Housing Court Decisions March 1998

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Case Caption:

Matter of Danzig v. DHCR

Issues/Legal Principles:

Tenant's affidavit of mailing is sufficient proof that tenant mailed answer to the DHCR; DHCR must present evidence of non-receipt.

Keywords:

high income / high rent deregulation; proof of mailing

Court:

Supreme Court, New York County

Judge:

Hon. McCooe

Date:

March 31, 1998

Citation:

NYLJ, page 28, col 3

Referred Statutes:

RSC Sections 504.3(c), 604.3(a),(c)(1) and 2527.9; CPLR Sections 3211 and 7804;

Summary:

The DHCR deregulated tenant's rent stabilized apartment pursuant to its high rent / high income deregulation rules because the DHCR did not receive tenant's response to the landlord's Petition for Deregulation. Tenant filed an Article 78 petition with the Supreme Court, New York County to challenge the DHCR's order of deregulation. The tenant claimed that he mailed his response to the DHCR and submitted an affidavit of mailing as proof. The Court found that the tenant's affidavit of mailing is sufficient proof of service and the burden of proof shifts to the DHCR to prove non-receipt. The case was sent back to the DHCR to resolve the issue of mailing. In response to the tenant's arguments that the DHCR's high income / high rent regulations are unconstitutional, the court rejected these arguments citing In re Norman Nick v. DHCR, 664 NYS2d 777 (App. Div. 1st Dept. 1997).

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Case Caption:

Levine v. Fannelli

Issues/Legal Principles:

Stale rent doctrine prohibits landlord's attempt to collect lost tax abatement from SCRIE tenant (or her successor) in the context of a summary nonpayment proceeding.

Keywords:

Senior Citizens Rent Increase Exemption Program ("SCRIE"); stale rent;

Court:

Civil Court, New York County

Judge:

Hon. K. Smith

Date:

April 1, 1998

Citation:

NYLJ, page 28, col 5

Referred Statutes:

none cited

Summary:

The Senior Citizens Rent Increase Exemption Program ("SCRIE") allows landlords to claim a tax abatement in exchange for accepting a lower rent from a qualifying senior citizen. In this case, the City of New York retroactively revoked the landlord's tax abatement benefit for the years 1988 through 1991 because the tenant (now deceased) did not qualify for SCRIE benefits for those years. The landlord then brought a summary nonpayment proceeding against the successor tenant, the daughter of the deceased tenant who succeeded to the apartment after her mother's death. The nonpayment petition demanded $4,907.76, the amount of the lost tax abatement. The court held that the housing court was not the proper forum to recover this money from tenant, because the money sought is not current rent but stale rent. The summary nonpayment proceeding in housing court is not to be used for the collection of stale rent. Moreover, Gail Fanelli is probably not a proper party, because she had nothing to do with her mother's SCRIE applications and thus could not be held responsible for any representations her mother may have made that resulted in the retroactive denial of benefits.

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Case Caption:

Homestead Equities, Inc. v. Washington

Issues/Legal Principles:

Holdover petition against a Section 8 tenant which does not allege tenant's participation in the Section 8 program must be dismissed, because it does not properly allege the facts upon which the proceeding is based as required by RPAPL Section 741.

Keywords:

holdover proceedings; contents of petition; contents of notice of termination; Section 8 program; public housing authority

Court:

Civil Court, Kings County

Judge:

Hon. Acosta

Date:

April 1, 1998

Citation:

NYLJ, page 29, col 3

Referred Statutes:

RPAPL Sections 732(3) and 741; CPLR Section 3215; RSC Section 2524; 24 CFR Section 982.310(e)(2)(ii)

Summary:

Landlord brought a holdover proceeding against tenant who receives a federal "Section 8" rent subsidy. When tenant did not appear, the landlord asked for a default judgment. The Court denied the motion for a default judgment and dismissed the petition. The notice of termination and the petition were defective because they did not include allegations that the tenant participates in the Section 8 program. Thus, the petition did not "allege the facts upon which the special proceeding is based" as required by RPAPL Section 741(4). In addition, federal regulations require the landlord of a Section 8 tenant to serve a copy of the notice of termination and petition upon the public housing authority. Although the landlord did serve the public housing authority, its service was a "nullity" because neither the notice nor the petition alleged that the tenant was a Section 8 tenant. This left the public housing authority "clueless" as to why the notice was served upon them, and deprived the authority of an opportunity to consider intervening on behalf of the Section 8 tenant.

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Case Caption:

London Terrace Gardens v. Various Tenants

Issues/Legal Principles:

Court reviews stipulation of settlement which held rent in escrow, determines that landlord has complied with stipulation and orders that rent be released to landlord.

Keywords:

warranty of habitability, failure to maintain services, swimming pool, stipulations, rent held in escrow

Court:

Appellate Division, First Department

Judge:

lower court judge: Hon. Saralee Evans

Date:

April 2, 1998

Citation:

NYLJ, page 26, col 6

Referred Statutes:

none cited

Summary:

Tenants of London Terrace Gardens withheld rent, alleging breach of warranty of habitability and failure to maintain services, when they lost use of swimming pool jointly managed by London Terrace Gardens ("Gardens") and London Terrace Towers ("Towers"). The nonpayment proceeding was resolved by a stipulation which placed a large sum of withheld rent in escrow, to be released to the landlord when Gardens and Towers reached an agreement which provided equal pool access to tenants of Gardens and Towers "upon the same terms and conditions as were available prior to the time they were denied use thereof." Shortly after the stipulation was entered into, Gardens and Towers entered into a pool access agreement, but the tenants refused to release the rent held in escrow, arguing that access was not "on the same terms and conditions." The Civil Court and the Appellate Term, First Department decided in the tenants' favor but the Appellate Division, First Department reversed, finding that the pool agreement does provide equal access to tenants of Gardens and Towers.

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Case Caption:

AD 1619 Company v. VB Management, Inc.

Issues/Legal Principles:

Landlord wins case, but is not entitled to attorney's fees as none were demanded in landlord's petition.

Keywords:

attorney's fees; prevailing party

Court:

Appellate Term, 1st Department

Judge:

lower court judge: Hon. Jose A. Padilla, Jr.

