Housing Court Decisions June 97

edited by Colleen F. McGuire, Esq.

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New York Law Journal,
decisions for the week of June 23-27, 1997 (5 cases)

Case Caption:
90th Realty Company v. Winter
Issues/Legal Principles:
Tenant did not abandon apartment simply due to excessive time spent at her mother's apartment taking care of her.
Keywords:
nonprimary residence
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Jerald R. Klein
Date:
June 24, 1997
Citation:
NYLJ, page 26, col 2
Referred Statutes:
none cited
Summary:
The Appellate Term upheld the lower court's dismissal of this nonprimary residency proceeding after trial, based on the documentary and testimonial evidence presented by the tenant. The Appellate Term looked to the record and noted that the tenant specified her address at the subject premises during the relevant time period on various important documents, including: 1) New York City resident income tax returns; 2) voter registration; 3) driver's license; 4) motor vehicle registration; 5) bank statements; and 6) credit card statements. Furthermore, the Court addressed tenant's testimony that although she was required to spend considerable time at her mother's nearby home, it was in her capacity as primary caretaker. The Court held that this circumstance alone does not mandate a finding of nonprimary residence. Moreover, the Court noted that tenant maintained daily contact with the subject premises and all her possessions remained there. As a result of the foregoing facts contained in the trial court's record, the Appellate Term refused to disturb these findings of fact.

Case Caption:
New York City Housing Authority v. Sampson
Issues/Legal Principles:
Tenant lacked documentary proof of remaining family member status in City-owned building.
Keywords:
succession rights
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Howard Sherman
Date:
June 24, 1997
Citation:
NYLJ, page 26, col 1
Referred Statutes:
no statutes cited
Summary:
The Appellate Term reversed the trial court's ruling that the tenant was entitled to possession of his mother's apartment as a "remaining family member" pursuant to the provisions of the Housing Authority's Management Manual. The Court looked to the record which indicated that the tenant vacated the premises approximately 16 years prior to his mother's death. Respondent testified that he returned to the subject premises five years prior to his mother's death, however the Court noted that he was not listed on the annual statements of occupancy and income filed after that date. Furthermore, the Court noted that there was no written notice to the management of the subject premises, informing them of his occupancy. Moreover, the Court emphasized that there was insufficient documentary evidence and/or supporting testimony from third parties in the record as proof of the respondent's actual residence.

Case Caption:
Beattie v. Silvers
Issues/Legal Principles:
Order of landlord's imprisonment for failing to correct violations reversed on appeal on grounds landlord subsequently conveyed the building.
Keywords:
consent order; civil contempt; imprisonment
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Jerald R. Klein
Date:
June 24, 1997
Citation:
NYLJ, page 26, col 1
Referred Statutes:
no statutes cited
Summary:
The trial court found landlord to be in civil contempt for his failure to comply with the terms of a consent order requiring repairs to the fire-damaged subject premises. Landlord argued that he was not aware of the extent of the fire or the cost of repairs. The trial court found this argument "unbelievable." At the time of the negotiation and execution of the "so ordered" settlement, the landlord was represented by counsel. The Appellate Term affirmed the contempt order, but modified it in part, to the extent of the portion of the order imposing a coercive sentence of imprisonment. The reason for this modification rests in the fact that the sentence has been rendered moot since the landlord conveyed the building in the meantime.

Case Caption:
Avon Bard Co. v. Aquarian Foundation
Issues/Legal Principles:
Notice of Non-renewal of lease defective where landlord religious organization not registered as a charitable organization in New York State.
Keywords:
nonprimary residence; religious organizations
Court:
Civil Housing Court, New York County
Judge:
Hon. Howard Malatzky
Date:
June 25, 1997
Citation:
NYLJ, page 27, col 5
Referred Statutes:
CPLR 3212; RSC 2524.4(c), 2524.2(b)
Summary:
Respondent/tenant, a religious organization entered into a rent stabilized lease for the subject premises. The spiritual leader of this organization was the signatory to the lease and has resided at the subject premises with his family since the inception of the tenancy over 17 years ago. Over the years, the lease has been renewed approximately 7 times. In October, 1996, landlord served respondent with a "Notice of Non-Renewal," as a predicate to this nonprimary residency proceeding. The original lease for the apartment allowed the use of the subject premises only by the tenant and the immediate family. However, the religious organization (who is the respondent in this case), being a charitable entity, does not and cannot maintain the rent stabilized apartment as a primary residence. Furthermore, the owner's search of New York State Tax Records reveals that the religious organization is not registered as a charitable foundation within the State of New York. Under these circumstances, there is no authorization to conduct activity within the State of New York and therefore, the subject premises could not be maintained as a primary residence. Respondents made a motion for summary judgment, arguing that the Rent Stabilization Code requires that a notice of non-renewal of the lease contain the ground as well as "the facts necessary to establish the existence of such ground for renewal." Respondents allege that none of the purported facts stated in the notice are true, rendering it defective and accordingly the petition must be dismissed. In support of this argument, respondents state that petitioner's "reasonable belief" that respondent is a charitable foundation has no basis in fact--the organization is a church and not a charitable entity. Respondent maintained that this fact could have been ascertained with minimal effort on the landlord's part. The Court held in favor of the respondent and dismissed the petition.

