156 E. 37th St. LLC v Eichner
Annotate this CaseDecided on February 6, 2019
Civil Court of the City of New York, New York County
156 East 37th Steret LLC, Petitioner,
against
Mark Eichner and LINDA EICHNER, Respondents.
63915/2018
Jack Stoller, J.
156 East 37th Street LLC, the petitioner in this proceeding ("Petitioner"), commenced this summary proceeding against Mark Eichner ("Respondent") and Linda Eichner ("Co-Respondent"), the respondents in this proceeding ("Respondents"), seeking a money judgment and possession of 156 East 37th Street, Apt. 3B, New York, New York ("the subject premises") on the basis of nonpayment of rent. Respondents interposed an answer. The parties stipulated that Respondents vacated possession of the subject premises during the pendency of this proceeding. The vacatur of Respondents did not divest the Court of jurisdiction over this matter. Sowalsky v. E. F. MacDonald Stamp Co., 31 AD2d 582 (3rd Dept. 1968), Eastrich No. 80 Corp. v. Patrolmen's Benevolent Ass'n of New York City Transit Police Dept., 180 Misc 2d 98, 99 (App. Term 1st Dept. 1999), Four Forty-One Holding Corp. v. Bloom, 148 Misc. 565, 567-568 (App. Term 1st Dept. 1933). Accordingly, the court proceeded with a trial of this matter, on January 23, 2019.
Petitioner proved that it is the proper party to commence this proceeding; that Petitioner has complied with the registration requirement of MDL §325; that the parties had a landlord/tenant relationship with one another; that the subject premises is not subject to rent regulation; and that Petitioner demanded payment of arrears from Respondents pursuant to RPAPL §711(2) prior to the commencement of this proceeding.
Petitioner introduced into evidence the original lease the parties entered into in 2003 and subsequent renewal leases. A rider to the lease provided for a late fee of five percent of the monthly rent if Petitioner received rent after the tenth of a month and that late fees are additional rent.
Petitioner introduced into evidence its rent ledger. The rent ledger actually shows that, by July of 2018, Respondents did not owe anything in base rent, only late fees; that Petitioner charged Respondents a holdover rate after their lease expired; that Respondents paid rent after the tenth of the month a total of thirty-four times; and that Petitioner charged Respondents late fees thirty-one of those times.
Respondent testified that he lived in the subject premises for fifteen years; that he moved [*2]out on November 15, 2018; that from 2012 to 2018 the wood floor had been sagging for three, four, or five years, that it worsened with a crack in linoleum tile on top of it; that Petitioner fixed the floor in late 2013 or early 2014; that Petitioner had previously agreed to fix the floor and then Petitioner reneged; he first spoke to the super about the condition in 2012 or 2013; that the bathroom ceiling collapsed in 2006; that Petitioner never fixed the bathroom properly; that the foyer, living room, and bedroom in the subject premises suffered from water damage and mold, a condition that persisted until they moved out; that he spoke to the super for Petitioner ("the super"), who was "wonderful," many times; that he spoke to building manager about this condition in 2015; that he had no heat in the living room in February of 2014 or 2015; that Petitioner started repairing the radiator, but had to tear a hole in the floor in order to do so; that the hole led to a mouse infestation; that Petitioner sealed the floor in September of 2018; and that the heat was turned on on October 15, 2018.
Respondent testified that he would deliberately pay his rent late in order to prod Petitioner to get the work done and that the told super that he would keep paying late till it was fixed.
Respondents introduced into evidence the following correspondence Respondent sent Petitioner: a letter dated January 7, 2014 that stated that Respondents were paying two months' rent upon the rectification of a flooring issue; a letter dated February 3, 2014 asking Petitioner to remove late charges because Respondent started paying late to get Petitioner's attention and that he would pay on time when repairs were completed; a letter dated February 2, 2015 asking again to remove late fees and complaining about the heat and the hole in the wood floor; a letter dated March 17, 2015 complaining about paint work and heat in the living room; a letter dated June 8, 2015 saying that a rent check is enclosed, that he had no heat since late February 2014, that the bathroom ceiling is water-damaged, and that he will pay late until issue is resolved; a letter dated July 24, 2018 stating that the subject premises has no heat, mice, a water-damaged bathroom ceiling, and no use of the refrigerator for three weeks; and an email dated July 11, 2016 complaining about heat in the living room, the hole in the living room floor, the bathroom ceiling, and the mice.
