Rudd v. Sharff

• Decision Date: 11 March 2010
• Citation: 2010 N.Y. Slip Op. 20089,27 Misc.3d 860,896 N.Y.S.2d 858
• Parties: Frederick J. RUDD et al., Petitioners,v.Eric SHARFF, Respondent.Frederick J. Rudd et al., Petitioners,v.Don Knight and Ray Kenny, Respondents.
• Court: New York Civil Court

27 Misc.3d 860

896 N.Y.S.2d 858

2010 N.Y. Slip Op. 20089

Frederick J. RUDD et al., Petitioners,

v.Eric SHARFF, Respondent.Frederick J. Rudd et al., Petitioners,

v.Don Knight and Ray Kenny, Respondents.

Civil Court, City of New York,New York County.

March 11, 2010.

Belkin Burden Wenig & Goodman, LLP, New York City(Brian Y. Epstein of counsel), for petitioners.Himmelstein, McConnell, Gribben, Donoghue & Joseph, New York City(Ronald S. Languedoc and Sam Himmelstein of counsel), for respondents.GERALD LEBOVITS, J.

In Pultz v. Economakis,the Court of Appeals interpreted Section 2524.4(a) of the New York City Rent Stabilization Code (RSC)(9 NYCRR 2524.4[a] ) to allow owners to recover entire buildings in owner's-use holdover proceedings if they can prove, at trial, their good-faith intention to recover the units for their personal use as their primary residence.( See10 N.Y.3d 542, 548, 860 N.Y.S.2d 765, 890 N.E.2d 880[2008].)Petitioners here, like the petitioner in Pultz, seek to recover an entire building.The issue in this owner's-use proceeding seeking an entire building is what a predicate notice must say before a proceeding may go forward to a trial at which the owner must prove good faith.

In these two owner's-use proceedings, petitioners seek to recover possession of two apartments, which respondents occupy, in the same building.Respondents move to dismiss the petition.Petitioner cross-moves for orders compelling respondents to pay use and occupancy pendente lite.These cases, which present nearly identical issues of fact and law, are consolidated for disposition.For the reasons below, respondents' motions to dismiss are granted.Because this proceeding is dismissed, petitioners' cross-motion motion must be denied.

BACKGROUND

The undisputed facts follow.

RespondentsDon Knight and Ray Kenny are the record tenants of a rent-stabilized apartment under a written rental agreement dated January 1, 1994, between them and petitioners' predecessor, the subject building's prior owner and landlord.RespondentEric Sharff is the tenant of another rent-stabilized apartment in the same building under a similar agreement dated August 8, 1994.The leases covering both apartments were extended by renewal lease agreements dated May 1, 2007, between respondents and petitioners' predecessor for terms expiring on July 31, 2009.

On April 29, 2009, petitioners, including Frederick J. Rudd, became the owners of a four-story (and a roof deck), 13–unit apartment building containing the subject apartments.On April 30, 2009, petitioners served respondents with identical combined predicate termination and nonrenewal notices ( Golub notices) declaring their intent to recover respondents' apartments as part of petitioners' a plan to convert the entire building into a single-family home to be used as Rudd's primary residence together with Kim Greenberg, his fiancée, and her two children.

Rudd's plan for the building is contained in Paragraph 6 of the predicate Golub notices:

“Frederick J. Rudd Plans to use the Building as follows:

“First Floor entry hall

“Second Floor kitchen, living room, dining room with powder room

“Third Floor three to four bedrooms with bathrooms and family room

“Fourth Floor master bedroom/was master bathroom, study/office, gym

“Installation of staircase from the fourth floor leading to the roof and roof deck

“Elevator from the first floor to the fifth [roof] floor to be installed.”

The notices go on to state Rudd's intention to recover the remaining apartments in the building by serving nonrenewal notices on the other tenants in the building as their lease terms expire.

After respondents' lease terms expired, petitioners brought these holdover proceedings by petitions dated August 6, 2009.Respondents now move to dismiss both petitions on the alleged ground that Rudd's predicate notices are fatally defective.

DISCUSSION

RSC § 2524.4(a)(1) provides that an owner is not required to offer a renewal lease to a rent-stabilized tenant if the owner seeks to recover possession of the housing accommodation “for such owner's personal use and occupancy as his or her primary residence in the City of New York.”Before an owner may lawfully exercise the power to decline a renewal lease under RSC § 2524.4(a)(1), the owner must first provide the tenant with a written nonrenewal notice “at least 90 and not more than 150 days prior to the expiration of the lease term.”(RSC § 2524.2[c];accordGolub v. Frank,65 N.Y.2d 900, 493 N.Y.S.2d 451, 483 N.E.2d 126[1985].)RSC § 2524.2(b) provides that this notice must state the “ground under section ... 2524.4 ... upon which the owner relies for removal or eviction of the tenant, the facts necessary to establish the existence of such ground, and the date when the tenant is required to surrender possession.”