Case Caption:
McAnulty v. Townan Realty Co.
Issues/Legal Principles:
Where landlord failed to file proper forms when apartment became subject to rent stabilization, tenant cannot raise that issue after DHCR later exempted the apartment from regulation on grounds of "luxury" decontrol since it was not raised in the DHCR proceeding.
Keywords:
overcharges; luxury decontrol
Court:
Supreme Court, New York County
Judge:
Hon. McMahon
Date:
June 25, 1997
Citation:
NYLJ, page 27, col 2
Referred Statutes:
Adm. Code 26-504.1, 26-504.3(b), 26-504(c)(1), 26-513(d); RSC 2529.2, 2523.1, 2522.3, 2520.13; CPLR 3011
Summary:
In this action, tenant sought a judgment for treble damages and back rent against her landlord for overcharges paid since the beginning of her first lease in October, 1993. Plaintiff/tenant later joined DHCR as a necessary party/defendant since the agency previously issued an order that the subject premises should be decontrolled on grounds that tenant's income exceeded $250,000 per year and the rent was $2,000 or more a month. Tenant argued that when the apartment went from rent control to rent stabilization (during a previous tenancy) the landlord failed to file the RR-1 notice to the first stabilized tenant. Absent the service of such a notice, the tenant argued that the rent should have reverted back to the rent control rent. She argued that the landlord could never have won a "luxury" decontrol of the apartment since the rent would never have been $2000 a month based on the failure to file the RR-1. And thus, the DHCR's decision was error and must be invalidated. Landlord moved to dismiss on the grounds that the tenant failed to exhaust her administrative remedies by not filing a timely Petition for Administrative Review (PAR) challenging DHCR's decision to deregulate the apartment. In response, tenant claims that she is not opposing the DHCR order, instead she is bringing a plenary action against the landlord for overcharges of rent. The Court held that the tenant's claims are barred by res judicata and dismissed her attempt to overturn DHCR's deregulation of the subject premises.

New York Law Journal,
decisions for the week of June 16-20, 1997 (8 cases)

Case Caption:
Bedford Gardens Company v. Ausch
Issues/Legal Principles:
Landlord faulted for not advising court that HUD never issued an opinion as to whether tenant engaged in fraud in obtaining rent subsidies.
Keywords:
HUD terminations; necessary parties
Court:
Appellate Term, Second and Eleventh Judicial Districts
Judge:
lower court: Hon. M. Friedman
Date:
June 17, 1997
Citation:
NYLJ, page 27, col 4
Referred Statutes:
CPLR 5015[a][3] and [a][4]
Summary:
Tenant's HUD rent subsidies were terminated in January, 1989 and the lower court awarded landlord a judgment of possession for unpaid rent by the tenant. The tenant was evicted and thereafter moved to be restored to the apartment on grounds that landlord made misrepresentations to the court. The tenant's wife was not made a party to the proceeding and moved for dismissal of the petition for failing to name her as a necessary party. The lower court dismissed the tenants' claims, holding that landlord's misstatements were a "matter of interpretation with the permissible bounds of advocacy" and that the wife's application was barred by laches (excessive passage of time). The Appellate Term reversed. The HUD Handbook provides that a tenancy can only be terminated on the ground of fraud after the regional inspector investigates the fraud and issues an opinion that the tenant's acts were fraudulent. In this case, the inspector conducted an investigation but issued no opinion. The Appellate Term held that landlord should have informed the court that no HUD opinion was issued regarding the tenant. The court dismissed the petition on this ground. It did not rule on the issue of whether a wife who is not a signatory to a lease and not obligated to pay rent is "a necessary party" to an eviction proceeding. The Appellate Term allowed the wife to intervene on her own motion for restoration based on her real and substantial interest in the outcome of the proceedings. The case was remanded to the trial court for a hearing on restoration, and whether or not a new tenant was leased the premises. There was a lengthy dissent by one of the justices who observed that the tenant also did not mention to the court that no opinion issued from the HUD investigator, which made the lower court's action reasonable.

