B.S.L. One Owners Corp. v. Rubenstein

• Decision Date: 03 January 1994
• Citation: 159 Misc.2d 903,606 N.Y.S.2d 979
• Parties: B.S.L. ONE OWNERS CORP., Petitioner, v. Raeanne RUBENSTEIN & Richard Burnes, Respondents.
• Court: New York City Court

Page 979

606 N.Y.S.2d 979

159 Misc.2d 903

B.S.L. ONE OWNERS CORP., Petitioner, v. Raeanne RUBENSTEIN & Richard Burnes, Respondents.

Civil Court of the City of New York Richmond County.

Jan. 3, 1994.

B.S.L. One Owners Corp. by Jerry A. Montag, Mandel and Resnik, P.C., New York City, for petitioner.

Raeanne Rubenstein by Andrea T. Novick, Finder, Novick, Kerrigan & Anderson, New York City, for respondents.

THOMAS P. ALIOTTA, Judge.

In a summary proceeding, respondent Raeanne Rubenstein (hereinafter referred to as respondent), moves, pursuant to Multiple Dwelling Law (MDL) §§ 301 and 302, to dismiss the petition and for partial summary judgment on her counterclaim seeking recovery of rent paid during the period that there has been no certificate of occupancy for the subject apartment. Petitioner has filed opposing papers and cross-moves, pursuant to CPLR § 3211, to dismiss respondent's defenses set forth in paragraphs "1" through "4" and "6" through "17" of the answer.

The undisputed facts are as follows:

In 1981, Key Manufacturing International, Inc. (hereinafter referred to as the "Sponsor"), opened an alteration file with the Buildings Department to convert a commercial warehouse building, 10 Bay Street Landing, to a co-operative apartment.

Pursuant to the plans filed with the Buildings Department, a certificate of occupancy was issued in 1983 for the first through seventh floors of the building. The eighth and ninth floors of the building were designated as storage/mechanical areas. In February 1984, the Sponsor opened a second alteration file to convert the eighth and ninth floor storage space to Class A duplex residential (penthouse) apartments. Pursuant to the plans filed with the Buildings Department, the Sponsor was obligated to complete all of the work required under the alteration file, including all improvements necessary to obtain a certificate of occupancy for the building. The Sponsor failed to file required controlled inspection reports including the report relating to firestopping of the penthouse apartments. Consequently, no certificate of occupancy has ever been issued for residential use of the penthouse apartments.

In 1985, respondent purchased shares from the co-operative and contracted a proprietary lease for the possession of the subject penthouse apartment with knowledge that no certificate of occupancy was issued for the apartment.

In 1992, during the replacement and repair of terraces on the eighth floor as well as the removal of part of the eighth floor concrete slab due to severe water leaks in the building, petitioner's engineering contractor discovered that there existed a deficiency in firestopping underneath the eighth floor and the plumbing shaft area between respondent's apartment and the apartment adjacent to it. Petitioner's engineering contractor further discovered that a report issued by an engineer hired by the Sponsor incorrectly stated that firestopping existed in the crawl space below the penthouse demising wall. Prior to this discovery, both parties mistakenly believed that the lack of issuance of the certificate of occupancy of the apartment was not related to the safety or integrity of the premises.

Petitioner asserts that, to date, all areas in the penthouse apartments requiring firestopping have been ascertained and that approximately 95% of the firestopping work required at the building is complete. Petitioner further asserts that its contractor was unable to complete the firestopping work in respondent's apartment at an earlier date because respondent failed to cooperate with petitioner and its contractors by providing them access to her apartment.

Petitioner seeks maintenance (rent) arrears in the amount of $13,876.83 which includes the balance of $100.00 owed for September 1993, monthly maintenance owed from October 1992 through April 1993, and legal fees.

Respondent argues that since no certificate of occupancy has ever been issued for her apartment, petitioner is in violation of MDL § 301(1) and the summary proceeding herein should be dismissed and petitioner precluded from recovering rents for the period during which she occupied the apartment and withheld payment of rent, pursuant to MDL § 302(1)(b). Moreover, respondent argues that pursuant to MDL § 302(1)(b), summary judgment should be granted on her counterclaim seeking reimbursement of rent previously paid during the full term of occupancy of the premises since 1985.

Petitioner claims that it is excused from its statutory obligation to obtain a certificate of occupancy because respondent purchased her apartment from the Sponsor and, pursuant to the sales agreement, the Sponsor was contractually obligated to obtain the certificate of occupancy. Any agreement between the Sponsor and the respondent, however, does not relieve petitioner from obligations imposed upon it by the Multiple Dwelling Law. Such a claim is irrelevant to the proceedings herein.

