NYC Media III LLC v M & I Pushcart, Corp NY Slip Op 30598(U) March 11, 2019 Supreme Court, Queens County Docket Number: LT /QU Judge:

Transcription

1 NYC Media III LLC v M & I Pushcart, Corp NY Slip Op 30598(U) March 11, 2019 Supreme Court, Queens County Docket Number: LT /QU Judge: John C.V. Katsanos Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's ecourts Service. This opinion is uncorrected and not selected for official publication.

2 [* 1] CIVIL COURT OF THE CITY OF NEW YORK COUNTY OF QUEENS, COMMERCIAL L&T, PART }{ NYC MEDIA III LLC, Petitioner-Landlord, v. Inde-x No. LT /QU M & I PUSHCART, CORP. and HELMY M. LOTFY, INDIVIDUALLY, (All rooms, 9,000 square feet of the building located at th Street, Long Island City, New York 11101) Respondents-Tenants, "JOHN" "DOE"* and "JANE" "DOE,"* (*Names of Respondents-Undertenants being fictitious and unknown to Petitioner; persons intended being in possession of the subject premises described in the petition) Respondents-Undertenants }{ APPEARANCES: SWEENEY, REICH & BOLZ, LLP Counsel for Petitioner-Landlord NYC Media III LLC 1981 Marcus A venue, Suite 200 Lake Success, New York Rashel M. Mehlman, Esq. Michael H. Reich, Esq. THE LAW OFFICES OF EDWARD ALPER Counsel for Respondents-Tenants M & I Pushcart, Corp. and Helmy M. Lotfy, Individually 75 Maiden Lane, Suite 214 New York, New York Edward P. Alper, Esq. DECISION AND ORDER ~-- dth ea,.r.~,y- MAR 11 n 1

3 [* 2] JOHN C.V. KATSANOS Judge, Civil Court: I. Background On the Court's own motion, the decision and order dated February 22, 2019 is hereby recalled and the following decision and order is substituted in its place and stead. A. Recusal of First Trial Court Judge The first court appearance by petitioner-landlord, NYC Media III LLC (the "Petitioner"), and respondents-tenants, M & I Pushcart, Corp. and Helmy M. Lotfy, individually (collectively, the "Respondents"), in this commercial landlord-tenant holdover proceeding occurred on June 26, On such date, the first trial court judge noted in handwriting on the case file folder for this proceeding under a section entitled "Court Action or Comments" as follows: "Both sides; U&O today; 7/5; first of mo thereafter 12, ,955 one year... [illegible] 13,749 one yr. $2, water $116, due Adj to 7/16/18." On or about July 11, 2018, Respondents filed a motion seeking an order, inter alia, to dismiss Petitioner's verified petition and to direct the first trial court judge to recuse and disqualify herself from the proceeding. In such recusal and disqualification motion, Respondents' counsel, The Law Offices of Edward Alper ("Respondents' Counsel"), noted that: (1) he and the first trial court judge served as two of three named partners at a law firm from January 1997 through May 2005 for approximately eight and half years until Respondents' Counsel no longer remained affiliated with the firm in May 2005 and both worked together for approximately a year and half at a predecessor firm; and (2) the dynamics and the particulars of that prior business relationship warranted the recusal and/or disqualification of the first trial court judge to avoid the appearance of impropriety (citing, in part, Rules of Judicial Conduct 22 NYCRR ("[a] judge shall avoid... the appearance of impropriety in all of the judge's 2