Case Caption:
Siafakas v. Danzy
Issues/Legal Principles:
Tenant who had paid all rent prior to issuance of warrant was restored to possession.
Keywords:
post-eviction hearings
Court:
Civil Housing Court, Kings County
Judge:
Hon. D. Thomas
Date:
June 18, 1997
Citation:
NYLJ, page 31, col. 6
Referred Statutes:
CPLR 2221(a); 5015(a)
Summary:
Tenant sought restoration to premises after eviction, stating that she didn't answer the petition because she had paid all the rent demanded in the petition. After receiving a 72-hour notice, she made an order to show cause and the matter went before Judge Arthur Birnbaum. The tenant claimed that Judge Birnbaum told her to pay the rent that accrued up to that point, which she did by certified mail. The landlord denied that the judge resolved the matter in this way. The tenant was then evicted. The judge held that since there was no record of the exchange with Judge Birnbaum, and since the tenant had paid all the rent, it was not necessary that the case go back to Judge Birnbaum since he was relocated to the Bronx Criminal Court. The court held a hearing and restored the tenant to possession upon her proof of rents paid prior to judgment, and that the landlord failed to admit prior to the execution of the warrant that it had received rent from the tenant. The court dismissed the petition.
Case Caption:
Swett v. Batraville
Issues/Legal Principles:
Tenant not deemed to harbor "boarders" as defined by the law, and could not be evicted for rent gouging absent any other stabilization violations.
Keywords:
boarders; rent gouging
Court:
Civil Housing Court, New York County
Judge:
Hon. Bruce Gould
Date:
June 18, 1997
Citation:
NYLJ, page 30, col. 4
Referred Statutes:
RPL 235-b; Roommate Law RPL 235-f; RSC 2525.1; Penal Code 180.54-57; MDL 248; HMC 27-2078; HMC 27-2004(4);
Summary:
Landlord brought a holdover against tenant, not on grounds of unlawful sublet, nor on grounds of violation of the roommate law. Rather landlord claimed that tenant was conducting an unlawful "rooming house" business for at least six months in violation of the certificate of occupancy, the Multiple Dwelling Law, the Housing Maintenance Code, and that the tenant collected more than 10% of the rent for this rent stabilized apartment which has four bedrooms. The landlord argued that the tenant violated the Penal Code against rent gouging. The court parsed the language of the Multiple Dwelling Law and the Housing Maintenance Code and found the former inapplicable. Although the HMC is more restrictive, the court noted that the tenant had not been given notice of the HMC provision nor an opportunity to cure. After trial the court held that the tenant did not provide "boarders" as defined by the MDL. The court also noted that since rent gouging is not in and of itself a ground for eviction, the petition was dismissed.

Case Caption:
Conboy v. Mauro
Issues/Legal Principles:
Judge relies on DHCR harassment hearings report to uphold tenants' Supreme Court lawsuit for harassment.
Keywords:
harassment
Court:
Supreme Court, New York County
Judge:
Hon. L. Miller
Date:
June 181, 1997
Citation:
NYLJ, page 29, col. 3
Referred Statutes:
CPLR 3212
Summary:
Plaintiffs tenants sued landlord for breach of lease, unlawful eviction, assault, breach of warranty of habitability and nuisance. The DHCR had previously issued a 137-page report finding that the testimony of various tenants corroborated landlord's extensive and ongoing harassment. The landlord argued that since the DHCR had already issued a decision, the Supreme Court was precluded from relying on it and sought dismissal of the complaint. (The legal theory used by the landlord is called collateral estoppel). The court disagreed, citing case law to hold that it was the landlord who could assert new facts which were not made during the DHCR harassment hearings. Relying on the DHCR's report, the judge granted the tenants summary judgment on their claims against the landlord, and set the matter down for a hearing on damages.

Case Caption:
99 Commercial Street v. Llewellyn
Issues/Legal Principles:
Landlord allowed to evict loft tenant for lack of certificate of occupancy even though Loft Laws require landlord to obtain the certificate as a step towards bringing lofts into the rent stabilization scheme.
Keywords:
Lofts
Court:
Appellate Term, Second Department
Judge:
lower court: Barasch
Date:
June 13, 1997
Citation:
NYLJ, page 33, col 4
Referred Statutes:
Multiple Dwelling Law 284(1), 286(2), 302
Summary:
In 1996 Landlord plaintiff brought an action for ejectment in the Supreme Court against the tenants who reside in a loft dwelling. The owner had been attempting since 1989 to get a certificate of occupancy for the property, which it still did not have. The tenant has resided in the premises since 1978. The Appellate Division held that the lower court was wrong to deny the owner a judgment of possession against the tenant, but ruled that because no certificate of occupancy existed, the tenant was not liable for rent. The court held that the absence of the certificate of occupancy does not bar a landlord from recovering possession in an ejectment action.
Notes:
This decision is unusual. The reason landlords are required to get certificates of occupancy for loft dwellings is to bring those dwellings up to building code standards. Loft tenants are supposed to be covered by the Rent Stabilization Code once the certificate of occupancy is acquired. This decision appears to allow loft landlords to evade the Code by simply failing to obtain a certificate of occupancy. It is not understood how this Court overlooked the Rent Stabilization laws in this case. It is hardly relief that the tenant is not liable for rent when the tenant is also evicted from their loft home.

