Mozes v Shanaman

[*1] Mozes v Shanaman 2004 NY Slip Op 51941(U) [21 Misc 3d 1134(A)] Decided on July 28, 2004 Supreme Court, New York County Lehner, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 July 28, 2004
Supreme Court, New York County

Alan V. Mozes, Plaintiff,

against

Deborah Shanaman, Defendant.



Michael Drexler, Plaintiff,

against

Mihai Popa, Defendant.



Reiner M. Leist & Andreas Berner, Plaintiffs,

against

Carol Wolff, Defendant.



117147/03

Edward H. Lehner, J.

Before the court are motions for summary judgment by the defendants in each of the above three cases. Since counsel have acknowledged that the legal issue presented with respect to the applicability of the four-year Statute of Limitations set forth in CPLR 213-a is the same in each of the cases, the motions are consolidated herein for disposition.

Defendants are artists who each rented a loft unit in the building at 545 Eighth Avenue approximately 25 years ago. They renovated the units and used them for work and living purposes. At various times eight to ten years ago the plaintiffs subleased the units from the [*2]defendants who had moved to premises in Long Island when they found they needed additional space for their artistic endeavors. The rents paid by each of the plaintiffs are substantially in excess of the rent paid by each of the defendants to the owner of the building. The units have never been legalized for residential use.

Plaintiffs commenced these actions in September 2003 seeking recovery of alleged rent overcharges during the period of their respective occupancies. At oral argument plaintiffs stipulated to reduce their claims to overcharges subsequent to September 1999 (Tr. pp. 2-3).

Defendants have moved to dismiss the claims as barred by CPLR 213-a, which provides: "An action on a residential rent overcharge shall be commenced within four years of the first overcharge alleged and no determination of an overcharge and no award or calculation of an award of the amount of any overcharge may be based upon an overcharge having occurred more than four years before the action is commenced. This section shall preclude examination of the rental history of the housing accommodation prior to the four-year period immediately preceding the commencement of the action."

Defendants maintain that since the overcharges asserted first occurred when plaintiffs subleased the units, which is well more than four years prior to the institution of these actions, no recovery may be had herein, whereas plaintiffs argue that recovery may be had for the overcharges that occurred during the four-year period immediately prior to the commencement of the actions. It is undisputed that the premises are used for residential purposes but are not covered by the Rent Stabilization Law ("RSL"), and hence the four-year limitation period set forth in §26-516 of said law is not applicable to these actions.

The court finds that since the first claims of overcharge in each of these cases occurred when the various plaintiffs leased the units eight to ten years ago, the actions are barred by the aforesaid §213-a.

In Brickerhoff v. DHCR, 275 AD2d 622 (1st Dept. 2000) lv. to ap. den., 96 NY2d 712 (2001), it was held that since the four-year Statute of Limitations contained in the RSL and the CPLR "by its terms commences to run with the first overcharge alleged', (and) [s]ince the first overcharge alleged by petitioners occurred on August 1, 1984 and the overcharge proceeding before DHCR was not commenced until April 6, 1989, the proceeding was time-barred". In so ruling, the First Department cited as authority the case of Bragston Realty Corp. v. Dixon, 180 Misc 2d 1018 (A. Term, 2nd Dept. 1999), where it was ruled that "[b]ecause the first overcharge alleged by tenant occurred in 1987 and tenant did not interpose his claim within four years of the overcharge, his claim is barred" (p. 1020), citing both CPLR 213-a and RSL §26-516. See also, Meyers v. Frankel, 292 AD2d 575,576 (2d Dept. 2002) ("The four-year Statute of Limitations applicable to rent overcharge claims commenced running with the first overcharge alleged"); Newgarden v. Theoharidow, 247 AD2d 367 (2d Dept. 1998).

In seeking to sustain their claims, plaintiffs rely on the case of Crimmins v. Handler & Company, 249 AD2d 89 (1st Dept. 1998). There DHCR issued an order in 1987 finding that the plaintiff-tenant had been overcharged between 1984 and 1986 and directed the owner to "roll back" the rent to the lawful amount and make a refund to the tenant. In 1989 DHCR issued another order and directed a rent reduction for failure to provide required services. The tenant [*3]did nothing to enforce the orders until 1996 when she instituted an action to recover damages and penalties arising out of the overcharge. The court held that, to the extent the tenant sought enforcement of the DHCR order, the matter was not justiciable in that the RSL provided that the tenant had the option of taking a 20% offset against the monthly rent or filing the overcharge order as a judgment and employing the enforcement procedures set forth in Article 52 of the CPLR. However, it went on to rule that the tenant could recover overcharge damages for the period beginning four years prior to commencement of the action, concluding (p. 91): "This Court construes the statutory language, An action on a residential rent overcharge shall be commenced within four years of the first overcharge alleged', to mean that the action must be brought within four years of the first month for which damages are sought to be recovered and not, as defendants suggest, that an action is forever barred where the overcharge extends over a period in excess of four years."

Subsequent cases have demonstrated that the basis for the Crimmins decision is that the "rent reduction order issued prior to the four-year limitation period, but still in effect at the time of the overcharge complaint, ... imposed a continuing obligation on the landlord to reduce rent, (and) where a duty imposed prior to a limitations period is a continuing one, the statute of limitations is not a defense to actions based on breaches of that duty occurring within the limitations period" [Condo Units, LP v. DHCR, 4 AD3d 424, 425 (2004)]. In Thelma Realty Co. v. Harvey, 190 Misc 2d 303 (A. Term, 2nd Dept. 2001), the court in referring to the four-year Statute of Limitations provided in CPLR 213-a and RSL §26-516 stated that the "Legislature ... neither contemplated nor provided for the Crimmins-type situation, involving breaches within the four-year period of a duty imposed by an order issued prior thereto" (p. 306). See also, Hollis Realty Company v. Glover, 179 Misc 2d 522 (A. Term, 2nd Dept. 1999); 446 Realty Co. v. Higbie, 196 Misc 2d 109 (A. Term, 1st Dept. 2003).

However, the decisions in Crimmins and its progeny do not aid plaintiffs as there is no prior order issued by any agency regarding the rents involved herein that could in any way be deemed a "continuing order" that remained violated within the period of limitations. Hence, these actions first commenced eight to ten years after the first alleged overcharge are barred by the period of limitations set forth in CPLR 213-a. The fact that none of the above-cited cases involved loft space is of no significance as, while the law and regulations with respect to the occupancy of such space are different from that governing premises subject to the RSL, §213-a applies to all rent overcharge claims of "residential" tenants and plaintiffs do not dispute that they occupy their premises for residential purposes.

In light of the foregoing, the Clerk shall enter judgment in each of the three actions dismissing the complaint.

Dated: July 28, 2004________________

J.S.C.