In the within commercial non-payment proceeding, Petitioner seeks to recover rent based on Respondent's breach of a lease agreement. Petitioner in its Petition and Notice of Petition demands (i) a money judgment plus interest, costs, expenses and reasonable attorney fees and (ii) a final judgment of possession and issuance of a warrant of eviction. Respondent in its Verified Amended Answer asserts Twenty-Three Affirmative Defenses and Four Counterclaims. A bench trial was held on July 26 and July 27, 2007 and post-trial briefs were submitted by both parties on September 5, 2007.

PROCEDURAL HISTORY

Petitioner-landlords Jane Goldman, Allan Goldman and Louis Little as Trustees of the LILLIAN GOLDMAN MARITAL TRUST and Jane Goldman, Allan Goldman, Amy Goldman and Diane Kemper as Executors of the ESTATE OF LILLIAN GOLDMAN; AND ESGD CORP. (hereinafter ""Petitioners") commenced the within non-payment proceeding by service of a notice of petition and petition dated February 2, 2007, based on Respondent's failure to respond to a Three Day Notice demanding payment of all rent arrears as of that date. Respondent-tenant, MJJ Music, Inc. hereinafter "MJJ") by its attorney submitted a Verified Amended Answer, which included [*2]various Affirmative Defenses and Counterclaims based on an alleged water leak in the premises which Respondent claims arises from Petitioner's failure to make repairs. By order of the court dated May 4, 2007 (J. Baily-Schiffman), Respondent's motion to dismiss the Nonpayment Petition was denied based on, inter alia, the following findings of fact and conclusions of law:

1. The description of the premises as set forth in the lease is accurate and, therefore, does not make the lease invalid.

2. The lease agreement between the parties is valid since the signature of one property owner is sufficient to create a binding and valid lease agreement.

3. The Three Day Notice is valid because it was signed by one of the landlords who was named in the lease, and;

4. The Three Day Notice sufficiently describes the premises sought to be recovered.

Thereafter, a related action was commenced by Respondent entitled, MJJ Music, Inc. v. Lillian Goldman, Estate of Sol Goldman, The Lillian Goldman Marital Trust and ESGD Corp., Index No. 10073/2007 in Supreme Court, New York County. The Supreme Court dismissed the action after entertaining a motion and cross-motion for summary judgment of the respective parties, and held, inter alia, that:

A. The signatures of all trustees were not required to make the lease valid;

B. Paragraph 54 of the lease demonstrates that one trustee's signature on the lease is sufficient;

C. The description of the premises in the lease is accurate.

The foregoing findings of fact and conclusions of law of the Supreme Court were consistent with the May 4, 2007 decision of J. Baily-Schiffman.

FINDINGS OF FACT

The order of May 4th, 2007 (J. Baily-Schiffman) denying Respondent's motion to dismiss is the law of the case. Thus, Respondent's First, Second, Third, Fourth, Fourteenth, Fifteenth, Nineteenth, Twentieth, Twenty-First and Twenty-Second Affirmative Defenses contained in its Verified Answer, seeking dismissal on various procedural grounds previously raised its motion to dismiss, must be stricken. Since the order also determined that the lease agreement between the parties is valid and that the three day notice is valid, the only issues for the this court to determine are whether Petitioner established its prima facie entitlement to a final judgment as a matter of law, and whether any judgment amount would be subject to an offset if Respondent met its burden of proof on its remaining Affirmative Defenses and Counterclaims.

DISCUSSION

A nonpayment proceeding enables a landlord to obtain a judgment of possession and a money judgment against a tenant based on a failure to pay rent, and is purely statutory in nature. In order to establish entitlement to judgment as a matter of law, there must be a default in the payment of rent, a proper demand for rent (RPAPL § 711(2) and §RPAPL 735) , and a duly issued Petition and Notice of Petition (RPAPL §741).

