[*1]
Stout v Syracusa
2010 NY Slip Op 51102(U) [27 Misc 3d 1238(A)]
Decided on June 24, 2010
Rochester City Ct
Morse, J.
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This opinion is uncorrected and will not be published in the printed Official Reports.


Decided on June 24, 2010
Rochester City Ct


Michael Stout, Plaintiff,

against

Mark Syracusa, Defendant.




2009 - SC - 24514



Anthony Daniele, Esq. (Counsel for the Defendant)

Thomas Rainbow Morse, J.



The court has conducted a de novo small claims proceeding in the above matter and has taken sworn testimony regarding the plaintiffs' request for return of his six hundred dollar security deposit on an apartment he rented from the defendant. There is no allegation that any portion of the security deposit has been needed to compensate the landlord for damage to the property over and above "normal wear and tear," nor is there an assertion that the tenant remained in the premises after the written lease expired, Rather, the landlord claims he is entitled to retain the security deposit for November rent because the tenant failed to give the landlord adequate notice that he was leaving at the end of October.

The landlord does not allege he had "no idea" the tenant might be leaving. Rather, he asserts he had no concrete information upon which he could act. While the written twelve month lease between the parties expired on October 31, 2009, it is undisputed that as early as August of that year, the parties had some discussion about whether the tenant would be leaving the premises at the end of the lease term because he would be buying a home. However, the tenant also acknowledges that in August he did not tell the landlord he would in fact be leaving and had arranged with a friend to house him after Halloween. The court also credits the testimony that there was no further communication regarding the tenancy until October 9th when the parties discussed whether the tenant had at that time signed a contract to purchase a home. It is also clear to the court that on that date the landlord contacted realtors in an effort to re-rent the apartment.

Most residential landlords require a tenant to pay a security deposit at the time they rent an apartment. As in this written agreement, such a clause constitutes "security for the full and faithful compliance of the terms of [the] lease." Since the 1930's, it has been recognized that such security "shall continue to be the money of the person making such deposit,"[FN1] and the landlord [*2]holds the security deposit in trust for the tenant.[FN2] Thus, if the landlord commingles the money with his or her assets, the tenant is entitled to immediate return of the money regardless of the validity of any claim the landlord might have had to use a portion of the security deposit to off-set a loss occasioned by the tenant's breach of a lease condition.[FN3] Moreover, the obligation to account for and return any unneeded security deposit rests on the landlord and the tenant does not have to sue to get it back. In an egregious case, "[a]s a trustee, a landlord who unlawfully retains security deposits can be prosecuted for larceny." [FN4] In this case, however, the court finds neither criminal conduct nor deceptive practices. [FN5] Here, the landlord simply relies on a lease clause commonly used to continue the tenancy for at least an additional month unless proper notice to quit is provided. The specific agreement in this lease required the tenant to give the landlord a [*3]month's notice that he intended to leave at the end of the lease and that "[f]ailure to timely notify the landlord that the tenant will vacate the property shall make this lease a month-to-month lease and the tenant shall be liable for an additional 30 days rent." [FN6] Both parties were adults when the lease was signed and they must be presumed to have read the lease completely and agreed to be bound by its terms. Since the court has already found that the earliest the tenant provided the landlord with a firm move-out date was October 9th, resolution of this case involves the validity of that paragraph since parties cannot contract or act in contravention of established New York law.

Lease extension provisions derive from English real property law and have been in existence in our state since the time of the revolutionary war.[FN7] By 1915, however, the Court of Appeals noted that while they are enforceable, "[c]ovenants by a landlord for continual renewals are not favored for they tend to create a perpetuity."[FN8] Two decades later, New York restricted the use of such clauses in leases when it required the landlord to provide a tenant with written notice of an imminent automatic renewal in order for such a provision to be valid.[FN9] Under our law,

[n]o provision of a lease of any real property or premises which states that the term thereof shall be deemed renewed for a specified additional period of time unless the tenant gives notice to the lessor of his intention to quit the premises at the expiration of such term shall be operative unless the lessor, at least fifteen days and not more than thirty days previous to the time specified for the furnishing of such notice to him, shall give to the tenant written notice, served personally or by registered or certified mail, calling the attention of the tenant to the existence of such provision in the lease.[FN10]


