Recitation, as required by CPLR 2219(a), of the papers considered in the review of this motion Papers Numbered Notice of Motion with Supporting Affirmation, Affidavit, and Exhibits A-R 1 Opposition and Notice of Cross Motion with Affirmation, Affidavits, and Exhibits A-O 2 Affirmation and Affidavit in Opposition to Cross Motion and in Reply to Motion with Exhibits S-T 3 Reply Affirmation and Affidavits, with Exhibits A-E 4 DECISION/ORDER Upon the foregoing cited papers, the Decision/Order on this motion is as follows: Petitioner 159 W. 23rd LLC (Landlord) moves pursuant to CPLR 3212 for summary judgment on its claims for a judgment of possession against respondent Spa Ciel De NY Corp. (Tenant), a money judgment for arrears in the amount of $291,694.03, with interest from June 1, 2018, and a money judgment for attorneys’ fees, costs and disbursements to be determined upon subsequent submissions or at a hearing. In addition, Landlord moves pursuant to CPLR 3211(b) to dismiss Tenant’s affirmative defenses. Tenant opposes the motion and cross-moves pursuant to CPLR 3212 for summary judgment dismissing the petition on several grounds. For the reasons stated below, the motion and cross motion are denied. Landlord argues that Tenant breached articles 3, 8, 63 and 65 of the lease by failing to, among other things, carry insurance in the requisite amounts during the entirety of the lease term and by failing to provide proof of same to Landlord. Specifically, Landlord argues that Tenant, among other things, violated (1) Article 3 of the Lease, by failing to carry and/or cause its contractors to carry worker’s compensation, commercial general liability, personal and property damage insurance before making alterations to the Premises; and (2) Articles 8 and 63 of the Lease by failing to maintain commercial general liability insurance in limits set forth in Article 63 of the Lease In opposition to Landlord’s motion and in support of Tenant’s cross motion, Tenant argues, among other things, that Landlord waived the alleged breach regarding insurance provisions set forth in the lease. Tenant asserts that the former landlord was aware of Tenant’s insurance coverage from the beginning of the lease. Tenant argues that Landlord deemed Tenant to not be in default under the lease by allowing Tenant to operate its business without charging rent for six months after it signed the lease, while it was undergoing renovations. In its opposition and in further support of its motion, Landlord asserts, among other things, that it has not waived its right to assert Tenant’s breach of the insurance requirements of the lease. Landlord cites paragraph 24 of the lease, which contains a no-waiver clause stating that “[t]he receipt by Owner of rent and/or additional rent with knowledge of the breach of any covenant of this lease shall not be deemed a waiver of such breach, and no provision of this lease shall be deemed to have been waived by Owner unless such waiver be in writing signed by Owner.” Landlord maintains that Tenant has failed to produce any written waiver of Tenant’s lease obligations. Landlord acknowledges paragraph 42 of the rider to the lease, but argues that Tenant was not entitled to the 180-day rent credit pursuant to that provision because of Tenant’s alleged insurance default and that there is no time limit for Landlord to “claw back” the abatement. Landlord further states that it first learned of Tenant’s insurance defaults on June 20, 2018 and that it promptly pursued its rights and remedies relating to the alleged defaults. Additionally, Landlord claims that it properly terminated Tenant’s tenancy on the basis of insurance defaults that allegedly existed prior to the service of the notice of cancellation and that it had not accepted rent for the premises. “A waiver is the voluntary abandonment or relinquishment of a known right” (Jefpaul Garage Corp. v. Presbyt. Hosp. in City of New York, 61 NY2d 442, 446 [1984]; Excel Graphics Tech., Inc. v. CFG/AGSCB 75 Ninth Ave., L.L.C., 1 AD3d 65 [1st Dept 2003], lv dismissed 2 NY3d 794 [2004]). “It is essentially a matter of intent which must be proved” (Jefpaul at 446), and it is generally an issue for the factfinder to determine after trial (see Sillman v. Twentieth Century-Fox Film Corp., 3 NY2d 395, 403 [1957]). Further, Landlord, as successor in interest, is bound by the former landlord’s waiver of any objection (Franpearl, LLC v. Orenstein, 59 Misc 3d 130[A], 2018 NY Slip Op 50429[U][App Term, 1st Dept 2018]; 52 Riverside Realty Co. v. Gallery: Gertrude Stein, Inc., 211 AD2d 77, 83 [1st Dept 1995]). “Hearsay evidence is not to be shut out” (id., [internal quotation marks omitted], citing Phillips at 312). Paragraph 24 of the lease, titled “No Waiver,” provides, in pertinent part, that “no provision of this lease shall be deemed to have been waived by Owner unless such waiver be in writing signed by Owner.” Pursuant to paragraph 42 of the rider to the lease, “[i]f and so long as Tenant is not in default under any of the terms, covenants and conditions of this Lease, Tenant shall not be required to pay the base rent until the earlier of: (a) the 180th