DECISION AND ORDERAFTER TRIAL On July 11, September 5th, 6th, November 14th, 2018, and January 30, 2019, this Court conducted a bench trial in this proceeding. The Court had ample opportunity to observe and assess the demeanor and credibility of the witnesses and carefully reviewed and considered all exhibits admitted into evidence. At the conclusion of the trial, it was clear that despite all of the historical and continuing various monetary disputes and those over the respective parties’ obligations, this Court’s decision would turn upon one issue: whether the stipulation of July 2, 2009 (hereinafter “2009 Stipulation”), negated the respondents’ obligation to notify the petitioner of her intent to exercise an option to extend her lease for 5 additional years as set forth in 16 of the September 2005 Assignment (hereinafter “Assignment”).BackgroundThe parties to the instant litigation have had a long and tortured litigation history since 2009. For the last 10 years, they have litigated in this Commercial Landlord and Tenant Part as well as in the New York State Supreme Court and the Appellate Term of the Supreme Court. These prior proceedings were not predicated upon the viability of a notice requirement to exercise an option to extend the lease. That issue was not resolved in prior proceedings. The prior proceedings essentially were based upon alleged nonpayment of rent and a lengthy dispute over the water/gas bills, the installation of meters and the issuance of a certificate of occupancy. While the prior litigation determined the viability of the 2009 Stipulation overall and compliance with other aspects of the 2009 Stipulation by respondents, none of the prior court orders of prior litigation have determined whether the terms of the Stipulation obviated the need for the respondents to notify the landlord of her intent to exercise an option to extend their lease six (6) years later.In September 2004, the predecessors-in-interest of the parties to the instant litigation entered into a lease agreement for the operation of a laundromat located at 133-24 Sanford Avenue, Ground Floor #1L Flushing, New York, (hereinafter “subject premises”), for a term of eleven (11) years commencing November 1, 2004 and ending on October 31, 2015 (hereinafter “Lease”). In September 2005, the former tenant sold its laundromat business to the respondent, Xiu Lan Ni (hereinafter “Ms. Ni”, “respondent”, “current tenant” or “Assignee”). At that time, through the Assignment, the former tenant also assigned the Lease to respondent individually, with the permission of the subject building’s former owner. On March 13, 2017, petitioner’s predecessor-in-interest sold its title interest and assigned its leasehold interest to the petitioner (hereinafter “petitioner” or “landlord”).Throughout the transactional history involving the respondents, in which Ms. Ni obligated herself individually, Ms. Ni was consistently represented by counsel. Similarly, in the relevant litigations, respondents were represented by counsel. Moreover, the Stipulation was translated for Ms. Ni by an official court interpreter, who also executed it.By its terms, 2 of the former tenant’s and current tenant’s Assignment of 2005 required the respondent to perform all of the former tenant’s obligations under the Lease and provided that the respondent would be subject to the terms of the Lease, as if the respondent had been the actual tenant named in the Lease. Therefore, the Lease and the Assignment must be viewed together as if they are one document.With respect to the duration of the tenancy, in 16 of the Assignment, the owner granted the assignee a conditional option to extend the term of the Lease for an additional five (5) years. This was a condition precedent. The condition was that the assignee was required to provide the owner with notice of its election to exercise the option by certified mail, return receipt requested, at least six (6) months prior to the expiration of the term of the Lease. Therefore, under the terms of the Assignment, respondent was required to exercise her option to extend the Lease prior to May 1, 2015.On July 2, 2009, in resolution of a summary eviction proceeding brought in the Commercial Landlord/Tenant Part of this Court under Index #: 63126/09, petitioner’s predecessor-in-interest and the respondents entered into the 2009 Stipulation. The 2009 Stipulation resolved various issues of dispute, but most significantly for the instant proceeding, the 2009 Stipulation set forth a condition precedent for exercising the option to renew the Lease.The 2009 Stipulation