In the case at bar, it is uncontroverted that the parties had a valid lease agreement which [*3]established the Respondent 's obligation to pay rent to the Petitioner. Ron Longstreet, Petitioner's Managing and Commercial Leasing agent for Solil Management LLC ("Solil"), and Concetta Ferrari, an administrator for Solil, provided detailed and credible testimony on Petitioner's direct case regarding the Respondent's default in payment of the rent pursuant to the lease, which was proffered into evidence.

Mr. Longstreet testified that MJJ leased the ground floor and second floor space of the subject premises pursuant to a Twelve Year lease commencing June 1, 1998 and ending on May 31, 2010. The monthly rent included base rent subject to an escalation every three years, and additional rent consisting of late charges, water/sewer charges, and real estate taxes. The lease also provided for the premises to be used for "Sale of Music (C.D.'s - cassette tapes and records) [V]ideos and [R]elated [M]usic [A]ccessories, [E]lectronics and [E]lectronics [A]ccessories."

A computer print-out of MJJ's rental account was also proffered by Petitioner. Mr. Longstreet testified that the print-out detailed arrears of $348,431.51 through July 01, 2007 consisting of base rent, water/sewer charges, real estate taxes, and late charges.

Citing Page One, Paragraph 41 of the lease, Mr. Longstreet testified on cross-examination that MJJ is responsible for 25 percent of any and all increases in real estate taxes, and that the real estate tax charge in the print-out reflects the bill for real estate taxes issued by the NYC Department of Finance. Petitioner sought to introduce the real estate tax bills dated June 17, 2005 and March 10, 2006. However, the Court ruled that the bills were inadmissable since the bills were issued to an entity named "Third & Fulton Associates," and not to the managing agent or Petitioner. Mr. Longstreet further testified that the print out reflected late fees of four percent of the monthly rental pursuant to Page Four of the Rider, Paragraph 52. He conceded that he did not know the basis for the miscellaneous fee charge contained in the print-out.

Ms. Ferrari whose responsibilities include closings and tenant operations, both residential and commercial, testified that Petitioners, Jane Goldman, Allan Goldman and Louis Little as Trustees of the LILLIAN GOLDMAN MARITAL TRUST, and Jane Goldman, Allan Goldman, Amy Goldman and Diane Kemper as Executors of the ESTATE OF LILLIAN GOLDMAN; AND ESGD CORP are the fee owners of the building in which the premises is located. As proof, Petitioner proffered five (5) deeds. While Respondent objected to the admission of the deeds based on lack of certification, the court permitted Petitioner to certify the deeds pursuant to CPLR §4539, and admitted the deeds into evidence.

Ms. Ferrari's testimony essentially mirrored the testimony of Mr. Longstreet regarding Petitioner's claim for real estate taxes. However, she also testified that Respondent was responsible for water/sewer charges pursuant to the terms of the lease. She testified that the Tenant Account History proffered into evidence included the water/sewer charges and real estate taxes owed by Respondent, and that these amounts were based on bills generated by the NYC Department of Environmental Protection ("DEP") and Department of Finance, respectively. While she testified that it was the practice of Solil to mail bills to the Respondent, she conceded that she did not know whether the bills were actually mailed to Respondent since the bills were issued to "Third & Fulton Associates", and not to Solil Management, LLC. Like Mr. Longstreet, Ms. Ferrari also admitted that she had no knowledge of what the miscellaneous service fee charges set forth in the computer print out of MJJ's account represented. At the conclusion of Ms. Ferrari's testimony, [*4]Petitioner rested, and moved to amend the Petition to date. The Court granted the motion.

