Housing Court Decisions Mar. 1996

edited by Colleen F. McGuire, Esq.

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New York Law Journal decisions for the week of March 25-29, 1996

Issues/Legal Principles: Decrease in services
Caption: In Re Application of Grenadier Realty Corp. v. DHCR
Court: Appellate Division, 1st Department
Judge: lower court: Supreme Court, Joan B. Lobis
Date: March 25, 1996
Citation: NYLJ, page 26, col. 3
Referred Statutes: none cited
Summary: In 1984 the tenant filed a complaint of decrease in building-wide services, including reduction in laundry room hours from 24 to 18 hours per day, reduction in playground hours and curtailment of access by messengers to apartments in the building. The landlord claimed such reduction was necessary for security reasons and insurance reasons. In a meandering legal process the DHCR evenutally ruled for the tenant and rolled the rent back to the legal rent in effect prior to 2-1-89. The Supreme Court affirmed the DHCR order after the landlord appealed in an Article 78. The Appellate Division reversed, holding that the changes in building services at issue here "... cannot rationally be viewed as a failure to maintain required services...".
Notes: The tenant's complaint was filed in 1984. By the time it wound its way in and out of the DHCR and Supreme Court over ten years had passed. The tenant claimed that as a result of the DHCR order, he was now entitled to at least $40,000 in overpayments. One senses that the glacial passage of time leading to the tenant's windfall influenced the Appellate Division's decision as much as its assessment that the decreases in services in this case were "meaningless infringements." The Court noted "in passing" that the complaining tenant was childless.

Issues/Legal Principles: Attorney's fees in pet case
Caption: St. Marks Place Assoc. V. Stuzenski
Court: Appellate Term, 2nd & 11th Judicial Districts
Judge: lower court: Richmond County Judge Ponterio
Date: March 27, 1996
Citation: NYLJ, page 34, col. 5
Referred Statutes: Adminstrative Code of City of NY Section 27-2009.1
Summary: Tenant prevailed in landlord's holdover case alleging that tenant unlawfully kept a dog. The lower court refused to grant tenant legal fees. The Appellate Term reversed, holding that tenant's successful defense entitled tenant to attorney's fees.

Issues/Legal Principles: No eviction action against an empty apartment
Caption: D'Arienza v. Juliano
Court: Appellate Term, 2nd & 11th Judicial District
Judge: lower court: Suffolk County Judge Cahill
Date: March 27, 1996
Citation: NYLJ, page 34, col. 6
Referred Statutes: none cited
Summary: The Appellate Term threw out the landlord's appeal, holding that a tenant must be in actual or constructive possession of premises at the time a proceeding is commenced. An example of constructive possession would be if the tenant is not physically occupying the space, but still retains keys to the premises. In this case the record showed that the tenant had abandoned the premises months before the proceeding began and that the landlord's agent was given the key months earlier.
Notes: The basis of landlord's appeal was the inadequacy of the final judgment. The lower court awarded the landlord a mere $363.88, presumably in rent. Although not explicitly stated in this case, it seems that what had happened is that the landlord was trying to collect rent on the remainder of the tenant's lease term, even though it had actual knowledge of the tenant's vacatur and abandonment. Since the tenant was not around to challenge the case in court, the landlord's attorneys presumably surmised they would win a rent judgment hands down. Niether the lower court or the Appellate Term went along with the game.

Issues/Legal Principles: Discovery in sublet case; use and occupancy payments
Caption: Tribeca Equity Partners v. Ezcura
Court: Civil Court, New York County
Judge: Judge Saralee Evans
Date: March 27, 1996
Citation: NYLJ, page 32, col. 4
Referred Statutes: CPLR 408; RPAPL 745(2)
Summary: The landlord brought an unlawful sublet proceeding. The tenant claimed that she was currently hospitalized for cancer treatment and the alleged subtenant was her son who was permitted to reside with her under the lease terms. At oral argument the landlord alleged the tenant did not occupy the apartment as her primary residence. The court denied landlord's motion for discovery because the request sought documents that could prove a non-primary residency case, yet the landlord did not opt to bring a non-primary residency case. The court labeled the landlord's request a "fishing expedition." The court also denied the landlord use and occupancy payments since it was the landlord, not the tenant, who was delaying the procedure by seeking discovery.
Notes This decision highlights the confusion tenants often encounter in distinguishing an unlawful sublet case from a non-primary residency case. The judge accused the landlord of seeking information that would more likely be used in a non-primary residency case than an unlawful sublet case. Yet, the same factual allegations are invariably asserted in either type case, primarily that the tenant is not residing in the apartment. The main differences are procedural and consequential. An unlawful sublet case can be brought at any time during the term of the lease, while a non-primary residency case can only be brought at the end of the lease term (after landlord has notified tenant that the lease will not be renewed on stated grounds). A tenant can cure an unlawful sublet case ten days after judgment and retain the apartment, whereas a judgment against a tenant in a non-primary residency case is final and cannot be cured.

