Malach v. Chalian
| Decision Date | 14 June 2019 |
| Docket Number | L & T 52757/19-KI |
| Citation | 64 Misc.3d 804,104 N.Y.S.3d 849 |
| Parties | Michael Joseph MALACH and Darlene Miriam Malach-Vourman as Trustees of the Malach Premises Trust, Petitioners, v. Henry CHALIAN and Sergio Barrios, et al, Respondents. |
| Court | New York Civil Court |
David Schreier, Esq.,
Borah Goldstein Altshuler Nahins & Goidel PC
Attorneys for Petitioner
Phone: (212) 431-1300
Andrew D. Cassidy, Esq.
Ween & Kozek, PLLC
20 Jay Street, Suite 814, Brooklyn, NY 11201
Phone:(212) 964-1822
In this chronic rent delinquency proceeding to recover possession of a loft unit, Respondents move for summary judgment dismissing the petition. Petitioner cross-moves for summary judgment in its favor. Each side opposes the other's motion.
Petitioner is the owner and Respondents are the statutory tenants of Unit No. 2 located in the building known as 104-106 Green Street in Brooklyn. Respondents first entered into possession of the premises pursuant to a written lease dated April 4, 2003 that expired in 2006. It is undisputed that the subject premises is governed by Article 7-C of the Multiple Dwelling Law, commonly referred to as the "Loft Law." Sometime in 2013, Respondents and other occupants in the building jointly filed an application before the Loft Board to legalize their respective unit, but thereafter withdrew their application because Petitioner consented to register their unit as an interim multiple dwelling (IMD) in or around March 31, 2015.
About one year later, Petitioner commenced a nonpayment proceeding against Respondents seeking September 2015 through February 2016 rent (2016 proceeding). In his answer, Respondent Chalian alleged a breach of the warranty of habitability, to wit, for "harassment, tampering with Respondents' mailbox, and failing to provide pest control." Chalian also alleged that Petitioner could not collect rent because it had not complied with the Loft Law. Notwithstanding these allegations, in a May 25, 2016 stipulation of settlement (2016 stipulation), Respondent Chalian consented to a final judgment in the amount of $11,398.02 but stayed execution of the accompanying warrant for payment of said amount. Notably, in the 2016 stipulation, Chalian withdrew his answer and defenses with prejudice (emphasis added). The parties ultimately discontinued the proceeding on August 31, 2016 because Respondents paid all outstanding arrears.
In or about June 2017, Petitioner commenced a second nonpayment proceeding seeking a portion of April and all of May 2017 rent (the 2017 proceeding). Respondents, who answered with a general denial, did not allege repairs. About one month later, on July 7, 2017, the parties stipulated to adjourn the proceeding for ten days for payment of arrears. Petitioner also agreed to inspect and repair the premises' electric submeter in the interim. On the adjourn date of July 17, 2018, the parties stipulated to discontinue the proceeding, ostensibly because Respondents paid outstanding arrears.
In or around October 2018, Petitioner commenced a third nonpayment proceeding seeking the balance of August and all of September 2018 rent. Less than a month later, on October 25, 2018, the parties again agreed to discontinue the proceeding because Respondents were current through October 2018.
Additionally, Petitioner alleges that it had to serve four rent demands, dated April 13, 2018, May 21, 2018, June 28, 2018, and July 31, 2018, that did not result in commencement of a nonpayment proceeding.
On December 19, 2018, Petitioner mailed to Respondents the instant Termination Notice stating, in relevant part:
"PLEASE TAKE NOTICE, that you have violated and continue to violate a substantial obligation of your tenancy and lease originally dated April 4, 2003 as well as Title 29 of the Rules of the City of New York, Chapter 2, § 2-08.1(a)(2) and (3), in that you have consistently, chronically, and unjustifiably exhibited a pattern of late payment of rent, failing to pay rent when due, and/or compelled the landlord to commence numerous proceedings in the New York City Housing Court to collect rent.
The Termination Notice further alleges that Respondents chronically and systematically paid rent late each month. Specifically, the Notice claims that Respondents paid rent when due only three out of the forty months preceding the date of the Notice. As a result, Petitioner was compelled to serve at least seven rent demands, three of which resulted in the commencement of a nonpayment proceeding.
The within motion and cross-motion for summary judgment ensued.
