1440 G.Pacific Realty Corp. v McCurdy

[*1] 1440 G.Pacific Realty Corp. v McCurdy 2004 NY Slip Op 51523(U) Decided on September 27, 2004 Civil Court Of The City Of New York, Kings County Heymann, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 September 27, 2004
Civil Court of the City of New York, Kings County

1440 G.PACIFIC REALTY CORP., Petitioner,

against

MARK McCURDY, Respondent.



70385/04

George M. Heymann, J.

Petitioner, pursuant to a written request by the Office of the District Attorney of Kings County, commenced this "Red Back" holdover proceeding pursuant to Real Property Law [RPL] §231(1) and Real Property Actions and Proceedings Law [ RPAPL] §§ 711(5) and 715(1) alleging that respondent was "using or permitting the subject premises to be used for an immoral or illegal purpose and for an illegal trade or business to wit: the illegal possession and/or sale of a controlled substance(s) and that the subject apartment, or any part thereof, is used or occupied for purposes of the illegal possession, packaging, sale, trade or manufacture of a controlled substance(s), or, for other illegal business of or relating to controlled substance(s)." (Notice of Termination, dated: January 19, 2004) [FN1]

Respondent now moves this Court for an order dismissing the petition with prejudice on the grounds that: (1) the Petition states that the subject premises is rent stabilized when, in fact, it is rent controlled and petitioner failed to properly serve the Division of Housing and Community Renewal [DHCR] with copies of the Notice of Termination and Petition, and that such failure to serve the DHCR is not amendable; (2) there was improper service on the [*2]respondent, as he is currently incarcerated and the petitioner failed to obtain leave of the Court to serve the detention center office that receives legal process on behalf of inmates; and (3) the Petition fails to state a cause of action.

BACKGROUND

On July 19, 2002, pursuant to a search warrant, the respondent was arrested in the subject premises, located at 1432 Pacific Street, Brooklyn, New York 11213, and charged with (1) growing the plant known as cannabis by unlicensed persons (Public Health Law [PHL] §3382); (2) criminal possession of a controlled substance in the second degree (Penal Law [PL] §220,18[6]); and criminal possession of marijuana in the first degree (PL§221.30). (See, Criminal Court Complaint, Resp. Ex. A & B) As a result of that arrest, the Office of the District Attorney, in a letter dated January 6, 2004, notified the petitioner's attorney that there was "clear evidence that the premises were being used for the illegal business of selling narcotics" and "urging" the petitioner to "initiate eviction proceeding against the tenant." (See, Resp. Ex. B)[FN2]

Upon receipt of said letter, the petitioner commenced the instant proceeding which, thereafter, prompted this motion to dismiss.[FN3] After a lengthy conference between the attorneys and the Court, the petitioner requested an adjournment to investigate and ascertain whether the subject premises were rent controlled, as asserted by the respondent, and to submit opposition papers to the motion to dismiss.

When this matter was again before the Court, the petitioner's attorney conceded that the regulatory status of the subject premises was, in fact, rent controlled. Realizing that he could no longer proceed with this matter, petitioner's counsel orally moved to discontinue it. Respondent's counsel had no objection to the discontinuance but insisted that it be with prejudice, as this was the second discontinuance on the same claims, citing Civil Practice Law and Rules [CPLR] §3217 (Voluntary Discontinuance).

In an effort to avoid termination of the proceeding with prejudice, petitioner's attorney then offered to withdraw his application for a discontinuance and requested that the Court rule on the respondent's motion to dismiss, for which no opposition papers were submitted.[FN4] It was petitioner's position that the motion would automatically be granted on default and there was no basis for a marking of "with prejudice". Respondent's attorney, once again, insisted that at least as to the third branch of the motion that dealt with the substantive issues of the case, as opposed [*3]to the jurisdictional ones, the motion must be granted with prejudice. He steadfastly maintains that there is no evidence that any sale or illegal activity transpired in the subject premises for which the Housing Court can enter a judgment of possession against the respondent.

QUESTIONS PRESENTED

If this matter is voluntarily discontinued must it be with prejudice pursuant to CPLR §3217(c) or, in the alternative, if the motion to dismiss is granted on default must it be with prejudice?

CONCLUSIONS OF LAW

For the reasons set forth below, it is the opinion of the Court that regardless of whether this proceeding is voluntarily discontinued at the request of the petitioner, or dismissed upon the motion of the respondent, in either case, the net result will be the same: no prejudice will attach.

