This motion is the latest skirmish in a long-running fight between plaintiff 71st Street-Lexington Corporation, a cooperative housing corporation, and defendant, Eric Frankel, over control of shares in plaintiff owned (or formerly owned) by defendant's late mother.

Plaintiff owns an apartment building on East 72nd Street in Manhattan. Defendant's mother was the proprietary lessee of one of the apartments in the building. She died in 2005. After her death, defendant, as executor of his mother's estate, requested the transfer of the proprietary lease to himself in his individual capacity. Plaintiff refused consent to the transfer. Litigation ensued. (See Frankel v 71st St. Lexington Corp., Index No. 105742/2011 [Sup Ct, NY County].)

Under a May 2014 stipulation in that action, defendant was to remove his belongings from the apartment by July 2014; and would be permitted access to the apartment thereafter only upon 24 hours advance written notice, and only for the purpose of selling the apartment or for renovating the apartment in anticipation of a sale. (See NYSCEF No. 25 at 6-11 [stipulation].) The apartment still has not been sold.

In 2019, Supreme Court (Carmen Victoria St. George, J.) dismissed the 2011 action. (See NYSCEF No. 27). In September 2021, defendant moved in the 2011 action to hold plaintiff in contempt for allegedly violating one of the prior stipulations in the action. Supreme Court (Alexander Tisch, J.) denied the motion. (See NYSCEF No. 82.)

In August 2019, the homeowner's insurance for the apartment—which the proprietary lease requires lessees to maintain—lapsed and was not replaced. (NYSCEF No. 1 at ¶¶ 25-30.) In May 2021, plaintiff requested that all lessees, including defendant, show that they have the required homeowner's insurance. (Id. at ¶ 31.). Defendant did not respond. (Id. at ¶ 32.) Plaintiff requested the proof of insurance from defendant again in July 2021. (Id. at ¶ 33.) In August 2021, defendant notified plaintiff that the apartment was not covered by a homeowner's insurance policy. (Id. ¶ 34.) On October 4, 2021, plaintiff issued a notice of default to defendant. (See NYSCEF No. 30.) On March 11, 2022, plaintiff terminated the lease. (See NYSCEF No. 32.)

In July 2023, plaintiff brought this action. Plaintiff has asserted a claim for a declaration that it properly terminated the lease, is entitled to sell the shares appurtenant to the apartment, and is entitled to apply the sale proceeds toward unpaid maintenance charges and to defray the costs of selling the apartment. Plaintiff has also asserted an award of attorney fees incurred in this action.

Plaintiff now moves for summary judgment in its favor on these claims and to dismiss defendant's affirmative defenses. The motion is granted.

A party moving for summary judgment "must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case." (See Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985].) If the movant makes that prima facie showing, the burden shifts to the non-movant to produce evidence raising material issues of fact requiring a trial. (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986].)

A. Whether Plaintiff's Notice of Default was Valid

Defendant argues that the notice of default is facially invalid because it "because it lacks the requisite specificity to sufficiently apprise Mr. Frankel of the claimed defaults under the Lease." (NYSCEF No. 76 at 5.) This argument is unpersuasive.^[FN1]

The default notice states that under "Article II, paragraph 4 and 18 of the proprietary [*2]lease and paragraph 25 of the house rules . . . the Estate of Gloria Frankel . . . is in default" of the lease and house rules because, in violation of those provisions, "the Estate has failed and continues to fail to maintain homeowners insurance for the apartment." (NYSCEF No. 30 at 1.) This statement is sufficiently clear and specific to put defendant on notice of the claimed default. Defendant emphasizes that the notice states that the list of facts included to substantiate this default is nonexclusive. (See NYSCEF No. 76 at 7-8, citing NYSCEF No. 30 at 1-2.) But neither the listed facts themselves, nor the statement that other supporting facts might also exist, creates any ambiguity about the nature of the default at issue, as defendant suggests.

