Conversion for Real Estate, LLC v Granik

[*1] Conversion for Real Estate, LLC v Granik 2004 NY Slip Op 51387(U) Decided on October 25, 2004 Civil Court, New York County 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 October 25, 2004
Civil Court, New York County

CONVERSION FOR REAL ESTATE, LLC, Petitioner,

against

JOAN GRANIK, a/k/a JOAN GENEVIVE GRANIK, Respondent.



64553/2004



Barry Gidseg, New York City, for petitioner.

Steven W. Smollens, New York City, for respondent.

Gerald Lebovits, J.

[*2]Petitioner commenced this nonpayment proceeding in April 2004 seeking $498.56 in electrical charges.

Respondent answered in April 2004, claiming primarily that the allegedly due electrical charges are not collectable as additional rent under the parties' rent-stabilized lease. Respondent also raised four counterclaims: breach of the warranty of habitability, rent overcharge, harassment, and attorney fees.

On May 19, 2004, petitioner moved orally to discontinue the proceeding without prejudice. Respondent refused to consent to that discontinuance. Respondent instead argued that the proceeding should be dismissed with prejudice and that summary judgment should be granted in her favor. The court adjourned the proceeding to September 10, 2004, for written submissions and oral argument on this issue.

Consistent with the motion schedule set on May 19, 2004, petitioner made a written motion dated May 27, 2004, to discontinue this proceeding without prejudice. Petitioner claimed that respondent conceded in various ways that it has the right to charge electrical use as additional rent and that respondent had paid electrical charges throughout her tenancy. Petitioner contended that the court has no basis to condition discontinuance of the proceeding on an award of attorney fees. Petitioner argued that because respondent raised whether her obligation to pay any electrical charge is deemed additional rent under the lease or an obligation of respondent's tenancy, only a declaratory judgment would answer that question. Continuing, petitioner argued that this proceeding should be discontinued because this court does not have subject-matter jurisdiction to grant a declaratory judgment. Petitioner contended that because respondent's counterclaims will be preserved for future proceedings, respondent will not be prejudiced by a discontinuance.

In petitioner's motion to discontinue of May 27, 2004, petitioner also submitted as Exhibit "E" letters from five tenants and a deliveryman to suggest that respondent has engaged in anti-social behavior toward petitioner, petitioner's contractors, the building's management, petitioner's employees, and other tenants in the building. Petitioner claims that respondent has entered tenants' apartments without permission; verbally assaulted tenants' employees and deliverymen, causing tenants' employees to leave the building; repeatedly telephoned and called tenants over the intercom over a period of hours on several different days; repeatedly shouted and banged on the ceiling and doors; complained to management about noise violations when there were none; defamed a tenant's mezuzah and wrote swastika signs and curse words on that tenant's apartment door frame; removed tenants' garbage from the incinerator room, untied it, posted a tenant's name on it, and put the garbage in the passenger elevators so the garbage would go up and down the elevators for other tenants to see; took pictures of deliverymen while they were making deliveries and yelled and cursed at them; threw delivery dollies at tenants' apartment doors; and had tenants' employees removed from the building by claiming it was illegal for them to be smoking cigarettes inside apartments. [*3]

Petitioner also alleged in its May 27 papers that respondent filed a complaint with HPD for lack of cold water and a complaint with the Disciplinary Committee in the Second Department against petitioner's attorney for commencing this proceeding on petitioner's behalf.

On August 20, 2004, respondent filed a cross-motion dated July 7, 2004, requesting that the proceeding be dismissed with prejudice on a defense founded on documentary evidence under CPLR 3211 (a) (1), that the arguably prejudicial material submitted in petitioner's motion be stricken from the record under CPLR 3204 (b), and that respondent be awarded damages and attorney fees. In her motion to dismiss, respondent argued that the electrical charges are not additional rent under the parties' written lease agreement or under any subsequent lease renewals. Respondent further contended that petitioner repeatedly charged respondent for payments already made, that petitioner refused to send invoices, and that petitioner continued to demand money for electrical charges. Respondent provided proof of payment for charges that petitioner did not account for in the period dating from July 27, 2000, through November 28, 2001, and which now supposedly reflects that no money was owed. Respondent submits that this behavior constitutes rent overcharging.

In the same papers, respondent also cross-moved for summary judgment on the issue of liability on her first counterclaim for breach of the warranty of habitability. According to respondent, petitioner refused to provide cold water to respondent's apartment. Respondent submitted an HPD violation report dated July 30, 2004, noting lack of cold water in her apartment kitchen.

