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. REPLY 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: March 10, 2013 i TABLE OF CONTENTS Page TABLE OF AUTHORITIES .................................................................................... ii PRELIMINARY STATEMENT ............................................................................... 1 POINT I PITT’S ROOM WAS EXEMPT FROM THE RENT STABILIZATION CODE ..................................................................... 3 POINT II RESPONDENT’S INTERPRETATION AND CONSTRUCTION OF SECTION 2520.6(J) IS NOT SUPPORTED BY CASE LAW OR FUNDAMENTAL PRINCIPLES OF STATUTORY CONSTRUCTION .......................................................................... 21 POINT III RESPONDENT UTTERLY FAILED TO ADDRESS POINT III OF APPELLANT’S BRIEF CONCERNING HIS STATUS AS A LICENSEE, THEREBY CONCEDING THE CORRECTNESS OF THE ARGUMENT ............................................................................................ 38 CONCLUSION ........................................................................................................ 41 ii TABLE OF AUTHORITIES Page 1133 Bldg. Corp. v. Ketchum Communications Inc., 224 A.D.2d 336, 638 N.Y.S.2d 450 (1 st Dep’t 96) ................................................ 5 1234 Broadway LLC v. Jing Yong Xu, 10 Misc.3d 655, 809 N.Y.S.2d 825 (Civ. Ct. N.Y. Cty. 2005) ........................... 24 286 Clinton LLC v. Lazarre, 18 Misc.3d 1101(A), 856 N.Y.S.2d 27 (Civil Ct. Kings Cty. 2007) ................... 15 Bingham v. New York City Tr. Auth., 99 N.Y.2d 355, 756 N.Y.S.2d 129 (2003) ........................................................... 19 Combined Ventures, LLC v. Fiske House Apt. Corp., 74 A.D.3d 1119, 906 N.Y.S.2d 568 (2d Dep’t 2010) .......................................... 35 Davis v. Dinkins, 206 A.D.2d 365, 613 N.Y.S.2d 933 (2d Dep’t 1994) .......................... 8-10, 12, 18 Feder v. Caliguira, 8 N.Y.2d 400, 208 N.Y.S.2d 970 (1960) ....................................................... 10, 20 Felske v. Hirschmann, 2012 WL 716632 (S.D.N.Y. 2012) ...................................................................... 40 Gruen v. Patterson, 55 N.Y.2d 631, 446 N.Y.S.2d 253 (1981) ........................................................... 34 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) .......... 39 Housing Works, Inc. v. City of New York, 255 A.D.2d 209, 680 N.Y.S.2d 487 (1st Dep’t 1998) ................................... 39, 40 Johnson v. Crandell, 19 Misc.3d 1136(A), 862 N.Y.S.2d 808 (Civil Ct. N.Y. Cty. 2008) .................. 31 iii TABLE OF AUTHORITIES (Cont’d.) Kanti-Savita Realty Corp v. Santiago, 18 Misc.3d 74, 852 N.Y.S.2d 579 (App. Term 2d Dep't 2007) ............ 2, 3, 22-24 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 1 st Dep’t 1985) ........ 31 Matter of Benjamin Shapiro Realty Co. v. New York State Div. of Hous. & Community Renewal, 2 A.D.3d 220, 769 N.Y.S.2d 226 (1st Dep’t 2003) ............................................ 26 Matter of Dodgertown Homeowners Ass'n, Inc., 235 A.D.2d 538, 652 N.Y.S.2d 761 (2d Dep’t 1997) .............................. 12-13, 17 Matter of Heilweil v. New York State Div. of Hous. & Community Renewal, 12 A.D.3d 300, 785 N.Y.S.2d 63 (1st Dep’t 2004) ............................................. 25 Miller v. City of New York, 15 N.Y.2d 34, 255 N.Y.S.2d 78 (1964) ......................................................... 10, 20 Nutter v. W & J Hotel Co., 171 Misc. 2d 302, 654 N.Y.S.2d 274 (Civil Ct. N.Y. Cty. 1997) ....................... 31 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) .................................... 28, 34-35 PHH Mortg. Corp. v. Ferro, Kuba, Mangano, Sklyar, Gacovino & Lake, P.C., 113 A.D.3d 831, 979 N.Y.S.2d 536 (2d Dep’t 2014) ............................................ 5 Rent Stabilization Ass'n of New York City, Inc. v. Higgins, 83 N.Y.2d 156, 608 N.Y.S.2d 930 (1993) ........................................................... 13 Ruiz v. Chwatt Assoc., 247 A.D.2d 308, 669 N.Y.S.2d 47 (1st Dep’t 1998) ........................................... 15 iv TABLE OF AUTHORITIES (Cont’d.) Scott v. J.P. Morgan Chase & Co., 2014 WL 338753 (S.D.N.Y. 2014) ...................................................................... 40 Stahl Associates Co. v. Mapes, 111 A.D.2d 626, 490 N.Y.S.2d 12 (1st Dep’t 1985) ............................................. 5 Starrett City, Inc. v. Smith, 25 Misc.3d 42, 889 N.Y.S.2d 362 (App. Term 2d Dep’t 2009) .......................... 30 Village of Nyack Housing Authority v. Scott, 1 Misc.3d 22, 767 N.Y.S.2d 562 (App. Term 2d Dep’t 2003) ............................ 39 Weil v. Chandler, 38 Misc.2d 58, 239 N.Y.S.2d 514 (App. Term 1 st Dep’t 1962) .......................... 30 Women’s Interart Center, Inc. v. New York City Economic Dev’t Corp., 97 A.D.3d 17, 944 N.Y.S.2d 137 (1st Dep’t 2012) ................................... 8, 11, 12 Unreported And Other Cases 204 West 73 rd Street, LLC v. Hess, N.Y.L.J. p. 20, col. 1 (Civil Ct. N.Y. Cty. 3/17/04) ............................................ 26 240 West 73rd Street LLC v. Vichitlakakran, N.Y.L.J. p. 22, col. 3 (Civil Ct. N.Y. Cty. 12/30/98) .......................................... 31 240 West 73rd Street LLC v. Weber, N.Y.L.J., p. 27, col. 5 (Civil Ct. N.Y. Cty. 1/13/1999) ................................. 30-31 Morris v. Cole, N.Y.L.J., April 5, 1989, p. 22, col. 6 (Civil Ct. N.Y. Cty. 1989) ........................ 29 Parker v. Salvation Army, 971 N.E.2d 995 (Ohio App. 8th Dist. 2012) ........................................................ 39 v TABLE OF AUTHORITIES (Cont’d.) Federal Statutes 24 C.F.R. §982.1(a)(2) ............................................................................................. 37 24 C.F.R. §982.308(b)(1) ......................................................................................... 37 24 C.F.R. §982.310 ................................................................................................. 37 24 C.F.R. §982.506 .................................................................................................. 37 State 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. §2522.5(a)(2) ..................................................................................... 36 9 N.Y.C.R.R. §2525.6(d) ......................................................................................... 39 9 N.Y.C.R.R. §2524.1 ........................................................................................ 34, 35 RPAPL §232 ............................................................................................................ 19 RPAPL §232-c ......................................................................................................... 19 RPAPL §711(2) .............................................................................................. 2, 22, 23 RPAPL §721 .................................................................................................... 6, 7, 11 Social Services Law § 143-b(2) ............................................................................... 