G.S.H. Associates v. Expressions, Inc.
(Civ. Ct. N.Y. Cty. 6/1/94)
We represented: Petitioner
Judith J. Gische, J.C.C.
DECISION and ORDER This non-payment proceeding was heard by the court on April 6, 21, 27 and May 16 and 18, 1994. The petition was amended through May 1994 and the parties stipulated that the outstanding rent through May 1994 was $22,496.45. The crux of the dispute between the parties concerns whether respondent is entitled to any offset against rent based upon the non-operation of the passenger elevators.
Finding of Fact
For the last nine years respondent has been the 19th floor ("premises") tenant in the commercial building located at 266 West 37th Street in Manhattan ("building"). The parties last executed a written lease which runs from March 1993 to January 1996. Respondent's principal is Kami Yakobian. David Yakobian, Kami Yakobian's brother, is employed by respondent and holds himself out to have authority with respect to certain aspects of respondent's business. Respondent is in the business of buying fabric, subcontracting the manufacture of garments and then reselling and shipping those garments to retail stores. In the regular course of business respondent has customers coming in and out of his premises during the business day which begins about 9:30 a.m. and ends 7:00 p.m.
The building has two passenger elevators and two freight elevators. The passenger elevators are automatically operated and are accessible 24 hours a day. The freight elevators are manually operated and are usually accessible from 8:00 a.m. to 5:30 p.m.
Primary access to respondent's premises is from the passenger elevators. There is a back door which opens directly onto the freight elevator. For security reasons, respondent installed a metal gate at the back door which padlocks from the inside. There is also an alarm system at the premises which is activated and deactivated only at the main entrance. Initial entry through the back door while the alarm is still activated causes the alarm to go off. The alarm cannot be turned on if respondent exits through the back door. The only access to the freight elevator from the passenger elevators on the 19th floor is by walking through the premises.
In the last number of years respondent has complained to the petitioner about the operation of the elevators. On or about December 10, 1993 all of the tenants at the building were notified that petitioner was shortly going to rehabilitate the passenger elevators by replacing the door mechanisms. The tenants were notified that the work could take up to five months to complete and that during that time of the renovation the freight elevators would be used to supplement passenger service for rush hour and lunch time. Petitioner planned that at least one passenger elevator would be operational at all times during the renovation.
Patti Langlais, the superintendent at the building, spoke with David Yakobian many times regarding the need to make a modification to the back entrance so that respondent could have additional access to the premises through the freight elevator. The modification petitioner suggested was that a hole be made in the iron security gate sufficient in size to get a hand in to unlock the otherwise intentionally inaccessible padlock. Respondent resisted such alteration of its gate until the events as more fully described below occurred.
The repairs were begun sometime in late December 1993 and continued through April 1994. The renovation involved taking one service elevator out of service at a time. On three separate occasions, however, during the period from December 1993 until April 1994 both of the passenger elevators were non-operational at the same time. The court finds that the suspension of elevator service on those days was due to both repair and renovation of the elevator system. On each of those occasions, and on other occasions as well, Kami Yakobian complained to management about the lack of appropriate elevator service.
On one occasion petitioner temporarily placed one of the passenger elevators back into service just to take Mr. Yakobian up to the premises that day. Anyone else requiring entrance or exit from the premises that day had to use the freight elevator.
On another occasion Kami Yakobian agreed to have the hole placed in the iron gate of his back door in order to gain entry into the premises from the freight elevator.
Discussion
Respondent claims that the problems with the elevator service amounted to an actual partial eviction for which it is entitled to an adjustment in rent. Petitioner argues that there has been no actual partial eviction and that in any event respondent's claims are barred under the terms of the lease.
The pertinent portions of the lease are as follows:
20. Owner shall have the right at any time without the same constituting an eviction and without incurring any liability to Tenant therefor to change the arrangement and/or location of . . . elevators . . . There shall be no allowance to Tenant for diminution of rental value and no liability on the part of Owner by reason of inconvenience, annoyance or injury to business arising from Owner or other tenant making repairs in the building or any such alterations, additions and improvements. Furthermore, Tenant shall not have any claim against Owner by reason of Owner's imposition of any controls of the manner of access to the building by Tenant's social or business visitors as the Owner may deem necessary for the security of the building and its occupants.