Issues/Legal Principles: Warranty of habitability; quiet enjoyment
Caption: Benitez v. Restifo
Court: City Court of Yonkers, Westchester County
Judge: Dickerson
Date: March 27, 1996
Citation: NYLJ, Page 36, col. 3
Referred Statutes Real Property Law 235-b
Summary A huge flood occurred which damaged the tenant's property. The tenant who lived in the basement sued the landlord and claimed that the source of the flood was a tenant on the third floor who intentionally overflowed her kitchen sink. The tenant also claimed that the landlord knew of the third floor tenant's behavior but chose not to evict her. The court awarded the tenant a money judgment for the damaged property, additional sums for "discomfort and disruption" to the tenant's life (breach of quiet enjoyment) and punitive damages because the landlord apparently took no action against the problem tenant.
Notes: It bears emphasizing that this was not a Housing Court case; rather the tenant sued the landlord in a regular civil court forum. Housing Court does not award tenants consequential damages, that is, money damages for loss of property. It is troubling that the court penalized the landlord for not attempting to evict the third floor tenant. There is no indication whether the landlord sought other less drastic means of dealing with that tenant. Furthermore, leaks are very, elusive, very tricky to locate. Many times elderly tenants or non-English speaking tenants are accused of flooding apartments below, when more often then not, the problem lies with faulty plumbing. This case cites many other water damage cases and habitability cases.

Issues/Legal Principles: Stipulations
Caption: Kent v. Bedford Apartments Co.
Court: Supreme Court, New York County
Judge: Charles Ramos
Date: March 27, 1996
Citation: NYLJ, page 31, col. 5
Referred Statutes RSC 2520.13; General Business Law 349(h)
Summary In 1987, the tenant of record died and the plaintiff Allegra Kent claimed tenancy rights to the apartment. The matter was settled by stipulation and Kent was given a Rent Stabilized lease at $1,800 per month. She renewed it regularly until 1995 when she sued the landlord claiming that the stipulation violated public policy and the rent charged was illegal. She claimed that she signed the stipulation under duress. The court rejected her claim, finding that she waited too long (seven years) to challenge it and her delay resulted in a ratification of the stipulation. The court also noted that she was represented by counsel when she signed the stipulation. Finally, the court cited two other cases where tenants stipulated away their statutory tenancy rights and the courts upheld the validity of the stipulations despite this waiver.
Notes: Stipulations tend to be very difficult to vacate especially if ample time has passed or the tenant had been represented by counsel. Therefore, tenants should be very careful about what they sign. If possible, ask the court for a short adjournment simply to consult with a lawyer as to the terms of a proposed stipulation. A consultation with a lawyer is not a costly affair, and the advice is preferable to winging it pro se (i.e., unrepresented). Despite this court's reference to two cases which upheld a tenant's waiver of statutory tenant rights, there are a host of cases which hold to the contrary.

Issues/Legal Principles: Oral agreement re rent payments
Caption: Lindsey Jones v. Fordham Hill Owners Corp.
Court: Appellate Division, First Department
Judge: lower court: Supreme Court, Bronx County Alan J. Saks
Date: March 28, 1996
Citation: NYLJ, page 26, col. 2
Referred Statutes General Obligations Laws 5-703(2)
Summary The plaintiff is the owner of the shares of stock to two co-op units. The co-op board served a notice of intention to terminate one of plaintiff's proprietary leases because no rent was paid for several years. The plaintiff argued that he had an oral agreement with the former chairman of the board that he did not have to pay rent on one of the units until he could sell the other unit. Although the lower court sided with plaintiff, the Appellate Division rejected the oral agreement as violative of the Statute of Frauds (contracts concerning real property involving terms exceeding one year must be in writing to be given effect).

