Sheridan One Co., LLC v Chowdhury

Civil Court of the City of New York, Bronx County

Decided on March 31, 2026

Index No. CV-006059-25

Eric J. Wursthorn, J.

A bench trial was held in this matter on March 16, 2026. Plaintiff appeared by counsel; defendant was self-represented. Plaintiff admitted four documents into evidence (Plaintiff's Exhibits 1-4) and called one witness: Gregory Rivera, a Collection Administrator for plaintiff's managing agent, Pelican Management. Defendant testified in the narrative using a Bengali interpreter and submitted two documents into evidence (Defendant's Exhibits 1-2). After hearing the testimony of the witnesses and reviewing the admitted evidence, the Court makes the following findings of fact and conclusions of law:

I. FINDINGS OF FACT

Plaintiff is the owner of a multiple dwelling building located at 930 Sherman Avenue, Bronx, New York 10451 (the "building"). On October 8, 2010, the parties entered into a rent-stabilized lease for apartment 4B in the building (Plaintiff's Exhibit 1) whereby defendant took possession of said apartment. Plaintiff continued to lease the apartment to the defendant for the next eleven years pursuant to lease renewals; the most recent renewal lease dated July 21, 2020 obligated defendant to pay monthly rent at the rate of $1,494.23 per month through October 31, 2021 (Plaintiff's Exhibit 2).

Before his most-recent lease renewal expired on October 31 2021, defendant vacated the apartment in April 2021. Defendant provided notice to plaintiff of his intent to vacate in the form of an email to bronx@goldfarbproperties.com dated April 1, 2021 notifying plaintiff that he will [*2]be moving out of the apartment by the end of the month and requesting that his security deposit be applied to the April rent because "due to COVID and lack of work I really cannot afford it anymore" (Defendant's Exhibit 1). Defendant also submitted into evidence a letter dated April 2, 2021 from plaintiff acknowledging defendant's request to move out on April 30, 2021 (Defendant's Exhibit 2). The April 2, 2021 letter outlined plaintiff's protocol whereby defendant could request an inspection of the apartment before he moved out.

Defendant credibly testified that plaintiff's employees performed an inspection of the apartment and that he was told there were no problems. Defendant admitted, however, that during the inspection, plaintiff's employee verbally identified some minor problems with the paint and items pertaining to the kitchen. Defendant credibly testified that he was otherwise unaware that plaintiff was seeking damages for unpaid rent or property damage until he received a notice sent from plaintiff's counsel dated April 12, 2022 (Plaintiff's Exhibit 4).

Plaintiff submitted a rent ledger into evidence which was properly authenticated by Mr. Rivera, whose job duties included maintaining and keeping all lease files for any past tenants that are in collections. According to the rent ledger, as of March 15, 2021, defendant did not owe any money to plaintiff. Thereafter, monthly rent was charged to defendant's account from April 1 through October 1, 2021 at the rate of $1,494.23, defendant's security deposit was credited to his account on April 30, 2021 and 4 debits for "Damages" were charged to defendant's account, also on April 30, 2021, for the following items: Stove, $150.00; Doors, $100.00; Cleaning, $350.00; and Wood Floors, $150.00 (Plaintiff's Exhibit 3). At trial, plaintiff's counsel indicated that plaintiff was not seeking to recover for property damage.

After possession of the apartment was returned to plaintiff, Mr. Rivera testified that "the apartment had to undergo further renovations and repairs to relist the unit." When asked why the apartment was renovated, Mr. Rivera explained that "[t]he apartment was renovated because the leasing department determined that the apartment in order to receive market value of the apartment, had to undergo renovations in order to relist the unit." When the Court asked Mr. Rivera how he obtained this information, he replied that he learned this information by "discussing it with the leasing department."

After the renovations were performed, the apartment was relisted in August 2021, which meant, according to Mr. Rivera, that the apartment was "made available for any potential new applicants to apply for the unit." This testimony was properly based upon Mr. Rivera's access to and review of plaintiff's file pertaining to defendant's tenancy. Mr. Rivera claimed that an applicant applied to rent the apartment in August 2021, that application was approved in September 2021 and a signed lease for the apartment with a new tenant was entered into on September 20, 2021 for a term commencing November 1, 2021. Mr. Rivera explained that the new tenant was from a voucher program which required additional documentation before move-in, thus explaining the extended period between lease signing and the new tenant taking possession of the apartment.

