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517 W. 212 St. LLC v. Musik-Ayala

Civil Court, City of New York, New York County.
Dec 1, 2017
58 Misc. 3d 652 (N.Y. Civ. Ct. 2017)

Opinion

12-01-2017

517 WEST 212 ST. LLC, Petitioner, v. Isaiah MUSIK–AYALA, Respondent.

Levy, Tolman, and Costello, by Noah Levenson, for Petitioner. Manhattan Legal Services, by Thomas James Honan, for Respondent.


Levy, Tolman, and Costello, by Noah Levenson, for Petitioner.

Manhattan Legal Services, by Thomas James Honan, for Respondent.

JACK STOLLER, J. The Decision and Order on this Motion are as follows:

517 West 212 St. LLC, the petitioner in this proceeding ("Petitioner"), commenced this holdover proceeding against Isaiah Musik–Ayala, the respondent in this proceeding ("Respondent"), seeking possession of 517 West 212th Street, Apt. 3C, New York New York ("the subject premises") on the ground that Respondent's lease expired and that no regulation requires Petitioner to renew Respondent's lease. Respondent interposed an answer that, inter alia, alleged that the subject premises is subject to the Rent Stabilization Law. Petitioner now moves for summary judgment in its favor and to dismiss Respondent's counterclaims. Respondent cross-moves for summary judgment dismissing the petition, awarding attorneys' fees, or, alternatively, for relief to obtain discovery. The Court consolidates these motions for resolution herein.

At the outset, Petitioner opposes Respondent's motion on the basis that Respondent does not annex the pleadings to his motion . A motion for summary judgment "shall" be supported by, inter alia, a copy of the pleadings. CPLR § 3212(b). Accordingly, a failure to annex pleadings to a summary judgment motion warrants its denial, Washington Realty Owners, LLC v. 260 Wash. St., LLC, 105 A.D.3d 675, 964 N.Y.S.2d 137 (1st Dept.2013), unless other parties annex copies of the pleadings to their motion papers. Serowik v. Leardon Boiler Works Inc., 129 A.D.3d 471, 472, 11 N.Y.S.3d 128 (1st Dept.2015). As Petitioner annexes the pleadings to its motion, the Court shall consider both summary judgment motions on their merits.

The parties essentially dispute the rent regulatory status of the subject premises, with Petitioner claiming that the subject premises is unregulated and with Respondent claiming that the subject premises is subject to the Rent Stabilization Law. As the expiration of a lease is not a ground for eviction pursuant to the Rent Stabilization Law, N.Y.C. Admin. Code § 26–511(c)(4), the resolution of the parties' dispute as such determines the outcome of their motions. The motion papers reveal no fact dispute between the parties concerning the material issues necessary to determine the rent regulatory status of the subject premises. The tenant before Respondent ("the prior tenant") was subject to the Rent Stabilization Law and Petitioner duly registered the prior tenant's rents with the New York State Division of Housing and Community Renewal ("DHCR") pursuant to 9 N.Y.C.R.R. § 2528.3. The registration history and the prior tenant's leases show that the prior tenant entered into a one-year vacancy lease commencing in June of 2012 with a purported legal regulated rent of $2,015.76 and a preferential rent of $1,400.00; that the prior tenant entered into a one-year renewal lease commencing in June of 2013 with a purported legal regulated rent of $2,056.07 and a preferential rent of $1,425.00; that the prior tenant entered into a one-year renewal lease commencing in June of 2014 with a purported legal rent of $2,138.31 and a preferential rent of $1,500.00; and that Petitioner subsequently treated the subject premises as exempt from the Rent Stabilization Law and entered into a one-year lease with Respondent commencing on May 1, 2015 with a monthly rent of $1,650.00.

Although this lease pre-dated the interposition of Respondent's answer by more than four years, the Court may consider records as such when the Court is determining the rent regulatory status of the apartment rather than adjudicating a rent overcharge claim. H.O. Realty Corp. v. State of N.Y. Div. of Hous. & Community Renewal, 46 A.D.3d 103, 109, 844 N.Y.S.2d 204 (1st Dept.2007), East West Renovating Co. v. N.Y. State Div. of Hous. & Cmty. Renewal, 16 A.D.3d 166, 167, 791 N.Y.S.2d 88 (1st Dept.2005).