20 1 PRELIMINARY STATEMENT As established in Appellant’s Brief, reversal of the Appellate Division Decision & Order is mandated because, inter alia, the Facility Rental Agreement was a lease between Branic and the City of New York, making the room occupied by Pitt exempt from the Rent Stabilization Code under Section 2520.11(b) as a matter of law. Pitt was a mere licensee of the City, occupying a room paid for by the City, to fulfill the City’s statutory obligations to provide emergency housing for the homeless. Although Respondent contends the Agreement is not a lease because it is allegedly missing “essential terms,” or because it allegedly did not surrender exclusive use and possession of the premises to the City, both contentions are demonstrably false as established by the very language of the Agreement itself. (see POINT I, infra) Reversal of the Appellate Division Decision & Order is also mandated because even if Respondent’s room was not exempt from the Code (which it is), it represents a dangerous departure from well-settled precedent in all the Appellate Divisions, as well as the Appellate Terms, 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 2 “tenant” applicable to the definition of “permanent tenant,” and merely imposes the natural (and common law) obligation to pay rent on an individual who wishes to occupy a housing accommodation. (see 9 N.Y.C.R.R. 2520.6(d) and (j)). There are no other appellate decisions holding that an individual can automatically become a “permanent tenant” under the Rent Stabilization Code 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, never had any agreement with the owner whatsoever, and never even had any obligation to pay rent. Although Respondent contends that the Appellate Term Order was an “aberration among a long line of established case law” (Respondent’s Brief, p. 11), the opposite is true; it is the Appellate Division Order that is the aberration. As established in POINT II, infra, every single case cited by Respondent in support of his position involved an individual who had an obligation to pay rent and did pay rent. Indeed, the error of the Appellate Division is demonstrated by the fact that the only case it cited, Kanti- Savita Realty Corp. v. Santiago, 18 Misc.3d 74, 852 N.Y.S.2d 579 (App. Term 2d Dep’t 2007), arose in the context of a non-payment proceeding, and the permanent tenant there had a landlord-tenant relationship and an agreement to pay rent. If the tenant in Kanti-Savita had no obligation to pay rent, the landlord could not have brought a non-payment proceeding under RPAPL §711(2) in the first 3 instance. And yet, the Appellate Division relied on Kanti-Savita (which concerned a rent-paying, permanent tenant sued in a non-payment proceeding) to hold that the payment of rent is not a requirement in order to become a permanent tenant. The error is manifest, and the Decision & Order should be reversed in its entirety as a matter of law because (i) Pitt’s room was exempt from the Rent Stabilization Code; and (ii) even if the room was not exempt (although it is), Pitt is not a rent-stabilized “permanent tenant” as a matter of law because he had no landlord-tenant relationship with Branic, had no obligation to pay rent, and never paid rent. POINT I PITT’S ROOM WAS EXEMPT FROM THE RENT STABILIZATION CODE Respondent does not dispute that housing accommodations otherwise subject to the Rent Stabilization Law become exempt from the Code while they are owned, operated, or leased by the City of New York pursuant to Section 2520.11(b) of the Code. Respondent also does not dispute that the City of New York entered into a written agreement with Branic for the exclusive use of up to 134 rooms in Branic’s hotel for the purpose of placing the City’s clients in those rooms, pursuant to the City’s statutory obligations to provide emergency housing for homeless and other eligible individuals. 4 Respondent also does not dispute that he was placed in exclusive occupancy of one of Branic’s room by the City, and does not dispute that the City paid Branic a negotiated nightly rate for the use of that room. Nevertheless, Respondent argues the written agreement between the City and Branic is not a lease, erroneously claiming: (i) the Facility Rental Agreement did not surrender absolute possession and control of Pitt’s room to the City, and (ii) that the Facility Rental Agreement is missing essential terms. Respondent is wrong on both counts. A. The Facility Rental Agreement Surrendered Exclusive Possession And Control Of Branic’s City-Leased Room To Respondent Respondent erroneously argues that the City did not have “absolute control” over any portion of Branic’s hotel, had no “day to day physical presence at the hotel,” and therefore, the Facility Rental Agreement is not a lease. (Respondent’s Brief, p. 25) Respondent’s arguments are meritless and based on the false premise that the City was not “occupying” the room. This is completely false as a matter of fact and as a matter of law. Despite Respondent’s strained arguments, he does not and cannot deny that the Facility Rental Agreement itself specifically provided that Branic was required to set aside rooms to be used by the City “exclusively for occupancy by Eligible Persons referred by HRA.”)(R297)(emphasis added) Indeed, because Pitt was in exclusive 5 possession of the room, a summary proceeding had to be brought to evict him. Otherwise, a summary proceeding would have been unnecessary. Contrary to Respondent’s argument, the City did have a day to day presence by reason of Pitt’s exclusive occupancy of his room in Branic’s facility. The room was paid for by the City and occupied by the City through Pitt as the City’s licensee. Respondent’s contention that the “City” itself had to physically occupy a room for the room to be “leased” by the City is a complete misstatement of controlling landlord-tenant law. For example, it is well-settled that a sub-tenant is deemed to be the tenant occupying the space if the sub-tenant holds over after the term of its lease is over. See, e.g., PHH Mortg. Corp. v. Ferro, Kuba, Mangano, Sklyar, Gacovino & Lake, P.C., 113 A.D.3d 831, 979 N.Y.S.2d 536 (2d Dep’t 2014) (holdover subtenant “liable for holdover damages for the entire leasehold premises during the period at issue.”); 1133 Bldg. Corp. v. Ketchum Communications Inc., 224 A.D.2d 336, 638 N.Y.S.2d 450 (1 st Dep’t 1996)(same). As stated in Stahl Associates Co. v. Mapes, 111 A.D.2d 626, 490 N.Y.S.2d 12 (1 st Dep’t 1985): “It is well settled that a wrongful holding over by a subtenant is to be deemed the same as a wrongful holding over of the tenant sublessor.” (emphasis added) Pitt’s occupancy of the room leased to the City by Branic was the same thing as the City occupying the room, as a matter of law. Thus, Respondent’s contention 6 that the “City” did not physically occupy the premises is frivolous. The salient fact is that Respondent – the City’s client -- physically occupied his room in Branic’s hotel, and had exclusive use, possession, and control thereof solely by virtue of the agreement between Branic and the City. Respondent makes the convoluted argument that because the Facility Rental Agreement gives Branic the right to evict a City client during the term of the lease if a referred person posed a threat to Branic’s operations or guests (R299), and because RPAPL §721 only permits persons with a possessory interest to commence eviction proceedings, this somehow proves the agreement was not a “lease.” (Respondent’s Brief, p. 26) This argument is frivolous for two reasons. First, Respondent misleadingly omits the actual language of the Facility Rental Agreement which states in Article 1, Section J, as follows: “HRA’s written approval 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)(emphasis added) Thus, the party with the possessory interest in the City-leased rooms during the term of the lease, i.e. the City, had to consent to eviction proceedings before Branic could evict a City client, thereby eviscerating Respondent’s arguments. 