Housing Court Decisions July 2000
Editors: Colleen F. McGuire, Esq., Chief Editor
Robert E. Sokolski, Esq., Catherine Grad, Esq. and David Weinraub, Esq.
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New York Law Journal,
decisions for the week of July 24-28, 2000
(5 cases)
- Case Caption:
- Matter of Gilman v. DHCR
- Issues/Legal Principles:
- DHCR's "extraordinary delay" in processing tenant's Fair Market Rent Appeal
prejudiced tenant and therefore DHCR cannot apply four year statute of limitations regarding
landlord's comparability data.
- Keywords:
- Fair Market Rent Appeal; four year statute of limitations; prejudice
- Court:
- Supreme Court, New York County
- Judge:
- Hon. Michael Stallman
- Date:
- July 26, 2000
- Citation:
- NYLJ, page 26, col. 2
- Referred Statutes:
- RSL 26-513 & 516(a); Rent Regulation Reform Act of 1997
- Summary:
- Tenant brought an Article 78 proceeding in Supreme Court seeking to nullify the
DHCR's decision regarding her Fair Market Rent Appeal ("FMRA"). Tenant moved into the
apartment in May 1990 with a lease at $2,075 per month. She timely filed an objection to the
rent. In a "mishap" DHCR did not notify the landlord until two years later in May, 1992 by
which time Tenant had negotiated a renewal lease at $1,976 per month. Two years later DHCR
requested additional information from both parties. While tenant responded promptly, landlord
sought an extension of time to submit the material. Eventually, the parties were given each
other's material and given an opportunity to respond. Again, Tenant responded timely while
landlord again requested an extension of time. It seems neither extension request was granted
by the DHCR.
On July 22, 1994 the DHCR issued an order establishing the initial legal regulated rent on May 1, 1990 as $1,011.12 and directed the landlord to refund or credit roughly $49,000 to tenant within six months. The decision pointed out that the landlord failed to submit comparability data when requested by the DHCR to do so. The landlord then filed an appeal known as a PAR, and only then did the landlord submit the information previously sought several times by the DHCR Rent Administrator. The tenant was not informed that the landlord "supplemented" the PAR with documents not previously in the record. For three years nothing happened. Then in June of 1999, the DHCR notified landlord that the Rent Regulation Reform Act of 1997 had been passed which resulted in new rules and that the landlord could resubmit the information originally requested in 1992. Tenant was not provided a copy of the landlord's material by DHCR until five years later in October, 1999. The tenant objected to the belated admissibility of the landlord's new evidence.
The PAR Commissioner then accepted the landlord's belated comparability data and by increasing tenant's rent from $1,011.12 to $1,754.64. Moreover, the tenant was also directed to pay back the increases that had accumulated in the last five years of $47,000 in 24 payments. Tenant appealed to the Supreme Court in an Article 78. The DHCR argued that it was required by the new 1997 law to accept landlord's comparability data, but the judge ruled that the law provides no such directive. The court determined that the DHCR on its own voluntarily accepted landlord's late submissions. The court observed that it had long been law that if a landlord failed to submit comparability data in a FMRA proceeding, DHCR was supposed to determine the legal rent without this information. This is, in fact, what the DHCR Rent Administrator did. The court also pointed out that the Appellate Division has consistently held that evidence submitted for the first time in a PAR cannot be used by DHCR to increase a tenant's rent when the landlord had "notice and ample opportunity" to submit the data. Further, when the law which provided that landlords were not required to hold records longer than four years was first enacted, the Appellate Division held that this law would not be effective to pending cases since that was unfair to tenants. The 1997 law, however, provides that the four- year rule affects all pending cases. The Appellate Division initially ruled that the four-year rule only applied to overcharges, not FMRAs, but then it reversed itself in 2000 In Re Muller, 703 NYS2d 80, by ruling that DHCR could apply the four-year rule to pending FMRA cases.
The court, however, held that Muller was not applicable because of the "kind of delay involved in this case." The extreme delay and DHCR's violation of its own rules resulted in "gross and unfair prejudice" to the tenant. The court determined that the DHCR was negligent in processing tenant's complaint. There were years of delay due to admitted errors by the DHCR. Moreover, DHCR only rendered a PAR when the tenant filed a mandamus whereby the Supreme Court directed the DHCR to issue an expedited ruling. The court held that had the tenant not sought a mandamus, DHCR would have prolonged the case even longer than nine years. The court ruled that since DHCR's negligence prejudiced the tenant, the law as it applied at the time the application was filed would be applied. Hence, the court rejected the DHCR's ruling and sent it back to the DHCR for a new ruling in accordance with the judge's decision.