Case Caption:
Moscowitz v. Rassbach
Issues/Legal Principles:
Appellate Court reinstates nonpayment petition so that landlord may show it took all reasonable and necessary action to bring loft apartment up to Code.
Keywords:
Lofts
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Margaret Taylor
Date:
June 20, 1997
Citation:
NYLJ, page 25, col 4
Referred Statutes:
MDL 284(1)(i); 302(1);
Summary:
The lower court dismissed landlord's claim for rental arrears prior to July, 1992 on grounds that the landlord failed to take all reasonable and necessary action to legalize the loft premises. Under Multiple Dwelling Law 284(1), failure to secure a certificate of occupancy deprives a loft landlord of rent. The Appellate Term reversed holding that a question of fact existed to determine whether all reasonable and necessary action was taken. Justice Helen Freedman dissented stating that while the landlord filed a timely alteration application in 1982, "little else was done" to bring the building up to Code standards.

Case Caption:
300 East 34th Street Co. v. Paleias
Issues/Legal Principles:
Tenant's unsuccessful motion to dismiss the petition represented delay of the proceedings, making it incumbent upon tenant to pay ongoing rent during the litigation.
Keywords:
use and occupancy
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Richard Braun
Date:
June 20, 1997
Citation:
NYLJ, page 25, col 5
Referred Statutes:
RPAPL 745[2]
Summary:
The lower court denied landlord's application for ongoing use and occupancy (rent payment) pending the litigation of this holdover proceeding based on an unlawful sublet allegation. The Appellate Term reversed holding that because tenant had made a prior motion to dismiss (which was not granted), the tenant had triggered delay of the litigation to landlord's prejudice.

Case Caption:
211 West 56 Associates v. Nager
Issues/Legal Principles:
Tenant denied overcharge claim in housing court because tenant failed to make a DHCR complaint when landlord failed to provide tenant a copy of the renewal lease.
Keywords:
overcharges; lease renewals
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Bruce Gould
Date:
June 20, 1997
Citation:
NYLJ, page 25, col 6
Referred Statutes:
RSC 2523.5(a), 2522.5[b][2]
Summary:
Tenant signed a renewal lease, but withheld rent on grounds that the prior renewal lease's rent was an overcharge. The lower court allowed the tenant to state an overcharge claim based on the prior lease because the landlord failed to furnish the tenant a copy of that renewal lease. The Appellate Term reversed, holding that an owner is not barred from collecting rent guideline increases on renewal leases unless DHCR, upon complaint of the tenant, directs the owner to furnish a copy of the renewal lease and the owner fails to comply within 20 days of the agency's order. Since the tenant filed no complaint to DHCR for failure to receive a lease, the landlord was not precluded from collecting lawfully increased rent nor could it be held liable for overcharge penalties in this circumstance.

Case Caption:
Gracecor Realty Co. v. Hargrove
Issues/Legal Principles:

Keywords:

Court:
Court of Appeals
Judge:

Date:
June 18, 1997
Citation:
NYLJ, page 27, col 3
Referred Statutes:
McKinney's Uncons Laws 8623(a), 8634 (ETPA); Administrative Code 26-504(b) & 2520.6(j) ; Multiple Dwelling Law 4(9); RPAPL 711
Summary:
The tenant occupied a lodging house (rooming house) in the Palace Hotel. The issue was whether the room was subject to Rent Stabilization. The owner brought a holdover proceeding by terminating what it claimed was a month to month tenancy. The tenant moved to dismiss the petition on grounds that the space was subject to Rent Stabilization Laws. The lower court dismissed the petition, the Appellate Term affirmed, with one dissent, and the Appellate Division affirmed. The Court of Appeals likewise affirmed, holding that Rent Stabilization laws cover Class B multiple dwellings. The Court ruled that the tenant's one room space fell into the category of "housing accommodation" as defined by the Code, which definition was not limited by any physical or structural requirements such as minimum square footage. The Court also held that other factors for consideration included the permanency of the residence, whether the occupant has any other residence, and any limitations relating to an occupant's use and control of the premise which have been imposed and enforced by the landlord. The Court also noted that the Court looks to the tenant's intent as to whether the space is their residence. Here the tenant occupied the room for a continuous period of two years and the tenant had no other residence. The Court held that it was irrelevant that the landlord could have limited the length of the tenant's stay to less than one week at a time since the actual length of continuous occupancy was significantly longer. Also, the tenant had a key which allowed the tenant to exclude others from the living space. The Court completely rejected the owner's contention that the room could not be subject to the Rent Stabilization laws due to its structural configuration. The owner also tried to argue that the DHCR has already ruled that lodging rooms are exempt from Rent Stabilization, but the Court found that the two cases cited by the owner were unclear as to their applicability to the Palace Hotel. The DHCR argued in a friend of the court brief that partitioned space cannot be a housing accommodation, but the Court of Appeals ruled that this position is unreasonable and inconsistent with applicable statutes, specifically since the definition of "housing accommodations" fits this case.

