State of New York
Supreme Court, Appellate Division
Third Judicial Department
Decided and Entered: January 28, 2016 520710
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DAVID A. FRAGOMENI et al.,
Appellants,
v MEMORANDUM AND ORDER
AIM SERVICES, INC.,
Respondent.
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Calendar Date: November 20, 2015
Before: Lahtinen, J.P., McCarthy, Egan Jr., Lynch and Clark, JJ.
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Chenel Myers, LLP, Albany (Mark A. Myers of counsel), for
appellants.
Kyran D. Nigro, Saratoga Springs, for respondent.
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Lynch, J.
Appeal from an order of the Supreme Court (Crowell, J.),
entered December 22, 2014 in Saratoga County, which granted
defendant's motion for summary judgment dismissing the complaint.
Plaintiffs commenced this action to recover rent due for
premises leased to defendant in the City of Saratoga Springs,
Saratoga County for a four-year term, running from May 1, 2009
through August 31, 2013. In January 2011, defendant notified
plaintiffs that it had determined to construct a new building
outside the city and, thus, wished to terminate its lease by
February 29, 2012. Defendant provided advance notice to allow
plaintiffs time to relet the premises so as to mitigate
defendant's rental obligations under the lease. It is undisputed
that defendant relocated the majority of its business operations
to the new location in January 2012, but continued to pay rent
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and utilize the leased premises. In July 2012, plaintiffs
entered into a lease with a new tenant for a portion of the
subject premises, without notice to defendant. After defendant
discovered the new tenant, and contacted plaintiffs about a rent
adjustment and name change for the utility account, plaintiffs
placed all the utility accounts in their own names. In August
2012, plaintiffs entered a lease with a second new tenant for
part of the subject premises, again without notice to defendant.
In the meantime, plaintiffs changed the locks to the premises,
ostensibly following a burglary involving the theft of
plaintiffs' tools. Plaintiffs declined defendant's request for a
new key to access its remaining premises, explaining "the area in
question is not available due to ongoing construction and the
liability issues that come with that." In response, defendant
discontinued the rent payments, and this action ensued. After
joinder of issue, Supreme Court granted defendant's motion for
summary judgment dismissing the complaint, finding that there was
an acceptance of the lease surrender by operation of law, by
which defendant was released from any further obligations under
the lease. Plaintiffs appeal.
We affirm. The parties agree that defendant effectively
surrendered the premises in January 2012, but disagree as to
whether plaintiffs accepted defendant's surrender by operation of
law. "A surrender by operation of law occurs when the parties to
a lease both do some act so inconsistent with the landlord-tenant
relationship that it indicates their intent to deem the lease
terminated" (Riverside Research Inst. v KMGA, Inc., 68 NY2d 689,
691 [1986] [citations omitted]; accord Chestnut Realty Corp. v
Kaminski, 95 AD3d 1254, 1254 [2012]; Ford Coyle Props., Inc. v
3029 Ave. V Realty, LLC, 63 AD3d 782, 782 [2009]; Brock Enters. v
Dunham's Bay Boat Co., 292 AD2d 681, 682 [2002]). A surrender by
operation of law is inferred from the conduct of the parties,
namely, the tenant's abandonment of the demised premises and the
landlord's acceptance thereof; whether a surrender by operation
of law has occurred in a particular case is generally a factual
determination (see Riverside Research Inst. v KMGA, Inc., 68 NY2d
at 691; Chestnut Realty Corp. v Kaminski, 95 AD3d at 1254; Ford
Coyle Props., Inc. v 3029 Ave. V Realty, LLC, 63 AD3d at 782;
Brock Enters. v Dunham's Bay Boat Co., 292 AD2d at 682).
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Here, defendant established that plaintiffs relet parts of
the premises without notice to defendant and refused to provide
defendant with a key to the remaining premises, after having
changed the locks. Plaintiffs also placed all the utility
accounts in their own names. Plaintiffs' assertion that a
question of fact was raised as to whether there was construction
in the leased premises precluding defendant's use is unavailing.
By their own account, plaintiffs refused to provide defendant
with new keys and access to the "area in question" due to
"ongoing construction" and liability concerns. Whether or not
plaintiffs were simply replacing a generator outside the leased
premises does not alter their refusal to allow defendant access
to the premises. Nor do we overlook the fact that, in their
complaint, plaintiffs seek to recover the full rent payable under
the lease, without offset for rent received from the two new
tenants (see Brock Enters. v Dunham's Bay Boat Co., 292 AD2d at
683). As such, we conclude that Supreme Court properly
determined that plaintiffs accepted the surrender of the lease by
operation of law.
Lahtinen, J.P., McCarthy, Egan Jr. and Clark, JJ., concur.
ORDERED that the order is affirmed, with costs.
ENTER:
Robert D. Mayberger
Clerk of the Court