MDL § 301(1) provides in part:

No multiple dwelling shall be occupied in whole or in part until the issuance of a certificate by the department that said dwelling conforms in all respects to the requirements of this chapter ...

MDL § 302(1)(b) provides:

No rent shall be recovered by the owner of such premises for said period, and no action or special proceeding shall be maintained therefor, or for possession of said premises for nonpayment of such rent.

Respondent argues that MDL § 302 should not be strictly construed so as to limit her from using the statute to recover rents voluntarily paid to the landlord during the period the premises had no certificate of occupancy issued for its use. Relying on the dissenting opinion in Goho Equities v. Weiss, 149 Misc.2d 628, 572 N.Y.S.2d 836, respondent contends that although MDL § 302 is penal in nature, it is a remedial statute, beneficial to the public, and should therefore be liberally or equitably construed so as to effect its purpose (McKinney's Cons.Laws of N.Y., Book 1, Statutes § 275; Matter of State of New York v. Strong Oil Co., 105 Misc.2d 803, 433 N.Y.S.2d 345, affd. on other grounds 87 A.D.2d 374, 451 N.Y.S.2d 437; Redlich v. Capri Cinema, 43 A.D.2d 27, 31, 349 N.Y.S.2d 697, lv. dismissed 33 N.Y.2d 974, 353 N.Y.S.2d 738, 309 N.E.2d 136).

In order to determine whether a statute which imposes a civil penalty is penal in nature, the Court must first determine whether the penalty is imposed for the punishment of a wrong or for the redress of an injury to the individual. Matter of State of New York v. Strong Oil Co., supra, 105 Misc.2d at 820, 433 N.Y.S.2d 345 (citing Ward v. Bochino, 181 Misc. 355, 358, 46 N.Y.S.2d 54, affd. 268 A.D. 814, 50 N.Y.S.2d 336, mot. for rearg. and for lv. to app. to Court of Appeals den. 268 A.D. 887, 50 N.Y.S.2d 781, mot. for lv. to app. den. 294 N.Y. 675, 60 N.E.2d 760).

The purpose of the multiple dwelling law is to establish and maintain proper housing standards requiring sufficient light, air, sanitation and protection from fire hazards essential for the benefit of the public welfare. The assurance that residents are provided with safe, sound and approved construction is evidenced by the issuance of a certificate of occupancy. Washington Square Professional Bldg., Inc. v. Leader, 68 Misc.2d 72, 326 N.Y.S.2d 716 (1971). Unlike a civil penal statute, which may in some instances only impose a monetary fine for its violation, MDL § 302 precludes an owner from recovering rent and maintaining a summary proceeding against a tenant living in a multiple dwelling which lacks a certificate of occupancy. The owner's preclusion derives solely from the owner's failure to obtain a certificate of occupancy for the premises and terminates once the certificate is issued. The statute's conditional provision motivates an owner to expeditiously correct, modify or repair the premises to conform with housing standards prescribed by law, and relieve the tenant from unsafe, substandard living conditions. It is well established that statutes found to benefit the public, though penal as to some persons, will receive equitable construction in order not to defeat a general, as well as specific purpose. Matter of State of New York v. Strong Oil Co., supra, 105 Misc.2d at 820, 433 N.Y.S.2d 345 (citing McKinney's Cons. Laws of NY, Book 1, Statutes, § 275, p 444; Cotheal v. Brouwer, 5 N.Y. 562; People v. Abraham, 16 A.D. 58, 44 N.Y.S. 1077). MDL § 302, though traditionally held by courts to be highly penal to owners of multiple dwellings which lack a certificate of occupancy, requiring a strict construction of the statute [Wokal v. Sequin, 167 Misc. 463, 4 N.Y.S.2d 86 (1938) ], in fact advances the purpose of the Multiple Dwelling Law in a remedial fashion and must therefore be equitably construed.

Black's Law Dictionary [ (rev. 5th ed. 1979), p. 283] defines "equitable construction" as "[a] construction of a law, rule, or remedy which has regard more to the equities of the particular transaction or state of affairs involved than to the strict application of the rule or remedy; that is, a liberal and extensive construction, as opposed to a literal and restrictive [construction]". Equitable construction does not exclude a literal application of a statute. Strict application of a rule, in fact, falls within the parameters of equitable construction. It may be applied, however, only after consideration of all of the equities in the matter leads to the conclusion that only a literal reading of the statute will tender the equitable relief sought.

The Court's attention is then drawn to MDL § 325(2), which requires a landlord of a multiple dwelling to register the building with the City, providing information which the City can use to trace the landlord and hold him...