Issues/Legal Principles:
Caption: Manocherian v. Lenox Hill Hospital
Court: Supreme Court, New York County
Judge: Walter M. Schackman
Date: March 29, 1996
Citation: NYLJ, page 32, col. 1
Referred Statutes none cited
Summary This is a protracted case (five years old) case between the landlord, Lenox Hill Hospital as the prime tenant and the 15 apartments which are sublet to nurses. The latest ruling provided that the Hospital was not entitled to a renewal lease but the individual occupants (the nurse sublets) are to Rent Stabilized leases. The Court of Appeals had previously ruled (84 N.Y.2d 385) that indefinite subletting to employees by not-for-profit hospitals absent the landlord's consent was an unconstitutional taking of private property.

Issues/Legal Principles: Deregulation based on high income
Caption: Kahn v. Glickman
Court: Appellate Term, 1st Department
Judge: lower court: Housing Court Walter Strauss
Date: March 29, 1996
Citation: NYLJ, page 31, col. 4
Referred Statutes RSL 26-504.1; 26-504.3
Summary Landlord brought a holdover proceeding because the tenants of record did not sign a renewal lease. Before the holdover began landlord petitioned the DHCR to decontrol the Rent Stabilized premises on grounds of high income rent exclusion (Rent Stabilization Law, Section 26-504.1. The tenants vacated the apartment but filed a complaint with the DHCR that the landlord refused to issue a renewal lease in the name of their adult children. The lower court dismissed the petition. The Appellate Term, reversed, stating that the petition should not be reversed, just stayed pending the outcome of the DHCR's determination over both issues: the high income deregulation issue of which DHCR has exclusive jurisdiction, and the succession rights issue which DHCR has concurrent jurisdiction with Housing Court. The Appellate Term ruled that the tenants had to pay interim use and occupancy pending the DHCR decision at the current rent guidelines rate ($2,672.47 per month for this unit).

Issues/Legal Principles: Succession rights to Mitchell Lama apartment
Caption: Ruppert Housing Co, Inc. v. Adams
Court: Appellate Term, 1st Department
Judge: lower court: Norman Ryp
Date: March 29, 1996
Citation: NYLJ page 31, col. 5
Referred Statutes Article II of Private Housing Finance Law
Summary The premises involved a Mitchell Lama cooperative apartment. The tenant-shareholder died and her daughter sought succession rights. Under the City regulations governing this subsidized limited profit housing company, a family member is entitled to succession rights if he or she resided in the premises as a primary resident with the tenant cooperator for at least two years prior to the tenant's permanent vacatur or death, and has appeared on income affidavits for at least two consecutive annual reporting periods immediately prior to the tenant's vacatur. Failure to include the family member's name on the annual income affidavits creates a rebuttalbe presumption that the person did not reside in the apartment as their primary residence during the requisite time period. In this case, the daughter was not named on the affidavits. She simply stated that the apartment had been her primary residence for over three years prior to her mother's death. The Court, however, held that if indeed the apartment had been her residence, she would have and should have produced documents supporting her claim, such as, affidavits of third parties or correspondence addressed to her at the apartment.

New York Law Journal, decisions for the week of March 18-22, 1996

Issues/Legal Principles: Late filing of MCI application
Caption: Matter of Lawrence Pape v. DHCR
Court: Appellate Division, 1st Department
Judge: lower court: Supreme Court, William McCooe
Date: March 21, 1996
Citation: NYLJ, page 25, col. 4
Referred Statutes: RSC 2522.4(a)(8)
Summary: The DHCR denied landlord's application for an MCI because it was filed two years after the improvements were made. The landlord's excuse was that an eviction proceeding was pending and he didn't want to prejudice his position. The lower court rejected this argument because late filings are excusable only if the delay is "beyond the applicant's control" (RSC 2522.4(a)(8).