4 [* 3] activities"); 22 NYCRR 100.3( 4) ("[a] judge shall perform duties without bias or prejudice against or in favor of any person"); and Code of Judicial Conduct Canon 3(E)(l)(a)(i) ("[a] judge shall disqualify himself or herself in a proceeding in which the judge's impartiality might reasonably be questioned, including but not limited to instances where... the judge has a personal bias or prejudice concerning a party")). After a July 16, 2018 hearing to consider Respondents' aforementioned motions and Petitioners' opposition to said motion to dismiss, the first trial court judge recused herself based on Respondents' Counsel's former partnership with said judge. On the same day, the supervising judge of the Court reassigned this matter to the current trial court judge herein. B. October 25, 2018 Interim Decision and Order After several evidentiary and procedural matters and interim decisions and orders in this proceeding from July 2018 through October 2018, the Court issued another interim decision and order on October 25, 2018 requiring that: (1) Respondents pay Petitioner for accrued use and occupancy for August 2018 through October 2018; (2) Respondents pay Petitioner for use and occupancy commencing on November 1, 2018 as it becomes due through the term of this proceeding pursuant to Real Property Actions and Proceedings Law ("RPAPL") section 745(2)(a) or, upon default of such payments and application of Petitioner, all of Respondents' defenses and counterclaims would be dismissed without prejudice and the Court would grant judgment for Petitioner pursuant to RPAPL section 745(c)(i); and (3) a trial be held on November 14, C. November 14-15, 2018 Trial On November 14 and 15, 2018, the Court tried this holdover proceeding (together with a related holdover proceeding under Index No. L T /QU). During trial, Petitioner noted that Respondents failed to comply with the Court's October 25, 2018 order to pay use and 3

5 [* 4] occupancy for August 2018 through November 2018 and, based on such default, Petitioner moved to strike Respondents' defenses and counterclaims pursuant to RPAPL section 745(c)(i). Since Respondents did not interpose the defense of payment and show that the use and occupancy required to be deposited has previously been paid to Petitioner, the Court granted Petitioner's RP APL section 745(c)(i) motion dismissing, without prejudice, all of Respondents' defenses and counterclaims. During trial, Petitioner proffered credible witness testimony and documentary evidence, including, but not limited to, the following: (1) the deed for the subject premises; (2) the commercial lease between the parties (the "Lease") (yet the Court requested for clearer copies of the Lease in January 2019); (3) the 30-day termination notice dated March 29, 2018 with a Lease termination date of April 30, 2018; (4) the holdover petition and notice of holdover petition dated May 23, 2018, filed with the Court on or about June 1, 2018 and served on or about June 20, 2018; (5) an open balance statement dated November 15, 2018 of alleged outstanding amounts due from Respondents to Petitioner on various items; (6) a New York City Department of Finance tax map for the subject premises; (7) New York City Department of City Planning street address information for the subject premises; (8) invoices and summonses for New York City Department of Building violations occurring in 2017 for the subject premises; (9) 2018 invoices for water charges of the subject premises; (10) invoices for New York City Department of Finance real estate taxes regarding the subject premises; (11) photos of alleged damage or alteration of exterior wall(s) of the building related to the subject premises; and (12) 2018 invoices for attorneys' fees for legal services rendered by Petitioner's counsel, Sweeney, Reich & Bolz, LLP ("Petitioner's Counsel"), to Petitioner regarding this holdover proceeding and, in part, related to Respondents' application for Yellowstone or similar injunctive relief in New York State Supreme Court, Queens County. Since the Court dismissed without prejudice 4

6 [* 5] Respondents' defenses and counterclaims pursuant to Petitioner's RP APL section 745( c )(i) motion, the trial effectively became an inquest and, accordingly, Respondents could only object to various forms of Petitioner's proffered evidence. At the end of trial, Petitioner also presented credible testimony that although Respondents allegedly vacated the subject premises, Respondents remained in legal possession, by refusing to surrender the premises to Petitioner. Petitioner's Counsel also alleged that Respondents: (1) filled the water drains in the subject premises' floor with cement, which prevented water from draining out of the premises; and (2) left the sprinkler system running, which caused water damage to the subject premises. Based on the foregoing, Petitioner's Counsel and Respondents' Counsel signed a two-attorney stipulation on November 15, 2018, whereby Respondents agreed to provide Petitioner with full access to the premises in order to secure the property and make any and all emergency repairs deemed necessary. However, Respondents did not agree to fully surrender possession of the premises in such stipulation. Additionally, the Court requested at trial that parties provide memoranda of law on or before December 3, 2018 on whether alleged pre-holdover rent, that is, rent prior to the termination of the Lease on April 30, 2018, and related additional rent can be awarded in this summary holdover proceeding or whether Petitioner would need to pursue such pre-holdover rent and additional rent arrears from Respondents in a subsequent plenary action. On or about such date, the parties submitted their respective memoranda of law on such issue (and, Respondents' exceeded the scope of such Court-requested memoranda of law by also asserting in its memorandum that Petitioner's requested attorneys' fees are unreasonable). D. Judgment of Possession, Warrant Issuance and Eviction On November 16, 2018, after weighing the credibility and sufficiency of Petitioner's proffered evidence and Respondents' objections to the same at trial, the Court awarded Petitioner 5

