Ollie Assocs. LLC v. Devis

• Citation: 58 Misc.3d 640,65 N.Y.S.3d 433
• Parties: OLLIE ASSOCIATES LLC, Petitioner–Landlord, v. Nadine DEVIS, Respondent–Tenant.
• Decision Date: 04 December 2017
• Court: New York Civil Court

58 Misc.3d 640
65 N.Y.S.3d 433

OLLIE ASSOCIATES LLC, Petitioner–Landlord,
v.
Nadine DEVIS, Respondent–Tenant.

Civil Court, City of New York, Bronx County.

Dec. 4, 2017.

65 N.Y.S.3d 434

Arun Perinbasekar, Esq., Sidrane & Schwartz–Sidrane, LLP, Rockville Centre, Attorney for Petitioner.

Maeve Callagy, Esq., Bronx, Attorney for Respondent.

DIANE E. LUTWAK, J.

58 Misc.3d 641

BACKGROUND & PROCEDURAL HISTORY

In this nonpayment proceeding, the issue is whether a Rent Reduction Order issued by the New York State Division of Housing and Community Renewal ("DHCR") in 1993 prohibits deregulation of a Rent Stabilized apartment. In its petition dated June 7, 2016, petitioner alleged that respondent owed $4140, comprised of "base rent" at the monthly rate of $1450 for May and June 2016, plus a balance of $900 for April 2016, and "miscellaneous charges" of $338 (late charges at $72 per month and $25 charges for a smoke alarm and "CM Detector"), and that the money due had been personally demanded from respondent prior to the commencement of the proceeding. Respondent pro se used the court's form to file an answer on June 14, 2016 raising a "General Denial" and a defense of payment/partial payment. Petitioner by counsel and respondent pro se settled the case on July 14, 2016 in an agreement which awarded petitioner a final judgment of possession and for $5250, with issuance of a warrant of eviction forthwith, execution

65 N.Y.S.3d 435

stayed through August 25, 2016 for respondent to pay the judgment. The agreement also included access dates for repairs.

Respondent retained counsel, who moved to vacate the July 14, 2016 stipulation and judgment, amend the answer to assert a defense of rent overcharge and conduct discovery. Petitioner cross-moved for leave to amend the petition to reflect that the subject apartment is not Rent Stabilized as stated in paragraph 7 of the petition but rather is unregulated¹ . In an Order and Decision dated February 15, 2017, the Hon. Brenda Spears

58 Misc.3d 642

denied respondent's motion and granted petitioner's cross-motion for leave to amend the petition.

Thereafter, respondent moved to renew based upon a newly discovered DHCR Rent Reduction Order issued on October 8, 1993 under Docket # GH630011–B, effective September 1, 1992, in response to a complaint of decreased services filed by certain tenants on August 4, 1992. The Order lists ten "Services Not Maintained" and:

• reduces the "stabilized legal rent" for the affected apartments, including respondent's apartment # 6H, to the level in effect prior to the most recent guideline increase which commenced before the Order's effective date;

• directs the owner to restore the listed services within 30 days; and

• prohibits any rent increase "until the DHCR issues an order restoring rent(s)."

By decision dated July 19, 2017, Judge Spears granted respondent's motion to renew and, upon renewal, vacated the stipulation of July 14, 2016 and permitted respondent to serve and file an amended answer. In doing so, the court explained that, while Rent Stabilized apartments are subject to various rent increases and deregulation upon specific occurrences, "if a rent reduction order is in effect, an owner is generally barred from collecting a rent increase until a corresponding rent restoration order is issued," citing Rent Stabilization Code ("RSC") § 2523.4(a)(1).

Respondent served and filed an amended answer and moved for summary judgment on her three objections in point of law and two affirmative defenses:

• 1st objection in point of law: failure to make a proper rent demand as required by the lease and by law

• 2nd objection in point of law: the alleged rent demand sought arrears that exceed the collectible rent and therefore did not constitute a fair approximation of the alleged arrears

• 3rd objection in point of law: petition fails to state a cause of action as the alleged rent demand was not a good faith approximation of the rent owed

• 1st affirmative defense: rent overcharge as DHCR Rent Reduction Order No. GH 63001B froze the rent at $650 per month effective September 1,

