Papers Numbered Petitioner’s Illegal Lockout Petition and Order to Show Cause 1 Respondent’s Cross Motion to Dismiss, Exhibits Attached 2 Petitioner’s Opposition to Respondent’s Cross Motion, Exhibits Attached 3 Respondent’s Reply to Petitioner’s Opposition 4 DECISION AND ORDER Upon the foregoing cited papers, the Decision/Order on the motions are as follows: PROCEDURAL HISTORY OneWay Boutique, LLC (hereinafter “Petitioner” or “the LLC”), filed this action against 691 Bay, LLC (hereinafter “Respondent”) on or about August 16, 2023 by way of an Order to Show Cause seeking relief from an alleged illegal lockout of 681 Bay Street, Staten Island, NY 10304, Unit #4 (hereinafter “the Subject Premises”) in violation of New York City Administrative Code §22-902. Both parties are represented by counsel. Petitioner’s suit was brought by one member of the LLC, Ms. Lorline Hunt, on behalf of the LLC. Petitioner alleges that it is the lawful occupant and tenant of record pursuant to a lease held for the subject premises and that on or about July 23, 2023, Respondent illegally removed Petitioner’s contents from the premises and changed the locks, effectively preventing entry by Petitioner. On August 21, 2023, the Hon. Robert J. Helbock signed Petitioner’s Order to Show Cause and adjourned the matter to be heard on September 7, 2023. A stay was put in place at that time, temporarily staying the re-letting of the subject premises as well as the removal of the remaining contents of the premises. On September 7, 2023, the matter appeared before Your Honor. On that date, Respondent requested an adjournment to file opposition to the Order to Show Cause. The matter was adjourned to September 14, 2023. On September 12, 2023, Respondent filed a cross motion to dismiss pursuant to CPLR §3211(a)(1), seeking dismissal of the action on the ground that a defense is founded upon documentary evidence. In support of it’s motion, Respondent includes an affidavit from Rickita A. James, a member and co-owner of the Petitioner’s LLC. Said affidavit states that in an effort to mitigate the ongoing nonpayment of rent, she, acting within her authority on behalf of the Petitioner LLC, surrendered the subject premises and terminated the lease with Respondent, as indicated in a letter from July 24, 2023. Ms. James also states that as a result of said surrender, she removed all personal effects from the premises and agreed to have the locks changed. Ms. James explicitly states that she acted without assistance from Respondent with respect to the removal of the personal property. Furthermore, Respondent includes an affidavit and supporting documentation, including a lease and a rent ledger, from Yevgeniy Lvovskiy, the sole member of 681 Bay, LLC. His affidavit and supporting documentation clearly demonstrate that 681 Bay, LLC owns the subject property and had entered into a lease agreement for the subject premises with Petitioner and after several months of nonpayment of rent, he was approached by a member of the Petitioner LLC seeking to surrender the premises. He concurs with Rickita James’ account of the letter from July 24, 2023 surrendering the premises and that he did not partake in the removal of any personal property. The parties appeared on September 14, 2023 before Your Honor. At that time, Petitioner made an application for adjournment to respond and oppose Respondent’s motion to dismiss. The Court gave a motion schedule requiring Petitioner to file its motion by September 21, 2023. Petitioner filed its motion on September 26, 2023 without providing any reason for the tardiness of the submission. Nonetheless, the Court will accept the motion. Petitioner’s motion attacks the documentary evidence submitted by Respondent. Specifically, it attacks the rent ledger as being inadmissible and irrelevant. Furthermore, Petitioner emphasizes the importance of the LLC’s operating agreement and argues that pursuant to the terms of said agreement, Respondent acted unlawfully in accepting the unsanctioned surrender of the premises. Petitioner also includes an affidavit and supporting documentation from Lorline Hunt, co-owner of Petitioner’s LLC. She maintains that she did not approve of the surrender and that she intended on continuing the lease. She also states that in mid-July, 2023, she communicated her intention on staying at the location directly to Respondent. Ms. Hunt further alleges that Respondent acted together and in concert with Ms. James to forcibly enter the property and assist in the unlawful removal of personal effects. Petitioner includes as supporting documentation, the operating agreement and text messages between Ms. Hunt and Respondent. As per the motion schedule set by the Court, Respondent filed a reply to Petitioner’s opposition. In its reply, Respondent maintains that it acted lawfully in accepting Ms. James’s surrender on behalf of the Petitioner LLC because of the reliance on Ms. James’s apparent authority to make decisions on behalf of the LLC. Respondent suggests that it is merely the scapegoat of an unsuccessful partnership between Ms. Hunt and Ms. James and that any legal action should be between those individuals. DISCUSSION I: NYC Administrative Code §22-902 This Order to Show Cause was brought by Petitioner seeking the return of possession of the subject premises after an alleged violation of NYC Admin. Code §22-902. NYC Administrative Code §22-902 prevents landlords of commercial premises from engaging in commercial harassment in varying forms, including, but not limited to, preventing a commercial tenant from entering a covered property occupied by such tenant. NYC Admin Code §22-902(8). Here, the Court is asked to determine whether Respondent is unlawfully preventing Petitioner from the premises. First, the Court notes that there are a few undisputed facts. There is no disagreement that Respondent owns the property, a lease was held between the Petitioner and Respondent with both members of the Petitioner LLC signing as tenants to the commercial property, and Petitioner was in rental arrears on the lease. To that extent, as suggested by Petitioner, the rental arrears and ledger