Assoc. v CW

[*1] Assoc. v CW 2009 NY Slip Op 51617(U) [24 Misc 3d 1225(A)] Decided on June 23, 2009 Civil Court Of The City Of New York, Bronx County Madhavan, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 June 23, 2009
Civil Court of the City of New York, Bronx County

Assoc., Petitioner,

against

CW, Respondent.



L & T *****/07



To:Rogers, Wughalter, et al.Legal Services NYC—Bronx

800 Grand Concourse329 East 149th Street, 3rd Floor

Bronx, NY 10451Bronx, NY 10451

Attorneys for PetitionerAttorneys for Respondent

Jaya K. Madhavan, J.

In this summary nonpayment proceeding, petitioner seeks over $7,000.00 in alleged arrears for Apartment ** at ****** Avenue in Bronx County ("Apartment")[FN1]. Respondent defends by raising rent overcharge and breach of the warranty of habitability. Respondent also seeks affirmative recovery on these defenses. The court held a trial spanning several sessions and now makes the following findings of fact and conclusions of law.

Facts

Competing Leases

Many of the key facts are hotly contested but the parties agree to a few basic points. Respondent is the recipient of a Housing Stability Plus (HSP) voucher administered by the New York City Department of Homeless Services (DHS). (Subpoenaed HSP Records, Commitment Letter dated February 8, 2006.) On March 22, 2006, the parties entered into a lease for the Apartment beginning that day and ending March 21, 2008 at the rate of $1150 per month ($1150 Lease). Respondent however maintains that on the morning of March 22, 2006, she entered into a lease for the Apartment with petitioner's broker for the same term at the rate of $820 per month—the maximum paid by DHS for a household of respondent's size ($820 Lease). Petitioner contends that the $820 Lease is invalid and seeks arrears based on the $1150 Lease.

Testimony of DHS Program Administrator Ronald Archin

In this vein, the court heard from several witnesses. First to testify was Ronald Archin who is the Program Administrator for Permanent Housing at DHS. In this role Mr. Archin oversees the HSP program, although he has no personal knowledge of respondent's tenancy. Mr. Archin testified credibly as to general DHS policies and procedures. He explained that the HSP program subsidizes rents to help make apartments affordable for low—income tenants. Participant landlords sign a series of documents, including an "Understanding Statement," by [*2]which they agree to adhere to program rules and policies. Among those rules is the requirement that the landlord enter into a lease with the tenant in which the rent does not exceed the maximum rent for a household of the applicant's size as determined by DHS. In respondent's case, the maximum rent was $820 per month. If the rent exceeds HSP maximums, DHS will not approve the landlord's participation. Nor will DHS approve an arrangement by which the tenant agrees to pay rent in excess of the HSP caps. Mr. Archin testified that such "side deals" are strictly prohibited by DHS. Assuming that the rent is within HSP limits and that the apartment has passed DHS inspection, a lease signing is set at DHS' offices. Significantly, Mr. Archin noted that DHS will accept a letter signed by a landlord before a notary, authorizing another to sign all leasing documents on his or her behalf.

Testimony of Real Estate Salesperson Dever Bruno

Respondent then called Dever Bruno to testify. From 2004 through 2007, Mr. Bruno worked for Vision Alliance Realty ("Vision Alliance") as a Sales Agent and Associate Broker. His job responsibilities included "selling houses and helping clients find apartments." As Mr. Bruno was not a licensed real estate broker in 2007, he worked under the supervision of Darnell Shillingford, a real estate broker employed by Vision Alliance.

In or about March, 2006, respondent contacted Vision Alliance for assistance in securing an apartment with her HSP voucher. Mr. Bruno testified that he contacted petitioner's managing agent, Luca Gjonlekaj, who had an available listing with Vision Alliance. However, Mr. Bruno could not recall if there was an underlying written listing agreement between petitioner and his agency. In any event, Mr. Bruno obtained the keys from petitioner's super and showed respondent the Apartment.

