Bianco v Howard
Annotate this CaseDecided on April 28, 2010
Civil Court of the City of New York, New York County
George Bianco, Petitioner,
against
Louise Howard and GARY GRAHAM GILBERT, Respondents.
076699/2009
Cornicello & Tendler, LLP, New York City (Jay H. Berg of counsel), for petitioner.
Collins, Dobkin & Miller, LLP, New York City (Seth A. Miller of counsel), for respondent.
Gerald Lebovits, J.
This is a holdover proceeding in which petitioner, George Bianco, seeks to recover an apartment that respondents, Louise Howard and her husband, Gary Graham Gilbert, rent in petitioner's building, which is located at 123 West 85th Street in New York County.
Petitioner owns the building in question and a house in Westchester County. The subject apartment is rent-stabilized. Petitioner seeks to recover possession of the apartment because he intends, he states, to renovate the building to convert it from a nine-unit building into a single-family residence for himself and his family. Respondents state that because petitioner has a home in Westchester County, petitioner has no intention to use the building for his or his family's use. In addition to possession, petitioner also seeks the fair-market value of use and occupancy of the apartment at a rate of $2250 per month.
In their answer, respondents asserted an objection in point of law, a jury demand, two counterclaims, and seven affirmative defenses. As a first objection in point of law, respondents argue that petitioner fails to state a cause of action because, they allege, petitioner's notice does not meet the requirements of RPAPL 741. Respondents' affirmative defenses state (1) that the proceeding is premature and not suitable for adjudication, (2) that the petition fails to state a cause of action because Howard's husband lives in the apartment and was never served with a nonrenewal notice, (3) that the other tenants in the building are necessary parties who need to be joined, (4) that petitioner has unclean hands, (5) that petitioner makes no claim that the apartment will become deregulated in the future and thus that the demand for fair-market use and occupancy is an illegal demand for an overcharge, (6) that petitioner's actions constitute a [*2]retaliatory eviction, and (7) that petitioner's cause of action unconstitutionally deprives respondents of equal protection of the law. Respondents' first counterclaim is that they are entitled to damages and punitive damages as a result of the alleged retaliatory eviction. Respondents' second counterclaim asserts that they are entitled to attorney fees.
Respondents move to dismiss under CPLR 3211(a) (7) asserting that petitioner does not have a viable cause of action in requesting a money judgment for the apartment's fair-market use and occupancy and that petitioner's demand for fair-market use and occupancy is an illegal overcharge. Petitioner cross-moves requesting (1) that respondents' objection in point of law be stricken on the ground that it has no merit, (2) dismissal of all seven affirmative defenses, (3) summary judgment dismissing respondent's first counterclaim, and (4) that respondents' jury demand be stricken.
Respondents' CPLR 3211(a) (7) motion must be denied. Petitioner has stated a valid cause of action. Under Rent Stabilization Code (RSC) (9 NYCRR) §§ 2524.4 and 2524.4 (a) (1), an "owner . . . may commence an action or proceeding to recover possession . . . . for such owner's personal use and occupancy . . . or for the use and occupancy of a member of his or her immediate family as his or her primary residence in the City of New York . . . ." In his nonrenewal notice, petitioner alleges that he intends to renovate the building to convert it for his and his family's use. Concerning petitioner's demand for fair-market use and occupancy, RPAPL 601 provides that "[i]n an action to recover the possession of real property, the plaintiff may recover damages for withholding the property, including the rents and profits or the value of the use and occupation of the property for a term not exceeding six years . . . ." For this reason, respondents' motion to dismiss is denied.
Petitioner's cross-motion to strike respondents' first objection in point of law is granted. Respondents argue that they are married and living together in the apartment and that petitioner incorrectly states respondents' interest by listing Gilbert as an undertenant rather than as a tenant. Gilbert is not listed on the lease as a tenant. Respondents admit that they have been living in the apartment for 20 years and that Howard had her lease renewed in the past. Howard also admits that previous landlords refused to add Gilbert the lease. Respondents do not allege that Gilbert has ever been named on the lease as a tenant. There is no reason to treat Gilbert as a tenant for the purpose of requiring petitioner to serve a nonrenwal notice on him when all documentation leads to the conclusion that he is not a tenant.