Respondent's Affirmative Defenses that seek, in essence, to attack Petitioner's prima facie case, are without basis in law and fact. First, it is well settled that "proof of a personal demand or a proper three-day notice is a jurisdictional requisite of a nonpayment summary proceeding" (see, Solack Estates, Inc. v Goodman, 102 Misc 2d 504, 425 NYS2d 906 [App Term 1979), judgment aff'd, 78 AD2d 512, 432 NYS 3 [1st Dept 1980]). In the case at bar, the May 4, 2007 order held as a matter of law that the three-day notice was valid. While petitioner objected to service of the three-day notice at trial, the Court ruled that Respondent' s Thirteenth Affirmative Defense was not plead with specificity in its Verified Amended Answer, therefore, Respondent waived its right to challenge the Court's jurisdiction. Additionally, while Respondent's Fifth, Sixth, Seventh and Seventeenth Affirmative Defenses collectively assert that Petitioner failed to comply with RPAPL §741, there is no requirement that a Landlord or lessor "plead the evidence upon which his right or title depends...it is enough to make any statement from which it is clear that...the person in possession is the lessee or assignee under a lease between the parties or their assignors...") (see, First Belmont Corp. v Galop, NYLJ, 5/13/99, p.28, col.5). "Whether party identified as "landlord" or "lessor"is actual fee owner is not dispositive to proceeding's maintenance: "Questions of title or ownership are not litigated in summary proceedings..." (see, Bay West Realty Col. v Christy, 61 Misc 2d 853, 310 NYS2d 346). Accordingly, Respondent's continuing objections on the basis that Petitioner failure to meet its burden on the issue of ownership is meritless. Based on the evidence adduced at trial, the Petition set forth sufficient facts to establish the petitioner's interest, the respondent's interest, a description of the premises, the facts upon which the proceeding is predicated, and the relief sought pursuant to RPAPL §741. As a result, the aforementioned Affirmative Defenses are stricken.

Both the documentary and testimonial evidence presented at trial establish Petitioner's prima facie entitlement to base rent and late charges only. Petitioner was unable to substantiate its charges for miscellaneous service fees, as well as its entitlement to real estate taxes and water/sewer charges since the bills containing those amounts were issued to an entity other than Petitioner. Any amounts due to Petitioner, however, may be subject to an offset based on the Court's determination of Respondent's remaining Affirmative Defenses and Counterclaims arising from allegations of Partial Constructive Eviction.

"In an action for rent, it is not sufficient for the tenant to defend on the theory that there was a diminution of the beneficial enjoyment of the property (see, Dave Herstein Co. v Columbia Pictures Corp., 4 NY2d 117, 149 NE2d 328, 172 NYS2d 808 [1958]). "The law is well settled that an actual though only partial eviction by an act of the landlord suspends the entire rent, so long as the partial eviction continues, unless the parties have agreed otherwise, since the landlord cannot apportion his wrong. This is true even though the tenant remains in possession, provided the tenant disputes his liability for such rent. This rule of suspension of rent applies only to an actual partial eviction, and not to a constructive eviction, since a necessary element of a constructive eviction is a surrender of the rented premises." (see, Frame v Horizons Wine & Cheese, Ltd., 95 AD2d 514, 467 NYS2d 630 [App Div, 2nd Dept, 1983]); (see also, Barash v Pennsylvania Terminal Real Estate Corp., 26 NY2d 77, 308 NYS2d 649, 256 NE2d 707); Minjak Co. v Randolph, 140 AD2d 245, 528 NYS2d 554 [1st Dept.]). When the tenant has not paid the rent, a partial constructive eviction may serve as a defense in the landlord's action for rent. (see, New York City Economic Development [*5]Corporation v Harborside Mini Stor., Inc., 12 Misc 3d 1155A, 819 NYS2d 211 [2006] quoting, 487 Elmwood, Inc. v Hassett, 107 AD 285, 486 NYS2d 1132 [4th Dept 1985]); (see also, Moklam Enterprises, Inc. v PWB Restaurant, Inc., NYLJ 5/12/92, p. 25. col. 1 [App. Term 1st Dept]). Conversely, when the tenant has paid the rent, the tenant "waives the right to claim that it was discharged from any rent or liability for its occupation of the residue of the premises and the waiver operates as an estoppel against it." [H]aving paid the rent, the tenant has a claim for damages arising from the eviction. (see, Frame v Horizons Wine & Cheese, Ltd., supra .)