Respondent agreed to rent the Apartment. Mr. Bruno in turn contacted Mr. Gjonlekaj who informed him that the rent for the Apartment was $1150. However, Mr. Bruno told Mr. Gjonlekaj that he would sign a lease for $820 "because that is what the program pays." Mr. Gjonlekaj agreed to accept $820 from HSP and the remaining $330 from respondent. Mr. Bruno testified that he "did not know [that this arrangement was] fraud." Consequently, Mr. Bruno prepared and signed a lease for $820 per month (Pet. Exh. 2) as well as other documents on petitioner's behalf at DHS' offices on or about March 22, 2006. DHS then gave Mr. Bruno a series of checks to deliver to petitioner. Later that same day, Mr. Bruno and Mr. Shillingford drove respondent to Mr. Gjonlekaj's office where she signed a second lease for the Apartment for the same term but at the rate of $1150 per month. (Pet Exh. 3.) Only then did respondent receive the keys to the Apartment.

Testimony of Real Estate Broker Darnell Shillingford

Supervising this transaction was Darnell Shillingford. Mr. Shillingford has been employed by Vision Alliance as a licensed real estate broker for the past four to five years. During this time Mr. Shillingford has rented over 20 apartments for petitioner, four of which receive a HSP subsidy. Mr. Shillingford characterized his relationship with Mr. Gjonlekaj, as both "personal and business" and one which is "valuable." Indeed, through the date of trial, Mr. Shillingford was still doing business with petitioner.

Mr. Shillingford could not initially recall the specific facts surrounding respondent's tenancy. Instead, he stated that it is Vision Alliance's policy to not show a HSP recipient an apartment unless he or she first agrees to pay any rent in excess of the HSP cap to the landlord [*3]"in cash." Once the HSP recipient agrees to this arrangement, Vision Alliance informs the landlord of the prospective tenant's consent.

As to this Apartment, Mr. Shillingford recalled that he prepared and obtained a notarized authorization from Mr. Gjonlekaj dated March 21, 2006, "to sign leases and contracts and pick up checks pertaining to ******** Avenue, Apt. ***." (Resp. Exh. C.) Mr. Shillingford also identified a DHS form entitled "Landlord's Statement." (Resp. Exh. E.) That document was prepared by Mr. Bruno but signed by Mr. Gjonlekaj. (Id.) It stated, in pertinent part, that respondent's rent was "$820." (Id.) However, Mr. Shillingford noted that respondent did not receive the keys to the Apartment until she went to petitioner's office and signed a second lease for $1150 per month. When asked why the Landlord's Statement reflected a rent of $820 and not the higher rent of $1150, Mr. Shillingford testified that HSP would not approve a rent of $1150. He explained that he does not inform DHS that there is a second lease with a higher rent "because then no one would get paid." Mr. Shillingford elaborated that if the rent exceeded the DHS cap, he would not receive his commission of $820.

Respondent's Testimony Regarding Lease

Respondent also testified as to the circumstances surrounding her leasing the Apartment. She testified credibly that she was residing in a domestic violence shelter with her minor child when she became eligible for an HSP subsidy in early 2006. Respondent received a card for Vision Alliance in the shelter and proceeded to contact Mr. Bruno. She informed him that she "needed an HSP apartment" and that she "had a voucher for $820." Mr. Bruno would then call respondent and tell her to meet him at various buildings where he would show her apartments, including the subject apartment. Respondent met Mr. Bruno in the lobby of ****** Avenue and, accompanied by the superintendent, viewed the Apartment. Mr. Gjonlekaj was not present during this inspection. Respondent "liked the Apartment," and proceeded to "get the paperwork" from DHS. Mr. Bruno then arranged for the lease signing at DHS' offices on March 22, 2006.

At the lease signing, Respondent signed various documents, including the lease for the Apartment. (Pet. Exh. 2.) Upon returning to the shelter later that day, respondent called Mr. Bruno to receive a set of keys to the Apartment. He informed respondent that he could get the keys to her within two to three days. Respondent told Mr. Bruno that since she had now signed a lease for an apartment, the shelter required her to leave immediately and therefore, she could not wait that long. Consequently, at about 6:00 p.m. that evening, Mr. Bruno and Mr. Shillingford picked respondent up in a van several blocks away from the shelter and drove her to petitioner's office, but it was closed. While waiting for the office to open, Mr. Bruno left the van. Mr. Shillingford then told respondent that the rent for the Apartment was not $820, but actually $1150. Respondent testified credibly that this was the first time that she learned that the rent for the Apartment was $1150. Approximately 30 - 45 minutes later, Mr. Gjonlekaj arrived. Respondent testified that she then met Mr. Gjonlekaj for the first time and signed the $1150 Lease (Pet. Exh. 3) because she would "probably be homeless if [she] didn't sign the lease." Respondent then received the keys for the Apartment.