31. Owner reserves the right to stop service of the heating, elevator, plumbing and electric systems, when necessary, by reason of accident, or emergency, or for repairs, alterations, replacements or improvements, in the judgment of the Owner desirable or necessary to be made, until said repairs, alterations, replacements or improvements shall have been completed.
In the seminal New York State Court of Appeals case of Barash v. Pa. Terminal Real Estate Corp., 26 NY2d 77 (1970), partial actual eviction was defined as follows (id at 82):
To be an eviction, constructive or actual, there must be a wrongful act by the landlord which deprives the tenant of the beneficial enjoyment or actual possession of the demised premises. Of course the tenant must have been deprived of something to which he was entitled under or by virtue of the lease.
An actual eviction occurs only when the landlord wrongfully ousts the tenant from physical possession of the leased premises. There must be a physical expulsion or exclusion. And where the tenant is ousted from a portion of the demised premises, the eviction is actual, even if only partial.
In the case of actual eviction, even where the tenant is only partially evicted, liability for all rent suspended although the tenant remains in possession of the portion of the premises from which he was not evicted.
Generally where a landlord deprives a tenant of the means of ingress and egress to the leased premises an actual partial eviction occurs. (Barash v. Pa. Terminal Real Estate Corp., supra; 487 Elmwood v. Hassett, 107 AD2d 285 (4th dept, 1985).) This principal has been extended to elevators where it is necessary to the beneficial enjoyment of the leased premises. (Broadway-Spring Street Corp. v. Jack Berens Exp. Corp., 171 NYS2d 342 (Mun Ct, 1958).) While clearly the cessation of passenger elevator service to a commercial enterprise, open to the public, located on the nineteenth floor of a building, is a substantial interference with the beneficial use of the leased premises, it is not an actual partial eviction unless the service was something to which the tenant was otherwise entitled by virtue of the lease. (Barash v. Pa. Terminal Real Estate Corp., supra; Bijan Designer for Men, Inc. v. St. Regis Sheraton Corp., 142 M2d 175 (NY Co., 1989).)
While respondent is entitled under the lease to elevator service, there are certain expressly stated circumstances in the lease in which interruption of elevator service is permissible. Those circumstances, present at bar, are the repair and/or improvement of the elevators in the building. In Bijan v. St. Regis, supra, the Hon. David Saxe squarely addressed the issue of whether a landlord's right to renovate under the lease precluded the tenant from raising a claim of actual partial eviction resulting from the renovation. In the case before Judge Saxe, the landlord's renovations to the Hotel in which the tenant retail store was located deprived the tenant of its means of ingress and egress from the interior of the hotel. Judge Saxe held that the tenant's theory of actual partial eviction could not be supported where the tenant had agreed in the lease that the landlord could make the renovations and that the landlord would not be liable for business interruption occasioned by such renovation. This court adopts the reasoning of Judge Saxe and finds consistent therewith that the cessation of elevator operation at the building during the repair and renovation of the elevator cars did not constitute an actual partial eviction. Indeed the case at bar presents an even stronger argument because the lease expressly deals with renovation or repair to the elevators.
In Bijan v. St. Regis, Judge Saxe warned tenants that they should seek during lease negotiation some limits to the exculpatory clause in the eventuality of temporary closing due to renovation. Here the latest lease was signed in early 1993, at a time when Mr. Kami Yakobian claimed to have known about the chronic elevator problems in the building. The latest lease, however, was signed without Mr. Yakobian ever taking the time to read it, let alone seeking to negotiate any of its terms. Under such circumstances respondent cannot be heard to complain about the enforcement of the lease provisions.
While the circumstances of this case do not amount to an actual partial eviction, which would be a defense to the payment of rent, this decision in no way affects respondent's right to seek compensatory damages which may exist based upon some other theory of liability. (Bijan v. St. Regis, supra.)
Accordingly the clerk is directed to enter a final judgment in favor of petitioner against respondent in the amount of $22,496.45 representing rental arrears through the month of May,1994. Warrant to issue five days after service of the decision and the judgment entered thereon on respondent's counsel with Notice of Entry. This constitutes the decision and order of the court.