Housing Court Decisions January 1999

edited by Colleen F. McGuire, Esq. and Linda Rzesniowiecki, Esq.

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New York Law Journal, decisions for the week of January 25-29, 1999 (4 cases)

Case Caption:
Stanley v. Hawkins
Issues/Legal Principles:
Landlord sanctioned for commencing baseless action against tenant
Keywords:
sanctions
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Arlene Hahn
Date:
January 29, 1999
Citation:
NYLJ, page 26, col. 1
Referred Statutes:
22 NYCRR 130-1.1(c)
Summary:
Landlord brought a baseless action against the tenant, although the case does not state the nature of the proceeding. The lower court awarded the tenant the costs of her reasonable attorney's fees in having to defend against the frivolous proceeding. The landlord appealed and the Appellate Term affirmed, holding that the trial court has discretion to award such fees and the record indicates that there was a sufficient basis to award them in this case.
Notes:
Tenants are advised that when they are hauled into court for completely frivolous reasons, and especially in the event that there is no lease clause permitting the award of attorney's fees, that 22 NYCRR 130-1.1(c) be invoked as a basis for recovering costs. Be aware that judges do not grant such a request liberally. To impose sanctions, the statute requires that there be a finding that the proceeding was brought with no legal basis for the landlord's position, or that the proceeding was brought to harass the tenant. (Check the statute for the precise criteria and language). In another case, the Appellate Term once reversed Judge Hahn for imposinging sanctions without stating the basis for the sanctions in her decision. So in seeking sanctions, tenants should make sure (as diplomatically as possible) that the judge sets forth the statutory ground on which the sanctions are based, or else the decision could be overturned on appeal.

Case Caption:
Matter of Joseph v. Franco
Issues/Legal Principles:
New York City Housing Authority improperly terminated tenancy by waiting to long to overturn the hearing officer's decision which simply placed the tenant on probation.
Keywords:
non-desirability; due process
Court:
Supreme Court, New York County
Judge:
Hon. Gans
Date:
January 27, 1999
Citation:
NYLJ, page 27, col. 6
Referred Statutes:
42 USC 1988(b); 24 CFR 966.57(b)
Summary:
The tenant has lived in the Dyckman public housing project for 38 years. The New York City Housing Authority (NYCHA) charged her with non-desirability and breach of rules and regulations after the tenant hit the receptionist in the office. The tenant claimed that the receptionist uttered a racial slur. In lieu of terminating her tenancy, and after a hearing, by decision dated September 26, 1996, the hearing officer imposed a one year probation in light of the fact that she was a long-standing tenant with no other incidents to her discredit. Further, the tenant had pled guilty in criminal court and was sentenced to six days community service (which she performed). NYCHA sent the tenant notice on October 17, 1996 and January 30, 1997 that the hearing officer's decision was under review and that the tenant would be advised of a new hearing date by letter. It was not until October 1, 1997 that NYCHA vacated the decision and terminated the tenancy.
The tenant appealed by way of an Article 78 to the Supreme Court (the forum where administrative rulings are appealed) arguing that NYCHA's decision was arbitrary and capricious on three grounds. First, the tenant argued that the applicable regulations require NYCHA to act within a "reasonable time" and upon prompt notification if the hearing officer's decision intends to be challenged by the agency. The court found NYCHA's 13 month delay unreasonable and not prompt. The tenant further argued that there existed no specific rule or regulation regarding workplace violence by which to justify the termination of her tenancy. The court agreed. Finally, the tenant argued that the termination of her tenancy as a penalty was entirely disproportionate to the offense charged. The court also agreed. The court awarded the tenant attorney's fees pursuant to 42 USC 1983, a federal statute authorizing fees where an agency acting under the color of state law deprives the party of due process.

Case Caption:
Park 50 Properties Ltd v. Hercules
Issues/Legal Principles:
Landlord's eviction proceeding based on tenant's harboring a pet was timely commenced.
Keywords:
pets; ten-day cure
Court:
Civil Housing Court, Kings County
Judge:
Hon. Jose Rodriguez
Date:
January 27, 1999
Citation:
NYLJ, page 32, col. 2
Referred Statutes:
NYC Administrative Code 27-2009.1(b); RPAPL 753(4)
Summary:
The landlord brought a holdover proceeding against the tenant on two grounds. First, tenant harbored a dog in her apartment in violation of her lease. Second, the dog's behavior allegedly constituted a nuisance. At trial it was undisputed that the tenant had a dog for a long time by permission from her prior landlord. This dog died in August, 1997 and tenant obtained a second dog the same month. The dispute centered around when the tenant displayed the dog in an "open and notorious" manner sufficient to charge the landlord with knowledge of the dog's presence. The law provides that once a landlord has knowledge of the dog's presence, and if the presence of the pet violates the lease, the landlord must take action against the tenant within three months. Failing to act within three months means that the landlord waives the lease clause and cannot maintain a proceeding against the tenant on this ground. Knowledge of the pet can be imputed to a landlord's employees.
The tenant's son testified that the dog was initially kept in the apartment and was first walked on a leash in September. He then testified that the dog was walked 2-3 times a day from November 1997 through January 1988. The super testified that he first saw the dog in November. The notice to cure was served on December 1, 1998. A prior proceeding was dismissed on technical grounds (improper service of the legal papers), and the court ruled that the same December 1, 1997 notice could be used for the instant case. The court found that the "open and notorious" activity did not occur until November, and since the notice was served in December, the landlord's action against the tenant was timely commenced.
The court ruled, however, that the landlord failed to establish that the dog was a nuisance. The only testimony in this regard came from the super who stated that he saw the dog urinate one time, but never saw the dog defecate anywhere in the building, and that the building does not stink. The super testified that he compared his own urine to that of the "spots" on the ground (where he suggested the dog urinated), but the court rejected this on grounds that the super did not qualify as a urine expert. Additionally, none of the neighbors alleged to have complained of the dog testified at trial. The court granted the landlord a possessory judgment, but stayed the issuance of the warrant for 10 days to allow the tenant to cure the violation of her lease. In this case, "cure" means the tenant must get rid of her dog or face eviction.