58 Misc.3d 643

1992 and is still in effect

• 2nd affirmative defense: failure to register the premises with the DHCR as required by the Rent Stabilization Law and Code

Other than the first objection in point of law which she supports with her sworn statement denying receipt of any written or oral rent demand, respondent's claims all derive from the DHCR's Rent Reduction Order. Respondent argues that the effect of that Order was to freeze the rent at $650 per month as of September 1, 1992 and foreclose any possibility of the apartment's

65 N.Y.S.3d 436

deregulation² until such time as the DHCR issues an order fully restoring the rent, which it has not yet done. Accordingly, none of the rent increases that occurred over the years were permitted as the rent remains frozen and the apartment remains Rent Stabilized. Based on the rent payments made from the commencement of her tenancy in February 2016 through May 2016 for a total of $3450, respondent argues that at the correct monthly rate of $650 she owed no rent as of the date of the petition. Respondent argues that there are no material issues of fact, she is entitled to summary judgment as a matter of law and the petition should be dismissed as (1) any rent demand that may have been made was defective both because it was based on an improper monthly rent of $1450 and because respondent owed no rent; (2) the petition demands rent at an excessive rate; and (3) the petition as amended pursuant to the court's Decision and Order of July 19, 2017 fails to state the facts upon which the proceeding is based as required by RPAPL § 741(4), and fails to state a cause of action, as it alleges that the premises are unregulated and not subject to Rent Stabilization, citing MSG Pomp Corp v. Jane Doe, 185 A.D.2d 798, 586 N.Y.S.2d 965 (1st Dep't 1992).

In opposition, petitioner calls the Rent Reduction Order "ancient" (it was issued twenty-four years ago) and asserts that it purchased the building in 2005 and lacked any knowledge of the Order until it surfaced in this proceeding. Further, petitioner argues that its predecessor-in-interest did file two rent restoration applications relating to the Rent Controlled

58 Misc.3d 644

apartments³ in the building: The first resulted in a DHCR Order Partially Restoring Rent dated August 29, 1995 which found after an inspection that five conditions had been corrected but four remained. The second resulted in a DHCR Order Partially Restoring Rent dated August 20, 1998 which found after an inspection that three conditions had been corrected but one remained, specifically, "the vestibule door is not self-locking and is missing its lock." The 1998 Order notes that the owner may refile "after the door is made to be self-locking" and that "The owner failed to file applications for the affected rent stabilized apartments."

Petitioner cites to Section 42–01 of Volume 1 of the Rules of the City of New York and asserts that there is no requirement that the vestibule door exist, much less that it be self-locking, and that the DHCR has found in another case that the maintenance of a vestibule door is a de minimus issue under RSC § 2523.4(e), citing and attaching a copy of the DHCR's Order in In Re 1646 Union LLC(Admin Dkt. No. DV–230009–RO, dated July 15, 2016). Petitioner further asserts that, as in In Re 1646 Union LLC, no tenants have complained about the vestibule door and that, in any event, it recently filed an

65 N.Y.S.3d 437

application with the DHCR seeking retroactive restoration of the rents for all apartments in the building.

Petitioner argues that summary judgment should be denied for several reasons: First, respondent's motion is procedurally defective as a copy of her amended answer is not attached to it, as required by CPLR R 3212(b). Second, the "permissive language" included in RSC § 2526.1(a)(2)(v) regarding the effect of a rent reduction order issued under § 2523.4(a) on a rent overcharge complaint "makes it clear that there is no requirement that ancient Rent Reduction Orders serve as an automatic basis for issuing a rent overcharge award." Affirmation in Opposition at ¶ 21. Petitioner argues that respondent's implicit reliance on Cintron v. Calogero, 15 N.Y.3d 347, 356, 938 N.E.2d 931,935, 912 N.Y.S.2d 498, 502 (2010) is misplaced, since the Code was amended to include,

58 Misc.3d 645

inter alia, RSC § 2526.1(a)(2)(v) after the Court of Appeals issued that decision. In support of this argument, petitioner cites to, discusses and attaches a copy of a Queens County Supreme Court decision dated June 21, 2016, Napa Partners LLC v. DHCR(Index No. 11928/2015), and argues that issues of fact have been raised as to the effect of the Rent Reduction Order on this proceeding. Third, at a minimum there are issues of fact...