Relatedly, defendant asserts that the notice is legally and factually erroneous because (i) one of the supporting facts given in the notice is that the Estate had not provided proof of homeowner's insurance for 2019 through 2021; and (ii) the lease and house rules do not require proof of insurance. (See NYSCEF No. 76 at 8-9.) But the notice does not represent that the failure to provide proof of insurance is a default—only that the absence of proof of insurance supported plaintiff's conclusion that the Estate in fact lacked the necessary underlying insurance itself. (See NYSCEF No. 30 at 1-2.) Defendant does not establish how this representation in the notice is either legally or factually erroneous.

B. Whether Plaintiff Could Terminate the Lease by Service of Notices of Default and Termination

Defendant argues that the lease contains a condition subsequent and therefore that plaintiff "was required to commence a plenary action to recover possession of the Apartment before declaring the Lease terminated." (NYSCEF No. 76 at 15.) Plaintiff contends that the lease instead contains a conditional limitation, and therefore does not "require Plaintiff to commence a plenary action to recover possession of the Apartment before it terminated the Lease." (NYSCEF No. 83 at 13.) This court concludes that the lease contains a conditional limitation.

To create a condition subsequent, the lease must "provide[ ] for a condition upon the breach of which the landlord may exercise his or her reserved right to declare the lease terminated and reenter the premises." (LLDP Realty Co., LLC v AGHR Enterprises LLC, 44 Misc 3d 716, 718 [Civ Ct, Kings County 2014].) Breach of a condition subsequent "does not automatically terminate the lease. The lease continues until the landlord, who has the right of forfeiture elects to terminate it. Possession can only be accomplished by a plenary action for ejectment." (South Street Seaport Ltd. Partnership v Jade Sea Restaurant, Inc., 151 Misc 2d 725, 726 [Civ Ct, NY County 1991].) For there to be a conditional limitation, on the other hand, the lease must "state clearly that it will expire upon the happening of some objective event." (Gouveneur Gardens Hous. Corp. v Lee, 2 Misc 3d 525, 528 [Civ Ct, NY County 2003].) Once the triggering event occurs, "the agreement automatically expires; no other act is necessary to end it." (Id.)

Here, the lease provides that if tenant defaults, and the lessor gives the tenant a notice stating that the lease will expire at least 10 days thereafter, then the lease will expire on the date set in the notice. (NYSCEF No. 21 at 19 [lease].) Plaintiff notified defendant of its default in October 2021. (See NYSCEF No. 30 [notice of default].) Plaintiff sent defendant a notice of termination on March 11, 2022, stating that because tenant had not cured its default, its lease would expire on March 25, 2022. (See NYSCEF No. 32 at 2 [notice of termination].) The lease provision thus contains "a conditional limitation; its language clearly provides that, if a notice of default were sent, the lease would automatically expire on the termination date fixed in the notice." (Matter of Ranalli v Burns, 157 AD2d 936, 937 [3d Dept 1990].) As a result, plaintiff is [*3]not bound to terminate the lease through a plenary action.

Defendant claims that notwithstanding the language of the lease, it must be construed as creating a condition subsequent, because conditional limitations may not be employed in residential leases. But both the holdings and reasoning of the line of precedents cited by defendant is particular to the nonpayment context, and do not necessarily carry over to other grounds for terminating proprietary co-op leases, such as failure to maintain insurance. (See e.g. Semans Family Ltd. Partnership v Kennedy, 177 Misc 2d 345, 350 [Civ Ct, NY County 1998].) Defendant does not provide any authority for the proposition that conditional-limitation provisions in residential leases are categorically unenforceable.

