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CIVIL COURT OF THE CITY OF NEW YORK

COUNTY OF NEW YORK: PART 75 L & T Index No.:76855/2012
Athenian and Athena Building Inc.,
DECISION/ORDER
Petitioner,
- against-
Present: HON. ARLENE P. RLUTH
511 Soundview Realty LLC, Judge, Civil Court
Respondent-Tenant,




Upon the foregoing cited papers and after oral argument, respondent's cross-motion to
dismiss this holdover proceeding is denied and petitioner's motion to dismiss the affirmative
defenses and for summary judgment is granted.
There was a twenty year written lease between the parties which commenced in July 2009
(exhibit A to respondent/lessee's motion). The premises is a building with commercial and
residential space. The lease had a conditional limitation regarding the payment of rent, allowing the
petitioner to terminate the lease if the respondent failed to pay rent. Based upon nonpayment, the
petitioner elected to terminate the lease and this holdover proceeding ensued.
There is currently an action in Supreme Court, New York County between the lessor
Recitation, as required by CPLR 2219(a), of the papers considered in the review of
respondent's motion to dismiss and petitioner's cross-motion for summary judgment:
Papers Numbered
Notice of Motion and
Affidavits/Affirmations .................... 1
Notice of Cross-motion ........................... 2
Opposition to Cross-motion ..................... 3
Reply .............. . ........ . ...............
4
(petitioner here) and another entity (for purposes of this decision, the other entity is referred to as
"Hiram Lodge") regarding ownership of the land upon which the premises are located. Based on the
existence of that case, respondent moves to dismiss the petition claiming, under various theories, that
petitioner lacks standing because the identity of the actual owner is "up in the air" until the Supreme
Court decides that case presently before it. In the alternative, respondent requests this Court to issue
a stay of this proceeding pending the outcome of that Supreme Court case. Meanwhile, the
respondent admits that it retains possession of the premises without paying any rent or use and
occupancy for more than two and one-half years. It also admits that it is a landlord to its own
subtenants, collecting rent from them and even bringing summary proceedings when those tenants
breach their leases.
Respondent's motion is denied; first five affirmative defenses dismissed. .
This Court declines to grant any stay and denies that part of respondent's motion. This Court
would reconsider such an application if all the past due monies are paid into an escrow account and
ongoing use and occupancy are likewise paid. Without such conditions, a stay from this Court would
merely be allowing respondent to further profit from a dispute in which it has no stake; regardless of
the outcome of the Supreme Court case, lessee cannot stay there for free.
Respondent also seeks dismissal claiming that petitioner cannot claim to be the owner until
the Supreme Court says it is the owner. This is without merit. As respondent well knows, a party
does not need to be the owner of the building in order to bring a summary proceeding and does not
need to be the owner in order to lease space; respondent is not the owner and it leases space and
brings summary proceedings.
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Here, the petitioner simply claims the right to possession due to the termination of the written lease
between the parties. The petitioner, as lessor in that lease, has standing pursuant to RPAPL 721(1).
Petitioner can claim to be the lessor because petitioner is the lessor - even the respondent/lessee
admits that it signed a lease with the petitioner/lessor.
Respondent also claims the case should be dismissed because in the petition the petitioner
identified itself as the "landlord or lessor". Because there is no doubt that the petitioner is the lessor
and is respondent's landlord, this also is a non-issue.
In several different ways, respondent seeks dismissal claiming petitioner cannot claim to be
the owner/lessor/landlord because Hiram Lodge is contesting that in the Supreme Court. But
"Hiram"is not contesting that here, and Hiram would have a hard time claiming it is a party to the
admitted lease because clearly it is not. Certainly, the lease governs the rights and obligations of the
parties in this proceeding. Hiram Lodge is not a necessary party hereto (another claim of lessee) for
the same reason - Hiram Lodge is not a party to this lease. There is simply no reason for this Court