Case Caption:
Mendez v. Franco
Issues/Legal Principles:
Notice of termination of tenant's Section 8 subsidy must be in writing addressed to the tenant, not to her ex-husband who did not reside in the apartment.
Keywords:
Section 8; due process notice; statute of limitations
Court:
Supreme Court, New York County
Judge:
Hon. Helen Freedman
Date:
January 27, 1999
Citation:
NYLJ, page 27, col. 3
Referred Statutes:
CPLR 217; 24 CFR 822.216(b)(3)
Summary:
The tenant signed a lease for a Bronx apartment where she lived with her were son, grandson and daughter. Her ex-husband never lived in the apartment. Subsequently, in responding to the annual recertification process, the tenant advised the New York City Housing Authority (NYCHA) that her son no longer lived with her. They sent her a letter addressed to her ex-husband requesting proof that her son is no longer part of the household. The letter warned her that if she failed to respond to the letter she risked losing her Section 8 subsidy. Thereafter NYCHA sent a notice of termination of tenant's Section 8 subsidy, and other correspondence, all of which were addressed to tenant's ex-husband. Tenant claimed to have not received any of the notices. Tenant discovered that she lost her subsidy when her landlord told her roughly six months after NYCHA's initial letter. She immediately went to NYCHA's office to inquire and found out about the notices. After writing several letters, on June 26, 1998, the tenant appealed to the Supreme Court in an Article 78 proceeding challenging the October 10, 1996 termination of her subsidy. NYCHA argued that she passed the four-months statute of limitations for challenging the termination. The court, however, ruled that as a matter of law the statute of limitations was never triggered because the tenant was never properly informed of NYCHA's determination since all correspondence was addressed to her ex-husband who did not reside in the apartment. The court further ruled that the statute of limitations does not begin to run until the party challenging the determination actually receives the decision by written notice in accord with the federal regulations governing the Section 8 program (i.e., not by oral notice from her landlord). The court denied NYCHA's motion to dismiss the tenant's Article 78 petition. Most likely, the tenant's Section 8 status will be reinstated at trial.

New York Law Journal, decisions for the week of January 18-22, 1999 (5 cases)

Case Caption:
In re Terry Diaz v. Ruben Franco
Issues/Legal Principles:
Public housing agency, which did not decide tenant's eligibility application until after tenant brought a court case, must pay tenant's attorney's fees.
Keywords:
attorney's fees
Court:
Supreme Court, Appellate Division, First Department
Judge:
lower court judge: Hon. Robert Lippmann
Date:
January 19, 1999
Citation:
NYLJ, page 27, col 1
Referred Statutes:
42 USC Section 1988
Summary:
Tenant applied for public housing in 1995. In 1997, the agency finally decided that the tenant was eligible. However, the agency did not make this determination until 1997, after the tenant filed an Article 78 proceeding with the Supreme Court asking the Court to order the agency to decide the application. The tenant then asked the Court for an award of attorney's fees in the amount of $2,000.00. The Court granted the tenant's request, finding that the agency's determination in 1997 was not coincidental, but the direct result of the Article 78 proceeding. Since the tenant's proceeding was successful, an award of attorney's fees is appropriate.

Case Caption:
In Re The Argo Corporation v. DHCR
Issues/Legal Principles:
Evidence not presented to DHCR's rent administrator should not ordinarily be considered on administrative review.
Keywords:
newly presented evidence; administrative review; DHCR
Court:
Supreme Court, Appellate Division, First Department
Judge:
lower court judge: Hon. Frederic Berman
Date:
January 19, 1999
Citation:
NYLJ, page 27, col 3
Referred Statutes:
none cited
Summary:
DHCR's rent administrator decided a case against landlord because of inadequacies and inconsistencies in the documentation presented by landlord. Landlord then filed a Petition for Administrative Review ("PAR") and attempted to present new evidence. DHCR's deputy commissioner denied the PAR. The Supreme Court dismissed the Landlord's Article 78 proceeding, thereby upholding the DHCR's PAR decision. The Appellate Division affirmed the Supreme Court's decision, noting that it would have been improper for the DHCR to consider new evidence at the PAR level which the landlord did not present to the rent administrator.

