City of New York v. Heritage Health & Hous., Inc.

City of New York v Heritage Health & Hous., Inc. 2026 NY Slip Op 05998 October 15, 2026 Appellate Division, First Department Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This decision is uncorrected and subject to revision before publication in the Official Reports. The City of New York, et al., Plaintiffs-Respondents, v Heritage Health and Housing, Inc., Defendant-Appellant, John or Jane Doe, etc., et al., Defendants. The City of New York, et al., Plaintiffs-Respondents, Decided and Entered: October 15, 2026 Index No. 451964/23 452315/23|Appeal No. 7260-7261|Case No. 2025-02883 2025-02884| Before: Manzanet-Daniels, J.P., Shulman, Rodriguez, Higgitt, Rosado, JJ. Smith Buss & Jacobs LLP, Yonkers (Avi Strauss of counsel), for appellants. Steven Banks, Corporation Counsel, New York (Karin Wolfe of counsel), for respondents. [*1] Order, Supreme Court, New York County (Jeanine R. Johnson, J.), entered on or about March 31, 2025, which denied defendant Heritage Health and Housing, Inc.'s motion to dismiss the complaint, unanimously affirmed, without costs. Order, Supreme Court, New York County (Jeanine R. Johnson, J.), entered on or about March 31, 2025, which denied defendant Ralph K. Jackson, M.D., P.C.'s (Jackson) motion to dismiss the complaint, unanimously affirmed. The instant actions are for ejectment and trespass. In the action involving defendant Heritage, Heritage argues that the parties' license agreement is, in fact, a lease, and that it is a month-to-month tenant. It further contends that plaintiffs failed to properly terminate its tenancy. In determining whether an occupant holds a tenancy or a license, "[w]hat defines the proprietary relationship between the parties is not its characterization or the technical language used in the instrument, but rather the manifest intention of the parties" (American Jewish Theatre v Roundabout Theatre Co., 203 AD2d 155, 156 [1st Dept 1994]). Here, the agreement contains multiple provisions indicating an intention to create a license rather than a tenancy. Paragraph 13(a) specifically disclaimed a landlord-tenant relationship, and paragraph 6(a) stated that the parties had "the absolute right to terminate this License agreement without cause upon [60] days' notice to the other party." "[A] broad termination clause reserving to the grantor the right to cancel whenever it decides in good faith to do so is strongly indicative of a license as opposed to a lease" (Union Sq. Park Community Coalition, Inc. v New York City Dept. of Parks & Recreation, 22 NY3d 648, 656 [2014] [internal quotations marks omitted]). Additionally, paragraph 14 of the agreement provided that Heritage was not permitted to transfer or assign any portion of the space, which is also indicative of a licensor-licensee relationship (see Greenwood Lake & Port Jervis R.R. Co. v New York & Greenwood Lake R.R. Co., 134 NY 435, 440 [1892]; Ark Bryant Park Corp. v Bryant Park Restoration Corp., 285 AD2d 143, 150 [1st Dept 2001]). In the action involving defendant Jackson, plaintiffs were not parties to the purported sublease, and the documentary evidence on which Jackson relies indicates that while plaintiff New York City Health and Hospitals Corporation (HHC) was aware that Jackson was occupying the premises, it always took the position that it was, at best, a sublicensee of another entity, who was in turn a licensee of HHC. Indeed, the documentary evidence indicates that HHC disputed the validity of the purported sublease in its entirety. The documentary evidence also indicates that HHC never accepted money for use and occupancy of the premises directly from Jackson. [*2] Moreover, "municipal contracts which violate express statutory provisions are invalid" (Henry Modell & Co. v City of New York, 159 AD2d 354, 355-356 [1st Dept 1990], appeal dismissed 76 NY2d 845 [1990]). New York City Charter § 384 contains statutory prerequisites for leasing City-owned property. In both cases, HHC's deputy general counsel attested that those requirements were never satisfied. Because Heritage has not conclusively demonstrated that the license agreement was intended to be a lease rather than a license, and Jackson has not conclusively established that it is or was a tenant of the premises, they have also not conclusively demonstrated that they benefit from the notice requirements for termination of a tenancy (see Eccles v Shamrock Capital Advisors, LLC, 42 NY3d 321, 343 [2024]). Even if Jackson's argument regarding improper service of predicate notices was considered, a receptionist may accept service on behalf of a party if granted authority to do so (see Crespo v A.D.A. Mgt., 292 AD2d 5, 10 [1st Dept 2002]; CPLR 311[a][1]). While Dr. Jackson asserted in his affidavit that neither his receptionist nor the building front desk receptionist was permitted to accept service of the predicate notices, this statement simply contradicts the process server's affidavits of service. Thus, Jackson has not conclusively established that its receptionist or the front desk receptionist was not permitted to accept service on its behalf. Finally, plaintiffs' trespass claims against Heritage and Jackson are not duplicative of their ejectment claims (see 302 W. 87th St. LLC v SHS Upper City NY II LLC, 241 AD3d 1114, 1114-1115 [1st Dept 2025]). We have considered Heritage's and Jackson's remaining arguments and find them unavailing or unnecessary to reach in light of our decision. THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT. ENTERED: October 15, 2026