Petitioner argues that it was entitled to an increase of 18.25% over the previous legal regulated rent of $2,138.31 upon execution of a one-year vacancy lease with Respondent, which would raise the rent to $2,528.55, above the threshold of $2,500.00 necessary to deregulate an apartment with a vacancy between June 24, 2011 and June 15, 2015. N.Y.C. Admin. Code § 26–504.3(a)(3). Twenty percent less 1.75%, the difference between an increase for a one- and a two-year renewal lease for leases commencing in May of 2015 by Rent Guidelines Board ("RGB") order 46, is indeed 18.25%. However, on a one-year vacancy lease, Petitioner was entitled to a rent increase of twenty percent less the difference between an increase for a one-year and a two-year renewal applicable to the previous lease. N.Y.C. Admin. Code § 26–511(c)(5–a), 9 N.Y.C.R.R. § 2522.8(a)(2). Cf. Lirakis v. 180 Seventh Ave. Assocs., LLC, 12 Misc.3d 1173(A), 2006 WL 1789049 (Civ.Ct. N.Y. Co.2006) (applying the RGB guidelines for the lease previous to a tenant with a one-year vacancy lease). The lease previous to Respondent's first lease commenced in June of 2014. The difference between an increase for a one-year and a two-year renewal for leases commencing in June of 2014 is 3.75%. RGB Order 45. Twenty percent less 3.75% is 16.25%. An increase of 16.25% over $2,138.31, the purported legal regulated rent from the last lease of the prior tenant before Respondent's tenancy, is $2,485.79, less than the deregulatory threshold.

Under N.Y.C. Admin. Code § 26–510(b), the RGB establishes rent adjustments for the units subject to the Rent Stabilization Law.

Respondent did not raise this argument in opposition to Petitioner's summary judgment motion. However, as the proponent of a motion for summary judgment, Petitioner bears the burden to tender sufficient evidence to eliminate any material issues of fact as to the claims at issue, regardless of the sufficiency of opposing papers. Smalls v. AJI Indus., Inc., 10 N.Y.3d 733, 735, 853 N.Y.S.2d 526, 883 N.E.2d 350 (2008), People v. Grasso, 50 A.D.3d 535, 545, 858 N.Y.S.2d 23 (1st Dept.), aff'd, 11 N.Y.3d 64, 862 N.Y.S.2d 828, 893 N.E.2d 105 (2008). While the Court will not, in essence, sua sponte dismiss the petition on this ground, as Respondent has not put Petitioner on notice as to this issue, the Court still denies Petitioner's summary judgment motion, as Petitioner failed to affirmatively eliminate issues of material fact that it lawfully increased Respondent's legal regulated rent above $2,500.00.

Respondent separately moves for summary judgment on the ground that the subject premises is subject to the Rent Stabilization Law. Respondent cites N.Y.C. Admin. Code § 26–511(c)(14) in support of his argument. N.Y.C. Admin. Code § 26–511(c)(14) provides that a landlord with a preferential rent may use the higher legal regulated rent, and not the lower preferential rent, as the basis for future rent increases when the tenant with a preferential rent vacates. However, upon a vacancy from such an apartment, N.Y.C. Admin. Code § 26–511(c)(14) further provides that the apartment "shall be excluded from [the Rent Stabilization Law] pursuant to [N.Y.C. Admin. Code § ]26–504.2 ... when, subsequent to vacancy ... such legal regulated rent prior to vacancy is [$2,500.00], or more, for any housing accommodation that is or becomes vacant after [June 24, 2011] but prior to [June 15, 2015] ...." (emphasis added). As the legal regulated rent of the subject premises prior to the vacancy of the prior tenant was not $2,500.00 or more, Respondent argues that N.Y.C. Admin. Code § 26–511(c)(14) precludes Petitioner from availing itself of the deregulation provision of N.Y.C. Admin. Code § 26–504.2.

N.Y.C. Admin. Code § 26–504.2(a) excludes from Rent Stabilization coverage apartments becoming vacant between June 24, 2011 and June 15, 2015 and where the "legal regulated rent" was at least $2,500.00 "at any time."