Date:

April 2, 1998

Citation:

NYLJ, page 29, col 2

Referred Statutes:

CPLR Sections 5001[a] and 3025(c)

Summary:

Landlord was ultimately the successful party in a nonpayment case, and asked for an award of attorney's fees. However landlord's request was not made until after the landlord filed a successful appeal with the Appellate Term, First Department. The Appellate Term, First Department denied the landlord's belated request for attorney's fees, stating that the request should have been made at the outset of the case (in the petition), so that the tenant could "effectively frame its litigation strategy." The court cannot address the issue of attorney's fees until a case has been completed, because it is not until then that one of the parties succeeds on the merits and is therefore entitled to an attorney's fees award. Nevertheless, the majority of the judges on the panel held that "timely notice should be given by a litigant that fees will be claimed so as to avoid surprise or prejudice to the adversary."

Notes:

Although the decision in this case denied the landlord's request for attorney's fees, it could apply equally to a tenant's request for attorney's fees. Be certain to make your request for attorney's fees in your answer to the holdover (eviction) or nonpayment petition. If you do not request attorney's fees until you win the case, the court may deny your belated request, for the reasons discussed in this opinion.

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Case Caption:

Lang v. Pataki

Issues/Legal Principles:

The immediate trial requirement of the rent deposit law is an unconstitutional violation of separation of powers between the judicial and legislative branches; the provision prohibiting a court from granting a stay of execution of a warrant, unless a rent deposit has been made, may be unconstitutional under certain circumstances, such as when there is a delay in obtaining money from social services.

Keywords:

Rent Regulation Reform Act of 1997; rent deposit law; unconstitutional statute; immediate trial requirement; separation of powers

Court:

Supreme Court, New York County

Judge:

Hon. Lehner

Date:

April 2, 1998

Citation:

NYLJ, page 30, col 6

Referred Statutes:

RPAPL Sections 745(2) and 747(a)

Summary:

Tenant Lang and various tenants' rights organizations brought this case against Pataki and the court system seeking class certification and an injunction against certain sections of the Rent Regulation Reform Act ("RRRA") of 1997, because these sections are allegedly unconstitutional and put tenants as a class at risk of wrongful eviction. The sections of the RRRA at issue are RPAPL Section 745(a) and RPAPL Section 747(a). The Court denied plaintiffs' request for class certification and an injunction. As a result, the court's decision does not bind anyone except perhaps the landlord and tenant in this case. Section 745(2) requires the Court to order a tenant to make a rent deposit into court if the tenant asks the Court for a second adjournment of a nonpayment or holdover case or thirty days have elapsed since the landlord and the tenant first appeared in court together. Section 745(2)(c)(ii) requires the scheduling of an immediate trial (to be continued from day to day until completed), upon the request of the landlord, if a tenant who has made an initial rent deposit fails to make a subsequent rent deposit. The court held that the immediate trial provision of Section 745(2) is unconstitutional because it violates the doctrine of separation of powers between the legislative and judicial branches. The court explained that if this section is read literally, "it deprives the court of the authority under any circumstances, including illness or calendar congestion, to adjourn or stay the matter and thus strips the court of its ability to utilize its inherent power to control its calendar to serve the interests of justice." RPAPL Section 747(a) provides that after a tenant appears, a judgment is issued and after five days, the Court "shall not grant a stay of the issuance or execution of any warrant of eviction nor stay the re-letting of the premises" unless the tenant can show that tenant either deposited the full amount of the judgment with the court or paid it to the landlord. The court held that this provision may be unconstitutional as applied to tenants under certain circumstances. The court said that it may be unconstitutional to prohibit the court from vacating a warrant (without a rent deposit) under the following circumstances: "if a tenant fails to appear for trial because of illness and a default judgment ensues, or if a judgment is entered improperly pursuant to a stipulation which the tenant claims has not been violated, or if there is a delay in obtaining money due the tenant from Social Services." The court found that the other provisions of the RPAPL Sections 745(2) and 747(a) are constitutional.

Case Caption:

Morita v. Kawasumi

Issues/Legal Principles:

Occupants who entered with an initial lease, now expired, become month to month tenants entitled to a 30 day notice of termination

Keywords:

licensees; statute of frauds

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Norman C. Ryp

Date:

March 23, 1998

Citation:

NYLJ, page 28, col 2

Referred Statutes:

RPL 232-a; General Obligations Law 5-703(1)

Summary:

Landlord brought a license proceeding against the occupants, but they produced an expired lease proving that they had once been tenants. After the lease expired they became month to month tenants and landlord was required to serve them a 30 day termination notice, not a ten-day notice to quit which is done in licensee cases. Tenants did not pay rent, they claimed, because art work was given to the landlord in exchange for rent. The Appellate Term could not determine from the record the actual relationship of the parties, but at a minimum summary judgment granted to the landlord by the lower court was reversed. The court noted that the respondents were not required to plead in their answer their tenant status as an affirmative defense. The dissent held that the occupants failed to show a statutory or contractual right to remain in the single family house, and any agreement to offset the rent must have been put in writing by the landlord in order to hold the landlord to that agreement, according to the doctrine known as the statute of frauds.

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Case Caption:

Hull Avenue Associates v. Weiss

Issues/Legal Principles:

Estate need not be named in holdover where deceased tenant never signed last renewal lease

Keywords:

nonprimary residency; estates; necessary parties

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Anne Katz

Date:

March 23, 1998

Citation:

NYLJ, page 27, col 4

Referred Statutes:

none cited

Summary:

The landlord brought a holdover petition based on nonprimary residency against the tenant whose husband had died. The lower court dismissed the petition because the landlord did not name the husband's estate as a party to the proceeding. The Appellate Term reversed holding that the estate was not a necessary party because the husband died in 1991 and was not named a party to the last renewal lease.

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Case Caption:

Seymour v. NYS DHCR

Issues/Legal Principles:

In a high rent luxury deregulation matter, DHCR erred by deregulating the apartment despite subsequent proof by the tenant that her income was far below $250,000.

