Housing Court Decisions July 2001
Editors: Colleen F. McGuire, Esq., Chief Editor
and Robert E. Sokolski, Esq.

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Significant Cases
Mandell v. Cummins
Geiser v. Maran
Notre Dame Leasing LLC v. Rosario
Jacreg Realty Corp. v. Barnes
Ben-Adi Strategic Corp. v. MacPherson


New York Law Journal,
decisions for the week of July 23-27, 2001 (4 cases)


Case Caption:
Kontorouhas v. Fells
Issues/Legal Principles:
After eviction tenant restoration to the apartment is reversed on appeal despite tenant's belief that all rent had been paid.
Keywords:
stipulations; default
Court:
Appellate Term, 2nd & 11th Judicial Districts
Judge:
lower court: Hon. U. Leveritt
Date:
July 24, 2001
Citation:
NYLJ, page 34, col 4
Referred Statutes:
RPAPL 749(3), 747-a
Summary:
The tenant failed to comply with a stipulation and was evicted. The lower court found that the noncompliance was de minimus, inadvertent and promptly cured. The lower court ruled that since the noncompliance was not substantial and therefore the eviction was improper. But the Appellate Term ruled that the eviction was proper because the noncompliance was substantial. [The case doesn't specify the nature of tenant's default]. One of the justices, however, dissented. He noted that the stipulation of settlement drafted by the landlord's attorney made no provision for notice to the tenant in the event of a default. The justice further noted that the lower court found the tenant's contentionşthat she believed the final rent payments were madeşwas credible. The tenant did not make an order to show cause to stay an eviction because she believed she had complied with the stipulation. Further, her post-eviction application for restoration offered to satisfy all arrears, despite the fact that she had in fact already satisfied all arrears asked for in the petition.


Case Caption:
Katz v. Neal
Issues/Legal Principles:
Hotel tenant is overcharged in rent because landlord improperly calculated a vacancy rent increase which the guidelines do not allow for hotel units.
Keywords:
hotel tenants; SRO; overcharge; vacancy increases
Court:
Civil Housing Court, New York County
Judge:
Hon. Laurie Lau
Date:
July 25, 2001
Citation:
NYLJ, page 18, col 3
Referred Statutes:
9 NYCRR 2522.8; CPLR 3212(2)
Summary:
Hotel tenant paid $260 a week in rent and withheld rent resulting in a nonpayment proceeding. Tenant counterclaimed for overcharges. Landlord claims that the $260 a week is a correct rent given vacancy increases charged. The tenant, however, argues that the landlord cannot collect vacancy increases because his SRO is located in a Class B multiple dwelling. The court determined that generally the formula for the calculation of vacancy increases is dependent on the existence of one and two year renewal increases promulgated by the Rent Guidelines Board. There do, however, exist two distinct categories of Rent Guidelines Board Orders, one for apartments and one for hotels. The court determined that the Guidelines Board Orders do not permit vacancy increases for hotel units (with the exception of a 1983-84 order). Therefore, an overcharge has occurred and the court set the matter down for a hearing to determine the amount of the overcharge.


Case Caption:
La Signora Estates v. Hooper
Issues/Legal Principles:
Superintendent who is entitled to succession rights is entitled to a renewal lease, not a vacancy lease; where apartment is registered as exempt for the past four years, respondent has no claim for overcharges and DHCR must determine legal rent.
Keywords:
superintendent; succession rights; overcharge; rent registration
Court:
Civil Housing Court, Queens County
Judge:
Hon. Brown
Date:
July 25, 2001
Citation:
NYLJ, page 23, col 3
Referred Statutes:
RSC 2523.5, 2526.1(a); RSL 26-512(f)
Summary:
The respondent's father moved into the apartment in 1975 as a rent stabilized tenant at a monthly rent of $250. A lease was signed in 1980 for $280. He served as the superintendent from 1981 onward paying no rent until his death in January 2000. After the father's death, his son, the respondent in this case, assumed the duties of the superintendent and continued in that capacity until June, 2000 when his employment was terminated. The apartment was registered as exempt in 1999.

In June, 2000 the landlord commenced a holdover proceeding against respondent on grounds that his right to occupy the apartment was an incident to his employment and since his employment was terminated, he no longer has a right to occupy the apartment. The landlord discontinued the proceeding based on the acknowledgement that the father never lost his rent stabilized status and the son succeeded to the tenancy as a remaining family member. In that regard the landlord then offered the son a lease at $1,100 per month which the landlord claims is the "first" rent.

Respondent refused to sign the lease because he argues that the rent should be based on the last registered rent which was $700 in 1998, or alternatively on the last least offered in 1999 which was $750. By contrast, the landlord argues that since the apartment was registered as exempt for over four years from 1999 onward, the landlord is entitled to a "first" rent. The landlord also pointed out that the registrations were in error, the apartment was temporarily exempt and that no rent was paid. Thus, there was no "base" rent upon which to calculate the rent for the current lease. The court reviewed the rent registration history and noticed that rents listed prior to 1999 were not in accord with guidelines increases. The rents increases seemed arbitrary with no basis, especially since no rent at all was paid during these years. It is not clear if the registrations were filed erroneously or wilfully wrong.

The court held that since the superintendent's position lasted from 1981 to December, 2000, the apartment rent status must be deemed exempt from 1981 to 2000. Prior to 1999, none of the filed registrations were correct. There was no rent paid pursuant to the 1999 lease, nor was it registered. Thus, the respondent cannot rely on a 1999 lease rent of $750 as the base date for calculating the rent of his first lease obtained through succession rights. The landlord relies for its position on a DHCR opinion letter in 1999 which advised that since the Rent Regulation Reform Act of 1997 precludes examination of the rental history, at least in an overcharge proceeding, prior to four years before the complaint was filed, DHCR would now allow a "first" rent if an apartment has been temporarily exempt for four years or more.