7 [* 6] with judgment of possession and ordered that a warrant of eviction be issued removing Respondents from the subject premises without stay. A warrant of eviction was issued for the subject premises on or about January 24, On or about February 13, 2019, a City Marshall of the City of New York, Queens County, executed (or scheduled) the eviction for the subject premises. II. Discussion This Court is compelled to decide the merits of this holdover proceeding based on substantive New York State commercial landlord-tenant law, including the RPAPL, contract law and principles of quantum meruit. Upon careful review and weighing of Petitioner's credible witness testimony and documentary evidence and Respondents' objections to parts of the same, the Court finds as follows on the final money judgment part of this proceeding without regard to amount since the Court's maximum monetary jurisdictional limit does not apply to a summary proceeding. A. Law of the Case Doctrine A threshold issue is whether the "law of the case" doctrine applies to the recused first trial court judge's "Court Action or Comments" handwritten notes on the case file folder for this holdover proceeding. In general, "[t]he doctrine of the 'law of the case' is a rule of practice, an articulation of sound policy that, when an issue is once judicially determined, that should be the end of the matter as far as OJudges and courts of co-ordinate jurisdiction are concerned" (Matter of Chung Li, 165 AD3d 1105, 1106 [2d Dept 2018] (quoting Martin v City of Cohoes, 27 NY2d 162, 165 [1975]); see also People v Evans, 94 NY2d 499, 503 [2000] ("law of the case is a judicially crafted policy that expresses the practice of courts generally to refuse to reopen what has been decided, [and is] not a limit to their power. As such, law of the case is necessarily amorphous in 6

8 [* 7] that it directs a court's discretion, but does not restrict its authority") (citations and quotation marks omitted)). "[T]he law of the case doctrine is designed to eliminate the inefficiency and disorder that would follow if courts of coordinate jurisdiction were free to overrule one another in an ongoing case" (Id. at 504 ). Effectively, "[t]he law of the case doctrine forecloses re-examination of that issue, absent a showing of subsequent evidence or a change in the law" (Matter ofyamilette MG., 118 AD3d 698, 699 [2d Dept 2014]; see also People v Martinez, 194 AD2d 741, [2d Dept 1993] (noting "absent a showing of 'manifest error' in the prior decision or that 'exceptional circumstances exist warranting departure from the law of the case doctrine', the defendant is precluded from having this issue reconsidered" (citations omitted); see generally Christianson v Colt Indus. Operating Corp., 486 US 800, 817 [1988] ("A court has the power to revisit prior decisions of its own or of a coordinate court in any circumstance, although as a rule courts should be loathe to do so in the absence of extraordinary circumstances such as where the initial decision was 'clearly erroneous and would work a manifest injustice"') (citations omitted)). Nevertheless, it is important to note that the law of the case "doctrine applies only to legal determinations that were necessarily resolved on the merits in [a] prior decision, and to the same questions presented in the same case" (Chung Li, 165 AD3d at 1106 (citations omitted)). Moreover, while "the doctrine of law of the case addresses the preclusive effect of judicial determinations made in the course of a litigation before final judgment is entered,... [p]reclusion under the doctrine necessarily requires that the parties had a full and fair opportunity to litigate the initial determination" (Engel v Eichler, 300 AD2d 622, 623 [2d Dept 2002] (citing, in part, People v Evans, 94 NY2d at 502)). In this matter, aside from the first trial court judge's handwritten notations on the case file folder under "Court Action or Comments," the record does reflect any further written decision 7

