Columbus 95th St. LLC v Fitzmaurice

[*1] Columbus 95th St. LLC v Fitzmaurice 2010 NY Slip Op 50848(U) [27 Misc 3d 1223(A)] Decided on March 31, 2010 Supreme Court, New York County Feinman, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 31, 2010
Supreme Court, New York County

Columbus 95th Street LLC, Plaintiff,

against

Patrick Fitzmaurice, RITA FITZMAURICE, and RYAN FITZMAURICE, Defendants.



108198/2009E



For the Plaintiff:

Kossoff & Unger

By: Joseph S. Goldsmith, Esq.

217 Broadway, Suite 401

New York, NY 10007

(212) 267-6364

For Defendants:

Collins, Dobkin & Miller, LLP

By: W. Miller Hall, Esq.

277 Broadway, 14th Floor

New York, NY 10007

(212) 587-2400

Paul G. Feinman, J.

Defendants move to dismiss the complaint pursuant to CPLR 3211 (5), (7), and (8) and seek attorneys' fees pursuant to Real Property Law § 234. For the reasons discussed below, the motion is denied.

Background

Plaintiff owns the premises located at 95 West 95th Street, New York County. Until March 3, 2006, the premises was subject to the Article II of the Private Housing Finance Law, commonly known as the Mitchell-Lama Law. It is undisputed that, since then, the premises has been subject to the Rent Stabilization Code (see 9 NYCRR 2520 et seq.; Emergency Tenant Protection Act of 1974, L 1974, ch 576, § 4).

In April 2004, Patrick and Rita Fitzmaurice completed and executed an application to reside in the premises. They listed that they would be the sole occupants along with their daughter. Patrick also executed a notarized letter stating that he intended the premises to be his primary residence, but that he would retain ownership of his residence in West Nyack, Rockland County.

On May 24, 2004, Patrick and Rita executed a lease for an apartment within the premises. In March 2006, Columbus House, Inc., plaintiff's predecessor in interest, was dissolved and the premises became subject to the Rent Stabilization Code, rather than the Mitchell-Lama Law. Defendants' lease expired on April 30, 2008. In June 2008, Columbus 95th Street LLC commenced a proceeding against defendants in Civil Court, Housing Part (Kaplan, J.), which [*2]was dismissed because the Golub notice to terminate the tenancy on the grounds of non-primary residence was not timely served within the statutory window (see Rent Stabilization Code [9 NYCRR] §§ 2524.2 [c] [2], 2524.4 [c] [requiring service "at least 90 and not more than 150 days prior to the expiration of the lease term"]).

In June 2009, plaintiff commenced this action. The complaint alleges seven causes of action, all of which seek the same relief: a declaration pursuant to CPLR 3001 that defendants ought to be ejected and that Ryan is not entitled to occupancy nor succession rights. Each cause of action seeks the relief for an ostensibly different reason: (1) because defendants violated the Mitchell-Lama Law by failing to occupy the premises as their primary residence; (2) because defendants violated 28 RCNY 3-02 (n) (4) ("It is required that the apartment of the tenant/cooperator be at initial occupancy and continue to be his or her primary place of residence"); (3) because defendants are not entitled to the rent-stabilized protection and Ryan does not have succession rights to the premises; (4) "[b]ased on [d]efendants' fraud in deceiving [p]laintiff's predecessor-in-interest that they were residing in the [a]partment; (5) because "[p]laintiff's predecessor in interest would have had just cause to terminate [defendants'] tenancy"; (6) because of their "fraud in concealing the fact that they were not primarily residing in the [a]partment"; and (7) because of their "fraud in concealing who was actually residing in the [a]partment."

Analysis

I. Motion to Dismiss Based on Res Judicata—CPLR 3211 (a) (5)

First, defendants move to dismiss on the grounds of res judicata (see CPLR 3211 [a] [5]). Once a judgment on the merits has been rendered, the doctrine of res judicata prohibits a party from subsequently litigating a claim or theory of a recovery that arises out of the same transaction (see Matter of Josey v Goord, 9 NY3d 386, 389-390 [2007]; Schwartzreich v E.P.C. Carting Co., 246 AD2d 439, 440-441 [1st Dept 1998]). Here, the issue is whether defendants' alleged fraud renders their right to possession, if any, void at inception. In the earlier case, the Housing Court decided a single narrow issue: whether the court could exercise personal jurisdiction over the tenants when the notice of non-renewal was served on the doorman. In its decision, the Housing Court acknowledged that while service on a doorman may be acceptable, in certain circumstances, that on the facts before him, the service was inadequate and the Golub notice untimely.

While no party is entitled to a second bite at the proverbial apple, it cannot be said that plaintiff's seven causes of action here are an attempt to re-litigate the claims commenced in the prior litigation because New York's transactional approach to res judicata only prevents the re-litigation of a claim " once a claim is brought to a final conclusion'" (Matter of Hunter, 4 NY3d 260, 269 [2005] [emphasis added], quoting O'Brien v City of Syracuse, 54 NY2d 353, 357 [1981]; accord Matter of Reilly v Reid, 45 NY2d 24, 29-30 [1978]). A claim cannot be said to have been brought to a final resolution "on the merits" when it has been dismissed on the grounds of a motion to dismiss for lack of personal jurisdiction (see NAMA Holdings, LLC v Greenberg Traurig, LLP, 62 AD3d 578, 578-579 [1st Dept 2009]; Wynn v Security Mut. Ins. Co., 12 AD3d 1100, 1100 [4th Dept 2004]). Such a "dismissal is not the equivalent of a final disposition on the merits" (Lamar Outdoor Adv. v City Planning Commn. of Syracuse, 296 AD2d 841, 842 [4th Dept 2002]). Thus, this branch of defendants' motion is denied. [*3]

II. Motion to Dismiss Based on Failure to State a Cause of Action—CPLR 3211 (a) (7)

Next, the parties essentially dispute the characterization of plaintiff's claims. Defendants would have this court believe that plaintiff has impermissibly commenced a declaratory action to circumvent the unfavorable disposition of Housing Court proceeding. However, plaintiff's claims here clearly sound in fraud. Primarily, plaintiff is arguing that defendants are not entitled to the protections afforded by the rent stabilization laws because their fraud, which allegedly occurred while the premises was still subject to Mitchell-Lama, rendered the initial lease void at inception and any rights purportedly flowing therefrom a nullity.