The court noted, however, that the DHCR opinion letter is silent as to its applicability to a tenant who succeeds to rent stabilized status as opposed to a new tenant obtaining a vacancy lease. The court further noted that a rent stabilized tenant who assumes the duties of a superintendent while continuing to reside in the same apartment is not divested of the protections of the rent laws, but continues to be a rent stabilized tenant even though the apartment is temporarily exempt during the period of the tenant's employment. A succession rights tenant steps into the shoes of the deceased or vacating tenant "as if there were one continuous tenancy." As a result a succession rights tenant does not receive a vacancy lease, but rather a renewal lease. Indeed, the landlord's eviction papers allege that respondent failed to sign a "renewal lease" yet no renewal lease was offered: a vacancy lease was offered which the tenant rightfully refuses to sign.

Since respondent is succeeding to the lease, the landlord cannot charge him a "first" rent as though he was a vacancy tenant because it is still the same apartment and the same tenancy. The court further concluded that a rent overcharge cannot be claimed while the tenant is employed as a superintendent and not paying any rent. Since neither the respondent or his father had a rent overcharge claim during the period the apartment was exempt, the four year statute of limitations could not be operative during this period so as to preclude a challenge to rents subsequently charged. A statute of limitations cannot begin to run before the date the cause of action accrues. As a corollary, a cause of action does not accrue until all the facts necessary to the complaint have occurred.

The court concluded that the respondent was in his rights for refusing to sign a vacancy lease. The court referred the case to the DHCR to determine the correct amount of the "base" rent.


Case Caption:
Mandell v. Cummins
Issues/Legal Principles:
Tenant's disabled gay life partner who lives with tenant prevents landlord from recovering the apartment on owner occupancy grounds unless a comparable apartment is offered.
Keywords:
owner occupancy; succession rights; non-traditional family member; disability; retaliatory eviction; discovery; good faith
Court:
Civil Housing Court, New York County
Judge:
Hon. Douglas Hoffman
Date:
July 25, 2001
Citation:
NYLJ, page 18, col 4
Referred Statutes:
9 NYCRR 2524.4(a)(2), 2520.6(q); New York City Administrative Code 8-107; Laws of New York, Book 1 Statutes 97; RPL 223-b
Summary:
In this owner occupancy proceeding, the issue presented to the court was stated as: whether the protections offered from eviction for owner occupancy under the Rent Stabilization Code to a married couple where the tenant or tenant's spouse is disabled apply equally to a tenant's disabled gay life partner.

The landlord began the holdover proceeding to recover the apartment for her son. The tenant's answer stated that the landlord cannot recover the apartment because his gay life partner is disabled. The tenant has lived in the apartment since 1974. He met his life partner in 1976 and they have lived together in the apartment openly as life partners for the past 17 years. The partner is disabled as he suffers from AIDS and a host of other afflictions. The partner's physician believes that his physical and psychological impairments are permanent and prevent him from gaining employment.

The court observed that under the rent stabilization code, landlords cannot recover an apartment on owner occupancy grounds if the tenant or the tenant's spouse is a senior citizen or disabled unless a comparable apartment is offered at a comparable rent in a closely proximate area. The court further observed that the courts expanded family succession rights to include gay life partners in rent stabilization housing. The Rent Stabilization Code defines "family" to include a specific list of traditional family relationships, but the Court of Appeals in Braschi determined that the there should not be a double standard for couples who are unable to formalize their relationship, such as the fact that gay people are not allowed to obtain a marriage certificate. Thus, in Braschi the gay life partner of the deceased tenant of record obtained succession rights to the apartment even though the couple were not married.

The court cited to a recent Court of Appeals case, Levin v. Yeshiva University which held that lesbian life partners had stated a cause of action for unlawful discrimination against a university that refused to grant their application for married student housing. Even though the Court there applied Human Rights Law, as opposed to Rent Stabilization Law, the public policy considerations are still relevant for reaching a similar conclusion. Based on this case and the policy expressed in Braschi, the court ruled that the protections accorded to a tenant or a tenant's spouse from eviction where they are disabled or elderly apply equally to the disabled gay life partner of a tenant.

The court refused to strike tenant's affirmative defense and counterclaim for retaliatory eviction. The court granted the landlord's request for discovery to ascertain the nature and extent of tenant's and his partner's emotional and financial interrelationship, which is the standard for succession rights. The court also granted the tenant's request for discovery on various issues, including landlord's good faith where the building was transferred from a corporate ownership to a personal ownership a mere month before the non-renewal of lease notice was served. (A corporate owner cannot maintain an owner occupancy proceeding.) The remainder of the decision went through the laundry list of tenant's demand for production of documents and the court's ruling as to which documents the landlord must produce.


New York Law Journal,
decisions for the week of July 16-20, 2001 (8 cases)


Case Caption:
ACP 233 East 70th Street v. Mourges
Issues/Legal Principles:
Executor of deceased tenant's estate may retain possession of the rent stabilized apartment until the end of the lease, but must obtain landlord's consent to sublet the apartment.
Keywords:
succession rights; estates
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Timmie Elsner
Date:
July 16, 2001
Citation:
NYLJ, page 23, col 5
Referred Statutes:
RPL 236
Summary:
Landlord brought a licensee proceeding against the remaining occupant after the death of the rent stabilized tenant of record. The estate was entitled to keep the apartment to the end of the lease term simply for "winding-up purposes." An executor of the estate cannot, however, sublease or otherwise assign the right to occupancy without the landlord's consent. The sole remedy available if the landlord denies consent to sublet is to obtain a release from further rental obligations. The executor may retain possession of the apartment until the end of the lease term. The estate had no right to allow any other occupant to remain in the apartment during the remainder of the lease.
Notes:
Unlike Rent Stabilized tenants, rent controlled tenants do not have estates. The tenancy expires at the death of the tenant. The estates of Rent Stabilized tenants, on the other hand, may keep the apartment until the end of the lease but no further.