Keywords:

luxury deregulation

Court:

Supreme Court, New York County

Judge:

Hon. Eileen Bransten

Date:

March 15, 1998

Citation:

NYLJ, page 25, col 6

Referred Statutes:

Rent Regulation Reform Act of 1993, McKinney's Unconsolidated Laws 26-504

Summary:

The tenant, a single working parent, resides with her infant daughter in a rent stabilized apartment. The landlord sought to deregulate her apartment based on her alleged high income. When the landlord sent her an affidavit of income statement to fill out she ignored it because she was in litigation with other tenants against the landlord. Thereafter landlord applied to the DHCR to deregulate her apartment. She neglected to file her answer to the DHCR which disputed that her income exceeded $250,000. On December 21, 1995, DHCR issued a default order against her deregulating her apartment. She filed a PAR (an appeal) and attached copies of her 1993 and 1994 income tax returns, but the DHCR held to their deregulation order. Despite having evidence before it that the tenant's income was well below half the threshold amount, the DHCR held that the DHCR answer form to the tenant stated in bold letters that failure to answer could result in deregulation. "Inadvertent neglect" was no excuse for the tenant's default. The tenant appealed by way of an Article 78 to the Supreme Court, and the court all but chastised DHCR for its position. The DHCR argued that it was bound by law to rule against a tenant who does not supply the income information within 60 days. The court acknowledged that deregulation was proper, but noted the law does not absolutely deny a tenant a right to supply the information after 60 days. Further, the court noted that the DHCR has discretionary power to consider the income affidavit during the PAR. The judge also found that DHCR's devotion to the 60 days is absurd in light of the agency's own failure to reach a decision in this case within 60 days, since the law directs the DHCR a 60 time period to render its own decisions. The court further observed that high luxury deregulation law was designed to deregulate apartments of a certain class of tenants. Since this tenant in no way fit into that class, the legislative intent was not intended to deregulate apartments for tenants outside the class.

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Case Caption:

Rogers v. Rhodes Building Management, Inc.

Issues/Legal Principles:

Tenant not entitled to treble damages or interest on a fair market rent appeal, but is entitled to recover attorney's fees to enforce the award.

Keywords:

fair market rent appeal; overcharges; collateral estoppel; attorney's fees

Court:

Civil Court, New York County

Judge:

Hon. Marcie Friedman

Date:

March 25, 1998

Citation:

NYLJ, page 27, col 3

Referred Statutes:

RSC 2520.6, 2522.3, 2526.1; RSL 26-512(a); RPL 234

Summary:

The tenant plaintiff won a fair market rent appeal ("FMRA") at the DHCR and after vacating the apartment he sued the managing agent of the building for the charges assessed by DHCR, plus treble damages, interest and attorney's fees. A fair market rent appeal occurs when a tenant, who becomes the first stabilized lessee of a former rent controlled apartment, believes that the landlord increased the rent far above a permissible market rent. The defendant argued that it was not a proper party to the proceeding and the DHCR decision therefore could not be binding against the agent (a "collateral estoppel" argument). Further, the agent argued that interest, treble damages and attorneys fees are not recoverable in connection with an award by the DHCR based on fair market rent appeal as opposed to an award based on overcharges. Defendant was the managing agent at the time of the FMRA. Tenant named the owner not the defendant managing agent as the respondent in the FMRA. The DHCR rendered an order against the owner c/o the managing agent. Defendant argues that it was not the owner and did not have a full and fair opportunity to litigate the FMRA. The court, however, examined case law and concluded that the managing agent was in privity with the owner, and was bound by the DHCR's decision. The court then examined the statutes pertaining to overcharges and FMRA and concluded that the statute pertaining to FMRA does not contain interest or treble damage provisions (unlike the overcharge statute). The court thus granted defendant summary judgment motion on this issue. The court agreed that the law also does not provide attorney's fees for a FMRA, but pointed out that the tenant is not seeking attorney's fees for the FMRA, but rather for his current civil court action. The court distinguished cases where attorney's fees were denied in a case which sought to obtain an FMRA ruling, whereas the instant case sought to enforce a FMRA order. The tenant would not have retained an attorney to enforce the order, but for the landlord's failure to comply with the order.

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Case Caption:

Hirsch v. Lafferty

Issues/Legal Principles:

Landlord's nonrenewal of lease notice failed to set forth facts to support owner occupancy proceeding; petition dismissed.

Keywords:

owner occupancy; notices

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Saralee Evans

Date:

March 25, 1998

Citation:

NYLJ, page 25, col 1

Referred Statutes:

9 NYCRR 2524.4(a)(1)

Summary:

Landlord brought an owner occupancy holdover and its notice of nonrenewal of the lease stated the reasons for the nonrenewal is that the owner "seeks to recover the subject apartment for his personal use and occupancy as his primary residency in the City of New York." The court affirmed the lower court's dismissal of the petition because the notice merely tracked the statutory language for nonrenewal of leases on owner occupancy grounds, but failed to set forth "allegations fact specific to this particular case."

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Case Caption:

Newport Gardens Assoc. v. Vicks

Issues/Legal Principles:

Petition which misstates address as Newport Street instead of Newport Avenue requires dismissal.

Keywords:

petitions; service of process; jurisdiction

Court:

Civil Housing Court, Kings County

Judge:

Hon. Jose Rodriguez

Date:

March 25, 1998

Citation:

NYLJ, page 29, col 6

Referred Statutes:

RPAPL 741(3)

Summary:

The petition and its affidavit of service recite the tenant's address as Newport Avenue instead of Newport Street. The landlord sought to amend the petition to reflect the proper address. The court noted that it did not really matter whether the tenant in fact received the legal papers, but rather whether the landlord properly complied with the statutory requirement to "describe the premises from which removal is sought." RPAPL 741(3) The court held that the problem is not minor but goes to the very heart of the court's jurisdiction. The court dismissed the petition.

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Case Caption:

E.G.A. Assoc. Inc. v. Goodwin

Issues/Legal Principles:

Tenant could not suffer eviction for unpaid rent which accrued after her overcharge complaint was denied after pending in DHCR for 6 years; landlord given a monetary judgment only.

