Sommer v. Lenoir/Hickory Knitting Mills, Inc.

• Decision Date: 14 November 1984
• Citation: 481 N.Y.S.2d 973,126 Misc.2d 255
• Parties: Viola SOMMER, d/b/a ETE Co., Petitioner-Landlord, v. LENOIR/HICKORY KNITTING MILLS, INC., Respondent-Tenant, and William Schey, Barbara Schey, "John Doe" and "Jane Doe", Respondent-Undertenants.
• Court: New York City Court

Page 973

481 N.Y.S.2d 973

126 Misc.2d 255

Viola SOMMER, d/b/a ETE Co., Petitioner-Landlord, v. LENOIR/HICKORY KNITTING MILLS, INC., Respondent-Tenant and William Schey, Barbara Schey, "John Doe" and "Jane Doe" Respondent-Undertenants.

Civil Court of the City of New York New York County, Housing Part 49.

Nov. 14, 1984.

Rosenberg & Estes, P.C., New York City, for petitioner-landlord; Maralyn B. Fairberg, New York City, of counsel.

Kantor, Davidoff, Wolfe, Robbino & Kass, P.C., New York City, for respondents; Robin Nelson Wolfe, New York City, of counsel.

HAROLD TOMPKINS, Judge.

Petitioner commenced this holdover proceeding on the ground that the tenant Lenoir/Hickory Knitting Mills, Inc. ("Lenoir/Hickory") a bankrupt corporation, did not maintain the subject rent stabilized apartment as its primary residence and consequently had no entitlement to a renewal lease. Petitioner now moves and respondents cross move for summary judgment.

In 1981 and prior to the expiration of respondent's lease, petitioner commenced proceedings before the Conciliation and Appeals Board (CAB) seeking a certificate of eviction of Lenoir/Hickory on the grounds that the apartment was not its primary residence. Lenoir/Hickory had filed a Chapter XI bankruptcy petition on April 18, 1979 and was adjudicated a bankrupt on March 12, 1980. The CAB made no determination on petitioner's application for approximately two years. During the period in which the CAB proceeding was pending the Emergency Tenant Protection Act of 1974 was amended by the Omnibus Housing Act of 1983 ("The Act") (L.1983, ch. 403). Petitioner also served a thirty day notice of termination on July 27, 1983 at which time the CAB proceeding was pending. On September 22, 1983, the CAB transmitted an opinion in connection with petitioner's application which read in pertinent part:

Staff was processing the case under the amended code provision when the above described law (i.e. The Omnibus Housing Act) took effect transferring jurisdiction effective immediately from the Conciliation and Appeals Board to a court of competent jurisdiction in all non-primary residence cases... The owner's application is dismissed without prejudice and the owner is directed, within 10 days of the service of this order to serve tenant with a 30 day notice to be immediately followed by the initiation of court action.

Petitioner immediately commenced this proceeding.

Pursuant to the lease between petitioner and Lenoir/Hickory the sole occupants of the apartment were to be William Schey, president of Lenoir/Hickory, Barbara Schey and their immediate family.

Petitioner argues that determination of the outcome of this proceeding hinges upon whether the Omnibus Housing Act of 1983 or prior case law is applicable to the facts of this case. Under the Act the landlord need not offer a renewal lease to a "tenant, not including subtenants or occupants", who does not utilize the housing accommodations "as his primary residence" (L.1983 ch. 403, Sec. 55). Sec. 39 of the Act defines a tenant as a "party to the lease". Thus the focus would be upon the tenant named in the lease and not subtenants or occupants. In this case that inquiry would result in the conclusion that the unit is not being utilized as a primary residence since Lenoir/Hickory as a corporation cannot maintain a primary residence. In determining whether or not a tenant has met the primary residence test the court looks to the place of voter registration, automobile registration, driver license and filing of individual tax returns (Rent Stabilization Code Sec. 54 (e)(2)(i)(ii)). Since corporations are inherently unable to meet these prerequisites, corporate tenants such as respondents would be unsuccessful non-primary residence cases under the new law as interpreted by the petitioner.

Under prior case law where, as here, a rent stabilized apartment was leased to a corporation and where the corporation designated a particular individual and his immediate family as sole occupants of the apartment, the court would look to the designated occupant and determine whether that individual used the apartment as his or her primary residence. If so, the landlord was obligated to offer a renewal lease to the corporation. (See Cale Development Co., Inc. v. Conciliation and Appeals Board, 94 A.D.2d 229, 463 N.Y.S.2d 814, affd. 61 N.Y.2d 976, 475 N.Y.S.2d 278, 463 N.E.2d 619; Sommer v. Conciliation and Appeals Board, 93 A.D.2d 481, 462 N.Y.S.2d 200, affd. 61 N.Y.2d 973, 475 N.Y.S.2d 280, 463 N.E.2d 621).

