Baygold Associates, Inc. v. Congregation Yetev Lev of Monsey, Inc. ( 2012 )

Smith, J. (dissenting).

The majority seems to me to make an arbitrary distinction between tenants and subtenants in applying the rule of J. N. A. Realty Corp. v Cross Bay Chelsea (42 NY2d 392 [1977]).

As we explained in J. N. A., “when a tenant in possession under an existing lease has neglected to exercise an option to renew, he might suffer a forfeiture if he has made valuable improvements on the property” (id. at 397). We held that, to prevent such a forfeiture, a tenant “should not be denied equitable relief from the consequences of his own neglect or inadvertence,” if the neglect or inadvertence has caused no harm to the landlord (id. at 398).

Here, it is a subtenant and not a tenant who has made the improvements, but the result of the tenant’s inadvertence is no less a forfeiture. Because the tenant failed to send a certified mail notice by the prescribed date, the subtenant loses improvements that cost, according to evidence in the record, several hundred thousand dollars; the tenant loses the revenue it anticipated from the sublease; and the landlord gets the improvements for nothing.

The only distinction between this case and J. N. A. is that the subtenant, not the tenant, was the party “in possession” and the party that paid for the improvements. Why that should make a difference is a question that the majority opinion makes no attempt to answer.

Chief Judge Lippman and Judges Ciparick and Read concur with Judge Pigott; Judge Smith dissents in a separate opinion in which Judge Graffeo concurs; Judge Jones taking no part. Order affirmed, with costs.