Overcoming Tenant’s Request for Judgment without a Trial
Q: A provision in my lease with a retail tenant specifies that the tenant must fix any damage to the elevator that it uses as part of its business. I recently discovered that the equipment has been damaged, so I sent a notice to cure to the tenant. However, the tenant claims that the damage occurred before it moved into the space. The tenant is asking a trial court for a judgment in its favor without a trial. What would I have to show in order for a trial to be held to determine the outcome?
A: You would have to produce evidence demonstrating the existence of a disputed material issue of fact sufficient to require a trial. Here the disputed issue is when the damage took place. You’re alleging that it happened after the tenant had control of the elevator, while the tenant is alleging that the damage was already present when it moved into the space. Any evidence that you could provide refuting the tenant’s time frame for the damage would help your claim.
A retail space owner in a recent New York case successfully refuted its tenant’s claim regarding damage, and a trial court ruled that there were issues that required a trial. In that case, competing affidavits left questions that were appropriate for a jury to decide. The time frame of damage was the crux of that case, as well.
There, the dispute involved commercial space subleased for a medical clinic, including use of an elevator to bring patients and staff up to the second-floor clinic. The owner and tenant entered into a sublease agreement dated July 9, 2016, for a term of five years with an option for renewal for another five years, starting on July 1, 2016. A section of the sublease called “Maintenance and Repairs” outlined some of the tenants’ responsibilities, which included maintaining and repairing the elevator and immediately reporting all general maintenance issues and needed repairs.
However, in a notice to cure dated Oct. 11, 2016, the owner stated that the tenant violated the “Maintenance and Repairs” portion of the lease because the elevator was “in a state of disrepair” and the tenant failed to repair it, causing the Department of Buildings (DOB) to issue a violation to the owner on July 27, 2016. The notice to cure gave the tenant 15 days to repair the elevator. On Nov. 9, 2016, the owner terminated the tenant’s lease based on the tenant’s failure to cure the violation.
The tenant asked a trial court for a judgment in its favor without a trial, asserting that it received keys to the elevator when it moved into the space on July 31, 2016, after the DOB violation was issued. In support of its argument, the tenant submitted its own affidavit and two affidavits from people who alleged they observed the tenant’s employee moving out of her old office on July 31, 2016. The tenant further supplied an affidavit of an elevator maintenance inspector who stated that a DOB inspection dated Sept. 16, 2016, reported the elevator to be in satisfactory operating condition, and that the cabin and door of the elevator appeared to be in safe and in satisfactory condition when he inspected them on Oct. 18, 2016, and on Dec. 9, 2016.
The tenant alleged that it didn’t have access to the elevator before the move-in date of July 31, 2016, so it couldn’t have been responsible for any issues related to the DOB violation on July 27, 2016. The tenant also provided a certificate of liability insurance that reflects that its insurance policy became effective on Aug. 1, 2016, and a receipt for $440 for moving services on July 31, 2016.
The owner provided its affidavit, in which it claimed that the tenant received keys to the premises, including keys to a fully functional and operational elevator on July 9, 2016. It stated that on July 10, 2016, the tenant changed the keys, began construction on the walls and pipes on the premises, and damaged the elevator. In support of its claims that the tenant was on the premises and had access to the elevator prior to the DOB violation, the owner submitted a copy of: (1) a rent check for the period from July 10, 2016, to July 30, 2016; (2) a screenshot of surveillance video taken on July 24, 2016, showing the tenant’s employee and others inside the premises; and (3) a screenshot of surveillance video taken of the tenant and others standing by the subject elevator on July 27, 2016, at 8:45 a.m., the morning the DOB violation was issued.
The tenant also provided an affidavit from its employee, who said that the owner met with the tenant on July 9, 2016, but keys were not provided at that time. On July 11, 2016, the tenant was given an elevator key, but, after riding the elevator, the employee observed the elevator to be “a very old, overly used, poorly refurbished piece of equipment” and “unsafe.” These issues were discussed with the owner, who said he would resolve the issues. The employee claimed that he and the tenant were present at the space on July 24, 2016, to demand a refund of the first rent payment due to the unsatisfactory conditions of the elevator. He also stated that the screenshot of the tenant and others standing outside the elevator on July 27, 2016, doesn’t prove they had access to the elevator, since they were under strict orders to post a sign indicating that the elevator was for the sole use of the clinic once they came into possession of the elevator key, and that sign isn’t shown in the screenshot. He also stated that when he was on the premises on July 27, 2016, he saw men working on the elevator for the owner, and that he accepted the elevator key on July 28, 2016, after the elevator was shown to be in operating condition.
The trial court determined that a trial was necessary, based on the competing affidavits regarding the sequence of events that led to the tenant’s move into the space; issues of fact remained with regard to when the owner provided the elevator key to the tenant. Although the tenant provided evidence that items were moved into the space on July 31, 2016, it didn’t provide sufficient evidence to rebut the owner’s claims that the tenant received the elevator key, performed construction on the property, and damaged the elevator prior to the DOB violation [Times Square Group, Inc. v. Yan Li Medicine, P.C., March 2016].