Jazilek v. Abart Holdings, LLC

• Decision Date: 20 April 2010
• Citation: Jazilek v. Abart Holdings, LLC, 899 N.Y.S.2d 198, 72 A.D.3d 529 (N.Y. App. Div. 2010)
• Parties: Roger JAZILEK, Plaintiff-Respondent, v. ABART HOLDINGS, LLC, Defendant-Appellant.
• Court: New York Supreme Court — Appellate Division

899 N.Y.S.2d 198

72 A.D.3d 529

Roger JAZILEK, Plaintiff-Respondent,

v.ABART HOLDINGS, LLC, Defendant-Appellant.

Supreme Court, Appellate Division, First Department, New York.

April 20, 2010.

D'Agostino, Levine, Landesman & Lederman, LLP, New York (Bruce H. Lederman of counsel), for appellant.

Sokolski & Zekaria, P.C., New York (Robert E. Sokolski of counsel), for respondent.

ANDRIAS, J.P., SWEENY, RENWICK, ABDUS-SALAAM, MANZANET-DANIELS, JJ.

Judgment, Supreme Court, New York County (Judith J. Gische, J.), entered December 11, 2009, awarding plaintiff principal damages of $12,377.85, treble damages of $31,205.31, and legal fees of $30,545.86, unanimously affirmed, with costs. Appeal from amended order (same court and Justice), entered October 28, 2009, which granted plaintiff's motion and denied defendant's cross motion for summary judgment, unanimously dismissed, without costs, as subsumed in the appeal from the judgment.

Defendant owns the apartment building at 50 East Third Street in Manhattan. From about 1981 through March 2002, defendant leased apartment 1B to a prior tenant, under a rent-stabilized lease. The stabilized tenant then agreed to vacate the premises and surrender all of her rights. The apartment's registered legal rent on file with the State Division of Housing and Community Renewal at that time was $812.34 per month.

After the tenant of record vacated the premises, the landlord commenced a holdover proceeding in Housing Court against plaintiff herein, on the grounds that he was an illegal subtenant. On April 2, 2002, the parties executed a so-ordered settlement stipulation whereby the landlord offered plaintiff a two-year lease in his own name, at a monthly rent of $2,200, with a "preferential rent" of $1,800 per month during the two-year term.

On April 2, 2002, in accordance with the stipulation, the parties executed a two-year lease with a rider reciting that the apartment's "legal regulated rent" was $2,200 and providing for a "lower preferential rent" of $1,800 during the term of the lease. In March 2004, the parties executed a renewal lease with a similar rider reciting a "legal regulated rent" of $2,299 per month and a preferential rent of $1,881.

In July 2005, plaintiff commenced this action seeking a declaration that the stipulation was "void as against public policy" because it violated the Rent Stabilization Law (RSL) and Code (RSC), and that he was the apartment's "lawful rent-stabilized tenant," and also a declaration as to the apartment's maximum legal rent. Plaintiff also sought damages and treble damages for any rent overcharges, as well as attorneys' fees. On a prior appeal, the Court of Appeals held that the "stipulation violates the Rent Stabilization Code and is void as against public policy" (10 N.Y.3d 943, 944, 862 N.Y.S.2d 854, 893 N.E.2d 132).

We reject defendant's contention that since the Court of Appeals held the stipulation to be void, the parties should be restored to the status quo ante the stipulation, thus permittingdefendant to pursue its claims against plaintiff as a holdover from an illegal sublet. Review of the parties' lease reveals it was a freestanding agreement, not specifically tied to the stipulation. Rather than incorporating or otherwisereferring to the stipulation, the lease instead contains a merger clause expressly reciting that "All promises made by the Landlord are in this lease. There are no others." Additionally, the stipulation did not in any way compel defendant to renew plaintiff's lease, which the landlord did in 2004. Hence, even assuming that the initial lease was, contrary to its own terms, inextricably bound to the voided stipulation, the...