Tenant also sought to dismiss the petition on grounds that the landlord accepted rent from the tenant after service of the notice of termination and prior to the commencement of the holdover proceeding. The acceptance of rent has the effect of reinstating the tenancy, thus rendering the termination notice a nullity. Without a valid termination notice, a holdover eviction proceeding cannot be maintained. In this case, the tenancy purportedly terminated on April 30, 2000 and the case was commenced on May 9, 2000. The landlord does not dispute that the tenantþs rent for May and June was received on May 2, 2000 and not returned until after the court proceeding began. The lanldord argues, however, that since the rent checks were never cashed, they cannot be deemed to have been accepted. The court rejected this argument, holding that the retention of the checks was tantamount to an acceptance. The tenant did not have use of the funds while the landlord retained the checks and the tenant reasonably believed that the landlord accepted the rent since the checks were not readily returned. The court dismissed the petition on this ground as well.

The DHCR denied landlordþs luxury deregulation petition on grounds that DHCR could not verify the tenantþs annual income. Landlord filed a PAR of this order. Meanwhile, the DHCR followed up to see if the tenant had filed on the next extension date, but the tenant stated that a þmultiplicity of health problemsþ hindered her efforts to file and her 1997 taxes remain unfiled. Landlord lost the PAR and thereupon appealed to the Supreme Court in an Article 78. DHCR took the position that the agency is only obligated to verify a tenantþs income with DTF and if the DTF, for whatever reason, cannot match the tenantþs name with a filed tax return for the relevant year, DHCR is not required to inquire further. The landlord, however, argued that it was incumbent on DHCR to undertake an independent income verification. The landlord had requested, unsuccessfully, to engage in discovery (i.e., ask the tenant questions). The owner also argued that if DTF cannot verify the income, the burden shifts to the tenant to prove their income is less than the statutory threshold.

The court found that the agency should be required to þawait the fall of the other fiscal shoe, the 1997 filingþ for the matter to be dispositive. DHCR produced a stalemate by letting the tenantþs procrastination in filing resolve the matter, albeit to the prejudice of the landlord. The court held that to comply with the statute in a situation where the tenantþs delay results in a DTF þno match,þ the DHCR should send the tenant a new income verification form, or another inquiry to DTF, since the court assumed it was þprobableþ the tenant had filed or is on the cusp of filing the 1997 return. The court ruled: þSuch a statutory interpretation favoring further inquiry provides a practical and workable construction of the statute and at the smae time obviates needless repetition of the ownerþs petition.þ The court found that the DHCRþs interpretation of the statute absolving the agency from making further inquiry justified the courtþs departure from the usual role of according great weight to the agencyþs interpretation of a statute. The court concluded that DHCRþs denial of the petition was arbitrary and capricious. The inadequate and inconclusive data before it did not allow for a rational decision by the agency. The judge remanded the case back to the DHCR with the directive for the agency to make further inquiry of the tenant and DTF.

Civil contempt involves a violation of a courtr order which also impedes or defeats or prejudices the rights of a party. The complaining party must show how their rights are compromised. However, if that does not happen, civil contempt can still lie if the offending conduct was intended to or calculated to prejudice the rights of a party. The evidentiary standard is reasonable certainty. Since civil contempt has its aim the vindication of the rights of a litigant, the fines imposed are intended to actually compensate the injured party for the actual damages, loss or interference. If no actual loss is shown, the complainant's costs and expenses, including attorneyþs fees, can be imposed. The aim of criminal contempt is the vindication of an offense against public justice and is used to protect the integrity of the judicial process and compel respect for it. The element which elevates a contempt to criminal status is the level of willfulness associated with the conduct. Penalties are punitive in nature designed to punish the contemnor, rather than compensatory. Willfullness, not misunderstanding or a mistake, is necessary for criminal contempt to lie. The penalty is a fine not exceeding $1000 or 30 days imprisonment.

The court ruled that the tenant was aware of the order to provide access and the refusal to do was was intended to defeat and prejudice the landlordþs rights. The court characaterized tenantþs refusal as a þfinal parting shotþ although it did not rise to the level of willfulness to support a finding of criminal contempt. The landlord showed no injuries, but the statute allowed the judge to impose a $250 fine, plus legal fees. The court rejected a fine of $3,000 since the statute does not permit it. The matter was set down for a hearing on the amount of landlordþs costs and legal fees.

On appeal, the Appellate Term affirmed the lower court, finding that the landlord was not estopped from refusing to allow the tenant to have this new dog because it had failed to object to his other dog. The Court also noted that HUD had dismissed the tenant's complaint against the landlord under the Fair Housing Act, finding no reasonable cause to believe that the tenant required a dog as an emotional support for his alleged severe depression.