Keywords:

overcharges; PAR

Court:

Civil Housing Court, New York County

Judge:

Hon. Cammer

Date:

March 25, 1998

Citation:

NYLJ, page 27, col 5

Referred Statutes:

none cited

Summary:

In a nonpayment proceeding the parties entered into a stipulation in 1991 and the parties agreed that the rent would remain frozen at $421.47 per month (instead of the lease rent of $735.00 per month) without prejudice subject to a DHCR determination. Thereafter the tenant filed an overcharge complaint with the DHCR. Six years later in 1997 the DHCR issued its order denying the overcharge allegations. The landlord then sought to recover the difference in rent for the 6 years, totaling $28,421.03, plus attorneys fees. The tenant's main argument was that she had filed a PAR of the order (an appeal) and thus she should not have to pay the amount due until the PAR is decided. The court rejected tenant's position. However, the court also felt that under the circumstances the tenant should not lose her apartment over a delay she did not cause. Also, she dutifully paid the lower rent while waiting for the DHCR decision. The court also recognized that the landlord should not be prejudiced in not receiving the rent because the landlord was not responsible for the delay either. In striking a balance, the court granted the landlord a monetary and possessory judgment for all rent accrued from May, 1997, but only a monetary judgment for the balance of the rent. The court also awarded the landlord attorneys fees to be determined at a hearing.

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Case Caption:

Jocar Realty Co. v. Galas

Issues/Legal Principles:

Tenant entitled to attorney's fees as prevailing party because court rejected landlord's nonpayment petition with prejudice with respect to an eviction; landlord permitted to pursue a rent claim only in civil court.

Keywords:

attorney's fees

Court:

Civil Housing Court, New York County

Judge:

Hon. Michael Stallman

Date:

March 25, 1998

Citation:

NYLJ, page 27, col 6

Referred Statutes:

CPLR 4544; RPL 234

Summary:

The court was faced with the following legal issue: if a nonpayment proceeding is dismissed without prejudice for landlord to commence a civil action for recovery of rent arrears, is the tenant the "prevailing party" so as to recover attorney's fees? During the proceeding, it was found that the tenant had tendered the rent but the landlord had refused to accept it. On those grounds the court threw out the petition but without prejudice to collect the rent in civil court where the tenant's home would not be an issue if the rent was not paid. The landlord argues that since the petition was dismissed "without prejudice," the "war" is still not over and it is too premature to determine who the prevailing party is. The court held that the dismissal was with prejudice with respect to the fact that landlord cannot commence another Housing Court proceeding for an eviction. The court also ruled that the attorneys fees clause of the tenant's 1968 lease projected in the statutory tenancy and set the matter down for a hearing to determine the amount of the tenant's attorney's fees.

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Case Caption:

Roth v. Vernon

Issues/Legal Principles:

Private landlords are subject to the Fair Housing Amendments Act of 1988

Keywords:

stipulations; pets

Court:

Appellate Term, 2nd & 11th Judicial District

Judge:

lower court: Hon. R. Birnbaum

Date:

March 27, 1998

Citation:

NYLJ, page 31, col 3

Referred Statutes:

42 U>SC 3604(f) & 3603

Summary:

Tenant signed a stipulation that waived a substantial meritorious defense under the Fair Housing Amendments Act of 1988. The Appellate Term reversed the lower court when it refused to allow the tenant to vacate that term of the stipulation. Apparently, the landlord had brought the proceeding to require the tenant to remove an animal and the tenant argued that her daughter is aided therapeutically by pets in the apartment. The Appellate Term rejected landlord's position that private landlords are not subject to the Fair Housing Amendment Act.

Case Caption:

Centennial Restorations Co. v. Robert Wyatt

Issues/Legal Principles:

Holdover petition is demissed and landlord liable for tenant's attorney's fees where landlord marks case off calendar and fails to restore for trial within one year.

Keywords:

Abandonment of case; attorney's fees

Court:

Appellate Division, First Department

Judge:

lower court judge: Hon. James Grayshaw

Date:

March 16, 1998

Citation:

NYLJ, page 26, col 1

Referred Statutes:

22 NYCRR Sections 208.1(a) and 208.14 (c) and (d); Real Property Law Sections 223-b and 234

Summary:

Landlord brought a nonprimary residence eviction proceeding against tenant. On March 18, 1993, the day the matter was scheduled for trial, the court marked the case off the court's calendar at the landlord's request. One year later, the landlord brought a motion to restore the case to the calendar and the court granted this motion. The case was scheduled for trial on June 3, 1994. Once again, at the landlord's request and despite the tenant's objection, the case was marked off the calendar. The Housing Court Judge ruled that the tenant's "request for attorney's fees is reserved if the case is restored."

On January 13, 1995, the tenant moved to dismiss the landlord's petition on the grounds of failure to prosecute and requested an award of attorney's fees. The Housing Court denied the tenant's motion to dismiss and said that the request for attorney's fees was premature - that is, the court would not make a decision on the question of attorney's fees until the landlord moved to restore the case to the calendar. The Appellate Term, First Department affirmed the order of the Housing Court.

The Appellate Division, First Department reversed the decisions of the Appellate Terms and the Housing Court, finding that the Housing Court should have granted the tenant's motion to dismiss the petition and remanding the case for a determination on the issue of attorney's fees.

The appellate court's decision was based upon an analysis of the Sections 208.14(c) and (d) of the Uniform Rules for the New York City Civil Court ("NYCRR"). Section 208.14(c) provides that a party may move to restore a case to the calendar at any time within one year from the date it was marked off the calendar. However, Section 208.14(d) provides that "if a restored case is not ready when reached, it shall forthwith be dismissed or an inquest or judgment ordered. . . ." Therefore, once the landlord restored the case to the calendar on March 19, 1994, and the landlord was not ready to proceed when the case was reached on June 3, 1994, the Housing Court should have dismissed the landlord's case, as the tenant requested. The statute's use of the words "shall forthwith" is strong mandatory language which required the Housing Court judge to dismiss the case.

The tenant's lease contained a clause which required the tenant to pay the landlord's attorney's fees if the landlord was successful in a case against the tenant. When a lease contains such an attorney's fees provision, then in accordance with Real Property Law Section 234, the landlord must pay the tenant's attorney's fees if the tenant is successful in the case. Since the Housing Court Judge should have dismissed the case, the tenant was the successful party, and the landlord should pay the tenant's attorney's fees. The appellate court remanded the case back to the Housing Court for a determination of the amount of the attorney's fees.

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Case Caption:

Matter of Hakim v. DHCR

Issues/Legal Principles:

The Court will not allow the DHCR to reconsider a PAR decision based upon a policy the DHCR adopted years after the PAR was filed.