Case Caption:
Matter of Orin Management Corp. v. DHCR
Issues/Legal Principles:
DHCR's determination of rent overcharge is overturned by the Court because the tenant filed his complaint more than four years after the overcharge commenced.
Keywords:
rent overcharge; four year statute of limitations
Court:
Supreme Court, Queens County
Judge:
Hon. Justice Golia
Date:
January 20, 1999
Citation:
NYLJ, page 33, col 4
Referred Statutes:
RRRA of 1997 Sections 33 and 46; CPLR Section 213-a
Summary:
In March 1984, tenant filed a complaint with the DHCR, alleging that he had been overcharged since August 1977 (for about six and one-half years). In November 1985, a DHCR rent administrator agreed and found landlord liable to tenant for the overcharge plus treble damages. The landlord then filed a Petition for Administrative Review ("PAR") with the DHCR, and the DHCR remanded the case to the rent administrator for further proceedings. In January 1991, the rent administrator issued another determination of rent overcharge plus treble damages, but this determination was for a lesser sum. Landlord then filed another PAR, and the DHCR finally issued a determination in 1998 (seven years later) upholding the 1991 determination of the rent administrator. The landlord challenged the DHCR's 1998 determination by filing an Article 78 proceeding in the Supreme Court. The landlord's challenge was based upon the Rent Regulation Reform Act ("RRRA") of 1997, which, among other things, amended CPLR Section 213-a. The newly-amended Section 213-a states that "an action on a residential rent overcharge shall be commenced within four years of the first overcharge alleged and no determination of an overcharge and no award or calculation of an award of the amount of any overcharge may be based upon an overcharge having occurred more than four years before the action is commenced." The RRRA of 1997 specifically provides that the amendment to CPLR Section 213-a should be applied to all pending proceedings. The Supreme Court determined that this proceeding was pending when the RRRA was passed in 1997, because the DHCR did not issue its final determination until January 1998. Since the tenant's overcharge complaint was filed six and one-half years after the overcharge commenced, the Court granted the landlord's Article 78 petition and annulled the determination of the DHCR.
Notes:
Justice delayed is justice denied. The DHCR's deputy commissioner took seven years to issue a PAR determination, and as a result, the rent administrator's 1991 rent overcharge determination was thrown out the window. This case provides yet another example of the devastating effect of the RRRA of 1997 on "pending" rent overcharge complaints.

Case Caption:
UBO Realty Corp. v. Santo Mollica
Issues/Legal Principles:
Where landlord knows that tenant is actually residing in premises leased for commercial purposes, landlord may not evict tenant in the commercial part of the civil court.
Keywords:
residential use of commercial premises
Court:
Supreme Court, Appellate Division, First Department
Judge:
Hon. Leona Freedman
Date:
January 21, 1999
Citation:
NYLJ, page 26, col 5
Referred Statutes:
none cited
Summary:
Landlord brought a holdover proceeding against the tenant of a ground floor store front copy shop. The holdover proceeding was dismissed by the civil court. Apparently, the landlord brought the holdover proceeding against the tenant in the commercial part of the civil court, even though landlord knew that tenant was actually living in the premises, and the trial court dismissed the landlord's case for this reason. The appellate court affirmed the trial court's dismissal of the case. Although the lease between the parties appeared to be a commercial lease and the use clause of the lease indicated that the premises were to be used for a copy shop "and for no other purpose," the words "and for no other purpose" were crossed out. The Court noted that the premises was already equipped for residential use when the tenant moved in and the landlord knew about the tenant's residential use. The "length and character of respondent's residential tenancy" also persuaded the appellate court that this case was properly dismissed by the trial court.

Case Caption:
EBW LLC v. Geralds
Issues/Legal Principles:
Tenant, who sublet loft unit from net lessee, is not protected by the loft law unless he could establish that the prior owner consented to the sublet.
Keywords:
loft law; protected tenant
Court:
Appellate Term, First Department
Judge:
lower court judge: Hon. Saralee Evans
Date:
January 22, 1999
Citation:
NYLJ, page 26, col 1
Referred Statutes:
29 RCNY Section 2-09[b][3][i]
Summary:
Landlord brought a holdover proceeding against Geralds, the occupant of a dwelling unit covered by "the Loft Law," MDL Article 7-C. The landlord alleged that although the unit was covered, Geralds was not a protected tenant, within the meaning of the relevant Loft Board regulation. The regulation in question, 29 RCNY Section 2-09[b][3][i], states that an occupant who took possession after June 21, 1982 (the effective date of the Loft Law) is protected if he "took possession, with the consent of the landlord, as a statutory tenant pursuant to Article 7-C, without the issuance of a new lease." In this case, Geralds took possession as the subtenant of Daniel, who is also allegedly the net lessee of the entire building. The trial court granted Geralds' motion for a summary judgment and dismissed the holdover petition. Although the reasons for the trial court's decision are not clearly explained, the trial court may have reasoned that Daniel (as net lessee) was, in effect, the landlord and that Geralds took possession with Daniel's (the landlord's) consent, and therefore Geralds qualifies as a protected tenant. The appellate court reversed the trial court's decision and reinstated the holdover petition. The appellate court stated that "it is not established as a matter of law that there was consent by the prior owner to the sublet." The appellate court emphasized that the sublease between Geralds and Daniel was for a period of only three months. Even assuming that Daniel's actions bind the owner, the court held that "it is at least a mixed question of law and fact as to whether a statutory tenancy was intended or created given the existence of the short-term agreement denominated a sublease."