- Case Caption:
- Loricorp, Inc. v. Burke
- Issues/Legal Principles:
- Where rent reduction order involves first rent stabilized tenant, court lacks authority to
roll back the rent to the prior rent control rent, but landlord could not collect any rent in excess
of the initial rent stabilized rent until a rent restoration order was rendered by the DHCR.
- Keywords:
- rent reduction order; rent restoration order; overcharges; counterclaims
- Court:
- Appellate Term, 2nd & 11th Judicial Districts
- Judge:
- lower court: Hon. J. Baynes
- Date:
- July 24, 2000
- Citation:
- NYLJ, page 31, col. 2
- Referred Statutes:
- RSL 26-514; RSC 2523.4(a)
- Summary:
- The tenants moved in pursuant to a two-year lease commencing on April 1, 1996 at a
rent of $1,350.00 per month. They were served an RR-1 form because the apartment had
previously been rent controlled and they were the first rent stabilized tenants. They did not
challenge the initial $1,350 rent stabilized rent. A nonpayment proceeding was commenced
against the tenants when they did not pay the full rent for several months. Tenants defended on
grounds that the DHCR rendered a rent reduction order on April 15, 1997. The usual effect of
a rent reduction order is to roll back the rent to the last previous rent in effect (i.e., one
guidelines adjustment) until such time as the landlord corrects the violations that resulted in the
rent reduction order. In this case the last legal rent was the rent control rent of $233.14.
Tenants argued that they were only obliged to pay $233.14 since the effective date of the DHCR
order and hence they counterclaimed for all excess rent paid. The lower court ruled for the
tenants that the rent should be rolled back to the last rent prior to the $1,350, citing an Appellate
Term, First Department case (Graham Court Owners Corp. v. Allen , NYLJ, March
19, 1966. The Appellate Term, Second Department refused to go along with the First
Department. The Court reversed the trial judge's decision on grounds that the Rent Stabilization
Code's provisions on rent rollbacks did not address situations where the rent stabilized rent was
rolled back to a non-rent stabilized rent (i.e., a rent controlled rent). This is because the statute
specifies that the rent be rolled back to the last "guidelines adjustment" and there was no last
adjustment because there was no rent stabilized rental prior to $1,350. (Rent controlled rents
do not have guidelines adjustments.) The Court concluded that it was up to the Legislature to
address this deficiency in the law. The Court did, however, rule that the landlord could not
collect any increases above the $1,350 until the rent was restored by the DHCR. The Court sent
the matter back to the lower court for a determination on the tenant's counterclaims.
- Case Caption:
- Beach Haven Apartments v. Jean-Michel
- Issues/Legal Principles:
- Landlord who voluntarily discontinues case is not liable to tenant for legal fees.
- Keywords:
- attorney's fees
- Court:
- Appellate Term, 2nd & 11th Judicial Districts
- Judge:
- lower court: Hon. James Grayshaw
- Date:
- July 24, 2000
- Citation:
- NYLJ, page 30, col. 5
- Referred Statutes:
- RPL 234
- Summary:
- Landlord sought to evict tenant on grounds that the tenant had not carpeted the apartment
floors as required by the lease. Landlord then discontinued its own proceeding. The lower
court awarded tenant attorney's fees as the prevailing party since landlord did not obtain the
relief it sought in commencing the proceeding. The Appellate Term reversed, holding that since
the landlord voluntarily discontinued the proceeding, as opposed to the judge rendering a
decision leading to the ultimate outcome, the tenants could not recover legal fees.
- Notes:
- This is a disappointing decision. It allows a landlord to "test the waters" so to speak.
It allows a landlord with a weak case to haul a tenant into court and try for an eviction. If,
however, the tenant refuses to be vulnerable and hires an attorney, the landlord could then
simply say, "Nevermind" with no ramifications or consequences even though the tenant
expended fees in defending themselves. It's an unfair decision and should not be allowed to
stand.
- Case Caption:
- Riverstone House Housing Co. v. Nicholson
- Issues/Legal Principles:
- Rent due under stipulation will not be owed through Housing Court where Landlord
delays for two years before attempting to hold the tenant in default.