at 10 states in pertinent part,provided respondents comply and do not default through 10/31/15 the owner agrees to extend the lease for five additional years upon the same terms and conditions of the current lease except the yearly increases shall be (seven) 7 percent for said additional term. (Emphasis added)Relevant Procedural History and TrialOn or about December 28, 2017 petitioner served the respondents with a 30-day Notice of Termination dated December 21, 2017 (hereinafter “Termination Notice”), ending respondents’ tenancy effective January 31, 2018. The Termination Notice was premised strictly upon the failure of the respondents to comply with the condition precedent of the Lease to exercise the option to extend the Lease for five (5) years, at least six (6) months prior to the expiration of the lease term on October 31, 2015.In February 2018, petitioner commenced the instant commercial summary eviction holdover proceeding against the respondents, seeking a final judgment of possession and related relief.The petitioner called Mr. Mohammad Malik as their initial witness to establish the chain of ownership and tenancies. Mr. Malik also testified regarding the terms of the Lease and Assignment, including the expiration of the term, i.e. October 31, 2015 and the six (6) month option election notice requirement of the Assignment in 16. Mr. Malik asserted that respondents were in default in numerous ways regarding their tenancy obligations, such as nonpayment of rent, failure to obtain insurance and Department of Buildings violations against them. Some of this was demonstrated through documentary evidence to support that testimony.Next the petitioner introduced the testimony of Lisa Byrus, the property manager and 20+ year employee of the management company for the subject building, whose responsibilities include rent collections and deposits. Through her testimony the petitioner introduced evidence of invoices, real estate tax bills and tenant rent ledger attributable to respondents’ tenancy.As their final witness, the petitioner called Ms. Ni to testify. The petitioner established that she is the owner of the laundromat business operating at the subject premises. She testified that she understood she was assuming the responsibilities of the tenant under the Lease by executing the Assignment and she received a copy of the Lease at the time she executed the Assignment. Ms. Ni stated that she was aware the Lease was due to expire on October 31, 2015. Furthermore, the respondent acknowledged that there is an option to renew the Lease and she understood the meaning of 16 of the Assignment of 2005. She also was unable to provide any notice that she sent to the landlord to exercise the option to extend the Lease and admitted there wasn’t any written notice provided to the landlord six (6) months in advance of the Lease expiration.Through respondent’s testimony, petitioner was able to admit two additional Stipulations of some significance from the prior summary eviction proceeding under Index #:76637/14. One of these Stipulations is undated, but can only be prior to March 26, 2015, because it contains adjournment language in which it states a future date of March 26, 2015. The undated Stipulation was entered as petitioner’s Exhibit “16″ in evidence (hereinafter “Stipulation #2″). The later Stipulation dated April 23, 2015 was entered into evidence as petitioner’s Exhibit “18″ (hereinafter “Stipulation #3).These stipulations are only minimally relevant to the issues of the instant proceeding. They demonstrate noncompliance with the Lease/Assignment and 2009 Stipulation in that they involved issues of nonpayment of rent, responsibility for installations of a water meter and water heater as well as an attorney fee hearing. However, petitioner’s sole basis for bringing the instant proceeding was that respondent failed to provide the time sensitive notice of her election to exercise the option to extend the Lease.Continuing with respondent’s testimony, her attorney brought out Ms. Ni’s “understanding” of the 2009 Stipulation resulting circumstances. Respondent testified she believed the 2009 Stipulation altered the Lease/Assignment’s requirement to provide notice of her intent to exercise the option to extend the Lease term for another 5 years. According to the respondent, it was her “understanding” that she was not required to follow the notice requirement of the Lease/Assignment, due to the language of the Stipulation executed 6 years earlier. Respondent also got side tracked in her testimony over the desired and attempted installation