Dugan v London Terrace Gardens, L.P.

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Dugan v London Terrace Gardens, L.P. 2017 NY Slip Op 33215(U) August 17, 2017 Supreme Court, New York County Docket Number: 603468/2009 Judge: Lucy Billings Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [* 1] COURT OF THE STATE OF NEW YORK OF NEW YORK: PART 46 --------------------------------x WILLI GAGNON JOSE P WALSH, JAMES and Al Situat DUGAN, MARSHA D'YANS, GEORGETTE LOWELL D. KERN, MICHAEL MCCURDY, LAEZ, TRACY SNYDER, MICHAEL J. LESLIE M. MACK, ANITA ZITIS, and OERR, on Behalf of Themselves Other Persons Similarly d, Index No. 603468/2009 Plaintiffs - against - DECISION AND ORDER LONDON TERRACE GARDENS, L.P., e. 0 Defendant ------1--------------------~-.\--'-----x APPE . CES : ~\lG 3 Q t\\\l j ~~ F r Plaintiff Class · . QU. Nf'f ~~~ W'lliam Gribben Esq . . .c _ Ni'H~ Rdnald S. Languedoc Es~c~;::::~ Hi~melstein, McConnell, Gribben, Donoghue & Joseph LLP 1~ Maiden Lane, New York, NY 10038 M tthew D. Brinckerhoff Esq. E ery Celli Brinckerhoff & Abady LLP 60~ 5th Avenue, New York, NY 10020 Ro ald Aranoff Esq. Be nstein Liebhard, LLP 10 East 40th Street, New York, NY 10016 Fo Defendant Ro ert D. Goldstein Esq. Paul N. Gruber Esq. Borah, Goldstein, Altschuler, Nahins & Goidel, P.C. 37 Broadway, New York, NY 10013 Ha. ry Frischer Esq. Proskauer Rose LLP 111 Times Square, New York, NY LUCY BilLINGS, J.S.C.: london2.~86 Supreme Court Records OnLine Library - page 2 of 6 1 10036 [* 2] It I this class action seeking recovery of rent overcharges from d~fendant owner of London Terrace Gardens, a housing complex in the Chelsea neighborhood of New York County, plaintiffs' motion for partial summary judgment claims that plaintiffs will seek p ejudgment interest on any retroactive overcharges. I C.P.L.~. § 5001(a); I § 2526.~(a); Borden N.Y.C. Admin. Code § 26-516(a); 9 N.Y.C.R.R. v. 400 55th St. Assoc., L.P., 24 N.Y.3d 382, 392 (20~4); Mohassel v. Fenwick, 5 N.Y.3d 44, 51-52 (2005). Theref ofe defendant moves for permission to refund to plaintiff class mfmbers defendant's calculation of the overcharges defenda+t owes to mitigate the potential prejudgment interest I that th$ court ultimately may award. Plaintiffs do not oppose ! such refunds, but do oppose the condition defendant seeks to I impose qn the refunds: i defenda~t's that they be without prejudice to right to recover all or part of the refunds if the court u~timately determines that class members are not entitled to the ~mounts defendant calculated. Since defendant continues to cha11\enge whether it is liable for overcharges retroactively, I its proppsed retroactive payments conditioned on its right to recover ~hem if its defense is successful expose plaintiffs to i consider~ble risk. The only way for them to avert that risk would be\ to keep the refunds available for repayment and thus deprive themselves of the very use of the funds for which I interest\ is intended to compensate and which plaintiffs would have rettined had defendant not overcharged them. J. D'Addario & Co., Inc1 v. Embassy Indus., Inc., 20 N.Y.3d 113, 118 (2012); london2.18$ Supreme Court Records OnLine Library - page 3 of 6 2 [* 3] Mohass91 v. Fenwick, 5 N.Y.3d at 52; St. Stephen Community A.M.E. Church v. 2131 8th Ave. LLC, 123 A.D.3d 642, 642-43 (1st Dep't 2014); Kassis v. Teachers' Ins. & Annuity Assn., 13 A.D.3d 165, 165 (1st Dep't 2004). To stop the accrual of prejudgment interest, C.P.L.R. 3219-21 provide defendant three alternatives. §§ Since defendant concede that it overcharged plaintiffs, albeit contesting the amount f damages owed, as defendant acknowledges it may deposit into th court the amounts defendant considers adequate to satisfy any potential judgment, which plaintiffs may withdraw only if they stipulate that the amounts do satisfy plaintiffs' claims.\ C.P.L.R. that c.t.L.R. § § 3219. For this reason, defendant insists 3219's procedure is less favorable to plaintiffs than de~endant's proposal, but defendant's proposal surely is less fa,orable to plaintiffs if they must repay the amounts accepte after continued litigation in which defendant succeeds in its efense to retroactivity. tender f funds under C.P.L.R. Moreover, to be effective, a 3219 "must be unconditional," § · h out Ia "reservation · · h ts" see k'1ng to a 11 ow d e f end ant's wit o f rig 1 I "defense\s to survive." Tanger v. Ferrer, 49 A.D.3d 2286, 286 (1st De~'t 2008). I If,I however, defendant believes C.P.L.R. is less ~avorable I § 3219's procedure to plaintiffs, then such a position is no reason fpr defendant not to use the procedure. If plaintiffs do not with~raw the deposited funds, defendant may reclaim them. Then, if\ plaintiffs do not obtain a judgment more favorable to I london2.18~ Supreme Court Records OnLine Library - page 4 of 6 3 [* 4] them t the amounts deposited, plaintiffs may not recover intere the time of the deposit and must compensate def end its defense expenses from that time. C.P.L.R. § 3219. ilarly, defendant may serve plaintiff with a written of fer allow a judgment against defendant on specified terms, which accepted by plaintiffs will fully satisfy their claims. C.P.L.R. § 3221. If plaintiffs do not accept the terms, the ensuing\ procedure tracks the procedure under C.P.L.R. § 3219. Defendant may offer a judgment conditionally only if def endait concedes the amount of damages owed if found liable. Then, ofly if defendant is found liable, may plaintiffs enter that ju~gment. I C.P.L.R. § This alternative, however, is 3220. contrary to defendant's position here, where defendant directl~ concede, liability for overcharging plaintiffs, but not the damages owed. 1 Fi9ally, defendant simply may calculate the minimum amounts defenda9t believes it unquestionably owes to plaintiffs and pay those ardounts to plaintiffs unconditionally, minimizing the risk I that defrndant will be determined to owe less, and stopping the accrual Ff interest on those amounts. If defendant seeks to avoid anl impermissible communication directly to plaintiff class I members, defendant may make the payments to the plaintiff class' I attorney~ amounts to the I ~o with an explanation of how defendant calculated the that the class' attorneys may distribute the payments c~ass members with an adequate explanation. i. I london2.18f Supreme Court Records OnLine Library - page 5 of 6 4 [* 5] S~nce prejud~ent these permissible remedies to stop the accrual of interest always have been and remain available to defendtnt, the court denies defendant's motion to employ a method to mittgate prejudgment interest that is not recognized by New York's\civil procedure, is potentially prejudicial to plaintiffs, and is \without their consent. I I DATED: August 17, 2017 LUCY BILLINGS, J.S.C. 5 london2.18 I I Supreme Court Records OnLine Library - page 6 of 6

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