West 140 LLC v Zeigler

Annotate this Case

Download PDF

West 140 LLC v Zeigler 2023 NY Slip Op 33663(U) September 11, 2023 Civil Court of the City of New York, New York County Docket Number: Index No. 308925/22 Judge: Alberto M. Gonzalez 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. INDEX FILED: NEW YORK CIVIL COURT - L&T 09/11/2023 04:15 PM NYSCEF DOC. NO. 27 NO. LT-308925-22/NY RECEIVED NYSCEF: 09/11/2023 CIVIL COURT OF THE CITY OF NEW YORK COU TY OF EW YORK: HOUSfNG PART A -------------------------------------------------- ----------------X WEST 140 LLC, PETITIO LT fndex No .: 308925/22 R-LANDLOR D DECISION/O RDER -against- ...t_ _ _ Civil C ct•= o f ·• .... City Of NUle YVETTE C. ZEIGLER, "JOHN DOE" WYork · C:f P I RESPONDEN T-TENANT Ei. TE --------------------------------- ----------------- -----------------X 2023 :, _ P,..=( Hon. AJberto Gonzalez: Recitation as required by CPLR Rule 22 l 9(A), of the papers considered in the review of Respondent 's motion seeking leave for disclos ure . Pa2ers NYSCEFDO C# [Respondent's ] Notice of Motion; 11 [Respondent's] Affidavit or Affirmation in 12 Support of Motion; [Respondent 's] Affidavit or Affirmation in 13 Support of Motion; [* 1] 1 of 12 FILED: NEW YORK CIVIL COURT - L&T 09/11/2023 04:15 PMINDEX NYSCEF DOC. NO. 27 NO. LT-308925-22/NY RECEIVED NYSCEF: 09/11/2023 Exhib it A-F ; 14- 19 [Petitioner 's] Affidavit or Affirmation in 22 opposition; [Petitio ner 's] A-B ; 23 ,25 [Respondent's] Affid avi t or A ffirm ation in 26 Reply. Procedural Historv and Factual Back2.-rouncl The instant nonpayment proceeding was initiated by service of a notice of petition and petition, dated May 22, 2022, ·eeking unpai d rent, at a monthly rent of 2,500, fo r the peri od of November 2021 to May 2022 for a total of $ 17 500. See YSCEF # 1 and #2. On December 19, 2022, Ms. Deana J. McGirt filed a Pro e Answer with the court, and the proceeding was made rerurnable on January 3 2023. See NY CEF # 6. Thereafter, the Respondent Yv rte C. Zeigler appeared by coun ·el ( anbattan Legal Services), who filed a notice of appearance w ith the cou rt dated February 24, 2023. See SCEF #7. Manhattan Legal erv1c th n filed an '·/\mended Answer, Defenses, and Counterclaim ·,"on beh alf of Ms. Yvette Zeigler. The mended Answ r stated amo ng its affirmative defenses/count rclaims, "Overcharge[,]" " Overcha rge and Fraud." See YSCEF #9. 2 [* 2] 2 of 12 INDEX FILED: NEW YORK CIVIL COURT - L&T 09/11/2023 04:15 PM NYSCEF DOC. NO. 27 NO. LT-308925-22/NY RECEIVED NYSCEF: 09/11/2023 After filing her Amended An wer, Re pondcnt filed a motion, dated May I, 2023 , seeking "limited d iscovery." See YSCEF # 11. The motion , in the attorney <1ffim1ation, expands upon the allegations made in the amended answer, rating, "38. The DHCR rent history for the subject premises shows a hi tory of pref rential rents and aclual rents sign ificantly lower than the legal regulated rents from 2000 to 2009 , then again in 2020, right after a significant increase in the legal regulated rent listed. 39. The subject prcrni -cs were not registered until 1999. though [DOB] permit for the building were issued before any registration." See NYSCEF # 12. The Re pondent' motion then offers specific instances, including that • ·'40. There are unexplained increases in the apartment's 1 gal rent. The first occurs in 2000 when the legal ly-registered rent increased from 771.00 to $97 5.00. • 41. Then in 2003. the legally-registered rent increa ed from $975.00 to $1193.40, an increase of 22.4%, though the same tenant (Viula Abreau) remains listed[ . .. ] In order to have charg d this amount legally in 2003, Petitioner must have made 7,956.00 worth oflndividual Apartment Improvement (lAls). Yet no IAJs is claimed on the [DHCR rent registration], and no permit for this period or purpose i filed with DOB[ .... ] • 42 . Then in 2008, th registered legal rent increa e \:Vas from $964. 70 in 2007 to $ 1.352.99, supposedly due to a vacancy increase. However. the allowable vaca ncy increas of 20% plu the 3% RGB incr ase for that year' one-year lease would have made the regist red rent in 2008 $ 1,186.58. No tenant is listed for 2008. yet th preferential rent was list d at $964. 