In its affidavit of July 22, 2004, in opposition to respondent's cross-motion in reply, petitioner argued that respondent's motion to dismiss should be denied given that respondent had not provided the court with a copy of the lease. Petitioner further claimed in that respondent brought actions to litigate disputes against petitioner in four forums. In addition to respondent's counterclaims, petitioner noted, respondent filed a harassment complaint against petitioner with DHCR.

On August 30, 2004, petitioner filed a sur-reply affirmation. In the affirmation, petitioner argued that respondent improperly requested relief based on all of respondent's counterclaims. Petitioner contended that respondent admitted in her cross-motion, supporting affidavit, and affidavit in reply of August 19, 2004, that respondent sought summary judgment only on her first counterclaim for breach of warranty of habitability. Petitioner argued that respondent is barred from seeking summary judgment for the other counterclaims and that respondent is also barred from seeking punitive damages, since this relief, petitioner stated, was not requested in respondent's answer of April 11, 2004.

Respondent opposed petitioner's submission of a sur-reply affirmation in an affirmation dated September 9, 2004. Respondent claimed that petitioner's sur-reply affirmation is not an authorized paper and cannot be submitted to the court without an order under CPLR 2214. [*4]

The parties appeared for oral argument on September 10, 2004. Petitioner represented orally that it misplaced or lost and thus does not have the parties' lease but that similar leases for tenants in the building require tenants to pay electrical charges as additional rent. Petitioner held fast to its position that the court should discontinue this proceeding without prejudice. Among the things petitioner told the court was that as of September 10, it had spent $20,000 to collect the $498.56, that respondent withdrew her DHCR complaint, and that the disciplinary matter was still pending.

Respondent claimed at oral argument that she has the lease and that it does not contain language that electrical charges are due as additional rent. Respondent neither confirmed nor denied the allegations that included her painting swastikas but urged that the allegations are irrelevant in this proceeding.

In response to the parties' conflicting representations, the court issued an interlocutory order on September 13, 2004, requiring respondent to submit a copy of the lease to the court and to petitioner by September 23, 2004. It seemed peculiar to the court that both sides were arguing about the contents of a lease that neither side submitted to the court.

On September 22, 2004, respondent submitted a letter to the court with a copy of the lease. Respondent argued again that the lease does not provide for electrical charges as additional rent.

Now that the court had a copy of the lease, the court filed a second interim order dated September 22, 2004, permitting both sides to submit, on the question of electrical charges, further affirmations, affidavits, memorandums of law, and exhibits to supplement their motion and cross-motion.

Petitioner filed papers in response to the court's second interim order. In petitioner's letter to the court of September 23 and affirmation of September 27, petitioner argued that this court has the jurisdiction to entertain its claim for electrical charges and that respondent must pay the $498.56 in electrical charges. According to petitioner, the lease allows petitioner to charge for electricity as additional rent. Petitioner contends that lease section 13 (B) and (C) provide if the landlord provides electricity and if the electrical charge is included in the rent, it is the tenant's responsibility under lease section 20 (A) (7) to reimburse the landlord for any electrical charges incurred as additional rent. In light of these arguments, the court assumes that petitioner's position has changed and that petitioner no longer seeks a discontinuance.

Petitioner also opposed respondent's claim for breach of the warranty of habitability in its September 22 letter and its September 27 affirmation. Petitioner claims that respondent refused to permit two scheduled inspections and then required that the inspections take place at 6:20 a.m. Petitioner urges that the inspection must take place between the business hours of 9:00 a.m. and 5:00 p.m. Petitioner requested that respondent and respondent's counsel be sanctioned and that legal fees and costs be awarded to the petitioner due to what it calls respondent's frivolous [*5]defenses and claims.

Respondent filed supplemental papers dated October 8, 2004, opposing petitioner's arguments. Respondent claims in her supplemental papers that regardless of the lease terms, a landlord may not maintain a nonpayment proceeding for electrical charges against a rent-stabilized tenant.

Like petitioner, respondent appears to have shifted its position. While petitioner is now so confident in its position that respondent owes electrical charges that it seems no longer to want to dismiss, respondent no longer suggests that the parties' lease does not allow for collection of electrical charges but rather that these charges cannot form part of the legal regulated rent.