- Keywords:
- stipulation; stale rent
- Court:
- Civil Housing Court, Kings County
- Judge:
- Hon. Silber
- Date:
- July 26, 2000
- Citation:
- NYLJ, page 31, col. 5
- Referred Statutes:
- none cited
- Summary:
- The landlord and tenant entered into a stipulation as to a payment schedule of the rental
arrears. Tenant failed to comply with the stipulation, but landlord waited almost two years
before making a motion to the court to hold the tenant in default. Because the Landlord did not
even provide an explanation for this "extraordinary delay," and because the court found the
delay unreasonable, the court denied the landlord's request to enforce its rights under the
stipulation. The $896 owed under the stipulation was deemed "stale" by the court. Thus,
landlord will have to bring a civil action to collect the rent (i.e., tenant's failure to pay will not
result in an eviction.
- Case Caption:
- Dirot Realty Corp. v. Bergue
- Issues/Legal Principles:
- Despite landlord's failure to register the apartment in 1984, court will not permit
overcharge claim not filed within four years of the overcharge.
- Keywords:
- Fair Market Rent Appeal; overcharges; rent registration; counterclaims
- Court:
- Civil Housing Court, Kings County
- Judge:
- Hon. Michael Pinckney
- Date:
- July 26, 2000
- Citation:
- NYLJ, page 31, col. 2
- Referred Statutes:
- RSL 26-517(e) & 516(a); Rent Regulation Reform Act of 1997; CPLR 213-a
- Summary:
- In this nonpayment proceeding, Tenant argued that since landlord failed to file an initial registration in 1984 the landlord was prohibited from collecting any rent above the legal rent in effect on the date the apartment became subject to registration requirements. The Omnibus Housing Act of 1983 made the apartment subject to registration requirements in 1984. The landlord argued that the Rent Regulation Reform Act of 1997 established a bar to challenging any rent registrations beyond four years. The landlord pointed to an Appellate Term case, Bragston Realty Corp. v. Dixon which held that the tenant could only look back to the last registration filed four years before the most recent registration. The tenant pointed out that in Bragston the registration was eventually filed during the course of the litigation, whereas in this case the landlord still had not filed the 1984 registration and thus could not collect rent in excess of the 1985 rent of $300. The court, however, noted that the Appellate Term did not base its decision on the late filing, but rather was concerned with the timing of the overcharge and the timing of the complaint. Since the first overcharge occurred in 1984 and the complaint was not filed within four years thereof, the court rejected tenant's grounds to dismiss the petition. The court also refused to dismiss the petition, as requested by the tenant, on grounds that the rent demand was defective since the stipulation reflected a breakdown of the rent. Tenant also claimed an overcharge within the four-year period. Landlord increased the rent by 7% when the guidelines only permitted 4% on a two-year lease. The court granted tenant's counterclaim on this latter issue.
New York Law Journal,
Decision for the week of July 17-21, 2000 (6 cases)
In 1999, the landlord then moved to vacate the consent agreement and rescind the tenant's lease so that it could offer a rent stabilized lease to the subtenants. The tenant argued that landlord was not allowed this relief because landlord's hands were unclean in that it had profited as well from its collusive arrangement with the tenant. The lower court denied landlord's motion on grounds that it would be more appropriate to resolve the dispute between landlord and tenant within the overcharge litigation that the subtenants brought against the prime tenant. Landlord complained that it was not a party to that action (although landlord could move to intervene as a party).
The Appellate Division reversed the lower court and held that the motion to vacate the consent agreement should have been granted because the parties' lease was invalid because RSC Section 2520.13, bars a landlord from tendering a lease on the condition of that the tenant agree to represent the unit is not the tenant's primary residence. An apartment cannot be deregulated by private agreement. The policy behind the law is to ensure an adequate supply of affordable housing, and this goal is frustrated when landlords and tenants attempt to contract around the regulated rent so as to make a higher profit by keeping an apartment vacant. The Court agreed with the tenant that the landlord was guilty, but to invoke the doctrine of unclean hands the tenant must show that not only was the plaintiff's conduct unconscionable but that the tenant also was injured by it. The Court held, "Far from acting inequitably towards defendant, plaintiff actively helped defendant make a substantial profit by means of the invalid lease arrangement."