Petitioner argues that N.Y.C. Admin. Code § 26–511(c)(14) merely spells out a specific exclusion to the Rent Stabilization Law when the tenant prior to the last vacancy received a preferential rent and the legal regulated rent was above the threshold at the time that tenant vacated, and that N.Y.C. Admin. Code § 26–511(c)(14) does not otherwise preclude a landlord from deregulating an apartment pursuant to N.Y.C. Admin. Code § 26–504.2(a). Petitioner's opposition as such raises a question about the purpose of the language of N.Y.C. Admin. Code § 26–511(c)(14) citing a rent of $2,500.00 for a prior tenancy, which the Legislature had not added to the statute until an amendment effective on June 15, 2015. N.Y.C. Admin. Code § 26–504.2(a), both in the language after the Legislature amended it in 2015 and in its language prior to the Legislature's amendment, permits deregulation of apartments that are vacant with lawful rents of at least $2,500.00. If, as Petitioner argues, the Legislature only intended 9 N.Y.C.R.R. § 26–511(c)(14) to state that a vacant apartment with a legal regulated rent exceeding $2,500.00 and a preferential rent would be deregulated, the Legislature need not have amended 9 N.Y.C.R.R. § 26–511(c)(14) to do so, as the plain language of 9 N.Y.C.R.R. § 26–504.2(a) had already permitted such deregulation.

Prior to June 15, 2015, 9 N.Y.C.R.R. § 26–511(c)(14) provided in relevant part as follows: "Where, subsequent to vacancy, such legal regulated rent, as adjusted by the most recent applicable guidelines increases and any other increases authorized by law ... for any housing accommodation which is or becomes vacant on or after [June 24,] 2011, is two thousand five [sic.] dollars or more per month, such housing accommodation shall be excluded from the provisions of this law pursuant to [9 N.Y.C.R.R. § ]26–504.2."

The Court must presume that each word used in a statute expresses a distinct and different idea, Tonis v. Bd. of Regents, 295 N.Y. 286, 293, 67 N.E.2d 245 (1946), and that the Legislature inserted every provision of a statute for some useful purpose. McGowan v. Mayor of NY, 53 N.Y.2d 86, 95, 440 N.Y.S.2d 595, 423 N.E.2d 18 (1981), Albano v. Kirby, 36 N.Y.2d 526, 530, 369 N.Y.S.2d 655, 330 N.E.2d 615 (1975). Conversely, the Court cannot conclude that the Legislature deliberately placed a phrase in the statute which was intended to serve no purpose. Rodriguez v. Perales, 86 N.Y.2d 361, 366, 633 N.Y.S.2d 252, 657 N.E.2d 247 (1995), In re Guar. Tr. Co., 309 N.Y. 487, 495, 131 N.E.2d 896 (1956), People v. Dethloff, 283 N.Y. 309, 315, 28 N.E.2d 850 (1940). See Also Matter of N.Y. Cty. Lawyers' Ass'n v. Bloomberg, 95 A.D.3d 92, 101, 940 N.Y.S.2d 229 (1st Dept.2012) (Courts must avoid a construction rendering statutory language to be superfluous). The Court must further presume that the Legislature knows what statutes are in effect when enacting new laws. In re Adoption of Gerald T., 211 A.D.2d 17, 21, 625 N.Y.S.2d 509 (1st Dept.1995). Accordingly, the Court does not construe 9 N.Y.C.R.R. § 26–511(c)(14) to redundantly restate what 9 N.Y.C.R.R. § 26–504.2(a) already provided for. Canons of statutory construction compel the finding that 9 N.Y.C.R.R. § 26–511(c)(14) must have a distinct purpose.

