The following named papers numbered 1 to 5 submitted on this Motion for Summary Judgment on October 25, 2019 Papers Numbered Notice of Motion for Summary Judgment 1 Memorandum of Law in Support of Motion 2 Affirmation in Opposition to Motion 3 Reply Affidavit in Further Support of Motion 4 Sur-Reply in Further Opposition to Motion 5 Petitioner has commenced this holdover proceeding against the Respondent/Tenant Walnut Road Realty (hereinafter referred to as “Walnut”), and against the Respondents/Undertenants Tri-County Leasing Co. f/k/a Tri-County MRI Associates, Long Island Radiology Associates, P.C., Long Island Neurology Consultants, Hewlett Medical Management, LLC, Imaging Associates P.C., LKBN Neurology Associates, P.C., CDP Holdings Group LLC, Neighborhood Radiology Services, P.C., Daniel DiPietro, Howard Gelber, James R. McCleavy, Glenn E. Schwartz, Matthew A. Diament, “XYZ Corp.”, “John Doe”, “Jane Doe” (hereinafter referred to as “Undertenants”). The Petition, dated November 7, 2018 states: (a) Petitioner is the owner of the premises. (b) Petitioner entered into a Lease with Walnut on September 23, 1988. There were four (4) executed Modifications to the Lease with the Fourth Modification being dated October 17, 2013. (c) The Lease expired on September 30, 2018. (d) Walnut and the Undertenants are liable for use and occupancy following expiration of the Lease at the rate of $35,741.91 pursuant to 4(f) of the Second Modification to Lease, dated January 22, 1999. Walnut and the Undertenants filed their Answer dated November 30, 2018. The Answer generally denies the allegations of the Petition but admits that they are in possession. The Answer has 13 affirmative defenses. The upshot of the affirmative defenses is that Walnut effectively extended the Lease for five (5) years by its exercise of the renewal option even though late. The affirmative defenses state that Petitioner was on notice, prior to December 29, 2017, of Walnut’s intention to renew the Lease. It is also claimed that Petitioner has not suffered any prejudice from the late exercise of the renewal option. Petitioner moves for summary judgment, supported by the Affidavit of Herman Goldsmith, dated August 21, 2019, and the Affirmation of Justin A. Levy, Esq., dated August 21, 2019. Herman Goldsmith states that he is the managing member of Petitioner. Mr. Goldsmith states that he reviewed the Memorandum of Law and Affirmation of Justin A. Levy, Esq., “and hereby attest that the facts set forth therein are true and accurate.” Attorney Justin A. Levy states, in his Affirmation, that the Court is referred to the accompanying Memorandum of Law for a full recitation of the facts and legal arguments. Exhibits “A” through “T” are attached to his Affirmation. Summary of Allegations in Petitioner’s Memorandum of Law In the Preliminary Statement of its Memorandum of Law, dated August 21, 2019, Petitioner maintains: “As demonstrated below, Walnut Road is not entitled to equitable relief because it does not have a leasehold or possessory interest in the Premises as defined below and comes before this Court with ‘unclean hands.’ In breach of the Lease, Walnut Road has: (a) sublet, assigned or transferred its interest and the entire Premises to Neighborhood Radiology Services, P.C. (‘Neighborhood Radiology’) and other medical practices without 227 Franklin’s prior knowledge or consent; (b) installed a large sign on the building’s facade for Neighborhood Radiology without 227 Franklin’s prior knowledge or consent; and (c) failed to make necessary repairs and allowed the Premises to fall into a state of disrepair.” The Memorandum of Law also states the two officers and sole shareholders of Walnut (incorporated in 1988) have passed away or retired. Specifically, it is alleged that Dr. Melvin Weiner and Dr. Dennis Rossi owned and operated Walnut and Long Island Radiology Associates, P.C. (“LIRA”), and that Walnut’s original signor to the Lease was Dr. Weiner, as President. Petitioner avers in the Memorandum of Law that the untimely notice to renew was signed by Daniel DiPietro, “who has never in the past thirty (30) years acted in any official capacity for Walnut Road.” It is also contended that Daniel DiPietro failed to identify his authority to act on behalf of Walnut. Petitioner further maintains that the renewal notice