Case Caption:
Geiser v. Maran
Issues/Legal Principles:
Appellate Term, Second Department upholds its ruling that tenants who rent units from a sponsor after the building goes co-op are protected under the Martin Act which requires the sponsor to offer the tenant a renewal lease at a conscionable rent (interpreted as a market rent).
Keywords:
Martin Act
Court:
Appellate Term, 2nd & 11th Judicial Districts
Judge:
lower Court: Hon. Kenneth Bedford
Date:
July 18, 2001
Citation:
NYLJ, page 21, col 4
Referred Statutes:
General Business Law 352-eeee(1)(e); 13 NYCRR 18.1 and 18.3
Summary:
Tenant failed to appear on the court date and made a motion to vacate the default judgment against him, and the lower court declined to grant it. As a meritorious defense, he claimed that he is protected by the Martin Act (i.e., the law governing cooperative units) as interpreted by Paikoff v. Harris , 178 Misc.2d 366, mod. 185 Misc.2d 372 (decided by this Appellate Term) which held that a tenant who rents an apartment from a sponsor after the transfer of title to the cooperative corporation is protected as a non-purchasing tenant. [The Appellate Term, First Department in Manhattan does not share the Second Department's opinion on this issue. See Park West Village v. Nishioka NYLJ May 26, 1999, affirmed, 187 Misc.2d 243].

Some courts have held that a tenant who rents from a sponsor subsequent to the transfer of title to the coop corporation falls within an exception to protection for those who sublet from a "purchaser under the plan," which is defined as "a person who owns the shares allowed to a dwelling unit." The Appellate Term, Second Department does not agree with these cases that a sponsor is a "purchaser under the plan." The Court states that the Martin Act must be understood in the light of the practice that it was designed to regulate. In that practice a sponsor is a seller not a purchaser, as the sponsor (before and after the transfer of title) offers to sell the shares under its control pursuant to the offering plan. The sponsor must continue to update the plan after closing of title, and remains the seller under the plan after closing, and never "a purchaser under the plan." Had the Legislature intended to depart from this conventional understanding of a sponsor's role, the Court stated that the Legislature could have expressly stated that the term "purchaser under the plan" could include a sponsor. An earlier statute defined a "purchaser under the plan" as a "person who owns the shares allocated to only one dwelling unit." The Martin Act was modeled after the earlier statute. The Court did not know why the Martin Act excludes the words "only one" but opined that "there is no reason to believe that it did so to allow for the inclusion of sponsors in the definition of `purchaser under the plan.'"

The Court adhered to its initial decision in Paikoff that tenants who rent from sponsors after the closing of title are protected under the Martin Act. Unfortunately, this tenant cannot benefit from this ruling because the Martin Act defense is unavailable where the building was converted to a cooperative before the effective date of the Act. Therefore, the tenant's motion to vacate the default judgment was properly denied by the lower court.

Notes:
The Second Department Appellate Term used this occasion to put a lot more meat onto its position that the Martin Act protects non-rent stabilized (or controlled) tenants who rent from co-op sponsors (as it previously ruled in Peikoff v. Harris. This decision provides additional rationale and reasoning. Presumably the Second Department Appellate Term took this opportunity because after it decided Peikoff the First Department Appellate Term took the opposite position and ruled that a sponsor is considered a "purchaser under the plan" and thus not obligated to offer a renewal lease to a tenant in a unit owned by the sponsor or holder of unsold shares. Higher courts need to be presented with this issue before it is fuller resolved. In Brooklyn an unregulated tenant in a co-op unit cannot be evicted provided the tenant accepts sponsor-landlord's offer of a lease with a conscionable rent (interpreted as a market rent). By contrast, in Manhattan such a tenant is not entitled to be offered such a lease and can be evicted. Applause to the Second Department, Appellate Term for its well-reasoned decision which advances the housing needs of the renting public over the profit-oriented goals of private corporation sponsors. Parenthetically, the owner-landlord cannot appeal this decision because it is in its favor in that a judgment of possession was upheld for the landlord.


Case Caption:
Notre Dame Leasing LLC v. Rosario
Issues/Legal Principles:
Public assistance tenants in Second Department are not allowed to independently withhold rent based on warranty of habitability unless Social Services Department withholds its portion of the rent first.
Keywords:
Spiegel Law; warranty of habitability
Court:
Appellate Term, 2nd & 11th Judicial Districts
Judge:
lower Court: none cited
Date:
July 18, 2001
Citation:
NYLJ, page 21, col 2
Referred Statutes:
Social Services Law 143(b)(5); CPLR 3212; McKinney's Consolidated Laws, Statutes 97
Summary:
Tenants made a motion to reargue the Appellate Term's initial decision and the Court adhered to that initial decision. On the appeal the Court held that the Spiegel Law defense is available to a tenant only in conjunction with a withholding of rent by the Department of Social Services. On reargument the tenants assert that the Court erred in determining an issue that was not even before the Court, and that the issue was determined incorrectly. The issue was whether in moving for summary judgment the tenants had established the elements of the Spiegel Law defense. Only the landlord raised this issue on appeal and the tenants did not brief the issue apparently because the lower court never addressed it. But the Appellate Term held that a court must apply the controlling law whether or not cited or relied upon by any of the parties.

The Appellate Term held that the statute is clear, that as a whole "it was intended to authorize social services officials to withhold rent payments where dangerous conditions exist and that the defense was established to implement this withholding of public funds by the official and not to authorize tenants, independently, to withhold their rent payments." At the time the law was enacted the Welfare Department was paying the tenant's entire rent, and thus, concludes the Appellate Term, the Legislature could only have authorized the Department and not the individual tenant, to withhold rent. The sponsor of the law, Assemblyman Spiegel, said the bill's purpose was to "stop the subsidizing of some `slumlords' by the Department of Welfare" and "public funds" should not be used to further the continuance of any building with dangerous or hazardous conditions. The Court concluded that "no legislative intention can be found to grant tenants an independent right to determine whether the existence of violations in the building justified their withholding of rents." The Court held that public assistance tenants have the option of bringing an HP proceeding to deal with their breach of warranty of habitability claims.