The Court takes judicial notice of the court file, wherein plaintiff sued defendant for $9,715.38 under a theory of breach of the lease. That original complaint itemized damages as follows: $1,494.23 per month for May-October 2021 and $750.00 for damages to the Stove, Doors, Wood Floors and for Cleaning. Defendant's answer contains a general denial and asserts affirmative defenses of failure to state a claim, surrender by operation of law, laches/delay in filing, failure to mitigate damages, waiver and estoppel and unclean hands.

[*3]II. CONCLUSIONS OF LAW

A. Liability

Plaintiff's first cause of action for unpaid rent sounds in breach of contract. The elements of a cause of action for breach of contract are as follows: the existence of a contract, the plaintiff's performance under the contract, the defendant's breach of that contract, and resulting damage (Noto v. Panck, LLC, 228 AD3d 516 [1st Dept 2024]). Here, plaintiff has shown that the parties entered into the original lease and most recent renewal lease dated July 21, 2020 and that the defendant breached the most recent renewal lease by failing to pay rent as of April 2021.

Defendant's affirmative defenses of failure to state a claim and surrender by operation of law are without merit and thus fail. Defendant's affirmative defenses of laches/delay in filing, waiver and estoppel and unclean hands are all based upon his testimony that he moved out in April 2021 and was not aware that plaintiff would seek damages for unpaid rent through the duration of the lease term. However, defendant admitted that he received notice from plaintiff that it sought unpaid rent through October 31, 2021 in the April 12, 2022 letter.

In any event, plaintiff could not calculate its damages until the new lease term commenced November 1, 2021. A less than six-month delay before plaintiff demanded the unpaid rent sought herein does not warrant dismissal based upon any of the defenses asserted by defendant. Accordingly, defendants' affirmative defenses which go to liability for breach of the lease are unavailing. The Court notes that defendant has pleaded an affirmative defense of failure to mitigate damages, which will be considered in the Court's determination of plaintiff's damages.

B. Damages

Having established defendant's liability for breach of the lease, the Court now turns to its analysis of plaintiff's claim for damages. Plaintiff seeks to recover unpaid rent for six months, from May 1, 2021 through the duration of the lease term, October 31, 2021. Plaintiff's efforts to mitigate damages are separately considered from May 1, 2021 through July 31, 2021 and from August 1, 2021 through October 31, 2021. For the reasons that follow, the Court finds that plaintiff has failed to establish that it discharged its duty to mitigate damages throughout the entire period that plaintiff seeks to recover damages from the defendant.

1. May through July 2021

RPL § 227-e was enacted as part of the Housing Stability and Tenant Protection Act of 2019 ("HSTPA"). Prior to the HSTPA, there was some disagreement about whether a landlord had a duty to mitigate damages with respect to a residential lease after the Court of Appeals held that there was no such duty concerning a commercial lease in Holy Props. L.P. v. Kenneth Cole Prods., 87 NY2d 130 [1995] (see 14 East 4th Street Unit 509 LLC v. Toporek, 203 AD3d 17, 23 [1st Dept 2022] for an extensive discussion of that history). Entitled "Landlord duty to mitigate damages", Section 227-e statutorily enshrines a landlord's obligation to minimize damages in the residential context.

RPL § 227-e specifically provides as follows:

In any lease or rental agreement, excluding any real estate purchase contract defined in paragraphs (a), (c) and (d) of subdivision four of section four hundred sixty-one of this [*4]chapter, covering premises occupied for dwelling purposes, if a tenant vacates a premises in violation of the terms of the lease, the landlord shall, in good faith and according to the landlord's resources and abilities, take reasonable and customary actions to rent the premises at fair market value or at the rate agreed to during the term of the tenancy, whichever is lower. If the landlord rents the premises at fair market value or at the rate agreed to during the term of the tenancy, the new tenant's lease shall, once in effect, terminate the previous tenant's lease and mitigate damages otherwise recoverable against the previous tenant because of such tenant's vacating the premises. The burden of proof shall be on the party seeking to recover damages. Any provision in a lease that exempts a landlord's duty to mitigate damages under this section shall be void as contrary to public policy.

