Roshodesh v Plotch

[*1] Roshodesh v Plotch 2010 NY Slip Op 51912(U) [29 Misc 3d 1220(A)] Decided on November 10, 2010 Supreme Court, Queens County Markey, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 November 10, 2010
Supreme Court, Queens County

Faramarz Roshodesh, Plaintiff,

against

Adam Plotch, et al., Defendants.



25537 2009



For the Plaintiff:Rothkrug Rothkrug & Spector, LLP, by Simon H. Rothkrug, Esq., 55 Watermill Lane, Great Neck, New York 11021

For the Defendant Gerard Owners Corp.: Rosen Livingston & Cholst, LLP, by Andrew J. Wagner, Esq., 275 Madison Ave., New York, NY 10016

For the Defendant Adam Plotch: Baron & Baron, by Kristen A. Meilak, Esq., 118-21 Queens Blvd., Forest Hills, New York 11375

Charles J. Markey, J.

The following papers numbered 1 to 9 read on this motion by defendant Gerard Owners Corp., dated February 23, 2010, for an order, inter alia, dismissing plaintiff Faramarz Roshodesh's first, second, third, fourth, fifth, and sixth affirmative defenses asserted against the defendant's counterclaims; the cross motion by plaintiff Faramarz Roshodesh, dated April 5, 2010, for, inter alia, an order permitting him to served an amended complaint; and the motion, dated April 8, 2010, by defendant Adam Plotch for an order, pursuant to CPLR 3012(d), compelling plaintiff Faramarz Roshodesh to accept his answer to the complaint.Papers Numbered

Notice of Motion - Affidavits - Exhibits........................................1-3

Answering Affidavits - Exhibits.....................................................4-6

Reply Affidavits..............................................................................7-9 [*2]

The complaint alleges that the plaintiff Faramarz Roshodesh is an incapacitated person who was represented by his guardian ad litem (Thomas Giles) in proceedings in the Civil Court of the City of New York, Queens County, in matters pending under Index Nos. 51429/06 (Proceeding I), 53224/06, and 54568/06. Gerard Owners Corp., a defendant herein, began a non-payment proceeding (Proceeding I) involving cooperative Apartment 7Y in Gerard Towers, located at 70-25 Yellowstone Boulevard, Forest Hills, New York, whose allocated 875 shares were owned by plaintiff Roshodesh. Charlotte Goodman rented Apartment 7Y, a rent-stabilized cooperative apartment.

Pursuant to a decision and order dated March 14, 2008, a Civil Court judge granted a default judgment against Roshodesh for unpaid maintenance in the amount of $13,353.12 in favor of Gerard Owner's Corp. Roshodesh appealed and obtained a stay from the Appellate Term dated July 7, 2008, on the condition, which he met, that he deposit the sum of $35,756.37 with the Court. However, by subsequent decision and order rendered on or about September 26, 2008, the Appellate Term vacated the stay, noting that pursuant to CPLR 5519(a)(2), Roshodesh was entitled to an automatic statutory stay by depositing just the amount of the judgment with the Court. As a result of an error, Gerard Owners Corp. received the entire $35,756.37 that had been deposited with the Court.

Gerard Owners Corp., in receipt of more than sufficient money to satisfy the judgment, nevertheless, served an execution of judgment on the Sheriff, who, on November 19, 2008, without following lawful procedure, including notice to Roshodesh, conducted a sale of the 875 shares allocated to Apartment 7Y. Defendant Adam Plotch made a successful bid in the amount of $96,000, and Gerard Owners Corp. cancelled Roshodesh's proprietary lease for Apartment 7Y and the shares allocated to the apartment and reissued them to Adam Plotch.

The plaintiff began this action on or about September 22, 2009. The first cause of action is for a judgment declaring that the Sheriff's sale of the shares allocated to Apartment 7Y was void and that the plaintiff lawfully owns the shares. The second cause of action is against the Sheriff for negligence. The third cause of action is for an accounting of the rents paid by the tenant in Apartment 7Y to defendant Plotch. The fourth cause of action is for a "restraining order" prohibiting, inter alia, the sale of Apartment 7Y.

Defendant Gerard Owners Corp. answered the complaint and asserted three counterclaims. The first counterclaim alleges that Gerard Owners Corp. is the owner and proprietary lessor of the building located at 70-25 Yellowstone Boulevard, Forest Hills, New York and that the plaintiff is a shareholder and the proprietary lessee of Apartment [*3]3U. The defendant owner alleges that the plaintiff defaulted on his obligation under the lease to make monthly maintenance payments in the amount of $746.05 for Apartment 3U. The second counterclaim alleges that the plaintiff, the proprietary lessee of Apartment 3V, defaulted on his obligation under the lease to make monthly maintenance payments in the amount of $1,629.78.

