Carrano v Castro

[*1] Carrano v Castro 2005 NY Slip Op 50973(U) Decided on January 25, 2005 Civil Court Of The City Of New York, Kings County Fiorella, J. 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 January 25, 2005
Civil Court of the City of New York, Kings County

James Carrano, Petitioner,

against

Jose Castro and JUANITA CASTRO, Respondents.



L/T 85442/04

Anthony J. Fiorella, J.

In this summary holdover proceeding respondents interposed an answer asserting two (2) affirmative defenses and one (1) counterclaim. Petitioner seeks summary judgment pursuant to CPLR § 3212 and entry of a final judgment of possession. By stipulation the respondents agreed to withdraw their first affirmative defense and one counterclaim, with prejudice. The sole issue for determination is whether the respondents are rent stabilized tenants protected under the Rent Stabilization Law. To this issue the court responds in the negative.

Essential Facts

Petitioner is owner of the building with the street address of 25 St. Marks Place, Brooklyn, NY 11217. The present proceeding is a holdover based upon respondents' continued possession of Apartment 2 after the expiration of their lease without permission of the landlord. Petitioner purchased the building from Nydia Castro and Aurea Castro on January 25, 2002. The building is a three (3) unit multiple dwelling. There is currently a valid registration statement on file with the HPD Office of Code Enforcement under MDR No. 361396.

Pursuant to a Renewal Lease form dated July 2, 2002, the tenants' lease expired on June 30, 2004. Tenants did not vacate upon the expiration of their lease. The landlord commenced this proceeding by service of a Notice of Petition and Petition on August 17, 2004. The tenants appeared by counsel and served a Verified Answer with Counterclaims. Their second affirmative defense is at issue.

The respondents contend that they are lawful tenants of the premises, having entered into possession pursuant to a written lease prior to 1964 and as such, were allegedly rent-controlled tenants. On or about January 21, 1992, by stipulation ("so ordered") by the court in a Landlord/Tenant proceeding under Index Number 82881/90, the respondents and the owner of the premises entered into an agreement, the full legal effect of which is submitted to the Court, but which provided in essence, that the respondents allegedly ceded their rent-controlled status and were given a rent stabilized lease. Said lease was renewed on a regular basis, with the most [*2]recent renewal dated July 1, 2002. The tenants have been occupying the premises pursuant to a lease that, by its terms, allegedly made their tenancy subject to all rules and regulations of a rent stabilized lease.

Respondents assert, that as rent stabilized tenants, they are entitled to a notice of non-renewal at least 90 days prior to the attempted termination of their tenancy.

Petitioner asserts that the stipulation between the tenants and the predecessor-in-interest is not binding on him since it does not contain language that unequivocally states it is binding on successors or assigns; that a stipulation cannot create a rent stabilized tenancy where the premises would otherwise be exempt from coverage under the Rent Stabilization Law; and,

the use of a Rent Stabilized Renewal Lease form does not impose an obligation upon him to treat tenants as rent stabilized tenants or to renew their lease since this is simply a legal three-family dwelling. When he purchased the building in 2002 and provided the tenants with a renewal lease in July 2002 for a term of two (2) years, it was under the erroneous impression that he was obligated to renew the tenants lease as rent stabilized tenants.

Discussion

Petitioner argues that he is not required to serve a notice of non-renewal under

the Rent Stabilization Law since the building is not subject to rent stabilization under Rent Stabilization Law Section 26-504(a). The law applies only to "multiple dwellings ...containing six or more dwelling units" and consequently has no application for a three-unit building.

Tenants claim rent stabilization protection is based on the stipulation dated

January 21, 1992 signed by the new landlord's predecessors-in-interest, Nydia Castro and Aurea Castro, and the tenants. The stipulation provided that the tenants would be "deemed" new rent stabilized tenants entitled to all rights of the rent stabilization law including renewal leases for the period of February 1, 1992 through January 31, 1993. The stipulation does not contain any language which would bind the prior landlord's successors or assigns.

Respondent's broad assertions that they are rent stabilized tenants entitled to protection under the law and a broad unsupported claim that if the foregoing cannot be changed by contract, then their status to the apartment must be rent-controlled, is without merit. Their argument was presented to the Appellate Term in November 1991 and the court found no merit to respondents' contention that the then petitioner failed to timely file a report of decontrol

(Forbes v. Lomazow, 22 AD2d 800; Baldwin v. Chang, 75 Misc 2d 458). Tenants' further

argument that absent the issuance of a warrant in the 1992 stipulation, the previous tenancy

never legally ended, is simply lacking in merit.

