Housing Court Decisions Feb. 1996

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Issues/Legal Principles: Illegal evictions
Caption: Barclay v. Natoli
Court: Civil Housing Court, Kings County
Judge: Callender
Date: February 28, 1996
Citation: NYLJ, page 29, col. 6
Referred Statutes: Section 26-521 of the Administrative Code of NYC; RPAPL 711
Summary: The tenant resided on the second floor of the building for seven months. The landlord evicted him without a court order, removed his possessions, had him arrested by the police for criminal trespass, and refused to give the tenant a key when the locks were changed. The landlord argued that he never resided in the apartment and was only a janitor and that there was a protective order against the tenant with respect to a female tenant on the third floor. The court declared him a lawful occupant in possession for longer than 30 days and therefore a member of the class of persons covered by the NYC unlawful evictions law. Only by court process could the landlord remove an occupant in possession for longer than 30 days.

Issues/Legal Principles: Landlord's use of John or Jane Doe; Evicting subtenants
Caption: Crooks v. Holcomb
Court: Civil Housing Court, Kings County
Judge: Bruce Kramer
Date: February 28, 1996
Citation: NYLJ, page 29, col. 4
Referred Statutes: CPLR 1024
Summary: Landlord claimed tenant had unlawfully sublet the apartment without prior consent. The "subtenant" moved to dismiss the holdover petition on grounds that she was a remaining family member with rights to succeed to the tenant's lease and that she was not named as a party. The "subtenant" argued that landlord did not make a diligent effort to ascertain her name prior to proceeding against her as "Jane Doe," citing CPLR 1024. This statute permits using the designation of John or Jane Doe only if the name or identity of a party is unknown prior to the commencement of the case. The court noted that recent case law has held that a "genuine attempt to discern the true name" of a party should be made before resorting to CPLR 1024. The court ruled that the landlord could only get a possessory judgment against the prime tenant, not the alleged subtenant.
Notes: The court noted that the subtenant did nothing to secrete her identity or purposely avoid contact with the landlord. Presumably an evasive occupant would not be shielded under a CPLR 1024 argument.

Issues/Legal Principles: Hotel tenant's overcharge
Caption: St. George Hotel Associates v. NYS DHCR
Court: Civil Housing Court, Kings County
Judge: Bruce Kramer
Date: February 28, 1996
Citation: NYLJ, page 29, col. 4
Referred Statutes: Rent Stabilization Law, Section 26-506
Summary: Hotel tenant filed rent overcharge with DHCR. Owner claims the room was exempt from Rent Stabilization because it was a "luxury" hotel with units renting in excess of $350 per month or $88 per week on May 31, 1968 (the standard for exemption). The DHCR in an appeal (known as a "Petition for Administrative Review," or "PAR") held that the apartment was Stabilized and the tenant was overcharged. It annulled treble damages awarded to the tenant. The judge did not find the DHCR's decision arbitrary, capricious or contrary to law (the standard for overturning an agency's decision).
Notes: It is puzzling how a Housing Court judge came to rule on a DHCR PAR. The only forum for challenging a PAR is in Supreme Court in an Article 78 proceeding (CPLR Section 7804(b) and Rent Stabilization Code Section 2530.1). Housing Court does not have concurrent jurisdiction with the Supreme Court to determine the validity of DHCR PARs.

Issues/Legal Principles: Owner's preclusion of collecting rent increases.
Caption: Zas v. Bricard
Court: Civil Housing Court, Kings County
Judge: Ronni Birnbaum
Date: February 28, 1996
Citation: NYLJ, page 29, col. 5
Referred Statutes: Rent Stabilization Law 26-517.1(a)
Summary: RSL 26-517.1(a) requires owners to pay an annual fee of $10 per year per apartment. Failure to pay precludes an owner from apply for or collecting rent increases until the payment is made. The owner argued that the statute has a four-year limitation, but the court said that applies to overcharges, but no statute of limitations exists for the $10 fee. The court denied the landlord rent increases.

