Reico Intl. Realty Ltd. v Rivera
Annotate this CaseDecided on February 18, 2011
Civil Court of the City of New York, Kings County
Reico International Realty Ltd., Petitioner(s),
against
Rosa Rivera, Respondent(s)
L & T No.89803/10
The petitioner was represented by:
Stern & Stern, Esqs.
50 Court Street
Brooklyn, NY 11201
718-935-9458
Respondent Carlos Robles was represented by:
Jennifer Levy, Esq.
Legal Services NYC - Brooklyn Branch
180 Livingston Street
Brooklyn, NY 11201
347-592-2100
George M. Heymann, J.
Petitioner commenced this nonpayment proceeding in August 2010 alleging that the respondent owed $18,812.00 from the period commencing June 2004 through August 2010. Prior thereto, a written rent demand, dated June 28, 2010, was served upon the respondent by conspicuous service.
This matter first appeared on the Court's calendar on October 14, 2010 and adjourned to November 15, 2010 with a notation on the Court's file " tenant deceased".
On November 15, 2010, the petitioner entered into a stipulation with Carlos Robles "as respondent for his mother Rosa Rivera deceased". The matter was then converted to a holdover proceeding "upon the consent of the parties". The respondent agreed to a Final Judgment of Possession, warrant forthwith and execution stayed to February 28, 2010 to vacate. In consideration for said agreement, the petitioner waived "all claims to U and Occupancy arrears thru 2-28-11 a total of $19,000 and [agreed to] pay Respondent $5000 concurrently with delivery of the keys".
The stipulation was allocuted on the record and the respondent stated that he understood [*2]the content thereof and agreed to it voluntarily.
On January 20, 2011, Mr. Robles, now represented by counsel, moved to vacate the stipulation; dismissal of the Petition for failure to name a necessary party and failure to state a cause of action; or, in the alternative, permitting Mr. Robles to interpose an amended answer. After argument on the motion, the Court reserved decision.
I
In Chung Yeun Tien v. Luya Liu, 2010 NY SlipOp 52314(U), 30 Misc 3d 130(A) [12/23/10], the Appellate Term, Second Dept., recently reaffirmed that: "Settlement stipulations are favored and will not be undone absent proof that the settlement was obtained by fraud, collusion, mistake, accident or other ground sufficient to invalidate a contract (see, e.g. Hallock v. State of New York, 64 NY2d 224 [1984]; Matter of Frutiger, 29 NY2d 143 [1971])".
Here, as in ,Chung Yeun Tien v. Luya Liu, supra, the movant has not set forth that the stipulation was the result of fraud, collusion, mistake or accident. However, upon submission of the motion, it is incumbent upon the Court to scrutinize the affirmations of counsel, the affidavits of the parties and the exhibits annexed thereto to support their respective positions.
In a prior proceeding between the petitioner and Ms. Rivera it was agreed, pursuant to a stipulation dated December 2, 2003, that "$289.31 per month is the legal regulated rent for the apartment after all outstanding rent reduction orders have been lifted". ( R Ex. "H")
Although petitioner argued that this has no bearing on the current proceeding, it is, in fact, relevant since Ms. Rivera did not sign any of her renewal leases since that time. According to the petitioner, "the relevant leases were properly issued to respondent but never signed. The rent then increased by operation of law. See Exhibit A'. The current rent is $651.18." (P Atty Affirmation in Opposition ¶ 20)
Exhibit "A" is a copy of a Renewal Lease Form dated February 24, 2010. It shows that the then "legal" rent in effect was $551.18 and would increase by $30 to $581.18 for a one year lease and by $60 to $651.18 for a two year lease. Not only are there handwritten changes to the typed rental amounts (i.e. reducing the then current legal rent from $591.18 to $551.18 which resulted in a reduction of the new one year rent from $621.18 to $581.18) the amount of the new two year lease is incorrectly stated, which the petitioner is now claiming is the current legal rent. Although the renewal lease is not signed, the petitioner filled in the blank space for acceptance of a one year lease at $581.18 per month.
Since the petitioner failed to provide the Court with copies of all the tendered renewal leases since 2003, when it was agreed that the legal rent was $289.11, it is not possible to calculate the correct legal increases for each renewal period. Nor are they stated on the printout provided in petitioner's Exhibit "C" which shows an outstanding balance due by Ms. Rivera of $17,422.22 as of January 2011.
Thus, Mr. Robles, being presented with a choice between paying a daunting amount of arrears (which may, in fact, be substantially less) and facing all but certain eviction upon default of payment, or the option of surrendering the subject premises, agreed to vacate by February 28, 2011. As an inducement, as noted above, the petitioner offered to pay the respondent $5000 upon surrender of the keys.
