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LLC v. Moodie

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

August 20, 2013

285 Madison Realty, LLC, Petitioners-Landlord
Michell Moodie 238 Madison Avenue, Apt 4D New York, New York 10016, Respondent-Tenant JOHN DOE and/or JANE DOE Respondents-Undertenants.

Unpublished Opinion

SIDRANE & SCHWARTZ-SIDRANE, LLP Attorneys for Petitioner Michael Littman, Esq.

FISHMAN & MALLON, LLP Attorneys for Respondent Mika Dashman, Esq.



This summary holdover proceeding was commenced by 285 MADISON REALTY, LLC (Petitioner) against MICHELL MOODIE (Respondent) seeking to recover possession of Apt 4D at 238 Madison Avenue, New York, New York 10016 (Subject Premises) based on the allegation that Respondent's lease had expired on April 30, 2013, and that she is no longer entitled to continued possession of the Subject Premises.


The petition is dated May 28, 2013. No predicate notice was served. The petition asserts Petitioner is the owner of the Subject Premises. The petition was verified by counsel for petitioner on May 28, 2013. The verification asserts in part:

I have read the forgoing Petition and know the contents thereof; the same is true to my own knowledge, except as to those matters therein alleged to be on information and belief, and as to those matters, I believe them to be true.... The grounds of my belief as to all matters not stated upon my own knowledge are.... The books and records of Petitioner which have been provided to me.

There are nine paragraphs of allegations in the petition. Only paragraphs two and three are alleged to be upon information and belief.

Petitioner purchased an index number on May 31, 2013. The petition was personally served on June 3, 2013, at 12:16 pm on Respondent at the Subject Premises. The affidavit of service is dated June 4, 2013 and was filed on June 5, 2013, at 9:35 am. The proceeding was originally returnable in Part F on June 12, 2013 at 9:30 am.

On June 10, 2013, Respondent appeared pro se and filed a written answer denying the all legations in the petition. At that time, Respondent was directed to appear in Part C on June 12, 2013, at 9:30 am as the proceeding had been reassigned to Part C. On June 12, 2013, Respondent made an application for an adjournment, because she wished to hire counsel. Respondent also made an oral application for an inspection to address alleged repairs.

Respondent's application was heard on the record at 10:29 am. Respondent asserted that she was entitled to the protection of the rent stabilization laws, based on her review of the rental history for the Subject Premises. Respondent asserted that she had been residing in the Subject Premises for a little over two years. Respondent stated she had filed a complaint with DHCR regarding her status as a regulated tenant.

The petition alleges that the Subject Premises is exempt from rent regulation "... as the premises were high rent vacancy deregulated in 1993 after more than 4 years of temporarily exempt at which time the subject apartment became permanently exempt." Respondent asserted that the rent history showed that the Subject Premises was registered as regulated in 2005 at a rental of $1000 per month. The parties agreed to adjourn the proceeding to July 19, 2013, for Respondent to obtain counsel.

On July 19, 2013, Respondent appeared by counsel. On said date, Petitioner had moved for an order seeking leave to amend the petition and substitute a new owner in place of Petitioner. The notice of motion was dated July 9, 2013. The motion was supported by the affirmation of Petitioner's counsel, also dated July 9, 2013, who asserted that during the pendency of the proceeding the building had been sold. Annexed to the motion was a copy of the deed showing the transfer took place on May 13, 2013. The motion was served on Respondent by overnight mail on July 10, 2013. The motion was withdrawn on the return date, pursuant to a stipulation between counsel.

Also pending on said date was Petitioner's motion to discontinue the proceeding pursuant to CPLR 3217(b). The motion to discontinue was adjourned to August 15, 2013. On said date Respondent moved for an order conditioning any discontinuance upon the payment of attorneys' fees and costs incurred in the proceeding. On August 15, 2013 the court heard argument on the motions and reserved decision. The motions are consolidated for disposition herein.


In its moving papers, Petitioner's counsel acknowledges that the building was sold prior to the commencement of the proceeding. A deed is annexed to the moving papers that shows that on May 13, 2013, the building was sold from Petitioner to JSTD Madison, LLC.

Respondent's counsel asserts they were retained on or about July 15, 2013. In connection with Respondent's claim that the building was subject to rent regulation counsel asserts "(w)e immediately began evaluating her substantive claims and defenses and realized that she most likely should be a rent stabilized tenant and that she may have significant rent overcharge claims against the landlord. We spent significant time analyzing and evaluating the landlord's claims as well as the status of the building and the respondent's apartment in particular."