Issues/Legal Principles: Attorney's fees to prevailing party
Caption: Katz v. Denniger
Court: Appellate Term, 1st Department
Judge: lower court: Housing Court, James Grayshaw
Date: March 20, 1996
Citation: NYLJ, page 26, col. 1
Referred Statutes: Real Property Law 234
Summary: Tenant prevailed in landlord's owner-occupancy case, but only on a procedural ground, not the merits of the case. Usually a win on technical grounds will not prompt a court to award attorney's fees because it is preferable to wait for the "ultimate outcome." More than 18 months passed and the landlord still had not started a proceeding. The tenant then made a motion for attorney's fees. The lower court denied the motion, but the Appellate Term reversed stating that a landlord should not be permitted to postpone indefinitely the ultimate outcome of the lawsuit where a case is dismissed on a motion rather than the merits.
Notes This is a great decision for tenants or attorneys who take advantage of technical defects to stymie a landlord's eviction proceeding. This case raises a question, however, as to how long should a tenant should wait before moving for attorney's fees? 3 months? 6 months? 1 year? If a tenant waits more than 18 months, perhaps the landlord could argue that the tenant had abandoned its claim for fees. The decision does not indicate if this landlord made such an argument.

Issues/Legal Principles: "Pet sitting" business as violation of tenancy
Caption: Park Holding Co. v. Grossman
Court: Civil Court, New York County
Judge: Peter Wendt
Date: March 20, 1996
Citation: NYLJ, page 27, col. 1
Referred Statutes: RSC 2524.3(a)
Summary: The landlord's basic claim was that the tenant had a dog walking business and a cat sitting business which entailed keeping various cats in her apartment and walking up to four dogs through the building. The landlord argued this was a substantial violation of the tenancy and created a nuisance. At trial the court found that all the dogs' owners lived in the same building and they would need their pets walked anyway. Likewise, the cats stayed in their owner's apartments (all in the same building) and the tenant was given keys to the apartments to feed and care for the cats. The extent of tenant's activity inside her own apartment consisted of no more than phone calls and storage of keys. Additionally, the court found that the landlord had knowledge of the tenant's conduct for years but continued to accept the rent. Knowledge of conduct, coupled with acceptance of rent, will waive a landlord's right to challenge the alleged conduct.

Issues/Legal Principles: Unlawful alterations
Caption: Classic Residences, Inc. v. Stuart
Court: Civil Housing Court, New York County
Judge: Judge Arthur Birnbaum
Date: March 20, 1996
Citation: NYLJ, page 26, col. 6
Referred Statutes: RSC 2524.3(a)
Summary: The landlord claimed that the tenants breached the "no alteration" clause of their lease and this is a substantial violation of the tenancy. The tenants, as they usually did, notified the landlord that certain repairs were needed, specifically the stove was not operating properly. The case does not state how long, if at all, the tenants waited for the landlord to respond to their request. Tenants unilaterally removed the stove, replaced it with another stove at their own expense and put the old stove in a storage bin in the basement. The court ruled that the tenant's action was not an alteration of the type that compels the court to evict the tenant. But the court gave the landlord 10 days to repair the old stove and restore it back to the apartment, and awarded the landlord attorney's fees.
Notes This was a very acrimonious case. The dispute was even the subject of an article in the New York Times (March 10, 1996). Without explicitly saying so, the court essentially found that the alteration was a violation of a substantial obligation of the tenancy. Nonetheless, the court allowed the tenant to cure the breach by directing the landlord to fix the old stove and put it back in the apartment. Why would a landlord want an old stove in an apartment if the tenant, at their own expense, bought a new one? In this case, it's because the landlord is Classic Residences who are notorious for aggressively litigating against tenants. It would be a departure from their normal modus operandi if Classic opts not to appeal this decision, even though they in essence won. But Classic isn't satisfied with anything less than a 100% victory, which the judge did not give them here because the tenants were not evicted.