of a boiler at the subject premises, as well as the installation of a gas meter.In the presentation of respondents’ defense, respondents’ sole witness was Ms. Ni. Ms. Ni’s testimony focused on the running of her laundromat and her compliance with other aspects of the 2009 Stipulation. Ms. Ni’s testimony was somewhat duplicative with respect to her presentation of further testimony about the gas meter.DiscussionThe Lease and the Assignment go hand in hand and can only be read together as if they were one document. When the assignee assumed the lease provisions, she became in privity of contract and privity of estate with the landlord. See Charlotte Avenue Associates, LLC v. Advance Nissan, LLC 880 NYS2d 222, 2008 NY Slip Op 52552(U) (District Court, Nassau County, Dec. 2008). The Lease was executed by the parties’ predecessors-in-interest, not the parties to the instant litigation. It was the Assignment that conferred rights and responsibilities to both the petitioner and respondent in this litigation. However, the Assignment is dependent upon the Lease. Nearly every paragraph of the Assignment terms discusses the terms of the Lease. Moreover, it is the interest in the leasehold that was assigned. Assignments are common in the real estate industry to assist in effectuating a complete transactional transfer of ownership of realty, businesses, etc. Without the Assignment, the parties to the instant litigation have no rights, because they didn’t execute the Lease. Similarly, without the Lease, there was nothing to assign.There is no question that the 2009 Stipulation is a valid binding stipulation. Moreover, an attempt to vacate it based upon the respondents’ breach was denied as determined in the decision/order of September 28, 2015 in the summary eviction proceeding under index #63126/09. The language of 10 in the 2009 Stipulation makes it clear that the respondents are required to comply with the terms of the Lease/Assignment through the expiration of the Lease for the petitioner to agree to the extension. The language “provided respondents comply and do not default through 10/31/15″ means the respondents must comply with the terms of the Lease/Assignment for the petitioner to extend it. The required compliance referenced in 10 of the 2009 Stipulation can only mean that the respondents were required to comply with the Lease/Assignment, because under the terms of the 2009 Stipulation, compliance was required through the date of the expiration of the Lease. Moreover, the only subject in that sentence is the Lease. Furthermore, specific obligations of the respondents set forth in the 2009 Stipulation had relatively short deadlines. Therefore, to extend the Lease for an additional five years, Ms. Ni was required to comply with her obligations under the Lease/Assignment through the expiration of its term.The option to renew the Lease for an additional five (5) year term was provided in 16 of the Assignment. The ability to exercise the option was conditioned upon a notice provision. The notice provision is a condition precedent. See Fidelity & Columbia Trust Co. v. Levin, 128 Misc. 838, 221 NYS. 269, aff’d. 221 App.Div. 786, 223 NYS. 866, aff’d. 248 NY 551 (1928); Application of Topp, Sup., 81 NYS.2d 344; Ocumpaugh v. Engel, 121 App.Div. 9, 105 NYS. 510 (1907). This condition was only further limited by the 2009 Stipulation which also broadly requires her compliance with the Lease/Assignment. Pursuant to the Assignment, Ms. Ni was required to notify the petitioner of her election to exercise the option by certified mail, return receipt requested at least six (6) months prior to the expiration of the lease term. Therefore, to exercise the option to extend the Lease for an additional five (5) years in compliance with the tenant’s obligations under the Lease/Assignment and the 2009 Stipulation, Ms. Ni was required to provide six (6) months’ notice of the election by certified mail return receipt requested and was also required to otherwise comply with the Lease/Assignment.It is settled law that a notice exercising an option is ineffective if it is not given within the time specified. see, J.N.A. Realty Corp. v. Cross Bay Chelsea, 42 NY2d 392, 396-397, 397 NYS2d 958 (1977); Sy Jack Realty Co. v. Pergament Syosset Corp., 27 NY2d 449, 318 NYS.2d 720 (1971). While “equity would intervene to relieve a tenant of the consequences of an untimely notice of an option to renew” in certain circumstances, in the instant case respondent provided no notice whatsoever. 