was emailed from a Mr. Lawrence Buchwalter, who held himself out to be Neighborhood Radiology’s Chief Administrative Officer and General Counsel. There is no proof that Mr. Buchwalter had authority to act for Walnut and ever acted on behalf of Walnut for the past thirty (30) years. The email, dated January 15, 2018, from Lawrence Buchwalter to Herman Goldsmith states as follows: “In accordance with your conversation with Dan DiPietro, attached please find a copy of the notice letter exercising our renewal option under the Fourth Modification and confirming the change in notice addresses under the Lease.” The Letter dated December 29, 2017 from Walnut to 227 Franklin exercising the renewal option states: “Reference is made to the above captioned Lease and modified and amended. In accordance with the provisions of the Fourth Modification, this letter serves as Tenant’s written notice of its invocation of its right to extend the Lease Term for a five (5) year period commencing October 1, 2018 and continuing until the close of business on September 30, 2023. In addition to the foregoing, and in accordance with the terms of the Lease, any notices to Tenant should hereafter be addressed and remitted as follows: Tenant:Walnut Road Realty Corp. 545 Elmont Road Elmont, New York 11003 Att’n: Daniel DiPietro With a copy to: Joshua Levine, Esq. Danziger & Markhoff LLP 1133 Westchester Avenue, Suite N208 White Plains, NY 10604 Finally, we are interested in commencing discussion about an additional modification to the Lease to provide for (a) a further five (5) year extension of the term, coupled with (b) a right to purchase the Building. Should you have any questions, please feel free to contact me. Sincerely, /s/ Daniel DiPietro” This letter was allegedly attached to the email sent by Lawrence Buchwalter on January 15, 2018, approximately 18 days past the date provided in the Lease and Modifications for renewal. It is claimed that on September 23, 1988, Petitioner and Walnut entered into a five (5) year Lease with two additional five (5) year options. Article 20 of the Lease prohibited Walnut from installing signs on the building without Petitioner’s prior written approval; this was also incorporated by reference in the four (4) Lease Modifications. Article 22(A) of the Lease prohibited Walnut from assigning or subletting the premises without Petitioner’s written approval; this was incorporated by reference in the four (4) Lease Modifications. Paragraph 8 of the Second Modification and continued by reference in the subsequent Modifications provides: “Tenant’s Repairs. Paragraph 12(A) of the Lease is hereby deleted in its entirety and replaced with the following: ‘(A) Tenant shall keep the interior and exterior of the Demised Premises, including the roof, in good repair at its sole cost and expense and at the end or expiration of the term, shall deliver the Demised Premises in substantially as good a condition as it was at the beginning of the term hereof. It is understood that the Landlord shall only be responsible for structural repairs to the Building and for replacement, but not repair, of the roof.’” On October 8, 2014, Dr. Rossi notified Petitioner that he would no longer be personally practicing at the subject premises or conducting business due to retirement. Dr. Weiner died in July of 2015. Thus, there were no officers or shareholders of Walnut. The Fourth Modification to Lease Agreement provides in Paragraph 2 the following: “Extension Term. Landlord hereby grants to Tenant the right to extend the Lease Term for a five (5) year period commencing on October 1, 2018 and continuing until the close of business on September 30, 2023 (the ‘New Extension Term’) on the following terms and conditions: A. It shall be a condition of the New Extension that Tenant shall have performed all of its obligations and agreements under the Lease timely, within any applicable grace period, through and continuing until the commencement of the New Extension Term; B. Written notice of Tenant’s exercise to invoke the New Extension Term must be received by Landlord no later than at the close of business on December 29, 2017 in writing; and C. Base Rent and Additional Rent shall continue during the New Extension Term in the amounts required by the Lease — that being at the monthly Base Rent in effect at