New York Law Journal,
decisions for the week of January 11-15, 1999 (8 cases)

Case Caption:
Knobler v. DHCR
Issues/Legal Principles:
DHCR decision is deemed unreasonable for rejecting a PAR on technical defects after DHCR allowed the case to languish for 3 years
Keywords:
DHCR appeals
Court:
Appellate Division, First Department
Judge:
lower court: Hon. Marilyn Diamond
Date:
January 11, 1999
Citation:
NYLJ, page 27, col 3
Referred Statutes:
RSC 2529.7 & 2529.3
Summary:
The petitioner filed an appeal (a PAR) of a DHCR order. (It's not clear whether the petitioner is the landlord or the tenant). The DHCR sat on the PAR for three years and then rejected it because it wasn't filed on the prescribed form. However, the original PAR contained all the necessary information and substantially complied with the content requirements under the law. The petitioner then filed an Article 78 with the Supreme Court, i.e., an appeal of a PAR. The court granted DHCR's motion and dismissed the complaint. The Appellate Division reversed, citing Section 2529.7 of the Code which states that "[w]ithin a reasonable time after the filing of the PAR and the answers, if any, the Commissioner may reject a PAR which is timely filed if it is insufficient or defective, but may provide a specified period of time within which to perfect the PAR." [emphasis by Appellate Division]. The Appellate Division found the time period in which DHCR waited to reject PAR to be unreasonable.

Case Caption:
110 Associates v. Stier
Issues/Legal Principles:
Landlord fails to establish entitlement to an MCI increase.
Keywords:
MCI; collectible rent
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Marian Doherty
Date:
January 11, 1999
Citation:
NYLJ, page 29, col 6
Referred Statutes:
none cited
Summary:
Landlord brought a nonpayment proceeding against tenant. The court found that the collectible rent for the period from August 1993 was $352.53. Landlord's claim of a $19.35 MCI increase in 1987 was not established upon the conflicting rent control records in evidence, or by any other independent documentation. The Appellate Term, however, held that the court erred in failing to credit landlord for MBR increases granted pursuant to DHCR orders effective April, 1994 and January, 1996. The Court remanded for a recalculation of the amount of rent due the landlord. Landlord did not dispute the amount of abatement awarded to the tenant.

Case Caption:
Berk v. Britton Realty Co.
Issues/Legal Principles:
Managing agents are not liable for property damages if owner is known to tenant, but this defense must be raised at trial.
Keywords:
warranty of habitability; damages; agent/principal
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Saralee Evans
Date:
January 11, 1999
Citation:
NYLJ, page 29, col 5
Referred Statutes:
none cited
Summary:
Plaintiff-Tenant sued landlord in civil court for damages to personal property arising from leaks emanating from the roof and penthouse apartment above tenant's apartment. Tenant also alleged breach of the warranty of habitability based on landlord's failure to repair the leaks. The defendants are the former and present managing agents of the premises who collected rent and exercised control at the building. The Appellate Term noted that defendants' argument that they are not liable for contract debts of a disclosed principal (i.e., the owner) is a viable argument, but the defendants failed to raise this defense at trial. As a result the defendants cannot now raise the issue on appeal. Also, the defendants failed to establish that the identity of the principal was in fact disclosed and known to the tenant. The appellate court modified the lower court's ruling solely to the extent of disallowing monetary damages for "meals out" alleged to be necessary because of water damage to tenant's kitchen because the proof was speculative and uncorroborated. (If compensation is sought for "meals out," save the restaurant receipts!)