Counsel for Respondent asserts that during this review he realized Petitioner lacked the authority to maintain the proceeding. Counsel asserts he advised Petitioner's counsel of the defect via phone call on July 17, 2013.

Respondent asserts she has suffered prejudice as a result of Petitioner's errors. The moving papers assert Respondent incurred $3677.50 in fees and that Respondent has been "blacklisted" as a direct result of the filing of the proceeding rendering her unable to rent another apartment anywhere in the country for the next seven years.

CPLR 3217(B) provides that a proceeding may be discontinued upon order of the court and upon such terms and conditions as the court deems proper. In cases where there was a valid claim ab intio that was later discontinued for good cause, courts have allowed the discontinuance without conditioning same on payment of costs and fees [ See eg Townhouse Co. LLC v Peters 17 Misc.3d 133(A)(improper to condition discontinuance of nuisance proceeding commenced in good faith and discontinued after condition was cured on payment of fees); New York Downtown Hospital v Terry 80 A.D.3d 493 (where action brought in good faith and discontinued after conduct complained of ceased it was reversible error to condition discontinuance on payment of fees).

In other cases, where there was a significant delay in moving to discontinue, courts have held that it is reversible error not to condition discontinuance on payment of costs (Barlan International SPA v Vetrerie Bormioliing Luigi SPA 215 A.D.2d 338; PSA 190 Ave B Assoc. LP v Ejoh 19 Misc.3d 141(A); see also Wilton Estates Inc v Quinn 25 Misc.3d 138(A) (where eviction claim was dubious and landlord delayed in moving to discontinue conditioning discontinuance on payment of costs and fees was appropriate).

In this case Petitioner moved promptly to discontinue the proceeding.

As far as the merits of the underlying claim, the parties have very divergent positions. Petitioner asserts Respondent is an unregulated tenant who's lease has expired and that she is wrongfully holding over in the Subject Premises, after the expiration of her lease. Respondent claims she is entitled to protection as a rent stabilized tenant. On the record before this court, it is not possible to determine the validity of the underlying claim or alleged defenses.

However, Petitioner's counsel has failed to satisfactorily address its errors in this proceeding. For example, absolutely no explanation is offered by counsel for Petitioner as to how he could verify the petition and assert that the verification as to Petitioner being the owner of the building was on his own personal knowledge, when in fact the building had already been sold. Additionally, counsel signed the petition as required, thereby certifying pursuant to 22 NYCRR 130.1-1 that the submission presented to the court was not frivolous.

Moreover, even after Petitioner's counsel became aware that Petitioner no longer owned the building, they prepared, served and filed a motion to substitute, which falsely asserted the transfer of ownership took place after the commencement of the proceeding, but attached a copy of the deed that proved just the opposite. All the attorney had to do was read the deed annexed to his own moving papers to knew that said motion never should have been served or filed.

These unexplained actions on the part of Petitioner's counsel caused Respondent to incur attorneys' fees in this proceeding. However, of the $3677.50 alleged incurred in this proceeding, much of the fees had to do with Respondent's asserted defense of being subject to Rent Stabilization, and relatively little of it had to do with the fact that the proceeding was incorrectly commenced in the name of the former owner.

Moreover, the work done on the substantive defense will be useful to Respondent when the next proceeding is commenced. Finally, to the extent Respondent asserts the blacklisting as prejudice and a basis for the court to condition the discontinuance on payment of fees, the court does not find this argument persuasive as Respondent will be sued again and the blacklisting would have occurred even if the proceeding had been commenced by the current owner.

Based on the foregoing, the court grants Petitioner's motion to discontinue without prejudice, conditioned on the payment of $1000.00 in fees which, at the asserted rate of $275 per hour, the court finds sufficient to compensate Respondent for any costs incurred solely as a result of Petitioner's false verification, false certification and negligent service and filing of the motion to amend (see e.g. Carter v Howland Hook Housing Co. Inc. 19 A.D.3d 146 court appropriately limited attorneys fees required for condition of discontinuance to fees incurred on the underlying motion).

If Respondent is ultimately the prevailing party in subsequent litigation, Respondent may seek the balance of fees incurred herein as a prevailing party in that matter, to the extent provided for in the parties' governing lease agreement.

This constitutes the decision and order of this Court.

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