Tuesday, December 3, 2013

J.N.A. Realty Corp. v. Cross Bay Chelsea, Inc. case brief

J.N.A. Realty Corp. v. Cross Bay Chelsea, Inc. case brief summary
366 N.E.2d 1313 (1977)

Appellant tenant sought review of an order of the Appellate Division of the Supreme Court in the Second Judicial Department (New York), which reversed a judgment of the trial court for appellant in respondent landlord's proceeding to recover a building leased by appellant due to the lease expiring. Appellant failed to respond to an option to renew the lease, and appellant alleged that it was entitled to equity to relieve it from a forfeiture.

Appellant tenant leased a building from respondent landlord. The lease agreement contained an option to renew the lease, which stated that appellant was to notify respondent by certified mail six months prior to the last day of the term of the lease if appellant desired renewal. Subsequently, respondent sent a letter to appellant informing it that the option had expired and that appellant was to vacate the premises. Appellant then sent notice of intention to renew the option, which was refused by respondent. Respondent commenced suit to recover the premises, and appellant replied that it was entitled to equity to relieve it from a forfeiture. The trial court found for appellant, and the lower appellate court reversed.


  • The court remanded for a new trial, holding that an equitable interest was recognized and protected against forfeiture if the landlord was not harmed by the delay in the giving of the notice and the tenant would have sustained substantial loss. 
  • A tenant was entitled to the benefit of equity where default in notice did not prejudice the landlord. 
  • Thus, the case was remanded for a determination of whether respondent was prejudiced by appellant's failure to give notice.

The court reversed the lower appellate court's reversal of the trial court's judgment for appellant tenant in respondent landlord's suit to recover possession of a building leased by appellant and remanded for a new trial so that the trial court could determine if respondent was prejudiced by the default. Equity should have relieved against default if it was due to inattention and if relief could have been granted without damage to the landlord.

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