At issue before the Court was whether the tenant was entitled to attorney's fees pursuant to the Equal Access to Justice Act. The Act was created to provide a mechanism authorizing the recovery of legal fees in certain actions against the State of New York. A similar law exists under the federal law system. The Act (CPLR 8601) authorizes fees to a party who prevailed against the state in a civil action and who otherwise qualifies under the statute "unless the court finds that the position was substantially justified or that special circumstances make an award unjust." Further, whether the government's position in the litigation is substantially justified turns "not on the government's success or failure, but on the reasonableness of its position in bringing about or continuing the litigation." The standard of substantially justified involves, for example, issues of first impression or where the law was unclear at the time the government made its litigating decision.
It is unclear whether the tenant won attorney's fees in this case. The decision does not explicitly state that tenant's motion was granted. At one point the decision states that the DHCR's position on past rental events "was and is substantially, indeed wholly, unjustified." However, later on the decision states that Case law makes it evident that reasonable people differ over the interpretation of RSL 26-516(a). It remains an unsettled point of law. DHCR's decision to defend its interpretation was therefore substantially justified."
New York Law Journal,
decisions for the week of
July 10-14, 2000 (5 cases)
- Case Caption:
- Brusco v. Armstrong
- Issues/Legal Principles:
- Twenty Year Rule against owner occupancy provision of
the Emergency Tenant Protection Act for apartment A, which tenant
occupied for over twenty years extends to adjacent apartment B
rented by tenant since 1992 as an extension of tenant's family
residence.
- Keywords:
- bootstrapping; tying; contiguous apartments; ETPA; Emergency
Tenant Protection Act; owner occupancy
- Court:
- Civil Housing Court, New York County
- Judge:
- Hon. Laurie Lau
- Date:
- July 12, 2000
- Citation:
- NYLJ, page 28, col 3
- Referred Statutes:
- ETPA L. 1974 c.576 Sec.4; RSC 2524.4
- Summary:
- Landlord brought an owner occupancy proceeding against the
tenant seeking possession of apartment B, which the tenant
occupied since 1992. After trial, the Court found that the
landlord established a good faith basis to recover apartment B
for the use and occupancy of the owner's daughter and her family.
Upon reargument however, the Court considered the tenant's
claim that the Emergency Tenant Protection Act ("ETPA")'s
Twenty Year Rule against owner occupancy proceedings applied to
apartment B, by virtue of the fact that the tenant occupied
apartment A for over twenty years, apartment A having become
subject to the Rent Stabilization Law by virtue of the ETPA. The
ETPA applies to apartments which were decontrolled between 1971
and 1974.
The tenant argued that like the Rent Control Law, the ETPA contained a twenty year rule (which prohibits owner occupancy proceedings against long term tenants who have occupied their apartments for over twenty years -- the Rent Stabilization Code does not include twenty year protection), applied to his entire tenancy. Thus, the tenant's twenty year protection, which applied to his ETPA tenancy in apartment A, extended to apartment B, which he occupied since 1992 as an extension of his family residence with the knowledge and consent of the landlord.
The Court agreed, and granted reargument, vacating the judgment of possession and dismissing the petition. Judge Lau, citing several nonprimary residence cases, reasoned that the later rented apartment B constituted a single primary residence. Moreover, consistent with the statutory language employed within the ETPA, which protects from eviction "a member of the housing accommodation . . . [who] has been a tenant in a housing accommodation in that building over twenty years or more," the Court ruled that the ETPA's protections applied to the tenant's entire tenancy, rather than just apartment A.
- Notes:
- The tenants in this case were represented by
McGuire & Zekaria, P.C., and Colleen McGuire, Tenant Net's Chief
Editor. This case, which extended ETPA protections (including
the twenty year rule) to tenants within the City of New York was
a case of apparent first impression. The application of the ETPA
within the City of New York represents a creative and
progressive new strategy to keep long term tenants in their
communities.
- Case Caption:
- 4260 Broadway Realty LLC v. Ricabal
- Issues/Legal Principles:
- Tenant was found not to have waived defense of lack of
personal jurisdiction by failing to raise the defense in two
prior post-answer motions to dismiss, which the court considered
motions for summary judgment.