the end of the current Lease Term and thereafter adjusted as of February 1 in each successive calendar year through the end of the New Extension Term based upon CPI increases consistent with current practice.” Petitioner states that Walnut’s notice was defective because it was untimely. Additionally the method of service of the notice was contrary to Paragraph 7. The notice was required to be sent by either certified mail, return receipt requested or via FedEx to both Mr. Goldsmith and its corporate counsel Kenneth Goldberg. Petitioner asserts that Walnut violated the Lease by transferring its interest to Neighborhood Radiology without Petitioner’s permission. Also, a large sign was placed on the outside of the building for Neighborhood Radiology without consent of Petitioner. Petitioner disputes the claim that Walnut made valuable leasehold improvements. It is claimed that the premises have become in disrepair as follows: “Despite Walnut Road’s unsubstantiated and self-serving claims that it made valuable leasehold improvements, the Premises has fallen into a state of disrepair. New flooring and wall coverings are needed in the lobby, hallways and common areas; the elevator needs to be refurbished; the weather stripping on all the windows needs to be replaced; the exterior of the Premises needs to be repainted; the dead and overgrown landscaping needs to be replaced; the parking lot needs a new blacktop and the repainting of the designated spots; the ceiling tiles above the parking area need to be replaced; and the front arc facia on the Premises needs to be repaired and repainted.” Petitioner avers that the purpose of the Third Modification was to accommodate an equipment Lease transaction for Walnut Road’s subtenant LKBN Neurology Associates to install an MRI machine in the Premises. Petitioner contends that the renewal notice was defective because Daniel DiPietro signed the renewal without any indication of his capacity or authority to act on behalf of Walnut. Additionally, the proof is lacking that attorney Buchwalter had authority to act for Walnut. Petitioner maintains that Walnut “is nothing but an empty shell corporation without any officers, directors, members, employees, or staff, and has no possessory or leasehold interest in the premises”. Petitioner wrote to Walnut on January 17, 2018, and rejected the renewal. Petitioner argues that Walnut is an out-of-possession tenant because Walnut has “(a) sublet, assigned or transferred its interest and the entire Premises to Neighborhood Radiology Services, P.C. (‘Neighborhood Radiology’) and other medical practices without 227 Franklin’s prior knowledge or consent”. Due to the foregoing, Walnut is not entitled to equitable relief. Finally, Petitioner asserts that Walnut never made any improvements to the premises and certainly not in anticipation of extending the term of the Lease. Summary of Respondents’ Affirmation in Opposition to Motion for Summary Judgment and Affidavit of Daniel DiPietro Mr. DiPietro submits the following statements: “4. I have read the Affirmation of Respondent’s counsel in opposition to Petitioner’s motion for summary judgment and affirm all of the facts alleged therein. 5. I deny that Walnut Road Realty illegally and without Petitioner’s knowledge and authorization, sublet the premises, erected signage at the premises, and failed to maintain the premises. 6. I affirm that on behalf of Walnut Road Realty Corp., I exercised the option to renew, albeit approximately 18 days late. The decision to renew was made with the knowledge and approval of Petitioner’s principal, Herman Goldsmith, with whom I communicated regarding this matter.” Mr. DiPietro further affirms that Petitioner did not market the property until this Court scheduled a settlement conference for October 17, 2019. There is no evidence that Petitioner had a prospective tenant. There is no prejudice to Petitioner if renewal is granted, because Petitioner will receive its rent. It is claimed that Walnut will incur substantial prejudice if there is no renewal because of the “enormous good will which it has established at this prime commercial location over the past 30 years.