CPLR §3217(c)

CPLR §3217(c) [Effect of Discontinuance] provides as follows: Unless otherwise stated in the notice, stipulation or order of discontinuance, the discontinuance is without prejudice, except that a discontinuance by means of notice operates as an adjudication on the merits if the party has once before discontinued by any method an action based on or including the same cause of action in a court of any state or the United States.

Upon a review of the statute and the various commentaries and cases pertaining thereto, it is evident that the intent of the statute is to avoid harassment to a respondent / defendant by the repeated commencement and discontinuance of a matter on the same claims for no legitimate purpose. By incorporating this provision in the law the legislature, by operation of law, established the doctrine of "res judicata" as to those claims.

As stated in Siegel, New York Practice, Third Edition, (1999), §298, at page 461: If any action on the same claim was previously discontinued, by any method, in any federal or state court including a New York court, the discontinuance of the second action by the notice method operates as res judicata and bars relitigation. Discontinuance of the second action by the stipulation or order method, however, is not such an automatic bar; the matter in that instance is left to the terms of the stipulation or order. Giving res judicata effect to a discontinuance-by- notice of a second action is designed to avoid harassment of the defendant. It has therefore been held that when the purpose of the second discontinuance, albeit by notice, involves no harassment, the res judicata rule will not operate and another action will be allowed. Where, for example, P discontinued the second action by notice (after discontinuance of a prior action) because D had moved to dismiss the second action for lack of jurisdiction, P's discontinuance in that instance was simply a concession of D's jurisdictional point and a third action was held permissible.

In the case at bar, there has been no demonstration that seeking a discontinuance was made with malicious intent or to harass the respondent. As in the example given above, the petitioner, herein, conceded the very point that the respondent raised in the first branch of his motion regarding the jurisdictional defect as to the regulatory status of the subject premises. To [*4]make a finding of "res judicata" or "with prejudice" under these circumstances would undermine the spirit and intent of this particular statute and would bring about an unjust result. In effect, it was a direct result of the respondent's insistence, that the subject premises were rent controlled and not rent stabilized as plead, that the petitioner sought a discontinuance. Thus, he should not be prohibited from commencing a third proceeding as a result of the jurisdictional infirmity. (See, ATM One v. Escobar, 193 Misc 2d 157, 747 N.Y.S. 2d 286) Further, in this Court's opinion, where, as here, the underlying conduct of the respondent is criminal in nature, and there has been no violation of CPLR §3217(c), public policy would dictate a full evidentiary hearing on the merits of the case.

MOTION TO DISMISS

As previously noted, no opposition papers to the motion to dismiss were submitted. Petitioner's counsel asserts that dismissal of the proceeding as jurisdictionally defective under the first branch of the motion divests the Court of jurisdiction and that the Court need not consider the remaining branches. Respondent's counsel was resolute in his argument to the contrary, that the Court must consider the entire motion and that prejudice lies with dismissal on the third branch.

Notwithstanding that the Court could dismiss this proceeding solely under the first branch of the motion and deem the second and third branches as moot, it will address the issue of whether, in the context of this proceeding, a dismissal for "failure to state a cause of action"should be with prejudice.

Respondent avers that because the supporting documentation annexed to the Notice of Termination (i.e.: copies of the Criminal Court Complaint and laboratory analysis reports) does not support an allegation of the sale of a controlled substance, only possession, the predicate notice fails to allege a breach of the respondent's tenancy with sufficient specificity. In essence, it is the respondent's posture that, under the theory of "impossibility", a dismissal on this ground should be with prejudice since the petitioner can never prove illegal conduct or business (based on the criminal charges against the respondent) sufficient to meet the petitioner's burden of proof to warrant the issuance of a judgment of possession,. To support his contentions, the respondent relies on the following three decisions: 1165 Broadway v.Dayana Sportswear, Inc., 166 Misc 2d 939, 633 N.Y.S.2d 724 (Civ. Ct., NY Co., 1995); 1895 Grand Concourse Associates v. Ramos, 179 Misc 2d 508, 685 N.Y.S.2d 580 (Civ. Ct., Bronx Co., 1998) and Normandy Realty Inc. v. Boyer, 2 Misc 3d 407, 773 N.Y.S.2d 186 (Civ. Ct., Bronx Co., 2003). In the latter two decisions, written by my esteemed colleague, Hon. Anthony J. Fiorella, there was a finding, after trial, that the respondents possessed controlled substances for personal consumption and that there was no proof that any other tenants / occupants in the respective premises had any knowledge of, or acquiesced in, the illegal possession of controlled substances. Thus, these cases are inapplicable regarding the pre-trial relief sought herein.

