A New York appellate court has upheld a jury's decision to award $1,216,177.36 to plaintiffs Monica Iken and Ordinary Faces LLC in a dispute with the Bohemian Brethren Presbyterian Church. The case centers around the church's failure to assist in obtaining necessary permits for the operation of a preschool, which ultimately led to significant financial losses for the plaintiffs. This ruling is significant as it reinforces the responsibilities landlords have to their tenants regarding property maintenance and compliance with safety regulations.
The case, Iken v. Bohemian Brethren Presbyt. Church, was decided on October 13, 2026, by the Appellate Division of the Supreme Court of the State of New York. The ruling comes after a jury trial in which the plaintiffs argued that the church's inaction directly hindered their ability to operate the preschool, resulting in substantial lost profits.
Monica Iken and her business, Ordinary Faces LLC, entered into a lease agreement with the Bohemian Brethren Presbyterian Church to operate a preschool. The dispute arose when the plaintiffs claimed that the church failed to fulfill its obligations under the lease, particularly regarding the installation of a fire alarm system and the resolution of building violations. The plaintiffs argued that these failures prevented them from obtaining a letter of no objection (LNO) from the New York City Department of Buildings (DOB), which was essential for the preschool's operation.
The case reached the appellate court after the plaintiffs were awarded damages in the Supreme Court, New York County, on August 20, 2025. The church appealed the decision, challenging various aspects of the trial, including the jury's award and the denial of its motions to strike the jury demand and to set aside the verdict.
The court ruled unanimously in favor of the plaintiffs, affirming the jury's award. The judges on the panel included Justice Moulton, Justice Scarpulla, Justice Michael, and Justice Hagler. The court found that the evidence presented at trial supported the jury's conclusion that the church breached its obligations under the lease.
The court stated, "Defendant failed to satisfy this heavy burden" in proving that the verdict was based on insufficient evidence.
The ruling highlighted that the church's failure to cooperate with the plaintiffs in resolving building violations and installing a fire alarm system directly contributed to the denial of the LNO. The court noted that the lack of a functional fire alarm system was a significant reason the DOB denied the plaintiffs' application.
The court also addressed the church's argument regarding lost profits. It found that the plaintiffs provided sufficient evidence to establish that their financial losses were a direct result of the church's breaches. The court noted that the plaintiffs had calculated their lost profits based on historical data from a preschool that previously operated in the same location.
The court emphasized that the plaintiffs showed "the damages were fairly within the contemplation of the parties" based on their business plan.
This ruling has important implications for landlords and tenants alike. It reinforces the idea that landlords have a legal obligation to assist tenants in complying with safety regulations and obtaining necessary permits. Failure to do so can lead to significant financial consequences, as seen in this case.
The decision also sets a precedent for future landlord-tenant disputes, particularly those involving commercial leases. It clarifies that landlords cannot simply ignore their responsibilities under a lease agreement without facing potential legal repercussions.
Looking ahead, the church has the option to appeal the ruling to a higher court. However, details regarding any potential appeal were not available in the court filing. The outcome of this case may influence similar disputes in New York and beyond, as it underscores the importance of compliance with lease agreements and the legal obligations of landlords.