221-06 Merrick Blvd Assoc., LLC v. Crescent Electric Acquisition, 79 AD3d 896, 913 NYS2d 560 (2nd Dept 2010).Moreover, the failure to provide notice cannot be viewed as an honest mistake or inadvertence under the present circumstances. Ms. Ni is not a naive inexperienced tenant. She has been represented by counsel in litigations and transactions involving this tenancy for the last fourteen (14) years, dating back at least as far as her execution of the Assignment. This was confirmed in her testimony. What was also demonstrated through respondent’s testimony was that she knew, at the time she executed the Assignment, she was assuming the responsibilities of the tenant under the Lease. The respondent testified she knew the date the Lease was expiring, i.e. October 31, 2015. She also acknowledged the existence of the option to renew the Lease and she understood the meaning of 16, the notice condition precedent of the Assignment of 2005.The required six (6) months’ notice of the respondent’s intent to extend the term of the lease pursuant to 16 of the Assignment was not received by petitioner by certified mail, return receipt requested. There is no dispute that the notice was never sent by any means whatsoever. Ms. Ni admitted this fact on her direct examination in the petitioner’s case in chief.The respondents have also sought to invoke a waiver theory in defense of this proceeding. It is the respondents’ contention that the petitioner’s predecessor-in-interest waived its right to bring this summary eviction proceeding by virtue of its acceptance of an agreed upon payment in conjunction with the 2009 Stipulation. The respondents then perceive this purported waiver to have been inherited by the petitioner. This argument is unpersuasive. To effectuate a waiver, a party must affirmatively act to relinquish the right being waived. Hadden v. Consolidated Edison Co. of New York, Inc. 45 NY2d 466, 382 N.E.2d 1136, 410 NYS.2d 274 (1978). The respondents did not submit any evidence showing petitioner or its predecessor intentionally waived their right to terminate respondents’ tenancy. See, Georgetown Unsold Shares, LLC v. Ledet, 130 AD3d 99, 12 NYS2d 160 (2nd Dept 2015).“In commercial scenarios, a non-waiver clause in the underlying lease may act to defeat the use of waiver as an affirmative defense.” See, Dennis & Jimmy’s Food Corp. v. Milton Co., 99 AD2d 477, 881 NYS.2d 367 (2nd Dept. 1984), 250 West Broadway Rlty. Corp. v. FFE LLC, 23 Misc.3d 126, 881 NYS.2d 367 (AT1 2009). Nonwaiver clauses in commercial leases are fairly standard and have been upheld in the appellate courts repeatedly. Jefpaul Garage Corp. v. Presbyterian Hospital in City of New York, 61 NY2d 442, 446, 474 NYS2d 458 (1984), Excel Graphics Technology, Inc. v. CFG/AGSCB 75 Ninth Avenue, LLC, 1 AD3d 65, 767 NYS2d 99 (1st Dept 2003).Pursuant to the Lease nonwaiver clause 24, any waiver must be reduced to a writing. Had the petitioner intended to amend or otherwise modify the terms of the Lease/Assignment with respect to the notice provision, it was incumbent upon the parties to specifically articulate with affirmative language that the Lease/Assignment was being amended to waive the notice provision. To make the document self-executing, the 2009 Stipulation would have to contain language demonstrating an intention to alter the Lease/Assignment. The way to do that would be by affirmatively stating the Lease/Assignment was being amended and that the six (6) month notice requirement was being omitted or obviated by the 2009 Stipulation. This was not done. No such language exists in the Stipulation. Rather, the respondents erroneously allege the Lease was extended by stipulation until the year 2020.The only references to any provisions of the Lease are in 10 of the 2009 Stipulation. In that paragraph, the 2009 Stipulation discusses 60 of the Lease and 13 of the Assignment, both of which pertain to utilities. The only other reference to the Lease in 10 is a specific reference to a rent increase of seven percent (7 percent), wherein it states that the potential Lease extension would be “upon the same terms and conditions of the current lease, except the yearly increases shall be (seven) 7 percent for said additional term.” Had the parties intended to obviate or modify the notice provision, they should have stated that specifically in the 2009 Stipulation. See 2039 Jericho Turnpike Corp v. Caglayan, 64 AD3d 609 (2nd Dept. 2009). The 2009 Stipulation is silent with respect to the notice provision and therefore did not extend the Lease for an additional five (5) years, six (6) years before its expiration, and there is no evidence in the record that the landlord