Respondents introduced into evidence photographs of mice in the living room in 2015, 2016 , 2017; a photograph of a torn-up floor near a radiator in 2017; a photograph of water in tub that had a wastewater back-up in 2014, which Respondent testified happened a couple of times a year from 2012; a photograph of a bathroom in October of 2018 showing discoloration near a window sill; and a photograph of a foyer ceiling with peeling paint in October of 2018.
Respondent testified on cross-examination that Petitioner sent an exterminator to the subject premises one or more times; that Petitioner fixed a refrigerator a month after it was a problem; that Petitioner corrected a problem with glass in the front door; and that he did not have an income cash flow problem. To that point, Respondent testified on redirect examination that Co-Respondent is a freelance makeup artist whose clients include a number of prominent celebrities.
Petitioner introduced into evidence work orders, dated December 21, 2015 for pest control for rodents, dated March 29, 2016 for fixing glass, dated August 3, 2016 for a locksmith, dated August 11, 2016 for a repair of a refrigerator, dated April 30, 2018 for dishwasher repair, and dated July 17, 2018 for a leak in the bathroom.
The super testified on rebuttal that he knows Respondents; that Respondents had monthly extermination for mice; that he had put glue traps in the subject premises; that a heating issue in the subject premises was connected with a problem in the floor there; that Petitioner could not fix the floor until the heat issue was resolved last winter; that the floor was open there for two winters; that the riser had a hole in it, requiring Petitioner to break the floor to fix the riser; that the whole ceiling had water damage that may not have been mold, but there was discoloration; and that, over the years, they fixed that those items, plastered, painted, scraped, did plumbing work on the upstairs apartment, broke the upstairs floor, and changed the shower body, the lead bend, the diverter, and the drain line.
New York State implies into every residential lease a warranty that the demised premises are habitable, RPL §235-b(1), and any purported modification of this warranty is void as a matter of public policy. RPL §235-b(2). "The only meaningful weapon a tenant has against a landlord for refusing to maintain the premises in a habitable condition is to withhold rent." Semans Family Ltd. Pshp. v. Kennedy, 177 Misc 2d 345, 348 (Civ. Ct. NY Co. 1998), citing 520 E. 86th St., Inc. v. Leventritt, 127 Misc 2d 566, 570 (Civ. Ct. NY Co. 1985)(Saxe, J.). See Ansonia Assocs. v. Ansonia Residents' Asso., 78 AD2d 211, 220 (1st Dept. 1980)(referring, in dicta, to a "right" to withhold rent), Whitby Operating Corp. v. Schleissner, 117 Misc 2d 794, 800 (S. Ct. NY Co. 1982).[FN1] Respondents proved the persistence of ongoing conditions in the subject premises in need of repair, which Petitioner's own rebuttal witness essentially corroborated, and Respondents proved, particularly by their unrebutted letters in evidence, that they intended to prompt Petitioner to repair the conditions by withholding rent, even if they eventually paid the monthly rent before Petitioner could commence a nonpayment proceeding.
