NY Tenant Awarded $1.8 for Wrongful Eviction

A landlord of a New York City restaurant obtained a warrant of eviction pursuant to a default judgment. A city marshal executed the warrant and barred the tenant from the restaurant. Shortly thereafter, a court granted a temporary restraining order (TRO) staying the landlord from removing the tenant’s property from the premises, restored the tenant to possession, vacated the default and scheduled a hearing. At the hearing, the court found that the tenant, who was in the second year of an 11-year lease, had not been served with a notice of petition and dismissed the landlord’s eviction petition.

The tenant sued the landlord seeking damages resulting from the illegal eviction.

The tenant observed that liquor bottles had disappeared; the lock on a walk-in cooler had been broken off; and wine, food, kegs of beer, tables, chairs bar stools, and silverware, as well as electronic equipment, additional furniture, bar equipment and stereo equipment were missing. The landlord asserted that the restaurant was destined for failure. However, the court found that the restaurant was in full operation the day prior to the eviction. The New York Supreme Court, New York County, noted that the tenant was impeded in presenting its damage claim because of missing financial records and the chaotic condition in which his office was left by landlord’s employees.

The landlord had taken several computers and file cabinets containing financial records that would have been helpful in establishing an accurate measure of tenant’s damages. Based thereon, the court reasoned that it would be inequitable for the court to demand precision from the tenant relative to his losses. The court considered “before” photos and weekly inventory and noted that the restaurant had several bookings for future events. The court also considered the active status of the restaurant and tax return information.

The court awarded compensatory damages for lost inventory, equipment and profits. Additionally, the court awarded punitive damages, finding that it was “clear that the bogus eviction was merely a sham to isolate the property from tenant. The Order of Eviction was bogus from its inception; it was never served, nor was it meant to be served on the tenant, who was continuously present and open for business, on a daily basis from 11:00 AM to past midnight.”

The court found that the eviction was “wanton and reckless, because done without warning, leaving the tenant unaware until after his property had been removed. This was malicious because done deliberately with full knowledge of tenant’s rights as a commercial tenant and with intent to stifle those rights.”

The court further stated that it was malicious because “it was done vindictively with knowledge of [tenant’s] financial vulnerability and his right to continue operating a comparatively vibrant restaurant.” The court reasoned that the “taking of the filing cabinets was particularly malicious, because they were of no value to anyone else, yet they were crucially vital to plaintiff.” Moreover, the landlord had arranged for a “conniving…City Marshall to illegally shut down, the restaurant in order that he might remove its assets.”

Additionally, the landlord had violated a prior TRO which “stay[ed] the [landlord] from attempting to re-let the…premises by displaying a ‘For Rent’ sign in front of the restaurant, and showing the property to several prospective tenants.” The landlord had also failed “over a period of several days to give possession by failing to surrender the keys….”

The court awarded $218,919.36 as compensatory damages for inventory and physical items; $160,000 for loss of business and profits; $350,000 in punitive damages and$1,136,758.00 as treble damages.

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