Griffith v. W. 171 Assocs., LP, INDEX NO. 159398/2017

• Decision Date: 11 February 2019
• Docket Number: INDEX NO. 159398/2017
• Citation: 2019 NY Slip Op 30322 (U)
• Parties: EMMA GRIFFITH and MERISSA MEYERS, on behalf of themselves and all others similarly situated, Plaintiffs, v. WEST 171 ASSOCIATES, LP, Defendant.
• Court: New York Supreme Court

2019 NY Slip Op 30322(U)

EMMA GRIFFITH and MERISSA MEYERS,on behalf of themselves and all others similarly situated, Plaintiffs, v. WEST 171 ASSOCIATES, LP, Defendant.

INDEX NO. 159398/2017

SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PART IAS MOTION 23EFM

RECEIVED: February 13, 2019

February 11, 2019

NYSCEF DOC. NO. 36

PRESENT:HON. W. FRANC PERRYJustice

MOTION DATEN/A

MOTION SEQ.NO.001

DECISION AND ORDER

The following e-filed documents, listed by NYSCEF document number (Motion 001) 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 28, 34 were read on this motion to/for ORDER MAINTAIN CLASS ACTION.

PlaintiffsEmma Griffith and Merissa Meyers(plaintiffs) are current residents of 651 W. 171^st Street located in New York, New York.In motion sequence no. 001, plaintiffs are seeking an order pursuant to CPLR §901 et seq. certifying this action as a class action.Defendant, West 171 Associates, LP, opposes the motion.

BACKGROUND

This action was commenced as a putative class action by plaintiffs on behalf of themselves and on behalf of all other past, present and prospective tenants residing at 651 West 171^st Street, City and State of New York(hereinafter "Building").(NYSCEF Doc. Nos. 1 and 2).Plaintiffs allege that the building is regulated by the Rent Stabilization Code("RSC") by defendant's receipt of J-51 tax benefits since 2008 and that defendant's participation in the J-51 tax reduction program will terminate in 2042.(NYSCEF Doc. No. 2, ¶3).Plaintiffs allege that defendant engaged in a fraudulent scheme intending to overcharge its past, current and prospective tenants with rents that have exceeded or will exceed Rent Stabilization levels during the J-51 tax benefit period.Plaintiffs further allege that defendant has unlawfully removed apartments from the protection of Rent Stabilization both during and upon expiration of its participation in the J-51 tax reduction program.(NYSCEF Doc. No. 2, ¶¶4-11).

The proposed class consists of current and former tenants who reside or have lived in the building during the relevant statutory time period which is alleged to be 2008 to 2042.(NYSCEF Doc. No. 2, ¶¶3 and 20;Transcriptp. 6, l. 22-24).Plaintiffs allege that they have paid rent in excess of the permissible rent as a result of defendant's alleged fraudulent scheme to deregulate apartments in the building and overcharge the rent.(NYSCEF Doc. No. 2, ¶¶ 20-22, 62-88).Plaintiffs are seeking class certification to litigate their damage claims.In support of the motion, plaintiffs have submitted affidavits indicating that any claim to treble damages, as to any causes of action, within this case are waived.(NYSCEF Doc. No. 25).

Plaintiffs contend that class action lawsuits are ideally suited for cases involving alleged violations of applicable Rent Stabilization Laws in J-51 buildings because resolution of these building-wide common issues, will be determinative of defendant's liability.Plaintiffs further assert that each class member's damages can be determined by litigating these common issues and by resolving common legal questions, related to determining base rent, how to account for lawful increases, and to establish a formula to determine the overcharge, if any, owed to each class member.

Defendant opposes the motion for class certification claiming HCR has primary jurisdiction over the claims asserted herein.Defendant also claims that plaintiffs have failed to unequivocally waive treble damages, and that the proposed class is overbroad and incapable of being ascertained.Defendants argue that plaintiffs have failed to satisfy the requirements for class certification set forth in CPLR 901 and 902.

STANDARD OF REVIEW/ANALYSIS

Whether a particular lawsuit qualifies as a class action rests within the sound discretion of the trial court.(Askey v Occidental Chem. Corp., 102 A.D.2d 130, 477 N.Y.S.2d 242[4th Dept.1984].)The movant bears the burden of proving that the prerequisites set forth in CPLR 901 (a) have been met. (Kudinov v. Kel-Tech Constr. Inc., 65 A.D.3d 48, 884 N.Y.S.2d 413[1^st Dept.2009].)It is well settled that CPLR 901 (a)"should be broadly construed" and that "the Legislature intended article 9 to be a liberal substitute for the narrow class action legislation which preceded it"(City of New York v Maul, 14 NY3d 499, 509, 929 NE2d 366, 903 NYS2d 304[2010]); see also, (Brandon v Chefetz, 106 A.D.2d 162, 168, 485 N.Y.S.2d 55[1st Dept.1985].)(Where the court held that the prerequisites of CPLR 901 (a) are to be liberally construed, since the State's policy favors the maintenance of class actions.)