New York Law Journal,
decisions for the week of June 9-13, 1997 (8 cases)

Case Caption:
Bronx District Attorney v. Jackson
Issues/Legal Principles:
No waiver exists where landlord accepts tenant's rent after District Attorney's office obtained a possessory judgment against tenant for illegal usage.
Keywords:
illegal usage; waiver
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Howard Sherman
Date:
June 10, 1997
Citation:
NYLJ, page 25, col 2
Referred Statutes:
RPAPL 715 & 711(5); RPL 231(1)
Summary:
The Bronx District Attorney obtained a final judgment of possession against the tenant based on the tenantžs illegal narcotics trade in the apartment. Thereafter, the City/landlord commenced a nonpayment proceeding and accepted rent from the tenant. The lower court denied tenantžs motion to vacate the possessory judgment obtained by the DAžs office on grounds that the prosecution of the nonpayment proceeding vitiated the holdover and revived the landlord tenant relationship. The Appellate Term upheld the denial on grounds that the DAžs office acted separately and independently from the City/landlord, and because a tenancy cannot be reinstated where it was rendered void by virtue of illegal or criminal conduct. Thus, waiver (by accepting the rent) had no effect on the possessory judgment against the tenant.

Case Caption:
Whitehouse Estates, Inc. v. Post
Issues/Legal Principles:
Landlord has no duty to find a new tenant when tenant breaks lease prematurely.
Keywords:
mitigation of damages; leases
Court:
Appellate Term, First Department
Judge:
Hon. Jose Padilla
Date:
June 10, 1997
Citation:
NYLJ, page 27, col. 6
Referred Statutes:
none cited
Summary:
The defendant tenant vacated the apartment about three months before the lease expired. The landlord sued the ex-tenant for rent arrears in civil court. The lower court dismissed the complaint because the landlord failed to show it had mitigated damages (i.e., that it made all reasonable efforts to find a new tenant after the ex-tenant vacated). The Appellate Term reversed citing a Court of Appeals case which held that the tenantžs obligation to pay the rent is fixed and the landlord is under no obligation or duty to relet or attempt to relet abandoned premises. The Appellate Term held that it made no difference that the Court of Appeals case involved a commercial tenancy.
Notes:
This is a devastating decision for tenants who wish to break their leases early. It basically says that a landlord can let the apartment sit until the end of the lease term (which could be six months, or one year, down the road) and the tenant will be responsible for the rent. There are numerous cases which hold to the contrary, but the Appellate Term stated that since the Appellate Division has not applied the rule that a landlord must mitigate damages when a tenant breaks the lease, it would follow the Court of Appeals case--- even though that case involved a commercial lease! Courts frequently distinguish between commercial and residential leases, and it is amazing and unfortunate that the Appellate Term declined to do so when given the opportunity in this case. One hopes and prays that the tenant here will appeal to the Appellate Division for a reversal, since there are frequent occasions when tenants need or desire to break their leases. This Appellate Term decision will make it more onerous for tenants to do so.

Case Caption:
Yorkville Towers Associates v. Mourino
Issues/Legal Principles:
Administrative hearings concerning subsidized housing cannot be relitigated in Housing Court.
Keywords:
jurisdiction; Mitchell Lama tenants
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Saralee Evans
Date:
June 9, 1997
Citation:
NYLJ, page 29, col. 3
Referred Statutes:
28 RCNY 3-02(P)(2)(ii)
Summary:
Tenants who defaulted in a hearing pertaining to the Mitchell Lama apartment had no right to challenge the landlordžs holdover proceeding in Housing Court. The Appellate Court affirmed the lower court's decision that the proper remedy was to file an Article 78 in Supreme Court appealing the City's administrative decision at the hearing.