After a hearing, the Court held that the landlord could not seek fees that had accrued when the prior landlord had owned the building because the prior landlord waived any such claim and such claim was barred by the doctrine of laches. However, the Court found that the landlord could collect fees that had accrued after the commencement of the term of the 1999 lease. The court relied upon a DHCR Operational Bulletin to find that the landlord could collect fees for the air conditioners. Pursuant to the DHCR Operational Bulletin, if a tenant installed an air conditioner prior to 10/1/85, the permissible charge is to be determined by the lawful practice then in effect. However, if the tenant installed the air conditioner after that date, a $5.00 fee is applicable. The Operational Bulletin, however, also provides that a landlord cannot charge the $5 fee if it "did not begin charging for the air conditioner at the time it was installed or within a reasonable period of time thereafter." Although there was no evidence to dispute the tenant's testimony that she had bought the air conditioners in 1984, the court found that the tenant had purchased them in 1995. The Court nevertheless found that the new owner was entitled to collect the fees, although more than three years had elapsed from the time that the tenant had installed the air conditioners. The Court relied upon the fact that the new owner had acted quickly after it had purchased the property to seek the fees. Thus, the Court held that the new owner had acted within a reasonable time

When the tenant defaulted in payment of the rent, the landlord sued for non-payment. In the course of the non-payment proceeding, the tenant raised the defense and counterclaim of rent overcharge, because the landlord had collected more than the rent it was allowed to collect pursuant to the Rent Reduction Order. Initially the landlord conceded such an overcharge, but then argued that the four-year statute of limitations barred the tenant from raising this claim. After a hearing, the Court held that the statute of limitations did not bar the claim of a rent overcharge. Relying upon an Appellate Term case, the Court found that the claim was not based upon an event that had occurred more than four years ago because the landlord is always under an existing obligation to comply with the Rent Reduction Order: "The Rent Reduction Order was an ongoing rental event that must be complied with until such time as it was rescinded by the issuing agency." The Court, in addition, found that the overcharge was willful since the landlord had sought to restore the rent without giving notice to the current tenant. Accordingly, it awarded the tenant treble damages for the two years preceding the filing of the claim.

On appeal, the Appellate Term reversed the Order granting fees, finding that there was no basis for the second judge to hear another motion pursuant to CPLR Section 3217. It found that, under the circumstances, the tenant should have made a motion to renew to the original judge.

Judge Davis dissented. He noted that, pursuant to CPLR 3217(b), a party is entitled to fees upon discontinuance of a case, even if there is no lease granting a right to fees. Judge Davis found that the original judge did not reject the claim for fees, but only deferred this decision until a proper motion, in writing, was made. Moreover, since the subsequent order did not modify the original order and the original judge's order specifically granted the tenant the right to renew the application for attorney's fees, the subsequent judge had the power to entertain the application for fees pursuant to CPLR Section 3217.

The lease had a provision that the security deposit could never be used as rent. The court, however, held that such a provision is overridden or nullified by General Business Law 7-103 as a matter of law and public policy. Alternatively, if the statute means that the lease provision does not permit tenants to withhold rent on their own, then the court construed the tenants' claimed offset as a valid defense or counterclaim and awarded the tenants the full relief requested.

When a rent controlled apartment is vacated, a landlord is required to notify the first incoming tenant in order for that tenant to challenge the initial rent. The notification form is called an RR-1. The landlord is also required to file the notice of initial rent with the DHCR. The landlord in this case claimed that it filed the initial registration with DHCR in July, 1997. Landlord also claimed that its computer mistakenly printed out a registration which indicated that the apartment was both "permanently exempt" due to "high rent vacancy" and "temporarily exempt" due to "owner occupied/employee." In October, 1999, landlord filed a second amended registration because of the July, 1997 error. A third registration was filed in April, 2000 when the landlord became aware that due to the July, 1997 error the DHCR listed the apartment as rent stabilized.

Tenant had commenced a Supreme Court action to recover rent overcharges. In that action tenant alleged that landlord failed to file the RR-1 form within 90 days of the commencement of their tenancy. Landlord did not serve an RR-1 until October, 1999 and served an amended one in April, 2000. In Housing Court, the tenant's overcharge counterclaim was dismissed without prejudice in deference to the pending Supreme Court claim, but the tenant's overcharge defense was preserved. In other words, although tenant cannot recover overcharges in the Housing Court case, tenant's defense of overcharges means the landlord must still prove the rent is legal.

The judge analyzed numerous past cases with a similar fact pattern: an apartment that goes from rent control to fair market rent and rent stabilization. (The review of past case law by the judge is very useful for one wanting to know this area of law). This case had the additional twist of high rent decontrol and its interplay with registration requirements following the vacatur of a rent controlled tenant, as well as the right to a fair market rent appeal notwithstanding the first rental amount after rent control increasing to an amount over $2,000 purportedly pursuant to a rent guidelines order. The judge then turned to a well-known case, Goldman v. Porges, NYLJ, March 28, 1995, 24:3 (Appellate Term, First Department) which held that a landlord cannot collect any rent above the last legal registered rent controlled rent until such time as the landlord registers the apartment. In other words, if the tenant has withheld rent for 10 months and the landlord doesn't register the initial rent of the new lease until the 11th month, the tenant is only obligated to pay the last rent controlled rent for those ten months, but on the 11th month the tenant must start paying the lease amount. Tenant may challenge the initial registered rent in a fair market rent appeal, but pending that proceeding the tenant must pay the higher rent.

In this case, the tenant owed 6 months of rent from August, 1999. The court rejected landlord's claim that the premises were registered in July, 1997. Rather, the court held that the October, 1999 registration prevailed. Hence, the landlord registered the initial rent during the second month that tenant withheld rent. Therefore, relying on Goldman v. Porges the judge ruled that the tenant owed the rent controlled rent of $1,889.96 for two months, but must pay the higher rent of $6,000 per month for the remaining outstanding 4 months. While tenant's fair market rent appeal is pending, tenant must pay the $6,000 a month rent. The court ruled that its holding is without prejudice to tenant's fair market rent appeal, meaning that if the DHCR determines that the $4,500 initial rent is excessive, then tenant would be entitled to a set- off of the excess rent paid.