to dismiss this case because a third party is fighting with the petitioner, the lessee's landlord and
lessor, in another forum.
The ownership of the property is not relevant - having admitted entering into the lease with
the petitioner, the respondent cannot now claim that petitioner is not its lessor. Even if it were
relevant, however, it is improper to litigate that issue in this proceeding. A tenant is estopped from
challenging the title of the landlord from whom it took possession and in any event, challenging
petitioner's ownership is improper in a summary proceeding: "To the extent that appellant seeks to
challenge landlord's ownership of the premises, questions of title and ownership are not properly the
subject of a summary proceeding". Ferher v Salone Moderne,
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Inc., 174 Misc.2d 945 (App Term, 1st Dept 1997); see also Gouverneur Gardens Housing Corp. v
Silverman, 20 Misc.3d 133(A) (App Term, 1st Dept 2010).
There is at least one case in Supreme Court between these parties. Because of the rent default,
the lessor/petitioner sought to collect respondent/lessee's subtenant's rents directly and the
respondent/lessee sought to prevent that in Supreme Court. The Supreme Court Justice denied a
preliminary injunction, finding that it "could not say that [lessee] is likely to succeed on the merits"
(exhibit 1 to cross-motion). The Supreme Court saw the same irony - the lessee cannot claim that the
lease is not good enough to obligate it to pay rent to its landlord but at the same time claim it is good
enough to obligate others to pay rent to it.
In other words, the respondent cannot claim here that the lease is no good and it does not
have to pay any money to its lessor yet claim at the same time that it can rely on that very same
document to establish that it has the right to re-rent the space and collect rents from others. That
argument is akin to a store owner claiming he doesn't have to pay for his inventory because it is
defective but that he has every right to sell it to other people and make a huge profit (because there is
no cost of goods sold).
Finally, the affidavit of William Radmin, respondent's manager (submitted in another forum
but annexed to petitioner's cross-motion as exhibit 3), admits that respondent signed the lease with
petitioner, and promised to pay petitioner rent, with full knowledge of Hiram Lodge's claim to
ownership. To now claim that there is no obligation to pay the rent because of Hiram Lodge's claim
to ownership is a thinly veiled attempt to commit a non-violent stick-up.
Accordingly, the first five affirmative defenses are unsupported and are dismissed.
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Petitioner's motion is granted: counterclaims/last two affirmative defenses dismissed.
In order to prevail on its motion for summary judgment, the movant must make a prima facie
showing of entitlement to judgment as a matter of law, through admissible evidence, eliminating all
material issues of fact. Alvarez v Prospect Hospital, 68 NY2d 320, 508 NYS2d 923 (1986). Once the
movant demonstrates entitlement to judgment, the burden shifts to the opponent to rebut that prima
facie showing. Bethlehem Steel Corp. v Solow, 51 NY2d 870, 872, 433 NYS2d 1015, 414 NE2d 395
(1980). In opposing such a motion, the party must lay bare its evidentiary proof. Conclusory
allegations are insufficient to defeat the motion; the opponent must produce evidentiary proof in
admissible form sufficient to require a trial of material questions of fact. Zuckerman v City of New
York, 49 NY2d 557 at 562, 427 NYS2d 595 (1980).
In deciding the motion, the court must draw all reasonable inferences in favor of the non-
moving party and must not decide credibility issues (Dauman Displays, Inc. v Masturzo, 168 AD2d
204, 562 NYS2d 89 [1st Dept 1990]). As summary judgment is a drastic remedy which deprives a
party of being heard, it should not be granted where there is any doubt as to the existence of a triable
issue of fact (Chemical Bank v West 95th Street Development Corp., 161 AD2d 218, 554 NYS2d
604 [1st Dept 1990]), or where the issue is even arguable or debatable (Stone v Goodson, 8 NY2d 8,
200 NYS2d 627 [1960]).
The motion for summary judgment is granted. Respondent has admitted it signed the lease
relied upon by petitioner and respondent has admitted it has not paid rent. Petitioner, through the
affidavit of Phyllis Pringle, who holds the office of Secretary of petitioner, a corporation, establishes
petitioner's prima facie case. Together with the exhibits and respondent's admissions, petitioner
establishes that petitioner is the lessor and respondent the lessee under a written lease
