H.L Klion, Inc. v. Venimore Bldg. Corp

In H.L Klion, Inc. v. Venimore Bldg. Corp., 39 Misc. 2d 547 (Sup. Ct., Nassau County 1963), mod 21 A.D.2d 673 (2d Dept.), mod 15 N.Y.2d 601 (1964), the tenant sought a declaratory judgment concerning the payment of certain taxes, and the landlord's answer included counterclaims for payments allegedly due under that lease clause, as well for attorney's fees. The lower court found for the landlord and awarded attorney's fees because "the insertion of counterclaims in the action . . . is tantamount to the institution of an action or summary proceeding within the meaning of [the lease]." (39 Misc. 2d at 551). The Appellate Division held that under the facts, the tenant was not "in default," and moreover that the landlord's counterclaim for a declaratory judgment and additional rent was not "the equivalent of the institution by [landlord] of 'an action or summary proceeding.'" (21 A.D.2d at 674). The Court of Appeals found for the tenant and dismissed the counterclaims.