Remsen Apartments v. Nayman

In Remsen Apartments v. Nayman, 89 A.D.2d 1014 [2d Dept. 1982], affd 58 NY2d 1083 [1983] a lessee of apartment units in a residential premises brought a declaratory judgment action against the lessor, to declare the parties' rights under their lease agreement with respect to the planned conversion of the premises to cooperative ownership. The lessor counterclaimed, also for declaratory relief: among other things, the lessor sought a declaration that certain payments and stock that the lessee might receive in connection with the conversion constituted "gross income" under the lease, thereby increasing the lessee's rent. The trial court dismissed the counterclaim, apparently on the ground that the conversion had not occurred because, among other things, the Attorney General had not yet approved the conversion plan. (Remsen Apartments, 89 A.D.2d at 1014-1015.) The appellate court found that the trial court should have issued a declaratory judgment with respect to the counterclaim. The court acknowledged that the lessee would only be required to make additional payment to the lessor under paragraph 38 of the lease if (1) the Attorney General approved the cooperative conversion, and (2) the lessee thereafter sold cooperative units. But, the Court found, a declaration of the parties' rights under paragraph 38 would not constitute an advisory opinion, because "there can be little doubt that the conduct of [the lessee] would be affected by knowledge of whether it must share with [the lessor] any of the conversion proceeds." (Id. at 1015.) If a declaration was issued before a conversion, the Remsen Court implied, the lessee could better decide whether investing in the conversion was a sound business decision. (Id.)