Matter of Bridgeview Garden Apts. LLC v New York State Div. of Hous. & Community Renewal
Annotate this CaseDecided on August 26, 2005
Supreme Court, Richmond County
In the Matter of the Application of BRIDGEVIEW GARDEN APARTMENTS LLC, Petitioner, For an Order and Judgment Pursuant to the Provisions of Article 78 of the New York Civil Practice Law and Rules
against
THE NEW YORK STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL, and MARTHA SULLIVAN, Respondents. SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF RICHMOND
In the Matter of the Application of BRIDGEVIEW GARDEN APARTMENTS LLC, Petitioner, For an Order and Judgment Pursuant to the Provisions of Article 78 of the New York Civil Practice Law and Rules -against- NEW YORK STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL, AND MARK O'CONNOR, Respondents. SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF RICHMOND
In the Matter of the Application of BRIDGEVIEW GARDEN APARTMENTS LLC, Petitioner, For an Order and Judgment Pursuant to the Provisions of Article 78 of the New York Civil Practice Law and Rules -against- NEW YORK STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL, and MICHELE SEBESTO, Respondents. SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF RICHMOND
In the Matter of the Application of BRIDGEVIEW GARDEN APARTMENTS LLC, Petitioner, For an Order and Judgment Pursuant to the Provisions of Article 78 of the New York Civil Practice Law and Rules -against-
against
THE NEW YORK STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL, and ANTHONY RAGUCCI, Respondents.
8157/04
PLAINTIFF ATTY: NEWMAN FINKELSTEIN, LLP
225 BROADWAY - 8TH FLOOR
NEW YORK, NEW YORK 10007
212-619-5400
DEFENSE ATTY: DHCR LITIGATION BUREAU
25 BEAVER STREET - ROOM 707
NEW YORK, NEW YORK 10004
PHONE: NOT GIVEN
Eric N. Vitaliano, J.
This is another installment in an epic landlord-tenant tussle. The odyssey began in 2002 upon the filing of rent overcharge complaints with the New York State Division of Housing and Community Renewal ("DHCR") by several tenants of petitioner Bridgeview Garden Apartments LLC ("Bridgeview"). Over the ensuing years, there have been litigation stops at DHCR, Housing Court, Civil Court, the Appellate Term and the four instant Article 78 proceedings originally brought by the landlord to challenge DHCR's rent overcharge determinations with respect to the tenancies of the individual respondent tenants. By a Decision and Order, dated September 9, 2004, this Court found that Bridgeview had failed to establish that DHCR's determinations in favor of the tenants were in any way arbitrary, capricious or unreasonable or that any of DHCR's conclusions of law were in any way erroneous. Each of the four petitions was, consequently, dismissed and the findings of rent overcharges by DHCR were sustained.
The next stop was a return to Civil Court. In January 2005, though, Bridgeview and the respondent tenants here entered into a Civil Court "so ordered" stipulation that resolved the rent overcharge claims, provided for the renewal of their leases subject to rent stabilization, withdrew all appeals with prejudice and acknowledged that the tenants would move to restore the four Article 78 proceedings to the calendar of this Court for a determination of their claims for legal fees. The motion foretold by the Civil Court stipulation is now at bar. It seeks restoration and [*2]consolidation of the proceedings, for purposes of the current motion, and a single award of legal fees and disbursements covering all matters relating to them.
There is, of course, no dispute that the American rule of jurisprudence requires each party to a litigation to bear that party's own lawyer's fees and expenses. Chapel v. Mitchell, 84 NY2d 345, 349, 618 NYS2d 626, 628 (1994). Compensation for the expense of carrying on litigation cannot be recovered from another absent a right granted either by contract or by statute. The only ground ultimately asserted by the tenants in support of their claims for reimbursement of the reasonable costs of attorney's fees incurred to prosecute, and defend on review, the rent overcharge claims they alleged at DHCR against the landlord is found in Real Property Law §234.
Substantively, §234 provides that where a lease conveys to the landlord a right to recover attorney's fees and expenses incurred in any litigation arising out of a claimed breach by the tenant of a lease covenant, the tenant is to have a reciprocal statutory right to recover such fees and expenses as well. Here, again without dispute, paragraph 27 common to each of the leases conveys a right to whichever side, landlord or tenant, prevails in any action or proceeding regarding the failure of the tenant to pay rent or the tenant's breach of a substantial covenant of the lease. Therefore, as the prevailing party, each of the tenants here would have, for example, a lease right to reasonable legal fees and costs arising out of their successful defense of the summary proceedings in Housing Court and Civil Court. Paragraph 27, however, conveys no contractual right to the tenants to recover such costs incurred in the successful defense of the Article 78 proceedings brought by Bridgview to review DHCR's adverse rent overcharge determinations.