The statute states that apartments with preferential rents shall be subject to vacancy deregulation when the legal regulated rent "prior to vacancy" is at least $2,500.00. A fundamental principle of statutory construction requires that the Court give effect to every word, if possible, and presume that every word, phrase, clause, or paragraph has some meaning. Matter of Tristram K., 36 A.D.3d 147, 151, 824 N.Y.S.2d 232 (1st Dept.2006). Giving effect to the words "prior to vacancy" in 9 N.Y.C.R.R. § 26–511(c)(14) means that a landlord may deregulate an apartment occupied by a tenant with a preferential rent when the legal regulated rent of that tenant exceeds $2,500.00. Moreover, where a law expressly describes a particular thing to which it shall apply, the Court must draw an "irrefutable inference" that the Legislature intended to omit or exclude what the Legislature omitted or excluded. Myers v. Schneiderman, 30 N.Y.3d 1, 12, 62 N.Y.S.3d 838, 85 N.E.3d 57 (2017), Matter of Shannon, 25 N.Y.3d 345, 352, 12 N.Y.S.3d 600, 34 N.E.3d 351 (2015), Matter of Raynor v. Landmark Chrysler, 18 N.Y.3d 48, 56, 936 N.Y.S.2d 63, 959 N.E.2d 1011 (2011), Town of Riverhead v. N.Y. State Bd. of Real Prop. Servs., 5 N.Y.3d 36, 42–43, 799 N.Y.S.2d 753, 832 N.E.2d 1169 (2005). The Legislature's specific mention of the necessity that a tenant with a preferential rent have a legal regulated rent above $2,500.00 in order to subsequently deregulate the unit therefore compels the conclusion that apartments with tenants with preferential rents and legal regulated rents of less than $2,500.00 are ineligible for subsequent deregulation. As the legal regulated rent of the prior tenant never exceeded $2,500.00 "prior to vacancy" and as the prior tenant had a preferential rent, the conditions stated in 9 N.Y.C.R.R. § 26–511(c)(14) for deregulation do not apply to the subject premises. Thus, the subject premises would remain rent-stabilized through Respondent's tenancy.

Petitioner argues that such an interpretation of N.Y.C. Admin. Code § 26–511(c)(14) contradicts N.Y.C. Admin. Code § 26–504.2(a). The Court must consider a statute as a whole, reading and construing all parts of an act together to determine legislative intent possible, and should harmonize all parts of a statute with each other and give effect and meaning to the entire statute and every part and word thereof, Friedman v. Conn. Gen. Life Ins. Co., 9 N.Y.3d 105, 115, 846 N.Y.S.2d 64, 877 N.E.2d 281 (2007), Rangolan v. Cty. of Nassau, 96 N.Y.2d 42, 48, 725 N.Y.S.2d 611, 749 N.E.2d 178 (2001), thus construing statutes in a way that renders them internally compatible. Yatauro v. Mangano, 17 N.Y.3d 420, 427, 931 N.Y.S.2d 36, 955 N.E.2d 343 (2011). Insofar as rent-stabilized apartments in New York City do not have preferential rents or, if they do, they have legal regulated rents exceeding $2,500.00, amendments to 9 N.Y.C.R.R. § 26–511(c)(14) discussed above have no effect on 9 N.Y.C.R.R. § 26–504.2(a). Thus, the Court can harmonize 9 N.Y.C.R.R. § 26–504.2(a) with 9 N.Y.C.R.R. § 26–511(c)(14): 9 N.Y.C.R.R. § 26–504.2(a) articulates the general rule permitting deregulation of certain vacant apartments, and 9 N.Y.C.R.R. § 26–511(c)(14) states an exception for apartments with preferential rents for which the legal regulated rent does not exceed $2,500.00. A general statute, particularly a prior general statute, yields to a later specific or special statute. People v. Zephrin, 14 N.Y.3d 296, 301, 899 N.Y.S.2d 739, 926 N.E.2d 246 (2010), Dutchess Cty. Dep't of Soc. Servs. ex rel. Day v. Day, 96 N.Y.2d 149, 153, 726 N.Y.S.2d 54, 749 N.E.2d 733 (2001). Where, as here, a special statute is in conflict with a general act covering the same subject matter, the special statute controls the case and repeals the general statute insofar as the special act applies. Velez v. Port Auth. of N.Y. & N.J., 111 A.D.3d 449, 450, 974 N.Y.S.2d 417 (1st Dept.2013).

