Casey v. Whitehouse Estates Inc.

• Decision Date: 15 September 2021
• Docket Number: 111723/2011
• Citation: 73 Misc.3d 562,154 N.Y.S.3d 738
• Parties: Kathryn CASEY, Laurie Cagnassola, Gerald Cohen, Betty Furr, Francesa Gagliano, Carolyn Klein, Joseph Morgan, Richard Rose, Jessica Saks, and Kirk Swanson, Plaintiffs, v. WHITEHOUSE ESTATES INC., Kieppel & Koeppel Inc., Duell 5 Management LLC, William Koeppel, and Eastgate Whitehouse Estates, LLC, Defendants.
• Court: New York Supreme Court

73 Misc.3d 562

154 N.Y.S.3d 738

Kathryn CASEY, Laurie Cagnassola, Gerald Cohen, Betty Furr, Francesa Gagliano, Carolyn Klein, Joseph Morgan, Richard Rose, Jessica Saks, and Kirk Swanson, Plaintiffs,

v.WHITEHOUSE ESTATES INC., Kieppel & Koeppel Inc., Duell 5 Management LLC, William Koeppel, and Eastgate Whitehouse Estates, LLC, Defendants.

111723/2011

Supreme Court, New York County, New York.

Decided on September 15, 2021

Himmelstein, McConnell, Gribben, Donoghue & Joseph LLP, New York, NY (Ronald S. Languedoc of counsel), for plaintiffs.

Rosenberg & Estis, P.C., New York, NY (Howard W. Kingsley of counsel), for defendants.

Gerald Lebovits, J.

This class action concerns the proper amount of rent owed by tenants of a residential apartment building in Manhattan. The various defendants held, or now hold, ownership interests in the building. The named plaintiffs brought this action on behalf of a class of present and former tenants to recover alleged rent overcharges imposed by defendants.

Previous orders of the court in this action required the tenants to pay use and occupancy (U & O) pending a final determination of their lawful regulated rents for the periods at issue. On the current motion, defendants contend that two tenants, Gina Chatel and Laurie Cagnassola, have failed to pay the required U & O. Defendants therefore seek (i) money judgments against these two tenants for back U & O plus interest; and (ii) judgments of possession and writs of assistance to enable defendants to recover possession of these tenants’ apartments.

The branch of defendants’ motion seeking money judgments against Chatel and Cagnassola is granted. The branch of the motion seeking judgments of possession and writs of assistance is denied without prejudice.

BACKGROUND

Plaintiffs allege that the class members were rent-stabilized or rent-controlled tenants in defendants’ building; and that defendants illegally deregulated the class-members’ units and assessed them excessive, market-rate rents for several years. (See generally Casey v. Whitehouse Estates, Inc. , 2017 WL 1161744, 2017 N.Y. Slip Op. 33319[U], at *1 [Sup. Ct., N.Y. County Mar. 23, 2017].)

In 2014, defendant Whitehouse Estates, Inc. (the building's former owner), offered the tenants renewal leases at a rent of Whitehouse's choosing, threatening to bring eviction proceedings if the tenants did not accept. (See Eastgate Whitehouse LLC v. Cagnassola , 2020 WL 3277490, 2020 N.Y. Slip Op. 50691[U], at *1 [Sup. Ct., N.Y. County June 16, 2020].) The tenants sought a preliminary injunction against Whitehouse. This court (Anil Singh J.) granted the preliminary injunction.¹ The court held that the proper course was, in effect, for the tenants to pay Whitehouse U & O pending the completion of the action, at the rent set by the tenants’ last expired leases. (See NYSCEF No. 194 at 19-20 [transcript of ruling on the record].)

In 2016, defendants asked this court to fix the amounts owed by plaintiffs in U & O, arguing that notwithstanding Justice Singh's 2014 order, defendants had been unable in practice to collect U & O from many of their tenants or to obtain judgments of possession. This court decided defendants’ request for relief in 2017. (See Casey , 2017 N.Y. Slip Op. 33319[U].) This court agreed with defendants that as an equitable matter, "a dispute concerning the amount of rent owed is no reason to allow a tenant to occupy the landlord's property gratis." ( Id. at *17 [internal quotation marks omitted].) But this court concluded the state of the record was such that "there is currently no way for the court to make a complete calculation of the U & O that is due for each apartment from the inception of this action." ( Id. ) The court therefore referred to a special referee the issue of the appropriate amounts of U & O owed by each tenant. Tenants who had not been paying U & O as directed by Justice Singh would be required to post a bond equal to their U & O obligation as determined based upon the special referee's forthcoming report. (See id. at *18.)

As a procedural matter, this court directed defendants, when "submit[ting] their motion to confirm or deny the Special Referee's report," to "include a request that the court issue an order requiring those plaintiffs who have not paid any use and occupancy to post a bond, equal to the amount of use and occupancy specified in Justice Singh's May 21, 2014 order," following this court's decision on the motion to confirm. ( Id. at *21.) Defendants could "thereafter commence an action for ejectment against any plaintiff who fails to post such a bond[,] and request that that action be referred to this court."² ( Id. ) The Appellate Division, First Department, recently affirmed this court's order on defendants’ U & O-related request (and on other issues in the case not relevant here). (See Casey v. Whitehouse Estates, Inc. , 197 A.D.3d 401, 153 N.Y.S.3d 6 [1st Dept. 2021].)

