Wolf v. 2539 Realty Associates

161 A.D.2d 11
Appellate Division of the Supreme Court of the State of New York·Decided September 6, 1990·Published·Cited by 18 cases

Opinion

OPINION OF THE COURT

Rubin, J.

At issue on this appeal is who, as between the landlord and the tenant, should bear the cost of alteration to a building component which remains functional but which nevertheless requires extensive modification as a result of governmental action.

Plaintiff is the lessee of space on the first four floors and a [13] portion of the basement of the subject premises which he utilizes as a parking garage. Defendants are the owner, general partner and managing agent (collectively The Landlord) of the building. At the time of its construction in 1963, the structural steel members were coated with an asbestos-containing substance which was then approved as a fireproofing material for the protection of steel-frame structures (Kaufman v City of New York, 717 F Supp 84, 86, affd 891 F2d 446, cert denied — US —, 109 L Ed 2d 744 [1990]). In a letter dated September 4, 1986, after the lease had been in effect for some 23 years with some 8 years remaining in the term, plaintiff’s counsel informed The Landlord, "From what we have been led to believe, there is a possibility that the asbestos could be deemed a dangerous toxic condition and that under the rules and regulations of OSHA [Occupational Safety and Health Administration], the situation should be corrected immediately.” The Landlord’s response was to issue a demand pursuant to article 10 of the lease which "provides that the tenant shall comply with all requirements of all laws, orders, etc. which shall impose any duty upon the landlord or the tenant with respect to tenant’s use and occupation of the demised premises” and to direct the tenant to "immediately, at your expense, correct any and all defective conditions within the interior of the demised premises.” The communication was followed by a 30-day notice to remedy the condition pursuant to article 26 of the lease. Plaintiff then initiated the instant action seeking a judgment declaring that it is The Landlord’s responsibility to remedy the asbestos condition. Plaintiff also obtained a "Yellowstone” (First Natl. Stores v Yellowstone Shopping Center, 21 NY2d 630) injunction staying The Landlord from taking any action to terminate his tenancy. The matter is before this court on defendants’ appeal and plaintiff’s cross appeal from a judgment declaring that the burden of abating the hazardous condition caused by the presence of friable asbestos-containing material at the premises rests upon The Landlord.

From the record, it is not apparent which regulation is claimed to be violated or by what authority abatement of the asbestos condition is required. However, section 24-146.1 (g) of the Administrative Code of the City of New York empowers the Commissioner of Environmental Protection with the authority to promulgate regulations for the protection of the health and safety of workers and the public from injury from asbestos which has been or is likely to be disturbed, whether [14] or not demolition or alteration of the building is being performed. Subdivision (h) thereof provides the authority to order the premises to be vacated and any work necessary to remove the danger to be performed. The record contains a reference, albeit in the affidavit of plaintiffs counsel, to a notice issued by the New York City Health Department that the parking garage would be closed down unless the condition were remedied. While the exact circumstances by which this controversy arose are not known, it is undisputed by the parties that a hazardous asbestos condition exists in the subject premises which requires removal or encapsulation of the asbestos-containing material covering the steel structural members. The only issue, therefore, which is required to be decided upon this appeal is whether, as a matter of law, either pursuant to the lease or not withstanding its terms, the tenant or The Landlord must bear the cost of the work.

Analysis appropriately begins with the maintenance provisions of the Building Code (Administrative Code, tit 27, ch 1, subch 1, art 6) § 27-128: "Owner Responsibility. The owner shall be responsible at all times for the safe maintenance of the building and its facilities.” This provision is entirely self-explanatory. The lease, however, contains two provisions which, it is urged, shift the responsibility for the abatement of the asbestos condition onto the tenant. Section 4, which deals with repairs, provides: "The Tenant shall take good care of the demised premises and of the fixtures therein, and shall keep the interior of the demised premises in good order and repair and, notwithstanding anything herein contained which may be interpreted to the contrary, the Landlord agrees to make all exterior repairs * * *. The Landlord further agrees to make any exterior structural repairs or alterations (except as herein set forth) provided that such repairs or alterations are not made necessary by any acts of conduct of the tenant, its agents, servants, customers and/or employees.” Pursuant to this provision, The Landlord maintains that its responsibility is limited to exterior structural repairs and that all other repairs, including abatement of the hazardous condition at issue, are the responsibility of the tenant.

Section 10 of the lease, which deals with compliance with governmental regulations, provides: "Tenant shall comply with all requirements of all laws, orders, ordinances and regulations of the federal, state, county and municipal authorities, and with any direction, pursuant to law, of any public officer or officers, which shall impose any duty upon Landlord [15] or Tenant with respect to Tenant’s use and occupancy of the demised premises. Tenant shall not permit to be done any act or thing upon said premises which shall or might subject Landlord to any liability or responsibility for injury to any person or persons or to any injury or damage to any property by reasons of any business or operation being carried on upon said premises; and shall comply with all rules, orders, regulations or requirements of the New York Board of Fire Underwriters, City Department or Municipal Authorities and shall not do, or permit anything to be done, in or upon said premises, or bring or keep anything therein in violation of the terms of this lease.” Pursuant to this provision, The Landlord similarly maintains that it is the tenant’s responsibility to comply with any regulations and orders regarding the removal or encapsulation of asbestos-containing material (ACM) in the leased premises.

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Wolf v. 2539 Realty Associates, 161 A.D.2d 11 (N.Y. Ct. App. 1990).

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