Park West Village v. Lewis

• Decision Date: 14 June 1984
• Citation: 477 N.Y.S.2d 124,465 N.E.2d 844,62 N.Y.2d 431
• Parties: , 465 N.E.2d 844, 46 A.L.R.4th 489 In the Matter of PARK WEST VILLAGE, Appellant, v. Barbara LEWIS, Respondent.
• Court: New York Court of Appeals Court of Appeals

Page 124

477 N.Y.S.2d 124

62 N.Y.2d 431, 465 N.E.2d 844, 46

A.L.R.4th 489

In the Matter of PARK WEST VILLAGE, Appellant, v. Barbara LEWIS, Respondent.

Court of Appeals of New York.

June 14, 1984.

Gary M. Rosenberg, Robert A. Jacobs, New York City, and Mark D. Graham, New Rochelle, for appellant.

Mark P. Denbeaux, Risa G. Dickstein, Scott A. Felcher and Barbara Dixon, New York City, for respondent.

OPINION OF THE COURT

JASEN, Judge.

The issue presented on this appeal is whether a significant violation of a substantial obligation of a lease occurs when a tenant who agreed to use her apartment solely for residential purposes also uses the apartment as a counseling office where she conducts her entire professional psychotherapy practice.

Respondent tenant, Dr. Barbara Lewis, a doctor in clinical psychology, rented an apartment in a rent-stabilized building located in New York City from petitioner landlord. The lease, which was entered into by both parties on June 16, 1969, provides, inter alia, that: "Tenant shall not use or occupy the apartment or allow the apartment to be used or occupied for any purpose other than as and for a private dwelling-place, nor by any party other than Tenant, the members of tenant's immediate family as stated in the most recent Information Form Concerning Applicant and any children hereafter born to or adopted by Tenant. Landlord hereby advises Tenant that the character of the occupancy of the apartment and the use thereof, as in this case restricted, is a special consideration and inducement for the making of this lease by Landlord."

Despite the unambiguous use and occupancy restriction contained in the lease, tenant, as a professional psychotherapist began counseling patients in her apartment. Sometime after the landlord learned of this, it served tenant with a 10-day notice to cure, stating that "has come to your landlord's attention that you are in violation of Article 2 of your lease, and of the terms and conditions of your lease in that you are using your apartment for purposes other than residential purposes, to wit, for the professional practice of psychology * * * I wish to advise you that it will be necessary for you to desist from continuance of this illegal occupancy within ten (10) days from the receipt of this notice. Should you fail to comply with the terms of this notice within the time required, then it will be necessary to commence legal proceedings to terminate your lease and occupancy." When tenant refused to comply with the notice, landlord served her with a notice terminating the tenancy.

Shortly thereafter, tenant commenced a declaratory judgment action against the owner seeking a declaration that her use of the apartment was not a violation of a substantial obligation of her tenancy within the meaning of subdivision a of section 53 of the Code of the Rent Stabilization Association of New York City, Inc. (Rent Stabilization Code).

On July 23, 1981, the parties entered into a stipulation discontinuing the declaratory judgment action and permitting the landlord to proceed with a holdover proceeding provided that, if landlord were awarded a final judgment of possession, tenant would be permitted to cure the default within 60 days thereafter by discontinuing the practice of psychotherapy in her apartment. It was further agreed that in the event landlord was successful at the holdover proceeding, tenant could remain in possession of the apartment during the pendency of an appeal, provided that she discontinue her practice of psychotherapy on the premises.

Landlord commenced a summary holdover proceeding against tenant in the Civil Court of the City of New York. After trial, possession of the apartment was awarded to landlord. On appeal, the Appellate Term reversed, holding that "it was not demonstrated that tenant's 'business activities' in her apartment were so substantial as to warrant termination of her twelve-year stabilized tenancy." A sharply divided Appellate Division affirmed. Landlord's appeal is before us pursuant to leave granted by the Appellate Division. We now reverse.

The subject lease contained a restrictive covenant limiting the tenant's use and occupancy of the apartment exclusively to residential purposes--"Tenant shall not use or occupy the apartment or allow the apartment to be used or occupied for any purpose other than as and for a private dwelling-place". Tenant concedes that she used the apartment for other than residential purposes by conducting her entire psychotherapy practice there. She correctly argues, however, that subdivision a of section 53 of the Rent Stabilization Code prevents a landlord from evicting a tenant in a rent-stabilized apartment unless "tenant is violating a substantial obligation of tenancy". (Emphasis supplied.) ¹

Thus, we turn our attention to the question whether tenant violated "a substantial obligation" of the lease. Tenant again concedes, as she must, that the lease provision limiting use and occupancy of the apartment to residential purposes is a substantial obligation of her tenancy. Indeed, by the express terms of the lease, the residential character and limited use of the apartment "is a special consideration and inducement for the making of this lease by Landlord". Although we find that tenant has violated "a substantial obligation" of her tenancy, this does not end our inquiry, for the problems associated with the acute shortage of residential housing in New York City demand that tenants be afforded more protection than would be available under an unduly restrictive interpretation of subdivision a of section 53.

We need not expound at length upon the crisis existing in the housing market in New York City. Suffice it to say, in 1969 the city council...