Here, it was plaintiff's burden to establish that it mitigated its damages caused by defendant's breach of the 7/21/20 residential lease. Specifically, plaintiff must show that it took reasonable and customary actions to "render the injury as light as possible" (Wilmot v. State of New York, 32 NY2d 164, 168 [1973]). The duty to mitigate damages requires landlords to, "in good faith and according to the landlord's resources and abilities, take reasonable and customary actions to rent the premises" (14 E. 4th St. Unit 509 LLC v. Toporek, 203 AD3d at 22). This duty is not an affirmative defense a tenant needs to raise (id.), even though the defendant here did so.

The duty to mitigate damages set forth in Section 227-e is consistent with well-settled contract law which requires parties who are injured by another parties' contract breach to take reasonable steps to avoid further losses (Hamilton v. McPherson, 28 NY 72 [1863] ["The law, for wise reasons, imposes upon a party subjected to injury from a breach of contract the active duty of making reasonable exertions to render the injury as light as possible. Public interest and sound morality accord with the law in demanding this; and if the injured party, through negligence or willfulness, allows the damages to be unnecessarily enhanced, the increased loss justly falls upon him."]; see also LaSalle Bank Nat. Ass'n v. Nomura Asset Capital Corp., 47 AD3d 103 [1st Dept 2007]). However, plaintiff does not need to succeed in reletting the premises in order to mitigate its damages (14 E. 4th St. Unit 509 LLC v. Toporek, supra; see generally LaSalle Bank Nat. Ass'n, 57 AD3d at 109-110).

The duty to mitigate damages is also consistent with public policy that housing should not sit vacant while a landlord collects damages from a tenant who has surrendered possession in the face of the well-documented housing crisis in New York City. (See e.g. 29 Holding Corp. v. Diaz, 3 Misc 3d 808, 813 [Sup Ct, Bx Co. 2004] ["The concept that a landlord can hold a residential tenant hostage to the terms of a lease, doing nothing and permitting damages to accrue when leased premises are readily marketable is clearly contrary to common sense, the reasonable expectations of the public, and notions of justice and equity."]

Mr. Rivera did not testify as to the nature and scope of the so-called renovation work that was done. Plaintiff did not submit any evidence to substantiate its claim that it took three months to perform such work. Mr. Rivera further admitted that his vague and conclusory testimony on this point was based upon conversations with the leasing department, not personal knowledge of the work performed or the condition of the subject apartment when defendant vacated. The Court finds Mr. Rivera's specific statement that the apartment was renovated because the leasing department determined it needed to be in order to receive market value of the apartment to be based on a legal conclusion without sufficient factual support.

On the other hand, the Court credits defendant's testimony that plaintiff and/or its agent [*5]inspected the apartment before he vacated pursuant to the procedure outlined in plaintiff's April 2, 2021 letter to defendant and as required by law (GOL § 7-108[1-a][d]). The Court also credits defendant's testimony that said inspection revealed only minor issues which would require light repairs. This testimony is consistent with plaintiff's $750 claim for property damage, which plaintiff voluntarily withdrew during the course of the trial, and the meager descriptions itemizing those claimed damages set forth in the rent ledger.

Thus, there was no testimony or evidence on this record which would support the conclusion that it reasonably took plaintiff three months to make $750 worth of repairs to the apartment, according to plaintiff's resources and abilities, in order to relist it at the rate agreed upon by the parties in the 7/21/20 renewal lease and/or at fair market value. Nor was there evidence or testimony that such work was customary. Thus, plaintiff's claim for damages for the months of May, June and July is disallowed.

2. Damages: August through October 2021

Having failed to mitigate damages for the first three months following defendant's vacatur, the Court must determine whether plaintiff may still recover for any period of time thereafter. The Court answers this question in the affirmative.