Issues/Legal Principles: Rent reduction order
Caption: Graham Court Owners Corp. v. Allen
Court: Appellate Term, First Department
Judge: lower court: Civil Housing Court, James Grayshaw
Date: March 19, 1996
Citation: NYLJ, Page 25, col. 2
Referred Statutes: RSC 2524.3(a)
Summary: Tenant sought modification of stipulation of settlement based on a DHCR rent reduction order. The order predated the execution of the stipulation. The court reduced the tenant's monthly rent from $1,121.80 to $338, the amount paid by the prior rent control tenant. RSC 2524.3(a) permits a rent reduction based on decrease of services "to the level in effect prior to the most recent guidelines increase." The Appellate Term reversed because the lower court failed to credit landlord with vacancy increases and increases for improvements during the vacancy.
Notes: If the rent is rolled back to the most recent guidelines increase, the standard procedure is to refer to the rent of the last Rent Stabilized rent. It appears that this tenant was the first Rent Stabilized tenant, that the $1,121.80 was the rent in her renewal lease. Apparently, her first lease rent was $1,068.30. What if the tenant filed her complaint during her first lease? To what rental figure would the DHCR roll back her rent to? If this decision is followed to the letter, it appears that the tenant would get no roll-back because the of 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: MCIs and rent reduction orders
Caption: Matter of Chelrae Estates, Inc. v. DHCR
Court: Appellate Division, 1st Department
Judge: lower court: Supreme Court Stanley Parness
Date: March 18, 1996
Citation: NYLJ, page 26, col. 5
Referred Statutes none cited
Summary The landlord filed for MCIs while the tenants filed a complaint for reduction of services. A DHCR inspector confirmed the lack of services and a rent reduction order was rendered. The landlord filed a PAR (appeal of a DHCR order) of that decision, and during the pendency of the PAR the landlord's MCI application was granted. The tenants filed a PAR on the MCI issue. The landlord lost the PAR on the reduction order, and the tenants partially won their PAR on the MCI issue to the extent that the MCI increases were suspended pending landlord's repair of the conditions which resulted in the rent roll-back. Further, once the conditions were remedied, the DHCR only permitted the landlord to collect increases prospectively from the date the conditions were corrected. The landlord claimed it never received timely notification of the PAR relating to the rent reduction orders which led the Supreme Court to vacate that order. The Appellate Division overturned this decision stating that the landlord had in fact known about the order and could have filed a rent restoration order.

Issues/Legal Principles:
Caption: City of New York v. 924 Columbus Associates
Court: Supreme Court, New York County
Judge: Charles Ramos
Date: March 21, 1996
Citation: NYLJ, page 25, col. 3
Referred Statutes Administrative Code of the City of New York, Section 7-701
Summary On five occasions individuals were arrested in a building for dealing in marijuana. The Police Department notified the landlord of the arrests and warned the landlord its property rights could be effected if nothing was done to stop the criminal activity. Under the Nuisance Abatement Law (Section 7-701, Admin. Code), the City obtained a temporary restraining order to close the building. Thereafter, without notice to the City, the landlord leased the premises to another tenant despite the effective closing order. The Supreme Court dismissed the City's nuisance action as moot since a new tenant was now in possession. The Appellate Division reversed, holding that a new lease with a new tenant does not prove that the prior illegal activity had abated or that the former tenant is not now operating under a new guise as a new tenant. The Court also held that the landlord could not engage in "self-help" while a temporary restraining order is in effect, that is, undertake any acts with respect to the premises during the order.

Issues/Legal Principles: Service of a three-day rent demand
Caption: Brophy v. Winter
Court: Appellate Term, 9th & 10th Judicial Districts
Judge: lower court, Westchester County, Klein
Date: March 22, 1996
Citation: NYLJ, page 30, col. 4
Referred Statutes RPAPL 711(2)
Summary The Appellate Term reversed the lower court's awarding possession to the landlord because the three-day rent demand to the non-payment petition was served by certified mail only. A rent demand must be served pursuant to RPAPL 735 which requires a reasonable application to serve the tenant first personally, and if not personally, then by leaving the papers on or under the door and serving a copy by regular and certified mail. The Appellate Term also faulted the lower court for failing to consider the tenant's counterclaims.

