Branic International Realty Corp., Appellant,v.Phillip Pitt,, Respondent, et al., Respondents.BriefN.Y.August 25, 2015To be Argued by: RONALD J. ROSENBERG (Time Requested: 30 Minutes) APL-2013-00221 New York County Clerk’s Index No. L&T 75547/07 Court of Appeals of the State of New York BRANIC INTERNATIONAL REALTY CORP., Petitioner-Appellant, – against – PHILLIP PITT 216 West 103rd Street, Room 214 New York, New York 10025, Respondent-Respondent, – and – “JOHN DOE” and/or “JANE DOE,” Respondents. BRIEF FOR PETITIONER-APPELLANT ROSENBERG CALICA & BIRNEY LLP Attorneys for Petitioner-Appellant 100 Garden City Plaza, Suite 408 Garden City, New York 11530 Tel.: (516) 747-7400 Fax: (516) 747-7480 Date Completed: December 16, 2013 DISCLOSURE STATEMENT UNDER 22 N.Y.C.R.R. §50o.l(f) Pursuant to 22 N.Y.C.R.R. §500.1(f), Branic7nte ational Realty Corp. has no parents, subsidiaries, or affiliates. Dated: December 16,2013 /11/}1 I /I {00120574-1} i TABLE OF CONTENTS Page TABLE OF AUTHORITIES ..................................................................................... v RULE 400.13(A) STATEMENT ............................................................................... 1 PRELIMINARY STATEMENT ............................................................................... 2 JURISDICTIONAL STATEMENT .......................................................................... 8 QUESTIONS PRESENTED .................................................................................... 11 STATEMENT OF FACTS ...................................................................................... 12 A. Branic Enters Into A Rental Agreement With The City Of New York To Provide Temporary Emergency Housing .................... 12 B. The City Places Phillip Pitt In Branic’s Facility ................................. 13 C. The Facility Rental Agreement Expires By Its Own Terms ............... 14 D. Following The Expiration Of The Facility Rental Agreement, The City Cancelled Pitt’s Room And Ceased Voluntary Payment ............................................................................................... 14 E. Branic Commences a Licensee Holdover Proceeding ........................ 16 F. Pitt Files A Discrimination Complaint With The New York State Division of Human Rights Based On The Holdover Proceeding, Which Was Dismissed After A Thorough Investigation In 2008 .......................................................... 17 G. The Civil Court Dismisses The Petition in June 2009 ........................ 18 H. The Appellate Term Correctly Reverses The Civil Court .................. 19 ii TABLE OF CONTENTS (Cont’d.) Page I. Pitt Is Granted Leave to Appeal By The Appellate Division ............................................................................................... 20 J. Prior To The Time Pitt Had To Perfect His Appeal, He Voluntarily Moved Out Of Room 214 ................................................ 21 K. The Appellate Division Reverses and Dismisses Branic’s Petition ................................................................................................. 21 POINT I THE APPELLATE DIVISION ERRED WHEN IT FOUND PITT’S ROOM WAS NOT EXEMPT FROM THE RENT STABILIZATION CODE PURSUANT TO SECTION 2520.11(B) OF THE CODE, WHICH SECTION EXPRESSLY EXEMPTS ROOMS THAT ARE LEASED TO A MUNICIPALITY FROM REGULATION UNDER THE RENT STABILIZATION CODE ................................................................... 24 POINT II THE APPELLATE DIVISION MISCONSTRUED SECTION 2520.6(j), RELYING EXCLUSIVELY ON ONLY THE FIRST SENTENCE THEREIN, IGNORING AND FAILING TO APPLY THE LAST SENTENCE OF THAT SAME SECTION, IN ORDER TO SUPPORT ITS ERRONEOUS CONCLUSION THAT A “PERMANENT TENANT” IS ANYONE WHO MERELY RESIDES IN A ROOM FOR SIX MONTHS OR MORE, WITHOUT REGARD TO WHETHER THE PERSON EVER HAD AN AGREEMENT TO PAY RENT OR ACTUALLY DID PAY RENT .................... 37 A. The Appellate Division Ignored The Fact That The Third Sentence of Section 2520.6(j) Expressly Provides That All References In The Code To “Tenant” “Shall Include Permanent Tenant With Respect To Hotels.” ..................................... 39 iii TABLE OF CONTENTS (Cont’d.) Page B. The Appellate Division Failed To Harmonize The First Sentence Of Section 2520.6(j) With The Second Sentence of Section 2520.6(j) Which Requires A Permanent Tenant To Pay Rent Under A Direct Agreement with the Owner .................. 41 C. Section 2524.1 of the Code Confirms That Rent Must Be Paid By A Tenant Or Permanent Tenant ............................................. 42 D. Case Law Supports Branic’s Statutory Construction As A Matter of Law .................................................................................. 47 E. Other Code Sections Support Branic’s Interpretation ......................... 51 F. The Rules Concerning Statutory Construction Mandate Reversal ................................................................................ 52 POINT III PITT WAS MERELY A LICENSEE WHO COULD BE EVICTED IN A LICENSEE HOLDOVER PROCEEDING .................................................... 54 POINT IV THE ORDER IF UPHELD WILL HAVE A CHILLING EFFECT ON LANDLORD’ WILLINGNESS TO ENTER INTO AGREEMENTS WITH THE CITY OF NEW YORK TO PROVIDE TEMPORARY EMERGENCY HOUSING ACCOMMODATIONS FOR HOMELESS AND OTHER ELIGIBLE PERSONS ...................................... 58 iv TABLE OF CONTENTS (Cont’d.) Page POINT V THE APPELLATE DIVISION DECISION FALLS WITHIN THE EXCEPTION TO THE MOOTNESS DOCTRINE; THUS THIS COURT RETAINS SUBJECT-MATTER JURISDICTION TO DECIDE THE APPEAL ON THE MERITS .......................................................................... 59 CONCLUSION ........................................................................................................ 65 v TABLE OF AUTHORITIES Page 1234 Broadway LLC v. Jing Yong Xu, 10 Misc.3d 655, 809 N.Y.S.2d 825 (Civ. Ct. N.Y. Cty. 2005) ........................... 48 219 Broadway Corp. v. Alexanders, Inc., 46 N.Y.2d 506, 414 N.Y.S.2d 889 (1979) ........................................................... 27 Bernstein v. 1995 Assoc., 185 A.D.2d 160, 586 N.Y.S.2d 115 (1st Dep’t 1992) .......................................... 26 Bezio v. Dorsey, 21 N.Y.3d 93, 967 N.Y.S.2d 660 (2013) ............................................................. 60 BLF Realty Holding Corp. v. Kasher, 299 A.D.2d 87, 747 N.Y.S.2d 457 (2002) ........................................................... 53 Board of Educ. of Monroe-Woodbury Cent. School Dist. v. Wieder, 132 A.D.2d 409, 522 N.Y.S.2d 878 (2d Dep’t 1987), mod. on other grounds, 72 N.Y.2d 174, 531 N.Y.S.2d 889 (1988) ........................................................... 53 Brown v. 165 Conover Assoc., 5 Misc.3d 128(A), 798 N.Y.S.2d 707 (App. Term 2d & 11th Dist. 2004) ........ 57 City of New York v. Maul, 14 N.Y.3d 499, 903 N.Y.S.2d 304 (2010) ........................................................... 61 Coleman ex rel. Coleman v. Daines, 19 N.Y.3d 1087, 955 N.Y.S.2d 831 (2012) ......................................................... 60 Combined Ventures, LLC v. Fiske House Apt. Corp., 74 A.D.3d 1119, 906 N.Y.S.2d 568 (2d Dep’t 2010) .......................................... 44 Community Bd. 7 of Borough of Manhattan v. Schaffer, 84 N.Y.2d 148, 615 N.Y.S.2d 644 (1994) ........................................................... 63 vi TABLE OF AUTHORITIES (Cont’d.) Page Coppa v. LaSpina, 41 A.D.3d 756, 839 N.Y.S.2d 780 (2d Dep’t 2007) ............................................ 56 Davis v. Dinkins, 206 A.D.2d 365, 613 N.Y.S.2d 933 (2d Dep’t 1994) .................................... 31-36 Dutchess County Dep’t of Social Services ex rel. Day v. Day, 96 N.Y.2d 149, 726 N.Y.S.2d 54 (2001) ............................................................. 52 Feder v. Caliguira, 8 N.Y.2d 400, 208 N.Y.S.2d 970 (1960) ....................................................... 27, 28 Fresh Meadows Associates v. New York City Conciliation & Appeals Bd., 55 A.D.2d 559, 390 N.Y.S.2d 69 (1st Dep’t 1976), aff’d, 42 N.Y.2d 925, 397 N.Y.S.2d 1007 (1977) ................................................... 46, 53 Giuffrida v. Giuffrida, 170 Misc.2d 63, 649 N.Y.S.2d 773 (City Ct. of Yonkers 1996) ......................... 55 Gruen v. Patterson, 55 N.Y.2d 631, 446 N.Y.S.2d 253 (1981) ..................................................... 43, 50 Hanna v. Turner, 2001 WL 1704931 (Sup. Ct. N.Y. Cty.), aff’d as modified, 289 A.D.2d 182, 735 N.Y.S.2d 513 (1st Dep’t 2001) ......................................... 25 Hatanaka v. Lynch, 304 A.D.2d 325, 756 N.Y.S.2d 578 (1st Dep’t 2003) ......................................... 24 Hearst Corp. v. Clyne, 50 N.Y.2d 707, 431 N.Y.S.2d 400 (1980) .................................................... 61, 64 Helping Out People Everywhere v. Deich, 155 Misc.2d 707, 589 N.Y.S.2d 744 (City Ct. Yonkers 1992), aff’d, 160 Misc.2d 1052, 615 N.Y.S.2d 215 (App. Term 2d Dep’t 1994) .................... 56 vii TABLE OF AUTHORITIES (Cont’d.) Page Henrietta D. v. Giuliani, 119 F.Supp.2d 181 (E.D.N.Y. 2000) ................................................................... 25 Housing Works, Inc. v. City of New York, 255 A.D.2d 209, 680 N.Y.S.2d 487 (1st Dep’t 1998) ................................... 56, 57 Jazilek v. Abart Holdings LLC, 41 A.D.3d 124, 839 N.Y.S.2d 7 (1st Dep’t 2007), rev’d on other grounds, 10 N.Y.3d 943, 862 N.Y.S.2d 854 (2008) ........................................................... 55 Jenkins v. Fieldbridge Associates, LLC, 65 A.D.3d 169, 877 N.Y.S.2d 375 (2d Dep’t 2009), app. dismissed, 13 N.Y.3d 855, 891 N.Y.S.2d 688 (2009) ........................................................... 53 Johnson v. Crandell, 19 Misc.3d 1136(A), 862 N.Y.S.2d 808 (Civil Ct. N.Y. Cty. 2008) ................. 51 Kanti-Savita Realty Corp v. Santiago, 18 Misc.3d 74, 852 N.Y.S.2d 579 (App. Term 2d Dep't 2007) ............ 5, 6, 48-50 Le Drugstore Etats Unis, Inc. v. New York State Bd. of Pharmacy, 33 N.Y.2d 298, 352 N.Y.S.2d 188 (1973) ........................................................... 62 Long Island Trust Co. v. Porta Aluminum Corp., 1973 WL 21412 (Sup. Ct. Nassau Cty.), aff'd as mod., 44 A.D.2d 118, 354 N.Y.S.2d 134 (2d Dep't 1974) ............................................ 52 Mann v. 125 E. 50th St. Corp., 124 Misc.2d 115, 475 N.Y.S.2d 777 (Civil Ct. N.Y. Cty. 1984), aff’d, 126 Misc.2d 1016, 488 N.Y.S.2d 1021 (App. Term 1st Dep’t 1985) .................. 51 viii TABLE OF AUTHORITIES (Cont’d.) Page Matter of M.B., 6 N.Y.3d 437, 813 N.Y.S.2d 349 (2006) ............................................................. 60 Matter of New York World-Tel. Corp. v. McGoldrick, 298 N.Y. 11 (1948) .............................................................................................. 28 Miller v. City of New York, 15 N.Y.2d 34, 255 N.Y.S.2d 78 (1964) ............................................................... 27 Mixon v. Grinker, 157 Misc.2d 68, 595 N.Y.S.2d 876 (Sup. Ct. N.Y. Cty. 1993) rev’d on other grounds, 88 N.Y.2d 907, 646 N.Y.S.2d 661 (1996) .................... 25 Novick v. Hall, 70 Misc.2d 641, 334 N.Y.S.2d 698 (Civil Ct. N.Y. Cty. 1972) .......................... 44 Nutter v. W & J Hotel Co., 171 Misc. 2d 302, 654 N.Y.S.2d 274 (Civil Ct. N.Y. Cty. 1997) ........................... 50 Park Summit Realty Corp. v. Frank, 107 Misc.2d 318, 434 N.Y.S.2d 73 (App. Term 1st Dep't 1980), aff'd, 84 A.D.2d 700, 448 N.Y.S.2d 414 (1st Dep't 1981), aff'd, 56 N.Y.2d 1025, 453 N.Y.S.2d 643 (1982) ................................................... 44, 48 People ex rel. McManus v. Horn, 18 N.Y.3d 660, 944 N.Y.S.2d 448 (2012) ........................................................... 62 People v. Mobil Oil Corp., 48 N.Y.2d 192, 422 N.Y.S.2d 33 (1979) ............................................................. 53 Rent Stabilization Ass'n of New York City, Inc. v. Higgins, 83 N.Y.2d 156, 608 N.Y.S.2d 930 (1993) ........................................................... 25 Rodriguez v. Wing, 94 N.Y.2d 192, 701 N.Y.S.2d 328 (1999) ........................................................... 61 ix TABLE OF AUTHORITIES (Cont’d.) Page Rosenstiel v. Rosenstiel, 20 A.D.2d 71, 245 N.Y.S.2d 395 (1st Dep’t 1963) ............................................. 55 Rueda v. Charmaine D., 17 N.Y.3d 522, 932 N.Y.S.2d 72 (2011) ............................................................. 60 Starrett City, Inc. v. Smith, 25 Misc.3d 42, 889 N.Y.S.2d 362 (App.Term 2d Dep’t 2009) ........................... 48 Village of Nyack Housing Authority v. Scott, 1 Misc.3d 22, 767 N.Y.S.2d 562 (App. Term 2d Dep’t 2003) ............................ 36 Weil v. Chandler, 38 Misc.2d 58, 239 N.Y.S.2d 514 (App. Term 1st Dep’t 1962) .......................... 48 Wright v. Giuliani, 230 F.3d 543 (2d Cir. 2000) .......................................................................... 12, 25 Yatauro v. Mangano, 17 N.Y.3d 420, 931 N.Y.S.2d 36 (2011) ............................................................. 52 Unreported And Other Cases 204 West 73rd Street, LLC v. Hess, N.Y.L.J. p. 20, col. 1 (Civil Ct. N.Y. Cty. 3/17/04) ............................................ 48 240 West 73rd Street LLC v. Vichitlakakran, N.Y.L.J. p. 22, col. 3 (Civil Ct. N.Y. Cty. 12/30/98) .......................................... 48 240 West 73rd Street LLC v. Weber, N.Y.L.J., p. 27, col. 5 (Civil Ct. N.Y. Cty. 1/13/1999) ....................................... 48 x TABLE OF AUTHORITIES (Cont’d.) Page Callen v. Callen, 2002 WL 32179000 (Civil Ct. N.Y. Cty. 2003) .................................................. 55 Winds v. Turner, N.Y.L.J., p. 19, col. 2 (Sup. Ct. N.Y. Cty. 9/18/2002 ................................... 12, 25 Parker v. Salvation Army, 971 N.E.2d 995 (Ohio App. 8th Dist. 2012) ........................................................ 56 Statutes 9 N.Y.C.R.R. §2520.6(d) ..................................................................................passim 9 N.Y.C.R.R. §2520.6(j) ...................................................................................passim 9 N.Y.C.R.R. §2520.11(b) ................................................................................passim 9 N.Y.C.R.R. §2521.3(b) ......................................................................................... 