Respondent, at trial, asserted that there was a leak on the second floor of the premises which rendered that portion of the leasehold unusable. Since Respondent continued to pay rent from the time the leak allegedly occurred in April 2004 through October 2006, Respondent must affirmatively establish its claim for damages arising from a partial constructive eviction.

A landlord's failure to repair can constitute an actual or constructive eviction. (see, Frame v Horizons Wine & Cheese, Ltd., id.) Moreover, it has been held that a landlord is not immunized form the consequences of a constructive eviction, if a failure to act...in breach of an agreement to provide a service essential to access and the operation of a tenant's business, "substantially and materially deprives the tenant of the beneficial use and enjoyment of the premises." (see, Barash v Pennsylvania Terminal Real Estate Corp., supra ). In the instant matter, Morris Missry, a principal of MJJ Music Inc., testified that the second of the two floor leased premises had been rendered completely unusable as a result of a leak that occurred around April 2004; that the leak was caused by a malfunction of the water supply line in the building's heating unit, which lasted for about three weeks; that the Petitioner failed to repair the leak, and as result, the second floor ceiling was left sagging and gapping which he feared could potentially pose a safety risk to customers. He testified that he was forced to shut the floor down and move the entire second floor inventory to the first floor due to the damaged ceiling. While he also testified at length about the need for the ceiling to be repaired in order to continue business operations on the second floor, he could not point to any obligation by Petitioner, either contractual or voluntary, to repair the ceiling. Equally telling is Mr. Missry's June 22, 2004 letter to Petitioner which makes no mention of the leak or the failure to repair the leak. Instead, the letter requests a rent reduction based on increased competition in the area due to street vendors selling electronic media. Further, Mr. Missry provided no plausible explanation for his inability to submit a claim to his insurance carrier for water damage, even while acknowledging that there was a no-subrogation clause in the lease. Mr. Missry's testimony taken as a whole demonstrates that the primary motivation of the Respondent was not to hold Petitioner accountable for the damage caused by the leak, but rather, amounted to a decision out of necessity, to address the decline in the electronics business and MJJ's faltering income. For this reason, the Court finds that Respondent-MJJ has not established that the leak on the second floor of the leased premises constitutes a partial constructive eviction. Thus, Respondent's Eighth, Eleventh, Eighteenth, Twenty-Third and Twenty-Fourth Affirmative Defenses are hereby stricken.

Lastly, Respondent's Ninth and Tenth Affirmative defenses alleging a waiver of real estate taxes, which Petitioner failed to establish as part of its prima facie case, is stricken as moot. Respondent's Sixteenth Affirmative Defense is also stricken as vague and lacking specificity.

The Court now turns to Respondent's Counterclaims which assert damages arising from partial constructive eviction. Generally, no counterclaim provisions contained in a commercial lease are enforceable, unless the counterclaim is so "inextricably intertwined" with a landlord's claim [*6]for nonpayment that "joint resolution of the claims will expedite disposition of the entire controversy. (see, Ring v Arts Int'l Inc., 7 Misc 3d 869, 792 NYS2d 296). Paragraph Twenty-Five of the lease in the instant matter contains such a provision. While it could be argued that Respondent's First Counterclaim falls within this narrow exception, Respondent would be precluded from asserting this Counterclaim based on its failure to meet its burden of proof on the issue of partial constructive eviction. Accordingly, Respondent' s Counterclaims are dismissed.

CONCLUSION

Based on the foregoing, Petitioner is awarded a money judgment in the amount of $415,562.40 which includes rent and late fees from October 2006 to the present, with interest and costs, and a final judgment of possession, warrant of eviction to issue forthwith, execution stayed to November 14, 2007. Petitioner is also entitled to attorney fees pursuant to Paragraph Nineteen of the lease. The matter is set down for a hearing on attorney fees, November 26, 2007, at 10:00am Part 52.

This constitutes the Decision and Order of the Court.

Court Attorney to notify both sides of this Decision/Order.

Dated: November 7, 2007_______________________________

Brooklyn, New YorkKATHY J. KING

Judge of the Civil Court

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