The court agrees in part with respondent's most recent argument. Rent Stabilization Law (Admin. Code of the City of NY) § 26-512 (a) and Rent Stabilization Code (9 NYCRR) § 2525.1 make it unlawful to collect electricity surcharges as rent exceeding the legal regulated rent. RSC (9 NYCRR) § 2522.10 provides that a tenant's legal regulated rent shall not include surcharges for electricity to which a landlord might otherwise be entitled. Even when lease clauses deem electrical charges additional rent, therefore these charges cannot be collected as a possessory judgment in a nonpayment proceeding against a rent-stabilized tenant like respondent. (Related Tiffany, L.P. v Faust, 191 Misc 2d 528, 529 [App Term, 2d Dept, 2d & 11th Jud Dists 2002, mem].) But a landlord may collect outstanding electrical charges in a plenary action for money if the electrical charges are expressly mentioned in the lease. According to petitioner, The parties' lease—sections 13 (B) and (C) and 20 (A) (7)—allow petitioner to charge respondent for electrical use.

In light of the above, the court decides as follows:

Both sides submitted sur-reply papers beyond those permitted as responsive pleadings. All are relevant. The court has read and considered them all. The applications to strike the sur-replies are denied.

In the event that respondent is still moving to discontinue, that motion is denied. CPLR 3217 (b) permits a court to grant a motion for voluntary discontinuance "upon terms and conditions, as the court deems proper." Whether to grant a motion to discontinue is in the trial court's sound discretion. (Tucker v Tucker, 55 NY2d 378, 383 [1982]; Chris Mac Co. v Johnson-Ono, NYLJ, Feb. 16, 2000, at 26, col 1 [App Term 1st Dept, per curiam].) Given the contentious nature of litigation the parties have charted for themselves over less than $500 in electrical charges, only a final disposition in one forum will be in anyone's interests. In this regard, the court cannot grant any discontinuance—whether with or without prejudice, whether upon payment or not of attorney fees, or whether or not to sever counterclaims. With regard to attorney fees, for instance, the court cannot ascertain in this case who the prevailing party entitled to fees is until there is a prevailing party. That determination must await further litigation. [*6]

Respondent asks this court to order and pay to transcribe the oral argument of September 10, 2004. This application is denied. Respondent, represented by counsel, her second in this proceeding, is not indigent. If she wants the minutes, she may order and pay for them herself.

Respondent's motion for summary judgment on the warranty of habitability is denied. Issues of fact remain on the issue of liability. (See e.g. Friends of Animals v Associated Fur Mfr., 46 NY2d 1065, 1067 [1979, per curiam] [finding that summary judgment cannot be granted if papers presents opposing issues of material fact that require trial].) The contested facts include the following. Respondent claims in her letter of July 16, 2004, that there was still a problem with the cold water, but petitioner submitted a work-order ticket of July 27, 2004, confirming normal water temperature in the building. Petitioner also claims that respondent agreed at a DHCR conference on June 17, 2004, that the repairs were completed. Respondent contends that the repairs were never made and submits HPD violation reports dated April 7 and July 31, 2004. Petitioner, on the other hand, claims that respondent refused to permit two scheduled inspections and that the respondent's counsel required that the inspections take place at 6:20 a.m. Petitioner contends 6:20 a.m. is an inappropriate time for an inspection and for that reason did not inspect the apartment. These issues of fact require a trial.

Respondent's motion to dismiss the proceeding based on documentary evidence is denied.

Money might or might not be due for electrical charges in this case, but this summary proceeding cannot be maintained. Whatever money, if any, might be due to petitioner for electrical charges or to respondent as a counterclaim cannot form the basis of a possessory judgment against a rent-stabilized apartment. (See Related Tiffany, 191 Misc 2d at 529.) This court therefore elects to transfer this proceeding as a money claim and counterclaim to Civil Court for plenary disposition. (See e.g. Wards Construction Co. v Arda, NYLJ, Apr. 15, 1995, at 29, col 6 [Hous Part, Civ Ct, NY County] [transferring nonpossessory money-only claim to Plenary Part in Housing Part's discretion].) The petition and notice of petition are deemed the summons and complaint for the plenary action. No fee need be paid. A free index number is to issue.

Although this court did not consider in deciding the parties' motions the allegations that respondent moved to strike from the record, the court declines to strike any pleadings. Civil Court's Plenary Part will decide that question.

The Plenary Part of Civil Court will similarly decide all issues of sanctions and attorney fees.

This opinion is the court's decision and order

Dated: October 25, 2004 [*7]

J.H.C.