Giovanni-Inoue v De La Rosa

[*1] Giovanni-Inoue v De La Rosa 2008 NY Slip Op 50568(U) [19 Misc 3d 1106(A)] Decided on March 11, 2008 Supreme Court, New York County Shulman, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 March 11, 2008
Supreme Court, New York County

Raeanne Giovanni-Inoue, Plaintiff,

against

Ezequiel De La Rosa and James Knehans, Defendants, and 37 West Realty Company, Proposed Defendant-Intervenor.



109716/06



Appearances of counsel:

David E. Frazer, Esq. for plaintiff

Belkin Burden Wenig & Goldman, LLP for defendant 37 West Realty

Goldberg Scudieri Lindenberg & Block, P.C. for defendant Knehans

Martin Shulman, J.

Proposed Defendant-Intervenor 37 West Realty Company ("37 West" or "Owner") has moved to dismiss the complaint of Plaintiff, Raeanne Giovanni-Inoue ("Giovanni" or "plaintiff") for failure to name the Owner as a necessary party, and/or alternatively, to grant 37 West leave to intervene as a defendant, amend the caption to add the Owner as a party defendant and, concomitant with such leave, permission to file its answer to the complaint. Plaintiff cross-moves to now disqualify Joseph Burden, Esq. ("Burden"), a member of the law firm of Belkin, Burden, Wenig & Goldman, L.L.P. (the "Belkin Firm"), and the Belkin Firm from representing 37 West in this action. The cross-motion inter alia rests on this court's July 11, 2007 Decision and Order which disqualified Burden and the Belkin Firm (the "Disqualification Order", annexed as [*2]Exhibit E to 37 West's Dismissal Motion [FN1]) from representing defendant James Knehans ("Knehans"). Plaintiff further opposes 37 West's motion for leave to intervene as a party defendant as untimely and unnecessary, and renews her earlier motion for summary judgment against Knehans on her first cause of action for ejectment which was stayed until such time as Knehans retains new counsel and pending a full and fair opportunity to respond thereto. Both motions and the cross-motion (motion sequences 1 and 3) are consolidated for disposition.

The Disqualification Order

After the Disqualification Order recited the respective arguments of the Owner, Knehans and plaintiff as to whether the Belkin Firm could simultaneously represent the Owner and Knehans, especially when consent was given (i.e., 37 West had actually recommended Burden and the Belkin Firm to Knehans when it learned Knehans was a defendant in this ejectment action), this court then concluded that Burden's and the Belkin Firm's then simultaneous representation of the Owner and Knehans had created an unwaivable conflict of interest. The Disqualification Order therefore directed Burden and the Belkin Firm to cease representing Knehans and afforded Knehans the opportunity to retain new counsel.

Second Disqualification Motion

In her cross-motion, plaintiff now claims the irreconcilable conflict even bars Burden and the Belkin Firm from representing the Owner "against their former client, Knehans . . ." (Frazier Affirmation in Support of Cross-Motion at ¶ 4). Plaintiff rests on the notion that Knehans' prior counsel continues to have a duty of undivided loyalty to its former client, particularly in not disclosing any confidential information counsel obtained from its prior representation of Knehans. Plaintiff then presents a hypothetical example of the type of confidential information gleaned which the Owner could use against Knehans (Id., at Footnote 1).

In opposition to this branch of plaintiff's cross-motion, 37 West's counsel argues that plaintiff glaringly failed "to offer any tangible explanation of what confidence would be breached . . ." (Burden Opp. Aff. at ¶23) upon the Belkin Firm's continued representation of the Owner in this action which would prejudice Knehans, and that in any event, such an objection to such representation would only be for Knehans to make. Knehans has subsequently retained new counsel and filed papers solely opposing that branch of the summary judgment motion seeking his ejectment from the Rear Space. However, Knehans has neither joined plaintiff in seeking to disqualify the Belkin Firm from representing the Owner, nor even alluded to a single fact which would corroborate a betrayal of any conceivable confidential information learned when Burden and the Belkin Firm previously represented him.

Now that Burden and the Belkin Firm no longer represent Knehans, the irreconcilable conflict which marred the prior simultaneous representation of 37 West and Knehans, presently represented by new counsel, has been resolved. Notably, [*3]Burden and the Belkin Firm represent the Owner in related litigation affecting the Building (e.g., the Holdover, Rent Action, etc.) and, where relevant here, before the Loft Board which is presently considering the OATH Report and will ultimately adjudicate the issue of Loft Law coverage, if any, for the 11th Floor Loft. To deprive 37 West of experienced counsel of its choice in this action under these circumstances would be an improvident exercise of this court's discretion especially when plaintiff has made no clear showing that disqualification is presently warranted (see Dominguez v. Community Health Plan of Suffolk, Inc., 284 AD2d 294, 725 NYS2d 377 (2nd Dept., 1995).