40 9 N.Y.C.R.R. §2522.5(a)(2) ............................................................................... 40, 51 9 N.Y.C.R.R. §2522.5(c)(2) and (3) ........................................................................ 40 9 N.Y.C.R.R. §2522.5(h) ......................................................................................... 40 9 N.Y.C.R.R. §2522.8(a)(2) and (3) ........................................................................ 40 9 N.Y.C.R.R. §2522.8(b) ......................................................................................... 40 9 N.Y.C.R.R. §2524.2(c)(3) ..................................................................................... 40 9 N.Y.C.R.R. §2525.3(b) ......................................................................................... 40 9 N.Y.C.R.R. §2525.6(d) ......................................................................................... 55 9 N.Y.C.R.R. 2524.1 ......................................................................................... 42-45 Other Sources And Treatises NYC Administrative Code, Section 21-128 ..................................................... 12, 25 NYC Administrative Code, Section 21-130 ............................................................ 12 NYC Administrative Code, Section 26-408a .......................................................... 43 Friedman, Friedman on Leases (3d ed. 1987) ............................................ 26, 28, 29 Dolan, Rasch’s Landlord and Tenant (4th ed. 1998) ............................................... 26 1 RULE 400.13(A) STATEMENT There is no other litigation pending between the parties. 2 PRELIMINARY STATEMENT Appellant Branic International Realty Corp. (“Branic”), which owns a private hotel on the Upper West Side of New York City (the “Facility”), a portion of which was voluntarily used for temporary emergency housing for the homeless, appeals from a Decision & Order of the Appellate Division, First Department dated April 16, 2013 (the “Order”)(R312-324). The Order made the unprecedented finding that a homeless person (Respondent Phillip Pitt), who was temporarily placed in one of the rooms in Branic’s Facility by the City of New York (the “City”), which room was temporarily leased and paid for by the City pursuant to a written lease agreement between the City and Branic (the “Facility Rental Agreement”), somehow attained the status of a rent-stabilized “permanent tenant” under the Rent Stabilization Code (the “Code”), even though Pitt did not have an agreement with Branic to pay rent, and indeed, never paid rent to Branic. Nevertheless, the Appellate Division erroneously found that Pitt merely needed to physically occupy the City-leased premises for at least six months – without having any rental agreement with Branic nor any corresponding obligation to pay rent and without having paid a penny in rent – in order to become a “permanent tenant” under the Code. This was unprecedented error as a matter of law. 3 As detailed below, reversal is mandated because, inter alia, the Order represents a significant departure from well-settled precedent in all the Appellate Divisions, as well as the Appellate Term, all of which have consistently and properly recognized that someone claiming to be a “permanent tenant” under the Code must have an agreement with and an obligation to pay rent to the landlord and actually pay rent to such landlord. It also represents a wholesale departure from the plain language of the Code, which expressly makes the definition of “tenant” applicable to the definition of “permanent tenant,” i.e. meaning a person who has an obligation to pay rent and does pay rent. (see 9 N.Y.C.R.R. 2520.6(d) and (j)). Nevertheless, in the case at bar, and perhaps out of misplaced sympathy for the Respondent or as an expression of genuine concern for the homelessness epidemic, the Appellate Division, First Department, erroneously reversed the Appellate Term and determined that Respondent acquired “permanent tenant” status merely because he occupied the premises for more than six months under the Facility Rental Agreement despite the fact that he never paid rent, never had any agreement with Branic, and never had any obligation to pay rent to Branic. Contrary to at least four decades of settled case law, and in contravention of the plain language of the Code itself, the Appellate Division, First Department has now unprecedentedly held that someone who has no agreement with a landlord to 4 pay rent, and who has never paid or attempted to pay rent, can somehow attain the status of a rent-stabilized “permanent tenant” merely because such person occupied a housing accommodation for at least six months leased to, and paid for by, the City of New York pursuant to the City’s statutory obligation to provide temporary emergency housing to eligible persons. In reaching this bizarre conclusion, the Appellate Division misconstrued the Code in at least two important respects. First, even though the room occupied by Pitt was expressly exempt from the Code pursuant to Section 2520.11(b) because the room was leased and paid for by the City of New York, the Appellate Division erroneously concluded, in a perfunctory and error-ridden analysis, that the Facility Rental Agreement between Branic and the City was somehow not a “lease” (R321). The Appellate Division made this erroneous ruling notwithstanding the undisputed evidence that the Facility Rental Agreement between Branic and the City provided “exclusive” occupancy of the rooms to the City for the purpose of the City placing eligible homeless persons with temporary occupancy therein, turning the well-settled, centuries-old definition of a “lease” as an agreement which provides for “exclusive” occupancy, on its head. Second, the Appellate Division completely misconstrued Section 2520.6(j) of the Code which defines the phrase “permanent tenant,” by reading only the first sentence of that Section, and ignoring the last sentence of that same Section which 5 provides that “reference in this Code to ‘tenant’ shall include permanent tenant with respect to hotels.” (emphasis added) The word “tenant” is defined in Section 2520.6(d) of the Code as “Any person or persons named on a lease as lessee or lessees, or who is or are a party or parties to a rental agreement and obligated to pay rent for the use or occupancy of a housing accommodation.” (emphasis added). Thus, pursuant to the express provision of the last sentence of Section 2520.6(j), the definition of “tenant” logically and expressly also applied to the definition of “permanent tenant” and accordingly, in order to qualify as a “permanent tenant” pursuant to Section 2520.6(j), the person must be a “party…to a rental agreement and obligated to pay rent for the use or occupancy of [the] housing accommodation.” Compounding its error, the Appellate Division mistakenly relied on a single Appellate Term case (Kanti-Savita Realty Corp v. Santiago, 18 Misc.3d 74, 852 N.Y.S.2d 579 (App. Term 2d Dep't 2007)), to conclude that an agreement to pay rent and the payment of rent was not a criterion for determining whether someone is a “permanent tenant” under the Code, but rather, only the length of time someone managed to successfully occupy premises, whether lawful or not was the 6 sole criterion.1 However, the Kanti-Savita case does not stand for that proposition and did not at all support the Appellate Division's holding herein, because in that case, wholly unlike here, the tenant had an agreement directly with the landlord under which it actually paid rent for five months which was accepted by the landlord. Contrary to the Appellate Division’s ruling herein, the Code clearly provides that in order to qualify as a “permanent tenant” under the Code, a person must have an agreement with the landlord and an obligation to pay rent, and must actually pay rent, because, inter alia, Section 2520.6(j) expressly incorporates the definition of “tenant” set forth in Section 2520.6(d). At bottom, the Appellate Division’s erroneous interpretation of the Code in the case at bar ignores the plain meaning and the plain language of the Code, is fundamentally at odds with well-established rules of statutory construction and landlord-tenant law, is contrary to established case law, and would lead to an unintended and absurd result. There are no other appellate decisions holding that an individual can automatically become a “permanent tenant” under the Rent Stabilization Code 1 Indeed, during oral argument in the Appellate Division, Branic noted that under Pitt’s theory of the law, a person could gain occupancy to a room by breaking in through a window without paying rent, and if they were able to stay in the room for six months (without paying rent), they would become a “permanent tenant.” In response, a panel member remarked “What’s wrong with that?” 7 merely and solely because he or she occupies a room leased and paid for by the City for six months, particularly where, as here, the individual never paid rent or even attempted to pay rent,2 never had any agreement with the owner whatsoever, and never even had any obligation to pay rent. While Appellant recognizes and wholeheartedly agrees that the homelessness epidemic is an important and genuine concern worthy of the utmost consideration, the Appellate Division’s ruling herein does not benefit the homeless -- in fact, it accomplishes the very opposite by discouraging private landlords to voluntarily enter into agreements with the City to provide temporary shelter for the homeless -- and will have a chilling effect on a landlord’s willingness to enter into such agreements in the future. Moreover, the Order invites lawlessness, and extends an invitation to homeless people to occupy temporary emergency housing arranged and fully paid for by the City, and then refuse to leave or be relocated when the City determines that an individual either no longer qualifies for emergency housing or, as in the case at bar, the City makes alternate emergency housing arrangements at another location, also arranged and paid for by the City, and worse, refusing the City’s relocation efforts while effectively continuing to 2 Pitt never even attempted to pay rent despite the fact that the Appellate Division ordered him to do so as a condition for the stay of enforcement of the warrant of eviction. (R325) 8 occupy the room “rent-free” for an inordinate period of time under the guise of the “Rent Stabilization Code,” which simply does not apply to such situation. Such a result is even more egregious considering that the City offered to provide alternate, free housing to Pitt, but Pitt simply refused to leave and instead, stayed in his room for six more years, without paying a dime. The Order should be reversed as a matter of law. JURISDICTIONAL STATEMENT On June 9, 2009, the Civil Court, New York County dismissed Branic’s licensee holdover petition (R6-8) and thereafter denied Branic’s motion to renew and reargue on December 3, 2009. (R10-13) Branic timely appealed to the Appellate Term, First Department. (R5, 9) On December 22, 2010, the Appellate Term, First Department correctly reversed, granted Branic’s cross-motion for summary judgment on its holdover petition, and issued a warrant of eviction. (R327-329) Pitt filed a motion to reargue in the Appellate Term and/or in the alternative, for leave to appeal to the Appellate Division, First Department. That motion was denied on March 6, 2011. (R326) Pitt then filed a motion with the Appellate Division, First Department seeking leave to appeal and for a stay pending appeal which motion was granted on December 11, 2011. (R3235) The stay was conditioned on Pitt paying arrears and fair use and occupancy. (R325) 9 Pitt never paid any use and occupancy and thereafter voluntarily vacated his room on July 30, 2012. However, after voluntarily vacating his room, Pitt perfected his appeal on or about September 13, 2012, stating that the case fell within an exception to the mootness doctrine. The Appellate Division, First Department agreed and thereafter reversed the Appellate Term and dismissed Branic’s holdover petition in a final Decision and Order dated April 16, 2013. (R312-324) On May 22, 2013, Branic moved in the Appellate Division, First Department for leave to appeal to this Court. By Order dated August 6, 2013, the Appellate Division, First Department granted Branic’s motion for leave to appeal to the Court of Appeals. (R311) On August 16, 2013, the Court asked the parties to submit letters concerning the issue of mootness and the Court’s retention of subject-matter jurisdiction. The parties submitted such letters, and this Court concluded its jurisdictional inquiry by letter dated October 10, 2013. As established in Point V, infra, despite Pitt’s vacatur of the premises, the Appellate Division found the appeal fell within the exception to the mootness doctrine because it found the case presented issues which (i) are likely to recur each time a person eligible for temporary housing assistance is placed in a participating facility; (ii) will evade review because of the relatively short time 10 period in which the person would normally be expected to stay there; and (iii) are both novel and substantial. Thus, this Court retains subject-matter jurisdiction to decide the appeal on the merits. 