- Keywords:
- motion to dismiss; summary judgment; personal jurisdiction;
waiver
- Court:
- Civil Housing Court, New York County
- Judge:
- Hon. Jean Schneider
- Date:
- July 12, 2000
- Citation:
- NYLJ, page 30, col 5
- Referred Statutes:
- CPLR 3211; CPLR 3212; RPAPL 735(1)(b); RPAPL 711
- Summary:
- In this nonprimary residence holdover proceeding, the tenant
moved to reargue and renew an earlier motion, seeking to dismiss
for improper service (lack of personal jurisdiction) pursuant to
CPLR 3211, which was denied by the court. Judge Schneider
recognized that the tenant had made a prior unspecified motion to
dismiss, on the grounds that there was no merit to petitioner's
case, which was properly treated as a motion for summary judgment
pursuant to CPLR 3212, but denied by Judge Oymin Chin. After
discovery was completed and the case was restored to the court
calendar, the tenant sought renewal and reargument of her prior
motion seeking dismissal. Although she characterized the motion
as made pursuant to CPLR 3211 (motion to dismiss) and 3212
(summary judgment), the court noted that the motion was again
treated as one for summary judgment pursuant to CPLR 3212. This
motion was also denied by the court, on the grounds that there
were factual issues which require a trial.
On the eve of trial, the tenant demonstrated to the court that there was still an issue of lack of personal jurisdiction, inasmuch as the landlord failed to serve her at her alternate address in Florida, and that she was at that alternate address at the time of service, and that the petitioner did not serve the tenant by regular and certified mail at the Florida address as required by RPAPL 735(1)(b). The landlord conceded that the tenant was not served at her alternate address in Florida, but the landlord's managing agent swore that neither she nor the landlord knew of any alternate address for the tenant until after the proceedings were commenced, and the landlord's attorney reiterated his clients' denials. The landlord also argued that the tenant had waived her right to challenge personal jurisdiction because she failed to move to dismiss within 60 days and because she made a prior motion under CPLR 3211 without raising the personal jurisdiction issue.
On March 6, 2000, Judge Schneider initially denied the tenant's motion, and granted the landlord's motion to strike the personal jurisdiction defense. However, upon renewal, the tenant presented compelling evidence that the landlord did in fact have her address in Florida which the managing agent swore was unknown to her until the proceedings were commenced. The tenant demonstrated that on May 26, 1998, well in advance of the commencement of this proceeding, the petitioner served the tenant with papers at her Florida address. The managing agent then conceded that she had the Florida address. Thus, it became clear that service did not comply with RPAPL 735(1)(a).
The only remaining issue was whether the tenant waived her right to challenge personal jurisdiction by failing to make the motion within 60 days, or in her prior motion(s) to dismiss. Judge Schneider found that CPLR 3211 (which mandates that a motion to dismiss for lack of personal jurisdiction be made within 60 days of service), expressly exempted summary proceedings under RPAPL 711 from the sixty day rule. Moreover, upon revisiting the issue, the court found that the tenant's prior motion to dismiss was a post-answer motion for summary judgment pursuant to CPLR 3212, and did not raise any of the defenses specified in CPLR 3211(a) for a pre-answer motion. Thus, the tenant did not waive her defense, and the court granted dismissal for lack of personal jurisdiction.
- Notes:
- Tenants should be careful when making pre-answer motions to
dismiss. CPLR 3211 states that unless personal jurisdiction
defenses are raised along with any other grounds asserted in a
CPLR 3211 pre-answer motion to dismiss, this defense is waived
and cannot later be preserved in the answer. Moreover, only one
CPLR 3211 motion to dismiss will be permitted. For an excellent
discussion of CPLR 3211 and 3212 motions, see McKinney's
Consolidated Laws of New York practice commentaries.
- Case Caption:
- McCarthy v. New York State Division of Housing and
Community Renewal
- Issues/Legal Principles:
- The annual registration for a rent-stabilized apartment is
part of the relevant four year rental history, notwithstanding
that the apartment was vacant at the time the registration was
filed.
