Housing Court Decisions May 1999

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Case Caption:

1065 Lexington Avenue Associates v. Public Administrator

Issues/Legal Principles:

Deceased tenant's son seeking succession rights has no standing to challenge landlord's failure to serve tenant's estate with notice to quit.

Keywords:

estates; notices; succession rights

Court:

Civil Court, New York County

Judge:

Hon. Acosta

Date:

May 26, 1999

Citation:

NYLJ, page 27, col 5

Referred Statutes:

RSC 2523.5(b)(1), 2524.3, 2524.4

Summary:

Landlord brought a holdover proceeding against the Public Administrator of the deceased Rent Stabilized tenant's estate. The tenant's son sought succession rights to the apartment and asked the court to dismiss the petition on grounds that the landlord failed to serve the estate and him (the son) a notice to quit advising that litigation would be commenced. The Public Administrator waived any possessory rights to the apartment and withdrew its challenge to the landlord's failure to serve the notice. The landlord argued that the son has no standing to raise the issue of the failure to serve the estate a predicate notice. Also, the tenant was in the midst of negotiating a right to cure her failure to sign a renewal lease, but she passed away before actually signing a renewal. The landlord therefore also argued that no predicate notice was necessary since there was no signed renewal lease. The court found that the estate was entitled to be a served a notice terminating the tenancy because the estate steps into the shoes of the tenant upon the tenant's death, albeit without acquiring all the rights the tenant would have. Since, however, the estate surrendered its interest, the issue before the court was whether the son had a right to raise the issue that the landlord failed to serve a predicate notice before commencing the proceeding. The court could find no prior cases on point, but referred to other case law wherein undertenants do not have standing to assert rights which are conferred by statute or a lease to the prime tenant. The undertenant son is not in "privity" with the landlord, and has no independent possessory rights until his succession rights claim is determined. The court concluded that the tenant did not have standing to raise an issue (lack of service of predicate notice) that only the estate could raise, and denied the son's request to dismiss the petition on this ground.

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Case Caption:

Plainfield Inn Inc. v. Carson

Issues/Legal Principles:

Welfare recipients whose rent and room were negotiated by social services agency resulted in a landlord-tenant relationship with the rooming house owner.

Keywords:

landlord-tenant relationship; agency; warranty of habitability; unlawful eviction; constructive eviction

Court:

District Court, Nassau County

Judge:

Hon. Stack

Date:

May 26, 1999

Citation:

NYLJ, page 31, col 5

Referred Statutes:

RPAPL 731(2), 711(2), 853; CPLR 2104, 3025(c), 3211; 24 CFR 100.400; 42 USC 3613; Penal Law 240.26

Summary:

Landlord brought a non-payment proceeding against the occupants of a rooming house. The occupants claimed that there was no landlord-tenant relationship due to the circumstances of their occupancy. They were placed in the room by the Department of Social Services (DSS) who was paying the rent. At some point DSS stopped paying the rent which triggered the instant proceeding. The court found that DSS acted as the occupants' agents and at no time did the tenants claim they were not tenants. Therefore, the court concluded a landlord-tenant relationship existed. (A nonpayment proceeding cannot be maintained unless a landlord-tenant relationship exists).

The tenants also complained that the amount of the rent is unconscionable for the smallness of the space and that they did not have an opportunity to accept or reject the room since DSS did all the negotiations. The court held that the tenants did not offer any proof that this size of room merits a lower rent, nor that the tenants had previously complained about the room size. The court also found that the predicate rent demand was proper in form. Additionally, the tenants raised warranty of habitability issues, including infestation of vermin, garbage in the hallways, and unsanitary bathrooms. An inspector found no vermin, but did confirm the other two conditions and also reported a fire egress violation. The court ended up awarding the tenants a 20% abatement for the months the condition lasted. The tenants also charged that the landlord unlawfully removed their possessions, including clothing and bed linens. The court concluded that since the tenants themselves were not put out of their rooms, this claim must fall. (The tenants commenced a property damage action in small claims court). Additionally, the tenants claimed discrimination under the Fair Housing Act but the court found insufficient evidence to support it.

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Case Caption:

Samuel v. Villafane

Issues/Legal Principles:

Retaliatory eviction found where landlord increases tenant's rent by 18% a mere 12 days after a previous eviction proceeding resulted in dismissal on grounds of retaliatory eviction.

Keywords:

retaliatory eviction; warranty of habitability

Court:

Civil Housing Court, Kings County

Judge:

Hon. Eva Alterman

Date:

May 26, 1999

Citation:

NYLJ, page 30, col 5

Referred Statutes:

CPLR 3212, 3211; RPL 223-b

Summary:

Landlord brought a holdover proceeding against a non-regulated tenant by serving a 30 day notice of termination. The tenant raised the defense of retaliatory eviction. The court examined a prior holdover proceeding which also involved a retaliatory eviction defense to determine if retaliatory eviction was likewise present in this second proceeding. Tenant resided in the premises for about 10 years, and in 1997, she began complaining about conditions in the apartment and filed a complaint with Housing Preservation and Development ("HPD"). Within six months after filing the complaint, the landlord brought a holdover proceeding against her in early 1998. The retaliatory eviction law (Real Property Law 223-b) prohibits a landlord from trying to evict the tenant in retaliation for a good faith complaint by a tenant to a governmental authority regarding a landlord's violation of housing codes. The prior court ruled that retaliatory eviction motivated the landlord's eviction proceeding, given that less than six month elapsed from the date of tenant's complaint to HPD to landlord's commencement of the eviction action.

A mere 12 days after the prior court's decision, the landlord advised tenant that her rent was increasing from $550 to $650 (an 18% increase) and then served her a notice of termination effective two months following the rent increase. During tenant's ten-year tenancy, her rent had never been previously raised. One section of RPL 223-b prohibits retaliatory eviction where the tenant acts in good faith to "secure or enforce any rights under the lease or rental agreement," including rent gouging. The landlord represented to the court that the reason he terminated the tenancy was because the tenant "failed and/or refused to continue her tenancy at the apartment at a new rental rate of $650." Even though the landlord is entitled to charge whatever rent he wants since the tenant is not protected by any rent regulation, the court found that the circumstances have to be scrutinized. Given that the landlord did not raise the tenant's rent for ten years, and now suddenly does, the burden must shift to the landlord to show that his motives for ending the tenancy are not retaliatory. The landlord claimed that he increased the rent because his costs had "skyrocketed." The court, however, pointed out that the landlord did not provide one iota of evidence to corroborate this allegation. The court also noted that another fact to consider in determining whether an action is retaliatory is to compare the treatment accorded this tenant as opposed to other tenants. The court noted that the landlord failed to indicate whether all the other tenants' received rent increases, too, or if only this tenant did. In light of landlord's inability to rebut the presumption of retaliatory eviction, the court held for the tenant finding that retaliatory eviction occurred for a second time, and thereupon dismissed the petition.

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Case Caption:

Port Realty Group v. Michel

Issues/Legal Principles:

Petition is dismissed for inaccurate description of the property's address.

Keywords:

petition

Court:

Civil Housing Court, Kings County

Judge:

Hon. Callender

Date:

May 26, 1999

Citation:

NYLJ, page 30, col 6

Referred Statutes:

RPAPL 741(3)

Summary:

The landlord brought a holdover proceeding against the tenant who appeared, answered and signed a stipulation consenting to personal jurisdiction. The court, however dismissed the proceeding because the petition listed the property as 460 Linwood Avenue, when in fact the proper address is 460 Linwood Street. The landlord argued that there was no prejudice because the tenant in fact appeared, and therefore must have received the petition, so the defect is harmless. The court ruled that a proper and accurate description of the property must exist for the court to maintain jurisdiction and that an incorrect description is more than a minor ministerial error.

