132132 LLC v Strasser

[*1] 132132 LLC v Strasser 2009 NY Slip Op 51694(U) [24 Misc 3d 140(A)] Decided on August 4, 2009 Appellate Term, First Department Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on August 4, 2009
APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT
PRESENT: McKeon, P.J., Schoenfeld, Heitler, JJ
570500/08.

132132 LLC, Petitioner-Landlord-Appellant- Cross-Respondent,

against

Joseph Strasser, Respondent-Tenant-Respondent- Cross-Appellant, and Seamus Tuohey, Respondent-Tenant.

Landlord appeals from that portion of an order of the Civil Court of the City of New York, New York County (Joseph E. Capella, J.), dated March 17, 2008, which denied its motion to dismiss tenant's affirmative defenses and granted tenants' cross motion for summary judgment dismissing the petition in a nonpayment summary proceeding. Tenant Strasser cross appeals from so much of the aforesaid order as granted landlord's motion to strike his claim for attorneys' fees incident to the overcharge counterclaim.

Per Curiam.

Order (Joseph E. Capella, J.), dated March 17, 2008, modified to deny landlord's motion to strike tenant's claim for attorneys' fees incident to the overcharge counterclaim, and, as modified, affirmed, without costs.

Tenant Strasser initially took possession of the apartment premises in 1992 pursuant to a rent stabilized lease agreement. In the fall of 2002, landlord discovered that tenant had made substantial alterations to the subject apartment. The alterations were allegedly made by respondent Tuohey, who was residing in the apartment without landlord's consent. Upon discovering the unauthorized alterations and occupancy, landlord advised tenant that legal action would be commenced to terminate his tenancy. After extensive discussions and negotiations, landlord and tenant agreed that landlord would not take any legal action to terminate tenant's tenancy and, in exchange, tenant and respondent Tuohey, as co-tenants, would enter into a new five-year lease agreement for the subject apartment, at an initial rent of $2,200. The parties [*2]further agreed that the apartment would be exempt from rent regulation. At issue on this appeal is whether that lease agreement was void as against public policy.

"An agreement in purported or actual settlement of a landlord-tenant dispute which waives the benefit of a statutory protection is unenforceable as a matter of public policy, even if it benefits the tenant" (Drucker v Mauro, 30 AD3d 37, 38 [2006], lv dismissed 7 NY3d 844 [2006]; see also Riverside Syndicate, Inc. v Munroe, 10 NY3d 18 [2008]). The parties' lease agreement, executed to forestall a threatened eviction proceeding for illegal alterations, effectively deregulated a rent stabilized apartment, in circumvention of the rent regulatory scheme. Deregulation of apartments "is available only through statutory means" (see 390 W. End Assoc. v Harel, 298 AD2d 11 [2002]), and "not by private compact, as was attempted here — a means expressly prohibited" (Draper v Georgia Props., Inc., 94 NY2d 809, 811 [1999]).

Contrary to landlord's argument, the apartment did not become exempt from regulation under the "high rent" deregulation provisions of the Rent Stabilization Law. Even assuming, without deciding, that landlord, upon an appropriate agency application, may have qualified for a "vacancy allowance" based upon the addition of Tuohey as a tenant (see e.g. Matter of Pikus, DHCR Administrative Review Docket No. ARL 13169-L, Nov. 28, 1988), any such eligibility would not have served to automatically exempt the apartment from regulation. Deregulation under the Rent Stabilization Law occurs only by two means: (1) where a housing accommodation becomes vacant on or after April 1, 1997 and at the time of the tenant(s)' vacatur, the monthly legal regulated rent was $2,000 or more or (2) for an occupied housing accommodation, by order of DHCR, where the tenant's annual income exceeds $175,000 and the legal regulated rent is $2,000 per month or more (see Rent Stabilization Law [Administrative Code of City of NY] §§ 26-504.1, 26-504.2). Neither statutory criterion was established here.

With respect to attorneys' fees, the court properly recognized that the expired lease contained no provision for attorneys' fees. However, upon an ultimate finding of a rent overcharge, tenant may be entitled to reasonable costs and attorney's fees (see Rent Stabilization Law [Administrative Code of City of NY] § 26-516[a][4]; Rent Stabilization Code [9 NYCRR] § 2526.1[d]). Inasmuch as a hearing to determine the legal regulated rent and any possible overcharge has been directed, tenant's claim for attorneys' fees incident to his overcharge counterclaim was prematurely stricken.

THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
I concurI concurI concur
Decision Date: August 04, 2009