It’s been a busy October at Kucker Marino Winiarsky & Bittens (“KMWB”) and a GREAT month for our clients. KMWB has obtained a number of significant victories so far this month that are of consequence not only for our clients but for the New York real estate community in general.
KMWB Wins Summary Judgment on $100 Million Dollar Claim
We start with a victory by KMWB partner Nativ Winiarsky wherein he obtained a decision granting our client summary judgment on a commercial landlord-tenant dispute wherein the damages potentially total more than 100 hundred million dollars. Our client owns a commercial building leased to hospitality startup Sonder in 2018 for a 10-year term. During the Covid outbreak, Sonder sought to blame an airborne pathogen for skipping rent payments, although the facts made clear that Sonder wanted to evade its rental obligations due to its non-performing lease during the height of the pandemic.
Despite Sonder claiming that it could not operate and needed to surrender its lease due to the alleged existence of the pathogen, Sonder defaulted on its payment of rent and failed to surrender possession. KMWB moved for summary judgment and after extensive papers and multiple oral arguments, KMWB completely prevailed and won on liability setting up an immediate hearing strictly confined to damages and attorneys’ fees.
Lesson Learned: A tenant cannot seek to both maintain possession and seek to excuse its non-payment of rent based on alleged conditions while it continues to operate.
KMWB Gets Court to Order Adjoining Landowner to Escrow $250K to allow KMWB Client to Perform Necessary Work
KMWB partner Nativ Winiarsky and Of Counsel Christoper Mcann were litigating a case involving a party wall. KMWB’s client complained that the adjoining landowner was allowing certain vinery to grow on its client’s side of the wall thereby causing damage. KMWB moved for a preliminary injunction seeking to have the court order the neighbor to immediately remove the vinery and repair the conditions.
Not only was KMWB able to convince the court that the preliminary injunction should issue but that since the neighbor had failed to time take corrective measures, that the neighbor was to place 250K in escrow and allow KMWB’s client to correct the work as it deemed fit.
Lesson Learned: An adjoining landlord to a party wall has an obligation to maintain the wall and you should not hesitate to have KMWB aggressively enforce your property rights where the adjoining neighbor’s conduct causes you damage. You can find the decision here.
KMWB is Successful in Defeating a Dismissal of an Alter Ego Claim
KMWB Partner Lisa Faham-Selzer and Associate Rafael Dayan fought a case on behalf of a Landlord who leased prime commercial space on Madison Avenue, New York. However, as is the case for many during the tumultuous COVID-19 pandemic, the tenant ceased rental payments.
In response, KMWB initiated legal action to recover the outstanding rent not only as against the tenant but also as against the sole remaining shareholder who was a non-party to the lease, asserting alter ego liability. KMWB alleged that the shareholder, who was the public face of the company, used the corporations as a shield to escape personal liability. The shareholder moved to dismiss the personal liability claims, contending that the landlord could only sue the corporation, not the individual shareholder.
After oral arguments, the New York Supreme Court sided with KMWB and the landlord, affirming the right to sue the shareholder even in the absence of his signature on the corporation’s lease. The court reasoned that the complaint adequately substantiated that the de facto owner wielded significant control over the corporation, behaving as though its assets were exclusively under his control and authority.
Lesson Learned: Creditors should not hastily assume that their avenues for recovery are limited. Instead, creditors should explore alternative routes to recovery, such as alter ego claims, when the situation calls for it. You can find the decision here.
KMWB Successfully Removes Another Building from HPD’s 7A Program
KMWB Partner Lisa Faham-Selzer and Associate Samara Geller successfully removed another building from HPD’s 7A program. This is the second building the KMWB Kings Civil team, led by Lisa Faham-Selzer, has removed from 7A control in the past 5 months.
Buildings often remain in the 7A program for many years because HPD, the 7A, and the tenants oppose returning a building to the owner’s control. Here however, KMWB successfully argued that new owners who demonstrate good faith, appropriate planning, and the funds to repair their buildings, should be given the opportunity to do so.
Article 7A administrators are notoriously difficult to remove off properties and to have two buildings removed in a short period of time is a testament to KMWB’s efforts combined with the cooperation of our client.
Lesson Learned: Sometimes the “good guys” do win. While removing a building from 7A administration is never easy, new owners who show the willingness to do the repairs and operate the properties effectively can reap the rewards of their efforts.
You can find the latest decision removing an administrator appointed in an HPD action here. You can find the earlier decision removing an administrator appointed in a tenant association action here, and the denial of HPD and the tenant’s association motion to reargue the removal which was issued this month, here.
KMWB Successfully Obtains Both a Monetary and Possessory Judgment Against a Licensee Occupant Claiming Non-Traditional Succession to a Rent-Stabilized Tenancy
An occupant of a valuable apartment was claiming non-traditional succession rights to the premises after the tenant of record passed away. The occupant, however, failed to comply with certain document discovery demands as well as pay court ordered use and occupancy. As a result of same, KMWB Partner Nicholas Yokos successfully brought an Order to Show Cause to secure both a monetary and possessory judgment resulting from the occupant failing to comply with discovery and pay use and occupancy and the Court granted the application in its entirety awarding the landlord possession solely on the papers submitted by KMWB.
Lesson Learned: Occupants of a rent-stabilized apartment can raise succession claims even as “non-traditional” family members when the tenant of record dies, but with persistent efforts your attorneys at KMWB can aggressively ensure that the tenants are complying with discovery and/or use and occupancy obligations on pain of a monetary and possessory judgment without having to even undertake a trial. You can find the decision here.