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Tenant-Shareholder’s Claims Against Cooperative Hotel Dismissed

An appellate court recently dismissed a series of claims by a tenant-shareholder who owns a residential suite in a cooperative hotel, arising from actions taken after a water leak into the apartment. Schwartz v. Hotel Carlyle Owners Corp., 2015 N.Y. Slip Op. 4257 (1st Dep’t May 19, 2015).


The plaintiff alleged that following a leak that occurred in July 2011, “the Hotel’s agents trespassed in his apartment and converted specified items of personal property, and that the Hotel breached the covenant of quiet enjoyment in the proprietary lease.”  A lower court upheld plaintiff’s pleading of this claims, but the appeals court disagreed.


The trespass claim was dismissed “because the proprietary lease for the apartment permits the Hotel to enter the apartment for purposes of assessing leak damages and making repairs.”  Moreover, the Hotel’s “agents left the apartment as soon as plaintiff objected.”  The court concluded that “[s]ince the essence of a trespass is intentional entry onto the property of another without justification or permission, plaintiff’s allegations that the Hotel’s agents mishandled his drapery and otherwise exacerbated the conditions caused by the leak do not support a trespass claim.”


The conversion claim was dismissed because there was insufficient evidence that any of the defendants, “as opposed to plaintiff’s own agents, were responsible for taking plaintiff’s personal property or that they were currently in possession of it.”  Moreover, plaintiff had already received full compensation from his insurer for the value of the items he claimed were missing, and had not shown that he had suffered any other loss.


With respect to the claim for breach of the covenant of quiet enjoyment, the court held that to establish such a claim, “a tenant must show an ouster, or if the eviction is constructive, an abandonment of the premises.”  Moreover, “[c]onstructive or actual eviction requires that ‘there must be a wrongful act by the landlord which deprives the tenant of the beneficial enjoyment or actual possession of the demised premises.’”  Here, plaintiff did not allege that the Hotel had intentionally caused the water damage, and his negligence claim had previously been dismissed.  Rather, plaintiff merely alleged that the Hotel’s agents caused some additional harm to personal property and delayed his ability to make repairs.


In any event, the Hotel presented evidence that plaintiff had been credited with a rent abatement for several months after the flood, and that even after the abatement expired, plaintiff had failed to make any payments of monthly maintenance pursuant to the proprietary lease.  The court concluded that “plaintiff’s failure to pay rent ‘constitutes an election of remedies,’ so that he had no claim for damages.”  Moreover, plaintiff had also received compensation from his insurer for additional living expenses while the apartment could not be used, “even though his primary and secondary residences were elsewhere,” and he had not shown that the delays in completing repairs, after the period of rent abatement, were the fault of the Hotel.


Finally, “[p]laintiff’s claim for punitive damages d[id] not survive the dismissal of the substantive claims, and in any event, [was] insufficient since he has not alleged or provided any evidence that defendants acted in a morally reprehensible manner.”