Quinatoa v. Hewlett Assocs.
| Decision Date | 21 April 2022 |
| Docket Number | No. 151132/2018,Motion Seq. No. 005,151132/2018 |
| Citation | 2022 NY Slip Op 31304 (U) |
| Parties | STELLA QUINATOA AND ANA CABRERA, ON BEHALF OF THEMSELVES AND OTHERS SIMILARLY SITUATED Plaintiff, v. HEWLETT ASSOCIATES, LP, Defendant. |
| Court | New York Supreme Court |
2022 NY Slip Op 31304(U)
STELLA QUINATOA AND ANA CABRERA, ON BEHALF OF THEMSELVES AND OTHERS SIMILARLY SITUATED Plaintiff,
v.
HEWLETT ASSOCIATES, LP, Defendant.
No. 151132/2018, Motion Seq. No. 005
Supreme Court, New York County
April 21, 2022
Unpublished Opinion
MOTION DATE 06/28/2021
DECISION + ORDER ON MOTION
HON. SABRINA KRAUS PART JUSTICE
The following e-filed documents, listed by NYSCEF document number (Motion 005) 200, 201, 202, 203, 204, 205, 206, 207, 208, 209, 210, 211, 212, 213, 214, 215, 216, 217, 218, 219, 220, 221, 222, 223, 224, 225, 226, 227, 228, 229, 230, 231, 232, 233, 234, 235, 236, 237, 238, 239, 240, 241, 242, 244, 245, 246, 248, 249, 250, 251, 252, 253, 254, 255, 256, 257, 258, 259, 260 were read on this motion to/for ORDER MAINTAIN CLASS ACTION .
BACKGROUND
In this case alleging rent overcharge, plaintiffs Stella Quinatoa and Ana Cabrera currently move for class certification, with Quinatoa and Cabrera as lead plaintiffs and Milbank LLP (Milbank) and The Legal Aid Society (Legal Aid) as co-counsel for the class. In addition, plaintiffs seek approval of their proposed class notice and an order that directs defendant Hewlett Associates, LP (Hewlett) to provide them with contact information for the proposed class members. Hewlett opposes the motion. For the following reasons, the court grants the motion.
Plaintiffs Stella Quinatoa and Ana Cabrera reside in the Trafalgar Apartments (Trafalgar) in Flushing, Queens (NYSCEF Doc. No. 1 [complaint], ¶¶ 8-9). Hewlett Associates, LP (Hewlett)
is the owner and landlord of Trafalgar (id., ¶ 10).[1] Plaintiffs allege that Hewlett violated Administrative Code § 11-243, commonly referred to as J-51 after its predecessor provision.[2] Under J-51, landlords who undertake major capital improvements on their buildings receive tax abatements. While they receive such abatements, all apartments in the buildings have rent-stabilized status, regardless of whether the apartments were stabilized before the building received the abatements. Where the cessation of benefits leads to the destabilization of an apartment, the landlord must notify the affepted renter that the J-51 benefits are about to expire and that as a result the renters will lose their rent-stabilized status. If the landlord does not notify them in the proper manner, the apartment remains rent stabilized.
Trafalgar was built around 1973 and contains 113 rental units (NYSCEF Doc. No. 1, ¶ 36). Hewlett filed for J-51 benefits in 2006 (see NYSCEF Doc. No. 11), and it allegedly received the benefits commencing in 2008 (NYSCEF Doc. No. 1, ¶ 39). The complaint contends that, during this period, Hewlett "systematically violated [its] obligations under the Rent Stabilization Laws" (NYSCEF Doc. No. 1, ¶ 40) in that it did not treat all the apartments at Trafalgar as rent stabilized. For example, the complaint alleges that in 2017, only 14 of the units were listed as rent-stabilized although the building received J-51 benefits; the current motion papers assert that no more than 15 of the units were treated as rent stabilized between 2014 and 2018, which is the proposed class period. Also, the complaint asserts that Hewlett did not notify the tenants that their apartments were rent-stabilized and that Hewlett lied to tenants and others who asked about their units' rent-
stabilized status. Quinatoa and Cabrera allege that they were unaware of the rent-stabilized status of their respective apartments and that their lease increases exceeded the amount the Rent Guidelines Board allowed. As a result, plaintiffs claim that they sustained financial damages.
According to plaintiffs, Hewlett's actions also adversely affected the ability of Trafalgar's senior citizens residents to take advantage of RPTL 467-b, which is implemented in New York City under N.Y.C. Administrative Code § 26-509. This provision is known as SCRIE, a shorthand for "Senior Citizen Rent Increase Exemption." SCRIE freezes the rent of senior citizens over 62 who live in rent-stabilized housing and whose income falls below a specified level, so that the rent does not exceed the greater of 1) one-third of the household's aggregate disposable income or 2) the rent in effect immediately before the senior becomes eligible for the benefit. For the purpose of this law, the eligibility date is the date a qualified tenant applies for SCRIE (see Nunez v Giuliani, 91 N.Y.2d 935 [1998]). Because of the misrepresentations, the complaint states, senior citizens who lived in Trafalgar did not apply for SCRIE when they first could have applied (NYSCEF Doc. No. 1, ¶¶ 40-48). Quinatoa alleges that she and her husband were eligible for SCRIE benefits.