are irrelevant to the Court’s decision. While it may provide some context to the relationship between the parties and perhaps be the source of tension between the parties, it ultimately has no bearing on whether the members of the LLC had authority to act on behalf of the LLC and/or whether the Landlord could reasonably rely on any representations made. II: Standing & the Operating Agreement Respondent argues that Ms. Hunt lacks standing to bring this case on behalf of the Petitioner LLC based on the operating agreement. It should be noted that Petitioner fails to submit the complete operating agreement. Nevertheless, the Court will only use the excerpts submitted for reference. The operating agreement is clear in stating that both members of the LLC must agree to take action on behalf of the LLC. That is the entirety of Petitioner’s own argument. Consequently, there is no evidence before the Court that the membership of the LLC or operating agreement has dissolved or changed in any way from what appears before the Court. Thus, applying Petitioner’s same logic, it stands to reason that Ms. Hunt, acting on her own, cannot bring the instant suit on behalf of the LLC as there is no evidence that Ms. James agreed to do so as well. While Ms. Hunt’s standing to bring suit on behalf of the LLC may be questionable at best based on the terms of the operating agreement presented to the Court, the operating agreement itself is irrelevant to the true issue at hand. This matter involves the dispute between the Petitioner as the Tenant and the Respondent as the Commercial Landlord. Whether Ms. James had the authority to act on behalf of the LLC is an issue between Ms. Hunt and Ms. James that is best decided in an action between those individuals, not the Respondent in this matter. The inner workings and agreements between the members of the Petitioner LLC are of no consequence to the Respondent as Respondent has no contractual relationship with the individual members, only the entity of the LLC. Furthermore, Petitioner’s arguments and evidence before the Court are devoid of proof that Respondent is in any way aware of the LLC’s operating agreement or its individual terms. Thus, the only concern before the Respondent, and in turn, before this Court, are the representations made by the members of the LLC to Respondent. III: Respondent’s Reliance on a Representation from the LLC While Petitioner argues that Respondent unlawfully excluded Petitioner from the subject premises, Respondent argues that he relied on the apparent authority of Ms. James and the representation she made on behalf of the LLC. The evidence submitted by Petitioner and Respondent make it clear that the two members of the LLC expressed differing sentiments to Respondent regarding the intention of remaining at the subject premises. Based on the text messages submitted by Petitioner from July 16 and July 19, 2023, Ms. Hunt communicated her intention on staying in the subject location to Respondent. Ms. Hunt also expressed the desire to take Ms. James off the lease so that she could continue the business at that location on her own, an act that based on her own argument, may not be possible. These text messages put Respondent on notice of the feelings of one of the two members of the LLC. Despite these feelings, Respondent’s only responsibility is based on communications from the LLC as an entity, not its individual members. Based on the evidence presented, the only communication from the entity of the LLC comes by way of the surrender from July 24, 2023 from Ms. James. The key statement in that document is “have authority to act on behalf of Oneway Boutique, LLC”. That statement triggers a communication from Petitioner LLC as the only entity that can have an agreement with Respondent. Furthermore, the evidence before the Court shows that this is the only communication from the LLC and comes subsequent to the texts from Ms. Hunt. Respondent relied on the representation made by an individual purporting to act with the authority of the LLC. It is important to note that this communication was made by a co-owning member of the LLC and a signatory of the lease. Any due diligence required to be done by the Respondent is satisfied because of the ranking authority Ms. James possessed. In addition, there is no evidence before the Court that Respondent had any knowledge that Ms. James did not in fact have the authority she purported to possess. From Respondent’s perspective, it is quite feasible that subsequent to the text messages from Ms. Hunt on July 16th and July 19th, she spoke with Ms. James and agreed to the surrender. Once again, the private meetings and dealings of the LLC leading to a decision on behalf of the LLC do not and should not concern the Respondent. Petitioner fails to present any argument supported by caselaw or statute to bolster its position to the contrary. Thus, it is reasonable for Respondent to rely on the statements made by Ms. James and therefore, bind the Petitioner. IV: Unjust Enrichment Petitioner further argues that if Petitioner does not have possession restored, Respondent will be unjustly enriched. The Court disagrees with that argument. In fact, Respondent is in a worse position than before this suit. Prior to the surrender, Respondent had a tenant, the Petitioner LLC, that leased the subject premises and was in arrears on the rent. Subsequent to the surrender, Respondent no longer has a tenant and has agreed to waive the arrears via the surrender agreement. That arrangement is the opposite of being enriched. Any claim regarding the damage or loss of personal property is between Ms. Hunt and Ms. James as there has been no evidence presented to the Court to demonstrate that the Respondent had any involvement. CONCLUSION Based on the foregoing, Petitioner’s Order to Show Cause is denied. Respondent’s motion to dismiss pursuant to CPLR §3211(a)(1) is granted. ORDERED: All stays currently in place are hereby lifted. ORDERED: Respondent is hereby restored to full possessory interest of the subject premises. The foregoing constitutes the final Decision and Order of the Court. Dated: October 12, 2023
