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Felton v. Leo-Dor Realty Corp.

Supreme Court of New York, Appellate Division

February 15, 1955

Leo-Dor Realty Corp.

Page 461

APPEALS, by permission of the Appellate Term of the Supreme Court in the first judicial department, from a determination of said court, entered September 16, 1954, which (1) reversed a judgment of the Municipal Court of the City of New York in favor of plaintiff, entered upon a verdict rendered at a Trial Term (RAFFERTY, J.), and (2) dismissed the complaint.


Murray A. Meyerson for appellant.

Beatrice Shainswit of counsel (Walter S. Fried, attorney), for intervener-appellant.

Leon H. Murray of counsel (Robert L. Boags and Horace I. Gordon with him on the brief; Dyer, Stevens & Murray, attorneys), for respondent.


Plaintiff and intervener, State Rent Administrator, appeal from a determination of the Appellate Term reversing a judgment entered in the Municipal Court upon a verdict in favor of the plaintiff following a jury trial and dismissing the complaint. The action was commenced in April, 1953, by the plaintiff, a former tenant of the defendant landlord, to recover alleged overcharges of rent for a period of twenty-six weeks from August 2, 1952, to January 31, 1953. It was claimed that the tenant during this period paid $21.50 weekly whereas the maximum rent there for was $10 per week. The total claimed overcharge was $299 but upon allegations of willful overcharge recovery was sought for treble damages amounting to $897 and counsel fees in the sum of $250. The jury returned a verdict for $400 plus $175 counsel fees.

It appears that in January, 1951, one Altman purchased the property which was then a vacant one-family house. He converted the building into a nine-unit rooming house. The rooms were first rented in June, 1951. No registrations were filed for these rentals. On August 2, 1952, plaintiff rented a rear bedroom with shared kitchen and bathroom and without linen service for $21.50 per week. Nine days later Altman and his wife sold the premises to the defendant corporation, of which Altman is president. It appears from the file of the Rent Administrator, which was received in evidence upon the trial, that shortly after renting the room the plaintiff wrote to the local rent administrator inquiring about the maximum rent. This inquiry set in

Page 462

motion an investigation by the administrator. The stated facts were discovered, including the fact that the converted rooming house had never been registered. A proceeding was commenced to fix the maximum rent of the plaintiff's accommodations and resulted in an order of the local administrator dated January 26, 1953, fixing the maximum rent of the room and facilities at $10 per week without linens. This rent was fixed as of August 2, 1952--the date of plaintiff's first occupancy. This amount was paid by the plaintiff from January 31, 1953, until the tenant moved out in April, 1953. Shortly thereafter, this action was commenced.

In the meantime, there was renewed activity before the local rent administrator. In February, 1953, the landlord objected, in writing, to the determination of the local administrator upon the grounds that it had been made upon insufficient evidence and that the landlord had not received notice of the proceeding. At about the same time, the landlord sought to file registration statements for the entire building. The local rent administrator opened a new proceeding to determine rents for the whole building, including a reconsideration of the determination previously made. Full proceedings on this reopening resulted in the issuance of an order by the administrator on October 29, 1953, effective January 26, 1953, revoking the order of January 26, 1953, for plaintiff's accommodations and fixing the rent therefor at $15 per week with linens, as of July 14, 1951--the date of first renting to any occupant of the converted building. On November 19, 1953, the defendant filed a protest to the State Rent Administrator from this order.

It was against this procedural background that the action was tried commencing on November 25, 1953. The complete file of the Rent Administrator was received in evidence and the jury was permitted to take all the exhibits when they retired to deliberate. The court in its charge made no reference to the later orders of the Rent Administrator revoking the original order fixing the maximum rent at $10 per week and increasing the maximum rental to $15 per week, including linen service. The case was submitted to the jury upon the theory that a verdict could be returned in favor of the plaintiff for any amount between the alleged overcharge of $299 based upon a maximum rent of $10 per week and three times that amount plus counsel fees. It is impossible, therefore, to determine how the jury arrived at its award of $400.

Following the trial and on February 9, 1954, the State Rent Administrator affirmed the order ...

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