It is well established that it is insufficient to merely set forth averments of factual and legal conclusions (Tofron Office Furniture Corporation v. King World Productions, Inc., 161 AD2d 355). Broad, conclusory assertions are inadequate to withstand a motion for summary judgment. In opposing a motion for summary judgment, it is incumbent upon defendants to

do more than merely raise an issue of consideration. Bald, conclusory allegations, even if believable, are not enough (Erlich v. American Moneger Greenhouse Manufacturing Corp.,

26 NY2d 255, 259; S.J. Capelin Associates, Inc. v. Globe Mfg. Corp., 34 NY2d 338).

The Rent Stabilization Law applies to multiple dwellings not owned as a cooperative or condominium containing six or more dwelling units. N.Y.C. Admin. Code

§ 26-504(a). Coverage under this rent regulatory scheme is governed by statute and cannot be [*3]created by waiver or estoppel where the premises are exempted from regulation (Mayflower Associates v. Gray, NYLJ 3/1/94 page 21, col.1). In Mayflower Associates v. Gray, a landlord who consistently treated the tenant as a rent stabilized tenant through the use of preprinted rent stabilization forms, brought a holdover proceeding at the expiration of the tenant's lease. The landlord contended there was no right to renew since the premises were not subject to rent stabilization because the building did not contain six or more dwelling units. The Mayflower court held that "[c]overage under a rent regulatory scheme is governed by statute and ...cannot

be created by waiver or equitable estoppel where the premises are exempt from regulation .... Thus, the fact that a landlord and/or prior owners previously treated tenant's apartment as rent stabilized does not preclude the subsequent maintenance of holdover proceedings where it is demonstrated that one of the fundamental requisites for coverage never attached." In the case

at bar, landlord should not be precluded from commencing a proceeding to terminate the tenancy, since the premises were never subject to rent stabilization. The tenants merely obtained benefits styled upon rent stabilization by their contract with the landlord's predecessor-in-interest.

In 546 West 156th Street HDFC v. Lenise Smalls, 1 Misc 3d 906(A), 781 NYS2d 629 (NY Civ. Ct., NY Co. 2003), tenant claimed a rent overcharge as a defense to a summary nonpayment proceeding. She argued that a so-ordered stipulation in a prior nonpayment proceeding between the parties granted her a two-year stabilized lease which, in turn, entitled her to a renewal lease at a regulated rent. When the first two-year lease under the stipulation expired, the parties entered into a two-year renewal lease in1998 at a rent above that allowed by rent guidelines. Tenant alleged that this was an overcharge. The court held that although a stipulation between the parties entered into in open court binds the parties, that merely meant that petitioner did not have the right to collect more than the agreed upon rent through the expiration of the last lease signed between the parties, and held that the tenant could not claim rights under the Rent Stabilization Law to limit rent increases as a matter of contract law for subsequent leases.

Here, the 1992 stipulation cannot be deemed to confer permanent rights of rent stabilization upon the tenants and therefore the landlord is not obligated to continue treating respondents as rent stabilized tenants.

The use of a Rent Stabilization Renewal Lease Form does not impose an

Obligation upon Landlord to treat Tenants as Rent Stabilized Tenants

Tenants rely on the fact that the landlord provided them with a Rent Stabilization Renewal Lease form in July 2002 for their claim that they have a rent stabilized lease. New York courts have held that the use of rent stabilization forms or riders does not foreclose a claim, at

the expiration of any given lease term, that the premises are exempt from or not subject to rent stabilization nor would the use of such instruments impose a contractual obligation to perpetuate a tenancy.

In Park West Village Assoc. v. Leonard, NYLJ 12/6/95 32:1 (App. Term 1st Dep't 1995), the landlord used rent stabilization forms and riders and inadvertently registered tenant's apartment as rent stabilized during the tenant's interim occupancy. The court held that none of these acts created or continued a rent stabilized tenancy.

In Heller v. Middagh Street Assoc., 4 AD3d 332, 771 NYS2d 533 (2d Dep't [*4]2004), the tenant commenced an action for breach of contract claiming that by attaching rent stabilization riders to certain leases, and by tendering renewal leases using rent stabilization forms, the landlord contractually agreed to subject the tenant's apartment to rent stabilization. The Appellate Division Second Department upheld the lower court decision to dismiss tenant's cause of action. It relied on the decision in Mayflower v. Gray, supra, holding that landlord's previous treatment

of an apartment as rent stabilized does not bind the landlord in the future if one of the fundamental requisites for coverage under rent stabilization never attached (see, Park West Village Assoc. v. Leonard, supra).

Thus, the previous owner did not create or continue a rent stabilized tenancy with the tenants by providing them a DHCR Renewal Lease form in July 2002. The use of DHCR forms and riders in lease renewals is not dispositive evidence that the apartment is rent stabilized and does not extinguish the statutory exemption on exempt apartments. One cannot confer a stabilized tenancy on a tenant when none existed in the first place. Herrmann v. AMD Realty, Inc., 8 AD3rd 619; 546 West 156th Street HDFC v. Lenise Smalls, supra.

Had tenants' and landlord's predecessor-in-interest intended that the 1992 stipulation be binding on the successors and assigns of the parties, it would have clearly been stated. In the absence of clear language evidencing that intent, the new landlord is not bound by an agreement to which he was not a party and did not have an opportunity to negotiate.

Conclusion

Based upon the foregoing discussion, respondents second affirmative defense is dismissed as a matter of law. Respondents' cross motion for summary judgment dismissing the proceeding is denied. Respondent is granted leave to file an amended answer. If respondent has served an amended answer, the court dismisses the third affirmative defense as a matter of law. The parties are directed to appear in Part D on February 3, 2005 for disposition of the matter.

DATED:Brooklyn, New York______________________________

January 25, 2005 Anthony J. Fiorella, Jr., J.H.C.