New York Law Journal decisions for the week of March 11 to March 15, 1996

Issues/Legal Principles: Service of papers; mailing of termination notice
Caption: Ringel v. Mansouri
Court: Civil Court, New York County
Judge: Michael Stallman
Date: March 13, 1996
Citation: NYLJ, page 26, col. 4
Referred Statutes: RPL 232-a; CPLR 2103(b)(2); RPAPL 735 and 721(9)
Summary: A month to month tenant is entitled to a 30-day notice of termination. The notice was attached to the door ("conspicuous place service") on May 30th and terminated the tenancy effective June 30th. The tenant argued that because the notice was mailed (as is required if service is by conspicuous place), CPLR 2103(b)(2) adds 5 days to the counting period. This would deprive the tenant of a full 30 days notice. The court ruled that CPLR 2103(b)(2) does not apply to notices, but only to papers served after commencement of an action. The tenant then argued that the process server's first attempt at service was 8:20 p.m. and this was not a "reasonable application" under RPAPL 735 because the landlord claimed that the tenant is a commercial tenant, not residential, and it is unreasonable to assume that a business would be operating after 8:20 p.m. The landlord argued that businesses stay open late in the Greenwich Village area, so this was a reasonable time to serve papers on a commercial establishment in that area. The court held that further factual inquiries were needed on this issue and set the matter down for a "traverse" hearing (a hearing to determine the validity of service of process). The crux of this case involved tenant's assertion that he resided in the premises and landlord's claim that the tenancy was purely commercial. The court ruled that the case was better left in Part 52 (the commercial part) rather than transferring it to the residential part of Housing Court because the latter's limited jurisdiction may interfere with a full adjudication of the case. The landlord in this case was actually a court-appointed receiver and the court ruled that a receiver has standing to bring a proceeding in its own name under RPAPL 721(9).
Notes: There is conflicting case law among the lower courts on whether five days should be added to the counting time of a predicate notice where it is served by conspicuous place service and mailed. The appellate courts have not addressed this issue as yet in the context of landlord-tenant law.

Issues/Legal Principles: Succession rights in public housing apartment
Caption: Matter of Brown v. Franco
Court: Supreme Court, New York County
Judge: Saxe
Date: March 13, 1996
Citation: NYLJ, page 25, col. 5
Referred Statutes: none cited
Summary: Tenant moved into her apartment in 1991. After she was mugged in 1993 she asked her brother to move in for safety reasons. In 1994 she moved out. The brother sought succession rights from the New York City Housing Authority, but his application was denied on grounds that he didn't receive management's written approval and that he filed the application after his sister moved out. At a grievance hearing his request was again denied. He filed an Article 78 (appeal of an administrative decision). The court felt there was sufficient evidence in the affidavits that the management may have actively prevented the brother from timely obtaining the application forms and ordered a hearing to examine whether management obstructed the brother's efforts to comply with the rules for requesting succession rights.

Issues/Legal Principles: Overcharges pending at DHCR during non-payment proceeding
Caption: 100 Mosholu Parkway Associates V. Hughes
Court: Civil Court, New York County
Judge: D.J. Thomas
Date: March 13, 1996
Citation: NYLJ, page 26, col. 6
Referred Statutes: CPLR 3025(b); CPLR 3212;
Summary: The tenant sought to amend its answer to assert an overcharge counterclaim. The tenant's rent is $1,200, but the last registered rent was in 1994 at $735.13. The tenant claimed an overcharge of $468.87 per month. The tenant had a pending complaint with the DHCR, but withdrew it so that the court could hear the overcharge. The landlord objected to the withdrawal, arguing that the DHCR should hear the issue. The court allowed the tenant to amend the answer and noted that jurisdiction for overcharge issues lies with either a court of law or the DHCR. The court cited a string of cases showing that some courts hold that a complaint should remain with DHCR and dismiss the overcharge counterclaim, while other courts allow a stay on the non-payment proceeding pending a DHCR decision. This court stayed the proceeding pending a certified withdrawal of the complaint from the DHCR. If DHCR refused to allow this tenant to withdraw its complaint, the court would then ask DHCR for an expedited decision. In the interim the court ruled that the tenant pay the arrears and future rent at the $735.13 rate.
Notes: More often than not, the tenant is required to pay the higher rent pending a DHCR decision.

Issues/Legal Principles: Mortgagee bank fails to provide heat and hot water
Caption: DHPD v. Greenpoint Savings Bank
Court: Civil Housing Court, Queens County
Judge: Harriet George
Date: March 13, 1996
Citation: NYLJ, page 29, col. 2
Referred Statutes: none cited
Summary: The bank foreclosed on a building, but did not sell the building until 29 months later, and about 3 months after DHPD sued the bank for Code violations for failing to provide the tenants with heat and hot water. The bank failed to file a multiple dwelling registration statement preventing the tenants from knowing where to pay the rent or to whom to address complaints. Also, suppliers of fuel had no way to know where to send fuel bills. The court rejected the bank's argument that as mortgagee it had no obligation to correct violations. The court fined the bank $250.00 for each day it failed to provide heat and hot water and $500 for failure to file a multiple dwelling registration statement with DHPD.