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Case Caption:

Park West Village Associates v. Nishioka

Issues/Legal Principles:

Interpretation of Martin Act relating to tenants renting unsold condo or co-op units does not create right of indefinite tenancy.

Keywords:

co-ops & condos; evictions

Court:

Civil Housing Court, New York County

Judge:

Hon. Bruce Kramer

Date:

May 26, 1999

Citation:

NYLJ, page 27, col 3

Referred Statutes:

General Business Law 352-eeee

Summary:

The petitioner in this proceeding is the owner of a condominium unit which was rented to the tenant after the conversion of the building. Petitioner was also the sponsor of the plan converting the building. After the tenant's lease expired, the owner brought a holdover proceeding. The tenant argued that he is a "non-purchasing tenant" under the Martin Act (i.e., the co-op and condo law). The owner argues that the tenant is not a "non-purchasing tenant" pursuant to the Martin Act definition, but rather a mere month to month tenant entitled to no more than a 30 day notice of termination. It was important for the tenant to establish that he is a "non-purchasing tenant" because under the Martin Act, a non-purchasing tenant cannot be evicted except for good cause. Such an interpretation of the Martin Act would in effect carve out a huge new class of tenants accorded somewhat less protections than Rent Stabilized tenants, but somewhat more protections than a month to month market rent tenant.

In Paikoff v. Harris, 679 NYS2d 251 (Civ. Ct. Kings Co. 1998), a Brooklyn Housing judge ruled that tenants who rented a co-op apartment from the sponsor and holder of unsold shares after a non-eviction conversion plan were in fact "non-purchasing tenants' and entitled to the protections of the Martin Act. Judge Kramer declined to follow Judge Marc Finkelstein's sweeping (and eyebrow raising) decision. Judge Kramer systematically parsed the statute to reach his determination that the Martin Act does not protect tenants renting sponsor-held condominium units because such tenants do not rise to the status of a "non-purchasing tenant" and because the sponsor is a "purchaser under the plan."

The Martin Act defines a purchaser under the plan as a "person who owns the shares allocated to the dwelling unit or who owns such dwelling unit itself." It is undisputed that the petitioner-landlord is the owner of this dwelling unit. The Martin Act defines "non-purchasing tenant" as a "person who sublets a dwelling unit from the purchaser . . ." The court analyzed the legislative history of the Martin Act and determined that there was no mention of an intent to provide continued occupancy protection for tenants who sublet a sponsor owned condominium or cooperative unit. The court also held that statutory construction compels such a result (meaning that the language of the Martin Act is clear on its face justifying this judge's interpretation of the Act).

Notes:

Word has it that the parties in Paikoff v. Harris settled, and therefore that decision will not be reviewed an appellate court. It is not yet known whether the tenant in this case will appeal Judge Kramer's decision.

Case Caption:

Rima 106 LLP v. Alvarez

Issues/Legal Principles:

Court finds clauses in certain rent stabilized leases void as violative of public policy; the clauses gave the tenants unlimited rights to sublet and assign and the right to continued occupancy despite non-primary residency.

Keywords

public policy; void or voidable lease

Court:

Appellate Division, First Department

Judge:

lower court judge: Leland DeGrasse

Date:

Monday May 17, 1999

Citation:

NYLJ, page 25, col 3

Referred Statutes:

RPL Section 226-b; RSL Section 26-511(c)(12); Debtor & Creditor Law Sections 273 and 276; Public Housing Law Section 14(4)(a).

Summary:

Landlord's predecessor-in-interest gave two tenants (Alvarez and Clark) leases which contained "sweetheart" clauses, permitting them to sublet and assign, without limitation, and to occupy their apartments as occasional residences rather than primary residences. The former landlord gave a "sweetheart lease" to Clark in order to satisfy an unpaid plumbing bill of approximately $40,000.00 and gave the other "sweetheart lease" to Alvarez, because she was the niece of one of the partners. Shortly thereafter, the property was foreclosed upon. The new landlord brought an action against the tenants (Alvarez and Clark) seeking a court order (1) declaring that the tenants are not primary residents, (2) ejecting (evicting) the tenants; (3) declaring that the unrestricted subletting, assignment and residency provisions of the leases are void or voidable and (4) awarding damages and attorney's fees. The Supreme Court refused to declare the leases void or voidable, finding that a landlord could waive its rights under the rent stabilization law (such as the right to evict a tenant for non-primary residency or for illegal subletting or assignment). The Appellate Division, First Department overturned the Supreme Court's decision and found the lease clauses at issue void as violative of public policy and the rent control and rent stabilization laws. The rent control and rent stabilization laws were enacted to protect tenants in the midst of a severe housing shortage. They were not meant to protect tenants who wish to sublet or assign their leases for a profit or to give non-primary residents the ability to keep their apartments for their convenience. Non-primary residents should give up their apartments for possible re-rental to someone who needs to use it as a primary residence. These tenants only serve to worsen the shortage of affordable housing. For these public policy reasons, the appellate court held that the sweetheart provisions of these leases (but not the entire leases) are null and void. The appellate court, however, refused to eject the tenants without a trial. The court commented that the tenants may have equitable rights because of the substantial renovations they made to their apartments to make them habitable. In addition, Clark's daughter, Melissa Stein, may prove at trial that she has succession rights to Clark's apartment.

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Case Caption:

Handwerker v. Ensley

Issues/Legal Principles:

Absent extraordinary circumstances, the Supreme Court should not enjoin a landlord from commencing a summary nonpayment proceeding in the housing part of the civil court.

Keywords:

injunction, roommates, rent overcharge, profiteering

Court:

Appellate Division, First Department

Judge:

Lower court judge: Hon. Emily Goodman

Date:

May 17, 1999

Citation:

NYLJ, page 27, col 1

Referred Statutes:

Civil Court Act Section 208

Summary:

Ensley is the tenant of a loft studio/apartment in Soho. In February 1994 she entered into a two-year "roommate(s) studio and/or living agreement" with Handwerker. After this agreement expired, the parties entered into a nine-month agreement and a seven-month agreement. Handwerker stopped paying rent after the last agreement and Ensley served him with a notice of termination / notice to quit in November 1997. Then Handwerker brought a Supreme Court action seeking to enjoin Ensley from commencing a summary holdover proceeding in housing court. Handwerker also claimed rent overcharge and harassment. The Supreme Court enjoined Ensley, as requested by Handwerker. The Appellate Division, First Department reversed. Although the agreement is a "roommate" agreement, Ensley and Handwerker were in a landlord-tenant relationship. Absent extraordinary circumstances, a nonpayment dispute is a summary proceeding that should be brought in the housing part of the civil court. The Supreme Court should not enjoin such proceedings unless the civil court is without jurisdiction. In addition, the appellate court noted that a roommate couldn't sue a roommate for rent overcharge or rent profiteering. The appellate court's decision leaves Ensley free to commence a summary nonpayment proceeding against Handwerker in the housing part of the civil court.

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Case Caption:

In Re Dupont Associates v. DHCR

Issues/Legal Principles:

DHCR determination - that discontinuance of storage space is a failure to maintain a building-wide service - is upheld by appellate court.