Petitioner's Testimony Regarding Lease

Finally, the court heard from Mr. Gjonlekaj whom the court found to have no credibility whatsoever. Mr. Gjonlekaj testified that he is the "manager in charge" for petitioner but never explained what his duties entail. Indisputably though, his role permits him to sign leases on [*4]petitioner's behalf as evidenced by the $1150 Lease upon which the petition is based. (Pet. Exh. 3.) When shown the authorization permitting Mr. Bruno to sign leases on petitioner's behalf, (Resp. Exh. C), Mr. Gjonlekaj admitted that it was his signature but denied authorizing anyone to act for petitioner. Upon cross-examination, Mr. Gjonlekaj was evasive, hostile and simply unbelievable. For example, when pressed about the authorization, Mr. Gjonlekaj suddenly stated that his English reading skills are "not too good." He then claimed that he could not read the authorization at all.

Discussion

These facts raise the issue of whether the acts of Mr. Bruno and Mr. Shillingford may be imputed to petitioner such that it is bound by the $820 Lease. A principal is liable for the acts of his or her agent which are performed within the course of their employment. (Greene v. Hellman, 51 NY2d 197, 204 [1980]; McGarry v. Miller, 158 AD2d 327, 328 [1st Dept 1990].) The party seeking to establish agency must prove that one person—the principal—consented to another person—the agent—acting on his or her behalf and subject to his or her control, and that the agent agreed to so act. (Art Finance Partners, LLC v. Christie's Inc., 58 AD3d 469 [1st Dept 2009] quoting Fils—Aime v. Ryder TRS, Inc., 40 AD3d 917, 918 [2d Dept 2007]; New York Times Co. v. Glynn—Palmer Associates, 138 Misc 2d 862, 865 [Civ Ct NY Co 1988]; Rest. 3d Agen § 1.01.) The principal's consent—and the agent's authority—may be express, implied or apparent. (Maurillo v. Park Slope U—Haul, 194 AD2d 142, 146 [2d Dept 1993].) It may also be inferred by the principal's ratification of the agent's conduct. (Stiebel v. Haigney, 134 AD2d 516, 520 [1st Dept 1909]; and 21 NY Jur2d Ratification, § 85.)

There are several bases for concluding that Mr. Gjonlekaj authorized Mr. Bruno and Mr. Shillingford to act as his—and thus, petitioner's—agents. First, Mr. Gjonlekaj expressly authorized Mr. Bruno to "sign all leases and contracts and pick up checks pertaining to **** Avenue, Apt. **, Bronx, NY 10***." (Resp. Exh. C.) That authorization therefore permitted Mr. Bruno to enter into the $820 Lease. (See General Obligations Law § 5—703[2], providing that a lease for longer than one year is void "unless the lease or some note or memorandum thereof...is in writing, subscribed by the party to be charged, or by his lawful agent...authorized by writing."[FN2]) Wittenberg v. Robinov, 9 NY2d 261 [1961], relied upon by petitioner, is inapposite as that matter involved a contract containing a specific disclaimer provision which limited the agent's authority to bind his principal. No such limitation exists here.

Although Mr. Gjonlekaj admitted that he signed the authorization, he claims that he is not proficient in the English language. The court rejects this claim as incredulous. However, even if Mr. Gjonlekaj did not comprehend English, he remains "conclusively bound" by the terms of the authorization. (Gillman v. Chase Manhattan Bank, N.A., 73 NY2d 1, 11 [1988]. See also British West Indies Guar. Trust Co., Ltd. v. Banque Internationale a Luxemborg, 172 AD2d 234 [1st Dept 1991], holding that a signatory to a contract is presumed to know the contents of the [*5]instrument he or she signed and to have assented to its terms.)

A lack of proficiency in the English language, without more, does not relieve Mr. Gjonlekaj, from the terms of the authorization. (Kassab v. Marco Shoes, Inc., 282 AD2d 316 [1st Dept 2001]; Kenol v. Nelson, 181 AD2d 863, 866 [2d Dept 1992]; Maines Paper and Food Service Inc. v. Adel, 256 AD2d 760, 761 [3d Dept 1998].) Where a party does not understand the English language well, he or she must make a reasonable effort to have the document explained to him/her. (Kassab, 282 AD2d at 316; Sofio v. Hughes, 162 AD2d 518, 519 [2d Dept 1990]; Shklovskiy v. Khan, 273 AD2d 371, 372 [2d Dept 2000].) Mr. Gjonlekaj made no effort to have the authorization translated or explained to him which amounts to gross negligence. (Gillman, 73 NY2d at 11.) He is therefore presumed to have known and assented to the contents of the authorization. (West Indies Guar. Trust Co., Ltd., 172 AD2d 234.) Mr. Gjonlekaj and petitioner are thus bound by both the authorization and the $820 Lease signed by Mr. Bruno on their behalf.

