Richards v. Kaskel
| Decision Date | 23 February 1972 |
| Citation | 69 Misc.2d 435,330 N.Y.S.2d 582 |
| Parties | Ethel RICHARDS et al., Plaintiffs, v. Doris KASKEL et al., Defendants. Larry BERMAN, Petitioner, v. Mr. & Mrs. Joseph SMITH, Respondents. Norman LEBEAU, Petitioner, v. Rose KATZ and Toby Katz, Respondents. Julio and Ana Cuomo TANGELOFF, Petitioners, v. Eugene F. SITTERLY, Respondent. Dorothy CRASTO, Petitioner, v. Helen MARKS, Respondent. Ligia TRUJILLO, Petitioner, v. Frank SZILVASSY and Maria Szilvassy, Respondents. Seymour GOLDSTEIN and Ruth Goldstein, Petitioners, v. Irene DE REGIS, Respondent. Murray BRESLOW and Betty Breslow, Petitioners, v. Alan MORRILL and Dorothy Morrill, Respondents. |
| Court | New York Supreme Court |
Plaintiffs are tenants of apartments in 360 East 72nd Street, New York, New York. They bring this action for a declaratory judgment that a plan under which the building has become a cooperative was in violation of the Rent Stabilization Law of 1969 and therefore null and void, and for incidental relief.
The action is against the sponsor of the plan (Estate of Alfred L. Kaskel), the cooperative corporation (360 E. 72nd Street Owners Incorporated), the Administrator of the New York City Housing and Development Administration, and the Real Estate Industry Stabilization Association of New York City, Inc.
The cooperative corporation has amended its answer to include a cross claim against the sponsor, the former owner of the building. In turn, the sponsor has moved to dismiss the cross claim on the grounds that it may not properly be interposed in this action, and that it fails to state a cause of action.
Six holdover summary proceedings, originally brought in the Civil Court of the City of New York by holders of proprietary leases against the occupants of the apartments involved, were removed to this court and consolidated for trial with the basic action. The answers in the summary proceedings raise the defense that the plan to convert the building to cooperative ownership was not validly declared effective under the Rent Stabilization Law. The parties to the summary proceedings have stipulated that the petitioners have proven a prima facie case. Hence, the dispositive issue in the summary proceedings is also whether the cooperative plan was, or was not, in violation of the Rent Stabilization Law.
The original plan is dated October 31, 1969. It was presented to the tenants beginning November 5, 1969. It was twice amended and then declared effective by the sponsor as of November 17, 1970. On March 12, 1971, the Attorney General ruled that the sponsor had improperly included duplicate purchases in computing whether it had reached the necessary 35% Of tenant occupants who had agreed to purchase dwelling units. The Attorney General directed that sales be suspended pending acceptance for filing of an amendment negating the premature declaration of effectiveness and offering to rescind all agreements executed on or after November 17, 1970. The sponsor complied with this directive.
The plan was again declared effective on or about May 4, 1971, as of April 20, 1971, under an amendment accepted for filing by the Attorney General. The cooperative corporation took title on May 27, 1971.
The building is a Class A multiple dwelling subject to the Rent Stabilization Law of 1969 (). It has 454 residential apartments. When the plan was presented in November of 1969, there were eleven vacancies--35% Of the 443 occupied apartments amounts to 155.05.
Section YY51--6.0 of the Administrative Code deals with the Real Estate Industry Stabilization Association and the code to be adopted by the association. Subdivision c(9) of this section provides that an owner shall not refuse to renew a tenant's lease except where he intends to demolish the building, or he has submitted to and the Attorney General has accepted for filing a plan to convert the building to cooperative or condominium ownership. The owner must present the offering plan to the tenants in occupancy, and must also file a copy of the plan with the Housing and Development Administration.
The subdivision sets out a series of mandatory provisions in any such plan (9a to 9f). Pertinent to present purposes are subsections 9a and 9b reading:
'(a) the plan will not be declared effective unless and until thirty-five per cent of the tenants then in occupany have agreed to purchase dwelling units or the stock entitling them to proprietary leases for such dwelling units with no discriminatory repurchase agreement or other discriminatory inducement; (b) the tenants in occupancy at the time of the offering shall have the exclusive right to purchase their dwelling units or the shares allocated thereto for ninety days after the offering, during which time a tenant's dwelling unit shall not be shown to a third party unless he has, in writing waived his right to purchase; * * *.'
I construe the words 'then in occupancy' in subsection c(9)(a) to mean in occupancy at the time the plan is declared effective (see Kovarsky v. Housing and Dev. Adm., N.Y. Co. Index #20711--1970, N.Y.L.J., 2/26/71, p. 19, col. 3, aff'd 37 A.D.2d 917, 324 N.Y.S.2d 867).