Notes:
This is an incredibly unfair decision for public assistance tenants. The Real Property Law gives every tenant a right to withhold rent for warranty of habitability issues, and they may also have the option to commence an HP proceeding to get housing violations corrected. Yet, low income tenants only have the latter option: to bring an HP proceeding. Often a landlord's incentive to make repairs is when the tenant goes on rent strike, and yet poor tenants cannot "independently" go on rent strike unless the Department of Social Service all but authorizes same by withholding rent first. Yet, it is commonly known that DSS rarely initiates withholding of rent. This ruling is so prejudicial and discriminatory to low income tenants. Fortunately, the Appellate Term, First Department in Manhattan does not share the Appellate Term, Second Department's viewpoint. In Dearie v. Hunter, the Appellate Term, First Department ruled that a tenant who was withholding rent could use the Spiegel Law defense even though social services officials were not withholding the welfare portion of the tenant's rent subsidy.


Case Caption:
Raphael v. Owens
Issues/Legal Principles:
Prime tenant who divided single apartment into two portions each with own kitchen, living and bathroom and did not overcharge subtenant held not to have engaged in an illusory prime tenancy scheme.
Keywords:
illusory prime tenancy
Court:
Appellate Term, First Department
Judge:
lower Court: Hon. Laurie Lau
Date:
July 18, 2001
Citation:
NYLJ, page 18, col 1
Referred Statutes:
none cited
27-2056
Summary:
The landlord brought a holdover proceeding against the prime tenant and the subtenant alleged that an illusory prime tenancy occurred. The space is divided by a removable wall separating the northern portion occupied by tenent from the southern portion occupied by the subtenant. Each portion of the parties' space has separate living, bathing and kitchen facilities. The subtenant's lease referred to his space as "apartment B, southern portion." The tenant did not profiteer in subletting the space and the tenant actually occupied the entire apartment before subleasing the southern portion. At all times the tenant paid rent directly to the landlord. The trial court concluded that no illusory prime tenancy occurred and that the tenant merely sublet a distinct portion of the premises to the subtenant. The apartment is registered as a single apartment and the evidence does not require a finding that two separate apartments exist so that the subtenant should be accorded the status of a permanent tenant of the southern portion of the apartment. The landlord was not involved in this proceeding and there is no evidence that the landlord benefitted from this arrangement.


Case Caption:
Revell v. Case
Issues/Legal Principles:
A lease (or lease extension) is not effective unless both parties are in mutual agreement on all material terms, and the lease is signed.
Keywords:
lease renewal; recision
Court:
Supreme Court, New York County
Judge:
Hon. Walter Tolub
Date:
July 18, 2001
Citation:
NYLJ, page 18, col 3
Referred Statutes:
General Obligations Law 15-301
Summary:
The tenant plaintiffs went to Supreme Court to stay the landlord's service of a thirty day notice of termination. The house in Katonah is leased for $13,750 per month pursuant to a two- year lease running from July 1999 to July 2001. The lease stated that if either party was required to relocate for their jobs, the lease could be terminated on 180 days notice. In March, 2000, the landlord notified tenants that he was terminating their lease in September, 2000 because he was relocated due to his job. The tenants claim that the landlord said that if they paid a higher rent, they could stay in the house as long as they liked. Apparently, the landlord rescinded the termination and based on the recision the tenants made plans to remain in the US (they are British) and enroll their children here. The landlord, however, claims that it was the tenants who offered to pay more rent when he initially terminated the lease. As a result he allowed them to stay until the end of the lease term at an increased rent.

The tenants also say that the landlord agreed to extend the lease into May, 2002, and that this extension eliminated the 180 day termination notice provision, but the landlord denies that they ever reached such an agreement. The tenants rely on an email that the landlord sent and a lease extension offer sent to the tenants. The landlord admits sending the extension but only the wife signed it and when he returned it for the husband's signature, the husband changed key terms, such as, making the 180 day notice provision applicable only if they, the tenants, relocated and keeping the amount of the security at the old rental amount. Thus, the landlord refused to sign the extension agreement, and terminated the lease effective February, 2001.

The court held for the landlord and dismissed the tenant's complaint on grounds that the lease provides for no oral modifications, that all changes must be in writing. Since no lease extension was signed, the landlord was within his rights to terminate the tenancy due to his relocation. The court interpreted the email as merely negotiations of the terms of the renewal lease, and nothing more, as this sentence indicates: "If that [the proposed terms] is not accurate, let me know." The changes made by the husband to the lease extension were material in substance and thus constituted a counteroffer which was never accepted by the landlord. The court concluded: "To create a binding contract, there must be a manifestation of mutual assent sufficiently definite to assure that the parties are truly in agreement with respect to all material terms."


Case Caption:
King Enterprises Ltd v. Mastro
Issues/Legal Principles:
Respondent's counterclaims for warranty of habitability and sanctions do not trigger a waiver of his defense that the court lacks personal jurisdiction.
Keywords:
personal jurisdiction; counterclaims; warranty of habitability; use and occupancy; sanctions
Court:
Civil Housing Court, New York County
Judge:
Hon. Julia Rodriguez
Date:
July 18, 2001
Citation:
NYLJ, page 20, col 3
Referred Statutes:
22 NYCRR 130-1; RPAPL 701(a)
Summary:
The landlord brought a licensee holdover proceeding against the deceased tenant's son who remained in the apartment after her death. The son raised two counterclaims, one based on the breach of warranty of habitability and the other for sanctions on grounds that the proceeding was frivolous since the landlord knew that the tenant's son had lived with her. The landlord now asks the court to dismiss the son's claim that the court lacks personal jurisdiction over the son because he was allegedly not properly served the legal papers. There is case law holding that a defendant/respondent waives personal jurisdiction defenses when he asserts counterclaims which are unrelated to the plaintiff/petitioner's complaint.

