Bet Construction Corp. v. City of New York

96 Misc. 2d 1102, 410 N.Y.S.2d 524, 1978 N.Y. Misc. LEXIS 2736
CourtNew York Supreme Court
DecidedNovember 20, 1978
StatusPublished
Cited by1 cases

This text of 96 Misc. 2d 1102 (Bet Construction Corp. v. City of New York) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bet Construction Corp. v. City of New York, 96 Misc. 2d 1102, 410 N.Y.S.2d 524, 1978 N.Y. Misc. LEXIS 2736 (N.Y. Super. Ct. 1978).

Opinion

OPINION OF THE COURT

Arthur S. Hirsch, J.

In the early 1970’s, New York City was faced with the immediate and pressing need for facilities to be used as day care centers. As an outgrowth of its arid financial condition, the city, unable to build its own, arranged with private builders on a competitive bidding basis for them to construct day care centers to the specifications of the city. The builder and the city would enter into a lease agreement which provided for the construction and, upon completion, for the occupancy of the entire premises for an extended time.

In this setting, the instant action arose. Plaintiff Bet Construction Corporation (Bet) built a day care center on Lefferts Avenue in Brooklyn pursuant to a lease agreement dated May 13, 1971, prepared by the Corporation Counsel with the imprimatur of the Board of Estimate of the City of New York. The defendant, the City of New York (city), by its Department of Social Services, occupied the premises at a rental of $7,000 per month qnd has been in possession since October, 1972. For four years, the agreed rental was paid, but in 1976, when the city’s financial problems became serious, it wrote to Bet (as well as together similar landlords)\explaining its financial difficulties and informing the owner that the rental of the day care center was to be reduced. In response, Bet, allegedly because of its own mortgage commitments, did not accept the voluntary reductions, insisting that the city comply with its lease contract.

Significantly, it was at this point in time, August, 1976, a full four years after occupancy and after its rent reduction proposal was rejected, that the defendant city made a thorough inspection of the premises and ceased to pay rental for the Lefferts Avenue Day Care Center. It gave by way of explanation the lease was invalid because of certain substantive branches by the landlord which had been discovered at that late date, particularly in regard to the installation at the time of construction of a play roof surface which did not comply with the original specifications. The city has refused to pay rent for the premises since 1976 to the present date, [1104]*1104although the plaintiff has denied that it had violated any of its obligations under the lease.

The result is the present action, another of the plethora of cases in which the city has been sued for failure to pay rent for day care centers. Plaintiff Bet is suing to recover rent for 13 months in the amount of $91,000.

Defendant’s amended answer set forth a number of defenses and counterclaims including: unconscionability as to the amount of the rent; lack of approbation of the lease by the Comptroller; rent excessive and unreasonable; exorbitant profit on the investment; failure of plaintiff to install certain items in accordance with the specifications and, finally, damages by reason of deprivation of the full use and enjoyment of the premises.

Defendant’s overriding goal, obviously, was to have the rent of the Lefferts Avenue Center reduced, but their unstated defense of "financial hardship” is untenable (Petinelli Elec. Co. v Board of Educ., 56 AD2d 520, affd 43 NY2d 760) and was not pursued. It would appear that the efficacy of a number of the defendant’s other defenses is equally untenable, the courts having earlier rejected defendant’s supportive arguments (see Euclid Ave. Assoc. v City of New York, 64 AD2d 550; Lexington Realty Assn. v City of New York, NYLJ, Aug. 23, 1978, p 6, col 2; Barry v City of New York, 175 Misc 712, affd 261 App Div 957), and so, the city did not seriously support these defenses with convincing proof. Rather, it concentrated its effort at trial on the issue of its alleged damages for deprivation of the use of the play roof area and the failure on the part of the landlord to install certain items in violation of the requirements in the specifications.

As an afterthought, defendant moved at trial to amend its answer to include a setoff against rent for failure of the landlord Bet to paint the premises pursuant to the terms of the lease. In regard to this trial motion, the subject lease requires the landlord to paint at the end of five years. At the prescribed five years, however, the city was not paying rent and had not paid for a period of a year. A tenant who refuses to pay rent to the landlord for that extended length of time is hardly in a position to demand that the landlord paint the premises. This probably accounts for the fact that the city did not exercise its right pursuant to the lease to give the landlord written notice, 30 days thereafter to have the premises painted, deducting the costs from the rent. Bet has indicated [1105]*1105that they are perfectly willing to paint just as soon as the city pays the rent allegedly owed. For these reasons, defendant’s trial motion, which the court considers to be a mere diversion, is herewith denied.

To justify its withholding of all the rent (see Fifth Ave. Estates v Scull, 42 Misc 2d 1052) and, equally important, to win a permanent rent reduction, the city faces the task of proving partial eviction or, alternatively, showing that the lease was invalid because of plaintiffs violation of its terms.

PARTIAL EVICTION THEORY

This issue necessitated testimony focused primarily on proving that the landlord’s willful act in installing inferior quality interlocking tiles on the play roof curtailed defendant’s use and enjoyment of the area, which constituted a partial eviction, actual or constructive (Barash v Pennsylvania Term. Real Estate Corp., 26 NY2d 77). It was not alleged that plaintiff physically ousted or excluded defendant, a necessary element in an actual eviction (Jackson v Paterno, 58 Misc 201, 204, affd 128 App Div 474; Meerbaum v Crepes D’Asie, 81 Misc 2d 842, 845), therefore, only constructive eviction remains open as a viable approach.

In support thereof, defendant offered testimony by a city engineer who had inspected the premises and found sufficient buckling of the surface tiles to create a tripping hazard to young children at play. Additionally, the tiles had not retained a level surface, which allowed pools of rainwater to form, thereby drastically restricting the area utilization.

Plaintiff countered with testimony by a teacher employed in the day care center who attested to the fact that the play roof was in daily use during clement weather and had been since the opening of the center. Recent photographs of the play roof area offered by plaintiff showed some slight buckling of the tile, but more decisively, showed children at play. This graphic evidence eliminated the effectiveness of a partial constructive eviction claim which would necessitate not only a showing of material deprivation of the beneficial use and enjoyment of the premises, but proof that the tenant abandoned a substantial part of the premises (Union Dime Sav. Bank v Frohlich, 57 AD2d 862 [abandonment]; Zamzok v 650 Park Ave., 80 Misc 2d 573 [partial eviction]). Furthermore, by remaining in possession long after the occurrence of the condition on which defendant based its claim it waived its right to abandon the [1106]*1106premises because of an alleged eviction (Waldene Realty Co. v Pfalzer, 223 App Div 787).

INVALIDITY OF LEASE

While the evidence did not support defendant’s eviction theory, it did partially substantiate the city’s claim that the roof play surface had defects.

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Bluebook (online)
96 Misc. 2d 1102, 410 N.Y.S.2d 524, 1978 N.Y. Misc. LEXIS 2736, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bet-construction-corp-v-city-of-new-york-nysupct-1978.