C. Whether Plaintiff's Claims are Barred by the Statute of Limitations

Defendant asserts as an affirmative defense that plaintiff's claims are barred by CPLR 213's six-year statute of limitations for contract claims. Plaintiff contends in response that defendant's failure to obtain insurance constitutes a continuing wrong. But even if the lack of insurance is not a continuing wrong, the claim would still be timely. Plaintiff has represented (both in the notice of default and the complaint in this action) that the insurance coverage for the apartment first lapsed in 2019. This action was brought in 2023, less than four years later—well within the applicable six-year limitations period.

Defendant also contends that plaintiff's claims are barred by laches, because it served the notice of termination in March 2022 but did not bring this action until July 2023. (See NYSCEF No. 76 at 16-17.) This contention is unpersuasive. "Laches is an equitable bar, based on a lengthy neglect or omission to assert a right and the resulting prejudice to an adverse party. The mere lapse of time, without a showing of prejudice, is insufficient to sustain a claim of laches. Prejudice may be demonstrated by a showing of injury, change of position, loss of evidence, or some other disadvantage resulting from the delay." (Matter of Linker v Martin, 23 AD3d 186, 189 [1st Dept 2005] [internal quotation marks omitted].) Defendant does not identify any prejudice to his interests that resulted from delay by plaintiff in bringing this action.

D. Whether Plaintiff's Claims are Barred by Waiver

Defendant argues that "even though [plaintiff] has purported to terminate the Lease it has continued to send Defendant monthly bills for rent—with interest and late fees accruing—despite asserting that the Lease was terminated in March 2022." (NYSCEF No. 76 at 19.) In essence, defendant is arguing that a fact question exists about whether plaintiff waived its capacity to terminate the lease, because it knew the premises was uninsured yet still accepted maintenance payments from defendant. But defendant does not establish that plaintiff's acceptance of maintenance payments could constitute a waiver of plaintiff's right to insist on compliance with the distinct, unrelated requirement that the Estate maintain homeowner's insurance for the premises. Nor, in any event, does defendant explain how this argument could survive the proprietary lease's no-waiver clause. (See NYSCEF No. 21 at 17.)

E. Whether Plaintiff has Established that Defendant Materially Breached the Proprietary Lease

Defendant argues that failure to maintain homeowner's insurance is not a material breach for a residential lease—only for commercial leases. But defendant provides no authority for this proposition. That, as defendant points out, New York law treats commercial and residential leases differently in several respects does not, without more, establish that the law treats them differently in this respect. And defendant does not provide more.

Defendant also argues that damages, rather than terminating the lease is the appropriate [*4]remedy for failure to have insurance under the lease. (NYSCEF No. 76 at 13.) But the cases relied on by defendant for this proposition involve situations in which the plaintiff procured its own insurance (see Yofi Book Publ'g, Inc. v Wil-Brook Realty Corp., 287 AD2d 712, 713 (2d Dept 2001]), or in which the lease limits landlord's remedy to damages (see Olin v. Warner, 11 Misc 2d 910, 910-911 [Jefferson County Ct, 1958]). Moreover, the Appellate Division, Fourth Department, has held that when a tenant breaches the terms of the lease by failing to insure the premises, the breach is material and warrants termination of the lease when the lease provides for that remedy. (See Brainerd Mfg. Co. v Dewey Garden Lanes, Inc., 78 AD2d 365, 366 [4th Dept 1981].)

Defendant points to a proprietary lease provision that limits the scope of plaintiff's legal obligations to ensure that a co-op resident maintains the necessary homeowner's insurance (and limits plaintiff's legal liability if the resident does not do so). (See NYSCEF No. 76 at 13, citing NYSCEF No. 21 at 25.) This court is not persuaded, though, that the presence of this protection for plaintiff implicitly ousts its right to treat the failure to maintain insurance as a material breach warranting termination of the lease.