Case Caption:
Nestor v. DHCR
Issues/Legal Principles:
Income of tenant's corporation is not included in tenant's income for purposes of calculating household income in luxury deregulation application.
Keywords:
luxury deregulation
Court:
Appellate Division, First Department
Judge:
lower court: Hon. Colleen McMahon
Date:
January 11, 1999
Citation:
NYLJ, page 28, col 2
Referred Statutes:
Administrative Code of NYC 26-501; CPLR 7803(3) & 7802(d); Rent Regulation Reform Act of 1997
Summary:
The Appellate Division upheld the Supreme Court's order which dismissed the landlord's appeal of a DHCR order which denied the landlord's application to deregulate the tenant's apartment based on high income rent. The law prohibits disclosure of any income other than the federal adjusted gross income of an occupant of an apartment, as reported on the New York state income tax return, in determining whether the apartment qualifies for deregulation. DHCR was correct in declining to consider the income of tenant's corporation (which seems to be based in tenant's apartment), in addition to tenant's own income, in determining whether to deregulate the apartment. The Court noted that the terms of the law are unambiguous and that even though the "household income" does not take into account all income that might be imputed to the tenant, it has the advantage of affording a simple and consistent methodology. The Court also affirmed the lower court's decision to allow the tenant's corporation to intervene as an independent party to the proceeding.

Case Caption:
Pledge v. DHCR
Issues/Legal Principles:
Tenant who fails to certify household income within 60 days in a luxury deregulation proceeding automatically loses stabilization status.
Keywords:
luxury deregulation
Court:
Appellate Division, First Department
Judge:
lower court: Gangel-Jacob
Date:
January 11, 1999
Citation:
NYLJ, page 27, col 6
Referred Statutes:
RSL 26-504.3; Rent Regulation Reform Act of 1997;
Summary:
Landlord sought to deregulate tenant's apartment on grounds of high income. In 1994, landlord demanded that tenants certify that their annual household income did not exceed $250,000 for the years 1992 and 1993. (In June, 1987, the Legislature lowered the threshold income to $175,000). The tenants failed to respond to the landlord's request for income certification. In June, 1994, the landlord petitioned the DHCR for deregulation of the apartment based on the tenants' failure to certify their income. In August the DHCR sent the tenants a form for responding to the petition, with notice that it must be answered within 60 days, or the apartment would be deregulated on default. The tenants still did not respond. The DHCR then deregulated the apartment. The tenants filed a PAR (a DHCR appeal) explaining that Robert Pledge was in France "almost the entire time from April 6, 1994 to October 11, 1994." The DHCR denied the PAR on August 15, 1996 on grounds that the tenant failed to submit a valid excuse. As a result, the DHCR did not take efforts to determine whether or not the tenants' income exceeded $250,000.
Meanwhile, sometime in 1995, the landlord brought another proceeding seeking to deregulate the premises for the years 1993 and 1994. In that proceeding, which tenants apparently participated in, it was determined that the annual household income did not exceed $250,000 for one or both of the subject years.
In October, 1996, the tenants brought an Article 78 to appeal the August 15, 1996 decision. The Supreme Court initially dismissed the tenant's petition, but on a motion to reargue the tenants referred to the DHCR's decision regarding the 1995 proceeding where the tenants' income was found to be below $250,000. On reargument, the court reversed its petition and annulled the DHCR's August 15, 1996 decision deregulating the apartment. Then the landlord and the DHCR moved to reargue the Supreme Court's second decision based on various case law by the Appellate Division that dictated a decision in landlord's and DHCR's favor.
In the meantime the tenants started a lawsuit against the landlord and sought to stay the landlord from commencing any eviction actions against them. The landlord counterclaimed seeking the tenants' eviction (it's called ejection in Supreme Court) and demanded rent (use and occupancy) payments. The court denied the landlord's counterclaim to evict the tenants. Further the court directed the DHCR to verify the tenants' household income for the years 1992 and 1993 (in effect, the court upheld its prior reversal of the DHCR's August 15, 1996 order).
The Appellate Division reversed the Supreme Court. It held that the deregulation of a stabilized apartment is required where the tenant fails to certify its income within the 60 period. Furthermore, the Court regarded the tenants' excuse for failing to timely comply with the filing as "inadequate." The tenant (father) conceded that he was not in Paris during the entire period of the first proceeding, and further his adult son who's also on the lease, was present in the apartment the entire time.

Case Caption:
Arnav Industries, Inc. v. Pitari
Issues/Legal Principles:
Tenant's defense of nonpayment is viable where landlord failed to amend certificate of occupancy when the apartment was subdivided.
Keywords:
certificate of occupancy
Court:
Civil Court, New York County
Judge:
Hon. Kornreich
Date:
January 13, 1999
Citation:
NYLJ, page 22, col 3
Referred Statutes:
Multiple Dwelling Law 302
Summary:
Landlord brought a nonpayment proceeding against tenant who withheld rent due to the absence of an amended certificate of occupancy and violations arising when landlord subdivided the apartment. The lower court dismissed tenant's defense that the law allows him to withhold the rent where there's no certificate of occupancy. The Appellate Term, however, reinstated the defense holding that the record violations require the landlord to legalize the alteration (by for example providing a second means of egress) and obtain a certificate of occupancy. The court also reinstated tenant's overcharge claim since it is not established as a matter of law that the subdivided apartment, if legal, qualified under DHCR's "first rent" policy.

