KRE Bklyner23 Menahan LLC v Fortune

Civil Court of the City of New York, Kings County

Decided on April 21, 2026

Index No. CV-015853-25/KI

Chidi A. Eze, J.

This case comes before this court for trial, this 17th day of March 2026. Plaintiff appears by counsel (Gutman, Mintz, Baker & Sonnenfeldt, P.C. [Young Yoo, Esq.]), and defendant is pro se.

BACKGROUND

This case involves an alleged unpaid rent owed by former co-tenants^FN1. Plaintiff is seeking to recover two months' unpaid rent at $3,375 per month from three former joint tenants, George R. Fortune, Sandra Fortune and Solomon Fortune. George and Sandra are married couple, and Solomon is their son. The Address of the property is 23 Monaham Street, Apartment 3A, Brooklyn NY 11221.

In June of 2020 the co-tenants signed a lease agreement with Plaintiff's predecessor-in-interest for a period of one year at $3,375 per month. The lease period began on June 1, 2020, and expired on May 31, 2021. There is no dispute that the co-tenants vacated the premises on or before May 31, 2021, in accordance with the lease agreement. All three were named in and signed the lease. There is dispute as to what months were unpaid and owing. Plaintiff claims that two months remain unpaid. Defendant asserts, among other things, that a payment they made on May 18, 2020, was not reflected in Plaintiff's payment ledger.

Plaintiff testified to payment record, through its witness, Justin Riley, who claimed that he became the subject property's manager in or around October of 2025. Riley testified that the [*2]old management company (Dalan Management), was replaced by his company, the current management company, in October of 2020. Riley further testified that according to the Resident Ledger (Plaintiff's Exhibit 3) and the Transaction Listing (Plaintiff's Exhibit 4), there remained an unpaid rent in the amount of $6,925 ($3,375 x 2) after the security deposit and the rent concession discounts were credited.

On the other hand, defendant Solomon Fortune challenged the grounds upon which Riley's knowledge of rent payment is based, since he was not employed during the pendency of the lease agreement. Fortune also disputed that any rent was owed. In fact, Fortune produced a bank statement showing that his family made a payment of $3,385 in May of 2020, which was not reflected in plaintiff's rent ledger. Riley was unable to rebut this evidence, because according to him, he only reviewed the payment record from June 2020 going forward, not prior.

Defendant stated that it was his co-tenants (his parents), not himself, that made the rent payments directly to the landlord. He testified that he usually hands over his portion of the rent to his parents, who made the payments to the landlord through an online portal or via check. He stated that he was never given access to this payment portal. He testified credibly that he knew nothing about when and how his parents made the payments. He produced some cashed checks, written by his parents, and bank statements from bank account(s) of his parents, to prove payments of rent. He obtained these documents from his parents. In essence, defendant proved that he had no firsthand knowledge of rent payments during the relevant time.

Defendant argued that it would be unfair to hold him solely responsible for the alleged unpaid rent arrears. Plaintiff testified that this action was commenced against this defendant alone, because his former co-tenants (George and Sandra Fortune) have relocated to the State of Georgia and they have no forwarding address for them in Georgia. Plaintiff also had concerns that it may not be able to enforce a possible judgment against these out of State residents.

The court notes that these tenants moved out of the apartment in May of 2021, but this action commenced in July of 2025.

At the close of trial, the parties were asked to submit post-trial memoranda which they did.

In his post-trial submission, defendant wrote in pertinent part " . . . [T]he accounting of rent payments and alleged arrears directly involves(sic) the actions and records of those co-tenants. The documentary evidence regarding payments, including bank statements to the Court, originates from co-tenants rather than from Defendant, further demonstrating that the underlying payment records are associated with parties who are not present in this action."

Defendant further argued that Plaintiff's delay in bringing this case is to be blamed for the inability to reach the co-tenants. He wrote " . . . the plaintiff did not file the present action until July 2025 approximately four years after the tenancy ended and several years after the alleged [*3]arrears arose."

He continued "During the hearing, plaintiff's counsel indicated that other co-tenants were not pursued because they had since moved out of state. However, those co-tenants resided in the New York and New Jersey area until July 2024. The plaintiff nevertheless waited until July 2025 to initiate this action."

As stated earlier, Plaintiff brought this case more than four years after the tenants vacated the premises. Defendant asserts that his parents relocated to New Jersey in 2022 and then to the State of Georgia in 2024.

At trial Plaintiff was unable to explain or justify this lengthy delay in seeking recovery. Even in its post-trial submission, Plaintiff did not attempt to explain the delay, rather it argues that Laches does not apply because the action was brought within the statute of limitations. Plaintiff's only explanation for failing to include the other co-tenants is that they moved out of State.