Leave to Intervene

It is unnecessary to provide a detailed discussion of the relationship among plaintiff, Knehans and the Owner. It should be patently obvious that 37 West is a necessary party which plaintiff should have named in this action. Plaintiff has not shown any prejudice or that this litigation has been delayed because the Owner waited a year before making this intervention motion. Moreover, and as will be briefly discussed, infra, plaintiff implicitly recognizes she must await the Loft Board's final determination to establish whether she is a protected tenant of the 11th Floor Loft. Accordingly, this court grants the branch of 37 West's motion for leave to serve and file its proposed answer as defendant-intervenor (Exhibit I to Motion). The caption shall be amended to add the Owner as a party defendant. Consequently, the branch of the Owner's motion to dismiss this action for failure to join 37 West as a necessary party as well as the branch of plaintiff's cross-motion to deny the Owner leave to intervene are respectively denied.

Motion for Summary Judgment

Giovanni's initial motion for summary judgment is grounded on the following allegations: (1) plaintiff is one of the record tenants of the 11th Floor Loft and had a legal right of possession thereof pursuant to her most recent renewal lease which was for a six year term commencing July 15, 2000 and expiring July 14, 2006 (Exhibit D to Motion); (2) as determined in the OATH Report, plaintiff is a protected tenant of the 11th Floor Loft which includes the Rear Space Knehans presently occupies pursuant to the July 15, 2006 lease he executed with the Owner; (3) at this juncture, Knehans' claimed possessory interest in the Rear Space appears to be a nullity; (4) even accepting Knehans' claim that Giovanni ceased physically occupying the Rear Space for many years (Knehans' November 19, 2007 Opp. Aff. at ¶ 21), the Owner still did not have a legal right to unilaterally execute a lease with Knehans for the Rear Space and/or grant him any possessory interest therein after the expiration of Giovanni's most recent renewal lease in July, 2006; (5) this is especially so where in both the pending Holdover (stayed and marked off the calendar by stipulation [see Exhibit I to Plaintiff's Summary Judgment Motion]) and Rent Action, the Owner acknowledged plaintiff's possessory interest in the 11th Floor Loft which includes the Rear Space; and (6) Giovanni has never surrendered her legal possessory interest in the Rear Space which renders any lease 37 West executed with Knehans void and warrants his ejectment therefrom.

Based on the following alleged facts which arguably raise materially disputed issues, both 37 West and Knehans contend plaintiff's entitlement to summary judgment is unwarranted:

Plaintiff has stopped paying rent for the 11th Floor Loft including the Rear Space for more than a year ostensibly relying on MDL § 302(b);

Rosa, a former defendant in this action who was a subtenant of the entire Rear Space, historically paid Giovanni rent for the Rear Space, did not physically reside there because he was the purported tenant of the 12th floor loft and unilaterally subleased various bedrooms in the Rear Space, including one to Knehans who occupied same as a licensee for about 4 years;

Tony Cenicola, Giovanni's former co-tenant on the now expired lease for the 11th Floor Loft (Exhibit D to Plaintiff's Summary Judgment Motion), historically occupied the Rear Space where as Giovanni occupied the front space;

The physical layout of the 11th Floor Loft apparently enabled these former co-tenants to reside separately; viz., the Rear Space was separated from the 11th floor front space by a demising wall and both spaces had separate entrances, kitchens and bathrooms (Knehans Opp. Aff. at ¶¶ 8-11);

During the 4 years he occupied a portion of the Rear Space, he observed plaintiff only occupying the 11th floor front space seemingly as her primary residence and illegally subletting the Rear Space without permission to subsidize her rent (Knehans Opp. Aff. at ¶ 18);

Since Knehans executed his own lease with 37 West in July 2006 to occupy the entire Rear Space, he has paid his own utilities and monthly rent directly to the Owner;

37 West has commenced the Rent Action for ejectment against Giovanni and other loft tenants as well as a separate holdover against Giovanni which is presently stayed and marked off the calendar pending a final determination of the Loft Board as to Giovanni's legal status vÍs a vÍs the 11th Floor Loft;

Because Giovanni never resided in the Rear Space and her "commercial lease" has expired, plaintiff is not entitled to eject Knehans and possess the Rear

Space; and

If plaintiff is a protected tenant, her status attaches only to the 11th floor front space, [*4]and not the Rear Space plaintiff never occupied.