Case Caption:
SJP Broadway Associates v. Smith
Issues/Legal Principles:
Where tenant defaults in a Supreme Court ejectment action, a hearing is necessary before landlord can obtain a default judgment.
Keywords:
defaults; ejectment
Court:
Supreme Court, New York County
Judge:
Hon. Alice Schlesinger
Date:
June 11, 1997
Citation:
NYLJ, page 30, col. 1
Referred Statutes:
CPLR 3215(b); RPAPL 732(3)
Summary:
Landlord sought a default judgment to evict the tenant from a basement apartment in an ejectment action in Supreme Court. (Default means the tenant did not make an appearance in the action). The landlord claimed that prior to purchasing the building the previous owner and super informed him that no one lived in the basement, and therefore concluded that the defendant took occupancy recently. Since there was no certificate of occupancy for usage of the basement as a residence, the landlord sought a warrant of eviction. The court, however, found that the landlord's mere affidavit was insufficient absent any documentary proof of illegal occupancy. The judge ordered that a hearing should be held on the matter and that the landlord was not entitled to a judgment on its mere affidavit in an ejectment action (unlike a summary proceeding in Housing Court where a default judgment could be obtained on the landlord's affidavit alone).

Case Caption:
Resolution GGY OY v. Mixon
Issues/Legal Principles:
Landlord ordered to pay tenants various monetary damages for refusing to comply with court order to make essential repairs; landlord's power of attorney was ordered to jail and the landlord was restrained from selling the building.
Keywords:
contempt
Court:
Civil Housing Court, Kings County
Judge:
Hon. Callender
Date:
June 11, 1997
Citation:
NYLJ, page 32, col 6
Referred Statutes:
Judiciary Law 773
Summary:
A prior court order required the landlord to provide water, gas and repairs by certain set dates. The tenants moved for civil contempt against the landlord for failing to comply with the order, but the landlord didn't appear for the hearing. Since the landlord had appeared in the past in the case, the court ruled that it retained jurisdiction over the landlord. The court found that the landlord displayed a complete indifference towards complying with the court order to supply essential services and make repairs. The tenants had to vacate their homes due to the apartments' unhabitability. The court granted the tenants various monetary relief for diminution of quality of life, mental suffering, reimbursements for expenses paid by the tenants to make their homes habitable, and civil contempt fees against the landlord. The court also ordered the person serving as power of attorney for the landlord be arrested as a contemnor of the court's order and brought to jail (the person resides in Texas). The court also restrained the landlord from selling the property and threatened future civil and criminal contempt if the order was not complied with.

Case Caption:
Pald Enterprises, Inc. v. Gonzalez
Issues/Legal Principles:
Tenant not bound to pay a rent stabilized rent until tenant signed a rent stabilized lease.
Keywords:
rent stabilization
Court:
Appellate Term, 2nd & 11th Judicial Districts
Judge:
lower court: Hon. James Grayshaw
Date:
June 12, 1997
Citation:
NYLJ, page 31, col 1
Referred Statutes:
none cited
Summary:
In January 1987 DHPD (City agency) set the rent at $425 per month. Before landlord rehabilitated the building, tenant had been paying a rent controlled rent of $83.91 per month. Various tenants in the building brought a Supreme Court action to contest the rents set by DHPD. All the tenants settled and accepted Rent Stabilized leases, except for the tenant in this proceeding who refused to sign a lease and continued to pay the lower rent while continuing to file challenges of the higher rent with DHPD and the DHCR. During a 1994 holdover proceeding, however, the tenant signed a rent stabilized lease at $446.25 per month beginning May, 1994. Thereafter, landlord brought a nonpayment proceeding to recover the difference in rent that the tenant refused to pay over the years (since 1987) prior to settling. Tenant defended on grounds of laches and the statute of limitations had passed. The lower court held for the landlord. The Appellate Term reversed holding that the landlord was not entitled to recover the arrears claimed from 1987 and prior to the period when she finally consented to be a rent stabilized tenant. The court ruled that the tenant was not bound to pay the stabilized rent during the period she did not agree to pay it, and during a time she never had a rent stabilized lease, and during a time she continued to challenge the higher rent. The proper remedy for her refusal to sign a rent stabilized lease was to bring a holdover against her (which the landlord eventually did in 1994).