The court agreed with the landlord that the warranty of habitability counterclaim was not related to this case, but held that the claim was certainly related to the landlord's request for use and occupancy. The court held that if the counterclaim was not raised now the son "may be barred from bringing said claim in any forum once petitioner establishes that respondent is a licensee. If it is determined that respondent is a licensee, respondent cannot establish privity with petitioner or prove standing to assert said warranty claim." Moreover, the court added that judicial economy favors resolution of all claims. Consequently, it is at the final stage in the holdover proceeding that the habitability counterclaim is relevant.

With respect to the second counterclaim, the court determined that the counterclaim is not properly pleaded as a counterclaim since relief under Rule 130 of the New York City Civil Rules and Regulations (i.e., seeking sanctions) is not a distinct cause of action. Rather, a party who asserts Rule 130 is actually asking the court to use its discretion as to conduct specific to the litigation before the court. The court ruled that the counterclaim may be struck as premature and improperly asserted, or alternatively, held in abeyance until after the litigation was concluded to determine if there is indeed sanctionable conduct on the part of the landlord. The court held: "Arguably, since an application for sanctions under Rule 130 addresses the events and conduct f the specific proceeding, it can never be unrelated because it must refer to the events only in the proceeding at issue." The court ruled that the second counterclaim is not unrelated for purposes of determining whether personal jurisdiction was waived.


Case Caption:
Phillips v. Wilcox
Issues/Legal Principles:
Outside New York City, tenants are only entitled to an abatement based on lead paint for the months after landlord was notified of the condition.
Keywords:
lead paint; abatement; attorney's fees
Court:
Appellate Term, 9th & 10th Judicial Districts
Judge:
lower court: Hon. P. Thompson
Date:
July 19, 2001
Citation:
NYLJ, page 19, col 3
Referred Statutes:
none cited
Summary:
In the nonpayment proceeding the tenants recovered a 60% abatement of four months rent based on the existence of a lead paint condition in the apartment. They appealed the decision because they felt entitled to a retroactive abatement for the entire term of the tenancy, but the Appellate Term rejected this argument, ruling that they are only allowed an abatement for the months after landlord was notified of the condition. Outside New York City, a landlord is not deemed to be on constructive notice of a lead paint condition. The tenants failed to establish that the condition existed for more than four months after the landlord was put on notice of the condition. The court reversed an award of legal fees to the landlord because such fees can only be won if there is an agreement, statute or court rule providing therefor.


Case Caption:
2921 Associates v. Willis
Issues/Legal Principles:
Landlord who fails to provide proper termination of rent assistance notices to Section 8 tenant cannot terminate the assistance and recover a market rent.
Keywords:
Section 8 tenant; HUD rules
Court:
Civil Housing Court, Kings County
Judge:
Hon. Dawn Jiminez
Date:
July 20, 2001
Citation:
NYLJ, page 20, col 5
Referred Statutes:
CPLR 3212(a), 409(b)
Summary:
The tenant has a Section 8 lease, but in a nonpayment proceeding commenced against the tenant, the landlord's petition failed to state the tenant's Section 8 status, failed to state that the landlord is in compliance with Section 8 regulations, nor did the landlord provide the requisite notice pursuant to the Housing and Urban Development handbook. The court ruled that the petition must state the Section 8 status of the tenancy and landlord's compliance with the HUD regulations, but failure to do so does not mandate the dismissal of the petition.

The petition is, however, subject to dismissal for failure to actually comply with the regulations regarding Section 8 tenancies. The landlord had sent the tenant previous notices, one of which alleged that her children were causing a nuisance, and the other which alleged that she failed to report changes in income or household composition when she recertified for the Section 8 subsidy. As a result of these notices the landlord terminated the rent assistance and charged a market rent. When tenant didn't pay the market rent the landlord brought a nonpayment proceeding. The court ruled that the landlord did not follow the regulations properly because they permit a tenant an opportunity to recertify upon notice to do so and provide for a ten day period to supply the recertification information. Since the regulations must be strictly followed, and they were not, landlord erred in terminating the Section 8 subsidy. The court dismissed the petition.


New York Law Journal,
decisions for the week of July 9-13, 2001 ( cases)


Case Caption:
240 West 73rd Street LLC v. Hess
Issues/Legal Principles:
Hotel undertenant must prove that he resided in the unit in excess of six months to prove "permanent tenant" status to enable him to receive rent stabilization coverage.
Keywords:
nonprimary residency; hotel; waiver
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Oymin Chin
Date:
July 9, 2001
Citation:
NYLJ, page 20, col 3
Referred Statutes:
9 NYCRR 2520.6
Summary:
The landlord brought a nonprimary residence proceeding involving a rent stabilized hotel tenant and the lower court awarded summary judgment in favor of the undertenant. The Appellate Term reversed, holding that a question of fact arises as to whether the undertenant (an attorney) was a "permanent tenant" entitled to the protections of rent stabilization after the tenant of record vacated. The undertenant claimed that an independent landlord-tenant relationship was created between him and the landlord's predecessor but this requires a trial, not a dismissal on motion. The undertenant paid his rent on checks bearing his office address not the hotel address. Further, the undertenant did not sufficiently prove that the prior landlord "intended to relinquish a known right" when the rent checks were cashed. In other words, the undertenant must prove that when the checks were cashed the prior landlord did so with the intention of making the undertenant the tenant of the unit. Also, the undertenant did not conclusively establish that he resided in the hotel unit for a period of six months in order to qualify for permanent tenant status.