day after the beginning of the term of the Lease; or (b) Tenant opens for business.” Paragraph 40 of the rider to the lease states: “Whenever any provision in this Rider is contrary or repugnant to, or inconsistent with, any provision contained in the Articles and/or paragraphs of this Lease designated “1″ to “39″ inclusive, then the provisions contained in this Rider shall govern and control.” To the extent the no-waiver clause conflicts with the rent abatement clause, pursuant to paragraph 40 of the rider, the rent abatement clause controls. Even if the clauses do not conflict, the existence of the nonwaiver clause does not in itself preclude waiver of the insurance provisions of the lease (Kenyon & Kenyon v. Logany, LLC, 33 AD3d 538, 539 [1st Dept 2006]). It is undisputed that Tenant never paid rent after executing the lease until the expiration of the rent abatement period and that it never opened for business. Furthermore, in support of its waiver argument, tenant attaches affidavits from Myoung Joo Yi, Tenant’s president (Yi) and Ju Ju (Ju), Tenant’s consultant. Yi avers that, “[u]nder Paragraph 42 of [the] lease, [Tenant] w[as] given a rent abatement for the first six months of the tenancy after [Tenant] took possession in November, 2017.” Yi further avers that pursuant to Yi’s conversations with the former landlord shortly before the sale of the building in April 2018, Tenant was in compliance with the insurance policy provisions under the lease. Ju states that in February or March 2018, while Ju was present at the premises during construction, Ju gave Javier Quintanas, the principal of the 159 West 23rd Street Realty Corp., the building’s owner and landlord until April 2018 (former landlord), insurance documentation effective as of that date pertaining to the premises and its contractor. Ju further attests that in April 2018, shortly before the former landlord’s sale of the building to petitioner, Ju spoke to Javier Quintanas. According to Ju’s affidavit, the insurance policies in effect at the time met the former landlord’s requirements under the lease and Tenant was not in breach of the lease. Tenant also attaches an affidavit from Byung Hoon Lee, founder of United Cornerstone Agency Corp. and Tenant’s insurance broker, who avers that a certificate of insurance (COI) for “binder” or “provisional” coverage issued on November 13, 2017 until policies issued on November 14, 2017 came into effect was sent by email to the prior landlord’s counsel on November 13, 2017, shortly after the lease was executed. Tenant submits a copy of an email dated November 13, 2017 purportedly from Seth Park of Cornerstone Insurance to William Chang, Esq., who was allegedly the former landlord’s attorney; the email indicates that a COI was attached to the email (see Tenant’s cross motion, exhibit J). The “binder” COI shows that a commercial general liability (CGL) policy and umbrella policy were in effect from November 13, 2017 until November 13, 2018. The COI for the “binder” policies have the same coverage limits as the COI for policies in effect from November 14, 2017 until November 14, 2018 (other policies), except for the Products Liability and Completed Operations amount, which was $1 million for the “binder” policies and $2 million for the other policies (see id., exhibit H). Each COI shows that the there was CGL insurance of $1 million per occurrence, and general aggregate insurance of $2 million. Accordingly, the court rules that there are questions of fact as to whether the former landlord had knowledge of Tenant’s alleged insurance defaults, deemed the Tenant to be in compliance with the lease, including its insurance provisions despite those defaults, and consequently allowed for the rent abatement. Such conduct by the prior landlord may constitute a waiver that the current landlord will be bound by (see 33 AD3d 538) While Landlord can seek pre-termination rent in a holdover proceeding contrary to Tenant’s contention (see RPAPL 741[5]; Ministers, Elders and Deacons of Refm. Prot. Dutch Church of City of New York v. 198 Broadway, Inc., 152 Misc 2d 936, 939 [Civ Ct, NY County 1991]), here a question of fact exists as to the amount of money owed, if any. Tenant’s president avers that Tenant was and still is unable to open the business due to Landlord’s failure to sign a PW-4 form required by the New York City Department of Buildings to install air conditioning. While Landlord’s member avers that the PW-4 form does not prevent Tenant from operating its business, he relies on the representations of Landlord’s expeditor, whose affidavit is not attached to Landlord’s papers. Additionally, Landlord merely states its belief that Tenant continues to occupy the premises. Accordingly, neither party is entitled to summary judgment, which is a “drastic remedy” (Sillman, 3 NY2d at 404). Given the triable issues of fact, the court denies Landlord’s motion to strike the affirmative defenses. The matter is to proceed to trial, to be scheduled by the Clerk in part 52. The Clerk will notify both sides of the trial date. The foregoing constitutes the decision and order of this Court. Dated: September 6, 2019