In upholding the statutory predecessor of this provision, the Court of Appeals noted that the law [*4]"was enacted solely for the protection of the tenant."[FN11] Another court found that "the automatic renewal clause in leases was indubitably a trap for the unwary or forgetful tenant."[FN12] The Third Department has found that a landlord's failure to provide the required written reminder precludes recovery from the original tenant even when the tenant subsequently sub-let the premises.[FN13] Lastly, the Fourth Department has held that "[c]ovenants for renewal are to be construed most favorably to the lessee."[FN14]In this case, there is no proof that the landlord provided the tenant with the required written reminder of the lease's automatic renewal. His inaction renders the automatic renewal clause in this case unenforceable as against the public policy of this state.[FN15]

Had the landlord sent such a notice to the tenant between September 1st and 15th, the paragraph would have been valid and the tenant would have been required to provide his notice to vacate before October 1st in order to avoid having to pay an additional thirty days rent. Also, had the tenant still been in the premises on November 1st, the landlord could have proceeded against him as a hold-over.[FN16]

This decision, however, does not mean that the tenant is to be commended for his insensitivity to the landlord's needs in this case. Rochester, like so many communities across this nation, depends on conscientious landlords who are willing to take the financial risks necessary to provide good quality apartments for low and moderate income residents who cannot afford to own a home. Even though our laws require that landlords trigger lease renewal provisions, common courtesy dictates that this tenant should have kept his landlord up to date as to his plans. If he could think far enough ahead to secure transitional housing with a friend, as a good neighbor he owed it to his landlord to let him know he would be leaving at the end of October even if he wasn't immediately moving into his own house. There is simply no wrong time to do the right thing!

After due deliberation and careful consideration of the evidence before the court, taking into account the demeanor and non-verbal communication of each witness [FN17] and consistent with [*5]the court's responsibility under Section 1804 of the Uniform City Court Act "to do substantial justice between the parties according to the rules of substantive law," it is hereby

HELD that the Plaintiff has shown entitlement to a judgment. Therefore, it is hereby

ORDERED that the Plaintiff is entitled to a judgment against Mark Syracusa in the amount of $ 600. And it is further

ORDERED that this court's judgment order is stayed until August 1, 2010, to allow the defendant time to pay the amount ordered without a judgment being entered. And it is further

ORDERED that if payment is not made by August 1, 2010, the judgment shall be entered in favor of the plaintiff without further appearance before the court after receipt of plaintiff's written request for entry of a judgment accompanied by a notarized affidavit indicating that no appeal of this order has been taken by either party and that payment was not made by the defendants as ordered.

The foregoing constitutes the decision and order of the court.ENTER,

Dated:June 24, 2010_______________________________________

Rochester, New YorkHon. Thomas Rainbow Morse, JCC

cc:Michael Stout

Anthony Daniele, Esq. (Counsel for the Defendant)

Footnotes


Footnote 1:General Obligations Law § 7-103(1).

Footnote 2:Park Holding Co. v. Johnson, 106 Misc 2d 834, 835 -836 (NYC Civil Ct., Dankberg, J., 1980). See also Glass v. Janbach Properties, Inc., 73 AD2d 106, 108-09 (2nd Dept., 1980).

Footnote 3:Dan Klores Associates, Inc. v. Abramoff, 288 AD2d 121, 122(1st Dept., 2001). The Court went on to note that the

showing that defendant failed to give plaintiff written notice of the banking institution that held plaintiff's security deposit, in violation of General Obligations Law § 7-103 (2), permitted an inference of commingling at the time of lease expiration, in violation of General Obligations Law § 7-103 (1), that defendant failed to rebut. As a result of such commingling, defendant forfeited any right he had to avail himself of the security deposit " 'for any purpose,' " entitling plaintiff to its "immediate" return notwithstanding that plaintiff may itself have breached the lease. Thus, we reject defendant's argument that a tenant's right to a refund of a security deposit for commingling is subject to offset to the extent a landlord incurs justifiable repair costs after the tenant vacates. Plaintiff had a cause of action against defendant for conversion as soon as the deposit was placed in a commingled account, which cannot be defeated by defendant's post-lease use of the commingled deposit for repairs.