11 QUESTIONS PRESENTED A. Where Rent Stabilization Code Section 2520.11(b) expressly provides, inter alia, that “housing accommodations…leased… by any municipality” are exempt from regulation under the Rent Stabilization Code, was the Appellate Division, First Department correct in determining that the “housing accommodation” occupied by Respondent Phillip Pitt was not exempt from the Rent Stabilization Code, even though the housing accommodation occupied by Pitt was leased by the City of New York pursuant to a lease agreement between the City and Branic, pursuant to which the City paid Branic for the emergency housing accommodations in furtherance of its statutory duty to provide emergency housing for statutory eligible individuals? B. Assuming arguendo that the housing accommodation occupied by Pitt was not exempt from the Rent Stabilization Code (although it was), did the Appellate Division, First Department correctly construe Section 2520.6(j) of the Code when it found Pitt to be a “permanent tenant” pursuant to the first sentence of Section 2520.6(j) merely because Pitt occupied a housing accommodation for more than six months, but ignored the third sentence of Section 2520.6(j) which expressly provides, inter alia, that: “reference in this Code to ‘tenant’ shall include permanent tenant with respect to hotels” and where Section 2520.6(d) expressly provides that a “tenant” is “[a]ny person named on a lease as lessee or lessees, or who is or are a party or parties to a rental agreement and obligated to pay rent for the use or occupancy of a housing accommodation, thereby making the definition of “tenant” expressly applicable to “permanent tenants?” C. Was the Appellate Division correct in holding that a homeless person who refuses to relocate from temporary emergency shelter in a hotel room that was leased and paid for by a New York City social services agency, and who never entered into any lease or any other agreement with the hotel owner and never paid or attempted to pay any rent whatsoever, is entitled to “permanent tenant” status and rights conferred by the Rent Stabilization Code merely because he resided in the City- rented room for more than six months? 12 STATEMENT OF FACTS Branic is the owner of a private hotel located at 216 West 103rd Street, New York, New York (the “Facility”)(R26). A. Branic Enters Into A Rental Agreement With The City Of New York To Provide Temporary Emergency Housing The New York City Department of Social Services, through the Human Resources Administration (the “City”) entered into a written lease rental agreement with Branic (the “Facility Rental Agreement”) whereby the City agreed to lease and rent a number of rooms in Branic’s Facility to temporarily house homeless and other people statutorily eligible for such emergency housing.3 (R27, 102, 110) The City is required by law to provide emergency temporary housing accommodations to certain eligible homeless individuals, disabled people, and victims of domestic violence. See, e.g., Wright v. Giuliani, 230 F.3d 543 (2d Cir. 2000)( housing for AIDS patients); NYC Administrative Code, §21-128 (AIDS victims), NYC Administrative Code §21-130 (victims of domestic violence); Winds v. Turner, N.Y.L.J., p. 19, col. 2 (Sup. Ct. N.Y. Cty. 9/18/2002)(compelling City to comply with its obligation to provide transitional housing). 3 The record in the Civil Court and the Appellate Term did not contain a copy of the Facility Rental Agreement. Despite Branic’s efforts to subpoena same from the City because it could not then find its own copy (R38-63), the subpoena was quashed on the City’s motion, supported by an affidavit from Pitt, based on alleged confidentiality concerns. (R64-68) However, Pitt’s counsel thereafter obtained a copy and included it for the first time in an Appendix submitted to the Appellate Division, along with other materials (see R228-307). 13 The Facility Rental Agreement states, in part, that “The Operator [Branic] manages an Emergency Housing Facility. . .(the “Facility”). During the two-year period following the signing of this MOU, the Operator shall set aside, at most, 134 of the Facility’s rooms exclusively for occupancy by Eligible Persons referred by HRA.” (R297) Thus, Branic agreed to exclusively lease up to 134 rooms in the Facility to the City for an agreed upon term and agreed upon rate. (R27, 102, 297) The amount paid ($65.00 per night) was a nightly rate determined by the City and agreed to by Branic, and was not determined under the Rent Stabilization Law or fixed by the Department of Housing & Community Renewal. (R27, 102, 300) Under the Facility Rental Agreement, the City alone determined who was permitted to occupy one of the City-rented rooms. B. The City Places Phillip Pitt In Branic’s Facility The City placed Phillip Pitt in Branic’s Facility and he was assigned one of the rooms leased by the City. (R10, 27, 102, 110) From Pitt’s initial occupancy until April 2007, the City voluntarily paid to Branic the $65.00 nightly rate due for his room which was leased by the City. (R102, 110) Each month, Branic submitted bills to the City for each of the City leased rooms occupied by such eligible persons, which bills included (i) the names of each person placed by the City for emergency shelter in the Facility; (ii) the $65 agreed upon nightly rate for 14 each rented room; (iii) the total amount due for each room for the monthly period; and (iv) a copy of the nightly sign-in sheets. (R103, 111-112) The City then paid the rent due on all such rooms to Branic on a monthly basis. (R103, 111-112) C. The Facility Rental Agreement Expires By Its Own Terms As the Appellate Term correctly found, the Facility Rental Agreement expired in December 2006. Not only did Branic’s building manager, Glenn Westerlind, state without contradiction that the Facility Rental Agreement expired on December 16, 2006 (R110-111,189), the Facility Rental Agreement itself provided that it expired December 16, 2006. On page 2, it states “During the two year period following the signing of this MOU, the Operator shall set aside, at most, 134 of the Facility’s rooms exclusively for occupancy by Eligible Persons.” (R297)(emphasis added) . D. Following The Expiration Of The Facility Rental Agreement, The City Cancelled Pitt’s Room And Ceased Voluntary Payment In April 2007, the City notified Branic that it was cancelling its rental of Pitt’s room effective April 17, 2007 via facsimile (R27, 42, 102, 111, 116). The notice was entitled “CANCELLATION/ROOM CLOSURE VERIFICATION 15 (Emergency Facility)” and stated that "Payments on his/her room will be stopped at cancellation and noted the “Date of Cancellation” as 4/17/2007 (R116).4 The City thereafter confirmed to Branic’s building manager, Glenn Westerlind, that Pitt’s right to occupy the room was cancelled and confirmed that the City had directly advised Pitt to contact his caseworker for relocation to a new emergency facility selected and to be paid for by the City. (R42, 103, 111) Consistent with the cancellation notice, the City ceased voluntarily paying for Pitt's occupancy on or about April 17, 2007. (R54-56, 111,116,171, 226-227) All the other eligible persons then occupying rooms in the Facility pursuant to the Facility Rental Agreement were relocated by the City into other emergency housing selected by the City (R189-190) – all except Pitt who wrongfully refused to leave or be relocated by the City like all the other eligible persons, even though it would not have cost Pitt anything as all relocation and housing expenses would be solely paid by the City. Pitt simply refused to leave and be relocated at no cost to another facility rented by the City, where Pitt could continue his rent-free occupancy. Instead, he continued in occupancy of his room at Branic’s Facility, 4 Apparently the City had been misinformed that Pitt had already vacated the premises like the other eligible persons in the Facility, when that was not the case. Nevertheless, the City sent the Cancellation Notice (R116) and it is undisputed that it thereafter ceased all voluntary payments for Pitt’s room. (R226-227) 16 without Branic’s (or the City’s for that matter) permission or consent, and without paying any rent or ever even attempting to pay rent to Branic. (R28, 227) E. Branic Commences a Licensee Holdover Proceeding In May 2007, Branic served a “Notice of Termination and/or License to Quit” on Pitt (R58-59) and in June 2007, commenced a licensee holdover proceeding in the Civil Court, County of New York. (R49-63) In that holdover proceeding, Branic specifically alleged that “The respondents have occupied the premises and no use and occupancy has been paid for the room for any period of time subsequent to the date of HRA’s “Cancellation/Room Closure Verification”…forwarded to the landlord on or about April 17, 2007.” (R55) Issue was joined, and Pitt moved for summary judgment, contending he was entitled to dismissal of the proceeding because he was purportedly a “permanent tenant” under the Rent Stabilization Code merely and solely because Pitt had resided in the City-rented housing accommodation for more than six months and thus could not be evicted. (R14-98) Branic cross-moved for summary judgment based on the undisputed facts, correctly contending that the housing accommodation rented and paid for by the City which Pitt occupied was not subject to regulation under the Rent Stabilization Code pursuant to Section 9 N.Y.C.R.R. 2520.11(b) which expressly exempts “housing accommodations…leased by…any municipality” and that in any event, 17 Pitt was not a “ permanent tenant” nor a “tenant” as he was “not named on a lease as lessee..[n]or a party…to a rental agreement and [did not have] any obligation to pay rent for the use or occupancy of [his] housing accommodation” as required by Sections 2520.6 (d) and (j) in order to be a “permanent tenant” and thus Pitt’s license to occupy the room had terminated in April 2007 when the City decided to relocate Pitt to another location leased by the City. (R99-147) F. Pitt Files a Discrimination Complaint With the New York State Division Of Human Rights Based On The Holdover Proceeding, Which Was Dismissed After a Thorough Investigation In 2008 In March 2008, Pitt filed a Complaint with the New York State Division of Human Rights claiming that Branic was engaging in discriminatory conduct by attempting to evict him based on his disability. (R189) After an investigation, the Director of the Division found there was “no probable cause” to believe Pitt’s allegations and specifically found that Branic was acting lawfully in attempting to evict Pitt after the Facility Rental Agreement with the City expired in December 2006 because Pitt had no legal right to remain in the Facility: “[U]pon expiration of the [Facility Rental] Agreement, the Agreement was not renewed and therefore all residents within the SRO no longer had a legal right to tenancy under the Agreement. The investigation does not support that Respondents’ attempt to have Complainant evicted, upon the expiration of the Agreement, was based on Complainant’s disability. Notably, the Investigation supports that Respondents’ conduct was the result of the Agreement having expired and was 18 within the lawful scope of the terms of the Agreement. Notably, Complainant and Respondent had no independent agreement regarding his tenancy. . .The investigation revealed that Complainant was one of many residents, who is living with a terminal illness and receives temporary emergency housing through agreements between NYCHRA and various landlords. . . Upon the expiration of the Agreement, NYCHRA began to look for a new placement for Complainant. Further, the Division interviewed residents of the SRO, who noted that their evictions were the result of economics rather than discriminatory treatment . . .In total, Complainant has not shown that Respondents subjected him to discriminatory treatment.” (R189-190) G. The Civil Court Dismisses The Petition In June 2009 By Order dated June 9, 2009 (R6-8), the Civil Court erroneously granted Pitt’s motion for summary judgment and dismissed the holdover proceeding, finding that Pitt had attained “permanent tenant” status and that it did not matter whether Pitt paid rent, and it did not matter whether Pitt was a party to an agreement to pay rent for the housing accommodation, merely because Pitt had continually resided in the housing accommodation leased and paid for by the City for more than six months. (R8) Branic moved to renew and reargue (R160-227) contending, inter alia, that the room was exempt from the Code and that the Court misconstrued the Rent Stabilization Code regarding Pitt’s status thereunder. By Order dated December 3, 2009, the Civil Court denied Branic’s motion, reiterating that Pitt did not need to have an obligation to pay rent – much less actually pay rent. (R10-13) It further found that neither fact was “a factor in 19 classifying someone as a permanent tenant,” and that the sole criterion to make Pitt a “permanent tenant” was his occupancy in his room. (R12) Branic then appealed to the Appellate Term.5 H. The Appellate Term Correctly Reverses The Civil Court By Order dated December 22, 2010, the Appellate Term correctly reversed the Civil Court's Order (A327-329), reinstated Branic’s holdover petition, and granted Branic summary judgment on its holdover petition. The Appellate Term Order properly construed the Rent Stabilization Code, held that it did not protect Pitt’s occupancy of the room, and correctly found that Pitt was not a “permanent tenant” because he had no landlord-tenant relationship with Branic and did not meet the definition of “permanent tenant” under Section 2520.6 (j), nor the definition of “tenant” under Section 2520.6(d) of the Rent Stabilization Code (which is expressly made applicable to permanent tenants pursuant to the last sentence of Section 2520.6(j) of the Code), and was merely a licensee of the City of New York who could be evicted after the City decided to relocate him at the City’s sole expense: 5 In 2009, Branic was compelled to file an action against the City, seeking the unpaid use and occupancy for Pitt’s continued occupancy from April 2007 through November 2009, which resulted in a judgment in Branic’s favor. Thereafter, Branic and the City settled the dispute up through and including use and occupancy due through September 2010. (R305) 20 “There was no express or implied landlord-tenant relationship... between petitioner and respondent (see 9 NYCRR 2520.6(d), (j);)... Therefore, respondent