Even if the authorization did not expressly vest Mr. Bruno with authority to act, an agency relationship may still be "implied from the parties' words and conduct as construed in light of the surrounding circumstances." (Riverside Research Institute v. KGMA, Inc., 108 AD2d 365, 370 [1st Dept 1985], affd, 68 NY2d 689 [1986].) Mr. Bruno testified without contradiction that he did not sign the $820 Lease until he first obtained Mr. Gjonlekaj's verbal consent. Thus, in addition to the written authorization, there was an oral agreement between Mr. Gjonlekaj and Mr. Bruno authorizing this transaction. At the very least then, Mr. Bruno had implied authority to enter into the $820 Lease on petitioner's behalf. (Standard Builders Supplies v. Gush, 206 AD2d 720, 721 [3rd Dept 1994], "it is undisputed that an agency may be established by conduct, as well as by a written or oral contract.")

Relatedly, Mr. Bruno also had apparent authority to act on petitioner's behalf. Apparent authority lies where there are "words or conduct of the principal, communicated to a third party, that give rise to the appearance and belief that the agent possesses authority to enter into a transaction." (Standard Funding Corp. v. Lewitt, 89 NY2d 546, 551 [1997] quoting Hallock v. State, 64 NY2d 224, 231 [1984].) Where a third party reasonably relies upon the appearance of such authority, the principal is then bound by the agent's acts. (Id.) However, liability will only attach where the principal is responsible for creating the appearance of authority in the agent to conduct the transaction at issue. (Ford v. Unity Hospital, 32 NY2d 464, 473 [1973].) In other words, the apparent authority for which the principal may be held liable must be traceable to him or her. (Id., quoting 2 NY Jur Agency, § 89.) Thus, in State Div. Of Human Rights v. Muia, 176 AD2d 1142, 1144 [3d Dept 1991], the court found that a landlord had clothed his agent with apparent authority to accept or reject rental applications where he authorized his agent to check with a telephone exchange service to ascertain if inquiries about the apartment had been made; provided his agent with access to the apartment; and authorized his agent to show the apartment to prospective tenants.

Mr. Gjonlekaj's conduct similarly vested Mr. Bruno with apparent authority to enter into the $820 Lease. Not only did Mr. Gjonlekaj give Mr. Bruno access to the Apartment and authorize him to show the space to prospective tenants, he also provided him with express written authorization to enter into the $820 Lease. Mr. Bruno further produced a DHS form entitled "Landlord's Statement" signed by Mr. Gjonlekaj in which the latter acknowledged that the rent for the Apartment was $820. (Resp. Exh. E.) Respondent and Mr. Archin of DHS acted [*6]reasonably in relying upon Mr. Gjonlekaj's acts to conclude that he had authorized Mr. Bruno to sign the $820 Lease, even if Mr. Gjonlekaj did not subjectively intend for there to be such authority. (Hoysradt v. Nilles Ford—Mercury, 168 AD2d 824, 825 [3rd Dept 1990], apparent authority may exist even if the principal did not subjectively intend to create an agency relationship as long as the third party's reliance upon the principal's statement or conduct is reasonable.)

Finally, even if the court were to believe that Mr. Bruno and Mr. Shillingford were acting without Mr. Gjonlekaj's consent—which it does not—Mr. Gjonlekaj ratified the $820 Lease signed by Mr. Bruno. "The substance of ratification is confirmation of the unauthorized act or contract after it has been done or made." (Stiebel v. Haigney, 134 AD2d at 520. See also Holm v. C.M.P. Sheet Metal, Inc., 89 AD2d 229, 232 [4th Dept 1982], "ratification occurs when the principal expressly or impliedly adopts the unauthorized acts of his or her agent." Matter of New York State Med Transp. Assn. v. Perales, 77 NY2d 126, 131 [1990], holding that ratification presumes knowledge of the material facts concerning the allegedly binding transaction.) "A principal's acceptance of benefits from a contract that was unauthorized when originally executed constitutes an affirmance of the contract that, under appropriate circumstances, will give rise to a ratification." (Cologne Life Reinsurance Co. v. Zurich Reinsurance (North America), Inc., 286 AD2d 118, 127 [1st Dept 2001]. See also Beutel v. Beutel, 55 NY2d 957, 958 [1982].) For example, in Hyatt v. Clark, 118 NY 563, 568 [1890], a landlord was found to have ratified an otherwise unauthorized lease signed by her agent by accepting rent from the tenant and not seeking to void the lease. (See also Siemers v. Heuchel, 109 Misc 323 [Sup Ct Kings Co 1919], affd, 184 AD 952 [2d Dept 1918], holding that a landlord's delivery of possession and acceptance of rent from a tenant may ratify a lease that runs afoul of the Statute of Frauds.)

