Amelius v. Grand Imperial LLC

• Decision Date: 11 September 2017
• Citation: 64 N.Y.S.3d 855,57 Misc.3d 835
• Parties: Richard AMELIUS, Sinja Cho, Ilona Farkas, Olga Papkovitch, Jesse Zhu, The City of New York, Plaintiffs, v. GRAND IMPERIAL LLC, Imperial V LLC, Imperial Court Management LLC, Michael Edelstein, The Land and Building known as 307 West 79th Street, Block 1244, Lot 8, County, City and State of New York, Imperial Success LLC, F&M Imperial LLC, Florence Edelstein, and "John Doe" and "Jane Doe," numbers 1 through 10, fictitiously named parties, true names unknown, the parties intended being the managers or operators of the business being carried on by, defendants Grand Imperial LLC, Imperial V LLC, Imperial Court Management, Imperial Success LLC, and/or F&M Imperial LLC, and any person claiming any right, title or interest in the real property which is the subject of this action, Defendants.
• Court: New York Supreme Court

57 Misc.3d 835

64 N.Y.S.3d 855

Richard AMELIUS, Sinja Cho, Ilona Farkas, Olga Papkovitch, Jesse Zhu, The City of New York, Plaintiffs,

v.GRAND IMPERIAL LLC, Imperial V LLC, Imperial Court Management LLC, Michael Edelstein, The Land and Building known as 307 West 79th Street, Block 1244, Lot 8, County, City and State of New York, Imperial Success LLC, F&M Imperial LLC, Florence Edelstein, and "John Doe" and "Jane Doe," numbers 1 through 10, fictitiously named parties, true names unknown, the parties intended being the managers or operators of the business being carried on by, defendants Grand Imperial LLC, Imperial V LLC, Imperial Court Management, Imperial Success LLC, and/or F&M Imperial LLC, and any person claiming any right, title or interest in the real property which is the subject of this action, Defendants.

Supreme Court, New York County, New York.

Sept. 11, 2017.

Goddard Riverside Law Project (Shafaq Islam, Esq. of counsel), New York, and Urban Justice Center (Sadia Rahman, Esq. and Stephanie Rudolph, Esq. of counsel), New York, for the tenant plaintiffs.

Zachary W. Carter, Corporation Counsel of the City of New York (Brian Krist, Esq., Special Assistant Corporation Counsel, of counsel), Mayor's Office of Special Enforcement, New York, for the City.

Chehebar Deveney & Philips (Charles Chehebar, Esq. and Cornelius P. McCarthy, Esq. of counsel), New York, for defendants.

ZwillGen PLLC (Nicholas A. Jackson, Esq. of counsel), New York, for non-party Yelp, Inc.

KATHRYN E. FREED, J.

The Imperial Court Hotel is a 227–unit single-room occupancy (hereinafter "SRO") multiple dwelling located at 307 West 79th Street, New York, New York, owned and operated by defendants. It was built in 1906 and, since it was granted its first certificate of occupancy in March 1943, it has been classified as a class A building within the meaning of the Multiple Dwelling Law. (Doc. No. 31); see Multiple Dwelling Law § 4(8), (16). Plaintiffs Richard Amelius, Sinja Cho, Ilona Farkas, Olga Papkovich and Jesse Zhu (hereinafter collectively referred to as "the tenant plaintiffs") are all long-term residents of the building in units that are subject to rent stabilization. The tenant plaintiffs claim that defendants have utilized the building for short-term stays in violation of the Multiple Dwelling Law and in contravention of the warranty of habitability applicable to their tenancies.

Defendants concede that, prior to amendments to the Multiple Dwelling Law that took effect in 2010 and 2011, they rented out SRO units at the Imperial Court for periods of as few as seven days. (Doc. No. 20.) This use was entirely legal pursuant to former Multiple Dwelling Law § 248(16), "which permitted single room occupancy owners to rent their rooms for periods as short as seven days." Matter of Grand Imperial, LLC v. New York City Bd. of Stds. & Appeals, 137 A.D.3d 579, 27 N.Y.S.3d 158 (1st Dept.2016), lv. denied 28 N.Y.3d 907, 2016 WL 6789777 (2016). Among the legal developments most relevant to this case is the decision in City of New York v. 330 Cont. LLC, 60 A.D.3d 226, 233–234, 873 N.Y.S.2d 9 (1st Dept.2009). There, the Appellate Division, First Department interpreted former Multiple Dwelling Law § 4(8)(a) to provide that units in class A multiple dwellings could be rented out for periods of less than 30 days, provided that the majority of the units in the building were occupied for permanent resident purposes. Id. The Court reasoned that this holding comported with the way the statute defined a class A multiple dwelling, namely that it would be "occupied, as a rule, for permanent residence purposes." Former Multiple Dwelling Law § 4(8)(a) (emphasis added). Following that decision, the Legislature amended the Multiple Dwelling Law to provide, among other things, that "[a] class A multiple dwelling shall only be used for permanent resident purposes." Multiple Dwelling Law § 4(8)(a) (emphasis added); see L. 2010, ch. 225 § 8, as amended by L. 2010, ch. 566, § 3.