Keywords:

Article 78 proceeding; rent reduction due to decrease in service; storage space

Court:

Supreme Court, New York County

Judge:

Hon. R. Braun

Date:

March 18, 1998

Citation:

NYLJ, page 25, col 4

Referred Statutes:

RSL Section 26-516; RSC Section 2529.11; Administrative Code of NYC Section 26-410(d); 9 NYCRR Section 2208.10(a); CPLR Sections 2004 and 7804(f)

Summary:

The tenants filed a complaint with the DHCR in January 1990 seeking an order decreasing their rents because of service reductions, including the discontinuance of storage service. In April 1993, the DHCR granted the rent reduction orders. In June 1993, the landlord filed a petition for administrative review ("PAR") with the DHCR. In July 1996, the DHCR denied the PAR. The landlord then challenged the DHCR's decision denying the PAR by filing a proceeding in Supreme Court, pursuant to CPLR Article 78.

The DHCR asked the Court to remit the proceeding to the DHCR for further consideration. In particular, the DHCR wanted to consider a DHCR processing memorandum dated November 10, 1995. This memorandum is entitled "SCORE processing of De Minimus issues" and lists certain service decreases (such as the discontinuance of storage service) which DHCR staff should treat as "de minimis" (minimal) and therefore do not support a finding of decrease in service. The Court refused to remit the proceeding to the DHCR, because it would be unfair to allow the DHCR to take years to decide the landlord's PAR (instead of the 90 days set forth in the rent stabilization and rent control laws) and then to apply a policy which was adopted years after the PAR was filed. As a result of the Court's order, the DHCR's order reducing the rent because the storage space was discontinued was undisturbed.

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Case Caption:

640 Broadway Renaissance Co. v. Eisner

Issues/Legal Principles:

Landlord waived its rights to object to tenancy by accepting rent checks from tenant for many years and by not bringing eviction case for many years.

Keywords:

acceptance of rent checks, waiver, estoppel, nonprimary residence, creation of tenancy

Court:

Civil Court, New York County

Judge:

Hon. Mills

Date:

March 18, 1998

Citation:

NYLJ, page 30, col 5

Referred Statutes:

none cited

Summary:

Landlord brought a holdover (eviction) proceeding against respondent Eisner (prime tenant) and respondent Tringale (former roommate or subtenant of Eisner) alleging that the premises was not Eisner's primary residence. The landlord served a notice of termination of tenancy upon Eisner in July 1993 and commenced this nonprimary residence proceeding four years later. Tringale brought a motion for summary judgment, asking the Court to dismiss the eviction proceeding, and the Court granted his motion.

The parties agree that Eisner vacated the premises on or before August 31, 1993 (the date set forth in the termination notice) leaving Tringale in occupancy. From September 1, 1993 forward, Tringale paid the rent to the landlord with checks in his own name. The landlord cashed the first few checks but noted, on the check, "accepted without prejudice as to balance due as use and occupancy only." The landlord accepted every other check without making any notation.

The Court found that under these circumstances there is sufficient evidence that the landlord intended to create a landlord-tenant relationship with Tringale. The landlord accepted rent from Tringale for many years while knowing that Eisner was no longer in possession.

The landlord argued that the lease provides that acceptance of rent does not constitute a waiver of a default. The Court found that the landlord waived this clause by accepting rent with knowledge of the default (the fact that Eisner was no longer a primary resident) and without making any effort to bring an eviction proceeding.

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Case Caption:

Trump CPS LLC v. Bousquette

Issues/Legal Principles:

Landlord may not evict high income / high rent tenant based upon a Cancellation Notice which is not a copy of the Cancellation Notice promulgated by the DHCR.

Keywords:

high income / high rent deregulation; cancellation notice; holdover proceedings

Court:

Civil Court, New York County

Judge:

Hon. Shulman

Date:

March 18, 1998

Citation:

NYLJ, page 31, col 1

Referred Statutes:

CPLR Section 3211(a)(8); RPAPL Section 735; RSL Section 504.3; RSC Section 2523.5 and 2524.3(f); DHCR Operational Bulletin 95-3

Summary:

Tenant commenced occupancy of the apartment in May 1993 at a rent of $2,600.00 per month. In June 1996, the landlord filed a petition for high income / high rent deregulation, on the basis that the rent was over $2,000.00 per month and the tenant's income was over $250,000.00 per year for two consecutive years. The DHCR granted the petition in December 1996 and the tenants filed a Petition for Administrative Review ("PAR"). However, the lease was scheduled to expire on May 31, 1997 and the landlord was obligated to offer a renewal lease during the window period (150 to 120 days before the expiration date of the lease). DHCR Operational Bulletin 95-3 states that under these circumstances, the landlord should send the tenant a renewal lease together with a copy of a DHCR form Rider. The DHCR form Rider does not require the signature of the landlord or tenant; it notifies the tenant that the renewal lease will terminate within 60 days of the date DHCR grants a petition for deregulation or within 60 days of the date the DHCR decides the Petition for Administrative Review ("PAR").

Instead of sending tenant a copy of the DHCR form Rider, the landlord made the mistake of composing its own Rider which required the tenant's signature. The tenants signed the renewal lease but not the rider and returned both to the landlord; the landlord did not sign the renewal lease and return it to the tenant and did not commence a holdover (eviction) proceeding against the tenant based upon alleged failure to enter into a renewal lease (because the tenants did not sign the rider). Instead, the landlord collected the new rent from the tenant from June 1, 1997 through November 30, 1997 and served the tenant with a Cancellation Notice (terminating the lease effective November 30, 1997), that is 60 days after the date the PAR was denied.

The Court held that the Cancellation Notice was defective, because it relied upon an improperly executed lease renewal. The lease Rider was not executed because the tenant had no reason to believe it was legal, since it was not a copy of the official Rider promulgated by the DHCR [DHCR form RA-LR 96 (3/96)] for use in this situation. The Court therefore dismissed the holdover proceeding against the tenant.

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Case Caption:

170 W. 85 Street HDFC v. Jones

Issues/Legal Principles:

Gay life partner denied succession rights by co-op board to his deceased partner's proprietary lease is granted a stay of Housing Court holdover petition pending his discrimination complaint to City Human Rights Commission

Keywords:

succession rights; stays; guardian ad litem; discrimination; NYC Human Rights Commission; holdover proceedings; licensee

Court:

Civil Court, New York County

Judge:

Hon. Hoffman

Date:

March 18, 1998

Citation:

NYLJ, page 29, col 6

Referred Statutes:

CPLR Sections 309(b), 320(a), 1201, 1202(c), 2201, 3013, 3025, 3026; Civil Court Act Section 212; RPAPL Section 741(4); RPL Section 223-b; Administrative Code of the City of New York Sections 8-107 and 8-120.

