After Iran severed diplomatic ties with the United States in 1980, the State Department's Office of Foreign Missions assumed control of a townhouse at 34 East 69th Street in Manhattan. The property had been the residence of Iran's deputy consul general.1
OFM leased the building to financier Jeffrey E. Epstein in 1992 for $15,000 per month. Epstein lived there for several years, then abandoned it and sublet to attorney Ivan Fisher in 1996 at a higher rent. The lease required written government approval for any sublet, but Epstein claimed OFM orally consented. When officials learned Fisher was occupying the house, they demanded a cure. Epstein refused, prompting OFM to terminate his lease and seek ejectment of all occupants.
Judge Denny Chin granted the government's motion for summary judgment. He ruled the lease unambiguously required prior written consent, so any oral approval was ineffective. The court also held that under New York landlord–tenant law the government could withhold consent for any reason, rejecting Epstein's argument that an implied covenant of good faith barred arbitrary refusal. Epstein, Fisher, and numerous subtenants were ordered to vacate.