In the context of a motion to dismiss under 3211 (a) (7), the court must "determine only whether the facts alleged fit within any cognizable legal theory" (Vig v New York Hairspray Co., L.P., 67 AD3d 140, 144-145 [1st Dept 2009]). "It is axiomatic that . . . the pleading is to be afforded a liberal construction, the facts alleged in the complaint accepted as true, and the plaintiff accorded the benefit of every possible favorable inference" (Mandarin Trading Ltd. v Wildenstein, 65 AD3d 448, 458 [1st Dept 2009]). "The test on a motion to dismiss for insufficiency of the pleadings is not whether the plaintiff has artfully drafted the complaint but whether, deeming the complaint to allege whatever can be reasonably implied from its statements, a cause of action can be sustained" (Ambassador Factors v Kandel & Co., 215 AD2d 305, 306 [1st Dept 1995] [emphasis added], quoting Feinberg v Bache Halsey Stuart, 61 AD2d 135, 137-138 [1st Dept 1978]).

To state a claim for fraud, plaintiff must allege "a material misrepresentation of a fact, knowledge of its falsity, an intent to induce reliance, justifiable reliance . . . and damages" (Eurycleia Partners, LP v Seward & Kissel, LLP, 12 NY3d 553, 559 [2009]). Here, plaintiff alleges that "[d]efendants, in their application, claimed that their son, Ryan, would not be residing with them" and that Patrick, Rita, and Jaclyn Fitzmaurice would be "the only occupants of the [a]partment." Plaintiff also alleges that in July 2005, Patrick and Rita asked the management company to place their son, Ryan, on the lease because they wanted him to live with them. Allegedly, Jaclyn then wrote a letter to the plaintiff's predecessor-in-interest asking to remove her name from the lease because she would be moving to the defendants' home in West Nyack.[FN1] Ryan executed an affidavit in which he attested that "[t]he subject premises have been [his] primary residence since June 2004." This is in direct violation of Rita and Patrick's explicit representation in the lease which states "that the Apartment shall be occupied only by Tenant and such other persons listed and approved on the application submitted in connection with this Lease." Patrick and Rita also expressly "warrant[ed] the accuracy of all the statements made in the application." Certainly, giving plaintiff the "benefit of every favorable inference as required on a motion to dismiss," it can be inferred that the predecessor-in-interest relied on defendants' [*4]various representations and that such reliance was reasonable (Reichenbaum v Cilmi, 64 AD3d 693, 694 [1st Dept 2009]). Further, damages are readily capable of being calculated because but for defendants' alleged fraud, plaintiff would not have been unlawfully disseised of premises. Therefore, the court concludes that defendants have failed to establish their entitlement to pre-answer dismissal because plaintiff has sufficiently alleged a claim for fraud for the purposes of surviving a motion to dismiss. The court notes that it need not determine at this juncture the precise extent and nature of any potential remedy should a fraud be found to have occurred.

III. Motion to Dismiss Based on Lack of Personal Jurisdiction—CPLR 3211 (a) (8)

Finally, defendants argue that this "court does not have personal jurisdiction over the respondent[s] as previously determined by [t]he New York City Civil Court." Other than this single allegation, defendants do not address this argument at all; they make no mention of the propriety of service made upon them here in this plenary action. Whether the Civil Court of New York had personal jurisdiction over the respondents in the prior proceeding (see L & T Index No. 071753/2008) has absolutely no bearing on whether this court has personal jurisdiction over the defendants in this action. Thus, this branch of defendants' motion is denied without further comment. Accordingly, it is

ORDERED that defendants' pre-answer motion to dismiss is denied in it entirety and the defendants are directed to answer the complaint within the time period set fort in CPLR 3211 (f); and it is further

ORDERED that the Clerk of Part 12 shall set this matter down for a preliminary conference on May 19, 2010 at 2:15 p.m. in Part 12, 60 Centre Street, Room 212, New York, NY 10007; and it is further

ORDERED that, pursuant to the NY County Protocol for e-filing of papers in this presumptive e-filing part, the parties are directed to upload into the NYEFS e-filing system those papers considered by the court on this motion but not yet electronically filed in order to fully preserve the appealable record leading to this decision and order. The parties may direct any questions about e-filing to the E-Filing Department at newyorkef@courts.state.ny.us or by calling 646-386-3610.

This constitutes the decision and order of the court.

Dated:March 31, 2010_________________________________________

New York, New YorkJ.S.C. Footnotes

Footnote 1: The court notes that both of these letters purport to bear a notary stamp, but neither letter bears a proper jurat because it is undated and "omits the customary sworn to before me' language" (Sparaco v Sparaco, 309 AD2d 1029, 1030 [3d Dept 2003]; see Siegel, NY Prac § 205, at 340 [4th ed]). Moreover, according to the application, which Patrick executed, Jaclyn was 16 years old as of April 4, 2004. If defendants' documents demonstrate their actual intent, which remains to be seen, then Jaclyn, as a minor, would be living in the home in West Nyack alone while her parents and her brother lived at the premises.