On March 7, 2024, Petitioner commenced the instant commercial holdover proceeding against the respondents by Notice of Petition and Petition seeking to recover possession of the premises described as "3129 Perry Avenue, First Floor and Basement, Bronx, New York" ("Subject Premises"), a warrant of possession, money judgment for the use and occupancy at fair market value together with legal interest, costs and disbursements, and attorneys' fees. The self-represented respondents filed a Verified Answer with Jury Demand on April 26, 2024. Respondent Schnepf filed a subsequent "Landlord/Tenant Answer in Writing and Verification" on August 21, 2024.

This matter was scheduled for a hearing on use and occupancy on June 16, 2025 in accordance with the Hon. Carol Malcolm's Decision/Order dated May 14, 2025. In said Decision/Order, the Hon. Carol Malcolm granted "Petitioner's motion for summary judgment and dismissal of Respondents' affirmative defenses . . . to the extent that a judgment of possession in favor of Petitioner, with a warrant of eviction issued forthwith"; and set the matter for a hearing on use and occupancy to be held on June 16, 2025.

A hearing was held in this commercial holdover proceeding on the record on June 16, 2025 (FTR). Petitioner appeared by Andrew Stafutti, Esq. and respondents Kathleen J. Conley [*2]dba McKeon Funeral Home and Ronald Schnepf appeared self-represented during the hearing held on June 16, 2025. Petitioner's owner and president, William Curran; and the foregoing respondents testified on June 16, 2025.

Petitioner's witness, the owner and president of John F.X. McKeon & Son, Inc., William Curran, was sworn and testified on Petitioner's case in chief presented. Petitioner submitted two exhibits: "Agreement to Transfer Ownership" dated July 28, 2021 ("Agreement") (Petitioner's Exhibit 1) and "Rent Payment Ledger" ("Ledger) for the years 2021 to 2025 (Petitioner's Exhibit 2). Petitioner's Exhibit 1 was admitted into evidence without objection by the respondents. Petitioner's Exhibit 2 was admitted into evidence over respondents' objection that the Ledger was inaccurate. This Court took judicial notice of its own records in the instant action (see Casson v Casson, 107 AD2d 342 [1st Dept 1985]).

Mr. Curran testified that respondents were responsible for use and occupancy in the amount of $11,935.38 for the Subject Premises in accordance with the Agreement. Petitioner admitted into evidence a printout of the Ledger (Petitioner's Exhibit 2) for the period from August 2021 to June 2025. The only charge listed in the Ledger is "Rent Amount" in the amount of $11,935.38.

RPL 220 provides that "in an action for use and occupancy '[t]he landlord may recover a reasonable compensation for the use and occupation of real property, by any person, under an agreement , not made by deed; and a parol lease or other agreement may be used as evidence of the amount to which he is entitled" (see Mushlam, Inc. v Nazor, 80 AD3d 471 [1st Dept. 2011]). The reasonable value of use and occupancy is the market value of the premises after the expiration of the lease, and the burden to prove the reasonable value of the use and occupancy lies with the landlord (Mushalm, Inc., 80 AD3d 471; see also Cooper v Schube, 101 AD737 [1st Dept 1984]).

Initially, the Court notes that neither the Petitioner nor Respondent Schnepf are parties to the Agreement to Transfer Ownership (Petitioner's Exhibit 1). The Agreement is entered between William T. Curran and Kathleen J. Conley. William Curran testified in this action that he is the owner and president of the Petitioner herein. Said Agreement provides in pertinent part:

FIFTH that Transferor [William T. Curran] has offered to transfer his entire stock interest [100%] with respect to the Funeral Home ["Mckeon Funeral Home" located at the Subject Premises], as well as full control of the assets hereinafter enumerated, to Transferee [Kathleen J. Conley] for the purchase price of $2,500,000.00 with payments of $11,935.38 per month for 180 months and a balloon payment of the principle balance at the same time as the last payment is made.

SIXTH the assets to be included in the transfer of the Funeral Home include the building located at 3129 Perry Avenue, Bronx, NY 10467 including all fixtures and all personal property belonging to the Funeral Home, one 2019 model year Chrysler Pacifica minivan, one 2021 model year Toyota Corolla car, and the Funeral Home's checking account with Sterling Bank in which Transferor agrees to leave the sum of $15,000.00 to offset compensations for the year 2020. Transferee hereby acknowledges an outstanding lien on the 2019 Chrysler minivan in the amount of $15,000.00 or the current outstanding [*3]Chrysler Capital balance.

SEVENTH that the transfer of the assets detailed in Clauses FIFTH and SIXTH shall take place on or about July 1, 2022. Both parties agree that a more formal agreement shall be made by an attorney at that time.

EIGHTH that Transferor grants to Transferee the unilateral right to purchase in full all stock with respect to the Funeral Home at any time prior to July 1, 2022 with payment to be made in accordance with the attached Bankrate amortization schedule. Transferee may also make advance payments to accelerate the stock transfer without incurring any prepayment penalty.

NINTH — In the event that Transferee fail [sic] to make 1 monthly payment or 1 monthly payment is made more than 30 days late within months 1-12 or fails to make or is 30 days or more late on 4 consecutive or nonconsecutive payments within months 13-180 that with respect to the arrangement set forth in Clause EIGHTH, this agreement shall be rendered null and void, and Transferor will maintain possession and control of all Funeral Home stock.

