Scott E. Mollen

Landlord Tenant—Joint and Several Liability Clause Held to be Unconscionable and Void Against Domestic Abuse Victim—RPL 227-c Did Not Abrogate Common Law Defenses to a Contract Action—Contract Valid On Its Face Could be Unconscionable “as Applied”—Wife Should Not Have to Pay the Rent for Her Abuser

A landlord commenced a non-payment proceeding pursuant to Real Property Actions and Proceedings Law (RPAPL) 711(2) to evict husband and wife tenants. The court had issued a default judgment against the husband. The wife's mother had appeared in court, seeking to represent her daughter. Although the mother could not answer or otherwise represent her daughter, the court declined to enter a default judgment against the daughter. Rather, the court placed the mother under oath to explain why the daughter had failed to come to court.

The mother testified that the husband had become abusive towards his wife and his wife vacated the apartment and sought shelter with her mother. The mother explained that the wife was “terrified to come to court and be in the presence of her husband” and that the wife “had no interest in returning to the apartment that her husband was occupying.”

The court found that the wife had a “legitimate excuse for failing to appear.” Since the wife did not want to return to the apartment, the court entered a judgment of possession for the landlord. However, the landlord still sought a money judgment against the wife for the rent arrears. The court ordered trial on that issue.

The husband and wife had signed the lease. After the wife gave birth to a child, the husband had become “controlling, abnormally jealous, disrespectful and short tempered.” The court cited examples of such behavior and noted that the husband's behavior had “crossed an indelible line when he threatened to kill (his wife who is now pregnant again), her child and her unborn child.” The wife fled the apartment and moved in with her mother for “her safety and the safety of the child.” The Family Court had granted the wife an order of protection. The wife provided the landlord the copies of the order of the protection, together with police reports.

The landlord claimed he was “unsure” if the wife had vacated the apartment completely. A building manager had observed “women's clothes in the apartment, beauty accessories and a crib.” The landlord assumed that since the wife's possessions remained in the apartment, the wife had “accessed and used the apartment up to and including the date of” the husband's eviction.

The wife acknowledged that her possessions remained in the apartment. She explained that she had made a “quick decision to leave, took what she could and left the rest behind.” She asserted that she never returned to the apartment and although her daughter had gone to the apartment to visit the husband, her daughter had been taken there by another person.

The landlord contended that under the lease the husband and wife were “jointly and severally liable for the rent” and that absent a statutory or common law rule to the contrary, the lease provision for joint and several liability should be enforced.

The court explained that Real Property Law (RPL) 227-c permits victims of domestic violence to terminate a lease. The statute provides, inter alia, “[A] tenant for whose benefit any order of protection has been issued shall be permitted to terminate [her] lease and surrender possession of the leasehold premises and be released from any liability to pay to the lessor rent for the time subsequent to the date of termination of such lease in accordance with subdivision two.” RPL 227-c (2) sets forth procedural steps to terminate the lease.

Although the wife qualified for relief under RPL 227-c, she had not appeared in court with a lawyer and she had never invoked RPL 227-c. The court assumed that the wife was “unfamiliar with the statute and sadly, nothing in the law requires a court to explain this important statutory right to victims of domestic abuse.” The court lacked the power to “retroactively apply the protections of RPL 227-c” for the wife's benefit.

The court then addressed the issue of whether RPL 227-c is the “exclusive method for a domestic violence victim to be absolved from rent owed under a lease agreement.” The court noted that there was no “obvious answer” to whether the tenant has a “common law contract defense” that would excuse her from liability. It explained that RPL 227-c “crafts a balance between victims' and landlords' economic rights and the balance having been set by the Legislature should not be disturbed by a court.”

The court further noted that whether RPL 227-c “eliminates common law contracts defenses to liability under a lease hinges on whether RPL 227-c 'abrogates, or merely derogates, the common law.'” RPL 227-c did not indicate that the common law remains “intact.” However, “finding a statute abrogates common law rights by the omission of an explicit clause preserving them is not the preferred method of statutory construction.” Rather, the “general rule of statutory construction that a clear and specific legislative intent is required to override the common law.” Thus, the court held that RPL 227-c “neither displaces nor eliminates any common law contract defense that may be available” to the wife.

The court then explained that a “term of a contract is unconscionable when it is shockingly unjust or unfair or because, procedurally, an unfair term was obtained through unconscionable means, or because of a combination of both factors.” However, “whether the contract is unconscionable in whole or in part is viewed from the time of its formation.” Here, the court found that the lease agreement was not “unconscionable on its face.” Here, the “unconscionability inquiry revolves around events that occurred after the execution of the contract.”