Petitioner also correctly states that the amendment to 9 N.Y.C.R.R. § 26–511(c)(14) adding language about deregulation of apartments for which the rent prior to a vacancy exceeded $2,500.00 took effect on June 15, 2015, before the commencement of Respondent's tenancy, such that the Court must apply 9 N.Y.C.R.R. § 26–511(c)(14) retroactively to award Respondent the relief he urges. Courts do not favor retroactive operation of legislation and will only construe a statute retroactively if the statutory language expressly or by necessary implication requires it, Matter of Leon St. Clair Nation v. City of New York, 14 N.Y.3d 452, 456–457, 902 N.Y.S.2d 22, 928 N.E.2d 404 (2010), Gleason v. Michael Vee, Ltd., 96 N.Y.2d 117, 122, 726 N.Y.S.2d 45, 749 N.E.2d 724 (2001), Majewski v. Broadalbin–Perth Cent. Sch. Dist., 91 N.Y.2d 577, 584, 673 N.Y.S.2d 966, 696 N.E.2d 978 (1998), or if the Legislature's preference for retroactivity "plainly manifest[s]." In re Marino S., 100 N.Y.2d 361, 370–71, 763 N.Y.S.2d 796, 795 N.E.2d 21, cert. denied sub nom., Marino S. v. Angel Guardian Children & Family Servs., 540 U.S. 1059, 124 S.Ct. 834, 157 L.Ed.2d 714 (2003).

Laws regulating rents are "remedial," Federal Home Loan Mortg. Corp. v. New York State Div. of Hous. & Community Renewal, 87 N.Y.2d 325, 332, 639 N.Y.S.2d 293, 662 N.E.2d 773 (1995), 459 W. 43rd St. Corp. v. N.Y. State Div. of Hous. & Cmty. Renewal, 152 A.D.2d 511, 514, 544 N.Y.S.2d 346 (1st Dept.1989), a factor weighing in favor of a retroactive application of 9 N.Y.C.R.R. § 26–511(c)(14). In re Marino S., supra, 100 N.Y.2d at 370–71, 763 N.Y.S.2d 796, 795 N.E.2d 21, Gleason, supra, 96 N.Y.2d at 122, 726 N.Y.S.2d 45, 749 N.E.2d 724, Majewski, supra, 91 N.Y.2d at 583–84, 673 N.Y.S.2d 966, 696 N.E.2d 978, Allstate Ins. Co. v. Belt Parkway Imaging, P.C., 33 A.D.3d 407, 408, 823 N.Y.S.2d 9 (1st Dept.2006). The Court must also consider what, if any, intent the Legislature had to apply a statute retroactively. Duell v. Condon, 84 N.Y.2d 773, 783, 622 N.Y.S.2d 891, 647 N.E.2d 96 (1995).

The Court finds significantly revealing of the Legislature's intent that the Legislature's amendments to 9 N.Y.C.R.R. § 26–511(c)(14), although effective June 15, 2015, explicitly exempt from the Rent Stabilization Code certain classes of apartments that become vacant "prior to the effective date of the rent act of 2015," 9 N.Y.C.R.R. § 26–511(c)(14), i.e., June 15, 2015. If this amendment to 9 N.Y.C.R.R. § 26–511(c)(14) could not be applied retroactively, then this provision is wholly without effect, an impermissible construction.

A similar reference to a past ascertainable date in a statute imparts a legislative intention to retroactively apply the statute. In re OnBank & Tr. Co., 90 N.Y.2d 725, 730–31, 665 N.Y.S.2d 389, 688 N.E.2d 245 (1997) (finding that a portion of Banking Law § 100–c(3) would be meaningless if applied prospectively only, given the statute's reference to EPTL § 11–2.2(b)(1), which contains a specific date, thus warranting a retroactive application of the statute). Even more oblique statutory references to past time frames demonstrate an intention to retroactively apply a statute. See, e.g., Duell, supra, 84 N.Y.2d at 783, 622 N.Y.S.2d 891, 647 N.E.2d 96 (as the Legislature imputed upon tenants a reciprocal entitlement to a judgment for attorneys' fees "[w]henever" a lease of residential property includes an attorneys' fees clause in favor of the landlord, the use of the word "whenever" evinced a legislative intention to retroactively apply RPL § 234 to a lease executed before the enactment of the statute). The Legislature's application of 9 N.Y.C.R.R. § 26–511(c)(14) to apartments becoming vacant before the effective date of the statute is, if anything, more explicit than the reference to another statute in Banking Law § 100–c(3) or the use of the word "whenever" in RPL § 234 that showed a legislative intention to retroactively apply a statute.