Issues/Legal Principles: Refusal to renew lease
Caption: In Re Application of Andrew Popik v. DHCR
Court: Appellate Division, First Department
Judge: lower court Supreme Court, Bruce Wright
Date: March 11, 1996
Citation: NYLJ, Page 26, col. 4
Referred Statutes Rent Stabilization Code Section 2524.4(a)(1) and 2527.8
Summary Tenant complained to the DHCR that landlord failed to renew its lease on grounds of owner/occupancy. The DHCR held for the landlord. Tenant requested the DHCR to reconsider its decision because the landlord misstated the lease's true dates. The DHCR reviewed the documents and then upheld for tenant. Landlord filed a PAR (appeal of a DHCR decision), lost, then filed an Article 78 (appeal of a PAR) and lost again. The court held that DHCR's treatment of the case was not unreasonable or irrational.
Notes: Refusual to renew a stabilized lease must given within 120 to 150 days prior to the lease's termination. The court held that a termination date of a lease should be ascertained from "a lease from which these dates can be calculated." This holding is significant because occasionally landlords neglect to send stabilized tenants renewal leases. Although tenants still retain their stabilized status, the important point is that a landlord cannot pursue an owner occupancy or non-primary residency proceeding against a stabilized tenant who does not have a lease.

New York Law Journal decisions for the week of March 4 to March 8, 1996

Issues/Legal Principles: Sufficient facts pleaded in non-primary residency proceeding
Caption: Price v. Chelsmore Apts.
Court: Appellate Term, 1st Dept.
Judge: lower court, Jerald Klein
Date: March 8, 1996
Citation: NYLJ, page 25, col. 2
Referred Statutes: Rent Stabilization Code Section 2524.2(b)
Summary: Notice of non-renewal of tenancy stated that tenant did not occupy apartment for more than 2 years except for a few days in June 1993 and that he had at least 12 roommates occupy the apartment during that period, and certified mail sent to tenant was returned undelivered. The tenant moved to dismiss on grounds that the notice failed to specify the other address where tenant allegedly resided as a primary residence. The Appellate Term affirmed the lower court's holding that a specific alternative address need not be stated where the notice set forth other information regarding the alleged non-primary residence of the tenants.

Issues/Legal Principles: Attorney's fees hearing when case is fully over
Caption: 1050 Tenants Corp. v. Lapidus
Court: Appellate Term, 1st Dept.
Judge: lower court, Arlene Hahn
Date: March 8, 1996
Citation: NYLJ, page 25, col. 3
Referred Statutes: none cited on point
Summary: Landlord sought attorney's fees in a 20 day trial where the judge rejected tenant's habitability defenses. The attorney's fees claim was severed at the time landlord rested its case. During tenant's appeal of the decision, the landlord made a motion for attorney's fees to the lower court. Tenant argued an attorney's fees hearing should be stayed pending the appeal. The tenant lost the appeal and the landlord moved to restore the fees hearing. Tenant argued that the fees claim was never severed and when the trial was over landlord should have sought attorney's fees then and cannot do so now. The lower court held, and the Appellate Term affirmed, that the landlord's claim for fees in the petition was never abandoned, but merely held in abeyance until the final resolution of the case.

Issues/Legal Principles: Waiver of Rent Stabilization status
Caption: Matter of 47-40 Realty Corp. v. DHCR
Court: Appellate Division, 2nd Department
Judge: lower court, Supreme Court Judge Posner
Date: March 8, 1996
Citation: NYLJ, page 33, col. 5
Referred Statutes: Rent Stabilization Law, Section 2520.13
Summary: In 1989 the landlord and tenant stipulated to discontinue a holdover proceeding where the tenant purportedly waived his Rent Stabilization rights. The court held that any agreement by a tenant to waive any provision of the Rent Stabilization Code is void, unless the negotiated settlement was approved (a) by the DHCR or (b) a court of competent jurisdiction where the tenant is represented by counsel and in that forum withdraws a complaint pending before the DHCR. In this case, the DHCR nor the court hearing the holdover ever approved of the stipulation. Therefore the DHCR properly refused to enforce the waiver provision of the stipulation.

