GREENE AVE ASSOC. v. Cardwell

• Court: New York Civil Court
• Citation: 191 Misc.2d 775,743 N.Y.S.2d 842
• Decision Date: 07 June 2002
• Parties: GREENE AVENUE ASSOCIATES, Petitioner,<BR>v.<BR>JESSIE CARDWELL et al., Respondents.

191 Misc.2d 775
743 N.Y.S.2d 842

GREENE AVENUE ASSOCIATES, Petitioner,
v.
JESSIE CARDWELL et al., Respondents.

June 7, 2002.

Rappaport, Hertz, Cherson & Rosenthal, P.C. (Michael Rosenthal and David I. Paul of counsel), for petitioner.

Robert E. Sokolski for Jessie Cardwell, respondent.

[191 Misc.2d 776]

OPINION OF THE COURT

JACK M. BATTAGLIA, J.

This holdover proceeding was commenced by petition and notice of petition each dated September 19, 2001, following a 30-day notice of termination of tenancy dated June 28, 2001. Petitioner seeks to recover apartment E-15 at 80 Greene Avenue, as well as use and occupancy at the rate of $1,087 per month from January 1, 2001. A prior holdover proceeding, commenced on January 16, 2001, was dismissed by Honorable Oymin Chin on June 25, 2001, because petitioner served a rent demand after the notice of termination.

The petition alleges that respondent Jessie Cardwell took possession of the premises pursuant to a lease dated February 14, 1992, and that her right to possession expired on August 31, 2001, the date specified in the 30-day notice. Respondents Tiffany Ann Cardwell, John Doe and Jane Doe are alleged to be "undertenant(s)" of Jessie Cardwell.

The 30-day notice states that Jessie Cardwell is "in material noncompliance of [her] tenancy," because she permitted Tiffany Ann Cardwell to occupy the premises without petitioner's prior written approval, and failed to report a change in family composition, apartment occupants or income. The premises are said to be "contained in a housing project specifically set up for the elderly and which has a mortgage aided by government insurance," and the notice is given pursuant to provisions of the written lease and "HUD Rules and Regulations." Paragraphs 13, 15 and 16 of the lease, and a "house rider," are cited, as well as "paragraph 23B and the HUD regulation handbook 4350.3(4-18)."

In a notice of appearance, answer and counterclaim dated November 13, 2001, respondent Jessie Cardwell denied the allegations of the petition and asserted eight affirmative defenses and a counterclaim. The answer alleges, among other things, that Tiffany Ann Cardwell is Jessie Cardwell's "lawfully adopted daughter," her "adopted minor daughter, who is also her granddaughter"; that Tiffany is permitted to occupy the premises pursuant to Real Property Law § 235-f; that "Petitioner, its employees and/or agents have had knowledge that the Respondent's lawfully adopted daughter had lived with Respondent for a number of years, yet took no action," thereby establishing laches, waiver and estoppel. The counterclaim alleges that "this summary holdover proceeding constitutes frivolous conduct as defined by 22 NYCRR § 130-1.1" and

[191 Misc.2d 777]

"is a clear attempt to knowingly harass and maliciously injure Respondent, an illiterate and sickly senior citizen."

Ms. Cardwell moved for summary judgment dismissing the action, which was denied by Honorable Marcia J. Sikowitz in a decision/order dated March 15, 2002. Judge Sikowitz found "questions of fact regarding Tiffany Cardwell's residence, and what, if any, information the respondent furnished to the petitioner about her adopted daughter Tiffany * * * [and] whether or not the petitioner is correct that a fraud was perpetrated on the petitioner as defined by HUD Handbook 4350.3 Section 5-19b."

A trial was held before this court on April 8 through April 11. Petitioner presented three witnesses: Al Weeks, a "field agent" employed by petitioner; Eva Diaz, a "secretary" employed by AMS Realty Company, petitioner's managing agent, working at the building at 80 Greene Avenue; and Jessica Fernandez-Prada, also employed by AMS, working at its office in Great Neck. Respondent Jessie Cardwell testified, and her daughter, Linda Wilson-Warner, testified on her behalf. The parties submitted posttrial briefs containing their respective legal and factual contentions and arguments.

As described by Judge Sikowitz in her decision/order on the motion for summary judgment, the subject premises is a "HUD Section 202 senior citizen housing unit." Under the section 202 program, "direct loans are provided by HUD at below market rates to * * * not-for-profit and public entities that agree to provide housing and related facilities for elderly * * * families * * * Rent subsidies, mostly under the Section 8 Program, are provided for all units in the Program." (Scherer and Fisher-Brandveen, Residential Landlord-Tenant Law in New York § 5:177.) "In general, the Section 8 Program, 42 USC § 1437f, provides federally funded rent subsidies to low income tenants to enable them to rent privately owned units. In the Section 8 Program, the subsidy generally pays for the difference between 30% of the household income and the `fair market rent' * * * or other legally established rent for a unit." (Id. § 5:96.)