waived the notice provision.The reason it would have been necessary for there to be a specific provision in the stipulation stating that the notice provision of the Lease/Assignment is because notice provisions are strictly construed. In fact, where a tenant had a 25-year lease, and failed to provide notice in the manner required in the lease for renewal, that lease renewal was held to be void. Id. “An election to renew “must be timely, definite, unequivocal and strictly in compliance with the lease term.” See 221-06 Merrick Blvd Associates, LLC v. Crescent Electric Acquisition Corp (24 Misc.3d 138(A), citing American Realty Co. v. 64 B Venture, 176 AD2d 226, 227 (1991).Essentially, the respondents are claiming they renewed their Lease by a stipulation, which was executed six (6) years before the expiration of the Lease. This attempt to renew their Lease retroactively was ineffective, because the option to renew conferred by the Assignment was required to be exercised six (6) months prior to the end of the Lease term. Omansky v. 160 Chambers Street Owners, Inc., 155 AD3d 460, 64 NYS3d 212 (1st Dept. 2017).The respondents also argue that they intended in good faith to exercise their right to renewal. Although unarticulated, they seem to be arguing that their compliance with the 2009 Stipulation would in some way obviate the need to comply with the Lease/Assignment notice requirement. It is true that previous judges have found respondents acted in good faith in complying with the terms of the 2009 Stipulation. However, those findings of Judge Purificacion and Judge Leverett applied to time periods long before 2015. Judge Purificacion’s finding was the law of the case through 9/17/10. The 9/28/2015 order of Judge Leverett states the petitioner did not show good cause to vacate the 2009 Stipulation based upon a breach through the date of Judge Greco’s order dated 5/9/11. There have not been positive judicial findings regarding respondents’ compliance with the 2009 Stipulation for any time frame after 5/9/11. In any event, to be clear, for the respondents to comply with the 2009 Stipulation with respect to the extension of the Lease, the respondents would have had to comply with the Assignment 16, which contains the condition precedent of six (6) months’ notice by certified mail return receipt requested.While respondents did receive earlier findings of compliance with the 2009 Stipulation, they most certainly did not obtain one for their nonpayment summary eviction proceeding under Index#: 76637/14. In Stipulation #2 executed in that proceeding, respondents acknowledged owing 3 months’ rent for the first 3 months of 2015. Stipulation #3 executed in the same proceeding granted petitioner $4,500.00 as legal fees, costs and expenses for the prosecution of the nonpayment summary eviction proceeding. Based on these stipulations, it is clear respondents did not comply with the most basic obligation of tenants everywhere, the obligation to pay rent. Therefore, since they did not comply with their obligation to pay rent under the terms of the Lease/Assignment, they did not comply with 10 of the 2009 Stipulation, the obligation to comply with the terms of the Lease/Assignment.The respondents are also attempting to impose a waiver upon the petitioner of the right to commence this proceeding. “A waiver is the voluntary abandonment or relinquishment of a known right. It is essentially a matter of intent which must be proved” Jefpaul Garage Corp. v. Presbyterian Hospital in City of New York, supra, Alsens Amer. Portland Cement Works v. Degnon Contr. Co., 222 NY 34, 37 (1917); Beacon Term. Corp. v. Chemprene, Inc., 75 AD2d 350, 429 NYS.2d 715 (2nd Dept 1980); 22 NY Jur.2d, Contracts, §330, p.212. The respondents offered no proof that petitioner intended to waive its ability to enforce the notice provision of 16 of the Assignment. Considering the lengthy litigious nature of this landlord tenant relationship, the record does not establish as a matter of law that petitioner or its predecessor intended to relinquish a known right.Additionally, the respondents are attempting to raise a defense of laches. However, laches is an equitable remedy which is a defense to stale claims. See 75A NY Jur. 2d Limitations and Laches §354. The respondents argue that petitioner should have commenced the instant litigation in April 2017, shortly after the property was transferred to petitioner. Alternatively, the respondents argue that the instant litigation should have been commenced by the petitioner’s predecessor-in-interest in 2015. However, the respondents are not