7 Second, RPAPL §721 lists the persons entitled to commence eviction proceedings. RPAPL §721(7) specifically provides that an eviction proceeding may be brought by “[t]he person entitled to possession of the property occupied by a licensee who may be dispossessed. The City terminated Pitt’s room in April 2007 and is no longer entitled to possession of that room. Under RPAPL §721, since the City no longer had any rights of possession, it could not bring an eviction proceeding, as a matter of law. Respondent’s arguments in this regard exemplify its repeated distortion of the law and fundamental principles of landlord-tenant law. If this Court does not reverse the Appellate Division’s dangerous and unprecedented decision, it will turn the law of landlord-tenant law on its ear. Respondent then cites several provisions in the Facility Rental Agreement which require Branic to provide certain services to the City’s clients, to comply with laws and regulations affecting the rights of tenants, and to guarantee the confidentiality of the client’s records and information. (Respondent’s Brief, pp. 26- 27) According to Respondent, this shows that Branic maintained “control and possession” over the premises, not the City. This is absurd. Merely because a lease between a tenant and landlord requires the landlord to also provide certain services does not mean the landlord did not give up exclusive use and possession of the room, or mean the parties’ lease is not a lease. 8 Similarly, Respondent claims that certain provisions in the Facility Rental Agreement, which require Branic to cooperate with the Department of Health and the Department of Housing Preservation and Development in the event of an inspection, also somehow “prove” the agreement is not a lease. According to Respondent, if the City had “exclusive control” over the rooms occupied by its clients, there would be “no need to rely upon Branic to provide access for inspection.” (Respondent’s Brief, p. 27) It is customary and common for landlord in virtually all leases to have access to leased premises to inspect and repair the premises. Numerous codes, including the Building Code, require landlords to maintain and repair leased rooms and apartments. Indeed, the very case cited by Respondent (Women’s Interart Center, Inc. v. New York City Economic Dev’t Corp., 97 A.D.3d 17, 944 N.Y.S.2d 137 (1st Dep’t 2012)), confirms that where a landlord retains certain rights regarding the leased premises, such as a right of entry to inspect, “these reserved rights [are] completely in line with the type of reservations that are permitted in a lease.” Id. at 22. Predictably, Respondent relies on Davis v. Dinkins, 206 A.D.2d 365, 613 N.Y.S.2d 933 (2d Dep’t 1994), the zoning case erroneously cited by the Appellate Division in its Decision & Order. As established in the moving brief, that case is utterly inapposite because, inter alia, there was no written agreement between the parties in that case (as there is here), there were no objective means by which the 9 Court could determine the length of the term or the amount of rooms to be leased (as there is here), and the hotel at issue in Davis was under no obligation to accept any referral, evidencing the uncertain nature of the agreement (unlike here, where Branic was required to accept every referral)(R297). Indeed, although Respondent claims the agreement at issue in Davis is “strikingly similar” to the Facility Rental Agreement here, that is simply false. For example: Davis v. Dinkins Branic v. Pitt No written agreement Written agreement No stated term 2-year term of agreement (R297); if City clients remained in possession after termination of agreement, the term would continue on a month to month basis for each such client (R301). No exclusive use Specifically provides for “exclusive use and occupancy” (R297) No objective means to determine Objective means to determine areas to areas to be leased be leased 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). Hotel could refuse to rent Branic could not refuse housing to a rooms if it so chose, and referred City client and if it did, City the City had no recourse had right to terminate agreement. 10 Hotel could evict anyone Branic could not evict a City it wanted client without the City’s consent during the term of the lease. Notably, Respondent fails to respond to the lengthy analysis of Davis v. Dinkins in Appellant’s brief, wherein Branic noted the errors of the Davis Court’s analysis in finding there was no definite term, and noted that the dissent correctly analyzed the issue, finding that once an HRA client was placed in a hotel, absent any definite term they would simply be a month to month tenant by operation of law. Indeed, the Facility Rental Agreement itself provides that if City clients remained in possession after termination of the agreement, their term would continue on a month to month basis for each such client (R301). In any event, as this Court held in Miller v. City of New York, 15 N.Y.2d 34, 255 N.Y.S.2d 78 (1964) and Feder v. Caliguira, 8 N.Y.2d 400, 208 N.Y.S.2d 970 (1960), “[i]t 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 order to determine the true nature of the transaction and the relationship of the parties.” Id. at 404 (internal quotations omitted) “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. 11 Here, the City had both the right to the exclusive use of the rooms leased to it by Branic, and controlled the use of those rooms, by deciding which one of its clients would be referred to Branic’s hotel for housing, and maintaining the veto right over any eviction proceeding Branic wished to bring. Respondent bewilderingly cites Women’s Interart Center, Inc. v. New York City Economic Dev’t Corp., 97 A.D.3d 17 (1 st Dep’t 2012), a case which squarely supports Branic, not Respondent. There, the legal issue presented was whether the party that commenced eviction proceedings against the plaintiff had standing to institute such action. The plaintiff (a month to month tenant) argued that the defendant, CHDFC, did not have standing to evict the tenant because it was merely an agent of the landlord, and not a person with any possessory interest in the premises, and therefore could not institute eviction proceedings in its own name under RPAPL §721. The defendant, CHDFC, argued it was not an agent of the landlord, but had a written agreement with the City of New York (the owner of the building) entitled a “net lease” and was the tenant entitled to possession and therefore entitled to institute eviction proceedings against plaintiff. The Court noted that if the proof supported a finding that CHDFC was merely an agent of the landlord, then the eviction “would be illegal because as an agent of the landlord, it would not have standing to maintain an eviction proceeding.” 