9 [* 8] and order (or similar) by such judge or any recording of the June 26, 2018 hearing. Therefore, the Court is unable to determine under the law of the case doctrine: (1) if the first trial court judge's handwritten notations on the case file folder are based upon full consideration of the merits of the applicable pre-petition and post-petition rent, additional rent, and use and occupancy amounts noted as due by Respondents to Petitioner; and (2) if such parties had a full and fair opportunity to litigate such amounts. Further, the Court will not consider for law of the case doctrine whether the first trial court judge should have recused or disqualified herself at the outset of the case based on her law firm partnership with Respondents' Counsel to avoid an appearance of partiality or impropriety and whether her subsequent recusal negated her handwritten notations on the case file folder prior to recusal. Instead, the Court finds that first trial court judge's handwritten notations on the case file folder are ambiguous and partly erroneous as a matter of facts and law. First, such handwritten notations are ambiguous because they are simply illegible. Second, the numbers in such notations appear to be incorrect. For instance, there is a notation for $12,312.42, which upon cross-reference to the rent schedule of Article 42 (entitled "Rental") of the Lease, is the monthly rent due from January 1, 2017 to December 31, However, the correct monthly rent due under said Lease provision for the period of January 1, 2018 to December 31, 2018, that includes the holdover period, is $12, Additionally, the first trial court judge's case file folder notation of "$116, due" appears to be incorrect since the number matches alleged damages of $116, in exhibit B of Petitioner's subsequent affirmation in opposition (to Respondents' motion to dismiss the petition) filed on or about July 11, 2018, where such alleged damages of $116, use $12, for monthly rent due from January 2018 to June 2018 (rather than the correct monthly rent due of $12, for 2018). Finally, as further discussed below, the first trial court judge appears to provide for pre-holdover period rent even if not 8

10 [* 9] specified in the petition as required under RPAPL section 741(5)'s specificity requirements. Under these manifest factual and legal errors, the Court finds it is not bound by the law of case doctrine and, therefore, in its discretion declines to follow the first trial court judge's earlier case file folder notations and determinations, including (1) pre-holdover rent and additional rent and (2) post-holdover use and occupancy amounts as further discussed below. B. Alleged Pre-Holdover Rent and Additional Rent Arrears Petitioner requests for a money judgment for pre-holdover rent and additional rent arrears, such as real estate taxes, water charges and municipal building violations, that are, among others, considered additional rent under the Lease, which allegedly accrued prior to the termination of the Lease on April 30, In the Court's requested post-trial memorandum oflaw dated December 3, 2018, Respondents' generally contend that Petitioner did not pray for such alleged pre-holdover rent and additional rent arrears at the outset of the proceeding to apprise Respondents of the same, which would have allowed Respondents to take a different litigation approach. Article 81 entitled ("Holding over") of the Lease provides as follows: Any holding over after expiration of this term or any renewal term shall be construed to be a tenancy from month to month, the parties agree that the reasonable monthly use and occupancy/rent during such holdover period shall be twice the base rent and additional rent that was in effect during the last month of this [L]ease or the latest extension thereof. Based on the foregoing Lease provision, Petitioner's 30-day notice of termination dated March 29, 2018 states as follows: TAKE NOTICE also that unless you remove from the said Premises on or before April 30th, 2018, the day on which your tenancy expires, the Owner will commence summary proceedings under the statute to remove you from said Premises for the holding over which the parties have set and agreed shall be twice the base rent and additional rent in effect during the last month of this Lease. 9

11 [* 10] Shortly thereafter, Petitioner's notice of petition dated May 23, 2018 and filed with the Court on or about June l, 2018, notes to Respondents that Petitioner "prays for a final judgment of eviction, awarding Petitioner possession of the premises" and that Respondents "TAKE NOTICE also that demand is made in the petition herein for judgement against you, the Respondents for the sum of reasonable use and occupancy with interest thereon." Petitioner's verified petition dated May 23, 2018, and filed with the Court on or about June 1, 2018, similarly states as follows: Petitioner requests final judgment; awarding possession of the premises to the Petitioner; issuance of a warrant to remove [R]espondents from possession thereof; judgment for reasonable use and occupancy arrears and through the date possession is awarded to petitioner with interest, together with legal fees, if and as allowed by applicable law; costs and disbursements herein. Moreover, in Petitioner's affirmation in opposition filed on or about July 20, 2018 opposing Respondents' motion to dismiss this proceeding filed on or about July 11, 2018, such affirmation notes, in part, that Petitioner "commenced the holdover proceeding after years of pursuing the Respondents for nonpayment of rent and failure to maintain insurance coverages in accordance with the Lease affecting the premises" and that "[t]he Respondents presently owe in excess of $116,966 for use and occupancy arrears," which cross-references an exhibit of an open balance statement. The above "$116,966 use and occupancy arrears" amount corresponds with the open balance statement that requests for alleged pre-holdover rent and additional rent. Further, during this proceeding Petitioner moved to amend its pleadings to conform them to the evidence, which in effect would cover such pre-holdover rent and additional rent arrears. Based on the foregoing, the Court is unconvinced by Respondents' assertion that Petitioner's failure to apprise Respondents at an earlier stage of this proceeding of Petitioner's intent to seek preholdover rent and additional rent arrears would somehow, in turn, prejudice Respondents' defense on the merits. Nevertheless, the Court agrees with Respondents' Counsel that since 10