Nevertheless, and the contrary arguments of the landlord notwithstanding, the conveyance by paragraph 27 to the landlord of the contractual right to recover reasonable attorneys fees and disbursements in any litigation brought by the landlord for a rent default or breach of lease covenant by the tenant triggers a further and more substantial right of the tenant to recover attorneys fees and disbursements in accordance with Real Property Law §234. That is, once a tenant's statutory right to recover reasonable attorneys fees and expenses has been activated by the language of the lease, the right conveyed by §234 is not delimited in any way by the words of the lease. Case law is definitive on this point: where the language of a residential lease creates an inchoate statutory right under §234 and where litigation results from the landlord's alleged failure to perform any material covenant under that lease, the effected tenant has a statutory right to collect reasonable legal fees and expenses incurred in that litigation. See Greco v. GSL Enterprises, Inc. 137 Misc2d 714, 716-717, 521 NYS2d 994, 996-97 (Sup. Ct., NY Cty 1987) : see also Salvato v. St. David's School, 307 App Div. 2d 812, 763 NYS2d 42, 44 (1st Dep't 2003); Jocar Realty Co. v. Galas, 176 Misc2d 534, 537, 673 NYS2d 836, 839 (Civ. Ct,. NY Cty 1998). Clearly, the rent overcharge claim advanced by each tenant before DHCR stated a claim for breach of, at least, an implied covenant of the lease. See 119 Fifth Avenue Corp. v. Berkhout, 134 Misc2d 963, 966, 513 NYS2d 642, 644 (Civ. Ct., NY Cty 1987). More importantly, whether the product of an express or an implied lease covenant, the fact that the tenant successfully vindicated a lease right in the context of an Article 78 proceeding and sought recompense of reasonable attorneys fees and expenses in that proceeding as opposed to some other form of action or proceeding is irrelevant to a determination of the tenant's entitlement to [*3]such recompense under Real Property Law §234. See Eaton v. New York City Conciliation and Appeals Board, 56 NY2d 340, 452 NYS2d 358 (1982). Procedurally, each of the respondent tenants could have, pursuant to CPLR §7804 (d), interposed a counterclaim in the respective Article 78 proceeding in which they were named respondent to pursue any claim they might have had under §234 for legal fees and expenses. See West Branch Conservation Association, Inc. v. Planning Board of the Town of Clarkstown, 222 App. Div. 2d 513, 636 NYS2d 61 (2d Dep't 1995).
No such counterclaims, however, were asserted by the tenants in their answers to Bridgeview's Article 78 petitions. To be sure, since New York is not a compulsory counterclaim jurisdiction, the claims were also not lost. CPLR §3019 preserves these putative claims of the tenants for another day. See Batavia Kill Watershed District v. Charles O. Desch, Inc. 57 NY2d 796, 455 NYS2d 597 (1982), aff'g, 83 App. Div. 2d 97, 100, 444 NYS2d 958, 960 (3d Dep't 1981). The fundamental question presented on this motion, therefore, is only whether the parties by their Civil Court stipulation can create a matter in controversy here in the context of the now closed Article 78 proceedings brought by Bridgeview. The Court holds that they cannot as of right; the Court will not in any provident exercise of its discretion.
All in all, this is yet another contortion in a tortured litigation history. The very tenants who now seek to revive actions dismissed on their own motions also opposed at the start an amendment of the Bridgeview petitions to permit joinder of the landlord's colorable claims under Real Property Law §220 for use and occupancy pendente lite. Concurring then in the tenants' opposition, this Court declined to burden judicial review of the DHCR rent overcharge determinations with consideration of the landlord's collateral claims for use and occupancy compensation. 4 Misc 3d 1023 (A), 798 NYS2d 343, 2004 WL 2059552 (Sup. Ct., Richmond County). Especially considering DHCR's sideline role in any such claim by the landlord, the argument for joinder was particularly weak. If anything, with the Article 78 proceedings fully resolved, with all appeals withdrawn with prejudice, and with DHCR still on the sideline, the argument to resurrect these proceedings merely to allow the tenants to assert a §234 counterclaim is even weaker.
Although the Court is flattered that all sides agree that it should be the forum to resolve their dispute about legal fees and expenses, the dispute has nothing to do with the actual issues before the Court in the original proceedings brought by Bridgeview. Regardless how colorable, the motions of the respondent tenants seek to assert fresh claims having no significant bearing on the substance of the claimed rent overcharges which brought the parties to DHCR and Supreme Court in the first place. Without any quibble, the claims for fees and disbursements have no relevance to DHCR, which, although not advancing a position, would technically be dragged back into controversies long ago and finally resolved as to it. Since CPLR §3019 makes all counterclaims under our practice permissive and none compulsory, Batavia Kill Watershed District, supra , the tenants are not hobbled or handicapped by the failure to assert their demand for reasonable attorney's fees and costs as counterclaims in the Article 78 proceedings in a truly fresh action limited to parties actually disputing the issue. Real Property Law §234 affords the tenants a clean, practical and effective alternative for the resolution of this dispute by way of a plenary action in Civil Court. Civil Court is the appropriate forum—no hoops, hurdles or inappropriate parties.
For all the foregoing reasons, the motion of the respondent tenants to restore the four [*4]instant Article 78 proceedings to the calendar and award reasonable attorneys fees and disbursements pursuant to Real Property Law §234 is denied without prejudice to seeking such substantive relief in Civil Court by the commencement or revival of an appropriate action or proceeding. Their motion to consolidate the four dismissed Article 78 proceedings for purposes of this motion is denied as academic.
This constitutes the Decision and Order of the Court.
Dated:Staten Island, New York___________________________
August 26, 2005Eric N. Vitaliano
J.S.C.
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