Keywords:

building-wide service; rent reduction; order to restore service; storage space

Court:

Appellate Division, First Department

Judge:

Hon. Elliott Wilk

Date:

May 17, 1999

Citation:

NYLJ, page 28, col 2

Referred Statutes:

(none cited)

Summary:

The DHCR determined that landlord had reduced building-wide services by discontinuing basement storage space available to tenants. DHCR ordered a rent reduction and ordered landlord to restore the service. The Supreme Court, by order dated July 11, 1997, refused the landlord's application to annul the DHCR's determination. The Appellate Division, First Department, affirmed the Supreme Court's order. The appellate court noted that the DHCR's determination was supported by an inspection report; tenants' claims of the existence of storage bins in the basement and tenants' photographs confirm these claims. Therefore, the DHCR was not required to hold a hearing to reach its determination.

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Case Caption:

Minors v. Valley Storage

Issues/Legal Principles:

Landlord, New York City Marshal and the moving company are all potentially liable to evicted tenant for damage to and loss of tenant's personal property.

Keywords:

full eviction; legal possession; city marshal; negligence

Court:

Supreme Court, New York County

Judge:

Hon. Justice Bransten

Date:

May 19, 1999

Citation:

NYLJ, page 26, col 6

Referred Statutes:

General Business Law Article 29-1; City of New York, Marshals Handbook

Summary:

Minors was evicted from her rent-controlled apartment on the grounds of nuisance, that is, that she permitted her apartment to become overly cluttered. After her eviction, Minors sued the landlord, the City Marshal and the moving company alleging that many valuable possessions had been stolen or destroyed at the time of her eviction. She alleged negligence, conversion and violations of the General Business Law. The landlord, the city marshal and the moving company all made motions for summary judgment, each alleging that they are not liable to plaintiff, as a matter of law. The court denied summary judgment to all three defendants, stating that the dispute must be resolved at trial. THE LANDLORD The landlord was obliged to give tenant the right to remove her possessions from the apartment, after the landlord obtained legal possession. Tenant claims that landlord did not give her this opportunity. Landlord also hired an independent contractor to remove tenant's possessions, rather than asking the marshal to do a full legal eviction. Landlord is therefore liable to tenant if he did not exercise reasonable care in hiring and supervising the independent contractors. THE CITY MARSHAL The Marshal gave landlord "legal possession" of the apartment but did not perform a "full eviction" (a removal of tenant's possessions as well as tenant herself). However, the marshal is obliged to inventory the property and provide a copy of the inventory form to the tenant. Tenant claims that the marshal did not perform a complete and accurate inventory. Tenant's claim can only be resolved after trial. THE MOVING COMPANY The tenant alleges that her property was stuffed into plastic bags and that her belongings were found broken when the plastic bags were unpacked. The court held that a trial was needed to resolve this issue.

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Case Caption:

New York City Housing Authority v. Carter

Issues/Legal Principles:

If a remaining family member in an apartment in a public housing project is not eligible to remain in the apartment for some reason (for example, a failed criminal background check), then the remaining family member must be granted a formal "due process" hearing before a NYCHA hearing officer.

Keywords:

undesirability; succession rights; NYCHA tenants; right to Escalera hearing; right to due process hearing

Court:

Housing Part of the Civil Court, Kings County

Judge:

Hon. Judge Sikowitz

Date:

May 19, 1999

Citation:

NYLJ, page 30, col 3

Referred Statutes:

NYCHA Management Manual; Public Housing Law Sections 37(1)(k) and (w) and 156; 24 CFR Sections 5.403(l)(6), 966.4(B), 966.50, 966.53(f), 966.55(c) and (e)

Summary:

In January 1997, Edith Carter, a NYCHA tenant, filed an application with NYCHA requesting that her daughter, Dawn Carter, be permitted to live with her on a permanent basis. In February 1997, the project manager granted such permission. Edith Carter died in December 1997. However, in February 1998, the project manager reversed position and denied permission to Dawn Carter due to a failed criminal background check. (Dawn Carter committed a Class B misdemeanor in October 1996 for which she served a sentence of four days' community service). NYCHA's project manager and Dawn Carter had a "grievance meeting" on March 1998, after which the project manager once again concluded that Dawn Carter is ineligible to become a permanent tenant. NYCHA's District Manager approved this decision. However, NYCHA did not give Dawn Carter a "due process" hearing before a NYCHA hearing officer. Instead, NYCHA went directly to court and brought an eviction proceeding against Dawn Carter. NYCHA alleged that respondent, Dawn Carter, was a licensee (rather than a tenant) whose license to live in the apartment expired. Respondent argued that she is a tenant, that NYCHA is essentially attempting to evict her on grounds of undesirability and that she cannot be evicted on such grounds unless and until she is granted a "due process" hearing before a NYCHA hearing officer. Such hearings are required by the consent decree signed in Escalera v. NYCHA. The Court agreed with the respondent's arguments. The Court found that Dawn Carter is a "remaining family member" in accordance with the Public Housing Law. She qualifies as a "remaining family member" because she moved in, with the project manager's written approval, and remained in continuous occupancy up until the tenant's death. If a remaining family member is not eligible to live in public housing for some reason (for example, a failed criminal background check), then the remaining family member is entitled to a formal "due process" hearing before a NYCHA hearing officer. The Court granted the respondent's summary judgment motion and dismissed NYCHA's eviction case against her. However, the Court said that NYCHA can bring another eviction case against Dawn Carter, but only after she is given a due process hearing before a NYCHA hearing officer. NYCHA argued that respondent was not entitled to a "due process" hearing because (1) she did not formally request such a hearing and (2) because she was not current on "use and occupancy" payments. The Court rejected NYCHA's arguments.

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Case Caption:

Eastern Estates LLC v. McPherson

Issues/Legal Principles:

Court finds "good cause" to vacate stipulation that was signed by pro se tenant who had inadvertently waived substantial defenses to landlord's nonpayment proceeding.

Keywords:

vacating stipulations

Court:

Housing Part of the Civil Court, Kings County

Judge:

Hon. Judge D. Thomas

Date:

May 19, 1999

Citation:

NYLJ, page 30, col 2

Referred Statutes:

CPLR Sections 3025(b), 3211(a)(7), 3212 and 402; Social Services Law Section 143-b

Summary:

Pro se (unrepresented) tenant entered into a stipulation with landlord settling a nonpayment proceeding on June 11, 1998. Tenant made certain payments pursuant to the stipulation, but apparently did not make all payments. As a result, landlord applied to the Court for entry of judgment against tenant for a sum certain and the issuance of a warrant of eviction. Tenant, now represented by attorney, responded by making a motion for a court order (a) vacating the stipulation, (b) permitting her to file an amended answer to the nonpayment petition, (c) granting summary judgement to tenant and (d) setting a hearing date where tenant's warranty of habitability and Spiegel Law defenses may be heard. The court refused to grant tenant's application for summary judgment, but granted the tenant's motion in all other respects. Summary judgment is not appropriate because the parties disagree about the facts. Therefore, a trial is needed to determine the facts. The court vacated the stipulation because the pro se tenant "has inadvertently waived substantial defenses in this proceeding, thus establishing good cause upon which to vacate the stipulation." Such defenses include rent overcharge, rent abatement on the grounds of landlord's alleged violations of the warranty of habitability and a Spiegel Law defense based upon the fact that the tenant is a welfare applicant and that there are serious breaches of the warranty of habitability. The Court noted that the tenant never asserted these "sophisticated" defenses because she was not represented by an attorney. The Court directed the tenant to file an amended answer by a date certain and directed a court appearance on a date certain for referral to a trial judge.

