: DAVID B. COHEN , J. It is Defendants' motion to vacate the note of issue is granted to the extent set forth herein and plaintiff's motion for summary judgment is granted in part and denied in part. On December 5, 2011, plaintiff, as tenant, and defendant Jim Duffy LLC, as landlord, entered into a sixteen-month residential lease (the "First Lease"). The last section of the Rider, Section 27 states "[a]s a condition to induce the landlord to enter into a lease for this apartment, to offset a
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It is

Defendants' motion to vacate the note of issue is granted to the extent set forth herein and plaintiff's motion for summary judgment is granted in part and denied in part. On December 5, 2011, plaintiff, as tenant, and defendant Jim Duffy LLC, as landlord, entered into a sixteen-month residential lease (the "First Lease"). The last section of the Rider, Section 27 states "[a]s a condition to induce the landlord to enter into a lease for this apartment, to offset and question of financial inability, tenant has agreed to pay in full, at the signing of this lease, the first years rent of ($37,200.00) Thirty Seven Thousand Two Hundred dollars and immediately pay monthly ($1,550.00) One Thousand Five Hundred Fifty Dollars for the first 12 months so as to accrue ($18,600.00) Eighteen Thousand, Six Hundred dollars, which represents the final four months and ($6,200.00) Six Thousand Two Hundred, the two months required security deposit. Rent paid in advance can be used as security, if the need arises, but security shall not be used as rent."

Following the expiration of the First Lease, the parties entered into a one year lease commencing on May 1, 2013 and ending on April 30, 2014 (the "Second Lease"). The monthly rental amount was set at $3,350.00. The Second Lease contained a longer and more detailed rider but the prior Section 27 was eliminated. The signature page of the base portion of the Second Lease includes a handwritten statement that "Rent Paid in full on Check No.248 in Amount $40,200 Forty Thousand Two Hundred Subject to collection." It is undisputed that plaintiff vacated the apartment by October 1, 2013.

In the Complaint plaintiff alleges that Jim Duffy, the managing member of Jim Duffy LLC engaged in certain behavior such as threatening plaintiff and entering her apartment without permission on multiple occasions. The Complaint alleges that because of this behavior she vacated the apartment prior to the end of the lease but that this behavior constituted a constructive eviction, a breach of the warranty of habitability and breach of lease. Plaintiff sought damages for these as well as attorney fees pursuant to RPL 234 and the return of her security deposit and unused portion of her prepaid rent.

On August 2, 2016, plaintiff filed the note of issue and on August 22, 2016, defendants filed the instant motion to vacate the note of issue. On September 15, 2016, plaintiff cross-moved for summary judgment. It is undisputed that certain depositions have not taken place as of this time.

General Obligations Law § 7-103 requires that money "deposited or advanced on a contract for the use or rental of real property" by a tenant be held in trust by the landlord and not comingled with the landlord's personal funds (GOL § 7-103). The statute further requires the landlord to give written notice to the tenant of the amount, banking organization, and address of the bank in which the funds were deposited (id.). If the required notice is not given, the Court is permitted the inference that defendants violated GOL § 7-103 by comingling the deposited or advanced funds with their personal funds (Dan Klores Assoc., Inc. v Abramoff, 288 A.D.2d 121 [1st Dept 2001]. A defendant has then "forfeited his right to avail himself of the deposit for any purpose" and plaintiff is entitled to "an immediate right to return of the funds notwithstanding that they may have breached the lease (Paterno v Carroll, 75 A.D.3d 625 [2d Dept 2010]). Here, it is undisputed that plaintiff did not receive the statutorily required written notice from defendants, regarding the security deposit and the "rent paid in full" in connection with the Frist or Second Lease.

Defendants argue that the amount paid by plaintiff prior to the commencement of the Second Lease was not subject to GOL § 7-103 as her lease required advance rental payment. Defendants cite to Eujoy Realty Corp. v Van Wagner Communications, LLC, 73 A.D.3d 546 [1st Dept 2010], affd, 22 N.Y.3d 413 [2013] in support of its position. However, the facts here differ from Eujoy in several respects. First, in Eujoy, the terms of the lease provided that the entire year's rent was due on the first of the year. In other words, it was not a monthly rental fee but a yearly fee that was due and would be applied in monthly instalments. In contrast, the First Lease (which requires prepayment of rent) refers throughout to monthly rent and Section 27 of the rider, the section that actually requires the prepayment also refers to a monthly rent. Both the First and Second Lease refer to monthly rent throughout. Second, the rider in the Second Lease, despite containing more provisions, eliminated the requirement for prepaid rent. The only reference to prepaid rent was the statement that rent was paid in full for the year in advance. Finally, in Eujoy, after requiring one annual payment to be applied, the Court found that lease specifically stated that ""[S]hould this Lease be terminated for any reason prior to the date of its expiration, Tenant shall not be entitled to the return of any additional rent theretofore paid or any base rent paid in advance and covering a period beyond the date on which the Lease is terminated" (id. at 547). Here, the lease contains no such paragraph and is not an annual rent. For the above reasons, plaintiff is granted summary judgment on her cause of action seeking the return of the unused portion of the prepaid rent and security deposit.1

The remainder of plaintiff's motion for summary judgment is denied. Based upon the affidavit of Jim Duffy, there remains a material issue of fact in dispute regarding the alleged misbehavior of Mr. Duffy and the related causes of action. Further, discovery in this matter with respect to that misbehavior is incomplete necessitating the denial of the motion. For the same reasons, defendants' motion to vacate the note of issue is granted.

Plaintiff's motion for attorney fees pursuant to RPL 234 is denied without prejudice. As there remain other claims that have been brought pursuant to the lease that either party may prevail on, it is premature for the Court to determine the issue whether plaintiff is the ultimate prevailing party under the lease. Accordingly, it is therefore

ORDERED that defendants' motion to vacate the note of issue is granted; and it is further

ORDERED that plaintiff's cross-motion seeking summary judgment on her claim for the return of the prepaid rent in the amount of $23,450.00 and security deposit in the amount of $6,200.00 plus interest, costs and disbursement is granted; and it is further

ORDERED that plaintiff's motion for summary judgement is otherwise denied; and it is further

ORDERED that plaintiff's request for attorney fees pursuant to RPL 234 is denied without prejudice.

This constitutes the decision and order of the Court.

FootNotes


1. Plaintiff has only sought the unused portion of the prepaid rent and has not sought the return of the whole prepaid rent.
Source:  Leagle

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