Case Caption:
Sheridan Apartments LLC v. Govan
Issues/Legal Principles:
Landlord is not entitled to collect a higher rent where tenant's rent reduction order still remains in effect since landlord has not yet received a rent restoration order from DHCR.
Keywords:
rent reduction order; rent restoration order
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Marian Doherty
Date:
July 9, 2001
Citation:
NYLJ, page 20, col 3
Referred Statutes:
none cited
Summary:
In this nonpayment proceeding the tenant was awarded a rent reduction order by the DHCR based on a hazardous wire condition in the bedroom and bathroom. There was no evidence that the landlord ever received a rent restoration order from the DHCR. The lower court improperly regarded another DHCR order bearing a different docket number as the rent restoration order applicable to this matter. The lower court erred and the Appellate Term reversed, holding that tenant's rent remained at the lower amount pending a rent restoration order. The Appellate Term noted that the record indicates that the hazardous condition has still not been fixed.


Case Caption:
Ben-Adi Strategic Corp. v. MacPherson
Issues/Legal Principles:
Tenant is denied legal fees because the abatement awarded far exceeded the abatement tenant demanded in the answer/counterclaim.
Keywords:
warranty of habitability; attorney's fees; abatement
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Howard Malatzky
Date:
July 10, 2001
Citation:
NYLJ, page 18, col 1
Referred Statutes:
none cited
Summary:
The tenant obtained an abatement of $4,000 or roughly 15% of the total rent arrears for a single rent-impairing condition: lack of heat. Tenant then sought legal fees, but the lower court and the Appellate Term both noted that the tenant failed to establish prevailing party status. Tenant demanded "not less than $25,000" for an abatement based on claims of "many problems" in the apartment, although the abatement went only towards the heat condition. Comparing the amount initially sought by the tenant with the actual recovery and noting that an award of attorney fees is not intended to confer a windfall, the Appellate Term affirmed the denial of tenant's post-judgment application for legal fees.
Notes:
With regard to prevailing party status, to avoid the problem of comparing the amount of an abatement initially sought in the counterclaim with the amount actually recovered, rather than cite a specific monetary amount, tenants are advised to ask for an abatement in general terms, such as "in an amount to be determined by the court."


Case Caption:
Walker v. Franco
Issues/Legal Principles:
Tenant's own undesirable conduct, not that of her son, results in termination of tenancy.
Keywords:
non-desirability; unlawful activity
Court:
Court of Appeals
Judge:
lower court: none cited
Date:
July 11, 2001
Citation:
NYLJ, page 20, col 3
Referred Statutes:
none cited
Summary:
Tenant of City Housing claims that her eviction should be annulled because it was based on acts committed by her son and her testimony that he moved out of her apartment six months before the hearing was not rebutted by the Housing Authority. Tenant offered cases where criminal activity by an "offender" other than the tenant led to a reinstatement of the tenancy.The Court, however, held that substantial evidence in the record indicates that the tenant herself engaged in undesirable conduct and her tenancy was terminated not just on the basis of her son but because of her own conduct.


Case Caption:
Jackson Gardens LLC v. Osorio
Issues/Legal Principles:
Landlord is obligated to inform court if tenant has or had a guardian ad litem.
Keywords:
guardian
Court:
Civil Housing Court, Queens County
Judge:
Hon. Grayshaw
Date:
July 11, 2001
Citation:
NYLJ, page 25, col 6
Referred Statutes:
CPLR 5015(a)
Summary:
Prior to the instant proceeding the landlord had sued the tenant and a guardian ad litem was appointed for the tenant in that case. Six months later the landlord again sues the tenant for nonpayment of rent, she defaulted, the landlord got a judgment of possession and eventually the marshal evicted the tenant. The tenant now seeks to be restored to the apartment. The judge granted it on grounds that the landlord was clearly on notice that the tenant was in need of a guardian ad litem. The landlord did not inform the court of the fact that a guardian was appointed for a prior case. The court held that no judgment is valid against any party for whom a guardian ad litem is needed until the guardian is appointed even if the judgment preceded the court's determination of disability. The court considered the landlord's behavior to constitute a fraud on the court. The court restored the tenant to possession of the apartment immediately.


Case Caption:
Gersten v. 111-50 Realty Co.
Issues/Legal Principles:
Excess rent paid by tenant following initial DHCR order of overcharge (paid while landlord appealed the decision) is collectible without tenant having to commence another complaint for the excess rent.
Keywords:
Fair Market Rent Appeal
Court:
Civil Court, Queens County
Judge:
Hon. Walker
Date:
July 11, 2001
Citation:
NYLJ, page 25, col 5
Referred Statutes:
CPLR 3211(e), 5001(a); RSL 26-513(b)(1); Civil Court Act 903
Summary:
Tenant won a Fair Market Rent Appeal at the DHCR. The landlord appealed but the DHCR did not render a decision for a good ten years. The decision was in the tenant's favor and the landlord did not appeal further. Within several months after the final ruling, the tenant sued the landlord in civil court for a monetary judgment. The court held that the tenant was entitled to prejudgment interest from the date of the original order of the overcharge, and the tenant is entitled to have included in the judgment any additional excess rents paid after the period covered by the order. The landlord tried to limit the judgment to the amount covered by the original order. The court held that the tenant's recovery cannot be limited only to the period covered by the order because to do so would "only encourage the kind of delay and noncompliance which has occurred in this case and would deny a tenant any effective remedy to recover excess rent paid during the pendency of DHCR proceedings." Tenant was forced to wait the ten years until a final decision was rendered, and in the interim, the tenant continued to pay excess rent. The court ruled that there can be only one initial rent and the calculation of any and all excess rent from the date of the ruling should be permitted.