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Case Caption:

In Re Langsam Property Services Corp. v. McCarthy

Issues/Legal Principles:

City agency's service of notices of violation upon employees of landlord's managing agent - rather than upon landlord - is good and sufficient service.

Keywords:

service of notices of violation; owner defined

Court:

Appellate Division, First Department

Judge:

lower court judge: Hon. Lewis Friedman

Date:

May 20, 1999

Citation:

NYLJ, page 26, col 1

Referred Statutes:

NYC Charter Section 1404(d); CPLR Sections 7803 and 7804; MDL Sections 4(44) and 304(11)

Summary:

The Environmental Control Board of the City of New York ("ECB") served certain notices of violation ("NOV's") upon landlord, Langsam Property Services Corp., by serving them upon certain employees of the landlord's managing agent. Langsam did not appear on the appointed hearing date, and a default judgement for a sum certain (penalties for the violations) issued against Langsam. The sheriff eventually served a levy (probably upon one of Langsam's bank accounts) and the landlord brought an Article 78 proceeding before the Supreme Court, New York County to vacate the default judgment. The landlord claimed that the default judgement should be vacated because service of the NOVs was improper - service should have been made upon one of Langsam's employees, rather than an employee of its managing agent. The lower court rejected landlord's arguments and upheld the ECB's default judgment. The appellate court upheld the lower court's order but disagreed with the lower court's reasoning. The appellate court cited to MDL Section 4(44). This section defines "owner" very broadly. The "owner" of a building includes an "agent, or any other person, firm or corporation, directly or indirectly in control of the building." The Landlord argued that NYC Charter Section 1404(d) requires that NOVs be served upon "a person employed by the respondent." The Court held that MDL Section 4(44) must be read in conjunction with NYC Charter Section 1404(d). When these sections are read together, the distinction between a person employed by the owner and a person employed by the managing agent does not have any legal significance. Therefore, service upon a person employed by the respondent's managing agent, who was in control of the premises at the time of service, constitutes proper service of the NOVs. The ECB's default judgment against the landlord is therefore valid.

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Case Caption:

In Re Multiverse Real Estate, Inc. v. DHCR

Issues/Legal Principles:

DHCR's decision to deny landlord's application for rent restoration is upheld because it is rationally based on the report of a DHCR inspector.

Keywords:

rent restoration application; DHCR inspection report

Court:

Appellate Division, First Department

Judge:

lower court judge: Hon. Judge Joseph Giamboi

Date:

May 20, 1999

Citation:

NYLJ, page 28, col 4

Referred Statutes:

DHCR Policy Statement 96-1

Summary:

DHCR issued an order reducing tenants' rent due to certain conditions. The landlord, claiming that it had corrected the conditions, applied to the DHCR for an order restoring the rent. The DHCR denied landlord's application. The landlord then brought an Article 78 proceeding before the Supreme Court, Bronx County (the lower court) and the lower court denied the landlord's petition. The appellate court affirmed. The DHCR's decision that landlord failed to restore required services was based upon the report of its inspector. Therefore the DHCR's decision was rationally based and should not be overturned.

Case Caption:

Dworman v. DHCR

Issues/Legal Principles:

Luxury deregulation of apartment is rejected on appeal on grounds of default where tenant submitted answer to landlord's luxury deregulation petition 11 months after the deadline, but before the DHCR rendered a decision, particularly when tenant earned less than the statutory income amount.

Keywords:

luxury deregulation

Court:

Appellate Division, First Department

Judge:

lower court: Hon. Robert Lippman

Date:

May 11, 1999

Citation:

NYLJ, page 32, col 3

Referred Statutes:

Administrative Code of City of New York 26-504.1 & 504.3

Summary:

Landlord sought to deregulate the apartment on grounds that the rent exceeded $2,000 per month and the tenant's income exceeded $250,000 per year. (As of June, 1997, the threshold was lowered to $175,000). The Appellate Division held that there is a factual distinction between cases where a tenant never responds to the DHCR notice to tenant to answer the landlord's luxury deregulation petition, and cases where a tenant does answer, but after the 60 day time period, although before the DHCR renders a decision. In the latter situations, the Appellate Division held that the statute's language does not mandate that a failure to submit the verification within the 60 days must result in deregulation by default, especially where the default is excusable and occurs at the administrative level. To deregulate the apartment by default in such circumstances is arbitrary and capricious. In this case the tenant's answer was submitted 11 months late, but before the DHCR rendered a decision, and the tenant's income did not exceed $250,000. Therefore the Appellate Division remanded the deregulation decision back to the DHCR for a determination on the merits. The DHCR order will assuredly be reversed and tenant's stabilization status reinstated in light of the tenant's income falling below $250,000.

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Case Caption:

Paganuzzi v. Primrose Management Co.

Issues/Legal Principles:

Interest and attorney's fees are granted to tenant in action involving judgment on a previously won Fair Market Rent Appeal on the basis of contract law.

Keywords:

Fair Market Rent Appeal; attorney's fees; interest award

Court:

Supreme Court, New York County

Judge:

Hon. Eileen Bransten

Date:

May 12, 1999

Citation:

NYLJ, page 30, col 5

Referred Statutes:

RPL 234; RSC 2650; CPLR 5001

Summary:

The plaintiff-tenants won an overcharge award at the DHCR against their landlord based on a fair market rent appeal ("FMRA"). The amount of the award was about $19,000. When plaintiff filed a lawsuit against the landlord seeking a money judgment, the landlord paid the $19,000. The issues left for the trial court was whether plaintiff was entitled to interest on the $19,000, whether plaintiff was entitled to attorney's fees, and whether plaintiff could obtain a judgment jointly and severally against the landlord and the managing agent. The court relied on an Appellate Division case for the principle that a managing agent cannot be held liable for overcharges when acting as agent for a disclosed principal.
>dd> With respect to plaintiff's demand for pre-judgment interest, the landlord argued that interest is not awarded in a FMRA award. The court, however, awarded interest on grounds that plaintiff's interest award does not derive out of the FMRA, but rather upon breach of performance of a contract under CPLR 5001. The landlord breached an implied covenant of the lease contract not to charge in excess of the legal regulated rent. An action sounding in breach of contract allows for an interest award. Although generally a FMRA award does not entitle the tenant to recover attorney's fees, the court did note its authority to grant fees in connection with a plenary action brought to enter judgment on a FMRA award (citing various case law), so long as the standards of RPL 234 are satisfied. This statute pertains to when a tenant may recover attorney's fees. Since the parties' lease contains an attorney's fees provision, and since the FMRA award derives from landlord's breach of the lease, the court concluded that the tenant is entitled to legal fees.

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Case Caption:

111 East 88th Partners v. Reich

Issues/Legal Principles:

Knowledge of tenant's dog by building doormen is imputed to tenant's landlord who is the owner of the condominium unit.