…” Respondents submit that Daniel DiPietro is the Chief Executive Officer of Walnut. Thirty (30) persons are employed at the site and thousands of patients are seen each year. Respondents insists that Walnut’s manager and Petitioner’s Principal were in contract concerning Walnut’s extension of the Lease. Petitioner received 259 days of advance notice regarding renewal instead of 277. Walnut alleges that issues of fact exist regarding the following: 1. Petitioner had complete knowledge that the undertenants were operating at the location. Petitioner never complained about the undertenants prior to this summary proceeding. 2. The signage at the premises was open and notorious and no complaints were made about this until well after commencement of this action. 3. Petitioner gave no notice of the claimed defaults with the opportunity to cure the alleged violations. 4. Respondents allege that all the undertenants were approved by the Second Modification in paragraph 12 which states as follows: “12. Landlord’s Consent to Sublessees. Landlord hereby consents to the subletting of a portion of the Premises by Tenant or by Tri-County MRI Associates (n/k/a Tri-County Leasing Co.) to Long Island Radiology, P.C., Hewlett Medical Management, LLC, Imaging Associates P.C. and LKB Neurological Associates P.C. (hereinafter referred to as the ‘Permissible Subtenants’) provided that any sublease shall be subordinate in all respects to the Lease, as modified. With the exception of LKB Neurological Associates P.C., Tenant represents that one or more of its principals is or are also principals of the foregoing Permissible Subtenants.” A review of the caption indicates the following Undertenants were, or were not, listed in paragraph 12 of the Second Modification: Approved Tri-County Leasing Co. f/k/a Tri-County MRI Associates YES Long Island Radiology Associates, P.C. YES Long Island Neurology Consultants NO Hewlett Medical Management, LLC YES Imaging Associates P.C. YES LKBN Neurology Associates, P.C. YES CDP Holdings Group LLC NO Neighborhood Radiology Services, P.C. NO Named Individuals NO Respondents offer an undated document from the NYS Department of State to demonstrate that the Chief Executive Officer of Walnut is Daniel DiPietro. The Court notes that this document does not prove, one way or another, that Daniel DiPietro was Chief Executive Officer or had any official position in January of 2018, when the renewal option was exercised on behalf of Walnut. Summary of Reply Affidavit in Further Support of Motion for Summary Judgment Petitioner submits the Affidavit of Herman Goldsmith, dated October 10, 2019. Mr. Goldsmith states that he attests to the facts submitted in the Reply Memorandum of Law. It is again contended that Walnut is an empty shell corporation “without a possessory or leasehold interest in the Premises.” Walnut is claimed to have sublet the entire premises. Walnut is alleged to have been in default of the Lease when it served the late notice of renewal. The claim that Petitioner waived the alleged defaults is disputed because the Lease contains a “no waiver” provision. The “no waiver” provision provides that acceptance of rent with knowledge of Walnut’s breach does not constitute a waiver of its rights under the Lease. Thus, Petitioner could reject the late renewal due to the defaults which included: 1. Improper signage on the building. 2. Failure to maintain the building. 3. Improper assigning and subletting. Petitioner also contends that written notice of the alleged defaults was not required to prevent renewal of the Lease due to the “no waiver” clause. Finally, it is asserted that neither Daniel DiPietro nor Lawrence Buchwalter had authority to act for Walnut. Summary of Sur-Reply in Opposition to Petitioner’s Motion for Summary Judgment Walnut maintains that the location is a medical radiology office operating for 30 years with thousands of patients seen each year. It is submitted that Walnut is a “tenant in the subject premises and several Co-Respondents are affiliates of Walnut”. Walnut reasserts that it undertook extensive renovations at the premises, including the waiting room area. Walnut urges that it will suffer a forfeiture. Petitioner will receive its bargained for rent and suffer no prejudice. Notice was never given to Walnut concerning any defaults. Walnut reiterates that Petitioner accepted the rent each month without reservation or complaint. Decision of the Court Walnut sought a declaratory judgment, from the Nassau