78. [* 3] 3 of 12 FILED: NEW YORK CIVIL COURT - L&T 09/11/2023 04:15 PMINDEX NYSCEF DOC. NO. 27 NO. LT-308925-22/NY RECEIVED NYSCEF: 09/11/2023 • 43. Even · tranger is th at the reg istered rent listed in 2009, also Ii ted as due to a vacancy increa. c, is $ 1, 13 1.21 . • 44. Then from 20 17 to 2018 when Petitioner represented to DHC R that a new set of tenants moved in , the rent wa increased fro m $ L370 to $2,500 per month. This is an incr ase of more than 82.4% or S 1,129.42 per month - even considering the all owable increa s thi s is an except ionall y larg increase th at raised the rent way beyond the legal limit. Furthe1111ore, thi increase and subsequent increases were not exp lained in an y rent rider provided to Ms. Zeigler at the inception of her tenancy. • 45 . Additi onall y, Petitioner regi stered the apartment on June 12, 201 9 as Vacant, but then registered the next tenant's lea e as commencing May I , 2019.'' See YSCEF # 12 . Respo ndent also alleges that there is " ample reason to doubt" that Petitioner made significant improvements to the apartment to justify increasing the rent, tating that the DHCR rent hi tory does not indicate lAis or MC ls by Petition r, and there are no permi ts with DOB indicating ubstantial work as a basis for the increase . See YSC F # 12. Respo nd nt then offer , as part of her common law fraud cla im, that "Petitioner ha misrepresented numerous facts as to the legality of the rent r gistered of th e subject apartment. These include entirely-missing regi trati ons, overlapping vacant regi . trations w ith lea e regi ·tration ·. incons istently listing legal regulated , preferentia l and actua l rent , larg increa ·es that exceed ve n the allowable vacancy percentages and no accompanying explanation in th fom1 of claimed JAis, DOB permits. or exp lana tions in rent rid ers. Ms. Zeigler had no way of knowing what the rental history of the unit was previous to her tenancy in subject premises that 4 [* 4] 4 of 12 FILED: NEW YORK CIVIL COURT - L&T 09/11/2023 04:15 PMINDEX NYSCEF DOC. NO. 27 NO. LT-308925-22/NY RECEIVED NYSCEF: 09/11/2023 only commenced in June 2020 [ ... ] [t]herefore. she had no choice but to rely on the Landlord's wi llful mi representation to what the lawful rent wa , and was materially injured a a re ult. See YSC · F # 12 1r 53 -55. Respondent then c nclude b stating that that increa. f 2.500, took place in 20 I \ hich doe not make it ubj ct to th 4-ycar look back period becaus th case commenced in June 2022. as per CPLR 213-a. See YS .. # 12 1r 98. Petitioner oppo e · Re pond nt's motion citing to Casey,~ Whitehouse fatales, inc. and Regina Metro Co . LLC v. . Tew York State Div. of Rousing and Community Rene"' al, to say that the on xception to the four-y ar look back period i th limi ted category of cas · s where the tenant produced videncc of a fraudulent scheme to deregulate and even then solely to ascertain whether fra ud occurred - not to furnish evidence for calculation of the base date or permit d iscovery for y ar of o ercharge barred by the statut of lim itation .·· e CEF # 221r 4. Petitioner defines fraud, by th e common law . tandard: "evidence of a representation of material fac t, falsity scienter, rel iance and injury[,]" and further states that the Court in Reaina carefully di tingui hes between actions that present a challenge to the deregulated. tatus of an apartment and an overcharg claim. ee NY CEF # 22 1r 5, 6. Petitioner '. opposition also. tates, citing to Bztrro11". v. 75 -25 153rd Street LLC, that reliance on a DHCR rent history - a public record - ·'negate the elem nt of reliance as a matter of law." Se " Y C : .· F # 22 13 .. The oppo ition then goes thrnugh each of Re ·pendent '. individua l allegations: • "17. The Tenant Protection U nit ("TPU") of the ew York tate Hom and ommunity Renewal determin d that th regi tered rent in 20 l 8, 2,500 for the ubject apa1tment wa suffici ntly sub tantiated [Petitioner attach . documents including work order and ch cks in upport of the TP find ing] . 