On April 20, 1971, there were 48 vacancies (Exh. H; cf. Exh. 44, par. 3, stating that there were 51 vacancies on that date). 35% Of the 406 tenants 'then in occupancy' amounts to 142.10.
Exhibit 5 lists 165 claimed qualifying purchasers as of April 20, 1971. Of these, 6 purchasers did not consummate their purchases, 11 bought apartments vacant on April 20, 1971, and 12 others were not in occupancy on that day of the apartments they purchased.
Thus, 23 of the listed qualifying purchasers were not in occupancy of the purchased apartments on April 20, 1971. On the other hand, 13 of the purchasers not in occupancy of the apartments they bought were occupants of other apartments in the building. My reading of the local law is that occupancy of Any apartment in the building was sufficient to comply with the quoted provision of the Rent Stabilization Law (Adm.Code, YY51--6.0, subd. c(9) (a)). This leaves 10 apartments purchased by non-residents and 6 unconsummated transactions--a total of 16. Hence, at least 149 purchasers qualified as 'tenants in occupancy' as against the required 142.10, so that, absent other invalidity in the implementation of the plan, it qualified under the law and may not be upset (see: Schumann v. 250 Tenants Corp., 65 Misc.2d 253, 317 N.Y.S.2d 500).
Plaintiffs argue that resident purchasers of apartments other than their own may not be counted when computing the 35% Needed to declare the plan effective (Code of Real Estate Industry Stabilization Association of New York City, Inc., § 61(4(a))). The Code bears some evidence to the contrary (Code, § 61(4(a), (ii)(iii)(iv))). If, however, the Code provision that for the plan to be declared effective 35% Of the tenants then in occupancy must 'have agreed to purchase Their dwelling units' (italics supplied), is to be read as urged by plaintiffs, it is inconsistent with the Rental Stabilization Law and consequently inoperative (8200 Realty Corp. v. Lindsay, 27 N.Y.2d 124, 129--130, 132, 313 N.Y.S.2d 733, 736--737, 738, 261 N.E.2d 647, 649--650, 651; Major v. Waverly & Ogden, Inc., 7 N.Y.2d 332, 336, 197 N.Y.S.2d 165, 168, 165 N.E.2d 181, 184; Picone v. Comm. of Licenses, 241 N.Y. 157, 149 N.E. 336; Schumer v. Caplin, 241 N.Y. 346, 350--351, 150 N.E. 139, 140; Tropp v. Knickerbocker Village, 205 Misc. 200, 211--212, 122 N.Y.S.2d 350, 361--362, aff'd 284 App.Div. 935, 135 N.Y.S.2d 618).
The Rent Stabilization Law permits the plan to be declared effective when 35% 'of the tenants then in occupancy have agreed to purchase dwelling units'. It does not require that these tenants purchase Their own dwelling units. The word 'their' was added by the Code. If the addition is deemed to delimit the local law, it is legislative in character and impermissible (8200 Realty Corp. v. Lindsay, supra, 27 N.Y.2d p. 132, 313 N.Y.S.2d p. 738, 261 N.E.2d p. 651; Tropp v. Knickerbocker Village, supra, 205 Misc. pp. 211--212, 122 N.Y.S.2d pp. 361--362).
We reach more troublesome problems, to be adjudicated in the light of applicable legal rules gradually crystalizing as more of cases of this character come before the courts (8200 Realty Corp. v. Lindsay, supra, 27 N.Y.2d 124, 313 N.Y.S.2d 733, 261 N.E.2d 647; Coolidge v. Kaskel, 16 N.Y.2d 559, 260 N.Y.S.2d 835, 208 N.E.2d 780; Northridge Coop. v. 32nd Ave. Construction Corp., 2 N.Y.2d 514, 523, 526--528, 530--531, 161 N.Y.S.2d 404, 408, 411--413, 414--415, 141 N.E.2d 802, 805, 807--808, 809--810; Shore Terrace Cooperative, Inc. v. Roche, 25 A.D.2d 666, 268 N.Y.S.2d 278; Northridge Coop. v. 32nd Ave. Const. Corp., 10 A.D.2d 244, 197 N.Y.S.2d 991, aff'd 9 N.Y.2d 818, 215 N.Y.S.2d 765, 175 N.E.2d 344; Schumann v. 250 Tenants Corp., 65 Misc.2d 253, 317 N.Y.S.2d 500; Gantzhorn v. Yorkville House Co., N.Y.L.J. 10/13/71, p. 2, col. 4, aff'd 38 A.D.2d 691, 327 N.Y.S.2d 998; see also General Bus.Law, § 352--e).
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