12 [* 11] RPAPL section 741(5), in part, effectively provides that every verified petition must state the relief sought with some specificity, including "a judgement for rent due," the Court finds that any of Petitioner's alleged pre-holdover rent and additional rent arrears may be pursued in a subsequent plenary action. C. Use and Occupancy Arrears Notwithstanding the aforementioned carve-out of pre-holdover rent and additional rent arrears, the Court finds that Petitioner provided credible and sufficient evidence during the November 14-15, 2018 trial to meet its burden of proof that Respondents defaulted on reasonable use and occupancy payments during the holdover period through the issuance of the warrant. Since the Court declines to follow the law of case doctrine, the Court is not bound by the first trial court judge's determination on use and occupancy, which appears to be $12, monthly rent due for the period of January 1, 2017 to December 31, 2017 (The Court does acknowledge based on Petitioner's exhibit 5 (open balance statement) proffered at the November 14-15, 2018 trial, that Respondents made two payments of $12, in June 2018 and July 2018, which is reflective of the $12, monthly rent due for the period of January 1, 2018 to December 31, 2018.) Instead, as referenced the above, the Court agrees with the Article 81 of the Lease as being a reasonable amount for use and occupancy arrears, where such provision provides "the parties agree that the reasonable monthly use and occupancy/rent during such holdover period shall be twice the base rent and additional rent that was in effect during the last month of this [L]ease or the latest extension thereof." Based on this finding, the Court reverses its October 25, 2018 decision and order, which ordered use and occupancy for the period of August 2018 through the term of this proceeding at the rate of $12, (that is, pre-holdover monthly rent). Further, since RPAPL section 749(3) appears to provide that the Petitioner may collect the 11

13 [* 12] amount payable at the time the holdover proceeding was commenced and the reasonable value of use and occupancy to the time when the warrant was issued, reasonable use and occupancy arrears as noted above are permissible from May 1, 2018 through the warrant issuance date of January 24, The Court finds that any alleged damages by Petitioner for post-warrant issuance date of January 25, 2019 through eviction date of on or about February 13, 2019 or upon Petitioner's discovery, if any, shortly thereafter upon full possession, should be pursued, along with pre-holdover rent and additional rent arrears, in a subsequent plenary action. Accordingly, the Court requires that Respondents pay reasonable use and occupancy totaling $201,574.54, which is based on the following calculation: (1) two times base rent of $12,681.79, that is, $25,363.58, for each of the holdover months of May 2018 through December 2018 for a sum of $206,713.14; (2) plus two times base rent of $12,681.79, that is, $25,363.58, yet apportioned to reflect only the first twenty-four days of January 2019, that is, the January 24, 2019 issuance date of the warrant, for a sum of $20,225.40; and (3) less $25, reflecting two $12, payments made by Respondents in June 2018 and July D. Real Estate Taxes The Court finds that Petitioner provided credible and sufficient evidence during the November 14-15, 2018 trial to meet its burden of proof that Respondents defaulted on its additional rent item of2018/19 real estate taxes of $16,955.95, including Petitioner invoicing Respondents on the same and that Article 43 (entitled "Real Estate Tax Payment") of the Lease provides that such real estate taxes are considered additional rent. Based on the foregoing, the Court requires Respondents to pay Petitioner the same amount. As to the 2017/18 real estate taxes of $13, that Petitioner invoiced Respondents on or about July l, 2017, the Court finds that such pre-holdover arrears or, if applicable, any post- 12