County Supreme Court, that the Lease had been renewed. Walnut sought summary judgment. On September 10, 2019, Justice Thomas Feinman denied summary judgment as follows: “With regard to plaintiff’s motion for summary judgment on its causes of action for a declaratory judgment and specific performance, plaintiff submits proof of its attempt to exercise the subject renewal option and argues that its failure to timely do so is a de minimis error that should be forgiven. However, with its submissions, plaintiff acknowledges its own failure to timely renew the subject lease, which had been renewed several times previously, and has not provided any excuse or reason for this delay. As such, the plaintiff has failed to demonstrate, as a matter of law, that it is entitled to a declaratory judgment that its attempted renewal was timely, nor has it eliminated all issues of fact as to whether it is entitled to specific performance of the subject lease (see International Customs Assocs., Inc. v. Bristol-Meyers Squibb Co., supra; see also Mendelson v. Adler, 133 A.D.2d 615).” Likewise, this Court finds that there are material issues of fact which require a trial, including, but not limited to: 1. Did Daniel DiPietro have authority to execute the letter on behalf of Walnut exercising the option to renew? 2. Was Walnut an out-of-possession tenant which failed to make any improvements in anticipation of renewal and which has no goodwill interest in an ongoing business? 3. Was there any prejudice suffered or sustained by Petitioner due to the late renewal? 4. Was Walnut in compliance with Paragraph 2 of the Fourth Modification when it attempted to renew the Lease on January 15, 2019? 5. Would Walnut and its affiliates sustain prejudice if the Lease extension is not permitted? 6. Did Petitioner waive the alleged defaults of Walnut by accepting rent each and every month without complaining to or sending notices of default to Walnut about the defaults now claimed by Petitioner? 7. What effect should be given to the “no waiver” clause in the Lease? Was there a waiver of this provision by Petitioner’s conduct? 8. Should this Court allow the late exercise of the renewal option to prevent a forfeiture? In 135 East 57th Street v. Daffy’s Inc., 91 AD3d 1, 934 NYS2d 112 (1st Dept 2011), Daffy’s operated a popular discount clothing store at 135 East 57th Street in Manhattan, which opened in 1994. The lease was scheduled to expire on January 31, 2011. The renewal option for an additional five (5) year term was to be exercised by January 31, 2010. Daffy’s controller failed to calendar the renewal date. The late notice of renewal was sent out by email and fax on February 4, 2010, but dated January 30, 2010. The landlord rejected the late notice because it had been fraudulently back dated and not sent in the manner required by the lease. The Court permitted renewal because Daffy’s would forfeit a location that was extremely valuable to Daffy’s business because the location was long standing with substantial goodwill. The forfeiture would cause the loss of employment for 114 employees. There was no evidence of prejudice to the landlord. This Court notes that the Petitioner in the case at bar similarly claims that Walnut back dated the renewal and the renewal was not sent in the manner required by the Lease and its Modifications. In 25-35 Bridge Street LLC v. Excel Automotive Tech Center Inc., 63 Misc 3d 269, 87 NYS3d 823 (Sup Ct, Kings County, 2018), the Court explained that tenants have been granted leave to renew the lease when the notice was served within a relatively short period after the due date: “In all J.N.A. cases, the court’s central concern is the length of the tenant’s delay, and the reason for it. The courts are much more likely to excuse a shorter delay caused by an innocuous reason. Nearly all cases where equitable relief was granted involved a delay of less than six weeks, and the tenant’s failure to timely exercise was cured immediately or soon after notice was given by the landlord. (See e.g. Street Beat Sportswear v. Waterfront Realty Co., 6 AD3d 693 [2d Dept 2004] [11 days]; Nanuet Natl. Bank v. Saramo Holding Co., 153 AD2d 927 [2d Dept 1989] [six days]; American Power Indus. v. Rebel Realty Corp., 145 AD2d 454 [2d Dept 1988] [eight weeks]; Chrysler Realty Corp. v. Urban Inv. Corp., 