Mount Sinai Hosp. v. Loutsch

• Decision Date: 27 May 1983
• Citation: 462 N.Y.S.2d 1004,119 Misc.2d 427
• Parties: The MOUNT SINAI HOSPITAL, Petitioner, v. Enrique LOUTSCH, Respondent. The MOUNT SINAI HOSPITAL, Petitioner, v. Valentin BOELCZKEVY, Respondent. The MOUNT SINAI HOSPITAL, Petitioner, v. Maria ZALLES, Respondent. The MOUNT SINAI HOSPITAL, Petitioner, v. Dennis and Astrid BIGELOW, Respondent.
• Court: New York City Court

Page 1004

462 N.Y.S.2d 1004

119 Misc.2d 427

The MOUNT SINAI HOSPITAL, Petitioner, v. Enrique LOUTSCH, Respondent.

The MOUNT SINAI HOSPITAL, Petitioner, v. Valentin BOELCZKEVY, Respondent.

The MOUNT SINAI HOSPITAL, Petitioner, v. Maria ZALLES, Respondent.

The MOUNT SINAI HOSPITAL, Petitioner, v. Dennis and Astrid BIGELOW, Respondent.

Civil Court of the City of New York,

New York County, Part 49,

Motion Calendar.

May 27, 1983.

Robinson, Silverman, Pearce, Aronsohn & Berman, New York City (Vincent Alfieri, New York City, of counsel), for petitioner.

Lorraine Backal, New York City (Stacy Sonnett, and Goldberg & Birnbaum, New York City, of counsel), for respondents except respondent Zalles.

DAVID B. SAXE, Judge.

May a tenant of residential premises that are not regulated (because the premises are owned and operated by a hospital thereby earning an exemption from the Rent Stabilization Law) be nevertheless entitled to certain continued rights and privileges of occupancy at such premises as third party beneficiaries of an agreement executed between the owners of the property and the United States Department of Housing and Urban Development ("H.U.D."), which purports to limit the use of the premises by the owner-hospital?

Mount Sinai is the owner of the apartment building located at 1245 Park Avenue which it purchased from the prior owner, Park House Sponsor Corp. in October 1975. The respondents live in Apartments 10K, 8G, 14G and 19E, respectively.

This building, like many others, is used by Mount Sinai to provide housing for its faculty, interns, residents, nurses, students and other staff members of the Hospital and the School of Medicine. Mount Sinai also rents units to residential tenants that are not professionally affiliated with the hospital. The respondents are among the latter group. The petitioner now seeks to limit its tenant population exclusively to persons affiliated with the hospital and, on this basis, seeks to evict each of the respondents herein.

I have determined that the premises are not subject to either the Rent Control or Rent Stabilization Laws. First, all of the relevant apartments have been vacancy decontrolled and are therefore not rent controlled. This conclusion is based on the fact that each of the respondents, with the exception of Boelczkevy, took possession of their apartments in the early 1970's after the vacancy decontrol of the respective apartments. And, although Boelczkevy moved into the building in 1967, he did not take possession of his particular apartment until it had been similarly decontrolled.

The apartments are not subject to Rent Stabilization either, because, contained in the Emergency Tenant Protection Act of 1976 ("ETPA"), is a specific statutory exclusion exempting housing accommodations owned or operated by a hospital. That exclusion clearly applies here.

Section 5(a)(6) of the ETPA states:

"... Housing accommodations owned or operated by a hospital, convent, ministery, asylum, public institution or college or school dormitory or any institution operated exclusively for charitable or educational purposes on a non-profit basis" [shall be exempt from the Act]. (emphasis added).

As a hospital within the meaning of Section 5(a)(6), the petitioner is exempt from the Rent Stabilization Law. And, although the building was acquired by Mount Sinai after the effective date of the ETPA, the exemption nevertheless applies. See Museum of Modern Art v. Kirk, 111 Misc.2d 1047, 448 N.Y.S.2d 93 (App. Term 1, 1981).

Therefore, each of the respondents, none of whom presently have written leases with the petitioner, are month to month tenants. Each respondent was served with a 30-day notice of termination, which purported to end their tenancies, but remained in possession subsequent to the time within which they were required to vacate. These holdover proceedings ensued.

Although the tenants have not derived any rights under the Rent Control or Rent Stabilization Laws, they contend that they have derived various rights as third party beneficiaries of a Regulatory Agreement which was executed between their landlord, Mount Sinai Hospital and H.U.D. in connection with Mount Sinai's purchase of the building.

Specifically, they contend that they may raise the petitioner's alleged failure to comply with Section 6(h) of the Regulatory Agreement as a defense to this proceeding. That section provides that the owner will not, without the prior written approval of H.U.D. "permit the use of the dwelling accommodations ... for any purpose except the use which was originally intended, or permit commercial use greater than that originally approved by the Secretary."

Are the respondents proper parties to raise an alleged noncompliance by the petitioner under the Regulatory Agreement as a defense to this holdover proceeding even though the respondents were not parties to the Regulatory Agreement?

In order to prevail on this defense it is necessary for the respondents to prove 1) their status as third-party beneficiaries of the Agreement, and 2) that the proposed actions of the petitioner commenced without H.U.D.'s approval are within the scope of the prohibition of Section 6(h) insofar as they represent a change in use to one not originally intended, or an increase in commercial usage on the premises.

With respect to the contention of the respondents that they are third-party beneficiaries of the Regulatory Agreement:

"New York follows the nearly universal rule that a third person may, in his own right and name, enforce a promise...