Discussion

The proponent of a motion for summary judgment "must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issue of fact." JMD Holding Corp. v. Congress Financial Corp., 4 NY3d 373, 384, 795 NYS2d 502, 510 (2005). The movant's failure to make a prima facie showing requires denial of the motion regardless of the sufficiency of the opposing papers. Id. However, if the movant makes such a showing, the burden shifts to the non-movant to demonstrate the existence of factual issues requiring trial. Dallas-Stephenson v. Waisman, 39 AD3d 303, 306, 833 NYS2d 89, 92 (1st Dept 2007). Summary judgment is appropriate where the nonmovant's opposition to the motion is entirely conjectural and there is no genuine issue of fact to be resolved. See Shaw v. Time-Life Records, 38 NY2d 201, 207, 379 NYS2d 390, 395 (1975).

As noted in the Disqualification Order, the OATH Report concluded that Giovanni is a protected tenant of the 11th Floor Loft. Nonetheless, the Loft Board is poised to either adopt or reject same in whole or in part. And there are clearly genuine issues of fact to be administratively adjudicated. If the Loft Board were to exempt the Building from coverage under the Loft Law inter alia that could render Giovanni's claimed possessory interest in the Rear Space a nullity. Regardless of either outcome, the Loft Board's final determination will presumably invite an Article 78 challenge by either Giovanni or 37 West.

Here is what we do know. Plaintiff has not denied that she illegally sublet the Rear Space to Rosa (see ¶ 12 of Giovanni's Affidavit in Support of Summary Judgment Motion). Plaintiff has neither challenged the physical description of the 11th Floor Loft, nor claims that she never physically occupied the Rear Space throughout her tenancy in the Building. Plaintiff's lease with the Owner has expired and the former has refused to pay 37 West any rent pending a final determination of her occupancy status principally relying on MDL § 302(b).[FN2] With these undisputed facts in mind, the legal position of Giovanni and 37 West still remains unsettled and each party intends to fully and conclusively "litigate" the coverage issue before the Loft Board. Were this court to decide plaintiff's summary judgment motion in her favor, its ruling could constitute an impermissible collateral attack (see Jemrock Realty Co. v. Roldan, 256 AD2d 122, 681 NYS2d 122 [1st Dept., 1998]). On a practical level, a final determination of the Loft Board could either vitiate this ejectment action or any chance of plaintiff successfully obtaining summary judgment.

Based on the foregoing, it is hereby

ORDERED that plaintiff's motion (seq. 001) is denied in its entirety; and it is [*5]further

ORDERED that 37 West Realty Company's motion (seq. 002) is granted to the extent that 37 West Realty Company is permitted to intervene in the above-entitled action as a party defendant, and is otherwise denied; and it is further

ORDERED that the summons and complaint in the above-entitled action be amended by adding 37 West Realty Company thereto as a party defendant; and it is further

ORDERED that 37 West Realty Company's proposed answer in the form annexed to its moving papers shall be deemed served within 20 days from service of a copy of this decision and order with notice of entry; and it is further

ORDERED that counsel for intervenor 37 West Realty Company shall serve a copy of this order with notice of entry upon the New York County Clerk and upon the Clerk of the Trial Support Office, who are directed to amend their records to reflect such change in the caption herein; and it is further

ORDERED that plaintiff's cross-motion (seq. 002) is denied in its entirety; and it is further

ORDERED that further prosecution of and proceedings in this action are stayed pending the final determination of the Loft Board and after exhaustion of administrative remedies; and it is further

ORDERED that any party may make an application by order to show cause to vacate or modify this stay upon the final determination of the proceedings before the Loft Board and after exhaustion of administrative remedies.

This constitutes this court's Decision and Order. Courtesy copies of same have been provided to counsel for the parties.

DATED: New York, New York

March 11, 2008

___________________________

HON. MARTIN SHULMAN, J.S.C. Footnotes

Footnote 1: The Disqualification Order set forth the factual background and procedural history of this case which is incorporated here by reference as if fully recited in this Decision and Order. The defined terms used in the Disqualification Order will be used here as well.

Footnote 2: Notwithstanding the expired lease was denominated a commercial one, Giovanni's residential occupancy of the 11th floor front space apparently raises a material issue of non-conforming use in violation of the present certificate of occupancy arguably justifying her and her co-tenants' refusal to pay rent resulting in 37 West's prosecution of the Rent Action.