Summary:

Jones, the gay life partner of Watts, the deceased tenant/shareholder of a co-op, filed a complaint with the NYC Commission of Human Rights ("the Commission") alleging that his landlord is discriminating against him on the basis of his sexual orientation by denying his succession rights and harassing him. After Jones filed this complaint, the landlord brought a holdover proceeding against Jones in housing court, alleging that he is a mere licensee and has no right to remain as a tenant in the subject cooperative apartment. Jones alleged a right to remain because he is the gay life partner of Watts, the deceased shareholder, and has succession rights. Jones, by his guardian ad litem, made a motion asking the housing court judge to stay (delay) its proceeding until after the Commission decided his discrimination claim. The request for a stay was made pursuant to CPLR Section 2201 and CCA Section 212.

The court granted the motion, noting that the housing court has granted stays of holdover proceedings in cases where the tenant had previously filed a discrimination complaint with the Commission. If the Commission finds that the landlord discriminated against Jones, the Commission would have the power to order the co-op to offer a proprietary lease to Jones, pursuant to NYC Administrative Code Section 8-120.

The Court discussed a similar case decided by the Commission, Kirkpatrick v. 60 Sutton Corp. In that case, the proprietary lease provided that a surviving spouse of a deceased shareholder could obtain the shares and proprietary lease to a co-op without first obtaining the approval of the co-op board. (This is a typical provision). However, when Kirkpatrick (the surviving gay life partner of the deceased shareholder) sought to obtain the shares and proprietary lease, the co-op Board would not approve of the transfer. In other words, the co-op Board treated Kirkpatrick as a stranger (who could not take possession without the Board's approval, which could be withheld for any reason or for no reason) rather than a surviving spouse. The Commission decided that the co-op board should have treated Kirkpatrick as a surviving spouse, and its failure to do so was discrimination on the basis of sexual orientation. The housing court noted that the only difference between Kirkpatrick and Jones was that Kirkpatrick's gay life partner died with a will leaving the co-op shares to Kirkpatrick whereas Jones' gay life partner died without a will. The housing court believed that this difference was not significant because "the Commission points out that for married couples the right of transfer inures to the surviving spouse under the terms of the proprietary lease. The Commission makes no mention of the need for a specific testamentary bequest of the shares by a deceased spouse before the co-op board must give effect to the transfer provisions of the proprietary lease."

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Case Caption:

Morita v. Kawasumi

Issues/Legal Principles:

Summary judgment motion in context of licensee holdover proceeding denied, where respondent proved that he entered into possession as tenant by displaying an expired lease.

Keywords:

holdover proceeding; licensee; month-to-month tenant; summary judgment motion

Court:

Appellate Term, First Dept.

Judge:

Hon. Norman C. Ryp

Date:

March 20, 1998

Citation:

NYLJ, page 25, col 4

Referred Statutes:

RPL Section 232-a

Summary:

Landlord brought a holdover (eviction) proceeding against respondent alleging that respondent is a licensee. (A licensee is a person entitled to possession because he entered into possession with the permission of a licensor, such as a prior tenant entitled to possession). The landlord then brought a summary judgment motion, asking the court to evict the tenant without a trial because the facts are not in dispute. In response to the motion, the tenant presented an expired lease, which persuaded the housing court judge to deny the landlord's motion for summary judgment. The landlord appealed the housing court's denial of its summary judgment motion and the appellate court affirmed the housing court's decision, stating that the expired lease is persuasive evidence that the respondents originally entered into possession as tenants.

If the respondents were tenants, and their lease expired, then the landlord should have treated them as month-to-month tenants, and given them a thirty-day notice of termination before commencing a holdover proceeding. Instead, the landlord treated the tenant as a licensee, and gave tenant a ten-day notice to quit before commencing the holdover proceeding.

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Case Caption:

Matter of Calogero DiMaggio v. DHCR

Issues/Legal Principles:

Landlord cannot introduce new evidence on a DHCR appeal

Keywords:

overcharge; Article 78

Court:

Appellate Division, Second Department

Judge:

lower court judge: Hon. Barasch

Date:

March 20, 1998

Citation:

NYLJ, page 31, col 4

Referred Statutes:

9 NYCRR Section 2526.1(f)(2), 2527.3(c) and 2529.6

Summary:

In 1990 the District Rent Administrator issued an order of rent overcharge, after the landlord failed to respond to the DHCR's notices and requests for lease information. Then the landlord filed a Petition for Administrative Review ("PAR") with the DHCR, making certain arguments and introducing certain evidence for the very first time. The DHCR refused to consider the arguments and evidence which were raised, for the first time, in the PAR. The landlord then brought an Article 78 petition in the Supreme Court and the Supreme Court granted the landlord's petition. The Appellate Division, Second Department reversed the Supreme Court and denied the landlord's Article 78 petition. The appellate court stated that the DHCR's decision had a rational basis and is supported by the evidence in the record and therefore must be affirmed by the reviewing court. The appellate court also reviewed the landlord's arguments and determined that they were without merit.

Case Caption:

Park Towers South Co. LLC v. Universal Attractions Agency, Inc.

Issues/Legal Principles:

Agreement between landlord and tenant to prevent landlord from bringing non-primary residency proceeding against tenant is void as against public policy.

Keywords:

nonprimary residency; void contracts

Court:

Civil Court, New York County

Judge:

Hon. Donna Mills

Date:

March 11, 1998

Citation:

NYLJ, page 28, col 4

Referred Statutes:

CPLR 3212

Summary:

The corporate tenant whose president resides in the apartment held a rent stabilized lease for over 30 years. In 1995 landlord attempted to terminate tenant's lease on grounds of nonprimary residency. The parties reached an agreement to settle the case wherein the tenant's rent was raised by 70% in exchange for landlord's promise not to bring an action against tenant on nonprimary residency grounds. Thereafter landlord brought this proceeding claiming that the agreement was not meant to last forever. Tenant moved to dismiss on grounds that the 1995 agreement prevented landlord from maintaining this proceeding. The court denied tenant's motion holding that the agreement violated public policy because of the ongoing housing shortage and that a tenant's pecuniary gain should not override the need for affordable housing.