was merely a licensee of HRA, . . .not a ‘permanent tenant’ entitled to the protections afforded by the Rent Stabilization Code...Since respondent’s license was revoked and he has no right to continued possession...petitioner’s cross-motion for summary judgment on its claim for possession should have been granted.” (R329)(internal citations omitted) I. Pitt Is Granted Leave To Appeal By The Appellate Division Pitt filed a motion to reargue in the Appellate Term and/or in the alternative, sought leave to appeal to the Appellate Division, First Department (R228-247), which motion was denied by the Appellate Term on March 6, 2011.6 (R326) Pitt then filed a motion in the Appellate Division seeking leave to appeal, and further sought a stay pending appeal. The Appellate Division granted Pitt’s motion on December 11, 2011 on the condition that Pitt pay all arrears and ongoing use and occupancy. (R325) However, Pitt failed to comply with these conditions, never paid any arrears or use and occupancy to Branic in violation of the Court's Order, 6 In that motion, Pitt’s counsel argued that the Appellate Term erred in finding that there was an agreement between Branic and the City, because at that point in time, a copy of the Facility Rental Agreement was not in the record. Pitt’s Counsel argued that because Branic’s subpoena to obtain a copy of that agreement had been quashed on confidentiality grounds, that was “a clear indication that any agreement involved Mr. Pitt personally and was not an agreement between the Landlord and HRA. . .the alleged agreement subpoenaed by the Landlord from HRA could not possibly have been an agreement or a lease between the Landlord and HRA. HRA moved to quash the subpoena on the basis of its duty of confidentiality to Mr. Pitt. The issue of confidentiality implies that any agreement involved Mr. Pitt personally. Thus. . .no agreement existed between the Landlord and HRA.” (R239-240) The Facility Rental Agreement is now in the record, confirming that it was an agreement directly between the City and Branic, and did not name or include Pitt personally in any way, thereby decimating Pitt’s counsel’s argument. 21 and to this day, Pitt has never paid one cent to Branic for his occupancy of his room nor even attempted to do so. J. Prior To The Time Pitt Had To Perfect His Appeal, He Voluntarily Moved Out Of Room 214 On July 30, 2012, Pitt voluntarily moved out of the Facility. (R316) Even though Branic believed that Pitt’s unperfected appeal to the Appellate Division, First Department was thus rendered moot, Pitt's counsel nevertheless perfected the appeal in September 2012. Branic thereafter moved to dismiss the appeal on the ground of mootness, but the motion was unanimously denied without opinion on December 4, 2012. (R316) K. The Appellate Division Reverses and Dismisses Branic’s Petition On April 16, 2013, the Appellate Division, First Department decided the appeal on the merits, finding that the issues presented by the appeal fell squarely within an exception to the mootness doctrine: “As a threshold matter, we find that this appeal is not rendered moot by the fact that Pitt voluntarily vacated the premises before the appeal was perfected. . .This matter presents an issue of substantial public interest that is likely to recur and evade review. Specifically, this Court must address the question of what constitutes a legal tenancy under the Rent Stabilization Code, and what rights are vested in a person occupying premises under the contract between a landlord and a social service agency. This is an issue that affects a large number of New Yorkers who declare permanent tenancy in a SRO. Thus, it presents an exception to the mootness doctrine.” (R317) 22 Turning to the merits, the Appellate Division reversed the Appellate Term Order, first mistakenly concluding that Pitt’s room -- rented and paid for by the City -- was not exempt from rent stabilization pursuant to Section 2520.11(b) of the Code because, inter alia, it astoundingly found the Facility Rental Agreement was somehow not a “lease,” although it did not (and apparently could not) state what the actual nature of the Facility Rental Agreement was, and despite the fact that it had every indicia of a lease, including, but not limited to the fact that the Facility Rental Agreement provided the City with exclusive occupancy of housing accommodations for it to place statutory eligible individuals for an agreed-upon term and agreed-upon rate. (A321) The Court remarkably also found that the fact that Pitt was placed by the City in the Facility pursuant to the Facility Rental Agreement was irrelevant and did not make him a licensee. (R320) The Appellate Division then erroneously held that Pitt was a “permanent tenant” under the Rent Stabilization Code merely because he resided in his City- rented room for more than six months, relying solely on the first sentence of Section 2520.6(j) of the Code which provides that an individual who has “continuously resided in the same building as a principal residence for a period of at least six months” alone qualifies a person, such as Pitt, as a permanent tenant. In doing so, the Appellate Division misconstrued that Section of the Code because, among other things, it ignored the last sentence of that very same section 23 which provides that “reference in this code to “tenant” shall include permanent tenant with respect to hotels.” The Appellate Division thus erroneously exclusively relied upon one sentence of Section 2520.6(j) in a vacuum, ignoring the fact that when the entirety of Section 2520.6(j) is properly construed, it requires that in order to qualify as a “permanent tenant” under the Code, Section 2520.6(d) must also be satisfied which provides that a “tenant” [and therefore a “permanent tenant” per the last sentence of Section 2520.6(j)] is “[a]ny person or persons named on a lease as lessee or lessees, or who is or are a party or parties to a rental agreement and obligated to pay rent for the use or occupancy of a housing accommodation.” (emphasis added) Apparently recognizing the critical importance of this matter, and consistent with its earlier holding that the appeal was not mooted by Pitt’s voluntary vacatur prior to his perfection of his appeal (and also perhaps their recognition of the unprecedented nature of their decision), the Appellate Division granted leave to appeal to this Court on August 6, 2013. 24 POINT I THE APPELLATE DIVISION ERRED WHEN IT FOUND PITT’S ROOM WAS NOT EXEMPT FROM THE RENT STABILIZATION CODE PURSUANT TO SECTION 2520.11(B) OF THE CODE, WHICH SECTION EXPRESSLY EXEMPTS ROOMS THAT ARE LEASED TO A MUNICIPALITY FROM REGULATION UNDER THE RENT STABILIZATION CODE Housing accommodations are exempt from the Code under a number of circumstances, such as here when premises are owned, operated, or leased by a municipality, such as the City. Section 2520.11(b) of the Code specifically provides as follows: “This Code shall apply to all or any class or classes of housing accommodations made subject to regulation pursuant to the RSL or any other provision of law, except the following housing accommodations for so long as they maintain the status indicated below: . . . (b) housing accommodations owned, operated or leased by the United States, the State of New York, any political subdivision, agency or instrumentality thereof, any municipality or any public housing authority. . .” (emphasis added) Thus, housing accommodations which otherwise may be subject to the Rent Stabilization Law are exempt from the Code for the period of time that they are owned, operated, or leased by the City of New York as a matter of law. See, e.g., Hatanaka v. Lynch, 304 A.D.2d 325, 756 N.Y.S.2d 578 (1st Dep’t 2003)(rent stabilized building exempt from stabilization laws during period when it was 25 leased by the School of Visual Arts as housing for its students pursuant to Rent Stabilization Code § 2520.11(f)). Here, the rooms were indisputably leased by the City for the use of its clients, to fulfill the City’s statutory obligation to provide emergency housing7 and thus fell squarely within the exemption of Section 2520.11(b). Indeed, in recognition of the exempt status of the rooms, the amount of rent paid by the City to Branic was not fixed by the Code provisions or the DHCR but rather, was fixed by the City.8 The Appellate Division, First Department erroneously found Pitt’s room was not exempt because it found the Facility Rental Agreement was not a “lease,” because it allegedly did not contain all the essential terms of a lease, and that Branic did not surrender “absolute possession and control” over the rooms to the 7 The City has statutory obligations to provide emergency temporary housing for the homeless and other eligible individuals which is funded by a combination of state and federal funds. See, e.g., NYC Administrative Code, §21-128; Winds v. Turner, N.Y.L.J. p. 19, col. 2 (Sup. Ct. N.Y. Cty. 9/18/2002) (compelling the City to comply with its obligation to provide transitional housing); Hanna v. Turner, 2001 WL 1704931 (Sup. Ct. N.Y. Cty.), aff’d as modified, 289 A.D.2d 182, 735 N.Y.S.2d 513 (1st Dep’t 2001)(describing need for emergency housing and City’s obligation to provide it); Wright v. Giuliani, 230 F.3d 543 (2d Cir. 2000)(housing provided for AIDS patients); Henrietta D. v. Giuliani, 119 F.Supp.2d 181 (E.D.N.Y. 2000) (discussing City’s obligation to provide housing and failure to, inter alia, pay rent on behalf of its clients resulting in eviction or loss of apartment); Mixon v. Grinker, 157 Misc.2d 68, 595 N.Y.S.2d 876 (Sup. Ct. N.Y. Cty. 1993), rev’d on other grounds, 88 N.Y.2d 907, 646 N.Y.S.2d 661 (1996)(discussing City’s obligation to house the homeless). 8 DHCR is the sole administrative agency to administer the regulation of rent under the rent control and rent stabilization statutes. Rent Stabilization Ass'n of New York City, Inc. v. Higgins, 83 N.Y.2d 156, 165, 608 N.Y.S.2d 930, 932 (1993). 26 eligible persons placed there by the City pursuant to the Facility Rental Agreement. Notably, the Court did not say what the actual nature of the Facility Rental Agreement was, other than to say it was not a lease. (R320-21) This was error as a matter of well settled law. The Facility Rental Agreement is indisputably a lease. To be considered a lease, a document must identify (i) the parties thereto; (ii) the premises to be leased; (iii) the term; and (iv) the rent to be paid. See generally Friedman on Leases, §§2.1 (parties), 3.1 (description of premises), 4.1 (term of the lease), and 5.1 (rent)(3d Ed. 1990). Most importantly, and as stated by Rasch: “The central distinguishing characteristic of a lease is the surrender of absolute possession and control of property to another for an agreed-upon rental. There must be a mutual assent or meeting of the minds on all the essential elements or terms of the lease, without the reservation of any such element for future negotiations. If a material element of a contemplated agreement is left open for future negotiation and agreement, there is no contract enforceable at all.” Rasch’s Landlord and Tenant, §2.7 (4th Ed. 1998). See also Bernstein v. 1995 Assoc., 185 A.D.2d 160, 162, 586 N.Y.S.2d 115, 117 (1st Dep’t 1992)(letter was in the nature of a lease, not an unenforceable agreement to agree, where “the letter contained all the essential terms of an enforceable agreement. The letter. . .sufficiently set forth the area to be leased, the duration of the lease and the price to be paid, fair market value. The price term in 27 the agreement was sufficiently precise since the amount of rent to be paid could be determined objectively.”); 219 Broadway Corp. v. Alexanders, Inc., 46 N.Y.2d 506, 409, 414 N.Y.S.2d 889, 890 (1979)(“a lease achieves two ends, to wit: the conveyance of an estate in real property from lessor to lessee, and the delineation of the parties’ rights and obligations thereto.”) In Miller v. City of New York, 15 N.Y.2d 34, 255 N.Y.S.2d 78 (1964), this Court dealt with the question of whether a particular agreement titled a “license,” entered into by the City of New York, was a lease or a revocable license. In finding it was a lease, the Court held “Although the contract speaks of a ‘license’ and avoids use of the word ‘lease’ it contains many provisions typical of a lease and conferring rights well beyond those of a licensee or holder of a mere temporary privilege. . . A document calling itself a ‘license’ is still a lease if it grants not merely a revocable right to be exercised over the grantor's land without possessing any interest therein but the exclusive right to use and occupy that land.” Id. at 37-38 (emphasis added). And in Feder v. Caliguira, 8 N.Y.2d 400, 208 N.Y.S.2d 970 (1960), this Court found the document in question was not a lease, noting that “It is the transfer of absolute control and possession of property at an agreed rental which differentiates a lease from other arrangements dealing with property rights. . .’we must look to the rights it [the agreement] confers and the obligations it imposes’ in 28 order to determine the true nature of the transaction and the relationship of the parties.” Id. at 404 (quoting Matter of New York World-Tel. Corp. v. McGoldrick, 298 N.Y. 11 (1948)). In Feder, the plaintiff entered into an agreement with the defendant to place plaintiff’s jukebox in defendant’s Brooklyn pizzeria. In exchange for allowing the jukebox to be placed in the premises, the defendant shared in a percentage of the profits. The issue before the Court was whether the agreement between the parties was a personal lease of property. The Court found that, inter alia, because the defendant had no obligation to pay rent, but in fact shared in the profits generated by the jukebox, the agreement was not a lease. The Court further found that since the defendant was not given the exclusive use of the jukebox machine, the right to control its use, nor any other form of dominion over it, it was not a lease: “A lease of property in which the lessee has no right either to use the property or to control its use is an unheard of legal conception.” Id. at 405. Further, it is hornbook law that a lease is both a contract and a conveyance – a contract containing the terms the parties agreed to, and a conveyance of exclusive 29 possessory rights to the tenant. Friedman on Leases, §1.1 (3d Ed.) 9 When the Facility Rental Agreement was executed by the parties it was a contract, but not then a conveyance of possession. It was only when each individual was referred to and placed in a room in the Facility that there was a conveyance of exclusive possession of a particular room by Branic to the City. The Facility Rental Agreement (R296-304) contained all the essential terms of a lease: . it identifies the parties to the lease (Branic and The City of New York)(R296) . it identifies the premises to be leased (up to 134 rooms in the Facility (R296, 297) . it identifies the term of the lease (“During the two-year period following the signing of this MOU, the Operator shall set aside, at most, 134 of the Facility’s rooms exclusively for occupancy by Eligible Persons referred by HRA.”)