Mr. Gjonlekaj likewise accepted the benefits of a purportedly unauthorized transaction. After Mr. Bruno entered into the $820 Lease, Mr. Gjonlekaj continuously negotiated HSP checks of $820 each month, even though he knew that DHS only made these payments because it believed respondent's rent was limited by her lease to $820 per month. Mr. Gjonlekaj also never took any action to void or otherwise disavow the $820 Lease. To the contrary, subpoenaed DHS records include an unsigned letter on petitioner's letterhead which states that respondent lives in the Apartment and is "paying monthly rent of $820." Mr. Gjonlekaj therefore ratified Mr. Bruno's entry into the $820 Lease on petitioner's behalf and may not now disclaim it.

Unconscionability

Given that petitioner is bound by the $820 Lease, the question becomes what effect, if any, should be given to the $1150 Lease. RPL § 235—c[1] provides:

[i]f the court as a matter of law finds a lease or any clause of a lea-se to have been unconscionable at the time it was made, the court may refuse to enforce the lease, or it may enforce the remainder of the lease without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.

The court must consider "evidence as to [the lease's] setting, purpose and effect." (RPL § 235—c[2].) "Unconscionability requires some showing of an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party.' " (Matter of State of New York v. Avco. Fin. Serv. of NY, 50 NY2d 383, 389 [1980], [*7]quoting Williams v. Walker—Thomas Furniture Co., 350 F2d 445, 449 [DC Cir].) Thus, unconscionability may be procedural and/or substantive, "operat[ing] on a sliding scale; the more questionable the meaningfulness of choice, the less imbalance in a contract's terms should be tolerated and vice versa." (State v. Wolowitz, 96 AD2d 47, 65 - 66 [2d Dept 1983].) However, either element alone may be sufficient to render a contract unenforceable. (Brower v. Gateway 2000, Inc., 246 AD2d 246, 254 [1st Dept 1998] citing Gillman v. Chase Manhattan Bank, 73 NY2d at 10.)

The $1150 Lease is both procedurally and substantively unconscionable. Procedural unconscionability requires the court to consider "high pressure commercial tactics, inequality of bargaining power, deceptive practices and language in the contract, and an imbalance in the understanding and acumen of the parties." (State v. Wolowitz, 96 AD2d at 69; Advanta Business Services Corp. v. Colon, 4 Misc 3d 117, 118 [App Term 2d & 11th Jud Dists 2004].) Respondent is an unemployed public assistance recipient with no higher education. While living in a domestic violence shelter with her minor child, she contacted Mr. Bruno in order to find an affordable home for her family within HSP limits. Mr. Bruno then located the Apartment for respondent; processed all of the paperwork with DHS and petitioner; and handled the lease signing. The shelter now required respondent to vacate, even though she had not yet obtained a key for the Apartment from petitioner. Mr. Bruno and Mr. Shillingford then drove respondent that night to Mr. Gjonlekaj's office where she first learned that she had to sign a lease for $1150 per month in order to obtain keys for the Apartment. Put another way, Mr. Gjonelkaj, Mr. Bruno and Mr. Shillingford—all experienced real estate professionals—forced respondent to choose between signing the $1150 Lease that night and receiving keys for the Apartment or not signing it and being left homeless with her child. Thus, the $1150 Lease was not the product of an arms—length, bargained for transaction between sophisticated parties; rather, respondent aptly characterizes it as an extortion.

