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.
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