WM Wellington, LLC v Grafstein Diamond, Inc.

[*1] WM Wellington, LLC v Grafstein Diamond, Inc. 2009 NY Slip Op 50255(U) [22 Misc 3d 1123(A)] Decided on February 10, 2009 Civil Court Of The City Of New York, New York County Capella, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 February 10, 2009
Civil Court of the City of New York, New York County

WM Wellington, LLC, Petitioner-Landlord,

against

Grafstein Diamond, Inc., Respondent-Tenant, BETTY GRAFSTEIN, "JOHN DOE" and/or "JANE DOE," Respondent-Undertenants.



83449/08



Petitioner's Attorney:

Howard W. Kingsley, Esq.

ROSENBERG & ESTIS, P.C.

733 Third Avenue

New York, New York 10017

Respondents' Attorney:

Mitchell S. Zingman, Esq.

STERN & ZINGMAN, LLP

110 East 59th Street

New York, New York 10022

Joseph Capella, J.

According to the predicate non-renewal ("Golub") notice, the petitioner alleges that the subject premises are not occupied by the corporate tenant, Grafstein Diamond, Inc. ("Grafstein Diamond"), as its primary residence. It also alleges, inter alia, that Betty Grafstein ("Betty") is the signatory to the most recent renewal lease on behalf of the corporate tenant, and pursuant to Manocherian v Lenox, (229 AD2d 197 [1st Dept 1997]), the corporate tenant is not entitled to a renewal lease because there is no particularly designated individual on the corporate lease, and this gives rise to an impermissible perpetual tenancy. By notice of motion dated December 22, 2008, the respondents seek dismissal pursuant to CPLR 3211 and 3212,[FN1] and in the alternative, discovery pursuant to CPLR § 408. The petitioner opposes and likewise cross moves for discovery.

The subject rent stabilized apartment was initially rented to Albert Grafstein, who died in 1991. His wife, Betty, succeeded to the apartment, and received renewal leases in her name in 1991, 1993, 1995, 1997 and 1999. In 2001, Grafstein Diamond, was listed as the tenant on the renewal lease. The 2001 renewal lease, and all subsequent renewals, which also listed Grafstein Diamond as the tenant, were signed by Betty. According to Betty, she never requested the name change, and said changes were made by the petitioner's predecessor without her consent. Despite these changes, Betty still appears as the tenant of record on the DHCR registration statements through 2006. Betty's son, Roger Basile ("Roger"), is the Secretary/Treasurer of Grafstein Diamond, and they both agree that Betty is not a shareholder, director, officer, employee or agent [*2]of Grafstein Diamond, nor is Betty authorized to execute leases on behalf of the corporation. In direct contradiction, the general manager for the petitioner's predecessor alleges that Betty and her son, Roger, requested the name change on the renewal leases. The petitioner also produced a letter dated June 27, 2002, from Grafstein Diamond stating, inter alia, that "a friend of ours will be staying in our apartment." The petitioner also produced a 2007 fax from Grafstein Diamond requesting a rent statement. Accepting the petitioner's allegations as true, and construing the evidence in a light most favorable to it, (O'Sullivan v Presbyterian, 217 AD2d 98 [1st Dept 1995]), the court is satisfied that given the aforementioned, issues of fact exist, (Esteve v Abad, 271 AD 725 [1st Dept 1947]), as to (a) why the tenant on the 2001 renewal lease, and all subsequent renewals, was changed to reflect Grafstein Diamond (id.); (b) whether there was some form of authority for said change (Hallock v State of New York, 64 NY2d 224 [1984]); and (c) whether Betty relinquished her right to a renewal lease in her name (501 v Ole, NYLJ, May 22, 2002, at 19, col. 2 [Sup Ct, NY Cty], aff'd 304 AD2d 310 [1st Dept 2003]). Therefore, that portion of the respondents' motion which seeks summary judgment and dismissal is denied.

The law regarding corporate rent stabilized tenancies and primary residence is now well settled, and only where the lease specifies a particular individual as the occupant (emphasis added) and no perpetual tenancy is possible will a corporate rent stabilized tenant be entitled to a renewal lease. (Manocherian v Lenox, 229 AD2d 197, supra; Avon v Aquarian, 260 AD2d 207 [1st Dept 1999].) The Appellate Division, First Department, decision in Avon effectively reaffirmed its 1997 holding in Manocherian, and eliminated the lower standards set forth in its earlier decisions of Cale v Conciliation, (94 AD2d 229, aff'd 61 NY2d 976 [1984]; renewal permitted if a designated class of individuals are listed on the lease), and Schwartz v Concilation, (117 AD2d 74 [1986]; renewal permitted if unnamed occupant is the intended beneficiary). Without specifying a particular individual occupant, the corporate privilege of using the rent stabilized apartment will "last for as long as its unilaterally controlled corporate existence." (Manocherian v Lenox, 84 NY2d 385, 391 [1994].) On the other hand, specifying a particular individual as the occupant will assure that another employee/officer of the corporate tenant will not assume occupancy upon removal of the specified individual occupant, (Avon v Aquarian, 260 AD2d, supra, at 209), and thereby obviate the perpetual tenancy concern. Interestingly enough, the facts in this proceeding are somewhat similar to the facts in Avon, where a religious corporation (i.e., Aquarian) was listed as the tenant on the lease, and its principal, Rev. Allen Jenne, is the signatory to the lease and the sole resident during the preceding 17 years. Betty is not identified/designated as the tenant or the intended occupant on the instant renewal leases, and given this, the respondents are correct that her residence is not at issue in this proceeding, and the petitioner is correct that there was no obligation to serve her with the Golub notice. (Katz v Olden, 158 Misc 2d 541 [Civ Ct, NY Cty 1993].) Of course, this still leaves us with the above mentioned issues of fact.