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for a properly described premises in New York County. Petitioner also establishes that respondent
was obligated to but did not pay rent and additional rent pursuant to that lease and was therefore in
default, and due to the default, petitioner terminated the lease by the procedures provided in the
lease. Petitioner also establishes that the premises was rented for business - purposes and are not
subject to rent regulations, and that it is properly registered as a multiple dwelling with a named
managing agent.
In opposition to summary judgment, respondent fails to contest any of the facts material to
this holdover proceeding. Rather, in a self-serving affidavit, completely devoid of any documentary
proof, Mr. Radmin, the manager of respondent, submitted an affidavit, apparently in support of its
counterclaims sounding in fraudulent inducement and justifiable reliance, claiming that "respondent
would not have entered into the lease with petitioner but for its representation that it was the owner
of the property". This, however, contradicts Mr. Radmin's other affidavit, where Mr. Radmin
explained that respondent wanted purchase the property from petitioner, but because Hiram Lodge
had a claim and caused a cloud on title, petitioner and respondent entered into the lease instead. This
fact is clear: prior to entering the lease, respondent knew, full well that ownership was contested; the
lease itself (fourth paragraph on page two) refers to landlord's issues with marketable title.
The essential elements of a claim for fraudulent inducement are "the misrepresentation of a
material fact, which was known by the defendant to be false and intended to be relied on when made,
and that there was justifiable reliance and resulting injury." Braddock v Braddock, 60 AD3d 84, 86,
871 NYS2d 68 (1st Dept 2009). Therefore, respondent's admission that it was aware of Hiram
Lodge's claim to ownership before entering into the lease, and the lease's
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mentioning it as well, show that there is no basis for respondent's claim of fraudulent
inducement.
Moreover, even if petitioner had misrepresented that it was the sole owner with good and
marketable title, the name of the owner - or whether there are any challenges thereto - are facts
easily discoverable. The entire concept of "due diligence" creates an obligation to check
representations; blindly relying on representations made by the adverse part}' is done at one's peril.
See Culver & Theisen v Starr Realty Co., 307 AD2d 910, 763 NYS2d 84 (2
nd
Dept 2003) (lessee's
failure to ascertain facts discoverable precluded lessee from asserting fraudulent inducement claim
against lessor). Here, respondent was aware of the issues with title and its attorney (representing it
on the purchase) had already discovered the relevant facts. Accordingly, any claim of fraudulent
inducement cannot be supported.
Additionally, although the issue of justifiable reliance is generally a question of fact that is
not amenable to summary resolution, there can be no justifiable reliance under the admitted facts in
this case. The First Department has held that "[a]s a matter of law, a sophisticated plaintiff cannot
establish that it entered into an arm's length transaction in justifiable reliance on alleged
misrepresentations if that plaintiff failed to make use of the means of verification that were available
to it." Ventur Group LLC v Finnerty, 68 AD3d 638, 892 NYS2d 69 (1st Dept 2009) (internal
citations omitted). In other words, when a party fails to ascertain facts easier discoverable, "he will
not be heard to complain that he was induced to enter into the transaction by misrepresentation"
(Danann Realty Corp. v Harris, 5 NY2d 317, 322, 184 NYS2d 599, 157; Schumaker v Mather, 133
NY 590, 596, 30 NE 755; Esposito v Saxon Home Realty, 254 AS2d 451, 679 NYS2d 152).
Therefore, the counterclaims, sounding in fraudulent inducement and justifiable reliance, are
dismissed.
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ARLENE P. BLUTH
For all the foregoing reasons, respondent's motion to dismiss is denied and petitioner's cross-
motion for summary judgment is granted. The affirmative defenses and counterclaims are dismissed.
Petitioner has reserved its monetary claims for another forum. Petitioner is granted judgment of
possession, warrant to issue forthwith, execution stayed five days.
This is the Decision and Order of the Court.




Dated: November 26, 2012
New York, NY

Judge, Civil Court



asn by DL on
11/26/12


City of New York
NOV 28, 2012

NEW YORK COUNTY