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McFadden v. Sassower

June 2, 2010

JOHN MCFADDEN, RESPONDENT-APPELLANT,
v.
ELENA SASSOWER, APPELLANT-RESPONDENT.



Accepted for Miscellaneous Reports Publication

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

As corrected through Wednesday, June 2, 2010

February 23, 2010

{**27 Misc 3d at 46}

OPINION OF THE COURT

Memorandum.

Ordered that, on the court's own motion, the appeals are consolidated for the purposes of disposition; and it is further, ordered that tenant's appeal from so much of the order entered October 11, 2007 as consolidated the instant proceeding with "any prior pending action" is dismissed as moot; and it is further, ordered that the order entered October 11, 2007, insofar as appealed from by tenant and insofar as reviewed, is affirmed without costs and, upon searching the record, landlord is granted summary judgment awarding him a final judgment of possession; and it is further, ordered that the order entered October 11, 2007, insofar as cross-appealed from by landlord, is reversed without costs and landlord's motion to dismiss tenant's affirmative defenses and counterclaims is granted; and it is further, ordered that the order entered January 30, 2008, insofar as appealed from and reviewed, is reversed without costs and all the provisions thereof, except the provision in which the court recused itself, are vacated.

Landlord was, at all times relevant to this holdover proceeding, the proprietary lessee of, and the owner of shares allocated and appurtenant to, the cooperative apartment that is the subject of this proceeding. In 1987, landlord entered into a contract to sell his shares and his interest in the subject apartment{**27 Misc 3d at 47} to tenant and her mother. Paragraph 6 of the contract of sale states, "This sale is subject to the approval of the directors or shareholders of the Corporation as provided in the Lease or the corporate by-laws." At the same time, landlord, tenant and tenant's mother entered into an occupancy agreement incident to the contract of sale. Tenant took possession of the subject apartment pursuant to that occupancy agreement. The cooperative corporation subsequently declined to approve the sale to tenant and her mother, following which landlord, in 1989, commenced a holdover summary proceeding to recover possession of the premises, and tenant and her mother commenced an ultimately unsuccessful federal action against, amongst others, the cooperative corporation. The federal litigation ended in 1993. Tenant paid landlord the sum of $1,000 every month until 2001, when, pursuant to landlord's demands, she began paying increased monthly amounts. The 1989 summary proceeding remained dormant from 1993 until this proceeding was commenced in 2007. Tenant's mother never resided in the apartment.

In the instant proceeding, landlord alleges that tenant entered into possession of the subject apartment pursuant to an occupancy agreement incident to a contract of sale, that upon termination of the occupancy agreement she became a month-to-month tenant pursuant to an oral agreement, that her term expired on May 31, 2007 and that she was given more than 30 days' notice of the termination of her tenancy. Landlord attached to the petition a copy of the termination notice and proof of its service. Tenant's answer denies the existence of a landlord-tenant relationship, raises the possibility that the apartment is subject to rent regulation, and asserts 10 affirmative defenses and four counterclaims. The answer does not challenge service of the termination notice, and, in a letter attached to the answer, tenant admitted receipt of the notice.

Insofar as is relevant to the issues raised on appeal, landlord moved to dismiss all of tenant's affirmative defenses and counterclaims. Tenant cross-moved for dismissal of the petition pursuant to CPLR 3211 (a), summary judgment dismissing the petition, referral to the Division of Housing and Community Renewal (DHCR) for a determination as to the rent-control status of the subject apartment, costs and sanctions, and the referral of landlord's attorney to the Grievance Committee. By order entered October 11, 2007, the City Court denied both parties their requested relief and consolidated the instant proceeding{**27 Misc 3d at 48} with "any prior pending action." Both parties have appealed from that order.

The outcome of this proceeding is dependent upon the relationship between the parties with respect to the subject apartment. While the parties agree that tenant entered into possession pursuant to the occupancy agreement, we find that tenant's right to possession pursuant to said agreement terminated long before the instant proceeding was commenced in 2007. The contract of sale was unambiguous as to the effect of the cooperative corporation's refusal to approve the sale: the contract would be cancelled. The stated purpose of the occupancy agreement was to accommodate the parties prior to closing. The occupancy agreement set forth specific circumstances under which tenant could maintain possession of the premises, none of which apply to the facts of this case. Accordingly, we find that tenant's right to possession pursuant to the occupancy agreement terminated, at the latest, when the federal litigation regarding the cooperative corporation's refusal to approve the sale had been resolved in the cooperative corporation's favor. In addition, we find that once tenant's right to possession under the occupancy agreement terminated and landlord continued to accept regular monthly payments in exchange for tenant's exclusive possession of the apartment (cf. Matter of Smith v Donovan, 61 AD3d 505 [2009]), a month-to-month tenancy was created (cf. Weiden v 926 Park Ave. Corp., 154 AD2d 308 [1989]; Walker v Espinal, 4 Misc 3d 136[A], 2004 NY Slip Op 50832[U] [App Term, 1st Dept 2004]). This is particularly so here, where the amounts of the monthly payments were increased from time to time pursuant to implicit or express agreements. We note that tenant does not claim that because these monthly payments were made during the purported pendency of the 1989 proceeding they must be deemed to be use and occupancy (cf. RPAPL 711 [1]), nor, under the unusual circumstances presented here, including the 14 years which elapsed following the termination of the federal litigation during which there was no activity in the 1989 proceeding, can these payments be so deemed (see McFadden v Sassower, 26 Misc 3d 141[A], 2010 NY Slip Op 50316[U] [appeal No. 2008-1427 W C 2010] [decided herewith]). We further find that landlord timely served a notice to terminate the month-to-month tenancy, receipt of which notice was admitted (see Real Property Law § 232-b).

The petition alleges that the subject apartment is exempt from the Emergency Tenant Protection Act of 1974 (ETPA) by{**27 Misc 3d at 49} virtue of a resolution passed by the Common Council of the City of White Plains on September 9, 1992. That resolution is entitled "Resolution Removing Owner-Occupied Condominium and Cooperative Units From Regulation Under The Emergency Tenant Protection Act of 1974." Tenant has argued that there is a question as to the rent regulatory status of the apartment and that it should be referred to DHCR. We find that the subject apartment is exempt from the ETPA under the resolution (see Harding v Engle, 184 Misc 2d 630 [App Term, 9th & 10th Jud Dists 2000] [construing the same resolution]).

Tenant has argued that this proceeding must be dismissed pursuant to CPLR 3211 (a) (4) because several summary proceedings were commenced against her many years earlier and remained pending. To warrant dismissal on this ground, the earlier proceedings must have been based on the same actionable wrong as the instant proceeding (see JC Mfg. v NPI Elec., 178 AD2d 505 [1991]; Pagano v Cohen, 190 Misc 2d 308 [App Term, 2d & 11th Jud Dists 2001]). As the instant holdover proceeding is based upon tenant's failure to vacate the subject apartment pursuant to a notice of termination served in 2007, it is impossible for the proceedings that were commenced in 1987, 1988 or 1989 to have been based on the same actionable wrong.

Contrary to tenant's position, landlord was not required to allege in the petition that tenant had tendered, and landlord had returned, checks for use and occupancy after landlord had served the notice of termination. Nor, on the record presented, which indicates that tenant subsequently stopped payment on the checks, is there a triable issue as to whether landlord reinstated the tenancy by retaining tenant's rent checks. Furthermore, as this holdover proceeding was based upon tenant's status as a month-to-month tenant by virtue of her possession of the apartment and landlord's acceptance of a monthly payment therefor, tenant's mother, who neither resided ...


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