Issues/Legal Principles: Pending DHCR proceedings
Caption: EGA Associates v. Goodwin
Court: Appellate Term, 1st Department
Judge: lower court Margaret Taylor
Date: February 28, 1996
Citation: NYLJ, page 25, col. 2
Referred Statutes: none cited
Summary: In 1991 landlord and tenant agreed that tenant would pay lower rent until the DHCR ruled on her claim challenging the legal collectible rent. Apparently, the landlord brought a petition seeking the higher rent. The court dismissed the petition on grounds that the tenant need only pay the lower rent until the DHCR decides. The Appellate Term upheld that portion of the decision that only the lower rent be paid, but reinstated the petition because the tenant had not paid any rent since 1991.
Notes: If not for the 1991 agreement, the tenant would have been obliged to pay the higher rent until the DHCR matter is determined. If the decision is in tenant's favor, tenant can deduct the excess paid over the years from future rent.
Explanatory note: A tenant cannot deduct excess paid rent pursuant to a pending overcharge complaint until DHCR makes an initial ruling at the District Rent Office (DRO) level. Once this order has been issued, the tenant may, at that time, deduct any excess rent directed by DHCR in accordance with the order. However, if the owner files a PAR, according to RSC 2529.12, the tenant may lower any future rent payments prospectively to the legal rent directed by the order, but the right to deduct previously paid excess rent (retroactive from the date of filing the complaint to the date of the order) is stayed pending the outcome of the administrative appeal. Tenants should hold the difference between the lower and higher rents aside in the case that the DHCR order is reversed. Some owners will seek to impose a complete stay of the order pending appeal either by asking the agency or commencing an Article 78 proceeding in Supreme Court. Absent compelling reasons, these requests are often denied because the "administrative process has not been exhausted." Tenants should vigorously fight any attempt for a complete stay.

Issues/Legal Principles: Senior Citizen Rent Exemptions (SCRIE)
Caption: Nunez v. Dinkins
Court: Supreme Court, New York County
Judge: Louis B. York
Date: February 26, 1996
Citation: NYLJ, page 27, col. 4
Referred Statutes: Section 26-509 of the Administrative Code of NYC
Summary: SCRIE provides rent increase exemptions for low-income senior citizens residing in rent stabilized housing (Sec. 26-509 of NYC Admin. Code). A class action suit was brought against the City's Department for the Aging and the court ruled that benefits should commence from the time the tenant is eligible for SCRI, which is 62 years old, not when the tenant applies to be covered under the SCRIE program. The judge rolled back the rent to the amount the tenants had paid when they were 62 years old, although he declined to order that any monies paid in excess be refunded to the tenants.
Notes: To be eligible for the SCRIE program aggregate disposable family incomes must be less than $16,500 a year (soon to be amended to $20,000). SCRIE exemptions include MCIs. The judge's lengthy decision provides much information about the SCRIE program in general.

Issues/Legal Principles: Emergency rental payments by DSS
Caption: Jiggetts v. Dowling
Court: Appellate Division, 1st Department
Judge: lower court, Karla Moskowitz
Date: February 26, 1996
Citation: NYLJ, page 26, col. 5
Referred Statutes: none cited
Summary: New York City Human Resources Administration (HRA) comes under the New York State Department of Social Services (DSS). The lower court ruled that DSS must process applications prepared by HRA. These applications relate to payments of rent to needy tenants to avoid evictions. HRA can only prepare applications for families requesting such relief, but the DSS has sole authority to determine the applications. The lower court also ruled that HRA is expressly prohibited from challenging a denial or advocating on behalf of a family. Further HRA is limited to preparing applications only where the tenant would be evicted because no outside organization is available to submit an application for relief on the tenant's behalf.
Notes: In the initial Jiggetts case (Jiggetts v. Grinker, 554 N.Y.S.2d 92 1990), the Court of Appeals ruled that DSS must provide a shelter allowance that enabled public assistant recipients to reside in affordable housing. In other words, the allowance must bear a reasonable relationship to the cost of housing.