- Keywords:
- 1997 RRRA; overcharge; four (4) years; rental history,
registration statement
- Court:
- Supreme Court, New York County
- Judge:
- Justice Lippmann
- Date:
- July 12, 2000
- Citation:
- NYLJ, page 27, col 3
- Referred Statutes:
- Rent Regulation Reform Act of 1997; RSL 26-512(b)(3); RSL 26-
517; CPLR 7803(3)
- Summary:
- Tenants brought an Article 78 proceeding in Supreme Court,
seeking to challenge the Order rendered by the DHCR, after a
Petition for Administrative Review ("PAR"), which denied their
overcharge claim, for lack of a rental history within the four
(4) year statute of limitations provided by the Rent Regulation
Reform Act of 1997 ("RRRA"). The tenants moved into their
apartment on October, 15, 1986, at a rent of $3,818.99. Three
years later, the tenants were paying $4,189.70. The tenants
brought an overcharge proceeding on October 30, 1989, in which an
overcharge was found, and treble damages were granted. However,
the Commissioner granted the landlord's PAR, and denied the
overcharge claim. The Commissioner reasoned that an annual rent
registration form filed by the landlord on October 15, 1986 (the
same day tenants first rented the apartment), which showed the
legal rent at the time to be $1,849.90, indicated that the
apartment was vacant as of January, 1985, and as such, there was
no prior rental history which could be considered because of the
four (4) year bar of the RRRA. In other words, the DHCR found
that the October, 1986 registration could be used to determine
that the apartment was vacant, but the amount of rent stated
therein was unavailing.
The Supreme Court disagreed, and found that the October 15, 1986 rent registration statement, filed by the landlord within four (4) years of the tenant's overcharge claim, stated the legal registered rent on April 1, 1986, regardless of whether the apartment was vacant or not. Thus, the registration was relevant rental history which fell within the four (4) year review period and should have been used for the purpose intended by the registration statement, as documentation of the legal registered rent in 1986. The Court granted the tenant's petition, and remanded the matter to DHCR.
- Case Caption:
- SAB 46 Schenck Associates LLC v. Fratangelo
- Issues/Legal Principles:
- Laches defenses rejected by Court in action for unpaid rent
back to 1996, where tenants fail to show prejudice resulting from
the delay
- Keywords:
- laches; nonpayment summary proceeding; stale rent; waiver;
prejudice
- Court:
- District Court, Nassau County
- Judge:
- Judge Fiechter
- Date:
- July 12, 2000
- Citation:
- NYLJ, page 31, col 1
- Referred Statutes:
- CPLR 213
- Summary:
- In two cases consolidated for decision after trial, landlord
brought nonpayment summary proceedings against tenants, for rent
accruing over the course of some four (4) years. The tenants
claimed that the landlords' actions were barred by laches/stale
rent doctrine and the statute of limitations. The Court noted
that the six (6) year statute of limitations applied. Moreover,
with respect to the laches, or stale rent, defense, the Court
found that neither tenant had a basis to believe that the
landlord waived any of his rights pursuant to the lease
agreements. More importantly, neither tenant demonstrated
prejudice resulting from the landlord's delay. In fact, one
tenant even claimed that he had plenty of money and could draw
any amount from his interest in a gourmet coffee shop. The Court
rendered judgment against one tenant for rent and attorneys fees
of $39,997.75, and in the second case, for $37,322.44. The Court
issued judgments for possession, and provided that the warrants
would issue forthwith.
- Case Caption:
- Manhattan Embassy Co. v. Burns
- Issues/Legal Principles:
- Rider provision allowing sublease with landlord's written
consent executed in 1973, predates RPL 226-b and thus confers
greater rights than the statute's exclusive remedy of release
from the lease.
- Keywords:
- sublet; RPL 226-b; release; unreasonably withheld; lost
sublease income
- Court:
- Appellate Term, First Department
- Judge:
- lower court: Hon. Bruce M. Kramer
- Date:
- July 13, 2000
- Citation:
- NYLJ, page 26, col 1
- Referred Statutes:
- RPL 226-b
- Summary:
- In a nonpayment summary proceeding, the tenant asserted a
counterclaim for lost sublease income due to the landlord's
wrongful refusal to approve a proposed sublet. The tenant
claimed the right from a rider attached to his 1973 lease, which
provided for subletting upon written approval of the landlord,
which would not be unreasonably withheld. The Housing Court
found that the rider provision did not confer upon the tenant any
greater right to sublet than that set forth in Real Property Law
226-b, and therefore, that the tenant's remedies were limited to
the exclusive remedies provided in the statute. The Housing
Court dismissed the counterclaim.
