Joe Lebnan LLC v Oliva
Annotate this CaseDecided on December 17, 2009
Civil Court of the City of New York, Kings County
Joe Lebnan LLC, Petitioner,
against
Arias Oliva, Respondent, "JOHN DOE" and "JANE DOE," Respondents-undertenants.
62440/2009
Attorneys for Petitioner:
Gutman, Mintz, Baker
& Sonnenfeldt, P.C.
813 Jericho Turnpike
New Hyde Park, NY 11040
(516) 775-7007
Attorneys for Respondent:
Brooklyn Legal Services Corp. A
Bushwick Office
Attn: Vance Gathing, Esq.
1455 Myrtle Avenue 2nd Floor
Brooklyn, New York 11237
(718) 487-0800
Laurie L. Lau, J.
By post-trial decision and order dated August 25, 2009, this court dismissed this holdover proceeding , finding that the proceeding's commencement constituted an attempt to evict respondent's for retaliatory purposes. Petitioner now moves to reargue the decision to the extent that it found that petitioner engaged in retaliatory eviction, and respondent cross-moves in support of petitioner's application to set aside the determination of retaliatory eviction, and for a determination that237 Jefferson Street, in Brooklyn (the "Building") is subject to the Rent [*2]Stabilization Law and Code, and for a finding that petitioner has wilfully overcharged respondent. Under the index number of a companion proceeding entitled Joe Lebnan LLC v Miguel Noula, Index No. L & T 63517/2009, respondent moves for an order requiring petitioner to maintain utilities and basic services at the Building and to compensate tenants for the lack of such services, and petitioner cross-moves for use and occupancy. The parties have further stipulated that the disposition of these motions shall each be binding as to the other proceeding.
Both parties, albeit for very different reasons, ask this court to set aside its finding that retaliatory eviction occurred. Petitioner urges that the court do so because, it claims, the court's conclusion is errant. Respondents, while maintaining that respondents presented ample evidence presented to support a finding of retaliatory eviction, asks that the court set aside the finding and instead make a determination based on the merits of respondents' claim that the Building is subject to the Rent Stabilization Law.
Initially, the court notes that a party seeking to avoid a determination based on a particular claim or defense has two readily available options - it can either choose not to advance the claim or defense, or it can withdraw the claim or defense prior to submission of the matter for determination. Had either of those options been exercised here, the court could have avoided wasting increasingly finite judicial time and resources by rendering a decision based on claims intended to be heard by the court. Here, however, both parties seem to be in agreement, essentially stipulating that the motion be granted to the extent of setting aside the finding of retaliatory eviction. Since "parties to a civil dispute are free to chart their own litigation course," (Mill Rock Plaza Associates v Lively, 224 AD2d 301, 301 [1st Dept 1996]), the court will grant petitioner's motion and the branch of respondent's cross-motion asking this court to set aside the finding that petitioner engaged in retaliatory eviction.
The remaining branch of respondent's motion seeks a determination that the Building contains more than six units and is therefore subject to the Rent Stabilization Law; the issue was before the court but not reached in the post-trial decision because the court found retaliatory eviction to constitute a defense.
The post-trial decision included a detailed review of the testimony and documentary evidence, one that will not be repeated here. During the trial, the court took into evidence the Certificate of Occupancy for the building, which listed two apartments on the third floor of the Building, two apartments on the second floor, one apartment and a dentist's office on the first floor, and no residential occupancy of the basement of the Building.
Petitioner's agent, Mendel Farkas ("Farkas"), was petitioner's only witness, and his testimony was consistent in its assertion that nobody resided in the basement of the Building, and that the basement contained no residential units. Francisca Liriano ("Liriano"), petitioner's first witness, testified that she was not only aware of the existence of apartments in the basement of the [*3]Building, but had lived in one of them. She also asserted that she had lived in an apartment designated 1A, in the front of the Building on the first floor; Mendel Farkas had denied during his testimony that any apartment existed in front on the first floor. While Farkas offered generalized denials, Liriano offered specific testimony, describing the layout of the basement apartment, and specific characteristics, such as its layout, its poor condition, and its odor. Pedro Medina, a former tenant of the Building, testified that he had also resided in the first floor front apartment, and described its layout in detail. Miguel Noula, Jessica Vaquero, Arias Oliva and Araceli Cedillo each of whom lived or had lived in the Building, described it as containing six or more apartments.