12 In looking at the document in question, the Court concluded that it passed sufficient control over the premises to CHDFC so as to establish a landlord-tenant relationship: “we find that the total nature of the agreement reflects that the parties entered into a lease agreement rather than a contract for management services.” The Court further noted that even though the City retained certain rights regarding the leased premises, such as a right of entry to inspect, etc., “these reserved rights were completely in line with the type of reservations that are permitted in a lease.” Id. at 22. So here, looking at the Facility Rental Agreement as a whole, the “total nature of the agreement” reflects a lease arrangement. Indeed, as far as “control” over the lease premises, it is undisputed that Branic was required to lease rooms to the City “exclusively for occupancy by Eligible Persons referred by HRA.” (R297)(emphasis added) Thus, each City client received the exclusive use and occupancy of his or her room, with Branic retaining only the limited right of entry for inspection, as is typical in all leases. Further, and showing control over the rooms passed to the City, the City’s consent was required in order to evict any City client during the term of the lease. (R299) Thus, unlike the undefined oral arrangement in Davis v. Dinkins, but like the written agreement in Women’s Interart Center, the Facility Rental Agreement contained all the essential terms and was in the nature of a lease. See also Matter of Dodgertown Homeowners Ass'n, 13 Inc., 235 A.D.2d 538, 652 N.Y.S.2d 761 (2d Dep’t 1997)(where agreement to lease up to 384 rooms in 2 buildings in the Kingsboro Psychiatric Center for housing the homeless for a stated 2 year term and agreed-upon rent, agreement was an enforceable lease). Significantly, Respondent never once mentions the amount paid by the City for his room, which was a negotiated rate of $65.00 per night, and not a rent- stabilized amount set by DHCR. If the rooms were subject to the Rent Stabilization Code, and not exempt from it, then the amount paid for the use of those rooms had to be pursuant to the Code, and could not be a negotiated rate between the parties as a matter of law. The fact that the amounts paid to Branic under the agreement were not rent-stabilized rents is further proof that the premises were exempt from the Code. 1 Finally, Respondent argues that because Branic allegedly “failed to produce” a copy of the Facility Rental Agreement below, the Court should not consider it at all. This contention is completely false. First, the fact that Pitt occupied the room, rented and paid for by the City, was undisputed at every level of these proceedings, as was the fact that he did not pay rent or even attempt to tender rent. Therefore, 1 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). 14 there was no need to have the Agreement in the record because the manner in which Pitt entered into possession and remained in possession was undisputed. Moreover, the record is undisputed that despite Branic’s efforts to subpoena such records from the City (R39-64, 44-45), the subpoena was quashed on the City’s motion, supported by an affidavit from Pitt, based on alleged confidentiality concerns. (R65-69) Thus, Respondent calculatedly and purposely refused to allow Branic to obtain a copy of the Agreement at a point in time when Branic could not locate its own copy. Pitt cannot be permitted to use the Agreement as both a sword and a shield. Moreover, although Branic finally did locate its own copy of the Facility Rental Agreement, it did so after the appellate record was closed. The Facility Rental Agreement was only added to the Appellate Division record for the first time by Respondent. It merely confirms what was undisputed below -- that Pitt never had an agreement with Branic, that Pitt entered into exclusive use and possession of his pursuant to an agreement between Branic and the City, and that the City paid the negotiated rent of $65.00 per night, and not a rent-stabilized rent. Indeed, because it was not part of the Civil Court record below, or even the Appellate Term record, Branic moved to strike it from the Appellate Division 15 record. 2 Its absence from the Appellate Term record was neither purposeful nor tactical, and there is no reason why the Court should not consider it. In any event, the Civil Court orders and Appellate Term Order referenced the existence of the Facility Rental Agreement (even though it was not in the record) because even Pitt did not dispute he was placed in Branic’s hotel pursuant to an agreement between Branic and the City. However, because Respondent chose to include the Facility Rental Agreement into the appellate record, the Court can and should consider it, as it confirms the undisputed fact that Branic was leasing rooms to the City that were exempt under the Code. 3 2 Oddly, although the Appellate Division denied the motion to strike (thereby concluding that the Facility Rental Agreement was properly made part of the record by Respondent), it then stated in its Decision & Order that it should not be considered – holdings that directly contradict each other. 3 Respondent notes in its “Statement of Facts” that Branic filed annual registration statements with the DHCR indicating Pitt as a rent-stabilized tenant for a period of time. (Resp. Br., p. 3) Those records were filed in error and were corrected to indicate the room’s status as “TE” or “temporarily exempt.” (R95, 106, 113-114, 122-148) In any event, errors in a DHCR registration do not confer rent stabilization status as a matter of law. Ruiz v. Chwatt Assoc., 247 A.D.2d 308 (1st Dep’t 1998)(landlord's mistaken registration of an apartment as rent stabilized over the years does not confer rent stabilization status); 286 Clinton LLC v. Lazarre, 18 Misc.3d 1101(A), 856 N.Y.S.2d 27 (Civil Ct. Kings Cty. 2007). 16 B. The Facility Rental Agreement Contains All The Essential Terms of A Lease Respondent argues that two essential terms of a lease are missing, i.e. the area to be leased, and the length of the term agreed upon, and that such terms are not ascertainable by objective means. This is demonstrably false. 1. The Areas To Be Leased Are Defined And Ascertainable By Objective Means The Facility Rental Agreement provided that Branic would set aside a maximum of 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. Respondent complains this is not specific enough and did not state the precise number of rooms to be occupied at the outset. However, 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. 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 the City. The fact that particular rooms would be conveyed at different times does not make the arrangement any less a “lease.” Respondent falsely states that Branic was “free to determine the number of rooms it would ‘set aside’ at any given time.” (Respondent’s Brief, p. 31) To the contrary, Branic agreed to, and was required, to set aside 134 rooms for the City, 17 for the entire two-year term of the Facility Rental Agreement. It was not “free” to set aside less rooms, as Respondent falsely claims. Moreover, given the nature of the lease arrangement, the Facility Rental Agreement could not have specified a precise number of rooms at the outset, because the agreement contemplated that the City would be referring Eligible Persons on a daily, ongoing basis, making it impossible to put in a specific number of rooms being leased for the entire two- year period. Indeed, a similar arrangement to house “up to 384 homeless men” was found to be an enforceable lease. Matter of Dodgertown Homeowners Ass'n, Inc., supra. 