The plaintiff, Roshodesh, has asserted several affirmative defenses against the counterclaims. As an initial matter, the attorneys for defendant Gerard Owners Corp., in seeking dismissal of the counterclaims, improperly cite Glenesk v. Guidance Realty Corp., 36 AD2d 852 [2nd Dept. 1971] for the alleged proposition: "Pleadings which are totally bereft of factual data, are fatally deficient and should be struck by the Court." This is not true, and the Glenesk case cited by defense counsel was expressly abrogated, along with several other named former precedents of the Appellate Division, Second Judicial Department, in a leading opinion, Butler v. Catinella, 58 AD3d 145 [2nd Dept. 2008] [Rivera, J.]. In Butler, the Appellate Division, Second Department, upheld the broad defense of a failure to state a cause of action. Pertaining to this motion, this Court relies on counsel not citing cases to it that have been reversed, overruled, or expressly abrogated.

That branch of the defendant owner's motion which is for an order dismissing the plaintiff's first affirmative defense asserted against the counterclaims is granted as to the first counterclaim. Specifically, the plaintiff alleges that the defendant owner breached the warranty of habitability by, inter alia, failing to perform repairs and failing to provide heat. In regard to Apartment 3U, the defense of breach of warranty of habitability is not available to Roshodesh because he does not live in that apartment (see, Leventritt v 520 East 86th Street, Inc., 266 AD2d 45 [1st Dept. 1999], lv. to appeal denied, 94 NY2d 760 [2000]; Frisch v Bellmarc Management, Inc., 190 AD2d 383 [1st Dept. 1999]; Halkedis v Two East End Ave. Apartment Corp., 161 AD2d 281 [1st Dept.], appeal denied, 76 NY2d 771 [1990]). In regard to Apartment 3V (where the plaintiff resides), the plaintiff tenant has adequately alleged a breach of the warranty of habitability through the failure to, inter alia, provide heat.

That branch of the defendant owner's motion which is for an order dismissing the second affirmative defense asserted by the plaintiff against the counterclaims is granted. Specifically, the second affirmative defense (offset) alleges that the defendant owner wrongfully collected the rents owed to the plaintiff from his tenant in Apartment 7Y. The defendant owner seeks a dismissal of the second affirmative defense on the ground of collateral estoppel.

The defense raised by Roshodesh in his answer to the Civil Court petition [*4]concerned the owner's alleged illegal collection of rent from the tenant in Apartment 7Y. "The doctrine of collateral estoppel, a narrower species of res judicata, precludes a party from relitigating in a subsequent action or proceeding an issue clearly raised in a prior action or proceeding and decided against that party or those in privity, whether or not the tribunals or causes of action are the same ***." (Ryan v New York Telephone Co., 62 NY2d 494, 500 [1984]; Parker v Blauvelt Volunteer Fire Co., Inc., 93 NY2d 343 [1999]; Altegra Credit Co. v Tin Chu, 29 AD3d 718 [2nd Dept. 2006]; Sam v Metro-North Commuter Railroad, 287 AD2d 378 [1st Dept. 2001]). Housing Court Judge Elizabeth Tao, in a ruling dated March 14, 2008, ruled that Roshodesh, the respondent-tenant in that proceeding, failed to prevail at trial on the defenses.

The second affirmative defense is thus barred pursuant to the doctrine of collateral estoppel. The Court notes that paragraph 32(b) of the lease provides in relevant part: "If the Lessee shall at any time sublet the apartment and shall default in the payment of any rent or additional rent, the Lessor may, at its option, so long as such default shall continue, demand and receive from the subtenant the rent due or becoming due from such subtenant to the Lessee, and apply the amount to pay sums due and to become due from the Lessee to the Lessor ***."

That branch of the motion by defendant Gerard Owners Corp. seeking an order dismissing the third and fourth affirmative defenses are denied. The third affirmative defense is based on the allegation that the defendant owner failed to properly file records with the New York State Department of Housing and Community Renewal with respect to Major Capital Improvements ("MCI"), thereby causing the plaintiff's apartments to generate insufficient rent. A party moving pursuant to CPLR 3211(b) for an order dismissing an affirmative defense has the burden of demonstrating that the defense is without merit as a matter of law (see, Vita v New York Waste Services, LLC, 34 AD3d 559 [2nd Dept. 2006]; Santilli v Allstate Ins. Co., 19 AD3d 1031 [4th Dept. 2005]). The defendant owner did not adequately establish on this motion that the cooperative is not subject to the Rent Stabilization Law (see, NYC Code § 26-504[a]) and that the plaintiff, rather than the cooperative, had to file the MCI records.