(R297)(emphasis added); . it identifies the rent or consideration to be paid by the City to Branic per person, per night ($65.00 per night)(R300) 9 Thus, a lease is comprised of two parts: a present interest in a future estate, or interesse termini, followed by a conveyance of an estate in possession, by which the individual takes exclusive possession of premises. As stated in Rasch, Landlord and Tenant: “A lease for a term to commence in the future is valid. EPTL §6-3.3 which provides that an estate. . .may be created to commence at a future time…From the time of the making of a lease for a term to commence at a future date, a present interest vests in the tenant. This interest is called an ‘interesse termini.’….The term is that period which is granted for the lessee or tenant to occupy and have possession of the leased premises.” Id., §1:4 (4th Ed.) Here, when the City Rental Agreement was executed, but before any rooms were assigned to HRA clients, HRA had a present interest in a future estate, or interesse termini. This interest was then transformed into an estate in possession each time a room was assigned to an HRA client and the HRA client took exclusive possession of that room. 30 . it provides that upon the City placing one of its eligible clients to Branic’s building for housing, Branic would give that person exclusive use and possession of one of the City’s rooms, giving that person the exclusive use and right to occupy that room. (R297) . it obligated Branic to maintain the premises and common areas and provide certain services to the referred persons (R298-299) . it required Branic to notify the City in the event that Branic had to evict anyone, further confirming that the City was the entity leasing the rooms, not the persons placed in the rooms. (R299) Nevertheless, the Appellate Division, First Department erroneously found there was an “absence of essential terms” because the Facility Rental Agreement provided for Branic to set aside “up to 134 rooms” but did not state the “precise number of rooms to be occupied” at the outset. (R321) There is no case law supporting a contention that the precise number of housing accommodations to be leased from time to time must be identified at the outset of a lease in order to qualify as a lease. The Appellate Division also erroneously concluded that the Facility Rental Agreement did not show “the surrender of absolute possession and control of property to another party for an agreed-upon rental” (A321). To the contrary, the Facility Rental Agreement did contain all the essential terms, and did show by its own terms “the surrender of absolute possession and control of property to another party for an agreed-upon rental.” In fact, the Facility Rental Agreement specifically provided that Branic was required to set aside rooms to be used by the City “exclusively for occupancy by Eligible Persons 31 referred by HRA.”)(R297) Upon assignment of a room, exclusive possession and control of that room was given to the City for the purpose of the City’s placing an eligible person in exclusive occupancy of that room. Indeed, because Pitt was in exclusive possession of the room, a summary proceeding had to be brought to evict him. Otherwise, a summary proceeding would have been unnecessary. In support of its erroneous conclusion that the Agreement was not a “lease,” the Appellate Division cited to an inapplicable zoning case, Davis v. Dinkins, 206 A.D.2d 365, 613 N.Y.S.2d 933 (2d Dep’t 1994). That case is utterly inapposite. There, petitioners commenced an action seeking to enjoin the City from housing up to 150 homeless families in the Kennedy Inn, a hotel in Queens. The petitioners argued that a homeless shelter would adversely affect the area and strain its limited resources. The petitioners also alleged that because this arrangement constituted a “leasing arrangement” by the between the City and the Kennedy Inn as contemplated by Uniform Land Use Review Procedure (hereinafter “ULURP”) , it was subject to ULURP and required a “fair-share” hearing pursuant to New York City Charter §§ 203 and 204. There was no written agreement between the Kennedy Inn and the City. However, the Supreme Court found an oral lease existed and directed the City to conduct proceedings pursuant to ULURP and a fair-share hearing. On appeal, the Appellate Division, Second Department reversed, and found no oral lease existed 32 and therefore the City was not required to comply with the procedures of ULURP. Specifically, the Second Department found no lease existed because it erroneously found the essential terms of the rental were not agreed upon: “The central distinguishing characteristic of a lease is the surrender of absolute possession and control of property to another party for an agreed-upon rental.... In order for an agreement, oral or written, to be enforceable as a lease, all the essential terms must be agreed upon... These essential terms include the area to be leased, the duration of the lease, and the price to be paid...If any of these essential terms are missing and are not otherwise discernible by objective means, a lease has not been created... Here, neither the area to be leased nor the length of the term has been agreed upon or is discernible by objective means. Specifically, there was never any agreement or obligation to rent any particular number of rooms, nor was there any agreement or obligation to rent for any particular time period... neither the City nor the Kennedy Inn had any contractual rights or obligations to lease any specified area for any specified length of time. The City could, with impunity, refuse to refer any families to the Kennedy Inn, and the Kennedy Inn would be without legal recourse. Concomitantly, the Kennedy Inn was under no obligation to accept any family referred by the City, and retained the unfettered power to end the stay of a family, and has done so on numerous occasions, with no legal recourse available to the City.” Id. at 366-367 (emphasis added) Although this view was expressed in the majority holding, it was clear error, and is based on a fundamental misunderstanding of basic landlord-tenant law principles. In contrast, the dissent in that case accurately analyzed the facts and legal issues. In any event, even assuming the Davis majority was correct, it still 33 does not support the Appellate Division’s holding that the Facility Rental Agreement was not a lease. First, under the Facility Rental Agreement, unlike the agreement in Davis, Branic had the obligation “to accept any [eligible person] referred by the City.” (R297). Second, Branic did not “retain the unfettered power to end the stay of a [eligible person]” as the landlord in Davis had retained. Thirdly, unlike the landlord in Davis, Branic had not “end[ed] the stay of a [eligible person]…on numerous occasions, with no legal recourse to the City.” The Facility Rental Agreement, unlike the agreement in Davis, expressly provides that Branic “agrees to accept referrals from HRA of Eligible Persons, and shall admit all those referred at the Facility.” (R297). Again unlike the agreement in Davis which provided no recourse to the City if the landlord refused a referral, Article 3(C) of the Facility Rental Agreement expressly provided that the City may terminate or suspend the Facility Rental Agreement if there was “[a] refusal by the Operator to register any Eligible Person who has been referred to the Facility in accordance with Article 1(B), without prior consultation with EPU personnel, except a refusal based upon the unavailability of an appropriate dwelling unit.” (R301) Furthermore, unlike the agreement in Davis which allowed the landlord the “unfettered power to end the stay of any [eligible person],” Article 1, Section J of the Facility Rental Agreement expressly required that “HRA’s written approval 34 will be needed before the Operator may remove or evict from the Facility any referred Eligible Person who the Operator reasonably believes is a threat to the health and safety of the Operator’s employees or guests.” (R299) The Davis majority found that merely because the arrangement between HRA and the Kennedy Inn did not specify the exact number of rooms, it was missing an essential term. However, there is no case law that supports such a holding. Because a lease is both a contract and a conveyance, it is not essential that the lease state with specificity every particular room ultimately to be leased to HRA; rather, the lease stated that the Kennedy Inn would provide up to 150 rooms, and a conveyance would thereafter occur each time exclusive use of that room was given to an HRA client. The fact that particular rooms would be conveyed at different times does not make the arrangement any less a “lease.” Similarly, the Davis majority erroneously found that because no specific term for each HRA client was provided, it was missing an essential term. This, too, was error. As the dissent correctly noted, once an HRA client was placed in the Kennedy Inn, absent any definite term they would simply be a month to month tenant. This does not make the arrangement any less a “lease.” The dissent correctly analyzed the issue as follows: 35 “Under the terms of the exclusive covenant at bar, . . .the Kennedy Inn. . .agreed to make available up to 150 of its 189 rooms, to be occupied by homeless families referred by the Human Resources Administration. . .The agreed-upon rate per room was $105 per day . . .This rental was paid by direct electronic transfer on a month-to-month basis from HRA into the hotel’s bank account. . .The HRA has thus engaged to fill 150 rooms at the Inn with homeless families, . . .to the exclusion of all others. Even though the intended period of occupancy of each homeless family is somewhat indefinite, the rate of rent is fixed at $105 per room per day. It is therefore indisputable that the City entered into a master lease arrangement with the Inn, as distinguished from a ‘license,’ since the respondents obtained exclusive and absolute control of the premises. In effect, a homeless housing center or complex was established. . .Moreover, judging from the manner in which rent was paid, the lease contemplated by the parties was a month to month tenancy. . . At the least it was a tenancy at will, and not a freely revocable license. In consequence, the Supreme Court properly found that the ‘lease’ at issue was subject to the land use review proceedings [under ULURP]. . .”. Id. at 368-370. (emphasis added) The dissent correctly pointed out that even if a precise term was not delineated in the parties’ arrangement, it did not make it any less of a “lease” because a lease can also be a month-to-month tenancy or in the nature of a tenancy at will. In any event, unlike in Davis v. Dinkins, the parties here had a written agreement setting forth all the essential terms of their agreement, under which they performed. (R296-304) The Facility Rental Agreement provided that Branic would set aside 134 rooms in its hotel for the exclusive use and occupancy of the City’s clients (R297) and it could not rent those 134 rooms to anyone else but the City. It required Branic to accept all referrals from the City, and Branic was not 36 free to turn such clients away, as the owner was permitted to do in Davis v. Dinkins. If Branic violated the terms of the Facility Agreement, the City was entitled to suspend the Agreement in its entirety. (R301) Further, the Facility Rental Agreement obligated the City to pay Branic $65.00 per night for each person exclusively occupying a room. (R300) The number of rooms leased to the City was ascertainable by objective means by reference to the monthly billing invoices sent to and paid by the City, which showed the precise number of rooms leased in any given month. (R103, 112) The fact that the Facility Rental Agreement did not specify a precise number of rooms, or a precise term for each particular room, does not make it any less a “lease.” A lease need not have a specific term to be enforceable. Rather, a month to month tenancy is equally enforceable as a leasehold interest. Thus, the fact that Pitt entered possession and stayed there on a month-to-month basis does not make the term of his tenancy any less certain or precise. It is still in the nature of a lease. Thus, unlike the undefined oral arrangement in Davis v. Dinkins, the Facility Rental Agreement contained all the essential terms and was in the nature of a lease. Thus, because the rooms were leased by the City for its HRA clients, any rooms occupied by those HRA clients were exempt from the Code. Indeed, whether the Agreement is deemed a lease or a license agreement, it is irrelevant. Because the rooms were used by the City to fulfill its obligation to 37 provide emergency temporary housing, the rooms were exempt from the Rent Stabilization Laws pursuant to Section 2520.11(b) as a matter of law. In sum, the rooms leased by the City of New York