Substantively, the lease is one—sided. It requires respondent to pay a rent of $1150 per month for an apartment for which she already has a lease at the rate of $820 per month. Thus, respondent was required to pay an additional $330 per month in exchange for which she received nothing. Equally importantly, petitioner hid the $1150 Lease from DHS and thus created an illegal side deal in direct violation of HSP program requirements and public policy. (DHS website, http://www.nyc.gov/html/dhs/html/rent/hsp_page3.shtml, providing that "[s]ide-deals are prohibited and under no circumstances will tenants be required to pay any additional amount above that stipulated on the lease." See also FIA Policy Directive No.05—43—ELI, Dec. 13, 2005, Exh. 19, same.) As the court observed in Crutchley v. Costa, 2001 NY Slip Op. 40475[U], [Dist Ct. Nassau Co.], involving a Section 8 tenancy,

[c]learly, the execution of a second lease is illegal since it modifies the amount of rent the tenant is required to pay under the Section 8 lease.....The petitioner never notified HUD that it was collecting rental payments in excess of the Section 8 lease. The conduct of the petitioner is reprehensible....The purpose of the Section 8 agreement [is] to enable a family to receive government aid in order to afford a rental apartment, not to enlarge the pockets of greedy landlords.

(See also McGarvey v. Johnson, NYLJ, May 14, 1975 [Civ Ct NY Co.]; Tinnin v. Tinnin, NYLJ, [*8]April 16, 1975, at 20, col. 1 [Civ Ct Kings Co].)

Rent Overcharge

As the $1150 Lease is void as unconscionable, the court turns to respondent's claim of rent overcharge. Respondent contends that she has a preferential rent of $820 per month which is also the lawful regulated rent for the Apartment. Petitioner argues that the lawful registered rent for the Apartment on file with the Division of Housing and Community Renewal (DHCR) is $1150 and is binding upon respondent. (Pet. Exh. 6.)

RSC § 2521.2[a] permits an owner to charge a tenant a preferential rent; that is, a rent lower than the legal regulated rent the owner could lawfully collect. The preferential rent is revocable upon renewal or vacancy. (RSL § 26-511[c][14].) However, if the owner fails to preserve the legal regulated rent "within a four (4) year period, [it] will effectively result in the preferential rent being established as the legal regulated rent." (DHCR Fact Sheet #40; RSC §§ 2521.2[a]; 2521.2[b][1]; Aijaz v. Hillside Place, LLC, 8 Misc 3d 73, 76 [App Term 2d & 11th Jud Dists 2005], affd as mod, 37 AD3d 501 [2d Dept 2007].) Merely filing a rent registration with DHCR does not establish the legal regulated rent for future use. (RSC § 2521.2[b]; Fact Sheet #40, Ex. 2.) Petitioner has registered a rent of $1150 for the Apartment with DHCR beginning March 22, 2006 (Pet. Exh. 6), but has not established a legal regulated rent for the Apartment. Indeed, respondent's $820 Lease bears no indication of the lawful regulated rent for the Apartment. (Pet. Exh. 2.) Nor has petitioner introduced a preferential lease rider or any other evidence that it has preserved a legal regulated rent. As such, respondent's legal regulated rent is $820 per month. (RSC § 2521.2[a].)

Upon reviewing payments made by or on behalf of respondent against her legal rent of $820 per month, it is clear that petitioner has overcharged respondent. Specifically, petitioner has overcharged respondent and/or DHS in the sum of $4,711.45 for the period of March 2006 through November 2008, calculated pursuant to Petitioner's Exhibit 7 and Respondent's Appendix 1, less $330.00 for respondent's security deposit. Respondent and/or DHS may seek to recover the overpayment in her security deposit in a court of competent jurisdiction. This overcharge is presumed to be willful. (RSC § 2526.1[a][1]; Hargrove v. DHCR, 244 AD2d 241, 242 [1st Dept 1997].) Petitioner has failed to rebut this presumption by establishing, by a preponderance of the evidence, that this overcharge was not willful. (Matter of Round Hill Mgt. Co. v. Higgins, 177 AD2d 256, 257 [1st Dept 1991].) Accordingly, the court awards respondent treble damages of $14,134.35 upon the $4,711.45 overcharge award, for a total overcharge award of $18,845.80. (RSL § 26—516[a]; RSC § 2526.1[a], setting treble damages at three times the amount of the overcharge.)

Breach of the Warranty of Habitability

Respondent's next affirmative defense is breach of the warranty of habitability due to an ongoing bedbug infestation in the Apartment. The parties agree that the Apartment has been infested with bedbugs since approximately January, 2007. Their dispute centers around whether petitioner's efforts to remedy this condition have been sufficient.

