Chatham Sq. Owners Corp. v Roth

[*1] Chatham Sq. Owners Corp. v Roth 2017 NY Slip Op 50236(U) Decided on February 22, 2017 District Court Of Nassau County, First District Fairgrieve, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 22, 2017
District Court of Nassau County, First District

Chatham Square Owners Corp., Petitioner(s)

against

Judah Roth, "JOHN DOE" and/or "JANE DOE," Respondent(s).



LT-004853-16



Sidrane & Schwartz-Sidrane, LLP, attorneys for Petitioner, 119 No. Park Avenue, Suite 201, Rockville Centre, New York, (516) 569-9539; Michael A. Rich, Esq., attorney for Respondents, 72 Jericho Turnpike, Mineola, New York 11501, (516) 742-7997.
Scott Fairgrieve, J.

The following named papers numbered 1 to 2

submitted on this Motion to Dismiss

on December 12, 2016

papers numbered

Notice of Motion and Supporting Documents1Order to Show Cause and Supporting Documents

Opposition to Motion2

Reply Papers to Motion

The petitioner commenced this holdover proceeding to recover possession of a Cooperative Unit, 326A, located at 326A Peninsula Blvd., Cedarhurst, NY, County of Nassau. The respondent, Judah Roth, now moves for an order dismissing the petition. The petitioner opposes the motion. The motion is decided as provided herein.

The respondent entered into possession of the subject premises, pursuant to his [*2]purchase of shares of stock in the cooperative and pursuant to a Proprietary Lease with Chatham Square Owners Corporation, petitioner at bar. After defaulting on his maintenance payments due and owing to the cooperative, the petitioner commenced a Non-Judicial Foreclosure against the respondent. Pursuant to such foreclosure, the shares of stock and leasehold were sold to the petitioner in accordance with the procedures set forth in UCC Article 9. Thereafter, petitioner's attorney commenced this summary holdover proceeding by the service of a Ten Day Notice to Quit on the respondent. The petition alleges that the respondent is a licensee, the basis of which has since been revoked as a result of the foreclosure.

In his motion to dismiss, the respondent challenges the propriety of the non-judicial foreclosure sale, and argues that the notices in connection with such foreclosure were defective. In addition, he contends that even assuming the foreclosure was done properly, the instant summary proceeding was improperly commenced. In doing so, he claims that the relationship at bar is that of a landlord and tenant, based upon the Proprietary Lease. As such, he asserts that a Thirty Day Notice of Termination of Tenancy was required, rather than a Ten Day Notice to Quit.

In opposition, the petitioner claims that the non-judicial foreclosure was proper, and that all parties were notified. In addition, the petitioner argues that any challenge to the foreclosure sale is not within the District Court's jurisdiction in a summary holdover proceeding. In any event, the petitioner asserts that it properly commenced this summary proceeding, as any previous landlord and tenant relationship was terminated as a result of the non-judicial foreclosure.

Under similar circumstances as the proceeding herein, the court in Federal Home Loan Mtge. Assn. v Perez, 40 Misc 3d 1, 4, 968 N.Y.S.2d 317 (App Term, 2d Dept, 2013), determined that RPAPL §§713 (1), (5), and (7) provides no basis for the assignee of a successful bid at a UCC article 9 non-judicial sale to maintain a summary proceeding. The court held that a summary proceeding was not appropriate and noted, "that if a new category of summary proceeding is to be created, it is for the legislature, not the courts, to create it (see Rosenstiel v Rosenstiel, 20 AD2d 71, 245 N.Y.S.2d 395 [1963])" (see also Dan M. Blumenthal, Recent Appellate Term Rulings Make Gaining Possession of Collateral More Difficult for Foreclosing Lenders, Purchasers, The Nassau Lawyer, September 2013; see also Federal Home Loan Mtge. Assn. v Simmons, 48 Misc 3d 24, 12 N.Y.S.2d 487 [App Term, 1st Dept 2015]; Retained Realty, Inc. v. Zwicker, 45 Misc 3d 1133(A), 7 N.Y.S.3d, 245 (App Term, 1st Dept 2014); Rayevich, LLC v. Gerstman, 45 Misc 3d 134(A), 5 N.Y.S.3d 330 (App Term, 2nd Dept 2014); but see Emigrant Mtge. Co., Inc. v Greenberg, 34 Misc 3d 1236(A) [Nassau Dist Ct 2012] [court had jurisdiction to grant eviction pursuant to RPAPL §§701 and 713(1) where secured party petitioner obtained ownership of cooperative apartment after non-judicial sale of defaulting tenant's interest]).

The Perez court reasoned that

"[a]s relevant here, RPAPL 713(7) provides for the maintenance of a summary proceeding to remove an occupant from 'real property' (RPAPL 701 [1]) where the occupant is a licensee of the person entitled to possession whose license has expired or been revoked. Tenant is not a licensee. Rather, he entered into possession as a tenant under a proprietary lease. If that lease has been terminated- and there is no allegation that it has- tenant is in possession as a holdover tenant. He is not in occupancy pursuant to a license. Thus, RPAPL 713(7) provides no basis for the maintenance of this proceeding" (40 Misc 3d 1, 3).

Under the particular circumstances herein and in accordance with the binding Appellate Term case law, this court is constrained to act within the limits of its jurisdiction and cannot expand its statutorily authorized power. Thus, the petition, which was based upon respondents status as a "licensee," is defective and must be dismissed. As such, the service of a Ten Day Notice to Quit was likewise improper. Moreover, to any extent that the petitioner purports to attempt to cross-move for summary judgment, such was not properly noticed, and is moot in light of the dismissal of the petition. Similarly, any challenges to the non-judicial foreclosure are not properly before this court.

This court suggests that the New York State Legislature may wish to review this situation as suggested by Dan M. Blumthenal, Esq., in his September 2013 article which appeared in The Nassau Lawyer entitled "Recent Appellate Term Rulings Make Gaining Possession of Collateral More Difficult for Foreclosing Lenders, Purchasers".

Accordingly, the respondent's motion to dismiss the petition is granted.

This constitutes the decision and order of the court.

Dated:February 22, 2017