Case Caption:
Evergreen Garden v. Campbell
Issues/Legal Principles:
Father seeking succession rights to Mitchell-Lama apartment cannot litigate issue in Housing Court once HPD issues a certificate of eviction after a hearing in that forum.
Keywords:
succession rights; collateral estoppel; Mitchell-Lama
Court:
Civil Housing Court, Bronx County
Judge:
Hon. Heymann
Date:
July 11, 2001
Citation:
NYLJ, page 22, col 5
Referred Statutes:
RPAPL 731 & 713; 28 RCNY 3-18(a); CPLR 3022; RPL 235(f)
Summary:
The Department of Housing Preservation and Development (HPD) issued a certificate of eviction against the Mitchell-Lama tenant on grounds that the prime tenant had permanently vacated the apartment in November, 1993 and the remaining occupant, the tenant's father, is not entitled to succession rights. Since the father has a disability, he was required to only show one year co-occupancy with his daughter (rather than the two-year standard). Since HPD has already decided the issue of the daughter's and her father's status. Housing Court is precluded from re- litigating those issues on the doctrine of collateral estoppel. Further, the court rejected the father's argument that the landlord was required to serve a thirty day notice of termination of tenancy. This is because no tenancy was established with the father before or after the certificate of eviction issued. The court granted the landlord's motion for summary judgment and rendered a possessory judgment against the father.


Case Caption:
New York City Housing Authority v. Harvell
Issues/Legal Principles:
City housing Tenant subject to federal regulations is entitled to a 30 day termination notice when landlord seeks to evict on grounds of illegal drug activity.
Keywords:
termination notice; illegal activity
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Pierre Turner
Date:
July 13, 2001
Citation:
NYLJ, page 18, col 1
Referred Statutes:
RPAPL 711(5), 715(1); RPL 231(1); 9 NYCRR 2524.3(d), 2524.2(c); 24 CFR 966.4
Summary:
Generally when a landlord seeks to recover an apartment based on illegal usage, no termination notice need be served because the grounds for bringing the procedure are based on the statute, RPAPL 715(1) for example, and not based on the termination of the lease. But sometimes the government has a regulatory scheme which must be adhered to, and this is the exception to the general rule. Public housing tenants are governed by federal regulations, and these regulations require the service of a 30 day termination notice when the grounds are related to criminal drug activity. The lower court dismissed the petition because New York City Housing Authority failed to serve this notice. The Housing Authority argued that the 1966 Escalera Decree (arising out of a federal case of that name) allowed the Authority to proceed directly against drug-trafficking tenants. The Appellate Term ruled that this decree still does not relieve the Authority from serving a termination notice.


Case Caption:
King Enterprises v. Franceschi
Issues/Legal Principles:
Tenant who routinely failed to pay rent during a probationary stipulation is not entitled to set aside the stipulation simply because landlord served three days notices when the defaults occurred.
Keywords:
stipulation of settlement; chronic nonpayment
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Laurie Lau
Date:
July 13, 2001
Citation:
NYLJ, page 18, col 1
Referred Statutes:
none cited
Summary:
In settling a holdover proceeding based on chronic nonpayment of rent, tenant conceded that he had routinely failed to pay rent over a two year period. Tenant consented to a probation stipulation which gave the landlord possession, but the warrant was stayed so long as tenant paid the rent "on a timely basis" during the probationary period. Tenant was deemed to be in default if he failed to pay rent by the tenth day of the month or if he paid after the fifth day of the month nine times or more. During the two-year probationary period, the tenant defaulted 17 times. The lower court rejected landlord's motion for a possessory judgment. Instead, the tenant successfully argued that the petition should be dismissed based on grounds that the landlord served three day notices thereby having delayed in applying for a warrant, and waiving its right under the stipulation to obtain a warrant. The Appellate Term reversed and ruled that tenant's grounds for dismissal were "insufficient." The Appellate Term granted landlord a possessory judgment on grounds that landlord never waived its right to enforce the terms of the stipulation. The Court held that the enforcement of a stipulation is warranted where the parties have charged their own litigation course, especially where the conduct which precipitated the underlying holdover continued unabated into the probationary period.


Case Caption:
Seventh FGP, Inc. v. Yee
Issues/Legal Principles:
Granddaughter who did not live with her granddaughter for the requisite two year period is not entitled to succession rights.
Keywords:
succession rights; nonprimary residence
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Eileen Rakower
Date:
July 13, 2001
Citation:
NYLJ, page 18, col 1
Referred Statutes:
CPLR 4110(b)
Summary:
The landlord brought a holdover proceeding against the elderly tenant of record who did not reside in the apartment after December, 1996 because she suffered a stroke and after hospitalization went to a nursing home facility in March, 1997. When she was discharged there, she went to live with her son in Queens. The tenant's granddaughter began residing in the apartment in May 1995, and therefore did not reside with the tenant for the mandatory two-year period in order to acquire succession rights. The jury ruled against the granddaughter and she sought to set aside the jury's verdict. The lower court refused to set aside the jury's verdict, as did the Appellate Term.


Case Caption:
Chester Mamaroneck Gardens v. Riggsbee
Issues/Legal Principles:
Tenant's post-eviction motion to be restored is denied without prejudice for tenant to make a second motion which names the new tenant in possession as a party.
Keywords:
unlawful eviction; entry of judgment
Court:
Appellate Term, 2nd & 11th Judicial Districts
Judge:
lower court: Hon. Klein
Date:
July 13, 2001
Citation:
NYLJ, page 21, col 5
Referred Statutes:
CPLR 5015(d)
Summary:
Tenant's son appeared on the return date of the petition and signed a settlement with the landlord's attorney. Then son mailed the landlord money orders totaling $1,500, an amount in excess of the rent arrears demanded in the petition. Landlord sent these money orders back to the son claiming that he would only accept rent from the tenant of record. Landlord did not move to restore the case to the calendar for a judgment based on violation of the stipulation. Instead he just applied for the judgment and warrant and the tenant was thus evicted. Tenant made a motion to be restored to possession, but the court denied the motion on grounds that it lacked authority to restore the tenant to possession. Nonetheless, the tenant's son came to court on the return date and the matter was settled.