In other contractual contexts, a failure to mitigate damages does not serve as a categorical bar to recovery, and courts consider "the extent to which such efforts would have diminished [] damages" (LaSalle Bank Nat. Ass'n, 47 AD3d at 108-1009). Plaintiff's failure to mitigate damages from May through July 31, 2021 does not necessarily impact its ability to begin mitigating damages in August 2021. A reading of Section 227-e which permits partial recovery for the period during which a landlord satisfies its obligation to mitigate damages is consistent with public policy: landlords should be encouraged, not penalized, to attempt to relet housing sooner rather than later. To hold otherwise would be overly punitive to the landlord, the party that did not breach the lease in the first place. Further, mitigation need not be perfect. A landlord does not need to succeed in renting the subject premises before expiration of the prior tenant's lease term, so long as reasonable and customary efforts have been made (14 E. 4th St. Unit 509 LLC v. Toporek, 203 AD2d at 24).

On this record, the Court finds that plaintiff took reasonable and customary measures to relet the apartment as of August 1, 2021 (see i.e. Kakade v. Newman, 79 Misc 3d 304 [2022]). Mr. Rivera credibly testified the apartment was relisted sometime in August 2021 based upon plaintiff's records. Although plaintiff did not specify when in August the apartment was relisted, assuming arguendo that the apartment was only relisted towards the end of the month, it would be unreasonable to require a landlord to enter the apartment at the stroke of midnight the day after a tenant has vacated early and begin mitigation efforts.FN1

Moreover, the Court concludes that a one-month time frame to perform light repairs and relist the apartment is reasonable, given the uncontroverted testimony that some manner of work needed to be done to make the apartment available for a new tenant to take possession. Based [*6]upon the evidence presented, the Court can draw a reasonable inference that such work addressed the ordinary wear and tear occasioned by defendant's possession of the apartment for eleven years prior to vacatur, as well as the items defendant admitted which needed to be repaired. The Court notes that it's previous finding that such work would not reasonably take 90 days to complete (disallowing damages for unpaid rent due May 1, 2021 through July 31, 2021), is not inconsistent with its finding that such work could reasonably be completed during the bulk of August 2021.

There is a gap in the record regarding what rent the apartment was listed at in August 2021. In order to determine whether a landlord has satisfied its obligation under RPL § 227-e, the Court must consider whether the plaintiff has made efforts "to rent the premises at fair market value or at the rate agreed to during the term of the tenancy, whichever is lower." Here, the Court takes judicial notice of the fact that the subject apartment was rent-stabilized, and any new lease would remain subject to rent stabilization law. Thus, the "rate agreed to during the term of the tenancy" represents the maximum legal rent that plaintiff could seek, thereby satisfying the statutory requirement for the August relisting.

After the apartment was relisted, plaintiff established that it began accepting applications which led to a new lease signed September 20, 2021. The Court further credits Mr. Rivera's testimony that the new tenant's move-in date was approximately forty days after the lease was executed, which was required in order to comply with the subsequent tenant's housing assistance voucher program. Thus, the Court finds that plaintiff has established that its actions to relet the apartment from August 1, 2021 onward were reasonable and customary, according to plaintiff's resources and abilities, and plaintiff has satisfied its obligation under RPL § 227-e.

Therefore, the Court awards plaintiff a money judgment for monthly rent at the rate of $1,494.23 per month for the months of August, September and October 2021 for the total amount of $4,482.69 plus prejudgment interest at the rate of 2% from October 31, 2021 thereafter pursuant to CPLR § 5004[b].

ACCORDINGLY, it is hereby:

ORDERED that judgment be entered in favor of plaintiff Sheridan One Company, LLC against defendant Habibullah Chowdhury in the sum of $4,482.69 plus at the rate of 2% from November 1, 2021, together with costs and disbursements as taxed by the Clerk; and it is further

ORDERED that the Clerk of the Court is hereby directed to enter judgment accordingly.

Dated: March 31, 2026

Bronx, New York

Hon. Eric J. Wursthorn, J.C.C.