5 [* 5] 5 of 12 FILED: NEW YORK CIVIL COURT - L&T 09/11/2023 04:15 PMINDEX NYSCEF DOC. NO. 27 NO. LT-308925-22/NY RECEIVED NYSCEF: 09/11/2023 • 20. That there were no rents registered between 1984 through 1998 is inconsequential and tbe lack of registration is not evidence of fraud. • 21. Re vondent's refer nee that in 1999 the premise were regi tered as rent stabilized - vacant with a legal regulat d rent of $771 per month while overlapping with another tenant s lease is inaccurate as the lease for tenant Mandis Scade commenced April 1. 2000. • 22. Respondent's claim that there are incon i t nt rent registrations between 2000-2003 is likewise not accurate as the legal regulated rent remained at $975 throughout this period with lower amounts for acru.al r 'nt paid. • 23. Re pondent's claim that the rent increase from $975 to S l , 193.40 i, evidence of a fraudulent scheme to deregulate the apartment is likewise merit le · ·. Tenant Viula Abreu from 2002 through 2007, last registered legal regulated rent in 2007 wa 964. 70 an amount less than $975 regist red in 200 1 when said tenant fir t moved into the premises . Th actual rent paid was lower than the aforementioned initial $97 5 legal regulated rent through out the tenancy. • 24. In 2008, th regi t red ren t for the vacant apartment was $ 1,352.99 but was then reduced to $ l , 131.2 1 in 2009 when the next tenant Alhou seynon Damba moved into the apartment. • 25. An increa e from 964.70 per month in 2007 to $1,131.21 registered in 2009 to thi. tenant is les · than the 21 % vacancy plu renewal increase permitted in 2009( 1,167.29). • 26. From 2009 through 2017 the rent increases were consistent w ith the allowable RGB Increases then in effect. 6 [* 6] 6 of 12 INDEX FILED: NEW YORK CIVIL COURT - L&T 09/11/2023 04:15 PM NYSCEF DOC. NO. 27 NO. LT-308925-22/NY RECEIVED NYSCEF: 09/11/2023 • 27. Certa in ly, the amount ofrent charged between $ 1,131.2 1 and 1,370.58 from 2009 through 20 l 7 were nowhere near the deregu lation threshold nee . ary to deregulate the premises."See NYSCEF # 22. F.in ally, Petitioner stat that Petitioner purchased the building in March 20 15 , that there have been six differe nt owners from l 988-2015, and the tenant was provided a rent stabilized lease with a ll the appropriate riders 1, and attaches a copy of Respondent's lease w ith the relevant riders. Respondent's reply stares that Petitioner 's reliance on Burrows and Ca cy is misplaced as the decis ions do not "abrogate" the decisio n in Thornton and Grim , and that both cases are stiJl good law and that Petitioner's conduct is replete with "indicia of fraud," as recognized in T hornton and Grimm. See Y CEF # 26 Jr 10. Concerning the TP finding, and the documents attached, Respondent's counsel writes, 'TPU's audi t is not conc lusive nor dispo" itive. The letter provid d by DHCR s TPU its If says that it " it is not an order of H Rand is done without prejudic to a tenant to file an overcharge complaint or other legal claim(s) that he/she may have." See YSC F # 26 Ir 18 .. Discussion Section 408 of the CPLR authori zed th e use of d iscovery in summary proceeding with pem1ission of the court if ample need i shown . Disclosure, "may assist the sp edy dispo .ition of a case when it has served the pmvosc of clarifying the issues for tri al." New York Univer itv v. Farkas, 121 Mi c.2d 643,468 .Y.S.2d 808 (Civ. Ct. N .Y. Cty. 1983) In New York Universitv v. Farkas , the court set forth six factor to consider wh n determining whether discovery is appropriate to 1 PLR § 408: The rid er. attached ind icate that the apartment is subject to 42 1-a. 7 [* 7] 7 of 12 FILED: NEW YORK CIVIL COURT - L&T 09/11/2023 04:15 PMINDEX NYSCEF DOC. NO. 27 NO. LT-308925-22/NY RECEIVED NYSCEF: 09/11/2023 I) 2) 3) 4) 5) 6) whether the party see kin g di covery has asserted facts to estab li sh a cau e of action or dcfcn e; whether there is a need to detcnninc inform at ion directly re lated lo the cause of action; whether the requested discovery is carefully tailored an d likely to c lari fy the di sputed facts; whether prejudice will res ult ; Whether prejudice can be d im inished or all eviated, for example by p rescribing a short time peri od to conduct di covery: and Whether the court, in its s upervisory role, can structure di scovery so that the party against whom discovery is sought particul arly pro se tenant, w ill be protected and not ad versely affected by the discovery requests . Tn nonpayment proceedings, s uch as the in stant one tenan ts are allowed to assert rent overcharge defenses and counterclaim to defend aga inst nonpaymen t proceedings, and in pursu it of the rent overcharge c ]aims tenants can seek dis closure from the landlord . As a resul t of the Housi ng Stability and Tenant Protection Act (HSTPA) of 2019. overcharge complaints were to be investigated by, ··consider[ing] all available rent history which is reasonably necessary to make such determination ." 