A warranty of habitability defense implicates a "clear public policy interest." Windy Acres Farm, Inc. v. Penepent, 40 Misc 3d 63, 64-65 (App. Term 2nd Dept. 2013). To the extent that terms of a landlord/tenant relationship impair the ability of a tenant to withhold rent, then, such terms impermissibly modify the statutory warranty of habitability, as follows:
•The New York City Housing Authority may not administratively penalize a tenant who withholds rent to enforce the warranty of habitability. Law v. Franco, 180 Misc 2d 737 (S. Ct. Bronx Co. 1999);
•While a landlord otherwise has a cause of action for a judgment against a tenant when a tenant's nonpayment of rent compels the landlord to commence an excessive number of nonpayment proceedings, Adams Tower L.P. v. Richter, 186 Misc 2d 620, 621-22 (App. Term 1st Dept. 2000), bona fide habitability defenses that caused a tenant to withhold rent preclude an eviction on that ground. Chama Holding Corp. v. Taylor, 37 Misc 3d 70, 71 (App. Term 1st Dept. 2012), Hudson St. Equities v. Circhi, 9 Misc 3d 138(A)(App. Term 1st Dept. 2005), citing Bennett v. Mantis, N.Y.L.J., Sept. 13, 2000, at 22:1 (App. Term 1st Dept.), 31-67 Astoria Corp. v. Cabezas, 55 Misc 3d 132(A) (App. Term 2nd Dept. 2017), Time Equities Assocs. LLC v. McKenith, 2019 NY Slip Op. 50123(U), ¶ 4 (Civ. Ct. NY Co.), Wonforo Assocs. v. Maloof, [*3]2002 NY Slip Op. 50316(U), ¶ 11 (Civ. Ct. NY Co.);
•A conditional limitation providing for the forfeiture of a tenancy upon nonpayment of rent is void as against public policy as it deprives tenants of their right to interpose a breach of warranty of habitability claim. Windy Acres Farm, Inc., supra, 40 Misc 3d at 64-65, Reinozo v. Eskander, 2017 N.Y.L.J. LEXIS 2151, *4 (Civ. Ct. Queens Co.);
•A landlord may not invoke a lease rider forfeiting a rent credit on nonpayment where the tenant has asserted a good-faith claim of breach of the warranty of habitability. 1461 Amsterdam Ave. LLC v. Carrasquillo, 2015 NY Slip Op. 30831(U), ¶ 3 (Civ. Ct. NY Co.);
•A landlord may not maintain a holdover eviction proceeding on no alleged cause against an unregulated tenant in retaliation for the tenant withholding the rent to enforce the tenant's "rights under the warranty of habitability ...." Barr v. Huggins, 41 Misc 3d 605, 613 (Civ. Ct. Bronx Co. 2013).
A late fee clause in a lease does not per se offend public policy, and may give rise to a cause of action for a money judgment in a summary proceeding, Brusco v. Miller, 167 Misc 2d 54, 55-56 (App. Term 1st Dept. 1995), as Petitioner seeks herein. However, as applied in this matter, the late fee would penalize Respondents as Respondents withheld rent over repairs. Petitioner's application of the late fees to these particular facts would therefore impermissibly modify the warranty of habitability just as readily as a conditional limitation or a lease rider forfeiting a rent credit would. Accordingly, the Court finds that the late fee clause, as applied herein, is unenforceable as a matter of public policy.
A separate ground for rendering purported late fees unenforceable is that 5% per month, or 60% per year, amounts to an excessive and usurious charge. Cleo Realty Assocs., L.P. v. Papagiannakis, 151 AD3d 418, 419 (1st Dept. 2017).
Finally, although Petitioner charged a monthly rent at a so-called "holdover rate" after the expiration of Respondents' most recent lease and before Respondents vacated, the lease in evidence does not entitle Petitioner to that relief.
Without the late fees and the holdover rate, Respondents do not owe anything to Petitioner. The Court therefore dismisses this proceeding with prejudice.
Respondents made a verbal application for attorneys' fees in their closing argument. However, Respondents did not interpose a demand or a counterclaim for attorneys' fees in their answer. Under those circumstances, the Court cannot grant Respondents' application. Oxford Towers Co., LLC v. Wagner, 25 Misc 3d 1224(A)(S. Ct. NY Co. 2007) (DeGrasse, J.), aff'd, 58 AD3d 422, 423 (1st Dept. 2009), Wychwood Assoc. v Kimberley Rest. Corp., 2009 NY Misc. LEXIS 4378 (S. Ct. Nassau Co. 2009), citing Landmark Props. v. Olivo, 62 AD3d 959, 960-961 (2nd Dept. 2009).
The parties are directed to pick up their exhibits within thirty days or they will either be
sent to the parties or destroyed at the Court's discretion in compliance with DRP-185.
This constitutes the decision and order of this Court.
Dated: February 6, 2019
New York, New York
________________________________
HON. JACK STOLLER
J.H.C. Footnotes
Footnote 1:Partial eviction is not the same defense as breach of the warranty of habitability, but the Court nonetheless finds instructive that the withholding of the entire amount of rent is the proper remedy when there has been a partial eviction. Eastside Exhibition Corp. v. 210 E. 86th St. Corp., 18 NY3d 617, 622 (2012).
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