WOODLAUREL, INC. v. WITTMAN, N.Y. App. Div., Judgment, Law, casemine.com

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Factual and Procedural Background

In 1984, the plaintiff landlord, Woodlaurel, Inc., initiated a summary proceeding in the District Court of Nassau County challenging the validity of a lease entered into in 1978 between the plaintiff's predecessor and the defendant, Lilian Wittman, and sought possession for nonpayment of rent. The District Court upheld the lease's validity in 1987, a decision affirmed by the Appellate Term and this Court. Subsequently, the plaintiff commenced the instant action to recover damages for tax increases allegedly owed by the defendant under the lease terms. The plaintiff moved for summary judgment to recover back tax increases from 1979 through 1990, while the defendant cross-moved to dismiss the complaint, asserting among other defenses, the six-year Statute of Limitations barred the suit and the plaintiff failed to comply with a lease provision requiring notice of tax bills as a condition precedent to recovery.

Legal Issues Presented

Whether the plaintiff's claims for tax increases from 1979 through 1984 are barred by the six-year Statute of Limitations applicable to contract actions.
Whether the plaintiff complied with the lease's condition precedent requiring notice of tax increases to the defendant for claims covering 1985 through 1990.
Whether issues of laches and the effect of the prior summary proceeding on the current action were properly before the court in motions for summary judgment.

Arguments of the Parties

Appellant's Arguments

The plaintiff asserted entitlement to summary judgment on the basis that the defendant owed back tax increases from 1979 through 1990 under the lease.

Respondent's Arguments

The defendant argued that the plaintiff's suit was barred by the six-year Statute of Limitations applicable to contract actions.
The defendant contended the plaintiff failed to comply with paragraph 24 of the lease, which required the plaintiff to provide tax bills as a condition precedent to recovering tax increases.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Gower v Weinberg, 184 A.D.2d 844, 845	Statute of Limitations runs from when the party is entitled to make a demand, not from the actual demand.	The court relied on this to determine the timing of accrual of the plaintiff's cause of action for tax increases.
Yeshiva Univ. Dev. Found. v Consultants Designers, 60 A.D.2d 525, 526	Interpretation of "demand is complete" language and lease provisions regarding tax increase calculations.	Distinguished the lease language here from Yeshiva's, noting absence of a base year for tax increases, raising a question of fact.
Federal Ins. Co. v Fries, 78 Misc.2d 805, 810	Statute of Limitations timing related to when demand is complete.	Supported the court's interpretation of when the Statute of Limitations begins to run.
Thornton v Roosevelt Hosp., 47 N.Y.2d 780	Cause of action accrues when the right arises, regardless of plaintiff's awareness.	Applied to reject plaintiff's claim that accrual was delayed by its belief about lease validity.
1014 Fifth Ave. Realty Corp. v Manhattan Realty Co., 67 N.Y.2d 718	Requirement to establish performance of conditions precedent in contract actions.	Used to hold plaintiff failed to prove compliance with lease's notice requirement for tax increases.
Azriliant v Oppenheim, 91 A.D.2d 586	Conditions precedent and summary judgment standards.	Supported the court's conclusion that plaintiff did not establish fulfillment of notice condition precedent.
Parente v Drozd, 171 A.D.2d 847	Procedural propriety of raising issues on summary judgment.	The court noted that issues of laches and prior proceedings were not properly before it as they were not raised by the defendant.

Court's Reasoning and Analysis

The court analyzed the Statute of Limitations under CPLR 206(a), concluding that the limitations period runs from when the right to make a demand is complete, i.e., when the party is entitled to make the demand, not when the demand is actually made. The court rejected the plaintiff's argument that the cause of action did not accrue until the lease was upheld in 1987, emphasizing that the plaintiff was aware of the cause of action as early as 1983 and that each tax year's cause of action accrued at the end of that calendar year.

Regarding the tax years 1985 through 1990, the court found the plaintiff failed to demonstrate compliance with the lease's condition precedent requiring notice of tax increases to the tenant, an essential element to recover damages. The court noted the absence of lease language specifying how to calculate tax increases, unlike in the Yeshiva case, creating a factual issue about the amount owed. Furthermore, the court declined to address issues of laches and the effect of the prior summary proceeding because these were not raised by the defendant and thus not properly before the court on summary judgment.