2019 McKinney' Y Ch. 36 , § I at Pan F, s 6. The H ession Law ews of TPA changed the analysis of rent overcharges. in that prior to 2019, re nt overcharge claims w ere gen era lly subject to a four-y ar statute of limitation, but events dating beyond the four- year statute of limitations could be onsidered ~ most notably to detem1in if th apt is rent regulated or to detem1ine "whether a fraudulent cheme to destabilize the apartment tainted the reliabi lity of the rent on the base date ." See Ger. ten v. 56 7th Ave LL C, 88 A D3d 189, 928 Y 2d 515 (Ap p. Div. 1st. Dept); Matter of Grimm v. State ofNew York Div ofHous and Commun ity Renewal Office ofRen t Admin, 15 N.Y.3d 358 912 N.Y.S .2d 49 1 (20 I 0). The Court of Appeals , a year after the passage of th HSTPA, beld in Matter of Regina Metro Co .. LLCthat. "the overcharge calculation am ndm ents (of the H STPA) cannot be applied retroactively to overcharges that occurred prior to their enactment." See Austin i·. 25 Grove St. 8 [* 8] 8 of 12 INDEX FILED: NEW YORK CIVIL COURT - L&T 09/11/2023 04:15 PM NYSCEF DOC. NO. 27 LLC, 202 A.D.3d 429, 162 NO. LT-308925-22/NY RECEIVED NYSCEF: 09/11/2023 .Y.S .3d 342 (App. Div. 1st. Dep't. 2022). As such, any overcharge claims, which were alleged to have occurred prior to the passage of the HSTPA, were to have the prior law applied. Id. The Court in Regina specifica ll y states,' The rule that emerges from our precedent in that, under prior law, review or rental history outside the four-year look back period was permitted only in the limited category of cases whe re the tenant produced evidence of a fraudulent scheme to deregulate, and even then, solely to ascerta in whether fraud occurred - not to furnish evidence for calculation of the base date rent or permit recovery for years of overcharges barred by the stanne of limitations." Regina Metropolitan Co., LLC v. New York State Division a/Housing and Community Renewal, 154 N.E.3d 972, 130 N. Y.S.3d 759 (2020). In addition , Appe ll ate Court have held that when pleadi11g an overcharge claim, it must be pied as common law fraud: ·'evidence ofrepresentation of material fact, falsity, scienter, reliance and injury." Burrow. v. 75-25 J53rd Street, LLC. 215 A.D.3d 105, 189 .Y.S.3d I (App. Div. 1st Dep't. 2023). But ·'at this juncture respondent need not prove fraud[ ... ] ["[A"]lthough under CPLR 30 16 (b) the complaint must sufficient detail the alleged ly fraudulent conduct, that requirement should not be confused with unassailable proof of fraud." 3612 Broadway Partners LLC vs. Mejia, 79 Misc.3d 230, 189 .Y.S.3d 406 (Ci . Ct. .Y. Cty. 2023). Here, Petiti oner is incorrect that the exception to the four year rule only applies to fraudulent scheme to deregulate the apartment, a it also applies to fraudulent schemes to overcharge an already rent tabilized apartment. See 435 Cent. Park W Tenant Assn. v. Park Front Apts., LLC, I 83 A.D.3d 509, 125 .Y.S.3d 85 (App. Div. 1st. Dept. 2020) ("We reject defendant 's land lord 's argument that th fraudulent exception applie on ly to a 9 [* 9] 9 of 12 FILED: NEW YORK CIVIL COURT - L&T 09/11/2023 04:15 PMINDEX NYSCEF DOC. NO. 27 NO. LT-308925-22/NY RECEIVED NYSCEF: 09/11/2023 fraudulent- cheme-to-deregulate ca e. In thee nt it is pro n that d fendanl engaged in a fraudulent overcharge scheme to rai c the pre-stabilization rent of each apartment, tainting the reliabi lity of the rent on the ba e date, then the lawfu l rent on the ba c date for ach apartment must be detcrmin d by using the default formula de ised by DHCR ... ) See also Montera v. KMR Amsterdam LLC. 193 A.D.3d l 02 , 142 N.Y.S.3d 24 (App. Div. 1st. Dep't. 2021) ("The dissent ignores our recent deci ion in 435 Cent. W. Tent. 509, 125 n. v. Park Front Apts., L , 183 A.D.3d . Y.S.3d 85 (1st Dept 2020). Citing to R gina, we tated that the fraud exception to the four-year lookback period applied both to a fraudulent sch me to deregulate and to a fraudul nt overcharge sch me. ' And though the public availability of a D11 R Rent Rc:.gistration History may negate the reliance elem nt in a fraud claim asp r the Appellate Di i ion in Burrow v . 