2. The Length of the Term Is Defined And Even If It Was Not Defined, It Would Be A Month-To-Month Tenancy Respondent argues that the Facility Rental Agreement does not state the length of the term agreed upon. (Respondent’s Brief, p. 29) This is demonstrably false. The Agreement specifically 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). Thus, for that two-year period, Branic was obligated to set aside 134 rooms for the exclusive use and occupancy of the City’s clients. See Matter of Dodgertown Homeowners Ass'n, Inc., supra (where agreement to lease 18 up to 384 rooms for housing homeless men for a stated 2 year term and agreed- upon rent, agreement was enforceable lease). Moreover, the Agreement specifically provided that if, after the termination of the Facility Rental Agreement, a City client still remained in the premises, then that client’s term would continue on a month to month basis and the City would continue to pay the rent for such client. (R301) Article 3A specifically provides that if the agreement was terminated, “the billing methodology of this MOU shall remain in full force and effect to the extent that any referred Eligible Person remains in the Facility.” (Id.) Indeed, as the dissent in Davis v. Dinkins correctly noted, once an HRA client is placed in housing accommodations, absent any definite term he or she would simply be a month to month tenant. As the dissent noted, “[e]ven 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. . .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. Id. at 368-370. (emphasis added) So here, the rent was paid by the City on a monthly basis, confirming that the parties contemplated a month to month tenancy. (“All payments will be made on a monthly basis via an electronic billing method based on the client related 19 information in HRA’s database. . .a billing month shall be a calendar month.”) (R300) Thus, contrary to Respondent’s contentions, the Facility Rental Agreement stated the length of the term. Even if the Agreement did not state the term (which it did), the law provides a statutorily imposed term. 4 Thus, even if the Facility Rental Agreement did not contain a stated term (which it did), the lack of a stated term does not mean the parties’ arrangement was not a lease. In the absence of a stated term, the law implies one. Thus, and contrary to Respondent’s contentions, the Facility Rental Agreement is not missing an “essential term.” 3. Contrary to Respondent’s Contention, Article 3B Of The Facility Rental Agreement Is Not Part Of The Analysis In an entirely new argument, never before raised during the last 7 years of litigation, Respondent argues that Article 3B of the Facility Rental Agreement somehow proves the Agreement is not a lease. As a threshold matter, we note this argument is not preserved and was not made below. Accordingly, the Court cannot consider it. Bingham v. New York City Tr. Auth., 99 N.Y.2d 355, 756 N.Y.S.2d 129 (2003)(“ this Court with rare exception does not review questions raised for 4 See RPAPL §232 (“An agreement for the occupation of real estate in the city of New York, which shall not particularly specify the duration of the occupation, shall be deemed to continue until the first day of October next after the possession commences under the agreement.”); see also RPAPL §232-c (where a holdover tenant holds over, and “the landlord. . .accept[s] rent for any period subsequent to the expiration of such term, then. . .the tenancy created by the acceptance of such rent shall be a tenancy from month to month commencing on the first day after the expiration of such term.” 20 the first time on appeal. Unlike the Appellate Division, we lack jurisdiction to review unpreserved issues in the interest of justice.”) Even if it was preserved, and this Court could review it, the argument is frivolous. Article 3B provides, in part, that if the City suspends operation of the Facility Rental Agreement due to, inter alia, hazardous conditions or otherwise, then the City “reserves its right to impose remedies afforded by the Spiegel Law, Social Services Law §143-b(2).” (Respondent’s Brief, p. 31) That law authorizes public welfare departments to withhold payments being made to a landlord on behalf of an individual receiving such welfare payments in the event hazardous conditions exist in the building. Based on this reservation of rights on the City’s part, Respondent argues that the Spiegel Law “would have no application if HRA were leasing the premises directly from the Operator.” (Id.) This is nonsensical. The City pays the rent from public coffers, from money given to the social service programs. The Spiegel Law applies to such payments because they are made from public funds. Application of the Siegel Law has no effect whatsoever on whether the Facility Rental Agreement is a lease or not. Under Feder and Miller, supra, the Court is required to look to the agreement “to determine the true nature of the transaction and the relationship of the parties.” The Facility Rental Agreement, read as a whole, as it must be, is clearly a lease. As such, the rooms leased by the City of New York were exempt 21 from the Rent Stabilization Code under Sections 2520.11(b) as a matter of law, mandating reversal of the Order below. 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 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 RESPONDENT’S INTERPRETATION AND CONSTRUCTION OF SECTION 2520.6(J) IS NOT SUPPORTED BY CASE LAW OR FUNDAMENTAL PRINCIPLES OF STATUTORY CONSTRUCTION Respondent urges this Court to adopt the Appellate Division’s myopic interpretation of Section 2520.6(j) of the Code to find that the only requirement of becoming a “permanent tenant” in a hotel is to simply reside there for at least six months, without any corresponding obligation to pay rent. In support of this argument, Respondent claims that existing precedent supports this interpretation, as do principles of statutory construction. Both contentions are wrong. 22 A. Existing Precedent Does Not Support Respondent’s Interpretation Respondent contends that existing precedent supports the Appellate Division’s interpretation of the Code and only requires continuous residence of six months or more. (Respondent’s Brief, pp. 12-13) In support of this statement, Respondent cites seven cases which it claims stands for that very proposition. To the contrary, every single one of those seven cases concerned an individual who not only resided in a hotel for at least six months, but also had an obligation to pay rent and did pay rent. Kanti-Savita Realty Corp. v. Santiago, 18 Misc.3d 74, 852 N.Y.S.2d 579 (App. Term 2d Dep’t 2007) is completely inapposite and erroneously relied on by the Respondent and the Appellate Division. Indeed, continued reliance on this case for the proposition Respondent claims it stands for (i.e. that only six months continuous occupancy is required to attain permanent tenant status) would not only distort the law, it would create bad law. What Respondent and the Appellate Division both got wrong in relying on this case is that it arose in the context of a non-payment proceeding brought pursuant to RPAPL §711(2), and the permanent tenant there had a landlord-tenant relationship and an agreement to pay rent. RPAPL §711 is entitled “Grounds where landlord-tenant relationship exists” and provides when a summary 23 proceeding can be maintained. RPAPL §711(2) provides that where a tenant defaults in the payment of rent, a non-payment proceeding can be brought. The landlord in Kanti-Savita