Greenwood v. Ajal, L.P.
| Decision Date | 20 August 2021 |
| Docket Number | INDEX 157838/2020 |
| Citation | 2021 NY Slip Op 32930 (U) |
| Parties | TYSON GREENWOOD, Plaintiff, v. AJAL, L.P., Defendant. |
| Court | New York Supreme Court |
Unpublished Opinion
DECISION + ORDER ON MOTION
The following e-filed documents, listed by NYSCEF document number (Motion 001) 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32 33, 34, 35, 36 were read on this motion to/for DISMISSAL.
On November 19, 2014, plaintiff Tyson Greenwood signed a one-year lease for apartment IB (the apartment) at 133 East 7th Street in Manhattan (the building) (NYSCEF Doc. No 22).[1] His tenancy commenced on December 1 of the same year. Annexed to the lease was a rider that informed plaintiff that the apartment had just been decertified and was no longer subject to rent stabilization. The rider provided the following breakdown:
(NYSCEF Doc. No. 1, ¶¶ 11-12). Plaintiff alleged in his complaint that the notice of deregulation did not comply with the notice requirements set forth in 9 NYCRR § 2522.5 (c) (1). He further alleged, among other things, that defendant did not inform him of his right to see documentary evidence substantiating the IAI increase (see NYSCEF Doc. No. 1, ¶¶ 11-12).
Plaintiff did not sign a renewal lease in 2015, but instead continued to pay $2500 a month in rent as a month-to-month tenant. Plaintiff missed four rental payments between October 1, 2017 and January 1, 2018, making partial payments totaling $3400 in December and January. He subsequently made a partial payment in March 2018. On April 3, 2018, defendant initiated a nonpayment proceeding against plaintiff, alleging that plaintiff owed defendant $13, 000 plus interest for back rent (NYSCEF Doc. No. 23).
Initially plaintiff appeared pro se and made a general denial. After he obtained counsel, however, he prepared a motion to amend the answer (NYSCEF Doc. No. 25). In the motion, which also included a copy of the proposed amended answer, plaintiff noted that a landlord is entitled to an IAI increase of 1/40 of the dollar amount spent on the improvements. To justify the IAI increase of $1617.50, therefore, defendant would have had to spend around $64, 700. In its application to the Department of Buildings (DOB) for a permit allowing it to renovate apartments IB and 3 A in the building (NYSCEF Doc. No. 24), however, defendant described the project as including minor plumbing work, the replacement of cabinets, the addition of plaster and paint to match what already was there, and replacements of the tub, toilet, and kitchen sink. The application estimated that the total cost for both apartments would be $18, 000, $10, 000 of which related to apartment IB. Plaintiffs proposed answer in the nonpayment proceeding relied on this evidence to claim that defendant improperly inflated the cost of the IAI in order to take the apartment out of its rent-stabilized status. In addition, plaintiff argued that defendant's three- day notice was improper because, as a month-to-month tenant, plaintiff was entitled to a thirty-day notice of termination.
In June 2018 defendant stipulated to discontinue the nonpayment proceeding (NYSCEF Doc. No. 26). According to plaintiff, he entered into the stipulation on the condition that he be allowed to remain in the apartment. The parties did not agree on a particular rent at that time. Plaintiff sought the rent records for the apartment and learned that "[defendant appear[ed] to have filed an exit registration in May of 2019" (NYSCEF Doc. No. 1, ¶ 24). Plaintiff asserts that defendant did not comply with the notice requirements in 9 NYCRR § 2520.11 (u) when it filed this document.
Although defendant alleges that, in February 2020, it sent plaintiff a rent-stabilized renewal lease which set the rent at $2, 477, plaintiff contends that he did not receive the same. However, he does acknowledge receipt of a June 23, 2020 letter from defendant, which provided a 30-day notice of termination of plaintiff's tenancy because of his failure to sign the renewal lease. Plaintiff responded by letter on July 17, 2020, stating that he did not receive the renewal lease and seeking more information about the computation of his new rent and his alleged rent-stabilized status (NYSCEF Doc. No. 27; see NYSCEF Doc. No. 1, ¶ 26). Defendant then provided plaintiff with a list of alleged improvements allegedly totaling $53, 600, along with repair bills totaling $8, 000. In addition, the document contained copies of a number of checks, some of which were made out to Alexander Neprel (NYSCEF Doc. No. 13).[3] According to the complaint, plaintiff did not receive a response to his letter until mid-August of 2020. Plaintiff further alleges that, before he could respond, defendant served plaintiff with a new 30-day notice of termination of tenancy and commenced a landlord-tenant proceeding shortly thereafter (see NYSCEF Doc. No. 18 [Ajal, LP v Greenwood, Index No LT-302906-20NY]). Plaintiff alleges that the above facts, taken together, "strongly indicate that Defendant is engaged in a fraudulent scheme to evade the rent laws" (NYSCEF Doc. No. 1, ¶ 34).