applying the correct timetable in making their argument. It would make little sense for the petitioner to commence a new summary eviction proceeding while another was pending. This would be a waste of judicial resources as well as the economic resources of the parties.Considering that the parties were embroiled in litigation through December 1, 2017, when the Appellate Term issued its decision on the previous summary eviction proceeding, even if this Court was to disregard the nonwaiver provision under 24 of the Lease, the equitable defense of laches would not apply. The petitioner waited less than a month after the issuance of the Appellate Term decision before it served the Termination Notice in the instant litigation. This cannot be viewed as a substantial delay resulting in substantial prejudice to the respondents. See 30A C.J.S. Equity §139.Although the respondents are attempting to raise a statute of limitations argument, nowhere in their pleadings, or otherwise, has they cited any specific statute which would apply. Where there is no specific statute of limitations otherwise provided for in the CPLR, §213(1) comes into play. That statute states that where there is no limitation of time to commence an action prescribed by law, an action must be commenced within six (6) years. In this instance, the accrual of the claim or triggering of the statute of limitations would have been six (6) months before the expiration of the Lease, since that is when the respondents were required to give notice to the petitioner. Therefore, the claim would have accrued in May 2015. This summary eviction proceeding was commenced in early February 2018, more than three (3) years prior to the expiration of the statute of limitations.The third affirmative defense alleges the petitioner accepted rent after the expiration of the Notice of Termination. The petitioner was directed to deposit the use and occupancy payments by this Court on March 22, 2018. Additionally, petitioner was granted permission to accept payments even earlier by court orders of both the Civil Court and the Appellate Term. This issue was further resolved in this Court’s order dated May 30, 2018 which pre-dated the respondents’ answer. The fact that respondents then subsequently raised the same defense in their answer can only be viewed as frivolous.The respondents’ first and sixth affirmative defenses raise a defense of subject matter jurisdiction. This defense is conclusory in lacking any explanation of the basis for this claim and no evidence was presented pertaining to this allegation. Moreover, there can be no doubt that this Court has subject matter jurisdiction over all commercial summary eviction proceedings in this County, and therefore this defense is erroneous as a matter of law. See NYC Civil Court Act §204 and RPAPL §701. The balance of respondents’ defenses were unproven.Findings of Fact and Conclusions of LawThe 2009 Stipulation was freely executed during the prior litigation between the same parties. The 2009 Stipulation is a legally binding agreement. The Lease, the Assignment of September 29, 2005 and the 2009 Stipulation must be read together. The Lease/Assignment required Ms. Ni to provide six (6) months’ notice, prior to the expiration of the Lease, that respondent intended to exercise the option to extend the Lease for another five (5) years. Overall compliance with the Lease/Assignment was a requirement under the 2009 Stipulation, before an extension would be considered by the petitioner. Therefore, to exercise the option to extend the Lease, respondent was required to give six (6) months’ notice. Contrary to the terms of the Assignment/Lease and the 2009 Stipulation, respondents failed to provide petitioner with six (6) months’ written notice. Since the respondent failed to comply with the Lease/Assignment, the Lease expired by its own terms. The petitioner was not legally precluded from commencing and maintaining this summary eviction proceeding based upon laches, waiver or statute of limitations.The petitioner has sustained its burden of proof, which has been unrebutted by respondent. The petitioner is awarded a judgment of possession and a warrant of eviction. The warrant shall issue forthwith. Execution is stayed for five (5) days. The parties are directed to appear on May 21, 2019 at 2 pm for a hearing to determine the amounts of outstanding rent/use and occupancy and reasonable attorney’s fees incurred which are attributable to the commencement and maintenance of the instant proceeding.This constitutes the Decision and Order of this Court.April 11, 2019