Keywords:

pets; condos

Court:

Civil Housing Court, New York County

Judge:

Hon. Maria Milin

Date:

May 12, 1999

Citation:

NYLJ, page 31, col 3

Referred Statutes:

Administrative Code of City of New York 27-2009.1(b); General Business Law 352- eeee(3)

Summary:

The landlord brought a holdover proceeding against the tenant on grounds that the tenant was harboring a dog in violation of the lease. The issue before the court was whether the landlord waived its objection to the pet by failing to taken action within three months of discovering the pet. The tenant stated in motion papers that he openly and notoriously harbored the dog, to wit; by walking the dog three times a day and passing through the building's only exit where the building's doormen perforce had to witness tenant with his 65 pound dog named Orion. The landlord, however, argues that he did not discover the dog when the dog first came to the premises. Rather, it was not until much later, and then upon his discovery of the dog, the landlord timely commenced the action. The landlord is not the owner of the building, but rather an individual owner of the condominium apartment where the tenant resides. The landlord argued that the knowledge of the doormen, who are not his employees, should not be imputed to him. The landlord further stated that neither the building employees or condominium, nor the building's managing agent, ever brought the dog's presence to his attention.

The court looked to statutory language involving the establishment of co-ops and condominiums: "All dwelling units occupied by non-purchasing tenants shall be managed by the same managing agent who manages all other dwelling units in the building or group of buildings or development." The court held that the statute is unequivocal in requiring one managing agent and one set of building personnel. The statute's purpose is to insure that tenants in condominium buildings (i.e., non-owners) receive the same services and amenities as individual condo owners. The court rejected the landlord's argument that the building personnel had no duty to report the dog to the condo owner. She held that to follow this argument to its logical conclusion, the condominium board could be held liable for a breach of the warranty of habitability occurring in a tenant's apartment, although this is a legal impossibility because there is no landlord-tenant relationship between the condominium and the tenants. Only the condo owner can be held liable for a breach of the warranty of habitability which occurs in a tenant's apartment. "If that is the case, then there must be a duty on the part of the building personnel to advise petitioner regarding conditions in the premises in much the same manner as there is a duty to report to the condominium. Accordingly, knowledge of the dog by building employees may, therefore, be imputed to petitioner." The court dismissed the petition and set the matter down for a hearing on the tenant's attorney's fees.

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Case Caption:

16 Maujer Avenue HDFC v. Maisonet

Issues/Legal Principles:

Low-income co-op landlord who evicts non-purchasing tenant must allege a "good cause" for the eviction because of the intimate role of the City of New York in the operation of the building.

Keywords:

low-income co-ops; termination notice

Court:

Civil Housing Court, Kings County

Judge:

Hon. Delores Thomas

Date:

May 12, 1999

Citation:

NYLJ, page 33, col 4

Referred Statutes:

Article XI of the private Housing Finance Law Section 576

Summary:

The landlord is a low income cooperative corporation. Tenant resided in the building before the cooperative conversion occurred. She chose not to purchase shares to her apartment and was given a two-year lease. After it expired the landlord served her a 30 day termination notice as a mere month to month tenant and then sought to evict her in Housing Court. The landlord claims that the conversion was an "evict plan" and since tenant chose not to purchase, and upon expiration of her lease, the landlord was entitled to evict her. The tenant claims that the City of New York is so entwined with the operation of the building that due process requires that the standards of when the City evicts a tenant in a City-owned building should apply in tenant's case as well. An example of the City's "entwinement" includes the fact that if the building is sold during the first 25 years of tenant-ownership, the City receives 40% of the profit. The court referred to Appellate Division case law which held that where the City is so entwined with a building, the owner was required to provide "good cause" for evicting a tenant (which is the standard when a tenant in a City-owned building faces eviction.) Simply because the tenant's lease has expired is not good cause according to the judge. The holdover petition was thereupon dismissed.

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Case Caption:

Matter of Law v. Franco

Issues/Legal Principles:

Tenants who withhold rent to enforce City to correct violations cannot be penalized by termination of their tenancies on grounds of alleged chronic nonpayment of rent.

Keywords:

warranty of habitability; chronic nonpayment

Court:

Supreme Court, Bronx County

Judge:

Hon. G. Friedman

Date:

May 12, 1999

Citation:

NYLJ, page 31, col 5

Referred Statutes:

RPAPL 745(2); RPL 235-b; CPLR 7804(g)

Summary:

Tenants in City Housing had egregious conditions in their apartments, including a leaking waste pipe and vermin infestation. They brought an HP action and had to restore it to for a contempt order when the City failed to make the repairs. The tenants also withheld rent and were awarded a 50% abatement. At one point the trial judge personally inspected the premises and found a continuing moisture problem. In the ensuing months the tenants continued to withhold rent resulting in additional nonpayment proceedings wherein a 50% abatement was again awarded. In the midst of this, the City advised the tenants that if they did not pay their rent they would be charged with "chronic rent delinquency" which is a ground for terminating their tenancies. The issue before the court was whether these tenants had a right to withhold rent in response to the City's failure to make repairs.

At the administrative hearing on the chronic nonpayment cases, the hearing officer ruled against the tenants and refused to allow testimony concerning the reasons why rent was withheld (i.e., the conditions in the premises). The hearing officer determined the tenants should pay their rent regardless of their dispute with the landlord over the repairs. On an Article 78 appeal, the court ruled that the hearing officer's position was arbitrary and capricious. The court acknowledged another case wherein that judge held that tenants are not entitled to withhold rent. Rather tenants' remedy should lie in an HP action or a lawsuit seeking an abatement, and that rent should be paid during the dispute. This court rejected that reasoning. The court observed that it was archaic common law that obligated a tenant to pay rent regardless of the conditions of the leased space. The court belittled the concept that a tenant's duty to pay rent is independent from a landlord's obligation to maintain the premises. Rather, this court held that the statutory warranty of habitability makes the parties' obligations mutual and interdependent. Further, a tenant should not be penalized in efforts to enforce housing standards and penalization might be implied in a chronic nonpayment charge. Withholding of rent is a weapon the tenants have to force the landlord to do repairs and this weapon should not result in punitive action by the landlord.

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Case Caption:

Stahl Broadway Co. v. Haskins

Issues/Legal Principles:

Landlord cannot bring a nonpayment proceeding where tenant's rental arrears had been discharged in bankruptcy prior to the commencement of the proceeding.

Keywords:

judgment; arrears; bankruptcy

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Marcy Friedman

Date:

May 12, 1999

Citation:

NYLJ, page 28, col 6

Referred Statutes:

RPAPL 711(2)

Summary:

The landlord brought a nonpayment proceeding against the tenant, but the rent arrears sought had previously been discharged in a bankruptcy proceeding. The landlord claimed that it did not seek a monetary judgment, but only sought a possessory judgment and warrant of eviction based on the failure to pay the arrears. The lower court dismissed the petition on grounds that a nonpayment proceeding may only be brought when rental arrears are owed at the time of the commencement of the proceeding. The Appellate Term affirmed the decision and distinguished these facts from one where it was previously held that a subsequent discharge in bankruptcy did not render unenforceable a pre-existing state court judgment of possession.

Notes:

The lower court's full decision can be found in the May 18-22, 1998 Housing Court Decisions Archives of Tenant.Net.

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Case Caption:

Edelman v. Omayad

Issues/Legal Principles:

At trial the court ruled that landlord was permitted to look at notes to refresh his recollection as to the amount of rent owed.