Issues/Legal Principles: "Prevailing party" in awarding attorney's fees
Caption: Duell v. Cunniff
Court: Appellate Term, 1st Dept.
Judge: lower court, Jerald Klein
Date: March 1, 1996
Citation: NYLJ, page 25, col. 3
Referred Statutes: none cited
Summary: Non-payment proceeding was dismissed because tenants tendered full amount of rent arrears demanded by landlord in its written rent demand before the commencement of the proceeding. As prevailing parties, tenants were awarded attorney's fees.
Notes: It is often a tricky question determining who is the "prevailing party," particularly in cases where a percentage of the rent is abated for warranty of habitability claims. Does a 20% rent abatement when the landlord sought 100% of the rent law constitute a "prevailing party?" The Appellate Division ruled that it did and that the tenant was entitled to attorney's fees (Lynch v. Leibman, 177 A.D.2d 453 (2st Dept. 1991). Rather than just look at a percentage bottom line, courts tend to consider the totality of facts, such as whether the litigation precipated by landlord's breach of the warranty, the extent of the abatement and the period for which the abatement was granted. See Heller v. Morgan, NYLJ, June 3, 1992, 22:1 (App. Term 1st Dept.)

Issues/Legal Principles: Vacate default judgment
Caption: McCaw Property v. Baker
Court: Appellate Term, 1st Dept.
Judge: lower court, James Grayshaw
Date: March 1, 1996
Citation: NYLJ, page 25, col. 3
Referred Statutes: none cited
Summary: Indigent tenant defaulted (failed to respond to a non-payment petition) and moved to vacate the on grounds that (a) the default was not willful nor deliberate, and (b) a substantial portion of the arrears was already paid by DSS. The Appellate Term found that the prejudice to the landlord was minimal, that tenant had habitability defenses for the remaining rent claims and strong public policy favors disputes on their merits. The lower court's denial of the tenant's motion was reversed.

Issues/Legal Principles: Attorney-tenant sanctioned by court
Caption: 25-35 Tennis Associates v. Humpherys
Court: Civil Court Brooklyn County
Judge: Judge Laurie Lau
Date: February 21, 1996
Citation: NYLJ page. 28, col. 6
Referred statutes:
Summary: The tenant, an attorney, argued that rent paid pursuant to a court-ordered settlement was for future rent, not past arrears. The Court, exasperated by the tenant's history of making frivilous motions to delay payment of large arrears, sanctioned the tenant and ordered her to pay $300.00 to the Client Security Fund, stating, "The court hopes that this sanction is sufficient to restrain respondent from engaging in further frivolous conduct."
Notes: It is unusual for a court to sanction an unrepresented tenant. However, the court observed that this tenant/attorney "is not an uneducated tenant struggling pro se to resist the inevitable force of the law." The court felt the tenant was abusing the system, particularly because it was clear the rent paid under the settlement was never future rent.

Issues/Legal Principles: Rights of tenants associations
Caption: 145 East 23 Street Tenants Association v. Movica
Court: Supreme Court, New York County
Judge: Judge Emily Goodman
Date: February 21, 1996
Citation: NYLJ page 28, col. 2
Referred statutes: RPL section 230
Summary: The tenants reside in the Kenmore Hotel (an SRO hotel) which is currently owned by the U.S. government due to forfeiture proceedings against the prior owner. The tenants sued various parties including the federal marshal who runs the hotel on grounds that the tenants' right to organize an association under Real Property Law Section 230 was impeded through the defendants' actions. The issue presented to the court was whether the marshal had to appear to answer questions when the tenants served him a subpoena: the Court ordered the marshal to testify. Because the hotel is owned by the U.S. government, the judge noted that the tenants' constitutional rights to assemble, speak and associate are implicated.

Issues/Legal Principles: Overcharge and conditional provisions of a new lease
Caption: Draper v. Georgia Properties, Inc.
Court: Supreme Court, New York County
Judge: Judge Emily Goodman
Date: February 21, 1996
Citation: NYLJ page 28, col. 1
Referred statutes: Rent Stabilization Code's section 2525.3(b)
Summary: Tenant brought an overcharge action against the landlord in Supreme Court. (The Civil Court is the forum where claims are less than $25,000). The lease set the rent at $2,700 a month, but DHCR records show the lawful stabilized rent to be only $739. Tenant stated that the landlord made her sign a rider to the lease that the apartment was not her primary residence, or else the apartment would not be leased to her. The landlord argued in court that the tenant was not entitled to overcharges because the apartment was not her primary residence. The court observed that Rent Stabilization Code's section 2525.3(b) prohibits an owner from requiring a prospective tenant to agree as a condition for renting the unit that it will not be used as a primary residence. The court reduced her rent to the legal amount, granted her claim for overcharges, and awarded her treble damages (because the overcharge was willful) and attorney's fees.
Notes: An overcharge claim can only be made for the past four years and treble damages for the past two years.