100 AD2d 921, 923 [2d Dept 1984] [three weeks]; Eva Donut Shop v. Pace, 54 AD2d 575 [2d Dept 1976] [tenant's 9½ week delay was excused because it was immediately cured by the tenant upon notice by the landlord with eight weeks remaining before the lease's expiration].) Equitable relief is less likely to be granted if the delay exceeds six weeks, although in limited instances, courts have excused a tenant’s delay of more than three months. (See Popyork, LLC v. 80 Ct. St. Corp., 23 AD3d 538 [2d Dept 2005] [2½ months]; Souslian Wholesale Beer & Soda v. 380-4 Union Ave. Realty Corp., 166 AD2d 435 [2d Dept 1990] [6½ months]; Nichols v. Didas, 137 AD3d 1495 [3d Dept 2016] [four months].)” The 25-35 Bridge Street Court stated that even where no substantial expenditures are made, the tenant may be entitled to relief where the tenant has a long standing business: “Alternatively, a forfeiture may be found even in cases where no substantial expenditures were made if the tenant shows that the business location itself is a ‘valuable asset’ and the tenant stands to lose customer goodwill associated with that location. J.N.A., supra 42 N.Y.2d at 398, 397 N.Y.S.2d 958, 366 N.E.2d 1313. In such instances, ‘a long-standing location for a retail business is an important part of the good will of that enterprise’ and the loss of earned customer good will can constitute a forfeiture. 537 Greenwich LLC, supra, 2008 NY Slip Op 50989[U], 19 Misc. 3d 1133(A) at 9; See also, Sy Jack Realty Co., supra, 27 N.Y.2d 453, 318 N.Y.S.2d 720, 267 N.E.2d 462; 135 East 57th Street LLC, supra, 91 A.D.3d at 6, 934 N.Y.S.2d 112.” In Souslian Wholesale Beer & Soda, Inc. v. 380-4 Union Avenue Realty Corp., 166 AD2d, 435, 560 NYS2d 491 (2ndDept 1990), the tenant exercised the option to renew 6½ months after the due date, but 2½ months prior to the expiration of the lease. The renewal was permitted because: 1. The failure to renew resulted from an honest mistake or inadvertence. 2. Substantial forfeiture of a business would result. 3. No prejudice would be sustained by the landlord. The Court in Souslian noted that the landlord did not serve any notice in writing of any violations of law or of the lease prior to termination date for renewal of the option. In Sy Jack Realty Co. v. Pergament Syosset Corp., 27 NY2d 449, 318 NYS2d 720 (1971), the Court allowed a tenant to be relieved of its default because: “We agree with the plaintiff that notice, when required to be ‘given’ by a certain date, is insufficient and ineffectual if not received within the time specified. (See, e.g., Peabody v. Satterlee, 166 N.Y. 174, 59 N.E. 818; Kantrowitz v. Dairymen’s League Co-op. Assn., 272 App.Div. 470, 71 N.Y.S.2d 821, affd. 297 N.Y. 991, 80 N.E.2d 366; Boyce v. National Commercial Bank & Trust Co., 41 Misc.2d 1071, 247 N.Y.S.2d 521, affd. 22 A.D.2d 848, 254 N.Y.S.2d 127; see, also, Restatement, Second, Contracts (Tent.Draft No. 18 1964), s 64, subd. (b); 1A Corbin, Contracts (1963), s 264; 1 Williston, Contracts (3d ed., 1957), s 87.) However, in view of the fact that the plaintiff had actually received notice before it took any steps to find another tenant or to lease the space, the Appellate Division was fully warranted in holding, as it did, for the defendant, by applying the principle that a tenant should be relieved of its default when its failure to give the requisite timely notice of renewal of its lease — or to perform some other condition precedent to renewal — has neither harmed nor prejudiced the landlord and was not due to bad faith.” The Court in Sy Jack also allowed the default to be vacated because the tenant stood to lose a valuable business interest. “Tenant should be relieved of its default when its failure to give requisite timely notice of renewal of its lease — or to perform some other condition precedent to renewal — has neither harmed nor prejudiced landlord and was not due to bad faith. * * * In the present case, too, the Appellate Division was justified in invoking that rule. Since a long-standing location for a retail business is an important part of the good will of that enterprise, the tenant stands to lose a substantial and valuable asset. Moreover, as is conceded, the landlord did not suffer any damage or prejudice because of the delay resulting from the nondelivery of the defendant’s letter. It is