The credible evidence establishes that the Building comprised at least six apartments during respondent's occupancy. Petitioner has relied extensively on a series of cases that restrict and limit the coverage of the Emergency Tenant Protection Act of 1974 and the Rent Stabilization Law for spaces converted to residential use. Those cases, however, address the conversion to residential use of commercial spaces outside the time frame of Article 7-C of the Multiple Dwelling Law, which regulates the conversion of commercial loft space to residential usage (See Wolinsky v Kip Yee Realty, 2 NY3d 487 [2004]); Gloveman Realty Corp. v John Jeffreys, 18 AD3d 812 [2d Dept 2005]). Petitioner further relies on the holding of Arrow Linen Supply Co. Inc. v Cardona, 15 Misc 3d 1143[A] [Civ Ct Kings Co 2007]) to support the contention that the principle advanced in Wolinsky would be applicable not just to converted commercial spaces to but to the unlawful conversion of a basement space to residential use. This court, however, declines to follow the holding of Arrow Linen Supply Co. Inc., rendered as it was by a court of coordinate jurisdiction, as it fails to reconcile what appears to be clear authority drawing a distinction between the conversion of loft space for residential use, and the modification of extant residential space to increase the number of residential dwellings.
Here, however, there is no dispute that the certificate of occupancy for the Building contemplated residential use. The salient issue is not the conversion of commercial space but the addition of further residential space in a structure in which such occupancy was already permitted.
It has been held that "[i]n our view, the use of the basement as a sixth housing accommodation over a multi-year period brought the entire building under rent stabilization," (Rashid v Cancel, 9 Misc 3d 130[A] [App Term 2d & 11th Judicial Dists 2005]; Commercial Hotel, Inc. v White, 194 Misc 2d 26, 26 [App Term 2d Dept 2002]). While petitioner has been testimony that basement area of the Building has been gutted, it has been held that "the alleged subsequent reduction in the number of housing accommodations to fewer than six, even if done, as landlord claims ... did not exempt the remaining units from rent stabilization," (Rashid, 9 Misc 3d 130[A] at 1). Under such circumstances, tenants "can be evicted only upon one of the grounds set forth in section 2524.3 of the Rent Stabilization Code and only after being served with the notices required under section 2454.2 of the code," (Commercial Hotel, 194 Misc 2d at 27 [App Term 2d Dept 2002]). Petitioner has also asserted that any alterations might have been [*4]made by the prior owner, but even "[i]f, as landlord claims, he was unaware, when he purchased the building, that the basement had been used as a housing accommodation, landlord's remedy, if any, would lie against the prior owner," (Rashid, 9 Misc 3d 130[a] at 1).
Under the circumstances presented, renewal is granted, and this proceeding, as well as its companion proceeding, Joe Lebnan LLC v Miguel Noula, Index No. L & T 63517/2009, are dismissed, as the Building is subject to the Rent Stabilization Law and petitioner has not articulated a ground for termination cognizable under the Rent Stabilization Code.
Respondent's cross-motion to recover for a rent overcharge are both denied as premature. The premises have not been registered with the New York State Division of Housing and Community Renewal, the Certificate of Occupancy has not been amended to reflect the use of the structure. In the absence of a legal regulated rent, the court has no basis upon which to find an overcharge, or to determine whether the rent charged would even constitute an overcharge.
Petitioner's motion for use and occupancy is denied as both of these proceedings have been dismissed. Finally respondent's motion for an order requiring petitioner to maintain all utilities and basic services is granted to the extent of requiring such utilities and services to be provided to the extent required by law and by any lease executed with respondent in either this proceeding or its companion case. To the extent either respondent seeks compensation for the alleged breach of such requirements, the respondents' claims are severed without prejudice to their reassertion in either a plenary action or as a counterclaim or setoff in any subsequent proceeding commenced by petitioner.
This is the decision and order of the court.
Dated: Brooklyn, New York
December 17, 2009
LAURIE L. LAU, J.H.C.
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