The court stated that there “appears to be no New York authority directly answering” the question of whether a court may “declare a facially valid contract clause invalid as applied to a particular situation.” The court then observed that courts “regularly distinguish between the facial validity and the as applied validity of a law” and “several sister states” were willing to “conduct as applied review to otherwise facially valid contract clause.”

The court noted that the order of protection was necessary to protect the wife from harm and when the rent had gone unpaid in June of 2018, the landlord did not immediately seek an eviction. The landlord also did not seek an eviction when the July rent was unpaid. The landlord waited until the August rent was due, before “it made a case returnable in this court.”

The court held that the joint and several liability lease provision as applied to facts in this case, is “unconscionable and thus void” as to the wife. The court reasoned that “[a] woman who is a victim of domestic violence should not be forced to pay the rent of her abuser.” If the court sustained the “contrary proposition,” it “would be shockingly unjust and unfair which is the very definition of an unconscionable act.” Accordingly, the court held that no money judgment would be entered against the wife.

Riverwalk on the Hudson v. Culliton, City Court, Albany Co., Case No. LT-394-18/CO, decided Nov. 7, 2018, Marcelle, J.

Land Use—Museum Permitted to Construct Addition on Part of Theodore Roosevelt Park—Parkland—ULURP—SEQRA

This decision involved an Article 78 proceeding, pursuant to which the petitioners challenged the determination of the NYC Dept. of Parks and Recreation (DPR) (determination), which granted permission to the American museum of Natural History to build an addition which will “replace three existing buildings and expand into neighboring Theodore Roosevelt Park (park) by approximately a quarter acre (addition).” The proposed addition would occupy approximately 230,000 square feet and five stories tall. The petitioners allege that the determination violates the NYC Charter. They also argue that the determination will “result in the loss of public parkland and cause 'catastrophic environmental to the area…'”

The petitioners argued that the determination should be vacated on the grounds that the Parks Department “misread the Act of 1876 (Act).” The Act authorized the Parks Department to “enter into a contract with the (museum) for the occupation by it of the buildings erected or to be erected on that portion of the Central Park…formerly known as Manhattan square, in accordance with the (Act of 1871) and (Act of 1875), and transferring thereto and establishing and maintaining therein its museum, library and collections, and carrying out the objects and purposes of the said society.” The park area described in the Act is known as the Theodore Roosevelt Park.

Although the museum lease referred to “buildings,” throughout the rest of the lease, the term “building” was used in the singular form. The petitioners asserted that the project is subject to a Uniform Land Use Review Procedure (ULURP) review and that pursuant to the lease, the museum “may only occupy its current foot-print, which is confirmed by the use of the term 'appurtenances'.” They contended that the museum would not have been granted the appurtenances “if the museum had been granted the right to 'occupy, or construct buildings over, the entirety of the park.'” Thus, they asserted that the project constitutes an “unauthorized disposition of city parkland without compliance with ULURP.”

Additionally, the petitioners argued that a ULURP review was mandatory because the project “constitutes a site selection for capital projects.” They reasoned that the project was a “city capital project” which will be funded “by the local financing law, with the approval of the comptroller and the mayor, with funding appropriated by the city and state of New York.”

Finally, the petitioners claim that the determination should be vacated because it is “irrational, arbitrary and capricious.” They claimed that the Parks Department “failed to identify the project's significant adverse impacts and rubber-stamped inadequate and incomplete mitigation measures proposed in a Final Environmental Impact Statement (FEIS) prepared in accordance with the State Environmental Quality Review Act (SEQRA) and City Environment Quality Review (CEQR).”

The respondents argued that the lease acknowledged that the building contemplated by the Act “has now been erected and nearly completed, and certain lease provisions dictate the operation and management of that original building…, those provisions relate explicitly to the museum's operations and do not and are not intended to confine the museum to that original building or limit the authorization for multiple 'buildings' that was expressly granted in the Act and the lease.” The respondents also asserted that they complied with SEQRA and that petitioners failed to exhaust their administrative remedies.

The court explained that the Act “expressly authorizes the Parks Department to enter into a lease with the museum for the then-existing and as-of-yet constructed buildings within the park.” The court rejected arguments that subsequent legislative actions explained the legislative intent at the time the Act was passed. The court found that the lease vested the museum with “the right to construct an appropriate building anywhere within the park.” The court cited, inter alia, certain provisions of the lease and explained that when the lease was read in “its entirety,” the lease “clearly expresses an intent to grant to the museum all buildings in the park.”