F. Whether Defendant has Established a Material Dispute of Fact about Whether His Breach Should be Excused

Defendant also claims that plaintiff prevented him from accessing the premises to make repairs so he could obtain insurance and therefore that he was excused from procuring insurance. Plaintiff counters that regardless of defendant's excuses, he was in default under the lease. (NYSCEF No. 83 at 8.) Plaintiff also contends that (i) there is no evidence that defendant tried to obtain vacant property insurance or renew his coverage; (ii) defendant was given access to the apartment when he requested it; and (iii) insurance defaults are incurable as a matter of law. (NYSCEF No. 83 at 9.) This court agrees with plaintiff.

Defendant provides no basis—other than his own characterizations of what his broker assertedly told him at an unspecified point in time—to show that he would be unable to procure insurance if the repairs were not made or if he were not residing in the apartment. (See NYSCEF No. 60 at ¶ 22 [defendant's affidavit]. And in any event, defendant does not represent either that he took steps in the months after the nonrenewal of the apartment's insurance policy to cure that default, or that he ever attempted to obtain retroactive insurance coverage for the 2019-2021 period, as needed to protect the co-op "against the unknown universe of any claims arising during the period of no insurance coverage." (Juan v 213 W. 28 LLC, 149 AD3d 539, 540 [1st Dept 2017] [internal quotation marks omitted].) Defendant has thus not shown that a material dispute of fact exists about whether his default should be excused.

G. Whether Defendant has Established that a Material Dispute of Fact Exists about Whether Plaintiff's Serving the Notices of Default and Termination were Impermissibly Retaliatory

Defendant claims it has a defense to plaintiff's claims under Real Property Law (RPL) § 223-b. This statute bars a landlord from "serv[ing] a notice to quit upon any tenant or commenc[ing] any action to recover real property or summary proceeding to recover possession of real property" in retaliation for protected activity.^[FN2] (RPL § 223-b [1].) As relevant here, [*5]protected activity includes "[a]ctions taken in good faith, by or in behalf of the tenant, to secure or enforce any rights under the lease or rental agreement," the statutory warranty of habitability, the statutory duty to repair, or "any other law of the state of New York, or of its governmental subdivisions, or of the United States which has as its objective the regulation of premises used for dwelling purposes." (Id. § 1 [b].) A presumption of retaliation arises if the tenant served a notice to quit within one year after the tenant engaged in protected activity; this presumption may be rebutted by the landlord's establishing "a non-retaliatory motive for his acts by a preponderance of the evidence. (Id. § 5.)

Defendant argues that because plaintiff served the notice of default on him a few weeks after he moved for contempt in the prior action between the parties, a presumption of retaliation has arisen that plaintiff has not rebutted—and therefore that he has a defense to the validity of the default and termination notices. (See NYSCEF No. 60 at ¶¶ 29-30 [party affidavit]; NYSCEF No. 76 at 19-20 [mem. of law].) This court disagrees.

As described above, the scope of protected activity under RPL § 223-b [1] [b] encompasses actions to enforce a tenant's rights under the lease or rental agreement or under New York statutes regulating residential premises. Defendant has not established that his motion for contempt comes within that scope. The court's order in the prior action denying the motion for contempt describes that motion as a request for "an order finding defendants in civil contempt for violating a 2013 so-ordered stipulation."^[FN3] (NYSCEF No. 82 at 1 [reproducing order].) An effort by defendant to enforce his rights under the stipulation—an agreement reached by the parties in court to resolve a pending motion in the prior action (see NYSCEF No. 25 at 3-5 [reproducing stipulation])—is not equivalent to an effort by defendant to enforce his rights under "the lease or rental agreement" or applicable New York statutes for purposes of § 223-b (1) (b).^[FN4] Nor does defendant explain how a contempt motion based upon the 2013 stipulation could constitute protected activity under § 223-b.