DISCUSSION

I. Is This a Consumer Credit Transaction

From the onset, it appears, according to case law, that this case is a consumer credit transaction matter, even though it is for rent arrears against former tenants. Indeed, several courts have held that a suit for unpaid rent against former tenants fall into the category of consumer credit. See Romea v Heiberger & Associates, 163 F.3d 111 (2nd Cir. 1998) (holding that unpaid back rent was debt within the meaning of Fair Debt Collection Practices Act (FDCPA) §803(5) as amended, 15 U.S.C. §1692a[5]); See also Kings and Queens Holdings, Inc. v. Ahmad, 56 Misc 3d 832, 53 N.Y.S.3d 503 (Civil Court, Richmond County 2017) (an action to recover rent from out of possession former tenant constituted consumer credit.)

FDCPA defines debt as:

[a]ny obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.

(15 U.S.C. §1692a[5] [1994]).

This alleged unpaid, out-of-possession, rent arrearage clearly falls under FDCPA definition of "debt", as will be discussed below. Plaintiff extended credit to the defendant in the amount of this alleged debt, because it had the opportunity to seek recovery of the rent arrears while the tenants were in possession, or soon thereafter, but failed to do so.

Article 7 of Real Property Actions and Proceeding law ("RPAPL") provides for summary proceedings to recover rent arrears, whether due under a subsisting lease agreement or month-to-month tenancy. However, once recovery is sought outside that mechanism, the debt becomes consumer debt subject to the laws governing consumer credit transactions.

CPLR §105(f) defines consumer credit transaction as follows:

The term "consumer credit transaction" means a transaction wherein credit is extended to an individual and the money, property, or service which is the subject of the transaction is primarily for personal, family or household purposes.

The within case meets every and all elements of consumer credit transaction, as set forth in the above statute. This court finds that rent arrears sought to be recovered outside the mechanism of Article 7 of the RPAPL are consumer credit debts.

CPLR §305 prescribes that:

The summons in an action arising out of a consumer credit transaction shall prominently display at the top of the summons the words "consumer credit transaction" and, where a purchaser, borrower or debtor is a defendant, shall specify the county of residence of the defendant, if one resides within the state, and the county where the consumer credit transaction took place, if it is within the state

Here, it appears the complaint failed to comply with the provisions of CPLR §305, requiring outright dismissal of this case. Further, the statute of limitations to commence a consumer credit transaction case is three (3) years, whereas this case commenced more than four (4) years from when the right to sue accrued.

This case should be dismissed on this ground alone.

II Does Laches Bar This Case

In this case, the inordinate delay in commencing this case, coupled with the likely severe prejudicial effect upon this defendant, requires an examination of the applicability of Laches.

As stated earlier, this case commenced in July of 2025 and served upon the defendant in September of 2025.^FN2 The question therefore is whether the more than four years delay in bringing this action has prejudiced defendant and frustrated his ability to properly and judiciously mount a defense. The elements of the equitable doctrine of Laches, are:

(1) conduct by an offending party giving rise to the situation complained of, (2) delay by [*4]the complainant asserting his or her claim for relief despite the opportunity to do so, (3) lack of knowledge or notice on the part of the offending party that the complainant would assert his or her claim for relief, and (4) injury or prejudice to the offending party in the event that relief is accorded the complainant (75 NYJur2d, Limitations and Laches, § 333).

Dwyer v Mazzola, 171 AD2d 726 (2nd Dept. 1991).

Basically, in landlord and tenant context, the equitable doctrine of Laches has been defined as simply unreasonable or inexcusable delays in asserting and enforcing rights and consequent prejudice to the tenant. (Dante v 310 Assoc., 121 AD2d 332, 503 N.Y.S.2d 786 [1st Dept., 1986]).

Laches defense is "an equitable doctrine based on fairness" (Building Mgt. Co. Inc. v Bonifacio, 25 Misc 3d 1233[A], 2009 NY Slip Op 52398[U] [NY Civ Ct 2009] (barring rent recovery due to nearly two years delay in demanding same); see also Marriott v Shaw, 151 Misc 2d 938, 940 [NYC Civ Ct 1991]). Laches bars the enforcement of a right where there has been an unreasonable and inexcusable delay that results in prejudice to an opposing party (see Saratoga County Chamber of Commerce v Pataki, 100 NY2d 801, 816 [2003], cert den 540 US 1017 [2003]).

Here, the alleged right to recovery accrued in May 2021, as, according to plaintiff, defendant failed to pay April 2021 rent, but Plaintiff initiated this case in July of 2025.

