315 Berry St. Corp. v Hudnall

[*1] 315 Berry St. Corp. v Hudnall 2005 NYSlipOp 52290(U) Decided on April 29, 2005 Appellate Term, Second Department 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 April 29, 2005
SUPREME COURT OF THE STATE OF NEW YORK
APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS
PRESENT: : PESCE, P.J., PATTERSON and RIOS, JJ
2004-321 K C.

315 Berry Street Corporation, Appellant, HANSON FINE ARTS, ERIK HANSON, PINOTTI PRODUCTIONS, "JOHN" PINOTTI and ZOETHECUS INTERNATIONAL, Tenants,

against

Clayton Hudnall, "JOHN DOE" and "JANE DOE", Undertenants, JENNIFER KUIPERS, SEAN RENBOLD and MIYUKI SHIBUYA, Respondents.

Appeal by landlord from an order of the Civil Court, Kings County (J. Grayshaw, J.), entered August 8, 2003, which denied its motion for summary judgment and awarded partial summary judgment to undertenants Jennifer Kuipers and Miyuki Shibuya to the extent of (1) adjudging that the subject premises, unit 5N3 at 315 Berry Street, Brooklyn, is subject to the Emergency Tenant Protection Act of 1974 and the Rent Stabilization Law and Code, and that said undertenants are the tenants of the premises protected by these laws and regulations, (2) dismissing the petition, and (3) setting a counterclaim by undertenants for attorney's fees down for a hearing.

Order unanimously modified by striking the provision setting the counterclaim for [*2]attorney's fees down for a hearing and by providing that landlord's motion for summary judgment is granted to the extent of dismissing the counterclaim for attorney's fees; as so modified, affirmed without costs.

After a buyout by landlord of the improvements in and the rights to the subject unit (see Multiple Dwelling Law § 286 [6], [12]) and a removal of the unit from coverage under the Loft Law based upon a representation by landlord that the unit would be used exclusively for nonresidential purposes (see NY City Loft Board Regulations [29 RCNY] § 2-10 [c]), portions of the unit were illegally converted to residential use with landlord's admitted knowledge and acquiescence. In this holdover proceeding seeking to remove the tenants and residential undertenants of the unit, Housing Court correctly determined that the residential undertenants are protected under the Rent Stabilization Law of 1969 (Administrative Code of City of NY § 26-501 et seq.) and the Rent Stabilization Code (9 NYCRR Parts 2520-2531). Since Hanson Fine Arts, the last-remaining commercial lessee, had relinquished occupancy of the unit prior to the undertenants' entry into possession and maintained its tenancy during the course of their occupancy solely for the purpose of making a profit, it was the undertenants who are the parties protected under rent stabilization and not Hanson Fine Arts or its principal, even if the latter had at some earlier point resided in the premises (see Primrose Mgt. Co. v Donahoe, 253 AD2d 404 [1998]; Bruenn v Cole, 165 AD2d 443 [1991]; Matter of Avon Furniture Leasing v Popolizio, 116 AD2d 280 [1986]). However, contrary to the determination of the court below, because undertenants-respondents sublet only a portion of the space demised in the prime lease, they are not successors of the prime tenants and are not entitled to recover attorney's fees based on the attorney's fees provision of the
prime lease and Real Property Law § 234 (Neidich v Gottlieb, 169 AD2d 541 [1991]; City of New York v Anonymous, NYLJ, July 13, 1998 [App Term, 1st Dept]). We modify the lower court's order accordingly.
Decision Date: April 29, 2005