Case Caption:
240 West 73rd Street v. Weber
Issues/Legal Principles:
Undertenant who resides in hotel for longer than six months and tenders rent in her name is deemed the rent stabilized tenant of record.
Keywords:
hotels
Court:
Civil Housing Court, New York County
Judge:
Hon. Chin
Date:
January 13, 1999
Citation:
NYLJ, page 27, col 5
Referred Statutes:
RSC 2520.6(j)
Summary:
Landlord brought a nonprimary residency holdover proceeding against the tenants and the alleged undertenant moved to dismiss the petition against her. The prime tenants did not appear in the proceeding. Rather, the prime tenants submitted affidavits in support of the subtenant's motion stating that they moved out of the unit in 1989. The undertenant's affidavit stated that she moved into the apartment in 1989 and has lived there ever since, has paid rent directly to the front desk attendant since 1994, and has paid rent in her name since 1993. The landlord's opposition papers do not dispute the undertenant's affidavit. The landlord's defense is that the rent payments went into a lockbox and that the receipts could not be construed as the creation of a tenancy. The court ruled that the undertenant is the rent stabilized tenant of record since it is undisputed that she has resided in the hotel as her primary residence for more than six months and tendered rent in her name for this period (the criteria for determining stabilization status of a hotel tenant).

Case Caption:
Hollis Realty Company v. Glover
Issues/Legal Principles:
Landlord who failed to reduce rent pursuant to a DHCR rent reduction order is liable for overcharges which arose as a result of the order, even though the overcharges began and continued four years before tenant's overcharge claim was filed.
Keywords:
overcharges; foreclosure
Court:
Appellate Term, 2nd & 11th Judicial Districts
Judge:
lower court: Hon. E. Haber
Date:
January 13, 1999
Citation:
NYLJ, page 29, col 1
Referred Statutes:
RSC 2526; 18 NYCRR 351.1; Social Services Law 104(1)
Summary:
Landlord brought a nonpayment proceeding against tenant, a recipient of rent subsidies from the Department of Social Services. On June 27, 1989 DHCR reduced tenant's rent to $301.81 due to a decrease in services. Landlord received the notice but did not reduce the tenant's rent. By the time landlord commenced this proceeding, it had overcharged tenant approximately $7,500. In court, landlord's defense to the overcharge was that it obtained the building in a foreclosure and that the failure to reduce the rent was just a bookkeeping error because things were "chaotic" due to the pending sale of the building. (Landlord conveyed the building to an unrelated entity but held a mortgage on the building, although it was not involved in administering the building's business. Landlord regained title 5 years later during a foreclosure). Landlord cited other lame excuses, ultimately alleging that the overcharge was not wilful. The lower court dismissed tenant's claims for overcharges and treble damages. Tenant moved to reargue and the motion went to another judge who adhered to the decision. The Appellate Term held that landlord did not overcome the presumption of wilfulness because all its excuses were insufficient and landlord had reason to know the amount it was charging was in excess of the lawful rent. The Appellate Term ruled that landlord was liable for the overcharges collected four years prior to tenant's claim, and treble damages. The court also held that the landlord could not claim to be an innocent purchaser at a judicial sale because it was the landlord that "initiated the rent in the first instance and because it remained charged with actual notice of the rent reduction order."
With respect to the four-year limitation on examination of the rent, the court held "landlord was at all times under a duty to reduce the rent in accordance with the DHCR rent reduction order so that tenant's claim is not based solely on an overcharge which occurred more than four years before the overcharge claims was interposed.

New York Law Journal,
decisions for the week of January 4-8, 1999 (7 cases)

Case Caption:
NYCHA v. Mojica
Issues/Legal Principles:
Tenant cannot be evicted for possession without proof that premises is being used for selling illegal drugs.
Keywords:
illegal use
Court:
Civil Court, Housing Part, New York County
Judge:
Hon. Thomas
Date:
January 4, 1999
Citation:
NYLJ, page 27, col 3
Referred Statutes:
Penal Law Article 220; RPAPL 711, 715, 721(8) and 741
Summary:
Landlord brought an eviction proceeding against tenant Carmen Mojica alleging that Frank Mojica was arrested at the subject premises for possession of a small quantity of illegal drugs. Conducting an illegal business (e.g. selling illegal drugs) from the premises is grounds for eviction pursuant to RPAPL Section 711(5), but mere possession of illegal drugs is not. Landlord argued that the Court should infer illegal sale from illegal use, but the Court refused to do so. The Court granted the tenant's motion to dismiss, because the petition did not allege specific facts pertaining to the sale of illegal drugs from the premises.