The Appellate Term, First Department disagreed, and modified the trial court's decision, denied the landlord's motion for summary judgment dismissing the counterclaim, and reinstated the tenant's counterclaim for lost sublease income. The Court reasoned that the lease rider pre-dated RPL 226-b, a remedial statute which was designed to bolster, but not decrease, tenant's rights. The Court found that the Legislature did not intend to affect the enforcement of pre-existing contractual rights in leases predating the enactment of RPL 226-b, and therefore, the tenant retained the traditional remedy of damages.
New York Law Journal,
decisions for the week of July 3-7, 2000 (5
cases)
- Case Caption:
- 1544-48 Properties, LLC v. Maitre
- Issues/Legal Principles:
- Stay of eviction granted to tenant in holdover case will not stop eviction in concurrent
nonpayment case.
- Keywords:
- stay; eviction
- Court:
- Appellate Term, 2nd & 11th Judicial Districts
- Judge:
- lower court: Hon. Bank
- Date:
- July 3, 2000
- Citation:
- NYLJ, page 26, col. 3
- Referred Statutes:
- CPLR 2201
- Summary:
- Landlord commenced two separate Housing Court proceedings against the tenant. The
first matter was a holdover proceeding and the parties settled by a stipulation. Tenant thereafter
moved by order to show cause to restore the matter to the calendar. The order to show cause
was signed November 19, 1997 and indicated that until "the entry of a court order, all
proceedings by the petitioner, his/her attorney and any City Marshal are stayed." The holdover
was then adjourned to January 8, 1998. The second case was a nonpayment proceeding and the
tenant failed to appear so that a default judgment was entered on or about December 9, 1997.
Tenant was evicted on January 5, 1998. The lower court refused to restore the tenant to
possession and the Appellate Term affirmed.
The Appellate Term observed that a stay of all proceedings is different from an injunction, and that all this tenant had was a stay. The court held that a stay is "effective solely within the parameters of the proceeding in which it was issued whereas an injunction has a much broader effect." Since the holdover and nonpayment proceedings are two distinct cases, with different facts and different laws, the stay obtained in the holdover case could not be effective to stop the nonpayment case.
- Notes:
- The difference between a stay and an injunction is so nuanced that it is doubtful that a
lay tenant would truly know the difference. When this tenant received a stay, which is a
"freeze" from the landlord evicting her, it was reasonable for her to assume that the "freeze"
included a nonpayment proceeding. This is an extremely harsh decision because it expects lay
tenants to understand sophisticated legal concepts that defy common sense. Perhaps there are
other factors going on in this case that are not spelled out in the decision, because the outcome
here (the tenant's eviction) is incredible considering her reliance on one judge's order that no
marshal could evict her.
- Case Caption:
- 4117 5th Avenue Realty Corp. v. Hornedo
- Issues/Legal Principles:
- Since tenant did not make a counterclaim, tenant could not get an abatement for a period
beyond that for which rent was sought in the petition.
- Keywords:
- default judgment; witnesses; counterclaim
- Court:
- Appellate Term, 2nd & 11th Judicial Districts
- Judge:
- lower court: Hon. S. Hoahng
- Date:
- July 3, 2000
- Citation:
- NYLJ, page 26, col. 3
- Referred Statutes:
- 22 NYCRR 208.11(b)(3)
- Summary:
- In a nonpayment proceeding, the tenant didn't show up and moved to vacate the default
final judgment and restore the matter to the calendar. Landlord did not submit opposition papers
to the tenant's motion to vacate, but did appear on the return date with witnesses and consented
to the vacatur. The lower court then vacated the default judgment and then held an abatement
hearing at which the court refused to allow the landlord's witnesses to testify on grounds that
the landlord failed to submit opposition papers to tenant's motion. The court then awarded the
tenant a judgment based on the abatement. The Appellate Term reversed the lower court's
decision on grounds that the court had no right to preclude the landlord's witnesses from
testifying at the hearing. The Appellate Term further noted that since the tenant never
interposed a counterclaim, the lower court erred in awarding the tenant damages for breach of
the warranty of habitability for a period beyond that for which rent was sought in the petition.
- Case Caption:
- 2820 W. 36th Street Realty Corp. v. Chiania
- Issues/Legal Principles:
- In property bought at foreclosure, tenant whose lease expired and could not show that
the building was rent stabilized would be evicted regardless that she was not named as a party
in the foreclosure action.