75-25 I 53rd treet, LLC the facts in the instant proceeding differ. In Burroivs , the fraudu l nt act (the inflated legc I rent) - which the landlord in Burrows claimed the tenants ne r paid - wa explain d and at all time made available on the rent registration history a well on the lease riders, which meant the tenant had notice from the outset. Here, Respond nt allege a collection of inaccuraci th lea in luding mi ing regi. trations (from 1984-1999). that are not explained on either riders or rent registration history (the DHCR registration do snot ind icate why the r gistrations are mi ing), and v hich, ould not ha e put R pondent on notice. Here Respo ndent has made out a colorable overcharge claim and plead, the e lements of common law fraud. in its an w rand motion th reby ass rting fact to establi ha caus of action of a fraudulent scheme to overcharg . Re pondent ha point d to numerous uspicious r gistration with un xplained increa e exceeding the vacancy incrca c, mis ing registrations (19 4-1999) lack f xplanation con erning IAT , and overlapping tenancie . Though P titioner [* 10] 10 of 12 FILED: NEW YORK CIVIL COURT - L&T 09/11/2023 04:15 PMINDEX NYSCEF DOC. NO. 27 NO. LT-308925-22/NY RECEIVED NYSCEF: 09/11/2023 offers a letter from TPU and checks and other documents alleging work in the apartment, the letter from TP states that the letter is w ithout prejudice to an overcharge c laim and itself states that it is not di spositi vc or conclusive. See also Tribbs 188 l'S . 326-338 E. l 00 LLC, 215 A. O.3d 480, .Y.S .3d 18 (App. Div. 1st. Dept. 2023) ("The eight defense of res judicata and/or collateral estoppe L based on the TPU deci. ion, was properly dismi scd. "[R]es Judicata and co llateral cstoppel are appl icable to give conclusive effect to the quasi-judical determination of administrative agencies'' (Ryan v. New York Tel. Co., 62 N .Y.2d 494,499,478 N.Y.S.2d 823, 467 .E.2d 487 [ I 984]). The TP procc s was not a qua i-judicial determination. TPU merely asked landlord to send it information: it did not give plaintiff an oppo1iunity to be heard." There is a need for the requested information, as the information sought goes directly to the overcharg claims alleged by Respondent, and which are in the exclu ive control of Petitioner. The information sought is car fully tailored , and seek Leases, rent records and proof of MCls and IAis. Little to no prejudice is expected against Petitioner~ Petitioner ued for the rent alleged and itself clai ms that the rent is properly reg istered. Finally, both parties are represented by counsel, which hould minimize any potential prejudice. As such, Respondent's motion i granted to the extent of Petitioner's counsel providing Respondent's counsel with a respo nse to Respondent's document demand within forty -five days of ser ice of thi decision and a otice of Entry. However, Petitioner's counsel shall not be required to comply/respo nd with item 12 of the Document Demand ("[a]II rent records, including ledger books or computer record s, show ing ren ts charged and/or paid for units in the subject building for the Pe1iod ... ", as the demand is ov rbroad and do not apply to the subject apartment. To the extent that Petitioner does not have custody or control of the documents, it shall produce an affidavit from its agent tating uch. ll [* 11] 11 of 12 FILED: NEW YORK CIVIL COURT - L&T 09/11/2023 04:15 PMINDEX NYSCEF DOC. NO. 27 NO. LT-308925-22/NY RECEIVED NYSCEF: 09/11/2023 Thi matter is then adjourned lo ovcmber 16, 2023 at 9:30am. Part A for all purpo e . For the rea ons tated above, it is h reby ORDERED that Re pendent' motion for di closure i granted. Dated: ew York ew York September 11 , 2023 12 [* 12] 12 of 12

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.