Issues/Legal Principles:Assignment of sublet & payment of "Use and Occupancy"
Caption: Park West Village Associates v. Slepian
Court: Civil Court, New York County
Judge: Judge Richard Braun
Date: February 21, 1996
Citation: NYLJ page 28, col. 5
Referred statutes: Real Property Law (RPL) section 226-b.
Summary: The court denied the landlord's motion for use and occupancy (i.e., rent) because it was not shown that the respondent was delaying the proceeding or sought any favor from the court (such as when the tenant asks for more than one adjournment or asks for a stay of the proceeding). The respondent in this case was not the tenant of record who had since vacated the apartment. The respondent claimed he was assigned the lease by way of a sublet agreement. The landlord wanted this defense stricken, but the court ruled that the tenant could pursue this defense at trial because "there may have been an assignment pro tanto, which is the creation of an assignment by subletting beyond the term of the overlease."
Notes: In an assignment the tenant gives the lease to someone else for good. A sublet is for a definite period of time and at the end of that period the prime tenant returns and resumes the lease. Both an assignment and a sublet require a landlord's prior written consent. Unlike a sublet request, an assignment can be rejected by a landlord for no reason at all.

Issues/Legal Principles: Pass-on rights in a city-owned building by foreclosure & newly discovered evidence
Caption: City of New York v. Johnson
Court: Civil Court, New York County
Judge: Judge Jack Dubinsky
Date: February 21, 1996
Citation: NYLJ page 28, col. 6
Referred statutes:
Summary: The City acquired the building by in rem tax foreclosure in 1990. In 1992, the respondent had applied for legal tenancy as a remaining family member of his now deceased mother. In 1995, the City rejected his request, claiming that he was involved in illegal drug activity. At trial, the court ruled in favor of the City. The tenant made a motion to set aside the judgment on grounds of newly discovered evidence consisting of a 1987 non-payment proceeding in which, according to the respondent, the prior owner recognized him as a tenant. The court ruled that statutory law provides that when the City takes over a building by in rem foreclosure, it is not bound by any prior agreements made by a prior owner. The court also ruled that newly discovered evidence consists of evidence that was not available at the time of trial. The non-payment proceeding was a public record, so respondent could have obtained copies of those proceedings for use at trial.

Issues/Legal Principles: Overcharge claim pending at DHCR
Caption: 24 Fifth Avenue Associates v. Malekian
Court: Appellate Term, 1st Department
Judge: lower court Judge Eileen Bransten
Date: February 21, 1996
Citation: NYLJ page 26, col. 6
Referred statutes:
Summary: The landlord's non-payment proceeding was dismissed by the lower court on grounds that the tenants' overcharge complaints were pending with the DHCR and therefore the court could not make a determination of the legal rent. The Appellate Term reversed and sent the case back to the court for a determination of the rent due, holding that a pending DHCR claim does not stay a landlord's entitlement to collect the rent. The court noted that if the tenants win their claim, they may offset their award against current and future rent, or enter the DHCR order as a judgment.

Issues/Legal Principles:Legal fees for landlord
Caption: Mill Rock Plaza Associates v. Lively
Court: Appellate Division, 1st Department
Judge: lower court Judge Bruce Kramer
Date: February 22, 1996
Citation: NYLJ page 26, col. 1
Referred statutes:
Summary: The tenant and landlord entered into a stipulation where the tenant apparently agreed to pay $5,000 legal fees. The judge extended the tenant's time to pay four times and would not enter a money judgment for the owner. The Appellate Term upheld the judge's orders. However, the Appellate Division (a higher court) reversed and ordered the tenant to comply with the stipulation, including the attorney's fees payment.
Notes: This decision did not recite much of the underlying facts. One is left wondering what facts motivated the Appellate Term to uphold the lower court's orders.