- Keywords:
- foreclosure; traverse; bias
- Court:
- Appellate Term, 2nd & 11th Judicial Districts
- Judge:
- lower court: Hon. Ronni Birnbaum
- Date:
- July 3, 2000
- Citation:
- NYLJ, page 26, col. 4
- Referred Statutes:
- RPAPL 713(5); CPLR 320(b)
- Summary:
- The new landlord purchased the property at a foreclosure sale. At the trial the occupant
attempted to show that she was a rent stabilized tenant which would have prevented her from
being evicted. But she failed to show that the building had been occupied by six families at any
time. The tenant argued on appeal that the judge was biased but the appellate court held that
the record reflected that the occupant's trial questions were disregarded on the basis of their
impropriety rather than bias. The appellate court also agreed with the lower court that the tenant
could not raise the issue of traverse (improper service of the legal papers) at trial where she had
not raised this issue previously (specifically on her first court appearance). Apparently the
occupant was not named in the foreclosure action and she attempted to argue that the new owner
could not oust her in Housing Court. The lower court, and the Appellate Term, rejected this
argument, holding that her lease expired before the holdover proceeding was commenced, that
the owner had not accepted rent from her thereafter and so any defect in the termination was not
relevant.
- Case Caption:
- Tucker v. Hannon
- Issues/Legal Principles:
- Tenant who lacks written lease cannot recover security deposit paid to prior owner from
new owner who purchased at foreclosure and alleges non-receipt of the deposit.
- Keywords:
- security deposit; foreclosure
- Court:
- Justice Court, Town of Ossining, Westchester County
- Judge:
- Hon. Shapiro
- Date:
- July 5, 2000
- Citation:
- NYLJ, page 36, col. 2
- Referred Statutes:
- General Obligations Law 7-108
- Summary:
- Plaintiff, the former tenant, sued the landlord to recover her security deposit. She paid
the prior landlord the deposit, then the building was foreclosed upon and a new owner took over.
The new owner obtained the property as a successful bidder at a public auction. The issue
before the court was whether a new owner who acquires property by foreclosure is obligated to
return a tenant's security deposit which was paid to a prior owner and not transferred to the new
owner. At common law, the new owner has no such obligation. By statute the original owner
is required to keep the security in a segregated account. Additionally, where there is a written
lease the General Obligations Law puts a reasonable burden on the grantee of a non-rent
stabilized apartment to protect a tenant's deposit. If the deposit is not turned over to the new
owner, the new owner is still liable to the tenant for its repayment with interest if the new owner
has actual knowledge of the deposit. The tenant here, however, has no evidence that there was
a written lease or that the new owner had knowledge of the deposit (even thought the new owner
is the daughter of the prior owner). The statute requires that the new owner have the burden
of making a reasonable inquiry, but not be strictly liable. The court ruled that substantial justice
would not result in this small claims case for the owner and thus ruled against the tenant who
was unable to prove her case.
- Case Caption:
- Malafis v. Evans
- Issues/Legal Principles:
- Landlord must serve new non-renewal notice in owner occupancy case if first petition
was dismissed.
- Keywords:
- owner occupancy; Golub Notice; cure
- Court:
- Civil Housing Court; Kings County
- Judge:
- Hon. Marton
- Date:
- July 5, 2000
- Citation:
- NYLJ, page 34, col. 2
- Referred Statutes:
- RSC 2524.2(c)(2), 2524.4(c)
- Summary:
- A prior holdover proceeding based on owner occupancy was dismissed for lack of improper service of the legal papers. The grounds of the nonrenewal notice, dated May 27, 1998, were that the owner's son was intending to leave his job in Massachusetts in July, 1998 and move to New York City to attend graduate school in September, 1999. The tenant's lease expired in October, 1998 and the holdover proceeding began in January, 1999. For reasons not stated in this decision, that first holdover was not dismissed until November, 1999 (it is not known what transpired during the 11 month period). The owner brought a second holdover proceeding and now tries to use the very same nonrenewal notice. The court, however, ruled that the first notice was vitiated by that petition's dismissal. Even though the first case was dismissed without prejudice, all that means is that the landlord is entitled to bring another proceeding, but it does not permit the landlord to bring another proceeding on the same nonrenewal notice. The landlord must start the process again and re-serve the notice. In this case the court also noted that over two years have elapsed since the initial nonrenewal notice was served and it is not clear if the son's plans have remained the same.