On its face, the agreement was not, in and of itself, unusual where tenants often agree to convert nonpayment proceedings into holdover proceedings when faced with large sums of arrears and no ability to pay. Vacating their premises in such circumstances enables tenants to avoid financial liability and the prospect of having a money judgment against them that could [*3]negatively impact on their future credit rating.
However, the next question that must be addressed is to what extent is Mr. Robles liable with respect to the substantial amount of arrears alleged in the Petition, since he was not the tenant of record legally responsible to retire the debt?
Ms. Rivera, the tenant of record, died on April 20, 2010. Her son maintains that he should only be responsible for the rent accrued from that month to the present. The petitioner claims that he is responsible for all the unpaid rent that has accrued since June 2004.
In 615 Nostrand Ave. Corp v Roach,15 Misc 3d 1, 2006 NY SlipOp 26535 (AT 2nd Dept., 2006) the Appellate Term affirmed the Housing Court's dismissal of the landlord's claims of arrears accruing prior to the tenant's mother's death. The court stated that "it is elementary that a nonpayment proceeding must be predicated on a default in the rent owed pursuant to the agreement under which the premises are held'". Id. at 4. See, Shahid v. Carillo, 18 Misc 3d 136(A), 2008 NY SlipOp 50278(U) (AT 2nd Dept., 2008).
In the case at bar, the landlord's proper remedy is the commencement of a plenary action against the estate of Rosa Rivera, the statutory tenant of record for the rent allegedly owed prior to her death. Edelstein & Son, LLC v. Levin, 8 Misc 3d 135(A), 2005 NY SlipOp 51190(U) (AT 1st Dept., 2005)
Assuming arguendo, that the monthly rent as set forth in petitioner's Exhibit "C" was $551.18 for the months of April 2010 through May 2010 [$1102.36] and $581.18 for the months of June 2010 through February 2011 [$5230.62], Mr. Robles would owe a total of $6332.98. Since he paid $289.11 per month for the period of April 2010 through September 2010 for a total of $1734.66, he would have an outstanding balance of $4598.32, provided the rents charged are the proper legal rents.
The Court is of the opinion that under the specific facts of this case, a vacatur of the stipulation is warranted.
II
The Petition names Rosa Rivera, the tenant of record, as the sole party to this proceeding and clearly sets forth that the nature of the proceeding as one for nonpayment of rent, setting forth the amounts allegedly due and owing.
Mr. Robles now avers that his mother's estate was a necessary party to the instant proceeding. In defense of petitioner's failure to name the estate of Rosa Rivera as a party, neither Mr. Robles or his counsel provide any proof that the petitioner was ever notified of Ms. Rivera's death prior to Mr. Robles' appearance in court.
Notwithstanding petitioner's good faith in naming only Rosa Rivera as a party respondent, in Malfis v. Cancel, NYLJ, 6/30/04, p.21, col.1, this Court held that if there is a current lease still in effect the landlord must sue the estate in order to gain possession of the subject premises. On the other hand, if there is no existing lease then the estate is not a necessary party to the proceeding. (See, also, 135 PPW Owners LLC v. Schwartz, NYLJ, 11/17/04, p.19, col.3 [Heymann, J.] )
Although the tenant of record failed to sign renewal lease forms since 2003, the petitioner asserts that the tenancy continued by operation of law [Rent Stabilization Code §2523.5(c)(2)].
(See, P Atty Affirmation in Opposition ¶ 20, supra).
The last Renewal Lease Form, dated February 24, 2010, commenced a new lease on June 1, 2010. As the petitioner filled in the blank space for a one year renewal, the current lease remains in full force and effect until May 31, 2011. [*4]
In 135 PPW Owners LLC v. Schwartz , supra, there were only seven weeks remaining on the decedent's lease and this Court dismissed the proceeding for failure to name the estate as a necessary party. As stated therein:
As a practical matter, with only seven weeks left to the expiration of the lease, it would appear to be unreasonable for the petitioner to now be placed in the position of having to either seek the appointment of a fiduciary to wrap up the estate of to commence a new proceeding. However, based on the case law cited above, it would be an abuse of discretion for this Court to arbitrarily carve out an exception to legal precedent solely because the lease term is virtually at an end. At what point should a court draw the line: a few days; a few weeks; a few months? Whether the law should contain a provision that if a tenant of record dies with only a brief time remaining in an unexpired lease term the petitioner could be relieved of its obligation to apply for and/or name an estate in these proceeding is strictly within the province of [the] Legislature to decide.
With at least three months remaining on Ms. Rivera's lease term, the law requires dismissal of the instant proceeding without prejudice.
Accordingly, the respondent's motion is granted to the extent of vacating the stipulation dated November 15, 2010 and dismissing the petition. The balance of the motion is denied as moot.
This constitutes the Decision and Order of the Court.
Dated: February 18, 2011____________________________
George M. Heymann, JHC
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