The prejudice against this defendant is enormous. He is being sued for alleged rent arrears owed by himself and two others, who were still around and available until July 2024, when they relocated down south. These former co-tenants moved to Georgia in 2024. Defendant, who is the son of his co-tenants, did not have firsthand knowledge of how and when the rent was paid. He was neither the person responsible for making the rent payments to the landlord nor tasked with keeping record of such payments. He testified, credibly, that he never made any direct rent payment to the landlord and that he never had access to the payment portal. He also testified that his parents made the payments through the payment portal, by Zelle or by check, and that he played no role in that. This testimony was supported by unchallenged evidence in the form of copies of checks and bank statements. It then follows that his parents and former co-tenants are in better position to defend against this unpaid rent allegation, not him. Yet, they were not made a part of this case due to the delay in bringing this case, as admitted by the plaintiff. "Harm to economic interest can be enough to bar an action on laches grounds, even if the delay does not affect a defendants' ability to defend against a suit." (Saratoga County Chamber of Commerce v Pataki, 100 NY2d 801, 817 [2003]).

Plaintiff argues that this is a breach of contract case, therefore the doctrine of laches cannot apply. It specifically argued that same is no defense to an action at law commenced within the period fixed by statute of limitations, citing several cases including Blum v. Good Humor [*5]Corp., 57 AD2d 911 (2nd Dept 1977); Stassa v Stassa, 73 AD3d 1157 (2nd Dept. 2010). Plaintiff further asserts that "`Laches is a doctrine peculiarly applicable to suits in equity; it does not apply to bar actions at law.'"

First, this court disagrees with plaintiff's characterization of this rent arrearage case as a breach of contract case. As stated earlier, this court finds that rent arrears sought to be recovered outside the mechanism of Article 7 of the RPAPL are consumer credit debts, which are subject to three years statute of limitations.

If even plaintiff was right, which of course it is not, courts, however, have the discretion to consider the equities to ascertain "when a claim [for rent] is stale." (Rota Holding Corp. No. 2 v. Shea, 21 Misc 3d 1127[A], 2008 NY Slip Op. 52250[U] (Civ Ct, NY County).

Plaintiff's reliance upon Blum v Good Humor, supra, is misplaced. Contrary to plaintiff's claim, that case is a strong proponent for the application of the doctrine of laches even in actions commenced within the statute of limitations. The last paragraph of the decision read as follows:

Therefore, although the action is not time-barred, the merits of defendant's affirmative defense of laches cannot be deemed insufficient as a matter of law and should be decided upon trial.

The within case clearly meets all the elements of the doctrine of Laches, requiring dismissal of this case on this ground alone.

III. Is Defendant Liable Under the Theory of Joint and Several Liability

As plaintiff is seeking to hold defendant solely liable under the theory of 'joint and several' liability for the entire alleged rent arrears, this court must examine if plaintiff can do that under the facts of this case.

Under New York Law joint and several liability principles apply to co-tenant rent obligations, even if absent from the language of the lease. See Lexington Ave. & 42nd St. Corp. v. Pepper, 221 AD2d 273, 634 N.Y.S.2d 87 (1st Dept 1995). However, there is a narrow exception to this rule. This rule will not be enforced where doing so would be unconscionable (i.e. unjust and unfair to the defendant). See Riverwalk on the Hudson, Inc. v. Culliton, 62 Misc 3d 351 (87 N.Y.S.3d 852 (City Court, New York 2018).

This court finds that it would be unconscionable to hold defendant solely liable for the alleged unpaid rent, where plaintiff waited for over four years to bring action, within which time the other co-tenants moved out of state and probably out of reach of plaintiff, plus the fact that defendant credibly showed that he did not have firsthand knowledge of how and when the rent was paid. He testified that he paid his share of the rent to his former co-tenants, who made direct payments to the plaintiff. Also factored in is the fact that this defendant was not the record keeper [*6]of the rent payment records and did not directly deal with plaintiff at any time during that tenancy. Further, at no time did plaintiff send this defendant any notice of late payment or unpaid rent. In fact, defendant testified that he only learnt about the alleged unpaid arrears when he received the within matter's summons and complaint.

An issue of unconscionability is a matter to be decided by a court (Wilson Trading Corp. v. David Ferguson, Ltd., 23 NY2d 398, 403—04, 297 N.Y.S.2d 108, 244 N.E.2d 685 [1968]). On the totality of the evidence presented in this case the court finds that enforcing the "joint and several liability" doctrine here would be unjust and unfair to this defendant.

Under the facts and circumstances of this case it would be unconscionable to hold this defendant solely liable for these alleged rent arrears. Accordingly, it is

ORDERED that defendant have judgment. This case is hereby DISMISSSED.

ORDERED that Defendant's counterclaims are dismissed as unmeritorious.

This is the Decision and Order of this court.

Date: April 21, 2026

Hon. Chidi A. Eze

Civil Court Judge (NYC)