Defendants have attempted to advance the legal position that this amendment did not apply to their ability to rent units for seven days—which use had been expressly permissible by statute, and not on the basis of the decision in City of New York v. 330 Cont. LLC, 60 A.D.3d at 233–234, 873 N.Y.S.2d 9 —reasoning that the Multiple Dwelling Law savings clauses permitted them to do so. See Multiple Dwelling Law 366(1). Defendants advanced this position before the Department of Buildings, the Board of Standards and Appeals, this Court (Hunter, Jr., J.), the Appellate Division, First Department and, finally, the Court of Appeals. Skipping to the end of those legal developments, the Appellate Division held that the amended 30–day minimum occupancy provision applies to the Imperial Court, as a class A multiple dwelling, notwithstanding the savings clauses (see Matter of Grand Imperial, LLC v. New York City Bd. of Stds. & Appeals, 137 A.D.3d 579, 579, 27 N.Y.S.3d 158 [1st Dept.2016] ) and, on November 17, 2016, the Court of Appeals denied defendants' motion for leave to appeal from the order ( 28 N.Y.3d 907, 2016 WL 6789777 ). Thus, it is now beyond any dispute that rentals of less than 30 days at the Imperial Court violate the Multiple Dwelling Law.

The seven-day stays at issue in this action have been almost exclusively reservations that were made following the decision of this Court (Hunter, Jr., J.) (Doc. No. 32), in which it was held that the savings clauses of the Multiple Dwelling Law permitted seven-day stays at the Imperial Court, but before the decision of the Appellate Division, First Department, which reversed the Supreme Court decision. Throughout the course of this litigation, defendants have maintained that the seven-day stays have been legal because the reservations were made while the decision of this Court (Hunter, Jr., J.) was in effect.

The tenant plaintiffs moved under motion sequence No. 001 for a preliminary injunction, which motion was denied in an order entered November 30, 2016. (Doc. No. 365). They now seek reargument of that motion.

The City of New York, under motion sequence No. 002, previously moved to intervene as a plaintiff, asserting, among other things, a public nuisance cause of action. The City also moved for a preliminary injunction. The court granted both branches of the City's motion, though there is still some disagreement as to the details of the City's intervention. This Court implied during the parties' first appearance that it intended to permit the City to intervene. Whether and when intervention was granted is subject to defendants' current motion to reargue.

In addition to the motions to reargue certain aspects of this Court's prior order, there are many additional matters that require resolution. The City has moved to dismiss certain affirmative defenses appearing in defendants' answers both to the tenant plaintiffs' complaint as well as to the City's own complaint. The City has also moved against various nonparties for discovery related relief.

I. The motion and cross motions to reargue are both denied.

A motion for reargument should be granted where the movant establishes that the court "overlooked or misapprehended any issue of law and fact in making its original determination." Jones v. City of New York, 146 A.D.3d 690, 46 N.Y.S.3d 57 (1st Dept.2017) ; see CPLR 2221(d) (2) ; Pezhman v. Chanel, Inc., 126 A.D.3d 497, 2 N.Y.S.3d 792 (1st Dept. 2015).

A. The City's Intervention

Defendants have failed to raise a basis to reargue whether the City was entitled to intervene. It is true that the determination seems to have been made before defendants were given an opportunity to raise objections to the intervention. Nevertheless, the City has an interest in this litigation that convinced this Court to permit it to it to intervene, as a matter of discretion, because its claims share common questions of law and fact with the tenant plaintiffs' claims.¹ Indeed, defendants do not raise any objections to the City intervening as a plaintiff in their papers supporting the motion. Instead, they assert that this Court never addressed whether the City had the right to bring additional parties into the action. They argue that the failure to make a ruling permitting the City to join additional defendants has caused some uncertainty as to service. Defendants argue that they were never served with the City's summons and complaint in intervention; rather, they were only served with the moving papers on the order to show cause, which included the proposed summons and complaint as exhibits. This, they contend, was not adequate service of the summons and complaint in intervention. They further argue that their attorneys have only appeared for the purpose of contesting service up until this point.

Defendants' objections with respect to personal jurisdiction over the newly added defendants were beyond the scope of the City's motion to intervene, and are thus beyond the scope of a motion to reargue. In any event, the City stated at least a facial basis on which to proceed against all the parties it named. If any individual defendant feels it was wrongly named in the City's complaint, as the City asserts, the appropriate remedy would be a motion to dismiss.²

B. The City's Preliminary Injunction

Defendants have failed to raise a ground for reargument of the City's preliminary injunction. They argue that, since defendants voluntarily ceased seven-day rentals, the preliminary injunction motion was rendered moot. This precise argument was advanced and rejected by this Court on the initial motion, and defendants have not set forth a reason to revisit the ruling.

C. The Tenant Plaintiffs' Motion for a Preliminary Injunction

The tenant plaintiffs' cross motion to reargue their motion for a preliminary injunction is denied. Their application was denied because this Court found that they failed to show a likelihood of success on the merits. If there is some theory available to the tenant plaintiffs a...