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Case Caption:

King David Development Co. v. Arteaga

Issues/Legal Principles:

Mother-son type of non-traditional family relationship satisfied the criteria for succession rights even though "mother" had almost no documents showing a financial interrelationship.

Keywords:

succession rights

Court:

Civil Housing Court, New York County

Judge:

Hon. Arlene Hahn

Date:

March 11, 1998

Citation:

NYLJ, page 27, col 4

Referred Statutes:

NYCRR 2204.6(d)(3)(i)

Summary:

This matter involved the succession rights of a non-traditional family relationship, a woman who had a mother-son relationship with the tenant of record. The court examined all the typical "Braschi" criteria and found them existing in this case: (1) longevity of relationship, (2) engaging in family-type activities together, (3) holding themselves out as the equivalent of a family through words and actions, (4) regularly performing family functions, such as caring for and relying on each other for family services and (5) engaging in an emotionally committed relationship. The only criteria the woman couldn't comply with was proof of financial interrelationship, but the court noted that income and educational levels of families can explain the lack of formal documentation. The court ruled the woman proved her right to succeed to the lease.

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Case Caption:

Ouziel v. Brito

Issues/Legal Principles:

Landlord mortgagee who purchased property at a mortgage foreclosure sale was not liable for overcharges collected by prior owners because the current owner was not on notice of the overcharge and had no united relationship with the prior owner.

Keywords:

overcharges; foreclosures

Court:

Appellate Term, 2nd & 11th Dept.

Judge:

lower court: Hon. Badillo

Date:

March 11, 1998

Citation:

NYLJ, page 30, col 5

Referred Statutes:

9 NYCRR 2526.1(f)(2)

Summary:

Landlord purchased the property at a mortgage foreclosure sale. The issue was whether or not this landlord was liable for rent overcharges collected by prior owners. The current owner was unaware of the overcharges at the time the property was transferred. In a nonpayment proceeding tenant alleged that the apartment had not been registered with the DHCR since 1985 and counterclaimed for rent overcharges. The DHCR rent records indicated the rent controlled rent in 1984 paid $101 per month. The lower court ruled that it was landlord's burden to prove that the apartment had been de-controlled, at which point the landlord withdrew the petition. The court, however, allowed the tenant to continue to litigate his counterclaims for overcharges. In April 1991 the landlord's husband had given the prior owners a $70,000 loan secured in part by a second mortgage on the property. Both landlord's husband and the holder of the first mortgage had commenced foreclosure proceedings against the prior owners who were able to delay the foreclosure proceedings by filing for bankruptcy four times. After the foreclosure the prior owner was made a managing agent. The lower court ruled that the landlord could not avail herself from the law which provides that owners are responsible for all overcharge penalties collected by any prior owner. The law states that "in the absence of collusion or any relationship" between the owner and the former owner, an owner who purchases at judicial sale is not liable for a prior owner's overcharges. The Appellate Court reversed and held that the words "in the absence of collusion or any relationship" means that there must be no relationship between the prior and current owners such as would tend to show that the transfer of the property was not made in good faith, for example, if the parties were in fact united in interest. The appellate court held that "any relationship" was not intended to include the ordinary mortgagor-mortgage relationship where no genuine unity of interest between the current and prior owners existed. The court noted that in this case there was an evident hostility between the current and prior owners. The court also rejected the lower court's conclusion that a mortgagee who purchases at a foreclosure sale has a greater burden of inquiry than other purchasers at foreclosure sales.

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Case Caption:

Holtze v. Kaplan

Issues/Legal Principles:

Tenant's notice of pendency against the landlord in a summary proceeding is vacated by the court since leases are not deemed an interest in property according to statutory rules.

Keywords:

restraining notice

Court:

Civil Housing Court, New York County

Judge:

Hon. Martino

Date:

March 11, 1998

Citation:

NYLJ, page 27, col 3

Referred Statutes:

CPLR 5519 & 6501

Summary:

During a nonpayment proceeding, the tenant filed a notice of pendency which is a legal type of restraint on the landlord's property. Landlord asked the court to set aside the notice of pendency and the court granted the landlord's motion. The court ruled that CPLR 6501 prohibits the filing of a notice of pendency in a summary proceeding to recover possession of real property. The court analyzed several exceptions to the general rule, but determined that the facts were distinguishable in those cases. CPLR 6501 provides that a leasehold interest is not an interest in property which is why a notice of pendency is inappropriate in summary proceedings. The court vacated the tenant's notice of pendency.

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Case Caption:

Hoexter Associates Inc. v. Ithier

Issues/Legal Principles:

Landlord's case dismissed for naming wrong person as tenant of record.

Keywords:

tenant of record

Court:

Civil Housing Court, New York County

Judge:

Hon. Acosta

Date:

March 11, 1998

Citation:

NYLJ, page 28, col 1

Referred Statutes:

CPLR 3211 & 1024; RPAPL 741(2)&(4); 22 NYCRR 130-1

Summary:

Landlord brought a holdover proceeding against the tenant of record named Francine A. Ithier on grounds of allegedly subletting the rent stabilized apartment without the landlord's consent. Another respondent named Francesca Ithier claims that she and not Francine A. Ithier is the actual tenant of record of the apartment. She argues that Francine has no relationship whatsoever with the apartment. Since the landlord sued someone who has no connection to the apartment, Francesca Ithier argued that the petition must be dismissed. Francesca Ithier presented very detailed and specific proof showing that she was the tenant of record. The court further found that the landlord not only failed to rebut any of her assertions, but also failed to raise any factual dispute that would have required a trial. The court dismissed the petition, but declined to sanction the landlord's attorneys for commencing such a frivolous case in part because the court was aware that over the course of her tenancy Francesca Ithier had used three different names.

Case Caption:

Plumey v. Gaffney

Issues/Legal Principles:

Tenant retains rent control status in one-two family house because it was never used for single family occupancy after 1953.

