Landlord Who Lost Eviction Case Must Pay Damages to Tenant

Landlord sued to evict rent-stabilized tenant of five contiguous SRO units. The court ruled against landlord and ordered landlord to pay tenant damages totalling $250,000. Landlord appealed and lost. Prior landlord had signed a settlement agreement with tenant in court. That agreement gave landlord the option to terminate the tenancy in exchange for payment to tenant of $3,500,000. The agreement also stated that if landlord sued to evict for nonpayment, nuisance, or breach of the lease and won, tenant would be entitled to this payment. But if landlord sued to evict on any of those grounds and lost, landlord had to pay tenant $250,000. Current landlord argued that the damages provision in prior landlord's agreement with tenant created an unenforceable penalty. But the provision was designed to discourage landlord from bringing baseless proceedings in an effort to avoid the buyout obligation. This didn't make the provision a penalty. 

JMW 75 LLC v. Debs: 2018 NY Slip Op 28070, 2018 WL 1278961 (App. Div. 1 Dept.; 3/12/18; Shulman, JP, Gonzalez, Cooper, JJ)