14 [* 13] November 14-15, 2018 trial date real estate taxes or similar may be pursued by Petitioner in a subsequent plenary action. E. Water Charges The Court finds that Petitioner provided credible and sufficient evidence during the November 14-15, 2018 trial to meet its burden of proof that Respondents defaulted on its additional rent item of water charges during the holdover period totaling $3, , including Petitioner invoicing Respondents on the same during the holdover period and that Article 28 (entitled "Water Charges") of the Lease contemplates that such water charges are considered additional rent. In particular, the $3, amount is based on water charges of: (1) $2, for the period of May 6, 2018 to August 6, 2018 that Petitioner invoiced to Respondents on August 21, 2018; and (2) $1, for the period of August 6, 2018 to November 7, 2018 that Petitioner invoiced to Respondents on November 15, Accordingly, the Court requires Respondents to pay Petitioner the same amount. As to water charges of $ (for the period of November 7, 2017 to February 6, 2018) and $1, (for the period of February 6, 2018 to May 6, 2018) that Petitioner invoiced Respondents before and after the pre-holdover period, the Court finds that such pre-holdover (and part holdover amount for May 1-5, 2018) and post-november 14-15, 2018 trial date water charges may be pursued by Petitioner in a subsequent plenary action. F. Legal Fees The Court finds that Petitioner provided credible and sufficient evidence during the November 14-15, 2018 trial to meet its burden of proof that Petitioner incurred the additional rent item of legal fees related to, or intertwined with, this holdover proceeding totaling $32,091.00, including, inter alia, Petitioner's Counsel invoicing Petitioner for reasonable legal 13

15 [* 14] services rendered during the holdover period, the Lease provisions note that various legal fees are considered additional rent, and the petition separately requested for an award of legal fees. This $32, is based on the following calculation: (1) $4, in reasonable legal fees invoiced on May 10, 2018, that is, the initial $7, invoiced amount on such date less $3, in pre-holdover legal fees for March 29, 2018 (that is, the date of the 30-day termination notice) through April 30, 2018 (that is, the date of the termination of the Lease), which include legal fees for Respondents' Yellowstone injunction proceeding in New York State Supreme Court, Queens County, commenced in April 2018 prior to termination of the Lease; (2) plus $3, in reasonable legal fees invoiced May 24, 2018, that is, the initial $5, invoiced amount on such date less $1, in legal fees related to oral argument on appeal from a Civil Court order (before another judge) denying stay of eviction in a separate summary proceeding between the parties herein (that is, under Civil Court Index No. LT /QU; App. Term. Docket No ); and (3) plus $24, in reasonable legal fees invoiced on June 27, 2018, October 14, 2018 and November 14, The Court notes that part of the above awarded amount of $32, includes postholdover legal services rendered by Petitioner's Counsel to Petitioner to continue to oppose Respondents' Yellowstone injunction proceeding during such holdover. The Court recognizes it is well settled under New York law that "attorney's fees are incidents of litigation and a prevailing party may not collect them from the loser unless an award is authorized by agreement between the parties, statute or court rule," and "[t]herefore, a contractual provision assuming an obligation to indemnify a party for attorneys'... fees must be strictly construed to avoid reading into it a duty which the parties did not attend to be assumed" (Pickett v 992 Gates Ave. Corp., 114 AD3d 740, 741 [2d Dept 2014] (citations and quotation marks omitted)). Here, Article 42 (entitled "Rental") of the Lease provides, in part, as follows: 14