Id.(citations omitted). See also Tappan Golf Drive Range, Inc. v. Tappan Property, Inc., 68 AD3d 440, 440-41(1st Dept., 2009). In this case, the record does not reveal any such conversion of the funds held in trust.

Footnote 4:Kamara v. Pavia, 11 Misc 3d 1051(A)(Rochester City Court, Yacknin, J., 2006)(citing to People v. Lyon, 82 AD2d 516, 520 (2d Dep't 1981). Judge Yacknin went on to note that "the Attorney General of the State of New York is explicitly authorized to institute a legal action to compel a landlord to comply with the mandates of NY General Obligations Law § 7-103, and to return unlawfully held security deposits. See NY General Obligations Law § 7-109; Gerel Corp. v. Prime Eastside Holdings, LLC, 12 AD3d 86, 89 (1st Dep't 2004).

Footnote 5:General Business Law § 349 provides that "deceptive acts or practices in the conduct of any business ... in this state are declared unlawful." See Miller v. Boyanski,, 25 Misc 3d 1228(A)(Watertown City Court, Harberson, J., 2009).

Footnote 6:"Notice to Vacate. This lease shall end on 31 Oct 09 , hereafter referred to as vacating date. Tenant must notify the landlord on or before the end of the prior month that they will be vacating on the above date. Failure to timely notify the landlord that the tenant will vacate the property shall make this lease a month-to-month lease and the tenant shall be liable for an additional 30 days rent. Beginning 30 days prior to the vacating date, either party may give the other party 30 days notice in writing in order to end the lease."

Footnote 7:Rutgers v. Hunter, 6 Johns. Ch 215 (Chancery Court of New York, 1822).To avoid the rule against perpetuities (e.g. that property can't be alienated for a period in excess of a life in being plus 21 years), such automatic renewal clauses typically had to be exercised every twenty-one years.

Footnote 8:Burns v. City of New York, 213 NY 516, 520 (1915).

Footnote 9:McKinney's Real Property Law § 230 (L. 1936, ch. 702.). This section of that statute has now been moved to the General Obligations Law.

Footnote 10:McKinney's General Obligations Law § 5-905.

Footnote 11:J. H. Holding Co. v. Wooten, 291 NY 427, 430 (1943). See also Boyd H. Wood Co. v. Horgan, 291 NY 422 (1943).

Footnote 12:Kuppers v. Tortora Agency, Inc. 63 Misc 2d 656, 658(N.Y.C. Civ.Ct., 1970).

Footnote 13:Malone Associates v. Grand Union Co,. 249 AD2d 830(3rd Dept., 1998)

Footnote 14:DeSantis v. Kessler, 83 AD2d 766, 767(4th Dept.,1981).

Footnote 15:In addition, the Real Property Law specifically exempts a month to month tenant who has "a tenancy for a definite term" from providing a month's termination notice. Real Property Law § 232-b.

Footnote 16:Real Property Law § 232-c.

Footnote 17:In evaluating the credibility of any witness in this and all cases, this court paid and always pays particular attention to the demeanor and non-verbal communication of anyone under oath because of the recognized limited scope of any appellate review. As noted by the First Department:

On a bench trial, the decision of the fact-finding court should not be disturbed upon appeal unless it is obvious that the court's conclusions could not be reached under any fair interpretation of the evidence, especially when the findings of fact rest in large measure on considerations relating to the credibility of witnesses. This standard applies with greater force to judgments rendered in the Small Claims Part, which is commanded to do substantial justice between the parties according to the rules of substantive law. This provision has been interpreted to mean that in general, alleged errors in the presentation of evidence or pleadings are not reviewable upon appeal as they are not a basis for reversal of a judgment. Because there is ample support in the record, there is no basis to disturb the factual findings made by Civil Court.

Williams v. Roper, 269 AD2d 125, 126-27(1st Dept.,2000)(citations and internal quotation marks omitted) lv. to appeal dismissed, 95 NY2d 898(2000).