brought a non-payment proceeding under RPAPL §711(2), evidencing that (a) a landlord-tenant relationship existed; and (b) that the tenant had paid rent but defaulted. If the tenant in Kanti-Savita had no obligation to pay rent, the landlord could not have brought a non-payment proceeding under RPAPL §711(2) as a matter of law. Thus, Kanti-Savita completely supports Branic as it recognizes that in order to attain permanent tenant status, the tenant must have an obligation to pay rent. A brief summary of the facts in that case further illuminates the Appellate Division’s error. There, the tenants of a rent-stabilized SRO agreed to pay rent and did pay rent for five out of the six months they resided there which was accepted by the landlord, thus establishing a landlord/tenant relationship. When the tenants failed to pay the sixth month of rent, the landlord commenced a summary non- payment proceeding. The tenants moved to dismiss the non-payment petition, asserting that the rent being sought was illegal and was not the legal regulated rent. In opposing the motion to dismiss, landlord argued that the tenants were not entitled to the legal regulated rent because they were not subject to the Rent Stabilization Code and further, that they had not attained “permanent tenant” status because they failed to pay part of the sixth month of rent. 24 The Civil Court found the tenants were “permanent tenants” entitled to the protection of the Code because, inter alia, they had continuously resided in the subject premises for more than six months, and dismissed the Petition in its entirety, based on the tenants’ contention that the rent charged was illegal. The Appellate Term, among other things, affirmed the Civil Court’s finding that the tenants were “permanent tenants” because they were in possession for at least six months and had paid rent for five of the six months. In response to the landlord’s contention that the tenants were not “permanent tenants” because they failed to pay the sixth month of rent, the Appellate Term held that “even were we to accept landlord's contention that residence alone is insufficient without the payment of rent, here, by commencing a nonpayment proceeding, rather than a holdover proceeding, and seeking to recover the unpaid rent, landlord has undermined its contention." Thus, and contrary to Respondent’s contentions, Kanti-Savita does not support his position, but squarely supports Branic. In 1234 Broadway LLC v. Jing Yong Xu, 10 Misc.3d 655, 809 N.Y.S.2d 825 (Civ. Ct. N.Y. Cty. 2005), the permanent tenant had a written one-year lease with the landlord which expired and turned into a month-to-month tenancy. Thus, as in Kanti-Savita, the tenant had an obligation to pay rent and had a landlord- tenant relationship. Moreover, the question decided in 1234 Broadway was not 25 whether the tenant there was a “permanent tenant;” rather, the issue presented was whether the landlord was required to send a 90-day “Golub notice” to a permanent tenant where the landlord sought to terminate the tenancy on the grounds that the hotel room was not the tenant’s primary residence. The Court held the landlord did not have to serve a “Golub notice” on a permanent tenant. Accordingly, Respondent’s reliance on this case is completely misplaced because (a) the Court did not decide when a person attains “permanent tenant” status; and (b) in any event, the tenant had an obligation to pay rent and did pay rent. The third case cited by Respondent is Matter of Heilweil v. New York State Div. of Hous. & Community Renewal, 12 A.D.3d 300, 785 N.Y.S.2d 63 (1 st Dep’t 2004) is completely inapposite and has nothing to do with the issues on this appeal. There, the DHCR found that certain hotel units in a building were exempt from rent stabilization because they had been “substantially rehabilitated” under Section 2520.11(e)(6) of the Code. The petitioner, a tenant in the building, challenged the DHCR’s ruling in an Article 78 Petition which was denied by the Supreme Court on the basis that the petitioner was not adversely affected by the ruling and therefore had no standing to challenge it. The First Department affirmed, finding that the DHCR’s ruling had a rational basis. The Court further noted, in dicta, that because rooms in the hotel would only become subject to the Code if the tenant attained “permanent tenant” status, the “petitioner should not be afforded the 26 expectation of residing in a building containing only regulated apartments.” Thus, this case did not decide the question of whether one is required to pay rent in order to become a “permanent tenant.” In 204 West 73 rd Street LLC v. Hess, N.Y.L.J., March 17, 2004 at 20, col. 1 (Civ. Ct. N.Y. Cty. 2004), an individual who paid rent since September 1996 for a hotel room and requested a lease in 1997 was a “permanent tenant.” Once again, the person attaining “permanent tenant” status had an obligation to pay rent and did pay rent. (see Appellant’s Compendium at C1-C5). In that case, the record was replete with documentary evidence that the tenant had paid rent and the rent had been accepted by the landlord for at least nine months: “Respondent paid his September rent to the building’s front desk and was then permitted to take occupancy. . .Respondent also paid his October and November 1996 rent in person by money order at the front desk. . [the landlord’s] acceptance of his nine monthly rent checks did in fact ratify his tenancy in the hotel. . .The former owner’s acceptance of respondents’ checks over an extended period of time is a clear signal that respondent was indeed accepted as a tenant.” The Court then concluded that Respondent was entitled to a rent stabilized lease. Matter of Benjamin Shapiro Realty Co. v. New York State Div. of Hous. & Community Renewal, 2 A.D.3d 220, 769 N.Y.S.2d 226 (1 st Dep’t 2003), the fifth case cited by Respondent, is also completely inapposite and also did not decide the 27 issue currently before this Court. There, the petitioner challenged a determination by the DHCR which reclassified petitioner's building from a “hotel” to an “apartment building” because petitioner failed to show it was providing hotel services to at least 51% of the building's permanent tenants as required by law to maintain “hotel” status. The Supreme Court found the DHCR determination to have a rational basis, and denied the Article 78 Petition. The precise issue on appeal concerned how the “51%” was calculated, with the landlord contending it should not include units that were exempt from the Code by reason of Section 2520.11(g)(2)(“ rooms or other housing accommodations in hotels where such housing accommodations. . . (2) were rented on May 31, 1968 for more than $350 per month or $88 per week.”) DHCR included in the “51%” calculation all hotel rooms that had been occupied for at least six months or more, regardless of whether they were otherwise exempt from the Code under Section 2520.11(g)(2). On appeal, the First Department affirmed, noting that DHCR’s interpretation of the Code was correct: “DHCR's interpretation of the term ‘permanent tenant’ as an occupant who, inter alia, has continuously resided in the building for at least six months, without regard to whether the unit is exempt from regulation under Rent Stabilization Code § 2520.11 (g) (2) by reason of the unit's former high rent, is in accord with the plain definition of “permanent tenant” contained in Rent Stabilization Code § 2520.6 (j), as well as the plain purpose of the law that a building holding itself out 28 as a hotel should provide hotel services.” The reference to an occupant “continuously residing” in the premises for at least six months was not a determination that in order to become a permanent tenant, an individual must merely reside in the premises for six months. It was recited merely to support DHCR’s determination that a determination of whether a building was being occupied as a hotel, and providing the requisite hotel services, should be measured by counting all rooms that might qualify for permanent tenant status. 