Dugan v. London Terrace Gardens, L.P.

• Decision Date: 05 September 2017
• Docket Number: Index No. 603468/2009
• Citation: 2017 NY Slip Op 33217 (U)
• Parties: WILLIAM DUGAN, MARSHA D'YANS, GEORGETTE GAGNON, LOWELL D. KERN, MICHAEL MCCURDY, JOSE PELAEZ, TRACY SNYDER, MICHAEL J. WALSH, LESLIE M. MACK, ANITA ZITIS, and JAMES DOERR, on Behalf of Themselves and All Other Persons Similarly Situated, Plaintiffs v. LONDON TERRACE GARDENS, L.P., Defendant
• Court: New York Supreme Court

2017 NY Slip Op 33217(U)

WILLIAM DUGAN, MARSHA D'YANS, GEORGETTE GAGNON, LOWELL D. KERN,
MICHAEL MCCURDY, JOSE PELAEZ, TRACY SNYDER, MICHAEL J. WALSH,
LESLIE M. MACK, ANITA ZITIS, and JAMES DOERR,
on Behalf of Themselves and All Other Persons Similarly Situated, Plaintiffs
v.
LONDON TERRACE GARDENS, L.P., Defendant

Index No. 603468/2009

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: PART 46

FILED: September 11, 2017
September 5, 2017

DECISION AND ORDER

APPEARANCES:

For Plaintiff Class
William Gribben Esq.
Ronald S. Languedoc Esq.
Himmelstein, McConnell, Gribben, Donoghue & Joseph LLP
15 Maiden Lane, New York, NY 10038

Matthew D. Brinckerhoff Esq.
Hayley Horowitz Esq
Emery Celli Brinckerhoff & Abady LLP
600 5th Avenue, New York, NY 10020

For Diahnne Dea Copeland
Yoram Silagy Esq.
Vernon & Ginsberg LLP
261 Madison Avenue, New York, NY 10016

For Defendant
Robert D. Goldstein Esq.
Paul N. Gruber Esq.
Borah, Goldstein, Altschuler, Nahins & Goidel, P.C.
377 Broadway, New York, NY 10013

LUCY BILLINGS, J.S.C.:

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Plaintiffs, a class of tenants at defendant's building complex London Terrace Gardens in New York County, move for approval of a proposed notice and plan for dissemination of the notice to all class members other than the named representative plaintiffs, providing all other class members an opportunity, within a proposed time frame, to opt out of the class action. C.P.L.R. §§ 903, 904. Defendant cross-moves for a different form of notice, but the parties agree on the plan for dissemination.

I. THE DEFINITION OF THE CLASS AND THE RECIPIENTS OF THE NOTICE

In 2013, the court certified a plaintiff class of:

all past and current tenants of London Terrace Gardens who have been charged or continue to be charged deregulated rents during defendant's receipt of J-51 tax benefits under New York Real Property Tax Law § 489(1)(a) and New York City Administrative Code §§ 11-243 and 11-244.

Dugan v. London Terrace Gardens, L.P., 45 Misc. 3d 362, 380 (Sup. Ct. N.Y. Co. 2013). See C.P.L.R. §§ 902, 903. In substance, this definition of the class is equivalent to the two definitions plaintiffs proposed when they moved for class certification in 2011.

Since the class includes past tenants, it encompasses more persons than the tenants who currently reside throughout the 10 buildings and 976 units within the London Terrace Gardens complex. Because the applicable statute of limitations bars plaintiffs' recovery for the claimed rent overcharges more than four years before plaintiff commenced this action in November 2009, however, the class does not include any tenant who moved from the complex before November 2005, C.P.L.R. § 213-a; N.Y.C.

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Admin. Code § 26-516(a); 9 N.Y.C.R.R. § 2526.1(a); Cintron v. Calogero, 15 N.Y.3d 347, 355-56 (2010); Crimmins v. Handler & Co, 249 A.D.2d 89, 91 (1st Dep't 1998), even though defendant charged deregulated rents during its receipt of J-51 tax benefits beginning before November 2005. N.Y. Real Prop. Tax Law § 489(1)(a); N.Y.C. Admin. Code §§ 11-243, 11-244 (formerly §§ J51-2.5 and J51-5).

Now, based on defendant's practices after its receipt of J-51 tax benefits ended June 30, 2014, plaintiffs propose that the notice be disseminated to a class that is broader than the class certified and in so proposing urge that the class definition be modified to encompass this broader class. Defendant estimates, and plaintiffs do not dispute, that this broader class will encompass more than 400 additional current and past tenants. Plaintiffs have not moved specifically to modify the class definition, but C.P.L.R. § 902 authorizes the court, without a motion, to adjust the class definition and the potential relief to be afforded to the class according to changed circumstances, particularly before a determination of the merits. E.g., City of New York v. Maul, 14 N.Y.3d 499, 513-14 (2010); DeFilippo v. Mutual Life Ins. Co. of N.Y., 13 A.D.3d 178, 181-82 (1st Dep't 2004); O'Brien v. GEICO Ins. Co., 99 A.D.3d 681, 683 (2d Dep't 2012). See Matter of Colt Indus. Shareholder Litig., 77 N.Y.2d 185, 198 (1991); Louisiana Mun. Employees' Retirement Sys. v. Cablevision Sys. Corp., 74 A.D.3d 1291, 1293 (2d Dep't 2010). Defendant, while understandably opposing any expansion of the

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class, concedes that plaintiffs' current motion has provided defendant as full an opportunity to oppose that expansion as if plaintiffs had moved specifically for that relief.

Plaintiffs now claim, based on circumstances that did not pertain before the tax benefits expired, that after expiration of the tax benefits, the rents charged for plaintiffs' apartments, even if less than previously charged when the apartments were deregulated illegally, are still more than the legal rents would have been had the apartments never been deregulated. Therefore plaintiffs now propose that the notice be disseminated to the following class and that the class definition be modified to encompass:

all past and current tenants of London Terrace Gardens who have resided in units that were deregulated during defendant's receipt of J-51 tax benefits.

This definition more accurately reflects the purpose of this action: to recover rent overcharges due to defendant's deregulation of its units while defendant was receiving J-51 tax benefits, whether the overcharges occurred during its receipt of the benefits or since then. Insofar a defendant's illegal conduct has continued to damage its tenants, they are entitled to recovery.

Three limitations dispel defendant's concern that this reformulated class definition renders the potential for recovery endless. First, obviously no tenants may recover overcharges before the tenants moved into units that were deregulated illegally. These tenants' recovery will extend into the future

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only for as long as defendant charges an illegally high rent. Finally, no more tenants may become members of the class once the notice to all class members has been disseminated.

In sum, defendant's practices after its receipt of J-51 tax benefits ended June 30, 2014, circumstances unknown when the court first certified the class, whether those practices are as plaintiffs portray or as defendant portrays and defends those practices, require modification of the class definition to address their legality. Therefore the court accommodates those changed circumstances by redefining the plaintiff class as:

all past and current tenants of London Terrace Gardens who have resided in units that were deregulated during defendant's receipt of J-51 tax benefits.

C.P.L.R. §§ 902, 903; City of New York v. Maul, 14 N.Y.3d at 513; Matter of Colt Indus. Shareholder Litig., 77 N.Y.2d at 198.

II. THE REMAINING CONTENTS OF THE NOTICE

Aside from the class definition, plaintiffs' revised proposed notice, after...