A proceeding brought on the basis of a nonrenewal notice that does not comply with RSC § 2524.2 must be dismissed.( See generallyHirsch v. Stewart,63 A.D.3d 74, 877 N.Y.S.2d 285[1st Dept.2009].)To comply with section 2524.2, a notice must state the specific facts that form the basis for nonrenewal.A notice that merely declares an intention to recover the apartment for the owner's use as the owner's primary residence is alone insufficient because it states only the ground for nonrenewal and not nonconclusory facts supporting that ground.( Berkeley Assocs. Co. v. Camlakides,173 A.D.2d 193, 195, 569 N.Y.S.2d 629[1st Dept.1991], affd.78 N.Y.2d 1098, 578 N.Y.S.2d 872, 586 N.E.2d 55[1991].)In evaluating the adequacy of facts contained in a notice, the standard is one of “reasonableness in view of all attendant circumstances.”( Hughes v. Lenox Hill Hosp.,226 A.D.2d 4, 17, 651 N.Y.S.2d 418[1st Dept.1996], lv. denied90 N.Y.2d 829, 660 N.Y.S.2d 552, 683 N.E.2d 17[1997].).

The question before this court is this: When an owner's timely nonrenewal notice states the owner's intention to decline a renewal lease to a rent-stabilized tenant because the owner intends to use the entire building as a primary residence, but the owner indicates no desire to convert any apartment for personal use and occupancy until the entire building is recovered and the notice makes clear that the recovery might not take place for several years, is that notice reasonable in view of all attendant circumstances?This court finds under the circumstances of this case that it is not.

1.Future Contingencies

Respondents' first major argument is that the Golub notice is improper because it contains facts dependent on future contingencies that might or might not occur.Respondents assert that petitioners' notice cannot require them to vacate now because of a plan based on uncertain events like removing of multiple tenants from the building, marrying his fiancée, his fiancée and her children moving in with him, and converting the building into a one-family home.According to respondents, the other tenants might not vacate, Rudd might not get married, his fiancée and her children might not move in, and the building might be never become a one-family home.But the existence of contingencies does not invalidate a Golub notice if the owner has proposed the plan in good faith.( SeeHirsch,63 A.D.3d at 79, 877 N.Y.S.2d 285[“The argument that the penalties imposed by RSC § 2524.4(a)(5) were intended as the sole remedy against a landlord whose intention to use the apartment personally turns out, in retrospect, not to have been genuine, is incorrect....[A]n owner is not entitled to a judgment of possession in the first instance if the owner cannot prove his or her good faith intention prior to evicting the tenant.”][emphasis in original].)On a motion to dismiss, this court must assume as true that petitioners intend to use the apartments for the purposes stated in the notice.( E.g.Foxell v. New York City Human Resources Admin.,167 A.D.2d 126, 127, 561 N.Y.S.2d 214[1st Dept. 1990 mem.][noting that court must accept petition's factual allegations as true on CPLR 3211[a][7] motion to dismiss].)That some facts might conceivably change after a predicate notice is served does not mean that the notice was served in bad faith.Any changed circumstance is an issue of good faith for trial.( Elias v. Gravel, Hous.Part, Civ. Ct., N.Y. County, Mar. 6, 2009, Kaplan, J., IndexNo. 50689/08, at 1.)

Respondents' argument should also be rejected at the motion-to-dismiss stage because it calls for an unnecessary expansion of the phrase “good faith” in the Golub-notice context.Pretrial arguments attacking contingencies in a Golub notice essentially argue that owners fail to act in good faith when they seek to evict tenants on the basis of Golub notices replete with uncertain facts.Although RSC § 2524.4(a) contains an implied requirement that an owner act in good faith, this requirement refers to the owner's good-faith intention to recover possession.( Pultz,10 N.Y.3d at 548, 860 N.Y.S.2d 765, 890 N.E.2d 880;Hirsch,63 A.D.3d at 79, 877 N.Y.S.2d 285;Horsford v. Bacott,32 A.D.3d 310, 312, 820 N.Y.S.2d 554[1st Dept. 2006 mem.].)That is, the “good faith” inquiry asks whether the owner seeks the apartment for the reason or reasons stated in the notice.Agreeing with respondents is tantamount to agreeing that a notice may be served in bad faith even if the owner intends to carry out the stated plan and truly believes that contingencies will unfold as expected.A pretrial challenge to a notice is more properly brought as an argument that the stated plan itself is improper.As discussed below, this court's reliance on respondents' second major argument avoids an unnecessary and unsupported expansion of the section 2524.4(a) good-faith requirement.

2.Personal Use and Occupancy

Respondents' second major argument is that even if petitioners' had put their plan forth in good faith, the plan itself does not state a valid ground for declining a renewal lease.The claim is that the facts petit...