Case Caption:
Perlman v. Martinez
Issues/Legal Principles:
Court grants tenant's request to take depositions of landlord and her son where landlord seeks eviction alleging that apartment is needed for son's personal use.
Keywords:
personal use holdover; discovery
Court:
Civil Court, Housing Part, Kings County
Judge:
Hon. Peter Wendt
Date:
January 6, 1999
Citation:
NYLJ, page 27, col 6
Referred Statutes:
RSL Section 26-511; RSC Sections 2524, 2520.6; CPLR Section 408
Summary:
Landlord sought to evict rent-stabilized tenant on the grounds that her son was graduating from an out-of-state college, the son had obtained work in New York City and the son needed to live in the tenant's apartment. Tenant moved to dismiss the landlord's case on the grounds that he suffers from a disability and the landlord should therefore have offered him "an equivalent or superior housing accommodation at the same or lower regulated rent in a closely proximate area" in accordance with RSC Section 2524.4(a)(2). The Court rejected tenant's argument, because the landlord did not know about the 28-year-old tenant's disability. Also, in the notice of intent not to renew the rent-stabilized lease, the landlord invited tenant to immediately notify landlord's attorney if he was disabled but tenant failed to do so. Tenant then asked the Court to permit him to conduct a deposition of landlord and her son. (A deposition is a pre-trial meeting, generally arranged in an attorney's office, where one party takes an oath to tell the truth and the other party is permitted to ask questions pertaining to the case, while an official court reporter takes notes). Referring to the principles set forth in a case 1983 case called Farkas, the Court ruled that the tenant's request should be granted because the question of whether landlord's son actually graduated from school, had a job in New York City and intended to live in the apartment were "relevant facts which are in the exclusive knowledge of the petitioner and her son."

Case Caption:
Gellerman v. Mayer
Issues/Legal Principles:
Ejectment action dismissed because landlord failed to submit adequate proof that subject property was worth less than $25,000 (the jurisdictional limit of the civil court).
Keywords:
ejectment action
Court:
Civil Court, Queens County
Judge:
Hon. B. Greenbaum
Date:
January 6, 1999
Citation:
NYLJ, page 28, col 3
Referred Statutes:
NYCCCA Section 203(j)
Summary:
Landlord brought an ejectment action against the tenant of an illegal basement apartment. (An ejectment action requests eviction). Both parties made a motion for summary judgment, which is a request that the Court make a decision without a trial, because there are no relevant facts in dispute. The tenant argued against summary judgment in favor of the landlord, because the landlord had not submitted sufficient proof of whether or not the premises was worth $25,000.00 or less. (The jurisdictional limit of the Civil Court is $25,000.00). The Court agreed with tenant, stating that the "unsubstantiated statement" of landlord's attorney was not sufficient proof that the premises was worth $25,000.00 or less.
Notes:
Tenants, take note that your landlord cannot evict you from an illegal space (such as a basement apartment) by bringing a summary holdover proceeding in housing court against you. The landlord must bring an ejectment action, which is more cumbersome. Ejectment actions are generally brought in Supreme Court, not Civil Court.

Case Caption:
Eppol Realty v. Friese
Issues/Legal Principles:
The recent amendment to the section of the rent stabilization code, which excluded aunts, uncles, nieces and nephews from the list of family members entitled to succession rights, should be applied prospectively only.
Keywords:
succession rights
Court:
Civil Court, Housing Part, New York County
Judge:
Hon. Bruce Kramer
Date:
January 6, 1999
Citation:
NYLJ, page 26, col 3
Referred Statutes:
RSC Sections 2202.6, 2520.6(o) and 2523.5; CPLR Sections 3052(b)
Summary:
The rent-controlled tenant, Lucia Carlin, died. Thereafter, the landlord brought an eviction proceeding against Wendy Friese, her niece, alleging that Friese is a licensee whose right to occupy the apartment expired upon the death of Carlin, the tenant of record. The tenant asked the Court to grant summary judgment alleging that a prior DHCR proceeding had determined that the landlord was not entitled to raise the rent because Friese was also living in the apartment as Carlin's niece. The Court denied tenant's motion for summary judgment, finding that the prior DHCR case was different from this case, which is a succession rights case. In this case, the issues were not limited to the relationship between the parties (aunt and niece) - the issues in this case included an inquiry as to whether the niece was living with her aunt for the two-year period prior to the aunt's death and whether the premises was the niece's primary residence during the entire two-year period. Another outstanding issue of fact was the date of Carlin's death. Did she die before or after the recent amendment to RSC Section 2520.6(o)? (This section of the rent stabilization code lists the family members who are entitled to succession rights; recent amendments to this section omitted nieces, nephews, aunts and uncles). The Court stated that if Carlin died before the amendment, then Friese's right to succession vested at that time and should not be taken away by the new amendment. That is, the new amendment should be applied prospectively and not retroactively.
Notes:
Disclosure. Editor Colleen McGuire's law firm represents Wendy Friese in this proceeding.