Respondents also allege that petitioner's nonrenewal notice is faulty because it fails to state the grounds for nonrenewal and adequate facts to support those grounds. In looking at a nonrenewal notice, "the appropriate standard for assessment of the adequacy of notice is one of reasonableness in view of all attendant circumstances." (Hughes v Lenox Hill Hosp., 226 AD2d 4, 17 [1st Dept 1996], lv denied, 90 NY2d 829 [1997].) If the notice "provide[s] the necessary additional information to enable the tenant respondent to frame a defense . . . . [It is] therefore adequate to meet the tests of reasonableness and due process." (Jewish Theological Seminary of America v Fitzer, 258 AD2d 337, 338 [1st Dept 1999].) Petitioner stated all the relevant [*3]information in his nonrenewal notice and timely served it on Howard. Because petitioner did not have to give Gilbert separate nonrenewal notice, petitioner correctly stated the parties' interest. Petitioner stated his own interest in the building and his future plans for the building, a description of the building itself, and his relationship to Howard. In light of all the information provided in petitioner's nonrenewal notice, petitioner's nonrenewal notice is reasonable.
Petitioner's cross-motion to dismiss respondents' first affirmative defense is granted. Respondents argue that this proceeding is premature and not ripe to adjudicate. The Honorable Joseph E. Capella decided this same claim in a proceeding involving petitioner and another tenant in the same building and found that this proceeding is not premature. (See Bianco v Sciaulino, 26 Misc 3d 780, 782 [Hous Part, Civ Ct, NY County 2009].) This court agrees with this aspect of that decision. Respondents argue that petitioner intends to convert the building into his and his family's home and therefore that the claim for use and occupancy may not succeed unless outside events occur. Respondents refer to the other tenants leaving the building. But "[w]hile the amount of time that elapses before the petitioner can obtain possession of all the units in the building will depend upon a variety of factors, including the expiration dates of each of the applicable leases and/or the length of any ensuing litigation, this does not mean that the instant proceeding is not ripe."(Id. at 782.) Petitioner cannot be stopped from initiating this proceeding based on the rental status of the other tenants in the building.
Petitioner's cross-motion to dismiss respondents' second affirmative defense is granted. Petitioner did not need to serve Gilbert with his own copy of the nonrenewal notice. Respondents note that RSC § 2522.5 (g) (1) provides that "the tenant shall have the right to have his or her spouse . . . added to the lease or any renewal thereof as an additional tenant where said spouse resides in the housing accommodation as his or her primary residence." Respondents, who are married, argue that the prior landlords refused to add Gilbert's name to the lease. Because the Rent Stabilization "Code defines a tenant' as a party to a lease or rental agreement, an owner must look to the tenant(s) listed on that last expiring lease agreement in order to determine who is entitled to a renewal lease. It logically follows that only the tenant or tenants listed on the last expiring lease must be given notice that they will not be offered a renewal lease." (Katz Park Ave. Corp. v Olden, 158 Misc 2d 541, 546 [Hous Part, Civ Ct, NY County 1993] [emphasis in the original].) Gilbert might have had the right to be added to the lease, but he is not listed as a tenant on the apartment's lease and, to the court's knowledge, he never has been.
Petitioner's cross-motion to dismiss respondents' third affirmative defense is granted. No necessary parties need to be joined. Respondents argue that petitioner's desire to recover the building cannot happen unless the status of the other tenants in the building, especially those tenants in deregulated apartments, is determined and that this makes them necessary parties. Referring again to Judge Capella's decision in Bianco, "[a]lthough a variety of factors may come into play, it is not beyond possibility that the petitioner might obtain possession of the other apartments in this building . . . . [D]ismissal [of petitioner's claim] on this ground would appear to require some speculation as to what will ensue during the pendency of this litigation." (Bianco, 26 Misc 3d at 782-83.) To regain possession of the subject apartment, petitioner need not file [*4]holdover proceedings against all the tenants in the building.
Concerning respondents' fourth affirmative defense that petitioner has unclean hands, respondents argue that petitioner's plans depend on unlawfully deregulating the rent-stabilized apartments in the building. Respondents' defense of unclean hands is preserved for trial only to the extent that petitioner must prove his good-faith intention to occupy the subject apartment for his and his family's use.
Petitioner's cross-motion to dismiss respondent's fifth affirmative defense is granted. Respondents argue that petitioner's demand for fair-market use and occupancy is an illegal overcharge because the apartment is rent stabilized and because petitioner has not shown that the building will become deregulated in the future. Respondents assert this as the basis for their motion to dismiss. However, landlords may recover fair-market use of occupancy for tenants who unlawfully hold over after their lease expires. A demand for fair-market value is not an illegal overcharge even if an apartment is rent stabilized.
Petitioner's cross-motion to dismiss respondents' sixth affirmative defense of retaliatory eviction is granted. Respondents argue that this proceeding constitutes a retaliatory eviction in response to their attempts to exercise their rights as tenants consistent with RPL 223-b (1) (b). Respondents allege that soon after petitioner bought the building petitioner trespassed into the apartment while they were not home, in violation of their rights. Respondents state that they complained about this to their prior landlord, who informed them that the building had been sold and that petitioner was entering the apartments. Respondents also argue that petitioner has filed this proceeding in retaliation to their unwillingness to negotiate a buy-out with him.