In August 2017, Hewlett notified tenants, including the named plaintiffs, that they should have received leases for stabilized rents and that Hewlett had not provided notice of the apartments' statuses in the tenants' prior leases. However, the complaint, which is dated February 6, 2018, states that Hewlett misrepresented the true amount of back rent due to the tenants. Therefore, the checks did not fully reimburse these tenants. Moreover, the complaint says that those tenants who accepted the checks did not waive their right to full compensation (id., ¶¶ 49-53). As relief, plaintiffs seek 1) full reimbursement of all overcharges, plus interest; 2) a declaratory judgment that all the rental units in the Trafalgar Apartments are subject to rent
stabilization, that all class members are entitled to rent-stabilized leases, that all leases that do not comply with the Division of Housing and Community Renewal (DHCR) requirements are invalid, and that the class members need not pay rent until Hewlett provides them with proper leases; 3) declaratory judgments from this court as to the legal regulated rent for each apartment; and 4) "a permanent injunction against additional violations ... of the Rent Stabilization Laws," to be regulated by an entity which will "audit and undertake an accounting of every apartment" and reform leases accordingly (NYSCEF Doc. No. 1, ¶ 117). Plaintiffs also ask for 5) a permanent injunction against Hewlett which will prevent it "from charging any rent above the relevant SCRIE rent for units eligible for SCRIE and awarding damages in an amount no less than the difference between the rent paid by SCRIE-eligible tenants and the SCRIE rent for the entire period for which they would have been eligible for SCRIE."[3]
On May 1, 2018, Hewlett filed a motion to dismiss the complaint under CPLR § 3211 (NYSCEF Doc. No. 19 [notice of motion, motion sequence number 002]). Among other things, the motion argued that, as a matter of law, the complaint did not satisfy the prerequisites for a class action. As is relevant here, in its May 3, 2020 order, this court denied the motion as it pertained to Hewlett (NYSCEF Doc. No. 83 at *20). The court found, in particular, that the alleged class of over 100 tenants satisfied the numerosity requirement (id. at 16 [citing Stecko v RLI Ins. Co., 121 A.D.3d 542, 542-43 (1st Dept 2014) (class of more than 50 workers established numerosity); Casey v Whitehouse Estates, Inc., 36 Misc.3d 1225 (A), 2012 NY Slip Op 51471 (U) (Sup Ct, NY County 2012) (tenants residing in 72 apartments established numerosity)]). In finding a prima facie case on the issue of commonality, the court relied on Maddicks v Big City Props., LLC, 34 N.Y.3d 116,
123-124 [2019]), which, like the case at hand, involved tenants who allegedly were the victims of a rent fraud scheme. The court rejected Hewlett's argument that, because Quinatoa also argued that she was deprived of the opportunity to apply for SCRIE benefits, typicality was not satisfied. In addition, the court found that a class action can be an appropriate method of litigating an overcharge case such as the one alleged. Finally, the court noted that New York courts have concurrent jurisdiction with the DHCR in rent overcharge matters (id. at *19 [citing Collazo v NetherlandProp. Assets LLC, 35 N.Y.3d 987, 990 [2020]).
On May 15, 2020, Hewlett filed its answer to the complaint (NYSCEF Doc. No. 123). Simultaneously, it moved to reargue the court's order to the extent that the court denied Hewlett's motion to dismiss (NYSCEF Doc. No. 124). The court denied Hewlett's motion in an order dated March 24, 2021 (NYSCEF Doc. No. 197).[4]
PENDING MOTION
On May 11, 2011, plaintiffs brought the current motion to certify the class, obtain approval of their proposed class notice, and compel Hewlett to disclose the names, addresses or last known addresses, the email addresses, and the phone numbers of all past and current tenants in the proposed class.
DISCUSSION
Class Certification
The State's rules on class actions, like their federal counterparts, "favor the maintenance of class actions" and support "a liberal interpretation" (Pruitt v Rockefeller Ctr. Props., 167 A.D.2d 14, 20-21 [1st Dept 1991] [internal quotation marks and citation omitted]; see City of New York v Maul, 14 N.Y.3d 499, 509 [2010] [Maul] [courts should broadly construe criteria set forth in CPLR
901 (a)]). In the context of rent-stabilization challenges against landlords who allegedly violated J-51, "CPLR 901 (b) permits . . . plaintiffs to utilize the class action mechanism to recover compensatory overcharges . . . even though the Rent Stabilization Law of 1969 . . . does not specifically authorize class action recovery" (Borden v 400 E. 55th St. Assoc, L.P., 24 N.Y.3d 382, 389-90 [2014]). Although damages may vary among the class members, this "does not per se foreclose class certification" (Andryeyeva v New York Health Care, Inc., 33 N.Y.3d 152, 185 [2019]). It is appropriate to bring a class action with one or more representative plaintiffs if 1) the size of the class is so large that it is impracticable to include them all as named plaintiffs, 2) common questions of law or fact predominate...
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