important to bear in mind that the difficulty in which the defendant finds itself is not owing to any willful or deliberate act or omission on its part. Its plight stems solely from the Post Office’s failure to deliver its letter which, in normal course, would have been received in ample time to effect the renewal. If reliance on the mails could possibly be characterized as fault, it is ‘excusable fault’ (Jones v. Gianferante, 305 N.Y. 135, 138, 111 N.E.2d 419, Supra) and should not operate to deprive the defendant of a valuable asset.” The above rule has been applied on a regular basis to prevent a substantial forfeiture. For example, in Beltrone v. Danker, 228 AD2d 763, 643 NYS2d 720 (3rd Dept 1996), the Court reiterated: “It is undisputed that plaintiffs did not exercise the option to renew in a timely manner and normally this failure will forfeit the tenant’s right to renew (see, Niagara Frontier Servs. v. Thress, 109 A.D.2d 1089, 487 N.Y.S.2d 228). However, equity will intervene to relieve a tenant of the consequences of an untimely notice of an option to renew where said failure resulted from an honest mistake or inadvertence, the nonrenewal would result in a substantial forfeiture by the tenant and the landlord would not be prejudiced (see, J.N.A. Realty Corp. v. Cross Bay Chelsea, 42 N.Y.2d 392, 399-400, 397 N.Y.S.2d 958, 366 N.E.2d 1313; Sy Jack Realty Co. v. Pergament Syosset Corp., 27 N.Y.2d 449, 452, 318 N.Y.S.2d 720, 267 N.E.2d 462; Souslian Wholesale Beer & Soda v. 380-4 Union Ave. Realty Corp., 166 A.D.2d 435, 437, 560 N.Y.S.2d 491, lv denied 78 N.Y.2d 858, 575 N.Y.S.2d 454, 580 N.E.2d 1057).” Thus, here, Walnut may be able to demonstrate substantial prejudice if it loses the location where it has allegedly operated for over 30 years, has 30 employees, and where thousands of patients come each year. However, Walnut may not succeed if it is shown to be an out-of-possession tenant. For, as the Court of Appeals stated in Baygold Associates, Inc. v. Congregation Yetev Lev of Monsey, 19 NY3d 223, 947 NYS2d 794 (2012), regarding such relief from forfeiture: “This narrow equitable doctrine was never intended to apply in a circumstance like this, were the out-of-possession tenant fails to make any improvements in anticipation of renewal and does not possess any good will in a going concern.” Moreover, the subject Lease and four Modifications contain a “no waiver” clause which states that Petitioner will not lose its right to enforce the Lease Modifications by acceptance of rent even though Tenant may be in default of which Landlord has knowledge. This “no waiver” clause may allow Petitioner to reject the renewal of the Lease even if Petitioner accepted rent with knowledge of Walnut’s alleged defaults. In Jefpaul Garage Corp. v. Presbyterian Hosp. in City of New York, 61 NY2d 442, 474 NYS2d 458 (1984), the lease contained a non-waiver clause which stated: “‘The receipt by Landlord of 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 Landlord unless such waiver be in writing signed by the Landlord.’” The Court of Appeals noted in Jefpaul, that waiver may occur from the acceptance of rent in some circumstances. However, the “no waiver” clause may preclude a finding of waiver of the conditions precedent to renewal. In Jefpaul, the Court held: “Plaintiff contends that application of this principle entitled it not only to remain in possession but to renew the lease. The general rule is that if a tenant’s right to renew is conditional, as it is in this case, it cannot be exercised validly unless the tenant is in full compliance with the conditions (see McIntosh v. Rector of St. Phillip’s Church, 120 N.Y. 7, 23 N.E. 984; People’s Bank v. Mitchell, 73 N.Y. 406; cf. Vanguard Diversified v. Review Co., 35 A.D.2d 102, 313 N.Y.S.2d 269). Whether the landlord has waived performance of the condition is a question of fact (as was waiver of a violation permitting re-entry, had the term not expired) but there is no necessary inconsistency in treating a party as a tenant by accepting the rent with knowledge of a violation of the lease, but in also refusing to extend the lease for a further term. The landlord may desire that the tenant complete the term but not wish to extend it for a variety of reasons. The refusal to extend results not in a forfeiture for the tenant but only in the