HUD regulations and "handbooks" govern various aspects of section 8 tenancies, including terminations, establishing substantive and procedural requirements. Handbook 4350.3, titled "Occupancy Requirements of Subsidized Multifamily Housing Programs," is applicable to this proceeding. (The court is using the text of the Handbook as it appears on HUD's Web site: [accessed July 17, 2002].) The provisions of the Handbook are intended to be mandatory, and

[191 Misc.2d 778]

are so treated by New York courts. (Jackson Terrace Assoc. v Rice, 142 Misc 2d 438, 440 [Nassau Dist Ct 1988]; Green Park Assoc. v Inman, 121 Misc 2d 204, 205 [Civ Ct, Kings County 1983].) The amount of the rent subsidy is determined by certification and annual recertification. (See, generally, Handbook 4350.3, chs 3, 5.)

In the 30-day notice, petitioner cites paragraphs 13, 15, and 16 of the lease and a "house rider." Paragraph 13 provides that the tenant, designated previously as Jessie Cardwell, "shall use the premises only as a private dwelling for himself/herself and the individuals listed on the Certification and Recertification of Tenant Eligibility. The Tenant agrees to permit other individuals to reside in the unit only after obtaining the prior written approval of the landlord." (The provision was amended in 1995 to underline "after.")

Paragraph 15 states that:

"Every year around the first day of November, the Landlord will request the Tenant to report income and composition of the Tenant's household and to supply any other information required by HUD for the purpose of determining the Tenant's rent and assistance payment, if any. The Tenant agrees to provide accurate statements of this information and to do so by the date specified in the Landlord's request."

There is no question that at the time of applying for an apartment, and each year thereafter when presented with the owner's certification of compliance with HUD's Tenant Eligibility and Rent Procedures, Ms. Cardwell signed the form, indicating that she was the only person in the household, with no dependents, foster children or attendants.

Paragraph 16 is titled "Reporting Changes Between Regularly Scheduled Recertifications," and, as amended at some point during the tenancy, requires the tenant to advise the landlord immediately if "[t]he household's income cumulatively increases by $40 or more a month." As will appear below, there was no evidence at trial of any increase in Ms. Cardwell's household income, and no other provision in paragraph 16 appears in any way relevant to this case. The reference in the 30-day notice to a "house rider" must mean the "House Rules" attached to the lease, which include "[n]o boarders."

The 30-day notice states that the termination is based upon "material noncompliance" with the lease; the notice cites paragraph 23 but not paragraph 25. Under paragraph 23 (b)

[191 Misc.2d 779]

(1), the landlord may terminate for "material noncompliance"; paragraph 23 (b), as amended, defines that term as including "one or more substantial violations of the lease," and the "failure of tenant to timely supply all requested information on income and composition or eligibility factors, of the tenant household * * * or to knowlingly [sic] provide incomplete or inaccurate information" (emphasis added). Paragraph 25, as amended, states: "Knowingly giving the Landlord false information regarding income or other factors considered in determining Tenant's eligibility and rent is a material noncompliance with the lease subject to termination of tenancy" (emphasis added).

The 30-day notice states that the termination is also based upon "the HUD regulation handbook 4350.3 (4-18)." The cited provision of the Handbook states that "[o]wners may evict tenants * * * for * * * material non-compliance with the lease." (§ 4-18 [c] [1].) The next section of the Handbook states that the "term material noncompliance with the lease includes * * * one or more substantial violations of the lease * * * [and] failure of the tenant to timely supply all required information on the income and composition, or eligibility factors, of the tenant household * * * or to knowingly provide incomplete or inaccurate information." (§ 4-19 [1], [3].) As is apparent, paragraph 23 of the lease, as amended, tracks sections 4-18 and 4-19 of the Handbook.

The provision in the Handbook cited in the 30-day notice, section 4-18, appears in chapter 4, "Leasing, Deposits and Termination of Tenancy." Chapter 5, "Recertification, Interim Adjustments, and Termination of Tenancy," contains provisions dealing with "fraud," including section 5-19 (b), cited by Judge Sikowitz in her decision on the motion for summary judgment. Although it is stated that "fraud" encompasses "[p]roviding false information * * * [in] material noncompliance with the lease" (§ 5-19 [c]), and that "material noncompliance" by "knowingly" providing false information gives the landlord "authority to pursue eviction in cases of tenant fraud" (§ 5-20 [b]), the precise relationship between the provisions of chapters 4 and 5 is not clear. The intention, however,...