In support of her claim, respondent called Uthira Kanaragan—petitioner's exterminator— whom the court found to be mostly credible. Mr. Kanaragan is an independent exterminator who has treated the building for roaches, rodents and bedbugs for the past six to seven years. He is licensed by the New York State Department of Environmental Conservation to exterminate, [*9]among other things, bedbugs (Pet. Exh. 12) and has taken classes relating to the treatment of bedbugs. Mr. Kanaragan has treated at least six apartments in the building for bedbugs for the past four years. He testified that his general treatment regimen begins with contacting the tenant and advising him or her to wash all of their clothes in very hot water; empty all closets, drawers and cabinets, apart from kitchen cabinets; and envelop their mattresses in plastic covers. Mr. Kanaragan then applies a series of chemicals in spray and aerosol form to eradicate the bedbugs and their eggs. He testified that he has been able to eliminate bedbugs with one treatment most of the time, provided that the tenant fully complies with his instructions. (Pet. Exh. 13.) Mr. Kanaragan also leaves his telephone number with the affected tenants so that they may contact him directly if there are any issues regarding the treatment such as recurrence.

Beginning in or about February 2007, Mr. Kanaragan attempted to follow his general procedure in treating the Apartment. He testified that he treated the Apartment twice, but that the respondent was uncooperative. Specifically, Mr. Kanaragan claimed that respondent never emptied her closets or drawers. He also alleged that respondent resisted the idea of washing all of her clothes because she was concerned about the expense of doing so. In short, Mr. Kanaragan believed that he received approximately 60% cooperation from respondent.

As its next witness, respondent called Jeffrey Eisenberg who was qualified as a bedbug expert. The court found Mr. Eisenberg to be credible and highly knowledgeable on treating apartments for bedbugs. Mr. Eisenberg opined that some of the chemicals employed by Mr. Kanaragan would be effective for a couple of weeks, while others were, in his view, completely ineffective. Like Mr. Kanaragan, Mr. Eisenberg too, stressed that a key factor in bedbug treatment is tenant compliance with pre—treatment guidelines. Mr. Eisenberg then testified as to a variety of techniques being employed to treating bedbugs ranging from dry heat to freezing to bedbug sniffing dogs. Notably, however, upon inquiry by the court, Mr. Eisenberg conceded that there were "no hard and fast guidelines" relating to the treatment of bedbugs.

Finally, respondent testified credibly regarding the bedbugs. She recalled discovering that the Apartment was infested with bedbugs in or about January 2007. Respondent and her three minor children endured numerous bites, rashes and skin blotches, all stemming from the extensive bedbug infestation in the Apartment. (Resp. Exhs. B1 - B4.) Respondent then contacted petitioner who sent Mr. Kanaragan to exterminate the Apartment for bedbugs in approximately Feburary, 2007; April 2007; and July 2007. Contrary to Mr. Kanaragan's claims, the court credits respondent's testimony that she "followed all [of Mr. Kanaragan's] instructions to the tee." In addition to washing all of her clothes in hot water, respondent also discarded three mattresses, a sofa and assorted toys as well as cleaned the Apartment with hot water and bleach.

In the interim, on August 1, 2007, respondent commenced an HP proceeding (Index No. *****/07) against petitioner based upon the bedbug infestation. That proceeding resulted in two separate orders to correct an August 10, 2007 violation placed by HPD for bedbug infestation. On September 24, 2008, the parties agreed that petitioner was to perform bedbug extermination in the Apartment on October 6, 2008 - October 7, 2008, by no later than 5:00 p.m. each day. Respondent testified credibly that no workers came to the Apartment on those dates. Instead, Mr. Kanaragan attempted to gain access to the Apartment on various occasions beginning in October 2008, at approximately 6:00 p.m. - 7:00 p.m. to conduct further extermination and to avoid cross—infesting other apartments. However, respondent admitted that she denied Mr. [*10]Kanaragan access to the Apartment on at least four such evening visits as she was feeding her children dinner. Thus, the violation remains uncorrected.

RPL § 235—b requires a landlord to, among other things, maintain an apartment fit for human habitation and free of conditions which would be dangerous, hazardous, or detrimental to a tenant's life, health or safety. This "implied warranty protects...against conditions that materially affect the health and safety of tenants or deficiencies that in the eyes of a reasonable person...deprive the tenant of those essential functions which a residence is expected to provide.'" (Solow v. Wellner, 86 NY2d 582, 588 [1995], quoting Park West Mgt. v. Mitchell, 47 NY2d 316, 328 [1979].) Where a landlord has breached the warranty of habitability, the court may, among other things, award a tenant a rent abatement representing the diminution in value of the services she contracted for. (Park West Mgt. v. Mitchell, 47 NY2d at 329.)