were exempt from the Rent Stabilization Code under Sections 2520.11(b) as a matter of law, mandating reversal of the Order below. POINT II THE APPELLATE DIVISION MISCONSTRUED SECTION 2520.6(j), RELYING EXCLUSIVELY ON ONLY THE FIRST SENTENCE THEREIN, IGNORING AND FAILING TO APPLY THE LAST SENTENCE OF THAT SAME SECTION, IN ORDER TO SUPPORT ITS ERRONEOUS CONCLUSION THAT A “PERMANENT TENANT” IS ANYONE WHO MERELY RESIDES IN A ROOM FOR SIX MONTHS OR MORE, WITHOUT REGARD TO WHETHER THE PERSON EVER HAD AN AGREEMENT TO PAY RENT OR ACTUALLY DID PAY RENT Section 2520.6(j) of the Code defines “permanent tenant” as follows: “(j) Permanent tenant. For housing accommodations located in hotels, an individual or such individual's family members residing with such individual, who have continuously resided in the same building as a principal residence for a period of at least six months. In addition, a hotel occupant who requests a lease of six months or more pursuant to section 2522.5(a)(2) of this Title, or who is in occupancy pursuant to a lease of six months or more shall be a permanent tenant even if actual occupancy is less than six months. . . .Unless otherwise specified, reference in this Code to “tenant” shall include permanent tenant with respect to hotels.” (emphasis added) 38 Reading the first sentence of Section 2520.6(j) in a vacuum, and ignoring the last sentence of that same Section, the Appellate Division wrongly determined that “A plain reading of RSC §2520.6(j) reveals that the only requirement to be a ‘permanent tenant’ is six months or more of continuous residence in a particular hotel building” and further found that “even if Pitt and Branic did not have an express or implied landlord-tenant relationship, Pitt nevertheless qualified as a ‘permanent tenant,’ entitling him to the enumerated protections of the Rent Stabilization Code.” (R318) In so holding, the Appellate Division, First Department misconstrued Section 2520.6(j) of the Code because it failed to apply the entire section, particularly the last sentence which expressly provides that “reference in this Code to ‘tenant’ shall include permanent tenant with respect to hotels.” When the entire Section 2520.6(j) is applied, it plainly provides that in order to be a “permanent tenant” in a hotel, an individual must be a “person or persons named on a lease as lessee or lessees, or who is or are a party or parties to a rental agreement and obligated to pay rent for the use or occupancy of a housing accommodation” as provided in Section 2520.6(d). The Appellate Term, unlike the Appellate Division, properly construed and applied the entirety of Section 2520.6(j) -- including the last sentence -- and correctly cited to Sections 2520.6(d) and (j), holding that: “HRA placed respondent 39 in the SRO unit and paid the rent for the room, and no express or implied landlord- tenant relationship existed between petitioner and respondent (see 9 NYCRR §2520.6[d], [j].” (R 329) In contrast, the Appellate Division misconstrued Section 2520.6 (j), relied only on the first sentence in isolation, ignored the last sentence, and otherwise made no attempt to harmonize the respective provisions of the Code, or to properly construe the Code, in at least three respects, as established below, in violation of fundamental rules of statutory construction, leading to an absurd and unintended result. A. The Appellate Division Ignored The Fact That The Third Sentence of Section 2520.6(j) Expressly Provides That All References In the Code To “Tenant” “Shall Include Permanent Tenant With Respect To Hotels.” The Appellate Division failed to apply and give meaning to the dispositive third sentence of Section 2520.6(j) which provides: “Unless otherwise specified, reference in this Code to “tenant” shall include permanent tenants with respect to hotels.” (emphasis added) The word “tenant” itself is defined as “any person. . .named on the lease. . .or who is. . .a party. . . to a rental agreement and obligated to pay rent for the use and occupancy of a housing accommodation.” 9 NYCRR §2520.6(d)(emphasis added). 40 Although Section 2520.6(j) expressly states that all references to the word “tenant” (and its corresponding obligation to pay rent) “shall include permanent tenants with respect to hotels,” the Appellate Division ignored this and was simply wrong to find that an individual does not need to have an agreement and an obligation to pay rent to become a “permanent tenant,” inasmuch as the word “tenant” includes “permanent tenant” in hotels, and therefore just as a “tenant” is “obligated to pay rent” pursuant to a rental agreement with the owner, so too is a “permanent tenant” obligated to pay rent pursuant to a rental agreement with the owner. The Appellate Division completely ignored this last sentence and only relied upon the first sentence of Section 2520.6(j) in a vacuum thereby distorting the true meaning of Section 2520.6(j). It also found that the third sentence was only meant to confirm that although the “eligibility criteria of a ‘tenant’ and a ‘permanent tenant’ are different, a hotel’s permanent tenant is nonetheless afforded the rent stabilization protections under the RSC.” (R319) There is no legal support for this conclusion, nor did the Appellate Division cite any. If this language meant what the Appellate Division found, then the numerous, specific references to “permanent tenant” throughout the Code would be superfluous and wholly unnecessary. See, e.g., RSC §§2521.3(b), 2522.5(a)(2), 2522.5(c)(2) and (3), 2522.5(h), 2522.8(a)(2)(ii) and (3), 2522.8(b), 2524.2(c)(3), 2525.3(b), etc. 41 Moreover, in dismissing the definition of the word “tenant” and its corresponding obligation to have an agreement with the landlord to pay rent and to actually pay rent, the Appellate Division held there was “nothing in the RSC [which] mandates that these sections should be read together, such that a person must become a ‘tenant’ before becoming a ‘permanent tenant.’” (R319) This conclusion again completely ignores the third sentence of Section 2520.6(j), which specifically says that everywhere the word “tenant” is used, it “shall” include “permanent tenant” “[u]nless otherwise specified.” Section 2520.6(d) does not “otherwise specify” and thus the plain language of Section 2520.6(j) -- not to mention common sense -- mandates that a “permanent tenant” must also be a “tenant” as provided in Section 2520.6(d). It is the third sentence of Section 2520.6(j) that expressly mandates these sections be read and construed together, contrary to the Appellate Division’s unsupported and erroneous holding. B. The Appellate Division Failed To Harmonize The First Sentence Of Section 2520.6(j) With The Second Sentence Of Section 2520.6(j) Which Requires A Permanent Tenant To Pay Rent Under A Direct Agreement with the Owner The Appellate Division also failed to reconcile and harmonize the first sentence of Section 2520.6(j) which defines one way an individual can become a “permanent tenant” (paying rent and being in possession for at least 6 months), with the second sentence of Section 2520.6(j), which provides a second way an 42 individual can become a “permanent tenant” (requesting a lease of at least six months duration, or actually having a lease of at least six months duration). In both instances, the individual must be obligated to pay rent under an agreement with the landlord and actually pay rent in order to attain the status of “permanent tenant.” Construing the first and second sentences of Section 2520.6(j) together in a way to make them internally compatible, whether one attains the status of “permanent tenant” by means of six months occupancy, or by demanding a lease where the occupancy is less than six months, that individual must also have an obligation to pay rent and have a direct relationship with the landlord. Otherwise, Section 2520.6(j) would be internally inconsistent, not to mention would lead to an absurd and unintended result as it would create one class of “permanent tenants” who merely need to continuously occupy premises without any obligation to pay rent, and a second class of “ permanent tenants” who must have a written lease and an obligation to pay rent. C. Section 2524.1 of the Code Confirms That Rent Must Be Paid By A Tenant Or Permanent Tenant Section 2524.1 of the Code, which relates to the eviction of rent-stabilized tenants, further confirms that a tenant (which also means permanent tenants in hotels, pursuant to Section 2520.6(j)), must have an obligation to pay rent and does 43 actually pay rent. That Section provides as follows: “(a) As long as the tenant continues to pay the rent to which the owner is entitled, no tenant shall be denied a renewal lease or be removed from any housing accommodation by action to evict or to recover possession, by exclusion from possession, or otherwise, nor shall any person attempt such removal or exclusion from possession, except on one or more of the grounds specified in this Code.”10 Thus, the payment of rent by both tenants and permanent tenants is an absolute requirement to the creation of, and continuation of, any tenancy.11 In 1981, this Court applied the predecessor to Section 2524.1 to find that as long as a rent-stabilized tenant was paying rent, albeit paying the rent chronically late, it was not grounds for denying a renewal lease. Gruen v. Patterson, 55 N.Y.2d 631, 446 N.Y.S.2d 253 (1981): “It is undisputed that the apartment occupied by the tenant is governed by the Rent Stabilization Code, a set of regulations applicable to New York City alone. . .Section 50 of the code [now Section 2524.1] specifically provides: ‘No tenant, so long as he continues to pay the rent to which the owner is entitled, shall be denied a renewal lease as prescribed by this Code.’ . . deliberate and repeated tardiness in rent paying, such as that in which the tenant in this case engaged, whatever the other remedies available to the landlord, is not one of the enumerated 10 See also see also N.Y.City Admin.Code §26–408a (“No tenant, so long as he or she continues to pay the rent ... shall be removed from any housing accommodation which is subject to rent control ... notwithstanding the fact that the tenant has no lease or that his or her lease ... has expired or otherwise terminated....”). 11 Section 2524.1 was formerly found in Section 50 of the Code of the Metropolitan Hotel Industry Stabilization Association, Inc. (the “Hotel Code”). Those sections were deleted in their entirety, and sections 2520.1 through 2530.1 were adopted in their place, now known as the Rent Stabilization Code. The Park Summit case, affirmed by this Court, was decided under former Section 50 of the Hotel Code. 44 causes for denial of renewal set forth in the code. . .”. Id. at 633 (emphasis added). Similarly, in Park Summit Realty Corp. v. Frank, 107 Misc.2d 318, 434 N.Y.S.2d 73 (App. Term 1st Dep't 1980), aff'd, 84 A.D.2d 700, 448 N.Y.S.2d 414 (1st Dep't 1981), aff'd, 56 N.Y.2d 1025, 453 N.Y.S.2d 643 (1982) – which also applied the predecessor to Section 2524.1 -- this Court affirmed the lower court’s holding which held that the Rent Stabilization Code “forbids the eviction of a 'permanent tenant' so long as he continues to pay rent,” and finding that “Rent, then, was viewed as the most sensitive element of the landlord-tenant relationship.” (emphasis added) See also Combined Ventures, LLC v. Fiske House Apt. Corp., 74 A.D.3d 1119, 906 N.Y.S.2d 568 (2d Dep’t 2010)(rent stabilized tenant who attempted to tender rent after foreclosure proceedings, which rent was refused by the new owner of the premises, could not be evicted as long as she paid or attempted to pay rent). In Combined Ventures LLC, the Appellate Division, Second Department confirmed that: “The Rent Stabilization Code. . . provides that ‘[a]s long as the tenant continues to pay the rent to which the owner is entitled, no tenant shall be. . .removed from any housing accommodation by action to evict or to recover possession, by exclusion from possession, or otherwise, nor shall any person attempt such removal or exclusion from possession, except on one or more of the grounds specified in this Code” (9 NYCRR 2524.1). . .the protections of the 45 RSC apply to those tenants who continue ‘to pay the rent to which the owner is entitled.’” Id. at 1120-1121. (internal citations omitted)(emphasis added) See also Novick v. Hall, 70 Misc.2d 641, 645, 334 N.Y.S.2d 698, 703-704 (Civil Ct. N.Y. Cty. 1972)(“ In order to give effect to the expressed intent of the legislature not to allow the removal of a statutory tenant from his abode so long as he pays the rent to which the landlord is entitled, the statute must be interpreted to mean that if the rent is paid or tendered at any time prior to his removal, the tenant may not be removed.”)