The Legislature's intent to retroactively apply its amendment to 9 N.Y.C.R.R. § 26–511(c)(14) to apartments becoming vacant before the effective date of the statute together with the remedial nature of the Rent Stabilization Law outweigh any presumption that the statute only apply prospectively. As the Court applies 9 N.Y.C.R.R. § 26–511(c)(14) to the subject premises, as the prior tenant had a preferential rent, and as the prior tenant's rent did not exceed $2,500.00 prior to his vacancy during the time frame set forth in 9 N.Y.C.R.R. § 26–511(c)(14), the Court finds that the subject premises does not qualify for deregulation. The Court therefore finds that Respondent is subject to the Rent Stabilization Law and that Petitioner's cause of action against Respondent sounding in expiration of Respondent's lease does not lie. The Court therefore grants Respondent's motion for summary judgment and dismisses Petitioner's case against Respondent. The Court denies Petitioner's motion to dismiss Respondent's defenses as moot.

Petitioner also moves to dismiss Respondent's counterclaims sounding in rent overcharge. The legal regulated rent for the purposes of determining an overcharge shall be deemed to be the rent charged on the base date, plus in each case any subsequent lawful increases or adjustments. 9 N.Y.C.R.R. § 2526.1(a)(3)(i). The base date is four years prior to the filing of a rent overcharge claim. 9 N.Y.C.R.R. § 2520.6(f)(1). Respondent's answer is dated August 15, 2017, the date the rent overcharge claim is interposed for purposes of determining the base date. Autopark, Inc. v. Bugdaycay, 7 Misc.3d 292, 297, 790 N.Y.S.2d 830 (Civ.Ct. N.Y. Co.2004), citing 78/79 York Assocs. v. Rand, 180 Misc.2d 316, 691 N.Y.S.2d 875 (App. Term 1st Dept.1999). Four years before August 15, 2017 is August 15, 2013. There is no issue of material fact on this motion practice that the prior tenant's preferential rent as of August 15, 2013 was $1,425.00 and that Petitioner registered $2,056.07 with DHCR pursuant to 9 N.Y.C.R.R. § 2528.3 as a legal regulated rent. As the only lease in evidence with a rent for Respondent is less than the legal regulated rent on the base date, Respondent has not stated a prima facie case for rent overcharge.

Respondent argues that an impermissibly large rent increase prior to the base date comprises the basis for his counterclaim. In order for the Court to consider rent increases prior to the base date, Respondent must prove that Petitioner has engaged in a fraudulent scheme to deregulate the subject premises. Thornton v. Baron, 5 N.Y.3d 175, 800 N.Y.S.2d 118, 833 N.E.2d 261 (2005). An increase in the rent alone does not suffice to establish a "colorable claim of fraud." Matter of Grimm v. State of New York Div. of Hous. & Community Renewal Off. of Rent Admin., 15 N.Y.3d 358, 366, 912 N.Y.S.2d 491, 938 N.E.2d 924 (2010). The registration histories on the record on this motion practice show that Petitioner consistently registered both the legal regulated rent and the preferential rents. Respondent thus fails to make a prima facie showing of a fraudulent scheme of Petitioner sufficient to warrant an examination of the rent history before the base date. Compare Matter of Pehrson v. Division of Hous. & Community Renewal of the State of NY, 34 Misc.3d 1220(A), 2011 WL 7163038 (S.Ct. N.Y. Co.2011), 560–568 Audubon Realty Inc. v. Rodriguez, 54 Misc.3d 1226(A), 2017 WL 1037584 (Civ.Ct. N.Y. Co.2017) (examination of a rent history before the base date warranted when, inter alia, a landlord did not properly register the apartment with DHCR, including failing to correctly register both purported legal regulated rents and preferential rents).

Respondent also avers in support of his motion that his evaluation of the condition of the subject premises led him to the conclusion that Petitioner could not have engaged in individual apartment improvements necessary to increase the rent. However, such a non-expert assessment is insufficient to raise an issue of material fact that Petitioner has engaged in fraudulent conduct. Matter of Boyd v. New York State Div. of Hous. & Community Renewal, 23 N.Y.3d 999, 1000–1001, 992 N.Y.S.2d 764, 16 N.E.3d 1243 (2014), 1290 Ocean Realty LLC v. Massena, 46 Misc.3d 1223(A), 2015 WL 920468, 2015 N.Y. Misc. LEXIS 616 (Civ.Ct. Kings Co.2015).