That branch of the motion which is for an order dismissing the fifth and sixth affirmative defenses are denied (see, Butler v. Catinella, 58 AD3d 145, supra). The Court notes that Gerard Corp. is only seeking to recover for new arrears which accrued after the Civil Court proceedings ended.

That branch of the motion by defendant Gerard Owners Corp. seeking summary judgment on the counterclaims is denied. Summary judgment is not warranted where there is an issue of fact which must be tried (see, Alvarez v Prospect Hospital, [*5]68 NY2d 320[1986]). In the case at bar, there are issues of fact pertaining to whether defendant Gerard Owners Corp. breached the warranty of habitability in regard to Apartment 3V and whether Gerard Owners Corp. failed to file MCI statements with DHCR.

That branch of the motion by defendant Gerard Owners Corp. seeking a preliminary injunction directing the plaintiff to pay use and occupancy pendente lite is denied. A party seeking a preliminary injunction must show (1) a likelihood of success on the merits, (2) irreparable injury if provisional relief is withheld, and (3) a weight of the equities in his favor (see, McGrath v Town Bd. of Town of North Greenbush, 254 AD2d 614 [3rd Dept. 1998], lv. to appeal denied, 93 NY2d 803 [1999]). In the case at bar, the defendant owner failed to establish the element of irreparable injury.

That branch of the cross motion by plaintiff Roshodesh which is for an order permitting him to serve an amended complaint adding a fifth cause of action, asserted against the New York City Department of Finance, is granted. The plaintiff shall serve his amended complaint within thirty days of the service of a copy of this order with notice of entry. The plaintiff alleges that the New York City Department of Finance held the money he was ordered to deposit and that the Department negligently released too much money to Gerard Towers.

CPLR 3025(b) provides that leave to amend a pleading "shall be freely given upon such terms as may be just" (see, Holchendler v We Transport, Inc., 292 AD2d 568 [2nd Dept. 2002]; St. Paul Fire & Marine Ins. Co. v Town of Hempstead, 291 AD2d 488 [2nd Dept. 2002]; Whitney-Carrington v New York Methodist Hosp., 289 AD2d 326 [2nd Dept. 2001]). As a general rule, the amendment of a complaint will be permitted where there is no significant prejudice or surprise to the defendant (see, Edenwald Contr. Co. v City of New York, 60 NY2d 957 [1983]; Holchendler v We Transport, Inc., 292 AD2d 568, supra; Dal Youn Chung v Farberov, 285 AD2d 524 [2nd Dept. 2001]). The Department did not show that the proposed amendment will cause it prejudice or surprise.

That branch of the cross motion by plaintiff Roshodesh which is for a default judgment against defendant Plotch is denied. Defendant Plotch alleges that upon the receipt of the summons and complaint in this action he retained an attorney to represent him. He subsequently learned in early March, 2010 that his attorney had not appeared or answered for him. He immediately retained his present attorneys, Baron and Baron, to represent him in this action, and they served an answer on his behalf or about March 16, 2010. The plaintiff's attorney rejected the answer as untimely. Defendant Plotch alleges that he purchased the cooperative unit in good faith and for value. [*6]

The motion by defendant Plotch for an order, pursuant to CPLR 3012(d), compelling plaintiff Roshodesh to accept his answer to the complaint is granted. Defendant Plotch offered a reasonable excuse for his default and a potentially meritorious defense (see, CPLR 3012[d]; 599 Ralph Ave. Development, LLC v 799 Sterling, 34 AD3d 726 [2nd Dept. 2006]; Watson v Pollacchi, 32 AD3d 565 [3rd Dept. 2006]; Skrabalak v Finn, 258 AD2d 719 [3rd Dept. 1999]). The plaintiff's excuse of law office failure is reasonable (see, Watson v Pollacchi, 32 AD3d 565, supra; American Sec. Ins. Co. v Williams, 176 AD2d 1094 [3rd Dept. 1991]). Insofar as a meritorious defense is concerned, defendant Plotch has alleged that he was a good faith purchaser for value and without notice of any defect, a matter affecting the remedies available to the plaintiff (see, U.S. Bank Nat. Ass'n v Vanvliet, 24 AD3d 906 [3rd Dept. 2005]; Aubrey Equities, Inc. v Goldberg, 247 AD2d 253 [1st Dept. 1998]).

The foregoing constitutes the Court's decision, order, and opinion.

Dated: November 10, 2010

J.S.C.