Keywords:

evidence; laches; service of process

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Anne Katz

Date:

May 12, 1999

Citation:

NYLJ, page 28, col 6

Referred Statutes:

RPAPL 735; CPLR 1018

Summary:

In this trial during a nonpayment proceeding, tenant appealed various rulings by the judge. The Appellate Term affirmed the lower court's decision that the landlord presented a prima facie case of the rent that was owed. The lower court ruled that it was proper for the landlord to refer to notes to refresh his recollection as to the amount of rent owed. The Appellate Term held that the credibility of the landlord's testimony was a matter for the trial court to assess. The court rejected tenant's laches defense ("stale rent") in light of the absence of demonstrated prejudice and the history of litigation between the parties. The Appellate Term ruled that tenant's brother who was familiar with the tenant's signature, kept his books and records, and had custody of his checks after they were negotiated by the landlord was a competent authenticating witness. In that regard, the Appellate Term remanded the case for the trial court to redetermine the rent after crediting the tenant with certain payments made as evidenced by cancelled checks. The court rejected tenant's argument that the landlord should have served him at a foreign address because the tenant failed to provide specific written information as to this alternative address.

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Case Caption:

Mettler v. Re

Issues/Legal Principles:

Private citizens cannot sue other private citizens to seek enforcement of the Multiple Dwelling Laws.

Keywords:

certificate of occupancy

Court:

Supreme Court, Queens County

Judge:

Hon. Milano

Date:

May 12, 1999

Citation:

NYLJ, page 33, col 5

Referred Statutes:

Multiple Dwelling Law 56(2) & 303 & 306

Summary:

Owners of one building brought a declaratory judgment in Supreme Court against owners of a building across the street. The plaintiffs alleged that defendants were in violation of the multiple dwelling law by the usage of the basement which contained three residential units. Plaintiffs alleged that defendants lacked a proper certificate of occupancy. The building is an SRO and defendant had obtained permits from the Department of Buildings to do certain construction work. The court ruled that the plaintiffs lacked standing to seek enforcement of the Multiple Dwelling Law since the law provides that the duty for enforcing the provisions of the law rest solely with the department charged with enforcing its regulations. In other words, private citizens cannot sue under the Multiple Dwelling Law to compel a party to comply with the law's provisions. Further, plaintiffs did not make any appeals of the Department of Building's decision to issue defendants the permits granted.

Notes:

The case does not provide insight as to why the plaintiffs felt compelled to sue the defendants over the defendants' use of the basement space. Although this case does not on its face involve tenants, it is significant for its holding that private citizens (i.e., including tenants) do not have a right to seek enforcement of the Multiple Dwelling Laws. Presumably, this is applicable only when a private party sues another to seek enforcement of the Law, because tenants have a right to raise as a defense in an eviction proceeding a landlord's violation of Multiple Dwelling Laws (e.g., lack of a proper certificate of occupancy).

Case Caption:

In Re 140 West 57th Street Corp. v. DHCR

Issues/Legal Principles:

DHCR's order reducing rent due to a reduction of certain building-wide services is upheld.

Keywords

rent reduction; building-wide services

Court:

Supreme Court, Appellate Division, First Department

Judge:

lower court judge: Luis Gonzalez

Date:

May 3, 1999

Citation:

NYLJ, page 27, col 6

Referred Statutes:

CPLR Article 78

Summary:

After holding a hearing, DHCR determined that the landlord had reduced building services and amenities. DHCR ordered a rent reduction and a restoration of services. The Supreme Court upheld the DHCR's determination and the Appellate Division, First Department affirmed. The Court found that there was ample rational basis for the DHCR's findings. The DHCR properly held a hearing to determine the factual question of whether services had been reduced. The DHCR found that services had been reduced and that the reduction were not de minimis (that is, minimal) only after hearing the tenants' testimony and finding their testimony credible. Therefore, both the Supreme Court and the Appellate Court upheld the DHCR's order.

Notes:

A trial court or agency determination which is based upon determinations of fact and credibility of witnesses will generally not be overturned by an appellate court. The appellate court did not hear and observe the witnesses and is in no position to make factual or credibility determinations which differ from the determinations of the trial court or agency.

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Case Caption:

Negron v. Goldman

Issues/Legal Principles:

Tenants' recovery on their rent overcharge claim is limited to the four-year period immediately preceding commencement of the action.

Keywords:

rent overcharge; four-year statute of limitations

Court:

Appellate Term, First Department

Judge:

lower court judge: Hon. Doris Ling-Cohan

Date:

May 4, 1999

Citation:

NYLJ, page 26, col 2

Referred Statutes:

RRRA of 1997; CPLR Section 231-a and RSL Section 26-516(a)

Summary:

On December 1, 1995, tenants asserted a claim alleging that they have been overcharged since April 1, 1991. The landlord asserted an affirmative defense based upon the four-year statute of limitations. However the landlord did not file its initial (1984) registration statement until 1996. The trial court dismissed the landlord's affirmative defense, holding that the statute of limitations did not begin to run until the landlord filed the initial registration statement in 1996. The appellate court modified the trial court's order, in accordance with CPLR Section 213-a, limiting tenants' recovery on their claim for rent overcharge to the four-year period immediately preceding commencement of the action, that is, from December 1991 through December 1995. In every other respect, the appellate court affirmed the trial court's finding.

Notes:

A summary of the trial court's decision appears in tenant.net's housing court decisions for the month of February 1998. This summary is based upon the decisions of the trial court and the appellate court.

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Case Caption:

Martha H. Washington Hotel v. Prince

Issues/Legal Principles:

Hotel unit is no longer subject to rent regulation due to occupancy by transient tenants - who paid rent in excess of $2,000 per month - for four years prior to the date tenant asserted an overcharge claim.

Keywords:

rent overcharge; luxury deregulation; hotel tenant

Court:

Civil Housing Court, New York County

Judge:

Hon. Malatzky

Date:

May 5, 1999

Citation:

NYLJ, page 29, col 6

Referred Statutes:

CPLR Sections 213-a, 321 and 3212; RSL Sections 26-506 and 26-516; RSC Sections 2520.11(g), 2520.6, 2521.1(b)(2)and 2422.5; RRRA of 1997.

Summary:

Landlord brought a holdover (eviction) proceeding against the tenant of a room in a Class B hotel, alleging that that the premises is no longer subject to rent regulation because of luxury deregulation: the rent exceeds $2,000.00 per month. Tenant moved to dismiss the petition because it failed to allege that the room is subject to rent regulation and also claimed rent overcharge; landlord argued that the petition properly alleges that the premises is not subject to rent regulation and moved for summary judgment. The Court found for the landlord. Certain hotel rooms are subject to rent stabilization. RSL Section 26-506 states as follows: "...this law shall apply to dwelling units in all hotels except hotels erected after [July 1, 1969], whether classified as a class A or a Class B multiple dwelling, containing six or more dwelling units, provided that the rent charged for the individual dwelling units on [May 31, 1968] was not more than [$350/month] or [$88/week]." There are two types of hotel occupants: (a) a transient tenant who is not protected by rent stabilization and (b) a permanent tenant, who is protected by rent stabilization. A transient tenant is someone who occupies a hotel room for less than six months and who has not requested a lease from the landlord. A transient tenant may become a permanent tenant by asking the landlord to issue a lease for a period of six months or more. A transient tenant may also become a permanent tenant by occupying a hotel room for six months or more. In the instant case, the occupant of the hotel room took occupancy on October 9, 1998 at the rate of $115 per day (which amounts to $3,450.00 per month). She asked for a lease on October 14, 1998 and alleges that she become a permanent tenant on that date, entitling her to a legal regulated rent of $161.14 per week, the rent that the landlord has always registered with the DHCR. The landlord argues that the legal regulated rent is $115 per day. Regarding the legal regulated rent of a hotel unit, RSC Section 2521.1(b)(2) provides as follows: "if any vacant housing accommodation is rented on or after August 15, 1983, the initial legal registered rent shall be the lawful rent paid by the most recent prior tenant plus any subsequent lawful increases and adjustments, if there has never been a prior tenant, the initial legal registered rent shall be the rent paid by the most recent hotel occupant, plus any subsequent lawful increases and adjustment." The Court adopted the landlord's argument in its decision. Although the rent was registered at $161.14 per week, it was also registered as "vacant." The nature of the occupancy (transient versus permanent) - not the registered rent - is controlling. The landlord presented evidence that there has been no permanent (rent stabilized) tenant of the unit for the four years prior to the present occupant's filing of an overcharge complaint. A hotel unit is exempt from rent regulation during a period of transient occupation. RSC Section 2520.11(g)(1). The Court is prohibited from examining rent history that is more than four years old. RSL Section 26-516; CPLR Section 213-a. Therefore, the legal rent must be set at $115 per day, the last rent paid by the most recent hotel occupant and the "first rent" agreed to by respondent-hotel occupant. The rate of $115 per day ($3,450 per month) exempts the unit from rent regulation pursuant to the luxury deregulation law because the monthly rent exceeds $2,000.00 per month. The Court granted landlord's petition and ordered the issuance of a warrant of eviction and a money judgment.

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Case Caption:

West 69th Street Partners v. Elgindi

Issues/Legal Principles:

Holdover proceeding is dismissed because landlord accepted rent after service of the notice of termination and before commencement of the proceeding; since landlord bypassed its own computer blocking system in order to make the deposit, the acceptance was not inadvertent.

Keywords:

termination notice; acceptance of rent

Court:

Civil Housing Court, New York County

Judge:

Hon. Chin

Date:

May 5, 1999

Citation:

NYLJ, page 30, col 2

Referred Statutes:

none cited

Summary:

Landlord served tenant with a notice of termination that terminated the tenancy effective December 31, 1998. The Landlord commenced a holdover proceeding on January 6, 1999, by filing a petition and notice of petition with the clerk of the court. After the date of termination and before the commencement date of the proceeding, the tenant paid and the landlord accepted tenant's rent for the month of January 1999. The Court held that by accepting the rent, the landlord vitiated (canceled) the termination notice and therefore granted the tenant's motion to dismiss the holdover petition. The landlord unsuccessfully argued that it "inadvertently" accepted the check and returned the money to the tenant "without unreasonable delay." Landlord used a computerized rent collection system and, in December 1998, entered a "block" to alert the computer operator not to accept rent payments from the respondent-tenant. The landlord utilized this system because he was aware that the courts dismiss holdover petitions if rent is accepted after the tenancy has been terminated. Nevertheless, the landlord purposely bypassed the computer block and deposited tenant's check because landlord was short on cash and need the money to pay bills. Under these facts, the landlord's acceptance of the check was not inadvertent.

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Case Caption:

145-47 Morningside Avenue HDFC v. Yann

Issues/Legal Principles:

The landlord's failure to allege regulatory status beyond the bare statement that petition is an HDFC requires dismissal of the petition.

Keywords:

Housing Development Fund Corporation; HDFCs; rent regulatory status; dismissal of petition

Court:

Civil Housing Court, New York County

Judge:

Hon. Billings

Date:

May 5, 1999

Citation:

NYLJ, page 30, col 3

Referred Statutes:

CPLR Section 3211; RPAPL Section 741; RPL Section 232-a; General Business Law Section 352-eeee; Private Housing Finance Law Section 570 et seq; RSL Section 26-504(a); ETPA Section 8621 et seq.

Summary:

Landlord, a housing development fund corporation ("HDFC") served tenant with a "notice to tenant of non-renewal of lease, termination of tenancy and intention to recover possession." Landlord then served tenant with a holdover petition seeking eviction on the grounds that the tenant's lease has expired. Tenant moved to dismiss because of various alleged defects in the petition, including failure to allege proof of service of the termination notice and failure to identify the rent regulatory status of the premises with particularity. The Court rejected the tenant's first argument. Tenant does not claim prejudice due to the petition's failure to allege the manner in which the termination notice was served. Nor does tenant deny timely receipt of the notice. Therefore the failure to allege the manner of service "is a non-material and therefore de minimus variation that is not fatal to the court's jurisdiction." (The court implied that if the petition had failed to allege service of a predicate termination notice, this would be grounds for dismissal of the petition). The Court accepted the tenant's second argument (failure to identify rent regulatory status with particularity) and dismissed the petition. The caption of the proceeding identifies the landlord as an HDFC. However, the body of the petition does not even allege that petitioner is an HDFC nor does it further describe its HDFC status. HDFCs are funded by federal, state or city assisted mortgages. Sometimes this financial backing comes with "strings attached," that is, the housing may be subject to certain tenant-protection regulations. In some types of HDFCs, a tenant may not be evicted without a showing of "good cause." In these instances, the expiration of a lease is not sufficient cause for eviction. Since the landlord did not describe the nature of its HDFC status with particularity in its petition, the tenant was unable to determine whether he had any rights and defenses flowing from statutory or regulatory provisions which relate to some HDFCs. This failure also prevented the court from determining whether the termination notice upon which the holdover petition is predicated is adequate. Although the landlord sought to amend its petition, alleging its HDFC status and the reasons why the tenant has no regulatory, statutory or due process rights based on government regulation or involvement, it is too late. Even if the court were to grant the landlord's requested amendment to the petition, it does not change the fact that this valuable information was not included in the termination notice. Amending the petition cannot cure a defect in the termination notice upon which the holdover petition is based. Chinatown Apartments v. Chu Cho Lam. In addition, the court held that the petition's failure to include information pertaining to HDFC status is a fatal and unamendable defect because it is "fundamental" and "implicates a potential defense to the proceeding."

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Case Caption:

Mauro v. Callender

Issues/Legal Principles:

The Supreme Court refuses to issue a "writ of prohibition" to prevent a Judge of the Housing Court from proceeding with a civil contempt hearing against a landlord.

Keywords:

civil contempt; writ of prohibition

Court:

Supreme Court, Kings County

Judge:

Hon. Justice Dowd

Date:

May 5, 1999

Citation:

NYLJ, page 31, col 6

Referred Statutes:

CPLR Section 7804(f); CPLR Section 3211(a)(2) and (7); Judiciary Law Section 753(A); NYCCCA Section 212 and 1701.