TENTH that prior to the transfer of the aforementioned assets, Transferor shall continue to possess his entire stock interest in the Funeral Home and shall not in any event transfer any of his stock interest in the Funeral Home to any third party, and Transferee shall operate the Funeral Home as a tenant during this time. Transferor shall continue to possess any Funeral Home's credit card(s) bearing his name until the transfer of ownership rights takes place.

. . .

SEVENTEENTH that the Transferee hereby accepts the terms offer detailed in Clauses FIFTH through SIXTEENTH, including the payment arrangement set forth in the amortization schedule reference in Clause EIGHTH.

The Court notes that neither party presented a more formal agreement as contemplated in the "Seventh" paragraph of the Agreement. In addition, neither party proffered the "Bankrate amortization schedule" referenced in the "Eighth" paragraph of the Agreement as evidence.

Contrary to Mr. Curran's testimony, the Court finds nothing in the Agreement to Transfer Ownership which requires Respondent Conley to pay rent for the period of the occupancy of the Subject Premises. Petitioner's position that $11,935.38 represents the monthly rent owed under the Agreement is contrary to the terms of the fifth and sixth paragraphs. The 180 payments in the amount of $11,935.38 per month required under the Agreement were for the purchase of Mr. Curran's 100% stock interest in the Mckeon Funeral Home ("FIFTH" paragraph of Agreement) as well as the assets detailed in the "SIXTH" paragraph of the Agreement. Although the "Tenth" paragraph provides that Respondent Conley would "operate" the Subject Premises as a tenant until the transfer of all the assets under the "Fifth" and "Sixth" paragraphs, the Agreement is devoid of any reference to any rent payments during Respondent Conley's possession as a tenant. As such, Mr. Curran's attempt to have this Court consider the Agreement's monthly payments as rent is equally not credible and unavailing. It is well-settled that "[t]he relation of landlord and tenant can be created only by contract, express or implied, and will not be implied where the acts and conduct of the parties negative of its existence. If the elements of an offer and acceptance, express or implied, are absent, the relation of landlord and tenant does not exist. . . Continued [*4]possession and occupancy on the part of the tenant are not of themselves sufficient to spell out an agreement to pay rent or to create the traditional relationship of landlord and tenant" (see Geist v State, 156 NYS2d 183 [Ct of Claims 1956]). In essence, based upon the terms of the Agreement and the reference to the "Bankrate amortization schedule" in paragraph eight, Respondent Conley defaulted on the terms of the mortgage which Mr. Curran provided to her per the Agreement.

This matter is akin to the matter of Wilkinson v Sukiennik, wherein the Court held that the purchaser of a real property - who took possession of said property prior to closing, and failed to satisfy the condition of contract when the purchaser was unable to obtain the mortgage — was not obligated to pay rent for his occupancy prior to the cancellation of the contract of sale (124 AD2d 1070 [4th Dept 1986]). As in Wilkinson, paragraph ten of the Agreement provides that it may be deemed "null and void". Petitioner, however, provided no testimony as to when the Agreement became null and void. Nevertheless, even if Petitioner had established the date of the cancellation of the Agreement, Petitioner failed to establish the fair market value of use and occupancy for the Subject Premises. Although "prior rent under the terminated lease is sufficient proof to establish the value of the use and occupancy" (see M.H. Thomasmith Co. v Nicola Design Studio, Inc., 2024 NY Slip Op 51193[U] [App Term, 2d Dept 2024]), as noted hereinabove, Petitioner failed to establish that it had a lease agreement with the respondents. Petitioner relies solely on the Agreement to suggest that it is a lease agreement and to establish its entitlement to use and occupancy in the amount of $11,935.38, arguments which this Court already deemed without merit. Furthermore, Petitioner relies on an Agreement to which it is not a party. "Generally it has been held that the ordinary construction contract — i.e., one which does not expressly state that the intention of the contracting parties is to benefit a third party — does not give third parties who contract with the promisee the right to enforce the latter's contract with another" (see Port Chester Elec. Const. Co. v Atlas, 40 NY2d 652 [1976]). Petitioner provided no other evidence in support of its application seeking the fair market value of use and occupancy.

Based upon the foregoing, Petitioner's application for fair market value of use and occupancy is hereby denied in its entirety in accordance with the Court's findings hereinabove.

Accordingly, it is hereby

ORDERED AND ADJUDGED that Petitioner's application for a fair market value of use and occupancy is hereby denied in its entirety in accordance with the Court's findings hereinabove; and it is further

ORDERED AND ADJDUGED that Clerk of the Court is directed to scan all exhibits submitted by the parties to this Court — Petitioner's Exhibits 1-2; and Respondents' Exhibits A-C — together with this Decision and Order After Hearing; and it is further

ORDERED AND ADJDUGED that the parties are directed to pick up their respective exhibits on or before September 15, 2025, or they will be either mailed to the parties or destroyed in accordance with Directives and Procedures 185; and it is further

ORDERED AND ADJUDGED that the Petitioner shall serve a copy of this Decision and Order After Hearing together with Notice of Entry upon the respondents within ten (10) calendar days of the entry of the Decision and Order After Hearing by the Clerk.

This shall constitute the decision and order of the Court.