In conjunction with their retaliatory-eviction defense, respondents argue, as their first counterclaim, that they are entitled to damages as a result of retaliatory eviction. Petitioner cross-moves for summary judgment on this counterclaim. In response, petitioner argues under RPL 223-b (1) (a) that respondents have not shown that petitioner has filed this proceeding within six months of a complaint to a government agency and therefore that there is no retaliatory eviction. Respondents' counterclaim for damages is not cognizable. Respondents admit that because they never complained to a government agency, they cannot get the benefit of the presumption of retaliatory eviction. Also, respondents offer no evidence that petitioner violated their rights. There is no proof of a trespass or of failed, illicit buy-out negotiations other than respondents' conclusory, hearsay-based assertions that both events took place. For these reasons, petitioner's cross-motion to dismiss this retaliatory eviction defense is granted. Similarly, petitioner's cross-motion for summary judgment against respondents' first counterclaim for damages is granted.
The court grants petitioner's cross-motion to dismiss respondents' seventh affirmative defense. Respondents argue that allowing petitioner to assert a cause of action for owner use under RSC § 2524.4 (a) is unconstitutional because it would deprive them of equal protection under the law. Respondents argue that the law is unconstitutional because it denies tenants [*5]protections that they would get if they were living other counties in New York. RSC § 2524.4 gives owners a valid claim to recover possession from a tenant. RSC § 2524.4 (a) (2), however, provides for two exceptions in which an owner shall not recover possession. It provides that "[t]he provisions of this subdivision shall not apply where a tenant or the spouse of a tenant . . . is a senior citizen or disabled person . . . ." Respondents note that in other counties outside New York City, the law offers a third exception preventing owners from recovering possession if a tenant has been living in the building for 20 years. Respondents argue that Howard has been living in the apartment for more than 20 years and would get the benefit of this third exception if she lived outside New York City, where this exception applies. Respondents argue that this differential treatment is unconstitutional. The constitutionality of RSC § 2524.4 (a) is subject to a rational-basis review, and there is a rational justification for the classification here. Although petitioner makes no argument for the rationality of the classification, the case law related to this constitutional question states that the discrepancies in the law pass the rational-basis test. (See e.g. Buchannan v Pataki,2003 WL 22208374, at *4 [SD NY Sept. 23, 2003]; Brusco v Armstrong, 191 Misc 2d 272, 274 [App Term 1st Dept 2001].) Respondents argue that Buchanan used faulty and outdated statistics to decide that the discrepancy in the law is reasonable and therefore constitutionally permissible. Respondents, however, offer no justification for their assertions that the information in Buchanan is faulty and provide no new evidence to stand in place of the information they consider outdated. Further, in addition to the rationale provided by the case law for the discrepancy, the courts in those cases were reluctant to find an exception where the Legislature did not provide one. In light of this, petitioner's cross-motion to dismiss respondents' affirmative defense is granted.
Petitioner's motion to strike respondents' jury demand is denied. Petitioner argues that Howard's renewed lease contains a jury-waiver clause. Howard observes that her initial lease is missing and that there is no proof that the lease contained a jury-waiver clause. Due to this, the terms of that initial lease cannot be inferred from subsequent renewals. In Camilleri v Pena, the Appellate Term noted that the right to a jury trial is fundamental. (21 Misc 3d 145 [A], 2008 Slip Op 52546 [U], *1, 2008 WL 5336576, 2008 NY Misc LEXIS 7142 [App Term, 1st Dept, Dec 22, 2008].) In Camilleri, the landlord's motion to strike the tenant's jury demand was denied. Citing RSC § 2522.5 (g), the court found that "any renewal lease [shall] be on the same terms and conditions as the expired lease." (2008 NY Slip Op 52546 [U] at *1.) The court in Camilleri found that the landlord's reliance on subsequent renewal leases was misplaced because without an initial lease, the landlord could not show that he was in compliance with the RSC. In that case, like here, neither party produced the original lease, and the court denied the landlord's motion to strike. Here, because neither party can produce the original lease, there is no way to know whether Howard waived her right to a jury trial.
Respondents' motion to dismiss is denied, and petitioner's cross-motion striking respondents' objection in point of law and dismissing respondent's affirmative defenses are granted. Summary judgment on respondents' first counterclaim is granted as well. Petitioner's cross-motion to strike respondent's jury demand is denied, and respondents' defense of unclean hands is preserved for trial to the extent indicated. In addition, respondents' second counterclaim [*6]requesting attorney fees is also preserved for trial
This opinion is the court's decision and order.
Dated: April 28, 2010
J.H.C.
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