Holding and Implications

The court affirmed the order insofar as appealed from, with costs. This meant that the court upheld the dismissal of the plaintiff's claims for tax increases from 1979 through 1984 based on the Statute of Limitations and found that the plaintiff failed to establish entitlement to summary judgment for tax increases from 1985 through 1990 due to failure to prove compliance with the lease's condition precedent.

The decision directly affects the parties by limiting the plaintiff's recovery to claims not barred by the Statute of Limitations and requiring proof of notice for subsequent claims. No new legal precedent was established beyond application of existing principles.

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WOODLAUREL, INC., Appellant, v. LILYAN WITTMAN, Respondent.

Ordered that the order is affirmed insofar as appealed from, with costs.

In 1984, the plaintiff landlord instituted a summary proceeding in the District Court, Nassau County, challenging the validity of a lease entered into between the plaintiff's predecessor and the defendant in 1978, and seeking possession for nonpayment of rent. The District Court, inter alia, upheld the validity of the lease in 1987, and that determination was affirmed by the Appellate Term and this Court (see, Woodlaurel, Inc. v Wittman, 163 A.D.2d 384).

The plaintiff landlord then commenced the instant action to recover damages for its payment of tax increases which the defendant tenant was allegedly responsible for pursuant to the terms of the lease. The plaintiff moved for summary judgment, asserting that the defendant owed back tax increases from 1979 through 1990. The defendant cross-moved for summary judgment dismissing the complaint, asserting that the plaintiff's suit was, inter alia, barred by the six-year Statute of Limitations applicable to contract actions and the plaintiff had failed to comply with paragraph 24 of the lease, which required the plaintiff to furnish the defendant with tax bills as a condition precedent for the recovery of tax increases.

In denying the plaintiff's motion and granting those branches of the defendant's cross motion which were to dismiss the seventh through twelfth causes of action seeking recovery of payments for alleged tax increases for the years 1979 through 1984, the Supreme Court was correct in relying upon CPLR 206 (a), which provides that, "where a demand is necessary to entitle a person to commence an action, the time within which the action must be commenced shall be computed from the time when the right to make the demand is complete". The courts have interpreted the "demand is complete" language to mean that the Statute of Limitations runs from the time when the party making the demand first becomes entitled to make the demand, and not from the time the actual demand is made (see, Gower v Weinberg, 184 A.D.2d 844, 845; see also, Yeshiva Univ. Dev. Found. v Consultants Designers, 60 A.D.2d 525, 526; Federal Ins. Co. v Fries, 78 Misc.2d 805, 810).

The general rule in New York is that the Statute of Limitations starts to run when the cause of action accrues, even if the plaintiff is unaware that he or she has a cause of action (see, Thornton v Roosevelt Hosp., 47 N.Y.2d 780). Here, even though the plaintiff may have thought that the lease was invalid until the determination in the summary proceeding in 1987 and therefore did not believe itself to have a cause of action arising out of the lease, the plaintiff was entitled to make its demand for payment, and its cause of action for nonpayment arose at the end of each calendar year in which taxes were imposed. In this regard, it should be noted that the plaintiff was, in fact, aware that the causes of action existed, since it had attempted in 1983 to recover tax increments without success prior to instituting the summary proceeding, within which she took the position that the lease was invalid.

As to the remaining causes of action covering the tax years from 1985 through 1990, the plaintiff, in moving for summary judgment, failed, as a matter of law, to establish its performance of the lease's condition precedent that it provide the tenant with notice of the tax increases (see, CPLR 3213; see also, CPLR 3015 [a]; 1014 Fifth Ave. Realty Corp. v Manhattan Realty Co., 67 N.Y.2d 718; Azriliant v Oppenheim, 91 A.D.2d 586). It is impossible to determine from examining the tax bills and reports of the official tax bureaus, which portions of the taxes were increases. Moreover, unlike the language of the lease in Yeshiva Univ. Dev. Found. v Consultants Designers (supra), which provided for the tax increases to be calculated from a specific base year, there is no language in the lease herein which would provide guidance on this issue, thus raising a question of fact as to the amount of the actual tax increases.

While the Supreme Court addressed the issues of laches and the effect of the prior summary proceeding for rent upon the current action, we note that these issues were not raised by the defendant and thus were not properly before the Supreme Court on these motions for summary judgment. Accordingly, we do not address those issues. The appellant's other contention is without merit (see, Parente v Drozd, 171 A.D.2d 847). Bracken, J.P., Sullivan, Lawrence and Joy, JJ., concur.

WOODLAUREL, INC. v. WITTMAN