Keywords:

rent control

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Marian Doherty

Date:

March 6, 1998

Citation:

NYLJ, page 26, col 2

Referred Statutes:

Administrative Code, 26-403(e)(2)(i)(4)

Summary:

Landlord brought a holdover proceeding against the rent controlled tenant claiming the apartment was exempt from rent regulation. The tenant Gaffney took possession of the fourth floor space in 1957 and at that time another tenant resided on the second floor, while the former landlord resided in a duplex apartment on the ground and first floors. Apartments are exempt from rent control in one or two family houses which become vacant on or after April 1, 1953 so long as the apartments are not occupied for other than single family occupancy. The court found that a series of tenants unrelated to tenant Gaffney resided on the second floor for many years. The appellate court held the actual use of the premises is dispositive, rather than the certificate of occupancy or other documents the landlord attempted to proffer. The court upheld the rent regulated status of the tenant.

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Case Caption:

Jewish Theological Seminary of America v. Fitzer

Issues/Legal Principles:

Not-for-profit landlord's non-renewal notices are jurisdictionally valid.

Keywords:

not-for profit institutions; non-renewal leases

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Joan Madden

Date:

March 3, 1998

Citation:

NYLJ, page 26, col 2

Referred Statutes:

RSC 2524.4(b)(1); 2524.2(b)

Summary:

Landlord brought holdovers against various rent stabilized tenants on grounds that it was a non-for-profit institution and needed the apartments for its students and faculty. The lower court dismissed the petitions on grounds that the owner failed to set forth the date when the landlord acquired the ownership. The Appellate Term reversed holding that the standard for such a notice is "one of reasonableness in view of the attendant circumstances." The Court held that due process standards were satisfied by these notices and they were jurisdictionally valid. Justice Helen Freedman filed a concurring opinion but noted that she would have required the landlord to file new petitions regarding those notices which did not set forth the dates on which those tenants took possession. She also noted that it would have been better practice for the notices to have stated when the landlord took ownership so that the tenants would not have had to find out that information through a title search.

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Case Caption:

M. Rubin & Co. v. Woods

Issues/Legal Principles:

Tenant who installs own fixtures cannot take them when he vacates apartment.

Keywords:

fixtures; security deposit

Court:

Civil Court, Queens County

Judge:

Hon. Greenbaum

Date:

March 4, 1998

Citation:

NYLJ, page 30, col 1

Referred Statutes:

none cited

Summary:

When tenant vacated the apartment he took with him the refrigerator, stove, sink and cabinets. Landlord sued him for the value of the items. Tenant claimed that when he moved in these items were in disrepair and he had to purchase new ones which he took with him when he vacated the apartment and left substitutes in their place. The court held that he was not entitled to take these items since the lease prohibited it. The court also ruled that the tenant was not entitled to apply his security deposit to the last month's rent. The court assessed the landlord's damages and also ordered the tenant to pay landlord's attorney's fees.

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Case Caption:

Roxborough Apt. Corp. v. Becker

Issues/Legal Principles:

Landlords acceptance of 3 months of rent checks after tenancy is terminated but prior to commencement of holdover proceeding vitiates the termination notice even where landlord did not deposit the rent checks.

Keywords:

waiver

Court:

Civil Housing Court, New York County

Judge:

Hon. Acosta

Date:

March 4, 1998

Citation:

NYLJ, page 27, col 2

Referred Statutes:

none cited

Summary:

Landlord brought a holdover against the tenant on non-primary residency grounds. Tenant moved to dismiss on grounds that landlord accepted three month's rent after the tenancy was purportedly terminated but before the commencement of the holdover, thereby vitiating the effectiveness of the termination of the tenancy. The landlord argued that it simply held the checks, but never cashed them. The court disagreed citing a legacy of cases from the First Department which required the dismissal of a petition in similar factual circumstances.

Notes:

This case provides a bountiful recitation of case law relating to landlord's acceptance of rent checks after termination of the tenancy but prior to the commencement of the holdover. The court distinguished cases where landlords inadvertently accept rent checks during the relevant period, but immediately return the checks, or if they were cashed, provided an explanation for the inadvertent cashing.

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Case Caption:

Sumpter v. New York City Housing Authority

Issues/Legal Principles:

Housing Authority's termination of tenancy is vacated on grounds of City's unfair handling of tenant's efforts to vacate a default judgment; Court tolls four month statute of limitations to appeal on grounds that City failed to advise tenant of her right to appeal.

Keywords:

termination of tenancy; vacate default; appeal time

Court:

Supreme Court, New York County

Judge:

Hon. Alice Schlesinger

Date:

March 4, 1998

Citation:

NYLJ, page 25, col 5

Referred Statutes:

none cited

Summary:

The tenant, a resident of the Housing Authority for 23 years, had her tenancy terminated on grounds that her adult son was possessing narcotics in a lobby of another project building. A second notice was sent to the tenant after settlement discussions broke down. The notice was an amended one and contained a second, new charge. The tenant defaulted on the hearing date and the hearing officer recommended that her tenancy be terminated. Before the recommendation was made, the tenant went to the Authority and asked to have her default opened. Her request was denied as no good cause was shown by her explanation that she worked late and misread the scheduled date. The Hearing Officer conferred with the Authority's Narcotics Strike Force attorney who said the tenant's response was not credible and told the Hearing Officer that she was simply engaging in dilatory tactics since she rejected his offer to settle the case. Her tenancy was then terminated by the Hearing Officer. The tenant filed the Article 78 (appeal) to the Supreme Court pro se (without an attorney). She stated that she was never given an opportunity to explain the merits of her case. She stated that her son no longer resided in the projects. The Court determined that the tenant did not know that in filling out the standardized form to vacate a default that she was required to set forth the merits of her case, not simply the reason why she failed to come to the hearing. Had the tenant known this procedural matter, she would have stated that her son was no longer residing with her. The court noted that the form's instructions were inadequate since simply stating that the default would be vacated for "good cause" does not inform the tenant that they must provide a meritorious defense to the charges, in addition to a reasonable excuse why the default occurred. The court found it unfair for the Authority to regard the tenant's inadequate answer based on an ambiguous form's instructions as having had her day in court. The Court also found it unfair that the Hearing Officer consulted ex parte (without the tenant's knowledge or input) with the Narcotics Strike Force attorney whose words and position clearly influenced the Hearing Officer's unfavorable decision. The court also tolled the four month statute of limitations period for appealing the Hearing Officer's decision because the Authority failed to advise the tenant that she had a right to appeal. The court vacated the Hearing Officer's decision and reinstated the tenant's tenancy.