Summary:

On January 22, 1999, Judge Callender of the Housing Part of the Civil Court, Kings County issued a decision an order scheduling a civil contempt trial against landlord Yvonmils, Inc. (a corporation) and William Mauro (the corporate president) to determine the allegation that they had violated two court orders. The first order was issued by the Supreme Court, Kings County. It prohibited the landlord Yvonmils from collecting rents and profits generated by the premises and appointed Millman the receiver of the premises (that is, the person entitled to collect the rents and profits). The second order was issued by a Bankruptcy Court. It also appointed a receiver and prohibited Yvonmils from interfering with the duties of the receiver. Yvonmils and Mauro violated both court orders by commencing nonpayment proceedings against certain tenants in housing court. The Receiver, Millman, brought a nonpayment proceeding in housing court against a tenant named Jack (Millman v. Jack). In the context of that proceeding, the receiver made a motion to hold Yvonmils and Mauro in contempt for violating the court orders. The housing court judge, Judge Callender, decided that the Housing Court had the authority to punish Yvonmils and Mauro for civil contempt although (1) the orders violated were not orders of the housing court, (2) Mauro was not named as a party in either the bankruptcy proceeding or the Supreme Court proceeding, and (3) Yvonmils and Mauro were not parties to the nonpayment proceeding Millman v. Jack. Judge Callender's decision relied upon Judiciary Law Section 753(A), which grants a court of record the power to punish for civil contempt a failure to obey a lawful mandate of a court "by which a right or remedy of a party to a civil action or special proceeding, pending in the court may be defeated, impaired, impeded, or prejudiced, in any of the following cases *** (2) A party to the action or special proceeding *** for any deceit or abuse of a mandate or proceeding of the court." Judge Callender found that Yvonmils and Mauro, by bringing nonpayment proceedings against tenants of the premises, had impaired the rights of the receiver. Judge Callender then scheduled a civil contempt trial. The trial was interrupted when Mauro brought an Article 78 proceeding in the Supreme Court, Kings County and a Justice of that court signed an Order to Show Cause at the request of Mauro. The Order to Show Cause temporarily interrupted the contempt proceedings in Housing Court while the Supreme Court decided whether or not these proceedings should be permanently interrupted (that is, whether a "writ of prohibition" should issue). Mauro simultaneously filed an Article 78 proceeding asking the Supreme Court to find that Judge Callender had exceeded his jurisdiction and authority. The Supreme Court refused to issue the writ of prohibition, which is an extraordinary remedy, and agreed with the reasoning in Judge Callender's decision. The Supreme Court further explained that when Judge Callender makes a final decision on the civil contempt issue (for example, if he finds Yvonmils and Mauro in civil contempt), that Yvonmils and Mauro could appeal Judge Calendar's decision to the Appellate Term, First Department.

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Case Caption:

Giaio v. Greco

Issues/Legal Principles:

Court vacates stipulations settling nonpayment proceedings, final judgment and warrant of eviction issued against tenant because landlord's attorney failed to give a predicate thirty-day notice as required by the FDCPA.

Keywords:

FDCPA; thirty-day notice

Court:

Civil Housing Court, Kings County

Judge:

Hon. Callender

Date:

May 5, 1999

Citation:

NYLJ, page 32, col 4

Referred Statutes:

Fair Debt Collection Practices Act ("FDCPA"), 15 USC Section 1692; RPAPL Section 711(2); US Constitution Art. VI Clause 2

Summary:

Respondent-tenant entered into two separate stipulations settling nonpayment proceedings (August 1998 and October 1998). In each stipulation, he consented to the issuance of a final judgement of possession. Tenant now moves to vacate the stipulations (and the final judgment and warrant of execution which issued as a result of the stipulations) because the nonpayment proceedings were predicated upon a three-day notice (as permitted by state law) rather than a thirty-day notice (as required by federal law, specifically the FDCPA). The Court granted the tenant's motion in full. The Court found that the FDCPA applies to the facts of this case. The landlord's attorney (rather than the landlord) signed the three-day notice. An attorney's activities are covered by the FDCPA. That is, when an attorney signs a three-day notice (rather than the landlord), the notice must give the tenant-debtor thirty days to dispute the debt, as required by the FDCPA. The Court cited to Romea v. Heiberger and subsequent cases. The Court further explained that the FDCPA was also intended to protect consumers from statute laws that are unfair and inconsistent with the FDCPA and that federal law always supersedes conflicting state law. The Court reached its decision notwithstanding the fact that the tenant owed about $6,000 in rent arrears as of the date the Court's decision was written.

Notes:

Dearie v. Hunter is a similar case where Judge Ruben Martino vacated a stipulation with a judgment, and dismissed the non-payment petition on grounds that it violated the FDCPA. That case was appealled by the landlord and was argued in the Appellate Term for the May, 1999 term. Dearie v. Hunter will be the Appellate Term's first opportunity to hear an FDCPA case coming from Housing Court, and therefore the decision will be particular important.

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Case Caption:

Pembroke Square Associates v. Coppola

Issues/Legal Principles:

A tenant of a cooperative apartment leased from the sponsor after title has passed to the cooperative corporation may be evicted at the end of the lease without cause; such a tenant is not entitled to the protection of the Martin Act.

Keywords:

the Martin Act; non-purchasing tenant; "purchaser under the plan"

Court:

Housing Part of the Civil Court, Queens County

Judge:

Hon. Judge Franke

Date:

May 5, 1999

Citation:

NYLJ, page 32, col 6

Referred Statutes:

General Business Law Section 352.eeee ("The Martin Act")

Summary:

The premises which is the subject of this holdover (eviction) proceeding is a cooperative apartment. The landlord of the subject apartment owns the shares and was also the sponsor of the plan to convert the building to cooperative ownership. (In other words, the landlord of the subject apartment used to be the owner of the entire building). When the building owner conveyed title to the cooperative corporation, the shares to the subject apartment (and the shares to all other apartments that were not otherwise sold) were conveyed back to the sponsor. Seven years later, the landlord leased the subject apartment to tenant Coppola, and upon expiration of the most recent sublease, commenced a holdover proceeding against tenant on the grounds that the lease had expired. Both the landlord and the tenant moved for summary judgment. The tenant argued that the landlord was not entitled to evict him without cause, because he is a "non-purchasing tenant" protected by the Martin Act. A "non-purchasing tenant" cannot be evicted without cause. In support of his argument, tenant cited to a recent favorable decision made by a housing court judge in Kings County called Paikoff v. Harris. The Court determined that it was not bound by a decision of a housing court judge in another county, found that the tenant was not protected by the Martin Act, granted summary judgment (and a judgment of possession) to landlord. The Martin Act protects a tenant if the tenant is a "non-purchasing tenant" and the landlord is a "purchaser under the plan" as those terms are defined in the Martin Act. The Court quoted the Martin Act's definition of "purchaser under the plan" as follows: "A person who owns the shares allocated to a dwelling unit or who owns such dwelling unit itself." The Court held that the landlord in this case satisfied this definition, since he owns the shares to the subject apartment. (The Paikoff court decided that the sponsor could not possibly be a purchaser under the plan but is, instead, the sponsor and a "holder of unsold shares"). The Court also quoted the Martin Act's definition of "non-purchasing tenant" as follows: "A person who has not purchased under the plan and who is a tenant entitled to possession at the time the plan is declared effective or a person to whom a dwelling unit is rented subsequent to the effective date. A person who sublets a dwelling unit from a purchaser under the plan shall not be deemed a non-purchasing tenant." The last sentence of this definition persuaded the Court that the tenant in this case is not a non-purchasing tenant, because the tenant in this case is renting from the landlord, who is a "purchaser under the plan."

Notes:

The law on this issue will remain unsettled until this case or a similar case is appealed. Rumor had it that Paikoff (a Second Department case) was being appealed by the landlord, but further rumor has it, that Paikoff has settled. The Coppola case is another Second Department case. No judge in the First Department (Manhattan/Bronx) has yet ruled on a similar Martin Act case, although it is known that Judge Bruce Kramer is on the verge of rendering a decision in several cases pending before him. Any decision from a First Department judge will be watched, especially now in light of the split in the Second Department between the Coppola and Paikoff decisions.