Petitioner contends that Sec. 55 of the Act should be applied and respondent Lenoir/Hickory be denied a renewal lease since it cannot maintain a primary residence as a matter of law. Respondent on the other hand claims that, since this matter was pending before the CAB before the Omnibus Housing Act was enacted, prior case law should govern this proceeding and that under the holdings of Cale Development Co., Inc. v. Conciliation and Appeals Board, supra, and Sommer v. Conciliation and Appeals Board, supra, respondent is entitled to a renewal lease since the unit is clearly the primary residence of William and Barbara Schey ("the undertenants"). Respondent also argues that petitioner's interpretation of the Act to require the court to look only to the named tenants' status in corporate tenant cases is contrary to the underlying purpose of the Act.

The Prior Order of this Court

The issue of the applicability of the Omnibus Housing Act was referred to in the order of another Judge of this court dated June 1, 1984 in which the court dismissed respondent's four affirmative defenses and denied respondent's cross-motion to dismiss the petition. The cross-motion to dismiss was based upon estoppel and waiver allegedly established by reason of petitioner's acceptance of rent checks from the undertenants. In the decision the court stated that the proceeding was governed by the Omnibus Housing Act and therefore the primary residence of the named tenant, Lenoir/Hickory, controlled the outcome of this proceeding. The court directed a trial on the issue of Lenoir/Hickory's primary residence.

Petitioner argues that the prior order of this court is the law of the case and that pursuant to that ruling on the issue of the applicability of the new Omnibus Housing Act the petitioner must be granted summary judgment. Respondents on the other hand contend that the law of the case doctrine does not bind this court to apply the Omnibus Housing Act and that the Court should look to prior case law and grant summary judgment to respondents dismissing the petition as the apartment is clearly the undertenants' primary residence.

The law of the case doctrine provides that once an issue has been judicially determined in an action, that determination binds the parties and other judges of coordinate jurisdiction for the remainder of that action. (29 N.Y.Jur.2d Sec. 496, p. 270-72).

However, the law of the case doctrine is not an absolute mandate and may be ignored in circumstances vitiating its effectiveness. (Foley v. Roche, 86 A.D.2d 887, 447 N.Y.S.2d 528). The phrase "law of the case as applied to the effect of previous orders on the later action of the court rendering them in the same case, merely expresses the practice of courts generally to refuse to reopen what has been decided, not a limit to their power." (Messenger v. Anderson, 225 U.S. 436, 444, 32 S.Ct. 739, 740, 56 L.Ed. 1152). "The doctrine ... is not a statutory concept compelling rigid observance ... is flexible, sensitive, without the finality of the doctrine of res judicata and does not limit the power of a Judge to deviate from a decision made by another". (Matter of Rose, 109 Misc.2d 960, 966-967, 441 N.Y.S.2d 161). Moreover, the prior court's reference to the applicability of the Omnibus Housing Act was not necessary to a determination of the motion and was made without full argument of the point.

Based upon the foregoing, the prior decision of the court which denied the motion to dismiss the petition, stated that the Omnibus Housing Act governs this proceeding and found that the issue of the primary residence of the corporate tenant could only be resolved at trial, does not bind this court to apply the Act.

The Prospective Application of the Act

The Act's provision concerning nonprimary residence cases is to be applied prospectively only. Statutes are presumed prospective in application (McKinney's Statutes Book # 1, Sec. 51(b, c). No statute is to be applied retroactively in the absence of clear legislative intent (Longines-Wittnauer v. Barnes & Reinecke, 15 N.Y.2d 443, 261 N.Y.S.2d 8, 209 N.E.2d 68). The act as it relates to primary residence (L.1983 ch. 403, Sec. 55) was effective immediately upon enactment on June 30, 1983 pursuant to Sec. 64 of the Act. There is no mention in the Act concerning retroactivity and given the fact that the Legislature chose to make other sections of the statute retroactive (see L.1983, ch. 403, Sec. 37) it is clear that the Legislature intended that Sec. 55 be applied prospectively (M&G Stromer v. Granata, 124 Misc.2d 934, 479 N.Y.S.2d 931 (App.Term 1st Dept.); see also Reilly v. Labovsky, 120 Misc.2d 478, 466 N.Y.S.2d 180).

Accordingly, since the CAB had petitioner's challenge before it prior to the enactment of the Omnibus Housing Act and given the prospective application of Sec. 55 of the Act, prior ...