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), the tenant in question had a three-year lease which expired in 1978, and remained thereafter on a month-to- month tenancy. Beginning in May 1979, the permanent tenant refused to pay his rent. Thus, unlike here, the tenant there had an obligation to pay rent. The landlord in that case did not dispute that the tenant was a “permanent tenant.” Rather, the landlord claimed that because the permanent tenant remained in the premises on a month to month basis, landlord was entitled to evict him pursuant to the laws governing month to month tenancies and commenced a holdover proceeding to do so. The tenant argued he was not a month to month tenant who could be evicted in a holdover proceeding, but a statutory tenant who 29 could only be evicted for non-payment for rent, which default he had a right to cure. The question as framed by the Court was “whether a holdover proceeding is the proper vehicle through which landlord may seek to evict the rent-defaulting tenant, or whether the landlord is limited to a nonpayment proceeding with its more liberal allowances for cure of a tenant's rent breach.” The Court found for the tenant, noting that the Code “forbids the eviction of a 'permanent tenant' so long as he continues to pay rent,” and further noting that giving a permanent tenant the right to cure its default in paying rent was in harmony with the legislative intent of the Code: “Rent, then, was viewed as the most sensitive element of the landlord-tenant relationship and the one that could most easily be turned into a weapon of abuse. It seems to us to be more in harmony with the legislative intent of the Rent Stabilization Law to afford the stabilized tenant the opportunity to cure a rent default which often may be the result of an oversight easily remedied.” This case did not hold, as Respondent claims, that a person seeking to attain permanent tenant status need not pay rent. Finally, Respondent cites Morris v. Cole, N.Y.L.J., April 5, 1989 at p. 22, col. 6 (Civil Ct. N.Y. Cty. 1989). That case did not construe the statutory language, but merely quoted it. Thus, it does not support Respondent nor aid the Court. The only issue there was whether the landlord had properly served a notice 30 of termination in a holdover proceeding where the owner was seeking occupancy of the premises. In sum, not one of the seven cases cited by Respondent remotely support his position. To the contrary, they each squarely support Appellant’s construction of the Code as requiring a hotel occupant to pay rent in order to attain permanent tenant status. Thus, Respondent’s contention that the Appellate Term Order was an “aberration among a long line of established case law” (Respondent’s Brief, p. 11) is demonstrably false. Indeed, the opposite is true – it is the Appellate Division Order that is the aberration. 5 Respondent conspicuously does not address, much less distinguish, the other cases cited by Appellant which squarely support Appellant. See, e.g., 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); Weil v. Chandler, 38 Misc.2d 58, 239 N.Y.S.2d 514 (App. Term 1 st Dep’t 1962)(permanent tenant paid rent); 240 West 73rd Street 5 Respondent argues that because the State Legislature has not amended the law, the implication is that the holdings of these cases (allegedly holding that the only requirement to become a permanent tenant is six months continued occupancy) is the correct one. (Respondent’s Brief, p. 20) This is frivolous. None of the cases cited by Respondent interpreted this Code section or decided that legal issue. Thus, there was no failure by the Legislature to act as the statute does not read as Respondent erroneously contends, nor do the cases cited by Respondent support Respondent’s erroneous interpretation. 31 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”). Nor does Respondent distinguish the cases that actually construed this section of the Rent Stabilization Code, each of which involved an individual who entered into a direct agreement with the building owner, agreed to pay rent, and did pay rent to the 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 1 st 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 32 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). B. While the Code Defines Two Types of “Tenants,” i.e. Tenants in Apartments and Permanent Tenants In Hotels, The Basic Obligation to Pay Rent Applies To Both Types of Tenancies Respondent devotes many pages to ensuring that the Court understands that the Code covers two types of tenants -- “tenants” in an apartment (defined in Section 2520.6(d)), and “permanent tenants” in hotels (defined in Section 2520.6(j)). Branic does not dispute that the Code defines two types of tenants, nor dispute that in order for a hotel occupant to become a permanent tenant of a hotel, it must do one of two things: (a) occupy the premises for at least six months; or (b) request a lease of at least six months, even if occupancy is less than six months. However, what Respondent ignores is that the threshold step to becoming a “permanent tenant” is to be a “hotel occupant” – and a “hotel occupant” must have a landlord-tenant relationship with the hotel owner or operator in the first instance; otherwise he or she would not be occupying a room in the first instance. The specific requirement of having to pay rent is not included in the definition of Section 2520.6(j) because the predicate requirement – being a hotel occupant – already requires it. Further, by noting that all references in the Code to “tenant” shall include “permanent tenant,” the Legislature was ensuring that all the rights, duties, and 33 obligations of a “tenant” would apply to, an protect, both types of tenancies. It did not, as Respondent urges, somehow excuse the “permanent tenant” from the obligation to pay rent. Respondent argues that if the definition of “tenant” is incorporated into the definition of “permanent tenant,” there would be no need for a separate definition of “permanent tenant” and it would render that section of the Code superfluous. (Respondent’s Brief, p. 15) This argument purposely misconstrues Appellant’s position. Appellant is not contending that the phrase “permanent tenant” means exactly the same thing as “tenant.” Rather, Appellant correctly contends that the same threshold obligation to becoming a “tenant” in an apartment applies equally to “permanent tenants” in hotels, that is, an obligation and agreement to pay rent for the right to occupy the housing accommodation. In Appellant’s moving brief, Appellant noted that to construe Section 2520.6(j) as suggested by Respondent would render it internally inconsistent, and would lead to an absurd and unintended result because 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. Respondent conspicuously fails to address this point. 