The Appellate Term reversed holding that the lower court does have the authority to vacate the possessory judgment and restore the tenant to possession. In this instance, the Appellate Term held that the final judgment should have been vacated because there was no proper basis for its entry. Since the case had been settled, it was improper for the court to enter a judgment without a motion by landlord for the entry of judgment. The court also ruled that is undisputed that the son tendered the full amount of arrears prior to entry of judgment. A tender of the full amount owed prior to the entry of judgment precludes the entry of judgment. The Court ruled that the landlord was not within its rights in rejecting tenant's son's tender because a tender may be made by the debtor himself or his agent. Since the landlord settled the case with the tenant's son, landlord cannot claim that he was unaware that the son was authorized to pay the rent on behalf of the tenant.
Since there is now a new tenant in possession, the Appellate Term ruled that the motion to be restored cannot be granted unless the new tenant is joined as a party. The denial of the motion to restore is without prejudice to renewal after joinder of the new tenant in possession. Thereupon, the lower court must make a determination of tenant's application to be restored with an eye toward "a careful balancing of the equities" between the old and new tenants.


New York Law Journal,
decisions for the week of July 2-6, 2001 (4 cases)


Case Caption:
Jacreg Realty Corp. v. Barnes
Issues/Legal Principles:
Landlord cannot withdraw or retract renewal lease offer once tenant signs and returns the lease.
Keywords:
renewal leases; legal fees
Court:
Appellate Division, First Department
Judge:
lower court: Hon. Deighton Waithe
Date:
July 2, 2001
Citation:
NYLJ, page 20, col 3
Referred Statutes:
none cited
Summary:
Landlord won a holdover proceeding against the tenant, but the lower court declined to grant landlord attorney's fees. The Appellate Term and Appellate Division both upheld this decision on grounds that attorneys fees may be denied "where bad faith is established on the part of the successful party or where unfairness is manifest." Although the landlord was apparently not obligated to offer the tenant a renewal lease (the case does not state why), once the offer was made, the tenants signing it and delivering it to the landlord resulted in a binding bilateral contract. Landlord attempted to later withdraw the renewal lease in retaliation for tenant's' inquiry to the DHCR as to the apartment's legal rent, but this purported withdrawal constituted a substantial breach of the lease. It is unclear why or how the landlord prevailed in the holdover proceeding, but in any event the Appellate Division held that to award the landlord legal fees "predicated upon [landlord's] wrongful lease termination, would not have been justified."


Case Caption:
Dewars Management Co. v. Klein
Issues/Legal Principles:
Tenant's counterclaim for damages arising out of landlord's denial of garage space is not severed and is allowed to be heard in a nonpayment proceeding.
Keywords:
counterclaim; garage space
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Shlomo Hagler
Date:
July 5, 2001
Citation:
NYLJ, page 18, col 3
Referred Statutes:
CPLR 3211(e), 407
Summary:
Landlord conceded that its motion to strike tenants' counterclaim in this nonpayment proceeding was untimely, but argues that CPLR 407 permits a court to order a severance of a particular counterclaim in a summary proceeding "at any time". The lower court disagreed, as did the Appellate Term which held that the lower court did not abuse its discretion in allowing the tenants' counterclaim to remain. Apparently the counterclaim involved damages arising out of a landlord's denial of tenant's usage of garage space.


Case Caption:
601 West 160 Realty Corp. v. Henry
Issues/Legal Principles:
Tenant who does not owe rent is allowed to interpose a defense of retaliatory eviction in a nonpayment proceeding, but such defense is not allowed where tenant admits rent is owed.
Keywords:
retaliatory eviction; sanctions
Court:
Appellate Term, 2nd & 11th Judicial Districts
Judge:
lower court: Hon. Sikowitz
Date:
July 2, 2001
Citation:
NYLJ, page 30, col 5
Referred Statutes:
Real Property Law 223-b; RPAPL 711; CPLR 5501(c)
Summary:
This was the third frivolous nonpayment proceeding that the landlord brought against the tenant in a three year period. The claims were frivolous since tenant never owed any rent. The lower court not only dismissed the proceeding, but also made landlord pay $3,000 in damages. The landlord appealed and lost. The Appellate Term held that since landlord never offered any explanation for suing tenant, the landlord's unexplained proceedings without legal basis "can be construed as retaliatory for tenant's actions as president of the tenant's association." In general, the claim of retaliatory eviction cannot be used as a defense to a nonpayment proceeding. If rent is actually owed, one cannot assert a retaliatory eviction claim, but if no rent is owed, as in this case, then the tenant's retaliatory eviction claim was properly asserted and proven.


Case Caption:
Goldman v. Green
Issues/Legal Principles:
Respondent's summary judgment motion is premature when it lacks documentation of her residence and landlord has not yet engaged in discovery.
Keywords:
succession rights
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Fitzpatrick
Date:
July 5, 2001
Citation:
NYLJ, page 18, col 2
Referred Statutes:
9 NYCRR 2523.5(b)(1)
Summary:
The respondent sought succession rights as the spouse of the deceased tenant of record. She has the affirmative burden to establish that she resided with the tenant as her primary residence for two years. She submitted a mere affidavit to that effect, supported by statements from her neighbors and sought to have the matter resolved on papers. The landlord's opposition papers included an affidavit from the superintendent which contradicted the respondent's papers. She failed to submit the "customary indicia of continuous residence" (e.g. tax returns, driver's license, bank statements, voter's registration, utilities, etc.). Although documentary proof is not a requirement, it does make a motion for summary judgment premature especially where the landlord has not yet had discovery. For this reason the Appellate Term reversed the lower court's granting the spouse summary judgment and remanded the matter back for a trial.