Lirakis v. 180 Seventh Ave. Assoc., LLC, 2006 NY Slip Op 51211(U) (N.Y. Civ. Ct. 5/2/2006)

• Decision Date: 02 May 2006
• Docket Number: 1903 CVN 2004.
• Citation: Lirakis v. 180 Seventh Ave. Assoc., LLC, 2006 NY Slip Op 51211(U) (N.Y. Civ. Ct. 5/2/2006), 2006 NY Slip Op 51211, 1903 CVN 2004. (N.Y. Civ. Ct. May 02, 2006)
• Parties: ISABELLE LIRAKIS, Plaintiff, v. 180 SEVENTH AVENUE ASSOCIATES, LLC, Defendant.
• Court: New York Civil Court

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2006 NY Slip Op 51211(U)

ISABELLE LIRAKIS, Plaintiff, v. 180 SEVENTH AVENUE ASSOCIATES, LLC, Defendant.

1903 CVN 2004.

Civil Court of the City of New York.

New York County.

Decided May 2, 2006.

Steven De Castro, New York, NY for Plaintiff

Gerald M. Pigott, Esq., New York, NY, for Defendant.

SALIANN SCARPULLA, J.

This is a plenary action in which the plaintiff Isabelle Lirakis ("Lirakis") alleges that defendant 180 Seventh Avenue Associates LLC ("180 Seventh Avenue") charged her an excessive rent during the term of her lease in 2003-2004. The Court held a non-jury trial on February 27, 2006, at which the following testimony was elicited:

Lirakis testified that she moved into apartment 1D at 180 Seventh Avenue (the "subject apartment") on April 1, 2003 and moved out on April 30, 2004. Her monthly rent, as reflected in her lease (in evidence), was $1,435.00. Lirakis testified that the apartment was subject to rent stabilization, and that she had no knowledge of any repairs performed in the apartment prior to her lease term. On her direct case Lirakis moved into evidence certified DHCR records concerning the registered rent for the subject apartment during the time period relevant to this action.

On its direct case, 180 Seventh Avenue presented the testimony of Jeffrey Pikus, a representative from managing agent Blue Star Properties. Pikus stated that 180 Seventh Avenue purchased the building located at 180 Seventh Avenue in 2001. At that time, non-party Thomas Shields occupied the subject apartment. Shields vacated the apartment in early 2002, before his lease term ended. Pikus testified that Shields had lived in the apartment for either 17 or 18 years, and that the rent for the subject apartment as of April 2001 was $706.12.

Pikus testified that after Shields vacated the apartment, 180 Seventh Avenue renovated the apartment. Pikus stated that Blue Star Properties had a separate company IFR, which performed a gut renovation of the apartment. Pikus testified that at the time of the gut renovation, he was the "overseer" of jobs performed by IFR and that he received a percentage of amounts paid for renovations.

Pikus claimed that the renovations to the subject apartment cost $37,500. 180 Seventh Avenue submitted into evidence a check for $37,500 dated April 17, 2001, made out to IFR from Blue Star Properties. However, the check from Blue Star Properties to IFR does not make reference to any renovations, and has no indicia linking it to the subject apartment. No other Blue Star records concerning the renovation were moved into evidence. Also, no one from IFR testified concerning the renovation, nor were any IFR records concerning the renovation moved into evidence.

Pikus testified that after the renovation, 180 Seventh Avenue raised the rent on the subject apartment by adding: (1) a long-term vacancy increase; (2) a regular vacancy increase; and (3) an increase of 1/40th of the cost of renovations to the subject apartment.

The next tenant who occupied the subject apartment was Elizabeth Kaplan. 180 Seventh Avenue moved Kaplan's lease into evidence, and the lease shows that Kaplan began renting the subject apartment as of March 1, 2001. In a rider to the Kaplan lease, 180 Seventh Avenue disclosed that it had raised the rent of $ 706.12 previously paid by Shields by the following amounts: $ 28.24 for a rent guidelines increase; $112.98 for a vacancy allowance; and $817.50 for renovations to the apartment. 180 Seventh Avenue thus listed the new legal registered rent at $ 1,664.84 per month.