In 1165 Broadway, supra, the court noted that there is a distinction between the illegal use of a premises which violates RPL §231 and RPAPL §715(1) and the commission of illegal acts within the apartment that do not, citing, as an example, the personal use of illegal drugs, even if habitual and customary. In that case, however, the court had to determine whether the respondents were utilizing commercial space for the illegal manufacture and sale of counterfeit trademark apparel and sportswear and there is no indication that if a dismissal for failure to state [*5]a cause of action based solely on possession of illegal drugs, without more, such dismissal would have been with prejudice.

In New York City Housing Authority v. Mojica, NYLJ, 1/14/99, p. 27, col. 3, a case not cited by the respondent but directly on point with his position that a case cannot proceed to trial where the only criminal charges against a tenant are possession of a controlled substance, the court held: While the petitioner does not have to prove its case in the petition, it does have to state the facts upon which the proceeding is based. *** Nowhere in the petition are there any facts which indicated that there was a sale of a controlled substance at or around the subject premises, nor any facts stated that the respondent was using the subject premises unlawfully for an illegal trade or business, nor any facts stated as to respondent and others acting with respondent's knowledge, acquiescence or permission for an illegal trade or business.

Although the court in Mojica, supra, dismissed the proceeding, it did so without prejudice.

In every instance, a court must evaluate the case before it on its own merits in determining whether a petition fails to state a cause of action.

As stated in Siegel, supra at §265, page 426:

As long as the complaint as a whole manifests a cause of action recognizable under the law, it is of no moment that the wrong relief was asked for. It has also been held that if there are several claims alleged, and any one of them is sufficient, a paragraph 7 motion aimed at the whole pleading will be denied in its entirety...

Finally, as this Court recently held in Malafis v. Cancel, NYLJ, 6 /30 /04, p. 21, col. 1, where the respondent sought dismissal for failure to state a cause of action: Based upon the foregoing, in the absence of any case law to the contrary, the Court cannot conclude that the petitioner *** has failed to state a cause of action warranting dismissal of the proceeding ***. Whether or not the respondent *** is correct in averring that the petitioner will not be able to sustain its burden of proving an illegal sublet and/or assignment is a factual issue to be determined at trial ***.

The petitioner has the burden of proof, by a preponderance of the evidence, to show that the tenant's apartment was used for an illegal purpose. Here, in contrast to the petitioner's admission regarding jurisdiction, no such concession has been forthcoming that it would be impossible to prosecute this proceeding with the evidence at hand. Since the petitioner withdrew its request for a discontinuance, and presents no opposition to the respondent's motion to dismiss, said motion is granted on default, in its entirety, without prejudice.

Accordingly, for the reasons enunciated, the petition is dismissed.

This constitutes the decision and order of the Court.

Dated: September 27, 2004

GEORGE M. HEYMANN, J.H.C. [*6]

Footnotes

Footnote 1:"The involvement of the District Attorney in illegal use proceedings is derived from RPAPL §§715(1) and 721(8).*** Illegal drug use proceedings initiated by the District Attorney's office or by any others at its behest are referred to as 'red back' cases because of the red legal backings attached to the pleadings to distinguish them from other holdover proceedings. In those cases where the proceeding is commenced by the landlord rather than by the District Attorney after receiving a written request to do so, the status of the District Attorney in such proceedings has been described as an 'anomaly' (citation omitted). Although not a party, the District Attorney's office is the 'driving force behind these proceedings' (citation omitted) and in some cases the Assistant District Attorneys actually conduct the proceedings, while in others they are present at the counsel table to assist the petitioner by providing the necessary documents to be offered into evidence." Heymann, Eviction Proceedings for Alleged Illegal Drug Activities: An Overview, NYLJ, May 28, 1999, p. 1, col. 1.

Footnote 2: "In almost every instance where a summary eviction proceeding based on alleged illegal drug use is commenced by an owner at the behest of the District Attorney pursuant to RPAPL §715(1), the tenant and/or other individuals involved in the alleged illegal activity will have been arrested and charged pursuant to the appropriate sections of the New York Penal Law (i.e.: Criminal Possession of a Controlled Substance; Criminal Sale of a Controlled Substance, etc.)." Heymann, id.

Footnote 3: Petitioner had previously commenced a holdover proceeding under Index # 97555/03 which was subsequently discontinued by the petitioner as it was jurisdictionally defective.

Footnote 4: Petitioner's attorney opined that it would be "superfluous" to submit opposition papers based on his desire to discontinue the proceeding.