Plaintiff filed the summons and complaint in this action on September 24, 2020, asserting causes of action based on rent overcharge, willful overcharge, and a violation of General Business Law (GBL) § 349. He seeks injunctive relief- specifically, the determination of the proper legal stabilized rent and a direction to defendant to provide him with a lease at the stabilized rent; treble damages under 9 NYCRR § 2526.1 (a) (1); and attorneys' fees pursuant to Rent Stabilization Law §26-516(a)(4) and 9 NYCRR §2526.1(d) or, alternatively, under GBL § 349.
In its answer, Defendant denies all allegations of wrongdoing (NYSCEF Doc. No. 3). Defendant maintains that it provided a deregulated lease to plaintiff based on a good faith belief that its IAI was accurate and the apartment was subject to decontrol. Defendant concedes in the answer that it recalculated the rent as $2, 447.23 and included this amount in defendant's proposed renewal lease which, it acknowledges, renders the lease subject to rent stabilization. According to the answer, as the result of defendant's alleged computational error in 2014, plaintiff was overcharged $2, 061.72 but nevertheless owes defendant $99, 700.56 in rent.
Defendant maintains that, after the $2, 061.72 credit, plaintiff owes it a balance of $97, 638.84 in back rent. Defendant counterclaims for payment of the said balance plus interest. In addition, defendant asserts a counterclaim for attorneys' fees under the lease.
Plaintiff replied to defendant's counterclaims, denying defendant's entitlement to any relief. As for the first counterclaim, the reply alleges that "Defendant has only served Plaintiff a renewal lease and not a vacancy lease because Defendant, well aware that it is illegally overcharging the Plaintiff, is attempting to avoid disclosing the information required by the Rent Stabilization laws to a tenant with a rent stabilized lease" (NYSCEF Doc. No. 4, ¶ 2). In light of the purported overcharges by defendant, plaintiff denies that he owes defendant $97, 638.84. In response to defendant's second counterclaim, plaintiff asserts that the 2014 lease - the only one between the two parties illegally deregulated the apartment and therefore is void. Accordingly, urges plaintiff in reply, defendant cannot seek attorneys' fees under the lease.[4]
Currently before this Court are defendant's motion for dismissal and/or summary judgment and plaintiffs cross-motion for summary judgment on his first and second causes of action (NYSCEF Doc. Nos. 5, 19). In support of defendant's motion, the affidavit of Barbara Chupa, the authorized signatory of defendant, reiterates defendant's contentions that defendant performed $61, 000 of IAIs which, along with the longevity increase and the vacancy increase, entitled defendant to issue a $2, 447.23 per month lease to plaintiff in 2014 (NYSCEF Doc. No. 6). As proof of the IAIs, defendant submits the lists it provided to plaintiff prior to the institution of defendant's second Housing Court proceeding. Chupa insists that defendant's original belief that the IAIs took the apartment out of rent-stabilized status was a good faith error. She states that defendant issued the rent-stabilized renewal lease to plaintiff on February 25, 2020 because it realized its original error. She asserts that defendant maintained the rent ledger and made the overcharge calculations during the regular course of business and, thus, they "conclusively establish[] that Defendant [sic] is liable to Defendant for rent, and therefore, Defendant's motion for summary judgment on its first counterclaim should be granted" (id, ¶ 23).
Counsel's affirmation reiterates these contentions. He argues that plaintiffs first cause of action, alleging that the apartment is rent stabilized, fails to state a claim because defendant concedes this fact. Counsel argues that plaintiffs second cause of action, for rent overcharge, must be dismissed because of plaintiff s alleged debt for back rent. Further, counsel argues that defendant is entitled to judgment in the amount of $97, 638.84, plus interest, on its first counterclaim, and is entitled to summary judgment on its second counterclaim, for attorneys' fees, and that a hearing should be held to determine the amount of fees owed.
Plaintiff submits an affidavit in support of his cross-motion (NYSCEF Doc. No. 21). He emphasizes that, in its 2018 Housing Court case...
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