The court also cited prior litigation involving the Metropolitan museum of Art's Lehman Wing since that litigation (Lehman case) which involved the “same Act and a similarly worded lease.” The court acknowledged that the Lehman case predated ULURP. However, there was a “similar review process in place under a predecessor statute.” Furthermore, the Lehman case “expressly rejected the argument that the Lehman Wing 'constituted a disposition of city property.'”

Additionally, the court referenced that a court decision involving the Hayden Planetarium, where the court noted that the petitioners therein had not shown “any reason why the word 'disposition' should be interpreted differently under ULURP.”

The court also declined to distinguish the Lehman case on the grounds that the Lehman lease had “expressly defined the area upon which the buildings could be granted by metes and bounds as opposed to simply naming the park.” The subject park was “clearly bounded by particular streets and the area of park which was granted to the Metropolitan museum of Art is situated within Central Park, making its delineation more complicated and therefore requiring specificity.”

The court also found it irrelevant that the lease used the singular form of the term building in provisions following the Parks Department's express grant of “said buildings and the appurtenances thereunto.” The court reasoned that assuming arguendo that the repeated use of the singular term gives rise to ambiguity, where “the express language of the lease and recitals which specifically quote the Act verbatim resolves any question.”

Finally, the court held that the respondents' reading did not render “the term 'appurtenances' superfluous.” The court believed that the “Parks Department's grant of appurtenances in the lease cannot reasonably be read as superfluous.”

The court also rejected the SEQRA challenges. The court found that the FEIS complied with SEQRA and the court would not “second-guess” the agency's determination. The court noted that the FEIS addressed issues regarding hazardous materials at the site and had sufficiently outlined “various mitigation protocols” and the petitioners had not come forward “with sufficient proof that would warrant a finding that such measures lack any rationale.” The court also found that noise and construction activity had been considered by the Parks Department and proposed measures to address such issues were “rational and otherwise sufficient.” Thus, the court denied the petition.

Comment: I was advised by petitioners' counsel's office that a temporary stay from the Appellate Division is no longer in place, but that this decision is still being appealed.

Comm. United to Protect Theodore Roosevelt Park v. City of N.Y., Supreme Court, New York Co., Case No. 152354/2018, decided Dec. 10, 2018, Kotler, J.

Landlord-Tenant—Summary Holdover Proceeding—Court Lacked Jurisdiction of Landlord's Attorney Fees Claim

This decision involved an appeal by a landlord from a Civil Court decision with respect to a claim for attorney fees. The landlord based the appeal on the “ground of inadequacy.” The tenant cross-appealed, challenging the judgment against her.

The trial court had awarded the landlord attorney fees in the amount of $9,284.68 in a holdover summary proceeding. The Appellate Term (court) dismissed the attorney's fee claim.

The landlord had argued that at the expiration of the tenancy, the tenants “became month to month and that landlord terminated the tenancy.” The tenants “conceded that they had surrendered possession of the premises to landlord, that landlord was the prevailing party, and that a final judgment of possession should be entered in landlord's favor.”

The court explained that “[w]here a lease does not deem attorney fees to be additional rent, a court entertaining a summary proceeding lacks subject matter jurisdiction to entertain a landlord's claim for attorneys' fees….” Here, the landlord subject lease provision provided for attorney fees under certain circumstances. The lease provision limited “landlord's right to recover attorney fees to instances where the tenant's default leads to landlord's cancelling the lease, taking back the apartment, and deducting landlord's expenses, which include reasonable legal fees, from the rent received from the new tenant.” The court noted that “New York public policy disfavors any award of attorney fees to the prevailing party in a litigation [and] a provision in an agreement allowing the recovery of attorney fees that are incidents of litigation should be strictly construed….”

The court further stated that since the lease provision which permitted attorney fees to be treated as “added rent” were inapplicable to the subject holdover proceeding based on the termination of a month-to-month tenancy, “where there was no default by tenants which prompted the cancellation of the lease or the taking back and rerenting of the apartment by landlord, the Civil Court lacked subject matter jurisdiction to entertain landlord's claims for attorney fees in this summary proceeding.”

The court further opined that if the issue had been “properly in the case, we would find, for the same reason, that landlord is not entitled to such fees.” Although only one tenant cross-appealed, it also held that the award of attorney fees against the other tenant “must also be set aside for lack of subject matter jurisdiction.” Thus, the court reversed and the landlord's legal fees claim was dismissed.

Sokolow v. Neumann-Werth, Appellate Term, 2nd Dep't, 11th and 13th Judicial Districts, Case No. 2017-1349KC, decided Nov. 2, 2018, Pesce, Aliotta, Elliot, JJ.

Scott E. Mollen is a partner at Herrick, Feinstein.