16 [* 15] Tenant waives his right to bring any plenary actions and/or a declaratory judgment action with respect to any provision of this [L ]ease, or with respect to any notice pursuant to the provisions of this [L]ease. If Tenant commences any action or proceeding against Owner seeking a Yellowstone injunction (First National City Stores, Inc., v. Yellowstone Shopping Centers, Inc., 21 N.Y.2d 630) or other preliminary and injunctive relief seeking to toll the time to cure or to stay service of a notice of termination, Tenant shall be required to post with the Clerk of the Court as a condition for such application an undertaking or surety bond with a penal sum of at least $1,000, and shall be required to pay any unpaid rent and additional rent together with all thereafter accruing rent and/or additional rent and/or to post with the Clerk of the Court an additional undertaking or surety bond sufficient to guaranty payment of all future accruals of rent and additional rent through the remainder of the term of the Lease. Tenant's failure to comply with this paragraph shall be grounds for dismissal of such action and denial of such application for Yellowstone or other preliminary and injunctive relief seeking to toll the time to cure or to stay service of a notice of termination and Owner shall be entitled to recover its actual attorney's fees, costs and disbursements from Tenant. Further, Article 75 (entitled "Tenant's Indemnity") of the Lease provides, in part, as follows: Supplementing the provisions of Article "8" of this Lease, Tenant will defend, protect, indemnify and save harmless Landlord of, from and against all liabilities, obligations, damages, penalties, claims, causes of action, costs, fees, charges and expense, including but not limited to attorneys' fees and expenses of employees, which may be imposed upon or be incurred by or against Landlord by reason of or in connection with any of the following: a) Any default or failure on the part of Tenant to perform or observe any of the terms, covenants, provisions or conditions on the part of Tenant to be performed or observed under this Lease; Moreover, Article 80 (entitled "Legal fees") of the Lease states as follows: In any case where owner brings any action or summary proceeding for any default of the tenant hereunder, whether for the non-payment of rent or additional rent or any other default owner shall be entitled to reasonable attorney's fees such attorney's fees may be claimed as Additional Rent in the action or proceeding. It is specifically agreed that reasonable attorney's fees shall be no less than $ (Seven Hundred Fifty) for any one action or proceeding. Since (1) Respondents commenced the Yellowstone injunction proceeding prior to termination of the Lease and such action is intertwined with this holdover proceeding, (2) Petitioner incurred such legal fees during the holdover period for the same, (3) Petitioner's 15

17 [* 16] termination of the Lease is based, in part, on Respondents' default thereunder, and (4) the Lease's language permits the recovery of such legal fees, the Court finds it may award postholdover legal fees for the Yellowstone injunction proceeding. Nevertheless, the Court carves out pre-holdover legal fees for the Yellowstone injunction proceeding based, in part, on the specificity requirements of RPAPL section 741(5) and the Court's related adherence to the aforementioned bright-line test of pre-holdover versus postholdover rent and additional rent damages. Therefore, the Court finds that any pre-holdover legal fees or any legal fees incurred after the November 14-15, 2018 trial date may be pursued by Petitioner in a subsequent plenary action. G. Municipal Building Violations During the November 14-15, 2018 trial, Petitioner requested for an award of damages based on municipal building violations incurred by Respondents at the subject premises in 2017, where Petitioner proffered invoices and summons from the New York City Department of Buildings regarding the same. Since the dates of occurrence are during the pre-holdover period, the Court finds that such pre-holdover building violations or any similar violations incurred after the November 14-15, 2018 trial date may be pursued by Petitioner in a subsequent plenary action. III. Conclusion Based on the aforementioned analysis, it is hereby: ORDERED that Respondents pay to Petitioner: (1) $254, consisting of (a) use and occupancy arrears of $201,574.54, (b) real estate taxes of $16,955.95, (c) water charges of $3,754, and (d) reasonable legal fees of $32,091.00; and (2) applicable statutory interest on said $254, from May 1, 2018 (that is, the start of the holdover period) through January 24, 16

18 [* 17] 2019 (that is, the warrant issuance date), where such interest is to be determined by the Clerk of the Court; and it is further ORDERED that the Clerk of the Court is directed to enter judgement accordingly. As to Petitioner's remaining damages, if any, the Court reiterates that Petitioner may pursue a subsequent plenary action for any alleged: (1) pre-holdover rent arrears; and (2) preholdover (and, if applicable, post-november 14-15, 2018 trial date) real estate taxes, water charges, municipal building violations, legal fees and any other additional rent items or damages. This constitutes the Decision and Order of the Court. Dated: March 11, 2019 Jamaica, New York John C.V. Katsanos Judge, Civil Court 17