The respondents argue that since commencement of this proceeding in August 2008, the Golub notice, which is dated May 24, 2007, has become stale. Often, where a new proceeding is commenced prior to the discontinuance of an initial proceeding, reuse of a predicate notice is permitted. (Arol v Goodie, 83 Misc 2d 477 [Civ Ct, NY Cty 1975], aff'd 84 Misc 2d 493 [App Term, 1st Dept 1976], aff'd 52 AD2d 538 [1st Dept 1976].) The petitioner commenced the instant proceeding upon learning of a jurisdictional defect in an identical non-primary residence [*3]proceeding that it had initially commenced in 2007. Some three months after commencing the instant proceeding, the petitioner was granted leave by court order dated November 7, 2008, to discontinue its initial proceeding. Therefore, as the petitioner commenced this proceeding (a) during the pendency of the initial proceeding, (b) shortly before permission to discontinue said initial proceeding was granted by the court, (Hudson v MTP, 8 Misc 3d 136(A) [App Term, 1st Dept 2005]), and (c) there being no discernable prejudice to the respondents, (Arol v Goodie, 82 Misc 2d 477 [Civ Ct, NY Cty 1975], aff'd 84 Misc 2d 493 [App Term, 1st Dept 1975]), the instant Golub notice is not stale.

Lastly, both sides seek discovery, and as already noted by the court, issues of fact exist as to (a) why the tenant on the 2001 renewal lease, and all subsequent renewals, were changed to reflect Grafstein Diamond; (b) whether there was some form of authority for said changes; and (c) whether Betty relinquished her right to a renewal lease in her name. Both sides have demonstrated ample need for discovery on these issues. (NYU v Farkas, 121 Misc 2d 643 [Civ Ct, NY Cty 1983].) However, the petitioner's discovery demand seeks to ascertain the whereabouts of Betty and Grafstein Diamond. Assuming that the petitioner is correct, and the only tenant is Grafstein Diamond, then in such situations the only issue for the court to resolve is whether the renewal lease specifies a particular individual as the occupant so as to avoid a perpetual tenancy. Therefore, where Betty and Grafstein Diamond primarily reside is irrelevant. As for the respondent's discovery demand, it consists of a demand for "[a]ny and all documents, letters, and/or correspondence pertaining to the switch of names on the renewal lease." It is well established, however, that a demand for the production of documents must specify the items sought with "reasonable particularity," and the burden of specificity is on the requesting party. (Mendelowitz v Xerox, 169 AD2d 300 [1st Dept 1991].) And more often than not, the utilization of the language "any and all," which is the case here, is an indication of a lack of the requisite specificity. (Id.) To the extent that the respondents lack knowledge of the existence of specific document(s), then they should make use of a deposition and/or related procedures as provided for in the CPLR so as to ascertain the existence of such documents in order that they may be designated with specificity in a notice to produce. (City of New York v Friedberg, 62 AD2d 407 [1st Dept 1978].) Based on the aforementioned, both parties' demands for discovery are denied without prejudice to renew upon disclosure that is more carefully tailored, (NYU v Farkas, 121 Misc 2d 643, supra), to the issues at hand.

Based on the aforementioned, both motions are denied accordingly, and the instant proceeding is adjourned to March 9, 2009, Part F, room 830, at 9:30 AM, for all purposes. This constitutes the decision and order of this court, copies of which are being mailed by the court to the parties' attorneys.

___2/10/09____________/S/_________________

DateJudge, Housing Court

[*4]Petitioner's Attorney:

Howard W. Kingsley, Esq.

ROSENBERG & ESTIS, P.C.

733 Third Avenue

New York, New York 10017

Respondents' Attorney:

Mitchell S. Zingman, Esq.

STERN & ZINGMAN, LLP

110 East 59th Street

New York, New York 10022 Footnotes

Footnote 1: The respondents' motion does not cite the specific provision of CPLR 3211 pursuant to which dismissal is sought. It should also be noted, however, that an answer has already been interposed. Therefore, to the extent possible, the court will utilize the more embracive and exploratory standard encompassing CPLR 3212.