Statute of Frauds Case Example

In City of New York v. Heller, 127 Misc 2d 814, 487 N.Y.S.2d 288, aff'd 131 Misc 2d 485, 503 N.Y.S.2d 995, the respondent tenant, and his then living brother, entered into an oral agreement in 1980 with the director of the Bureau of Property Management, Division of Real Property of the City of New York to vacate one of two suites they occupied in the premises that had been previously purchased by the city for condemnation purposes. Upon vacating one suite they could remain in the other at a fixed rent until both of them died. The respondents had become month to month tenants when the city purchased the building in 1965. In 1969, the city was awarded possession of the said premises but due to fiscal problems could not go forward with its initial plans, thus the court issued a stay and allowed the occupants to remain in their apartments provided they continued to pay their use and occupancy. In May 1984, the petitioner served a 30 day notice on the respondent claiming that he is a month to month tenant and refused to pay a proposed rental increase. In his defense, the respondent raised his oral lease which petitioner argued was barred by the Statute of Frauds. Addressing the issue of the Statute of Frauds, the court began with a recitation of the sections of the GOL as set forth above. It then went on to state the following: The statutory language makes clear that a writing is required where performance is for longer than one year. However, where a contract is capable of being performed within a year, it does not fall within the strictures of section 5-701(a)(1). The controlling words here are capable of'. Thus even if performance extends beyond a year, if it was capable of performance within a year measured from the date of the agreement, the Statute of Frauds does not require a writing. Similarly, where an oral lease could be construed to be for a period less than a year, it does not fall within section 5-703(2). In determining whether the oral contract is within the prohibition of the Statute of Frauds, it is the endurance of the defendant's liability, not the plaintiff's, that is the deciding factor. In the cases before me, respondent is an individual whose lifetime is finite and capable of enduring less than a year. [ ] a lifetime can be shorter than a year. Hence, this lease was capable of performance within one year of the making of the agreement. Where a contract can be so construed, it is free of the requirement set out by General Obligations Law 5-701(a)(1) and 5-703(2). Although the court held that the oral agreement between the agent of the city and the respondent was not invalid for failure of being reduced to a writing, the Administrative Code of the City of New York prohibited the agent from leasing the premises for a period in excess of five years from the date of the agreement (July 1980) and, therefore, the lease would terminate on July 31, 1985. Since the petitioner commenced the proceeding in June 1984, the court dismissed the proceeding as premature. In City of New York v. Heller, 127 Misc 2d 814, 487 N.Y.S.2d 288, aff'd 131 Misc 2d 485, 503 N.Y.S.2d 995the respondent was a month to month tenant with an oral agreement that he could remain in the subject premises until he died. There was no dispute as to whether the term of the tenancy was definite or indefinite. As the court there stated, a lifetime tenancy can be completed within one year because of the possibility that the tenant could die within a year from the making of the agreement. Yet, notwithstanding the court's finding that the oral agreement survived the Statute of Frauds, it held that the agreement could only be enforced for a period of up to five years as the agent who entered into the agreement with the respondent did not have the authority to exceed that time period. While Heller is often cited for the proposition that if the duration of an oral lease is measured by the tenant's lifetime it is capable of termination within one year and therefore not barred by the provisions of GOL 5-701(a)(1) and 5-703(2), this Court does not concur in the proposition that meeting the requirements of 5-701(a)(1) automatically satisfies the provisions of 5-703(2).