(emphasis added) Here, Pitt never paid a dime of rent, never even attempted to pay rent, never requested a lease, and never once acknowledged or accepted an obligation to pay rent. Indeed, even after he obtained a stay of his eviction from the Appellate Division on the condition that he pay ongoing use and occupancy and pay all arrears (R325), he blatantly failed to do so. Because Pitt never paid any rent, much less rent pursuant to an agreement with Branic, he was not, and never could be, a “permanent tenant” as a matter of law. Reading Section 2520.6(j) in pari materia with Section 2524.1, there can be no doubt that an individual must pay rent in order to attain the protected status of “permanent tenant.” The Court’s interpretation of Section 2520.6(j) simply failed to construe the entirety of that Code Section and the Code’s provisions together. If it had done so, it would lead to the inexorable and common sense conclusion that 46 in order to obtain rights under the Rent Stabilization Code, whether as a tenant or permanent tenant, the individual taking possession of the room must be obligated to pay rent under an agreement directly between the individual and the landlord– the sine qua non of any type of tenancy. Indeed, to adopt the Court’s illogical and strained interpretation would mean a squatter or any other person who somehow gains occupancy to a room in a hotel, without paying rent or having any obligation to pay rent, and who squats there for six months, would get all the benefits of being a “permanent tenant” under the Code merely because of the length of occupancy, without any of the obligations, including the fundamental obligation to pay rent for such occupancy.12 This is clearly not the law, nor is there any rational reason for it to ever become the law. Such an interpretation of Section 2520.6(j) flies in the face of the actual language of that Section not to mention well-settled landlord-tenant law, violates fundamental rules of statutory construction, and distorts the Code. To interpret the first sentence of Section 2520.6(j) as the Appellate Division did –in a vacuum –not only violates cardinal rules of statute construction, but also results in “absurd and unexpected consequences,” Fresh Meadows Associates v. 12 Indeed, during oral argument in the Appellate Division, Branic noted that under Pitt’s theory of the law, a person could gain occupancy to a room by coming in through a window without any agreement to pay rent and without paying rent, and if they were able to stay in the room for six months (without paying rent), they would become a “permanent tenant.” In response, a panel member remarked “What’s wrong with that?” 47 New York City Conciliation & Appeals Bd., 55 A.D.2d 559, 560, 390 N.Y.S.2d 69 (1st Dep’t 1976), aff’d, 42 N.Y.2d 925, 397 N.Y.S.2d 1007 (1977). In sum, and as the Appellate Term effectively found, any and all persons who wish to attain the status of “permanent tenant” must either have an obligation to pay rent and actually pay rent to the landlord, whether it is conjunction with occupancy of at least six months, or in conjunction with demanding a lease. Pitt cannot be deemed to be a “permanent tenant” as he was never its logical precursor – a person with an obligation to pay rent, never paid rent nor ever had an agreement with Branic to pay rent. Construing Sections 2520.6(d) and (j) together, as the last sentence of (j) requires, and as the Appellate Term correctly did, it is clear that in order to become a “permanent tenant,” a person must have an agreement with the landlord to pay rent and be obligated to pay rent. D. Case Law Supports Branic’s Statutory Construction As A Matter of Law Until now, the case law was clear that a “permanent tenant” is an individual who continuously resides in a hotel as a principal residence for a period of six months and is legally obligated to pay rent and has, in fact, paid rent to the landlord, or who has requested a lease or has a lease for a period of six months or more. The Appellate Division overlooked that in all the cases interpreting the 48 meaning of the phrase “permanent tenant,” the individual was someone who had an obligation to pay rent under an agreement with the landlord and did actually pay rent to the landlord. See Kanti-Savita Realty Corp, 18 Misc.3d 74, 852 N.Y.S.2d 579 (App. Term 2d Dep’t 2007)(occupant had agreement to pay rent and did pay rent for five out of the six months he resided there which was accepted by landlord, thus establishing a landlord/tenant relationship); Starrett City, Inc. v. Smith, 25 Misc.3d 42, 889 N.Y.S.2d 362 (App.Term 2d Dep’t 2009)(respondent-licensee paid rent which was accepted by landlord, thereby creating a landlord-tenant relationship); Park Summit Realty Corp. v. Frank, 107 Misc.2d 318, 434 N.Y.S.2d 73 (App. Term 1st Dep't 1980), aff'd, 84 A.D.2d 700, 448 N.Y.S.2d 414 (1st Dep't 1981), aff'd, 56 N.Y.2d 1025, 453 N.Y.S.2d 643 (1982)(construing phrase "permanent tenant," and noting that the Code “forbids the eviction of a 'permanent tenant' so long as he continues to pay rent,” and “Rent, then, was viewed as the most sensitive element of the landlord-tenant relationship.”); Weil v. Chandler, 38 Misc.2d 58, 239 N.Y.S.2d 514 (App. Term 1st Dep’t 1962)(permanent tenant paid rent); 1234 Broadway LLC v. Jing Yong Xu, 10 Misc.3d 655, 809 N.Y.S.2d 825 (Civ. Ct. N.Y. Cty. 2005)(hotel occupant was “permanent tenant” where he had obligation to pay rent and previously had a written lease); 204 West 73rd Street, LLC v. Hess, N.Y.L.J. p. 20, col. 1 (Civil Ct. N.Y. County 3/17/04)(individual who paid rent since 1989 for hotel room and occupied same for 10 years was 49 “permanent tenant”); 240 West 73rd Street LLC v. Weber, N.Y.L.J., p. 27, col. 5 (Civil Ct. N.Y. Cty. 1/13/1999)(same); 240 West 73rd Street LLC v. Vichitlakakran, N.Y.L.J. p. 22, col. 3 (Civil Ct. N.Y. Cty. 12/30/98)(individual who paid rent and occupied hotel room for 8 years was “permanent tenant”). The sole case cited by the Appellate Division in support of its holding, Kanti-Savita Realty Corp. v. Santiago, squarely supports Branic, not the Appellate Division’s Order. There, the occupant had an obligation to pay rent and did pay rent for five out of the six months he resided there, which rent was accepted by the landlord. The landlord there argued that the occupant could not be a “permanent tenant” because the tenant only paid five out of the six months’ rent, and therefore could not satisfy the “six month” criteria of the Code. The Appellate Term in Kanti-Savita disagreed, stating in one part thereof that in the context of the case before them the “criterion is not the payment of rent but continuous residence in the unit for six months.” Id. at 76. The Appellate Division erroneously relied on that quote from the Kanti- Savita decision to support its erroneous holding, ignoring the fact that Kanti-Savita did not apply to the facts of this case. In Kanti-Savita, the tenant had an agreement with the landlord to pay rent and did pay rent to the landlord, while in the case before the Appellate Division here, the tenant did not have such an agreement or obligation with the landlord and never paid or attempted to pay any rent 50 whatsoever. Thus, the quote from Kanta-Savita relied upon by the Appellate Division was taken out of context and misconstrued, and provides no support for its erroneous holding. When that quote is actually read in the context of the facts of the Kanti-Savita case, the quote merely says that “the criterion [for becoming a permanent tenant] is not [only] the payment of rent [for all six months] but continuous residence in the unit for six months.” Just as the Appellate Division seized upon only one sentence of Section 2520.6 (j) in isolation and out of context and thus misconstrued that section, it did the same thing with this one quote from Kanti-Savita to support its erroneous holding. Indeed, Branic’s analysis of Kanti-Savita is supported by this Court’s holding in Gruen v. Patterson, 55 N.Y.2d 631, 446 N.Y.S.2d 253 (1981), where this Court held that as long as a rent-stabilized tenant is paying rent, albeit paying the rent chronically late, it was not grounds for denying him a renewal lease under Section 2524.1. Under Gruen v. Patterson, the failure of the tenant in Kanti-Savita to pay just one months’ rent would not deprive him of permanent tenant status, as long as he continued to be obligated to pay rent and did ultimately pay the rent. Further, in the only other cases construing this section of the Rent Stabilization Code (other than this case), the individuals entered into a direct agreement with the building owner, agreed to pay rent, and did pay rent to the 51 building owner. See, e.g., Nutter v. W & J Hotel Co., 171 Misc. 2d 302, 303, 654 N.Y.S.2d 274, 275 (Civil Ct. N.Y. Cty. 1997)(“Petitioner Cynthia Ann Nutter registered for a rent-stabilized room at the Washington Jefferson Hotel at approximately 1:00 P.M. on December 20, 1996, and paid $117 for one night.”); Mann v. 125 E. 50th St. Corp., 124 Misc.2d 115, 475 N.Y.S.2d 777, 778 (Civil Ct. N.Y. Cty. 1984), aff’d, 126 Misc.2d 1016, 488 N.Y.S.2d 1021 (App. Term 1st Dep’t 1985)(“Ms. Marie Mann, rented a room at the Hotel Beverly. . . on November 23, 1983. . .”); see also Johnson v. Crandell, 19 Misc.3d 1136(A), 862 N.Y.S.2d 808 (Civil Ct. N.Y. Cty. 2008)(where Respondent occupied premises in a rent-stabilized building for 7 years and paid rent, and landlord sought to evict respondent on grounds that the unit was exempt from rent regulation because respondent was allegedly a “transient,” the Court found that even if the building was a hotel, there was no basis to evict respondent because under the Code he was a permanent tenant and no other basis existed to evict him). E. Other Code Sections Support Branic’s Interpretation Rent Stabilization Code §2522.5(a)(2) provides: "For housing accommodations in hotels rented to an occupant who has never had a lease, such occupant may at any time during his or her occupancy request a lease and the owner must, within fifteen days after such request, grant a lease commencing on the date such request was made at a rent which does not exceed the legal regulated rent, for a term of at least six months. 52 The hotel occupant who requests such a lease becomes a permanent tenant but the lease need not be renewed." (emphasis added) Again, the phrase “housing accommodations in hotels rented to an occupant who has never had a lease” confirm that the building owner must “rent” the unit directly to the hotel occupant who in turn, must be obligated to pay “rent” to the landlord for his or her use and occupancy of the hotel room – a scenario which did not occur here. Rather, the rooms here were leased and rented by the City of New York pursuant to a written agreement, the City of New York paid for the rooms, and the City of New York decided which of its statutory eligible individuals it would place in Branic’s rooms. F. The Rules Concerning Statutory Construction Mandate Reversal In construing a statute, well settled rules of statutory construction require the Court to “harmonize the various provisions of related statutes and ... construe them in a way that renders them internally compatible.” Yatauro v. Mangano, 17 N.Y.3d 420, 426-27, 931 N.Y.S.2d 36, 39 (2011)(internal citations omitted); Dutchess County Dep’t of Social Services ex rel. Day v. Day, 96 N.Y.2d 149, 153, 726 N.Y.S.2d 54, 57 (2001)(“Courts must ‘harmonize the various provisions of related statutes and construe them in a way that renders them internally compatible.’”) “It is a well-settled principle of statutory construction that a statute or ordinance must be construed as a whole and that its various sections must be considered together 53 and with reference to each other.” People v. Mobil Oil Corp., 48 N.Y.2d 192, 199, 422 N.Y.S.2d 33, 38 (1979); Long Island Trust Co. v. Porta Aluminum Corp., 1973 WL 21412 (Sup. Ct. Nassau Cty.), aff'd as mod., 44 A.D.2d 118, 122-123, 354 N.Y.S.2d 134, 139 (2d Dep't 1974)(same). Courts are “not compelled to confirm statutory interpretations which, though perhaps supported by the literal language of a statute, result in absurd and unexpected consequences.” Fresh Meadows Associates v. New York City Conciliation & Appeals Bd., 55 A.D.2d 559, 560, 390 N.Y.S.2d 69 (1st Dep’t 1976), aff’d, 42 N.Y.2d 925, 397 N.Y.S.2d 1007 (1977); Jenkins v. Fieldbridge Associates, LLC, 65 A.D.3d 169, 174, 877 N.Y.S.2d 375, 378 (2d Dep’t 2009), appeal dismissed, 13 N.Y.3d 855, 891 N.Y.S.2d 688 (2009)(statutory interpretation must avoid reaching an absurd result). Moreover, “statutes in pari materia are to be construed together and as intended to fit into existing laws on the same subject unless a different purpose is clearly shown.” BLF Realty Holding Corp. v. Kasher, 299 A.D.2d 87, 93, 747 N.Y.S.2d 457, 462-463 (2002); cf. Board of Educ. of Monroe-Woodbury Cent. School Dist. v. Wieder, 132 A.D.2d 409, 414, 522 N.Y.S.2d 878, 881 (2d Dep’t 1987), mod. on other grounds, 72 N.Y.2d 174, 531 N.Y.S.2d 889 (1988)(“statutes are to be construed in such a manner as to render them effective, and in pari materia with other enactments concerning the same subject matter.” 54 Construing Sections 2520.6(d) and (j) in pari materia, the proper interpretation of “permanent tenant” is someone who has an obligation to pay rent pursuant to an agreement with the owner, consistent with the definition of “tenant” in Section 2520.6(d) which is expressly incorporated into Section 2520.6(j). To allow the Appellate Division Order to stand would distort the true intent and meaning of the Code, particularly Section 2520.6 (j), to mean a person merely has to occupy a room in a hotel for six months (whether lawfully or not, whether he is obligated to pay rent or pays rent or not) to obtain such status, regardless of the manner in which he entered into possession. The Order should be reversed as a matter of law. POINT III PITT WAS MERELY A LICENSEE WHO COULD BE EVICTED IN A LICENSEE HOLDOVER PROCEEDING It is well settled that the protection of the rent stabilization laws belongs solely to the “tenant” of rent-stabilized housing; other types of occupants such as subtenants, licensees, squatters, and others do not become rent-stabilized tenants merely by virtue of their occupancy of the space as a matter of law and do not enjoy the same rights as rent-stabilized tenants. See Rent Stabilization Code §2525.6(d)(“The tenant, rather than the subtenant, retains:(1) the right to a renewal lease, whether or not the term of the sublease extends beyond the term of the 55 tenant's lease; and (2) the rights and status of a tenant in occupancy with respect to conversion to condominium or cooperative ownership.”); see also Jazilek v. Abart Holdings LLC, 41 A.D.3d 124, 839 N.Y.S.2d 7 (1st Dep’t 2007), rev’d on other grounds, 10 N.Y.3d 943, 862 N.Y.S.2d 854 (2008)(where plaintiff was subtenant of rent-stabilized tenant who surrendered possession, subtenant had no legal right to tenancy); Callen v. Callen, 2002 WL 32179000 (Civ. Ct. N.Y. Cty. 2003)(noting that if premises were subject to rent stabilization, the only party that would benefit would be the “real tenant,” not licensees or subtenants occupying the premises). A licensee “is defined as one who enters upon or occupies lands by