34 Respondent reluctantly concedes, as he must, that permanent tenants must obviously have an obligation to pay rent (Respondent’s Brief, p. 23). However, he then argues that paying rent is not a requirement to becoming a permanent tenant under the Code. In other words, Respondent acknowledges that rent has to be paid; he just disputes at what point in the tenancy it has to be paid in order to acquire “permanent tenant” status. This is nothing more than double talk. An obligation to pay rent arises at the beginning of the tenancy, whether the tenancy is in an apartment or in a hotel. Respondent’s contention that the payment of rent is not a requirement in order to attain “permanent tenant” status is simply untenable, illogical, and contrary to the statutory scheme. C. Section 2524.1 of the Code Confirms That A Permanent Tenant Is Required To Pay Rent In its moving brief, Appellant noted that Section 2524.1 of the Code squarely confirmed its interpretation of the Code. That Section provides that “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.” See also Gruen v. Patterson, 55 N.Y.2d 631, 446 N.Y.S.2d 253 (1981); Park Summit Realty 35 Corp. v. Frank, supra; Combined Ventures, LLC v. Fiske House Apt. Corp., 74 A.D.3d 1119, 906 N.Y.S.2d 568 (2d Dep’t 2010). 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” because Section 2524.1 expressly states that such a tenant cannot be evicted “as long as the tenant continues to pay the rent.” This confirms that a requirement of becoming a permanent tenant is to pay rent. Knowing it cannot hide from the dispositive language of this statute and the cases construing it – all of which make clear that a permanent tenant cannot be evicted as long as he or she continues to pay rent – Respondent frivolously argues that the obligation to pay rent is merely required to “maintain possession” of premises but is not required to actually become a “permanent tenant.” (Respondent’s Brief, pp. 21-22) In other words, Respondent argues that paying rent is not an obligation to obtain possession of premises in the first instance, only to maintain possession, and that the obligation to pay rent only begins at some uncertain, unspecified, unascertainable date in the future. There is no support in the law for such an outlandish, illogical contention. If rent is required to “maintain possession,” rent is required to get possession and to attain the status of a permanent tenant. 36 D. Section 2522.5(a)(2) of the Code Confirms That A Permanent Tenant Is Required To Pay Rent 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. The hotel occupant who requests such a lease becomes a permanent tenant but the lease need not be renewed." (emphasis added) 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. Respondent conspicuously does not even address this section of the Code in his discussion of statutory interpretation. E. Mr. Pitt Never Paid Rent, Nor Acknowledged An Obligation To Pay Rent To Branic Respondent claims even if rent is required to attain “permanent tenant” status, rent was paid on Pitt’s behalf by the City of New York. (Respondent’s Brief, pp. 22-23) Respondent argues he is like an individual who get a housing allowance under the Section 8 program, whose tenancy rights are not compromised merely because part of their housing cost is paid by a third party. However, the 37 dispositive difference between Respondent and a Section 8 tenant is that the Section 8 tenant selects its housing, negotiates the rent to be paid, and is required to have a direct landlord-tenant relationship pursuant to which they have the primary obligation to pay rent. The government then merely pays a subsidy to the landlord on their behalf. The federal program under which Section 8 payments are made is called the Housing Choice Voucher Program and is governed by 24 C.F.R. Part 982. Under this program, “Families select and rent units that meet housing quality standards.” 24 C.F.R. §982.1(a)(2). Thereafter, once a public housing agency has approved the rental unit in question, the agency contracts separately with the landlord to pay a subsidy on behalf of the tenant. The regulations governing the program make clear that the landlord/tenant relationship is between the private landlord and the assistance recipient. See C.F.R. §982.308(b)(1): “The tenant and the owner must enter a written lease for the unit.” (emphasis added) See also 24 C.F.R. §982.310 (specifying grounds for termination of the family’s tenancy by the owner); 24 C.F.R. §982.506 (“The owner and the family negotiate the rent to owner.”) Here, Pitt did not select his housing; he did not negotiate the rent. He was placed into Branic’s facility pursuant to an agreement between the City and Branic pursuant to the City’s statutory obligation to provide emergency housing, at a rate negotiated between Branic and the City. Unlike Section 8 tenants, he had no 38 landlord-tenant relationship with Branic and had no direct obligation to pay rent. Accordingly, Respondent’s attempt to rely on Section 8 subsidies as an analogy is completely meritless. 6 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. POINT III RESPONDENT UTTERLY FAILED TO ADDRESS POINT III OF APPELLANT’S BRIEF CONCERNING HIS STATUS AS A LICENSEE, THEREBY CONCEDING THE CORRECTNESS OF THE ARGUMENT Appellant’s moving brief noted the well-settled law 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 6 Respondent also argues that Article 1J supports Respondent’s contention that he is a “permanent tenant.” To the contrary, that Article merely states that if a referred person were to properly become a “permanent tenant” under the Rent Stabilization Code (i.e. by paying rent directly to Branic, or requesting a lease from Branic, establishing a landlord-tenant relationship between them), that person could not be evicted without cause and notice to the City. This does not mean, as Respondent disingenuously claims, that Respondent is a permanent tenant without having a landlord-tenant relationship. 39 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 tenant's lease; and (2) the rights and status of a tenant in occupancy with respect to conversion to condominium or cooperative ownership.”) Appellant also cited several cases which correctly 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) (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 40 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.”) Respondent conspicuously failed to respond to this point, or distinguish any of the cases, thereby conceding the point. See Felske v. Hirschmann, 2012 WL 716632, at *3 (S.D.N.Y. 2012)(“A plaintiff effectively concedes a defendant's arguments by his failure to respond to them.”); Scott v. JPMorgan Chase & Co., 2014 WL 338753 (S.D.N.Y. 2014)(same). As the above-cited cases confirm, at best Pitt was a licensee, occupying the room with permission pursuant to the Facility Rental Agreement between Branic and the City, and was not a “permanent tenant” as a matter of law. Housing Works, Inc., supra (HRA clients occupying apartments were licensees). 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 March 7, 2014 / _ . .-· } , /] 1'./ ./; //.. I I / . / / /; ,,. I I ./ , I R0hald J. R6senberg, Esq. ¥esley A. 1 Reardon, Esq. Rosenbe~tg Calica & Birney LLP I AttomeY,s for Petitioner-Appellant 100 Garden City Plaza, Suite 408 Garden City, New York 11530 (516) 747-7400