On their motion, Respondents contend that summary judgment dismissing the petition is warranted on three grounds. First, Respondents argue that the Loft Board's regulations, to wit, 29 RCNY § 2-08.1 (a) do not expressly provide for an eviction based upon a violation of a substantial obligation of the lease, let alone one for chronic rent delinquency. Second, Respondents argue that, assuming arguendo such a claim exists, the Termination Notice herein is defective because it does not comply with Real Property Law (RPL) § 232-a, which terminates a month-to-month tenancy, requiring a thirty-day notice be served pursuant to Real Property Actions and Proceedings Law (RPAPL) § 735. Lastly, Respondents contend that the prior nonpayment proceedings are insufficient as a matter of law to form the basis for a chronic rent delinquency cause of action. In support of this last argument, Respondents rely on the affidavit of Henry Chalian annexed to the moving papers, who avers that they owed less than one month's rent at the time the April, May, June, and July 2018 rent demands were served. Chalian, however, does not dispute that arrears were owed at the time the 2016, 2017, and 2018 proceedings were commenced, nor does he claim that any rent was withheld in this proceedings based on repairs.
In opposition and in support of their cross-motion for summary judgment, Petitioner argues that the Loft Law and regulations are to be read in pari materia with the Rent Stabilization Code. Because it is well-established that a claim for chronic nonpayment of rent as a violation of a substantial obligation of the lease may lie against a rent-stabilized tenant, Petitioner argues that the same should apply to a loft tenant. In support, Petitioner relies on the Appellate Division's holding in BLF Realty Holding Corp. v. Kasher , 299 A.D.2d 87, 747 N.Y.S.2d 457 [1st Dept. 2002] ) which sustained an eviction proceeding against a loft tenant based on rent-gouging. Second, Petitioner contends that, based on the doctrine of pari materia , the instant Termination Notice was properly served in accordance with § 2524.3 of the Rent Stabilization Code (RSC). Petitioner further points out that it gave more notice than the five days required under paragraph 14 of the parties' expired, 2003 lease. Lastly, Petitioner contends that the prior nonpayment proceedings are not only sufficient to survive Respondents' motion, but the undisputed facts in this proceeding warrant granting judgment on the petition. Namely, Petitioner relies on the affidavit of its managing agent, Abraham Malachi, who avers that in addition to commencing three nonpayment proceedings and serving four additional rent demands, Respondents failed to timely pay rent 37 out of the 40 months immediately preceding December 2018.
In opposition to the cross-motion, and even though Respondents have never seriously disputed Petitioner's right to collect rent in the prior nonpayment proceedings, Respondents now contend that permitting Petitioner to evict a loft tenant for their alleged chronic nonpayment of rent undermines the purpose of the Loft Law.
"On a motion for summary judgment, the movant carries the initial burden of tendering sufficient, admissible evidence to demonstrate the absence of a material issue of fact as a matter of law" ( Alvarez v. Prospect Hospital , 68 N.Y.2d 320, 324, 508 N.Y.S.2d 923, 501 N.E.2d 572 [1986] ). The court's function is "issue-finding, rather than issue-determination" ( Sillman v. Twentieth Century-Fox Film Corp. , 3 N.Y.2d 395, 404, 165 N.Y.S.2d 498, 144 N.E.2d 387 [1957] ) and the evidence will be construed in the light most favorable to the non-moving party (see Kershaw v. Hosp. for Special Surgery , 114 A.D.3d 75, 82, 978 N.Y.S.2d 13 [1st Dept. 2013] ). Once the movant meets its initial burden, the burden then shifts to the opposing party to "show facts sufficient to require a trial of any issue of fact" ( Zuckerman v. City of New York , 49 N.Y.2d 557, 562, 427 N.Y.S.2d 595, 404 N.E.2d 718 [1980] ).
Whether a Violation of a Substantial Obligation of the Lease based on Chronic Rent Delinquency May be Maintained Against a Loft Tenant :
The issue of whether a loft tenancy may be terminated based on a violation of a substantial obligation of the lease due to chronic rent delinquency appears to be a matter of first impression. None of the papers filed on the motion and cross-motion cite to a single case and research by this Court yields no legal authority that addresses the propriety of the instant holdover theory.
In any event, the analysis begins with 29 RCNY § 2-08.1 (a), which provides in relevant part:
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...defendant's current month-to-month holdover tenancy (see Aurora Assoc., LLC v Hennen, 157 AD3d 608, 608-609 [1st Dept 2018]; Malach v Chalian, 64 Misc 3d 804, 812 [Civ Ct, Kings County 2019]). Given that plaintiff served a notice to cure and a notice of termination that more than satisfied ......