loss of the privilege because the conditions precedent to enjoyment of the privilege have not been met. In the absence of some prejudice to the tenant, therefore, a waiver of the right to terminate the tenancy will not automatically result in a waiver of the conditions precedent to renewal.” It is important to note that enforcement of the above in Jefpaul is subject to the tenant being able to show prejudice if the “no waiver” clause is held applicable. In Dice v. Inwood Hills Condominium, 237 AD2d 403, 655 NYS2d 562 (2nd Dept 1997), the Court held that the parties may waive a contractual provision despite the no waiver clause. Whether a waiver has resulted is generally a question of fact: “‘[W]aiver is the voluntary abandonment or relinquishment of a known right, which, except for such waiver, the party would have enjoyed’ (P & D Cards & Gifts v. Matejka, 150 A.D.2d 660, 662, 541 N.Y.S.2d 533). Waiver ‘may be accomplished by express agreement or by such conduct or failure to act as to evince an intent not to claim the purported advantage’ (Hadden v. Consolidated Edison Co. of N.Y., 45 N.Y.2d 466, 469, 410 N.Y.S.2d 274, 382 N.E.2d 1136) and is generally a question of fact (see, Jefpaul Garage Corp. v. Presbyterian Hosp. in City of N.Y., 61 N.Y.2d 442, 446, 474 N.Y.S.2d 458, 462 N.E.2d 1176). Moreover, the existence of a nonwaiver clause does not in itself preclude waiver of a contract clause (see, TSS Seedman’s, Inc. v. Elota Realty Co., 72 N.Y.2d 1024, 534 N.Y.S.2d 925, 531 N.E.2d 646; P & D Cards & Gifts v. Matejka, supra; Lee v. Wright, 108 A.D.2d 678, 485 N.Y.S.2d 543). Accordingly, we disagree with the appellants’ contention that the existence of a general nonwaiver clause in the condominium by-laws in and of itself precludes waiver of the right to enforce a provision of the by-laws or the rules and regulations.” See also, Pickering v. Wright, 108 AD2d 678, 485 NYS2d 543 (1st Dept 1985) (landlord may waive a “no-waiver” clause by accepting rent without any effort to terminate the lease for the violation). In Popyork v. 80 Court St. Corp., 23 AD3d 538, 806 NYS2d 606 (2nd Dept 2005), the Court stated a lease would be extended if: (1). The late notice of renewal was the result of inadvertence or honest mistake; (2). Nonrenewal would result in substantial loss to the tenant; and (3). Landlord would not sustain prejudice. In Popyork, the Court found that the tenant “would lose the goodwill it shares with the community, and its customer base”. The Court held that the tenant effectively renewed the lease even though the notice of renewal was late. See Wollard v. Schaffer Stores, 272 NY 304 (NY Ct of App, 1936) (waiver of claim of violation of lease through improper subletting without landlord’s written consent and structural changes waived by landlord accepting rent with knowledge of default. This Court is aware of the Second Department’s holding in La Lanterna v. Fareri Enterprises, 37 AD3d 420, 831 NYS2d 190 (2007), that the acceptance of rent by the landlord with no waiver clause in the lease did not constitute a waiver of a breach of the lease extension. There was no written waiver of default required by the no waiver clause. However, the Court did indicate that the tenant was entitled to litigate the issue of whether it was in breach of the lease extension requirements. In J.N.A. Realty Corp v. Cross Bay Chelsea, Inc., 42 NY2d 392, 397 NYS2d 958 (1977), the tenant failed to timely exercise the option to renew the lease. The Court of Appeals held that the tenant was never the less eligible to be relieved from its late notice because the gravity of the loss of a restaurant and its customer goodwill outweighed the gravity of the fault. The Court in J.N.A. remanded the case for trial to determine whether the landlord would sustain prejudice if the renewal was granted. The Court stated that the tenant would be entitled to the renewal if the landlord did not sustain any prejudice. Based upon the above, this Court deems a trial is necessary on the issues outlined above in accordance with the extensive case law cited herein. This matter is scheduled for trial on January 6, 2020 at 9:30 a.m. in the Landlord Tenant Part, Room 280. This is a final trial date and the parties shall be ready to proceed each and every day to day thereafter, until conclusion. Dated: November 28, 2019