In late 2019, defendants brought separate actions against Cagnassola and against Daniel Geller (another tenant in the building), seeking money judgments for unpaid U & O, and judgments awarding them possession of Cagnassola's and Geller's apartments. (See Eastgate Whitehouse LLC v. Cagnassola , 2020 WL 3277490 (2020) ; Eastgate Whitehouse LLC v. Geller , 2020 WL 3277739 (2020).) In June 2020, this court granted Cagnassola's and Geller's motions under CPLR 3211 (a) (1) and (a) (4) to dismiss the actions against them. (See Cagnassola , 2020 N.Y. Slip Op. 50691[U] ; Eastgate Whitehouse LLC v. Geller , 2020 WL 3277739, 2020 N.Y. Slip Op. 50692[U] [Sup. Ct., N.Y. County June 16, 2020].)

Defendants now move in this action against Chatel and Cagnassola for (i) money judgments in the amounts of $209,775, and $163,800, respectively, in assertedly owed U & O; and (ii) judgments of possession and writs of assistance based on Chatel and Cagnassola's failures to pay accrued U & O.

DISCUSSION

Defendants contend that they are entitled to money judgments, judgments of possession, and writs of assistance against Chatel and Cagnassola for their respective failures to pay U & O as putatively required by this court's previous orders in this action. Plaintiffs have expressly declined to contest at this time defendants’ arguments about Chatel and Cagnassola's putative failures to have paid required U & O. Instead, they argue that under the COVID Emergency Eviction and Foreclosure Prevention Act (CEEFPA), L 2020, ch. 381, and under L 2021, ch 417, this court may not now consider any part of defendants’ motion. (See NYSCEF No. 465 at ¶ 12.) This court agrees that it may not consider defendants’ requests for judgments of possession and writs of assistance until after the expiration of the stay imposed by chapter 417. But the court sees no bar to considering and determining defendants’ request for money judgments.

I. The Branch of Defendants’ Motion Seeking Judgments for Possession and Writs of Assistance

The first question raised by the current motion is whether chapter 417 bars this court even from considering defendants’ requests for judgments of possession and writs of assistance as against Chatel and Cagnassola. This court concludes that chapter 417 does bar consideration of those requests prior to its expiration in January 2022.

A. Whether this Branch of the Motion Constitutes An "Eviction Proceeding" for Purposes of Chapter 417

Defendants contend first that CEEFPA did not (and chapter 417 does not) even apply to this motion. The statutory restrictions in those statutes, defendants argue, apply only to "eviction proceedings"—not to motions brought in a rent-overcharge action that seek possession based on a tenant's failure to pay court-ordered U & O. This court disagrees.

CEEFPA imposed a moratorium on (most) residential eviction proceedings. It defined "eviction proceeding" to include not only RPAPL article 7 summary proceedings, but also "any other judicial or administrative proceeding to recover possession of real property relating to a residential dwelling unit." (L 2020, ch 381, pt A, § 1 [1] [emphasis added].) In enacting CEEFPA, the Legislature stated that its intent was "to avoid as many evictions and foreclosures as possible for people experiencing a financial hardship during the COVID-19 pandemic." (Ch 381, § 3.)

In Chrysafis v. Marks, ––– U.S. ––––, 141 S.Ct. 2482, 2482-83, 210 L.Ed. 1006 [2021], the U.S. Supreme Court enjoined CEEFPA. The Court held that CEEFPA's limits on a landlord's ability to challenge tenants’ certifications of financial hardship violated due process.³ The Legislature then enacted chapter 417 to restore a moratorium on (most) residential eviction proceedings while addressing Chrysafis's due-process holding (See L 2021, ch 417, § 2 [legislative findings].) Chapter 417 and CEEFPA define "eviction proceeding" the same way. (See L 2021, ch 417, pt C, subpt A, § 1 [1].) In enacting chapter 417, the Legislature explained that restoring the moratorium was necessary in light of "the ongoing risks posed by residential evictions stemming from non-payment of rent" during the pandemic, "such as the potential to exacerbate the resurgence of COVID-19, the damage significant numbers of evictions would cause to the state's economic recovery, and the deleterious social and public health effects of homelessness and housing instability."⁴ (Ch 417, § 2.)Thus, in stringently limiting residential eviction proceedings, chapter 417 employs a broad definition of "eviction proceeding." The legislative findings of chapter 417 and its predecessor CEEFPA make clear, moreover, that this definition should itself be construed broadly to further the Legislature's aim of avoiding public-health, economic, and social harms from residential evictions during the COVID-19 pandemic. (See NYCTL 2016-A Trust v. Neighborhood Youth & Family Servs., Inc. , 71 Misc. 3d 479, 484, 142 N.Y.S.3d 898 [Sup. Ct., Bronx County 2021] [holding, in interpreting "eviction proceeding" in CEEFPA, that the statute's "statement...