The court must also consider the five factors enumerated in CPLR 902, but consideration of those factors is not triggered until the prerequisites of CPLR 901 (a) have been met. (2 Weinstein-Korn-Miller, NY Civ PracP 902.06.)If there is any doubt in deciding whether to certify a class, the court should err in favor of allowing the class action.(Super Glue Corp. v Avis Rent A Car Sys., 132 A.D.2d 604, 517 N.Y.S.2d 764[2d Dept.1987];Brandon v Chefetz, 106 A.D.2d 162[1st Dept.1985], supra.)The court may consider the merits of plaintiffs' claims only to the extent of ensuring those claims are not a sham, Pludeman v. Northern Leasing Sys., Inc., 74 A.D.3d 420, 422, 904 N.Y.S.2d 372(1st Dep't2010);Kudinov v. Kel-Tech Constr. Inc., 65 A.D.3d at 482;Jim & Phil's Family Pharm. v. Aetna U.S. Healthcare, 271 A.D.2d 281, 282, 707 N.Y.S.2d 58(1st Dep't2000), as C.P.L.R. § 902 contemplates a determination of class certification "early in the litigation . . . well before any determination on the merits."O'Hara v. Del Bello, 47 N.Y.2d 363, 369, 391 N.E.2d 1311, 418 N.Y.S.2d 334(1979).

CPLR § 901[a] sets forth five threshold requirements that must be satisfied before a class action may be maintained:

1. the class is so numerous that joinder of all members, whether otherwise required or permitted, is impracticable;

2. there are questions of law or fact common to the class which predominate over any questions affecting only individual members;

3. the claims or defenses of the representative parties are typical of the claims or defenses of the class;

4. the representative parties will fairly and adequately protect the interests of the class; and

5. a class action is superior to other available methods for the fair and efficient adjudication of the controversy.

Plaintiffs argue that they have satisfied each of the five prerequisites for class certification.Plaintiffs contend that given the issues alleged in the complaint, litigating these claims as a class action is the superior method to resolve the allegations due to defendant's alleged practice of circumventing the Rent Stabilization Laws while receiving J-51 tax benefits.

As the Court of Appeals has noted, "the City's J-51 program, authorized by Real Property Tax Law § 489, allows property owners who complete eligible projects to receive tax exemptions and/or abatements that continue for a period of years. . . .Rental units in buildings receiving these exemptions and/or abatements must be registered with the State Division of Housing and Community Renewal(DHCR), and are generally subject to rent stabilization for at least as long as the J-51 benefits are in force (see28 RCNYat 5-03[f])."Roberts v Tishman Speyer Props., L.P., 13 NY3d 270, 279, 918 NE2d 900, 902 NYS2d 388[2009]).

Subsequently, in Gersten v. 567th Avenue LLC, 88 AD3d 189, 928 N.Y.S.2d 515[1st Dept.2011], the First Department held that Roberts should be applied retroactively, as it did not establish a new principle of law.

Following the Roberts decision, the Appellate Division decided a series of cases, which plaintiffs rely on to support their contention that a class action is the superior procedural mechanism to combat the alleged systemic denial of rent regulatory rights in buildings receiving the financial benefits of the J-51 tax subsidy, as is alleged in the complaint herein.See, Borden v. 400 East 55th Street Associates, LP, 24 NY3d 382(2014);Downing v. First Lenox, 107 AD2d 86(1st Dept.2013);Gudz v. Jemrock, 105 AD3d 625(1st Dept.2013);Dugan v. London Terrace, 101 AD3d 648(1st Dept.2012)(collectively hereafter, "the Roberts Progeny").

Defendant argues that plaintiffs' motion should be denied because HCR, and not this Court, has original jurisdiction over the rent overcharge claims alleged in the complaint.This argument was rejected by the Court in Downing v First Lenox Terrace Assoc., 107 AD3d 86, 91, 965 NYS2d 9[2013], and is similarly rejected here.The Supreme Court has concurrent jurisdiction with HCR to entertain an action to recover rent overcharges.Downing v First Lenox Terrace Assoc., 107 AD3d 86, 91, 965 NYS2d 9[2013]citing, Wolfisch v Mailman, 196 AD2d 466, 601 NYS2d 300[1st Dept.1993], lv denied82 NY2d 661, 627 NE2d 518, 606 NYS2d 596[1993];see alsoNezry v Haven Ave. Owner LLC, 28 Misc 3d 1226[A], 958 NYS2d 62, 2010NY Slip Op51506[U][Sup Ct, NY County2010], Additionally, HCR is not authorized to decide whether to certify a class, determine its parameters, adjudicate plaintiffs' class-wide claims, or grant the class-wide relief that plaintiffs seek here.C.P.L.R. § 905;seeDugan v London Terrace Gardens, L.P., 101 AD3d 648, 648, 955 N.Y.S:2d 873 (1st Dept. 2012);see alsoGerard v Clermont York Assoc, LLC, 81 AD3d 497, 916 N.Y.S.2d 502(1st Dept.2011).Accordingly, plaintiffs are justified in litigating their claims in this court and not HCR.

In the verified complaint, plaintiff Griffith alleges that she has been a tenant in the Building since 2015 and plaintiff Meyers commenced her tenancy in 2014.(NYSCEF Doc. No. 2, ¶¶ 62, 75).Plaintiffs allege that each tenant was compelled to sign unlawful lease riders entitled "Notice of Unregulated Status," waiving their RSL rights.(NYSCEF Doc. No. 22).In support of their motion, plaintiffs also submit the Rent Registration Histories filed with the New York...