Respondent has amply established that petitioner has breached the warranty of habitability. It is undisputed that the Apartment has been infested with bedbugs since in or about January 2007 and that petitioner has been on notice of this condition since February 2007. Courts have consistently found a breach of the warranty of habitability and awarded an abatement where an apartment is infested with bedbugs. (Ludlow Properties, LLC v. Young, 4 Misc 3d 515, 520 [Civ Ct NY Co 2004], 45% abatement; Bender v. Green, 2009 NY Slip Op 29087, * 7 [Civ Ct NY Co], 12% abatement; Choudhury v. Ramtahal, NYLJ, June 3, 2009, at 28, col. 1 [Civ Ct Kings Co], 9% abatement; and Jefferson House Associates, LLC v. Boyle, 2005 NY Slip Op 50225[U], *6 [Justice Ct West. Co], 50% abatement.)

In calculating respondent's abatement, the court notes that petitioner acted promptly and reasonably in attempting to rid the Apartment of bedbugs. Although Mr. Eisenberg testified as to various techniques that he believed were more effective at treating bedbugs than those employed by petitioner, he also conceded that there were "no hard and fast guidelines" for bedbug extermination. That stated, the court finds that petitioner's extermination efforts were consistently unsuccessful. At best, the bedbug infestation abated for only two weeks following any given extermination. Consequently, respondent and her minor children have suffered countless bites and rashes from bedbugs; have been unable to sleep in their beds; and cannot have friends or family visit them in the Apartment. In short, the bedbug infestation rendered the Apartment unfit for human habitation. The court therefore awards respondent an abatement of 50% per month for the period of February 2007 through November 2008, totaling $9,020.[FN3] Petitioner is directed to exterminate and otherwise rid the Apartment of bedbugs by July 20, 2009, subject to respondent: (a) providing access beginning on June 29, 2009 and as may be further arranged by the parties' respective counsel; and (b) fully complying with all pre- and post—treatment procedures required by petitioner's exterminator.

Conclusion

Accordingly, the Clerk of the Court is directed to enter judgment in favor of respondent and against petitioner as follows:

(a)dismissing the petition with prejudice through November 2008;

(b)in the sum of $18,845.80 upon respondent's defense and counterclaim of rent overcharge, inclusive of treble damages; and [*11]

(c)in the sum of $9,020.00 upon respondent's defense and counterclaim of breach of the warranty of habitability.

The judgments for rent overcharge and breach of the warranty of habitability are subject to any lien(s) that may be imposed upon them by DHS, HRA or any other entity to the extent permitted by law. This constitutes the Decision/Order of this Court, copies of which are being sent today to DHS, HRA, the NYC Corporation Counsel's Office as well as the parties' respective counsel. Copies of this Decision/Order are also being sent to the NYS Department of State, so that it may take whatever action it deems appropriate, if any, against Dever Bruno and Darnell Shillingford. The parties are directed to retrieve their trial exhibits from the Part T Clerk in Room 470, forthwith.

Dated:June 23, 2009

Bronx, NY

_______________________________________

Hon. Jaya K. Madhavan

Additional copies to: NYC Dep't of Homeless ServicesNYC Human Resources Administration

Division of Legal ServicesOffice of Legal Affairs

33 Beaver Street, 17th Floor180 Water Street, 18th Floor

New York, NY 10004New York, NY 10038

NYC Law DepartmentNYS Department of State

General Litigation DivisionDivision of Licensing Services

Thomas Crane, Esq.,PO Box 22001

Division ChiefAlbany, NY 12201—2001

100 Church Street

New York, NY 10007 Footnotes

Footnote 1:Id.

Footnote 2:The authorization "need not be in any special form; but it must contain a sufficient expression of intent to confer authority, and it must confer authority to execute the very contract which the agent undertakes to execute." (Commission on Ecumenical Mission & Relations of United Presbyt. Church in U.S.A. v. Roger Gray, Ltd., 27 NY2d 457, 465 [1971] quoting Bacon v. Davis, 9 Cal.App 83, 98 P. 71.)

Footnote 3:$820.00 rent X 50% = $410 X 22 months = $9,020.