425 Madison Assoc. v Eastern Computer & Notebook Corp. (2008 NY Slip Op 51094(U))

425 Madison Assoc. v Eastern Computer & Notebook Corp.

2008 NY Slip Op 51094(U) [19 Misc 3d 143(A)]

Decided on June 4, 2008

Appellate Term, First Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and will not be published in the printed Official Reports.

425 Madison Associates, Petitioner-Landlord-Appellant,

against

Eastern Computer and Notebook Corp., Respondent-Tenant-Respondent

Petitioner-landlord appeals from a judgment of the Civil Court of the City of New York, New York County (Barbara Jaffe, J.), entered November 27, 2007, after a hearing, which, inter alia, awarded tenant a recovery of a portion of its security deposit.

Judgment (Barbara Jaffe, J.), entered November 27, 2007, modified only to the extent of remanding the matter to
Civil Court for calculation of the amount of interest due tenant in accordance with this decision; as modified, judgment affirmed, without costs.

We find no cause to disturb the hearing court's resolution of the disputed security deposit issue in favor of tenant, a determination resting largely upon the court's findings of fact and credibility and the adverse inference appropriately drawn against landlord for failing to call any witness with personal knowledge of the circumstances involving the execution of the operative lease and lease modification agreements (see Rivera v TRW Title Ins. of New York, 309 AD2d 740 [2003]). The tenant's principal's unrebutted testimony that, upon signing the lease, he tendered the full amount of the security deposit specified in the document — half in cash and half by check — is consistent with the provisions of lease paragraph 31 reflecting full payment, and is neither inherently improbable nor incredible (compare Kiamos & Tooker, Inc. v Zelis Florist, Inc., 264 Ad2d 623 [1999]).

The court erred, however, in awarding tenant interest on the disputed portion of the judgment ($17,500) at the statutory rate of 9%, where the lease agreement provided that tenant was to earn interest on the security deposit at the rate payable in an "interest-bearing account" (see Wanich v Bitter, 12 Misc 3d 1165[A], 2006 NY Slip Op 51062[U] [2006]; see generally Heimbinder v Berkovitz, 263 AD2d 466, 467 [1999], lv denied 94 NY2d 755 [1999]). "Granting [tenant] interest at the [statutory] rate would be granting [it] a windfall beyond that which [it] would have received had [landlord] complied with the [Lease] Agreement" (Wanich v Bitter, 12 Misc 3d 1165[A] at 10-11). [*2]

THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
Decision Date: June 4, 2008