When Kaplan renewed her lease for one year, 180 Seventh Avenue raised the rent to $1,731.43 per month. Pikus testified that when Kaplan vacated the apartment in 2003, 180 Seventh Avenue increased the rent of the subject apartment by a regular vacancy increase, thus the rent for the subject apartment rose to $ 2,008.46 per month. Pikus testified that at this point the subject apartment was no longer subject to rent regulation, and it was registered with DHCR as high rent/high income.

When Lirakis moved into the apartment, 180 Seventh Avenue did not charge her the legal registered rent and instead charged her rent in the amount of $1,435.00 per month.

Discussion

At the close of testimony, Lirakis first asked the Court to disregard Pikus' testimony concerning any alleged renovations to the subject apartment because 180 Seventh Avenue had not pled its renovations as an affirmative defense to Lirakis' rent overcharge claim. In opposition, 180 Seventh Avenue argued that it did not need to plead the renovations as an affirmative defense, as it was free to use the evidence of the renovations to disprove Lirakis' overcharge claim.

In her complaint, which comprises only eleven paragraphs, Lirakis simply alleges that "[t]he rent history of this apartment reveals that in March of 2001, the defendant and/or its predecessor in interest imposed a rent increase from $692.28 to $1,664.84. This increase exceeds that which is allowable under the rent stabilization law." Lirakis further alleges that "[d]efendant and its predecessors have charged plaintiff in excess of the rent allowable under the Rent Stabilization Law from April 2003 to present." In neither of these allegations does Lirakis explain the underlying basis for her allegation that 180 Seventh Avenue raised the rent for the subject apartment in 2001 more than was legally allowable.

In its answer, 180 Seventh Avenue denied Lirakis' allegations concerning the alleged illegality of the 2001 rent increase, and also denied that it had overcharged her in 2003. Like Lirakis, 180 Seventh Avenue did not explain the underlying basis for its denial of these allegations.

The pleading of affirmative defenses is governed by CPLR 3018, which provides, in part, that " [a] party shall plead all matters which if not pleaded would be likely to take the adverse party by surprise or would raise issues of fact not appearing on the face of a prior pleading . . ." CPLR 3018 lists a number of defenses which must be plead as affirmative defenses, including statute of fraud, statute of limitations, and res judicata. CPLR 3018 makes clear that only matters which would surprise the other party or would raise new issues must be pled as affirmative defenses. The CPLR 3018 list is not exhaustive, and other matters must be considered on a case by case basis.

With these guidelines in mind, the Court finds that 180 Seventh Avenue was not required to plead renovations to the subject apartment as a separate affirmative defense. Lirakis pled in her complaint and has the burden to prove that the rent charged by 180 Seventh Avenue was greater than the amount allowable under the rent regulations. Once 180 Seventh Avenue denied that it had overcharged Lirakis, she was on notice that 180 Seventh Avenue planned to submit evidence justifying its rent increases. Also, Lirakis raised the alleged excessiveness of 180 Seventh Avenue' s rent increase in her complaint. Thus, 180 Seventh Avenue's justification for its rent increase was not a new issue of fact requiring a separate affirmative defense. Accordingly, Lirakis' request that 180 Seventh Avenue's evidence concerning renovations to the subject apartment be stricken from the record is denied.¹

Lirakis next contends that she has proven her rent overcharge claim by a preponderance of the evidence, by showing that the rent for the subject apartment went from $692.28 in 2000 to $1,664.84 in 2001, and that there was no justification for this increase. In opposition, 180 Seventh Avenue argues that it has shown, by a preponderance of the evidence, that it took proper statutory increases in rent for that year, including a large increase for renovation to the subject apartment.

The Rent Regulation Reform Act of 1997, codified at 9 NYCRR §2522.8[a], sets forth the rent increases a landlord may claim for a rent stabilized apartment which becomes vacant. Pursuant to the statute, an owner of a rent stabilized apartment, upon the vacancy of the apartment, is entitled to increase the rent by a vacancy increase which, for a one year lease, amounts to an increase of twenty percent of the previous legal regulated rent less a sum equal to the difference between the two year...