The Court notes that Petitioner predicated its motion to Respondent's rent overcharge counterclaim on the proposition that the subject premises is not subject to the Rent Stabilization Law, not that the rent increase Respondent objected to pre-dated the interposition of Respondent's claim by more than four years. However, Respondent moved for leave to obtain discovery on his rent overcharge cause of action, requiring, inter alia, that Respondent establish facts necessary to state a cause of action, Lonray, Inc. v. Newhouse, 229 A.D.2d 440, 440–41, 644 N.Y.S.2d 900 (2nd Dept.1996), New York University v. Farkas, 121 Misc.2d 643, 647, 468 N.Y.S.2d 808 (Civ.Ct. N.Y. Co.1983), and, in that context, the parties briefed this issue. Under these circumstances, summary judgment on this ground cannot prejudice Respondent. Compare D & M Concrete, Inc. v. Wegmans Food Mkts., Inc., 133 A.D.3d 1329, 1330, 20 N.Y.S.3d 801 (4th Dept.2015), leave to appeal denied, 27 N.Y.3d 901, 2016 WL 1202693 (2016), Weinstock v. Handler, 254 A.D.2d 165, 166, 679 N.Y.S.2d 48 (1st Dept.1998). The Court therefore grants Petitioner's motion to dismiss Respondent's counterclaim sounding in rent overcharge.

Petitioner also moves to dismiss Respondent's counterclaim sounding in attorneys' fees. Both parties show a lease between the parties with an attorneys' fees clause that purports to give Petitioner an option to waive both parties' claim to attorneys' fees. The lease indicates that Petitioner did not exercise this option. If Petitioner does not exercise this option, the lease purports to give Petitioner an exclusive right to collect attorneys' fees against Respondent in the event that Petitioner incurs legal fees in the enforcement of Petitioner's rights. Regardless of the option the lease purports to create, the lease still permits Petitioner to recover fees that result from Respondent's breach, and therefore entitles Respondent to a cause of action for attorneys' fees. Graham Court Owner's Corp. v. Taylor, 24 N.Y.3d 742, 745, 5 N.Y.S.3d 348, 28 N.E.3d 527 (2015).

As the Court dismisses Petitioner's cause of action for possession, the central relief sought in a holdover proceeding, Respondent has a prima facie cause of action for attorneys' fees. 542 E. 14th St. LLC v. Lee, 66 A.D.3d 18, 24, 883 N.Y.S.2d 188 (1st Dept.2009), Cassorla v. Foster, 2 Misc.3d 65, 67, 774 N.Y.S.2d 901 (App. Term 1st Dept.), appeal denied, 2004 N.Y.App. Div. LEXIS 8905 (1st Dept.2004), MEP Realty Ltd. v. Herman, 2008 N.Y. Misc. LEXIS 7406, *19–20 (Civ.Ct. N.Y. Co.2008), citing Nestor v. McDowell, 81 N.Y.2d 410, 415–16, 599 N.Y.S.2d 507, 615 N.E.2d 991 (1993). However, as the Court also dismisses Respondent's rent overcharge counterclaim, the outcome of this proceeding is mixed to the point that neither party is the prevailing party for purposes of determining which party may be entitled to attorneys' fees. 12–14 E. 64th Owners Corp. v. Hixon, 38 Misc.3d 135(A), 2013 WL 399340 (App.Term 1st Dept.2013), 339–347 E. 12th St. LLC v. Ling, 31 Misc.3d 48, 49, 921 N.Y.S.2d 781 (App. Term 1st Dept.2011). Accordingly, the Court grants Petitioner's motion to dismiss Respondent's counterclaim sounding in attorneys' fees and denies Respondent's motion for attorneys' fees. The Court also denies Respondent's motion for discovery as moot.


Summaries of

517 W. 212 St. LLC v. Musik-Ayala

Civil Court, City of New York, New York County.
Dec 1, 2017
58 Misc. 3d 652 (N.Y. Civ. Ct. 2017)
Case details for

517 W. 212 St. LLC v. Musik-Ayala

Case Details

Full title:517 WEST 212 ST. LLC, Petitioner, v. Isaiah MUSIK–AYALA, Respondent.

Court:Civil Court, City of New York, New York County.

Date published: Dec 1, 2017

Citations

58 Misc. 3d 652 (N.Y. Civ. Ct. 2017)
66 N.Y.S.3d 861

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