permission, express or implied, of the owner or under a personal, revocable, nonassignable privilege from the owner, without possessing any interest in the property, and who becomes a trespasser thereon upon revocation of the permission or privilege.” Giuffrida v. Giuffrida, 170 Misc.2d 63, 65-66, 649 N.Y.S.2d 773, 775 (City Ct. of Yonkers 1996)(citing Rosenstiel v. Rosenstiel, 20 A.D.2d 71, 76, 245 N.Y.S.2d 395, 400-401 (1st Dep’t 1963)). Several cases have characterized individuals placed in emergency housing as licensees. See Housing Works, Inc. v. City of New York, 255 A.D.2d 209, 680 N.Y.S.2d 487 (1st Dep’t 1998)(persons with AIDS occupying apartments leased pursuant to a contract with NYCHRA were licensees); Village of Nyack Housing Authority v. Scott, 1 Misc.3d 22, 767 N.Y.S.2d 562 (App. Term 2d Dep’t 2003) 56 (housing authority successfully brought holdover proceeding evicting licensees from temporary emergency housing); Coppa v. LaSpina, 41 A.D.3d 756, 839 N.Y.S.2d 780 (2d Dep’t 2007)(homeless person placed in emergency temporary housing was licensee, not tenant);. Helping Out People Everywhere v. Deich, 155 Misc.2d 707, 589 N.Y.S.2d 744 (City Ct. Yonkers 1992), aff’d, 615 N.Y.S.2d 215 (App. Term. 2d Dep’t1994)(homeless person with HIV placed in emergency housing was licensee, not tenant); see also Parker v. Salvation Army, 971 N.E.2d 995, 1000 (Ohio App. 8th Dist. 2012)(finding that social services program that “operates an emergency shelter used for the temporary housing of homeless individuals as part of a program to transition them to permanent, stable living accommodations. . . is excluded from the Landlord–Tenant Act. . .The relationship between the parties here is not like that of a landlord and tenant, but similar to a licensee provided with a place to sleep as part of a program to enhance a person's ability to cope with the vagaries of modern-day life.”) Upon the expiration of a license, the licensee becomes a trespasser who can be evicted in a holdover proceeding. Brown v. 165 Conover Assoc., 5 Misc.3d 128(A), 798 N.Y.S.2d 707 (App. Term 2d & 11th Dist. 2004)(mere licensee whose license expired upon the death of the tenant of record would not be restored to possession). 57 Here, the City leased up to 134 rooms in the Facility by virtue of the Facility Rental Agreement, and upon being placed in a room by the City, eligible individuals, such as Pitt, were permitted to exclusively occupy the rooms. Pitt was thus nothing more than a licensee, occupying the room with permission pursuant to the Facility Rental Agreement between Branic and the City. Housing Works, Inc., supra (HRA clients occupying apartments were licensees). Moreover, Pitt is not within the class of those the rent stabilization laws were designed to protect. He is a recipient of benefits from the City’s Department of Social Services, was placed in the Facility by the City, the City rented and paid for his accommodations, and the City wished to relocate him to a different location after the Agreement expired in December 2006. Pitt is not a “victim” but had access to free housing at another location, but instead wrongfully chose to stay at Branic’s Facility without paying a dime. Such occupancy is not the type which is, or should ever be, protected by the Code. In sum, Pitt was merely a licensee who could be evicted and compelled to move with the other HRA clients to the new, free housing selected and paid for by the City. Accordingly, the Appellate Division Order should be reversed as a matter of law. 58 POINT IV THE ORDER IF UPHELD WILL HAVE A CHILLING EFFECT ON A LANDLORD’S WILLINGNESS TO ENTER INTO AGREEMENTS WITH THE CITY OF NEW YORK TO PROVIDE TEMPORARY EMERGENCY HOUSING ACCOMMODATIONS FOR HOMELESS AND OTHER ELIGIBLE PERSONS While Pitt’s counsel may believe that the Appellate Division Order was a victory for homeless people, in truth it was not, and will have a chilling effect on those landlords, like Branic, who were previously willing to lease rooms to the City for use as temporary, emergency housing for disenfranchised, disabled, or otherwise homeless people pursuant to agreements with the City at an agreed-upon rate, and an agreed-upon term. If the Order is permitted to stand, landlords will rightly be concerned that if they enter into such an agreement with the City, the individuals who are eligible for free housing and placed in their facility will declare themselves “permanent tenants,” even if the City has cancelled or terminated their rooms and wishes to relocate them to other emergency housing. This will result, in turn, in landlords no longer being interested in housing such persons, since the temporary term of the agreement with the City will not be enforced, thus making a dire situation even worse for the homeless. Accordingly, not only does the law compel reversal of the Order below, sound policy supports 59 reversal too. Otherwise, such housing may soon no longer be available, or will certainly be much less available if at all available. Another sound policy reason supports reversal of the Order. A person receiving subsidized housing from a government social services agency should not be permitted to declare themselves a “permanent tenant” without paying rent or even requesting a lease and agreeing to pay rent on their own, where the City has terminated their room and ceased payment. If the City agency providing the housing has determined the eligible person should be relocated, that eligible person should not be permitted to subvert the City’s decision. Not even the broad reach of the Rent Stabilization Laws support such an unjust and irrational result, nor could the Legislature have intended it. Merely because someone may want to stay in a particular location does not mean that it can force the private owner of the building to house them, or force the government to forever pay for such housing. POINT V THE APPELLATE DIVISION DECISION FALLS WITHIN THE EXCEPTION TO THE MOOTNESS DOCTRINE; THUS THIS COURT RETAINS SUBJECT-MATTER JURISDICTION TO DECIDE THE APPEAL ON THE MERITS Where, as here, the appeal was arguably rendered moot after the Appellate Term’s decision but before reaching the Appellate Division, and where the Appellate Division decided the case on the merits and reversed the Appellate Term 60 decision, finding it fell within one of the exceptions to the mootness doctrine, the Court retains jurisdiction over the appeal. Indeed, the Court has traditionally required full briefing under such circumstances in order to determine, inter alia, whether it agrees with the Appellate Division that the issues presented fell within the exception to the mootness doctrine. See, e.g., Bezio v. Dorsey, 21 N.Y.3d 93, 100, 967 N.Y.S.2d 660, 665 (2013)(deciding appeal on merits and agreeing with Appellate Division that “the central issue in the case falls within the exception to the mootness rule since it is novel, likely to recur and, given the exigencies involved in addressing a hunger strike, would typically evade review. . .Accordingly, the Appellate Division did not err in applying the mootness exception.”); Coleman ex rel. Coleman v. Daines, 19 N.Y.3d 1087, 955 N.Y.S.2d 831 (2012)(agreeing with Appellate Division that the claim fell within the exception to the mootness doctrine); Rueda v. Charmaine D., 17 N.Y.3d 522, 934 N.Y.S.2d 72 (2011)(agreeing with Appellate Division that case fell within exception to mootness doctrine); City of New York v. Maul, 14 N.Y.3d 499, 903 N.Y.S.2d 304 (2010)(same); Matter of M.B., 6 N.Y.3d 437, 813 N.Y.S.2d 349 (2006)(agreeing with Appellate Division that appeal fell within mootness doctrine even though mentally retarded ward had died following termination of life- sustaining treatment.) 61 Indeed, even where an appeal became moot between the time of the challenged Appellate Division Order and the appeal to the Court of Appeals (which did not occur here), this Court has nevertheless determined, in the first instance, that the appeal fell within an exception to the mootness doctrine by reason of the novel issues presented and the likelihood that such issues would evade review. See, e.g., Rodriguez v. Wing, 94 N.Y.2d 192, 701 N.Y.S.2d 328 (1999). Rodriguez involved an appeal by a recipient of emergency housing by the Department of Social Services (as here) who by the time the appeal reached the court, was no longer receiving such emergency housing (as here). This Court held: “Even if there is no live case or controversy before us, however, the appeal should be retained. The issue presented here will recur whenever DSS requires future recipients of housing assistance to sign the “Voluntary Assignment of Income” form. Moreover, it will typically evade review because of the relatively short time period in which a person would normally be expected to receive temporary emergency shelter (see Social Services Law §131–v[3] ). Finally, the issue is both novel and substantial; it has significance for the administration of temporary housing assistance for disabled homeless persons receiving SSI or SSD. Thus, the exception to the mootness doctrine is applicable (see, Matter of Hearst Corp. v. Clyne, 50 N.Y.2d 707, 714–715, 431 N.Y.S.2d 400, 409 N.E.2d 876). We turn then to the substantive question presented for review.” Id. at 196. As in Rodriguez, the Court retains subject-matter jurisdiction over the appeal because the case presents issues which (i) are likely to recur each time a person eligible for temporary housing assistance is placed in a participating hotel; (ii) will 62 evade review because of the relatively short time period in which the person would normally be expected to stay there; and (iii) are both novel and substantial. Indeed, it appears that this would be the first time this Court would be declaring the nature of the legal relationship between individuals placed in hotel rooms rented by a City social services agency, and a private landlord, and whether such an individual can attain rights of permanent tenancy under the Code merely by being placed in such a facility by the City of New York under an agreement between the City and the building owner. It also raises important questions concerning the statutory construction and interpretation of the Rent Stabilization Code which is of considerable public importance. See, e.g., Le Drugstore Etats Unis, Inc. v. New York State Bd. of Pharmacy, 33 N.Y.2d 298, 352 N.Y.S.2d 188 (1973)(declining to dismiss appeal as moot even though appellant closed its business, where appellant’s use of tradename “Le Drugstore” concerned interpretation of Education Law and issues concerning whether unlicensed retailer may use phrase “drug store” was “of considerable continuing public importance.”); see also People ex rel. McManus v. Horn, 18 N.Y.3d 660, 664, 944 N.Y.S.2d 448, 450 (2012)(finding in first instance that even though guilty plea mooted habeas corpus petition, Court would still decide appeal on merits where “the propriety of cash-only bail is an important issue that is likely to recur and which typically will evade our review.”); Community Bd. 7 of Borough of Manhattan v. Schaffer, 84 N.Y.2d 148, 615 63 N.Y.S.2d 644 (1994)(finding in first instance that appeal fell within mootness exception). Admittedly, in the Court below, Branic argued the appeal did not fall within any of the exceptions to the mootness doctrine. Branic’s position is not now contradictory, however. Because the Appellate Division decided the appeal on the merits, after Pitt vacated the premises, and issued a decision which reversed the Appellate Term’s decision and is contrary to the plain meaning of the Rent Stabilization Code and contrary to well-settled law, it has now created a dangerous and unprecedented holding that will guide future Courts on this very same legal issue. The decision will also have a chilling effect on landlords who will no longer be willing to enter into agreements with the City of New York to provide temporary emergency housing for fear that the eligible persons will claim “permanent tenant” status, thus undermining the landlord’s agreement to rent rooms to the City on a temporary basis. Remitting the matter for dismissal, on mootness grounds, would leave these important legal issues unsettled, while the Appellate Division decision would remain out there as the First Department’s 64 pronouncement on the issue, despite a vacatur on mootness grounds.13 Particularly because the Appellate Division decided the appeal on the merits after Pitt vacated and then determined to reverse the Appellate Term’s decision, (which decision we respectfully submit was correctly determined in accordance with well settled law), it is of the utmost importance in light of the substantial and important issues involved and the unprecedented nature of the Appellate Division’s decision that this Court retain jurisdiction. This is particularly so as the appeal now presents substantial and important issues which are likely to evade review. Thus, it is clear that this case is properly an exception to the mootness doctrine and that this Court should retain jurisdiction over the appeal. 13 Although the Court’s dismissal of underlying proceedings on mootness grounds is designed to “prevent a judgment which is unreviewable for mootness from spawning any legal consequences or precedent,” see, e.g. Hearst Corp. v. Clyne, 50 N.Y.2d 707, 718, 431 N.Y.S.2d 400, 404-405 (1980), as a practical matter, Westlaw and other legal research resources would continue to report the case and it would likely be viewed by courts and practitioners as precedent or, at a minimum, a strong indication as to how the First Department would rule on the issue. CONCLUSION By reason of the foregoing, the Appellate Division Order should be reversed, together with such other, further, and different relief as the Court may deem just and proper. Dated: Garden City, New York December 16, 2013 Ronald i osenb~{i, Esq. Lesley}\. Rearq6t(Esq. Rosenberg Callta & Birney LLP Attorneys for Petitioner-Appellant 100 Garden City Plaza, Suite 408 Garden City, New York 11530 (516) 747-7400 65