Case Caption:
Cyline Properties Co. v. Lyngstad
Issues/Legal Principles:
Eviction proceeding against daughter of deceased tenant claiming succession rights is dismissed because landlord failed to name the deceased tenant's Estate.
Keywords:
necessary party; succession rights
Court:
Civil Court, Housing Part, Bronx County
Judge:
Hon. Fiorella
Date:
January 6, 1999
Citation:
NYLJ, page 26, col 5
Referred Statutes:
CPLR Sections 408 and 3212; ETPL Section 13-1.1
Summary:
Landlord brought holdover proceeding, naming the daughter of the deceased tenant but not the Estate of the deceased tenant. Landlord claimed that daughter was a mere licensee and that her license had expired upon her mother's death. Daughter claimed succession rights. She asked the Court to dismiss the case against her on the grounds that the landlord failed to name the Estate of the deceased tenant. The Court agreed and dismissed the case. The Court explained that the Estate of the deceased tenant has the right to occupy the apartment until the end of the lease term (and the duty to pay rent to landlord). Therefore, the Estate (or, if the tenant is not deceased, the tenant), is a necessary party to a proceeding to evict an alleged licensee. Failure to name a necessary party mandates dismissal
.
Notes:
If the apartment is rent controlled, there is no property to pass on to an Estate. This case's analysis only applies if there is a lease in existence at the time of the tenant's death. Rent control tenants do not have leases. Their rights are covered by statutes.

Case Caption:
Walentas v. Johnes
Issues/Legal Principles:
Appellate court finds that landlord is not guilty of intentional infliction of emotional distress, abuse of process or retaliatory eviction.
Keywords:
intentional infliction of emotional distress; abuse of process; retaliatory eviction; maximum collectible rent
Court:
Supreme Court, Appellate Division, First Department
Judge:
lower court judge: Hon. Louise Gruner Gans
Date:
January 7, 1999
Citation:
NYLJ, page 25, col 2
Referred Statutes:
RPL Section 233-b; Omnibus Housing Act (L 1983; c 403); RPL Sections 234 and 235-f[3]
Summary:
This case involves, among other things, a dispute about the amount of rent due from a rent-controlled tenant for the period from March 1986 to the present. The lower court found that the landlord was not entitled to rent increases for certain years because, in the court's opinion, landlord did not adequately document that he served the required notices upon tenant. The appellate court reversed, finding that landlord's documentation was adequate. Landlord testified regarding his practice of distributing the notices and landlord's testimony was not disputed by tenant. Tenant also never denied receiving the notices. The Court also overturned the lower court's finding of intentional infliction of emotional distress, abuse of process and retaliatory eviction. The landlord's commencement of litigation against the tenant does not support a finding of intentional infliction of emotional distress. Although landlord lost its case against tenant, tenant's claim of succession rights was not free from doubt and therefore landlord should not have been found guilty of abuse of process. Similarly, other actions commenced by landlord had a sound legal foundation, and therefore landlord should not have been found guilty of retaliatory eviction. Having overturned these findings which were made in the tenant's favor, the court also found that tenant was no longer the prevailing party and therefore was not entitled to an award of attorney's fees.

Case Caption:
Stowe v. 19 East 88th Street, Inc.
Issues/Legal Principles:
When co-op board rules require a standard of reasonableness, co-op must provide reason instead of relying on "business judgment rule" in rejecting reques by shareholder's estate.
Keywords:
co-ops; estates
Court:
Supreme Court, Appellate Division, First Department
Judge:
lower court judge: Hon. Diane Lebedeff
Date:
January 7, 1999
Citation:
NYLJ, page 26, col 1
Referred Statutes:
RPL Section 234
Summary:
Plaintiff (the brother of the deceased shareholder of a cooperative apartment) brought a declaratory judgment action in Supreme Court seeking a determination that he had the right to have the proprietary lease transferred from his deceased brother to him. Plaintiff is also the executor of his deceased brother's estate and the only person entitled to inherit his deceased brother's estate (which includes the cooperative apartment). The Board of the cooperative corporation (defendant) refused to allow the transfer. Generally speaking, a co-op Board may refuse to allow the transfer of a proprietary lease to a new tenant without stating a reason. The Board apparently applied the "business judgment rule." (The business judgment rule means that decisions made by the Board of a cooperative corporation may not be overturned unless it can be proven that the board's decision was not taken in furtherance of the purposes of the co-op corporation, were not within the scope of the board's authority or were taken in bad faith. In most cases, it is very difficult to overturn the decisions of a co-op board). The Supreme Court sided with the co-op Board and dismissed the tenant's complaint. The appellate court disagreed and remanded the case to the Supreme Court for further proceedings, which may include a trial if there are facts in dispute. The appellate court underscored the fact that the deceased brother's proprietary lease provides that, in the event of the tenant's death, the cooperative corporation's consent to an assignment of the leasehold to a financially responsible relative shall not be unreasonably withheld. In other words, since the proprietary lease requires the co-op Board to abide by a standard of reasonableness in this situation, the Board must give reasons for its actions, instead of relying on the business judgment rule. The Board stated certain reasons for its rejection of plaintiff, but the appellate court implied that these reasons were not very persuasive. (Plaintiff is a doctor who is clearly financially responsible, judging by his net worth and income). The appellate court remanded the case to the Supreme Court for further proceedings, which may include a trial if there are facts in dispute. The appellate court also held that the tenant may not be evicted while the case is pending.