Case Caption:
Ted Zane v. Barry Kellner
Issues/Legal Principles:
Tenant ordered to deposit rent with the court until landlord obtained a certificate of occupancy.
Keywords:
certificate of occupancy
Court:
Appellate Division, First Department
Judge:
lower court: Hon. Harold Tompkins
Date:
June 12, 1997
Citation:
NYLJ, page 26, col 6
Referred Statutes:
CPLR 325; Multiple Dwelling Law 301
Summary:
The landlord in this case offered a residential lease to its tenant, while aware that the building lacked a residential certificate of occupancy. As a result, the tenant withheld his rental payments. The lower court granted the landlord's motion for use and occupancy and denied tenant's cross motion to dismiss the causes of action for rent arrears and use and occupancy. The Appellate Division modified the order to direct that use and occupancy be paid directly into the court rather than the plaintiff/landlord until such a time when the landlord obtains a certificate of occupancy for the subject building. In reaching their determination, the Appellate Division recognized that the landlord was aware that the building lacked a certificate of occupancy and made no effort to comply with the law. However, the Court also looked to the fact that the tenant did not claim that the conditions in the building posed a threat to his health and safety. Additionally, the tenant did not express a desire to vacate the premises.

Case Caption:
Commercial Street, Inc. v. Kim Llewellyn
Issues/Legal Principles:
In the absence of a residential certificate of occupancy, landlord is not entitled to use and occupancy but may bring an action in ejectment.
Keywords:
certificate of occupancy; interim multiple dwelling; Loft Law
Court:
Appellate Division, Second Department
Judge:
lower court: Hon. Barasch
Date:
June 13, 1997
Citation:
NYLJ, page 33, col 4
Referred Statutes:
Multiple Dwelling Law 281, 284(1), 286[2], 302, 302[1][b]
Summary:
Plaintiff/landlord is the owner of an interim multiple dwelling. Under the new Loft Law, owners of such properties are given a sufficient amount of time in which to convert their commercial space to residential use. During this transitory period, tenants of such property are entitled to a right to occupy the premises while the owner of the building obtains the residential certificate of occupancy. However, the law prevents an owner from recovering rent when the premises are occupied without a residential certificate of occupancy. In the present case, the owner was attempting to obtain a certificate of occupancy since 1989. Due to the alleged inaction of the City, the owner has not yet recieved a certificate of occupancy. The tenants have withheld rent since 1989. As a result, in 1996 the landlord brought an action in ejectment to recover possession of the premises. The tenants argued that no action or proceeding for the recovery of rent may be maintained in the absence of a residential certificate of occupancy. The lower court denied the landlord's motion to eject the tenants and recover use and occupancy. The Appellate Division modified the holding and ordered that the landlord was in fact entitled to recover possession of the premises. However, the Court upheld the lower court's ruling that the landlord was not entitled to recover use and occupancy in the absence of a residential certificate of occupancy. The Appellate Division held that the tenant's argument would have merit if the landlord commenced a nonpayment proceeding. Since this was an action to recover possession of the property the absence of the residential certificate of occupancy did not preclude the landlord from commencing the instant proceeding.

New York Law Journal,
decisions for the week of June 2-6, 1997 (4 cases)

Case Caption:
390 West End Associates v. Pearl
Issues/Legal Principles:

Keywords:

Court:
Civil Housing Court, New York County
Judge:
Hon. Arthur Birnbaum
Date:
June 5, 1997
Citation:
NYLJ, page 30, col 3
Referred Statutes:
9 NYCRR 2524.5(b) & 2523.5(b); RPAPL 853
Summary:
Landlord initially brought a nonpayment proceeding against the tenant of record, but did not notify the wife wife. The landlord obtained a warrant and judgment of possession but this was vacated when the wife brought an order to show cause and paid all the rent, and she was restored to possession. She claimed that she resided with her husband in the apartment for 22 years, but that she temporarily vacated the apartment because her husband was abusing her. Also, her son was attending college and was residing in a dormitory. The landlord then brought a holdover against her, her husband having surrendered possession, and she asserted succession rights on behalf of herself and her son. The court ruled that the son clearly was entitled to a lease in his name because under the Code, his enrollment in school exempts him from the two- year primary residence requirements (for the period he is in school) necessary for a family member to succeed to the lease. The Code also has a catch-all provision where primary residency requirements are interrupted for "other reasonable grounds." The court ruled that the wife's absence from the apartment for the sole reason that her husband, the tenant, abused her constituted other reasonable grounds, so that such absence would not defeat her succession rights claim. The wife wrote the landlord a letter informing the landlord the reason she was temporarily vacating. The landlord argued that she failed to prove abuse, but rather there was simply "marital discord." The record, however, reflected that the wife took out an order of protection against her husband. The court held, "It would be unjustiable reasoning to demand that a spouse put her life or physical safety in jeopardy in order to preserve a home otherwise her's by law. " The court also found it was unreasonable for the landlord to dispose of all property in the apartment knowing that via her letter that the wife still held a claim to the apartment (even though she was absent at the time her husband surrendered possession.) The court put the matter down for a hearing on treble damages for an unlawful eviction and attorney's fees.