Issues/Legal Principles: Pending DHCR proceedings
Caption: McCaw Property v. Baker
Court: Appellate Term, 1st Department
Judge: lower court James Grayshaw
Date: March 1, 1996
Citation: NYLJ, page 25, col. 3
Referred Statutes: none cited
Summary: The indigent tenant failed to answer the petition and the lower court refused to vacate her default. The Appellate Term reversed finding that the default was neither willful nor deliberate and that a substantial portion of the arrears had already been paid by DSS [Department of Social Services], so that the landlord's prejudice was minimal.
Notes:: A tenant's motion to vacate a default judgment requires a showing of (a) a reasonable excuse why the petition was not answered and (b) a meritorious defense to the allegations of the petition.

Issues/Legal Principles: rent overcharges
Caption: Matter of K.S.R. & Co. v. DHCR
Court: Supreme Court, Queens County
Judge: Lonschein
Date: March 6, 1996
Citation: NYLJ, page 29, col. 5
Referred Statutes: Rent Stabilization Code 2526.1(a)(3)(ii) and 2523.7(c)
Summary: Tenant signed a one-year lease on March 1, 1983 for $375 in rent. On March 1, 1984 she signed a three-year renewal lease at $412.50 in rent. Tenant's DHCR complaint alleged that the initial apartment registration on April 1, 1984 was listed as $375.10, but that she paid $412.50. DHCR asked landlord several times to produce records from April 1, 1980, the base date for that apartment, but the landlord said records were only available from August, 1980. In 1989, the DHCR ruled that the tenant was overcharged and awarded treble damages. In 1995, the DHCR denied landlord's PAR (appeal). Landlord brought an Article 78 challenging the PAR order and argued that the DHCR should have searched for and produced the rent history for those months landlord allegedly had no history and that DHCR improperly used the rent history of a unit outside the apartment's model line to determine the allowable rent. The tenant argued that the rent was properly established at the lowest amount among three alternative met ods of calculation. The court ruled that Section 2523.7 requires a landlord to maintain a rental history of an apartment for no more than four years prior to the initial or most recent annual registration, that it is not an excuse for landlords not to supply the full history simply because they did not own the building at the time, and that DHCR has no duty to supply missing records. Also, it is the owner's burden of proof to establish that the overcharge was not willful. The court upheld the DHCR's decision.

Issues/Legal Principles: laches vis-a-vis demand for a jury trial
Caption: 140 West 57th Street Corp. v. Bovet
Court: Appellate Term, 1st Department
Judge: lower court, Saralee Evans
Date: March 5, 1996
Citation: NYLJ, page 25, col. 2
Referred Statutes: CPLR Section 4101, 4102(c), RPAPL Section 745
Summary: In a non-payment proceeding, tenant's defenses included laches (landlord waited six years before bringing suit), warranty of habitability and intentional infliction of emotional distress. The court ruled that the tenant did not waive a trial by jury based on the equitable defense of laches. This defense could be tried by the court, while the remaining legal defenses could be tried by a jury.
Notes:: Legal defenses are those where money damages are sought. Equitable defenses are not based on a monetary recovery. If the tenant prevails in the laches defense the landlord cannot tie the collection of approximately six years worth of stale rent to a possessory judgment: the landlord must seek the recovery of the stale rent in a civil plenary action (i.e., non-Housing Court). Apparently, this tenant had no lease because almost all leases have clauses precluding a tenant's right to a trial by jury.

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: The case implies that this landlord accepted the tender of rent before the petition was commenced. Seemingly, the holding in this case would still apply where a tenant attempts to tender the full amount due but a landlord refuses to accept the tender. 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 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 (2nd Dept. 1991). Rather than just look at a percentage bottom line, courts tend to consider the totality of facts, such as whether the litigation was precipitated by landlord's breach of the warranty, the extent of the abatement awarded 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: post-eviction restoration
Caption: Jireh Realty Co. v. Rodriguez
Court: Civil Housing Court, New York County
Judge: Debra Thomas
Date: March 6, 1996
Citation: NYLJ, page 27, col. 6
Referred Statutes: none cited
Summary: By stipulation tenant was to pay all rent by a certain date. All the rent was timely tendered by DSS [Department of Social Services] checks, but several of the checks were stale so the landlord returned them. Before the stale checks could be replaced, the tenant was evicted. When tenant moved to be restored, the landlord argued that she waited too long to make her motion and he already re-let the premises to a new tenant. The court found that a three week delay in making the motion was not excessive and that the tenant would have complied with the stipulation but for DSS's failure to reissue the checks. Finding "good cause" the court restored the tenant to possession and ordered the new tenants to relocate.