H. Whether Plaintiff May Sell the Estate's Co-Op Shares Upon Terminating the Lease

Defendant claims that even assuming plaintiff properly terminated the lease, plaintiff has not established its entitlement to sell the Estate's co-op shares as a matter of law. (NYSCEF No. 76 at 21.) In particular, defendant asserts that before selling the shares, plaintiff must establish [*6]that it has a security interest in the shares and has otherwise complied with the security-interest-enforcement procedures of article nine of the Uniform Commercial Code (as enacted in New York). (See NYSCEF No. 76 at 21-23.) This assertion is groundless. UCC article nine provides for and governs the sale of collateral, such as co-op shares upon enforcement of a security interest in that collateral by a party such as a co-op. But does not mean that UCC article nine is the only basis on which a sale of co-op shares may occur. Here, the proprietary lease expressly provides that after termination of the lease, the lessee (i.e., defendant) must surrender the shares and plaintiff may then sell the shares. (NYSCEF No. 21 at 28 [lease].) That contractual right exists, and may be exercised, without regard to UCC article nine.

Plaintiff also moves under CPLR 3211 (b) to dismiss the 38 affirmative defenses raised in defendant's answer. Most of those affirmative defenses are addressed—and found lacking—in the discussion above of plaintiff's request for summary judgment in its favor on the declaratory judgment claim. Any remaining affirmative defense is subject to dismissal as conclusory and unsupported. Plaintiff's request for dismissal of the defenses is granted.

In addition to its claim for declaratory relief, plaintiff seeks an award for attorney fees and expenses incurred in this action, as provided for by the proprietary lease. (See NYSCEF No. 39 at 7.) To support its fee application, plaintiff has provided an attorney affirmation and supporting invoices. In opposing the application, defendant argues only that awarding fees would be premature because plaintiff has not established that it should prevail on the underlying claims in the action. (See NYSCEF No. 76 at 24.) Defendant does not, however, challenge the reasonableness of plaintiff's counsel's hourly rates or hours billed. And, on reviewing the fee invoices, this court is satisfied that the claimed fees set out in those invoices are reasonable. This court therefore awards $57,470.50 in fees and $1,904.88 in expenses, for a total of $59.375.38. This award is without prejudice to plaintiff's seeking a further award for fees incurred after the filing of plaintiff's opening papers on this motion.^[FN5]

Accordingly, it is

ORDERED that the branch of plaintiff's motion seeking summary judgment in its favor is granted; and it is further

ORDERED, ADJUDGED, and DECLARED that pursuant to the terms of the co-op Lease and House Rules plaintiff: (i) properly terminated the Lease; (ii) is entitled to sell the shares appurtenant to the Apartment to a purchaser free and clear of all liens, restrictions, charges and encumbrances, at which time the Shares and Lease held by the Estate shall be automatically cancelled and rendered null and void and the purchaser shall take legal, valid, binding enforceable and marketable title to such Shares and Lease free and clear of all liens, restrictions, charges and encumbrances; and (iii) is entitled to apply the proceeds received for the sale of the shares of stock towards the payment of the Estate's indebtedness, including any unpaid maintenance charges accruing until closing of the sale, costs of preparing the Apartment [*7]for sale, costs of selling the Apartment (including brokerage fees and commissions), and interest on all of the foregoing; and it is further

ORDERED that the branch of plaintiff's motion seeking dismissal of defendant's affirmative defenses is granted; and it is further

ORDERED that the branch of plaintiff's motion seeking an award of attorney fees and costs is granted, and plaintiff is awarded $59,375.38 in fees and costs; and it is further

ORDERED that plaintiff is awarded a judgment against defendant for $59,375.38; and it is further

ORDERED that plaintiff may enter a supplemental judgment for its reasonable attorney fees incurred in this action after April 19, 2024, with the amount of those fees to be determined by motion made on notice made within 30 days of entry of this order; and it is further

ORDERED that plaintiff serve a copy of this order with notice of its entry on defendant and on the office of the County Clerk (by the means set forth in the court's e-filing protocol, available on the e-filing page of the court's website, https://ww2.nycourts.gov/courts/1jd/supctmanh/E-Filing.shtml), which shall enter judgment accordingly.