Case Caption:
Century Apartments Associates v. Postel
Issues/Legal Principles:
Chronic non-payment case based on nuisance is defective.
Keywords:
chronic non-payment
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Marcy Friedman
Date:
June 3, 1997
Citation:
NYLJ, page 25, col 2
Referred Statutes:
9 NYCRR 2524.3(a) & (b)
Summary:
Landlord brought a holdover against the tenant on grounds of chronic non-payment of rent in that landlord was compelled to commence four nonpayment proceedings from March 1994 to August 1995 to recover rent that had accrued over a period of about 2« years. (Tenant resided in the apartment for over ten years). Tenant alleged temporary financial hardship and ultimately paid the entire amount sought. The lower court granted landlord's summary judgment motion, but the Appellate Term reversed and dismissed because the holdover was based on a nuisance theory, and the recent Court of Appeals case, Sharp v. Norwood held that non-payment or late payment of rent in and of itself is not conduct which causes damage to the building or threatens the comfort and safety of the owner or other tenants. Instead of a nuisance proceeding, the appropriate legal theory for such holdovers is on grounds that tenant violated a substantial obligation of the tenancy.

Case Caption:
Broadway Inwood Corp. v. Kellner
Issues/Legal Principles:
Absence of qualified super living in the building constituted a rent impairing violation, relieving the tenant from payment of rent.
Keywords:
supers
Court:
Civil Court, New York County
Judge:
Hon. Bruce Gould
Date:
June 4, 1997
Citation:
NYLJ, page 27, col. 6
Referred Statutes:
MDL 302(a), Housing Maintenance Code 27-2054; Administrative Code 27-2052, 2053 & 2054;
Summary:
The superintendent of the building did not reside in the building during the period in which the landlord sued tenant for unpaid rent. A super is required to reside in or within one block or two hundred feet of any apartment building with nine or more units. A rent impairing violation was found because the super lived three blocks from the building. An assistant who resided in the super's apartment was not qualified to and did not take care of the building's central heating and hot water system. The frequent lack of hot water was never corrected until the super would arrive at the building between 7:30 and 9:00 am. Shortly after he arrived, the heat and hot water would go on. The court ruled that no rent would be recovered for the period of time that the building lacked a qualified super, and due to the existence of a plethora of other rent impairing violations. The tenant was awarded attorney's fees.

Case Caption:
Auletti v. Chemical Bank
Issues/Legal Principles:
Tenants seeking recovery of embezzled rent deposits cannot seek claims on behalf of tenants who did not join the lawsuit.
Keywords:
escrow rents; attorney disqualification
Court:
Supreme Court, New York County
Judge:
Hon. Carol Arber
Date:
June 4, 1997
Citation:
NYLJ, page 25, col. 5
Referred Statutes:
Code of Professional Responsibility DR 5-102(A)
Summary:
Various members of the Tenants Association at 215 East 66th Street brought an action in Supreme Court to recover rent money embezzled by its former leader, Steven Delit, to whom the tenants had given their rent. A defendant law firm, Finder Novick, sued to dismiss the complaint with respect to plaintiffs' efforts to recover monies lost by tenants who were not parties to this Supreme Court case, and for attorney's fees in another action, Solow v. Delit. Alternatively, they moved to disqualify the law firm of Karlsson & Ng (K&N) who were plaintiffs' attorneys in the Solow v. Delit action from representing plaintiffs in this action. Chemical Bank moved for the same relief. The tenants had gone on a rent strike and the court ordered that their rent monies be deposited in an escrow account. Delit was in charge of the account. Ultimately $1,820.519.56 was deposited, of which Delit embezzled $616,974. The landlord, Solow, sued the tenants for the return of the money in the case called Solow v. Delit, but that case was dismissed because the court ruled that the money belonged to the tenants. This Supreme Court case was begun by 39 of the 65 units which had participated in the rent strike. 26 units chose not to participate. The plaintiffs claim that the defendant law firm and the bank failed to safeguard the funds. They seek damages for the rent money deposited and lost by themselves, as well as other tenants not a party to this case, plus reimbursement of attorney's fees against Finder, Novick, arguing that the law firm's negligence caused Solow to initiate the lawsuit against Delit and the tenants, and the tenants had to pay K&N to represent them in that suit. The court ruled that the plaintiffs, including the Tenants Association, cannot recover rent money lost by other tenants who are not parties to this action, and granted Finder Novick's motion on this issue. The court denied Finder Novick's motion to dismiss the plaintiffs' attorney's fees claim because the court stated a trial was required to determine if it should have been foreseeable on the law firm's part that the landlord would sue. Finally, the court denied Finder Novick's argument that the plaintiffs' attorney K&N should be disqualified because they could be called as witnesses. The judge held that there is nothing to support the conclusion that K&N ought to be called as witnesses.