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LLC v. Nicholson

Supreme Court of New York, Second Department

December 20, 2019

125 Court Street, LLC, Respondent,
v.
Yolande Nicholson, Appellant, et al., Undertenants.

          Yolande Nicholson, appellant pro se. Leon I. Behar, P.C. (Leon I. Behar of counsel), for respondent.

          PRESENT: THOMAS P. ALIOTTA, J.P., MICHAEL L. PESCE, DAVID ELLIOT, JJ

         Appeal from an order of the Civil Court of the City of New York, Kings County (Leslie A. Stroth, J.), entered April 18, 2018. The order denied the branch of tenant's motion seeking, in effect, leave to renew her prior motion to vacate two so-ordered stipulations of settlement and a final judgment of that court (Anthony J. Fiorella, Jr., J.) entered pursuant thereto on June 10, 2010, which prior motion had been denied in an order of that court (Anthony J. Fiorella, Jr., J.) entered May 20, 2011, and, upon renewal, to grant her prior motion, and, upon such vacatur, to dismiss the petition, to restore tenant to possession and for an award of attorney's fees, in a holdover summary proceeding.

         ORDERED that the order entered April 18, 2018 is modified by providing that the branch of tenant's motion seeking leave to renew her prior motion is granted and, upon renewal, the branches of the prior motion seeking to vacate the two stipulations of settlement and the final judgment are granted, upon such vacatur, the branch of the motion seeking to dismiss the petition is granted, and the matter is remitted to the Civil Court for a determination of the branch of tenant's motion seeking to be restored to possession following the joinder of the new tenant in possession, if any; as so modified, the order entered April 18, 2018 is affirmed, without costs.

         Landlord commenced this holdover proceeding in February 2010, based on a claim that tenant had failed to execute a renewal lease, which listed the new two-year legal maximum rent as $8, 704.53 and the rent to be charged as $4, 276. The petition alleges that the apartment is rent stabilized, that the demanded monthly rent of $4, 276 is properly registered with the Department of Housing and Community Renewal (DHCR), and that tenant had failed to sign the renewal lease (see Rent Stabilization Code [RSC] [9 NYCRR] § 2524.3 [f]). On June 10, 2010, a per diem counsel acting on behalf of tenant entered into a so-ordered stipulation in which counsel admitted that tenant owed landlord $22, 423.21 through June 30, 2010. The stipulation provided for a waiver of a part of this purported past rent in the amount of $9, 532.18 and for tenant to surrender the apartment by September 30, 2010 and to pay use and occupancy at the rate of $3, 576 per month. A final judgment was entered on June 10, 2010, pursuant to the stipulation, awarding landlord possession and the sum of $12, 891.03. A second so-ordered stipulation, entered into on July 27, 2010, modified the amount due landlord, decreasing the sum by $891.03. In September 2010, tenant moved to vacate the stipulations and the final judgment, based on a claim that she had inadvertently waived her right to a postjudgment cure. By decision and order dated June 13, 2014 (44 Misc.3d 128[A], 2014 NY Slip Op 50973[U]), this court affirmed an order of the Civil Court (Anthony J. Fiorella, Jr., J.) entered May 20, 2011 which denied tenant's motion. This court's decision and order noted that dehors-the-record material attached to tenant's briefs, which included the 2009 renewal lease proffered by landlord and a letter dated June 14, 2011, had not been reviewed.

         Tenant was evicted on July 14, 2014 and moved, the same day, on an emergency basis, to be restored to possession on the ground that she had not received a marshal's notice. By order dated July 16, 2014, the Civil Court (Marcia J. Sikowitz, J.), after oral argument, denied the motion, noting that tenant had been given a "$10, 000" waiver of arrears.

         Tenant thereafter moved, in effect, for leave to reargue or renew her prior motion to vacate the stipulations and final judgment, which motion had been determined in the order entered May 20, 2011, and, upon reargument or renewal, to grant the prior motion, and, upon such vacatur, to dismiss the petition, to be restored to possession, and for attorney's fees, alleging, among other things, newly discovered evidence and fraud. Specifically, tenant alleged that, in 2013, she had obtained from a neighbor who had made a Freedom of Information Law (FOIL) request a letter dated June 14, 2011, sent by the New York City Department of Housing Preservation and Development (HPD), Office of Development, Division of Housing Incentives, to landlord's tax attorney. The letter stated that landlord was the recipient of an RPTL 421-a tax abatement, that 256 units in the building were improperly registered with DHCR as exempt and needed to be registered as rent stabilized, and that the rents that were registered exceeded the amounts approved by HPD, which, pursuant to the abatement program, set the maximum legal rents for the building. By order dated September 19, 2014, the Civil Court (Leslie A. Stroth, J.) denied tenant's motion, on the ground that the issues raised were the same as those that had been raised in the motion which had been determined in the order dated July 16, 2014 and that the court lacked the authority to disturb the determinations of Judge Sikowitz in that order and of this court on the prior appeal.

         On an appeal from, among other things, the order dated September 19, 2014, this court, in a decision and order dated September 7, 2016 (52 Misc.3d 144[A], 2016 NY Slip Op 51281[U]), found that the issues of fraud and newly discovered evidence that had been raised in support of tenant's renewal motion had not been before this court on the first appeal nor had they been raised before, or determined by, the Civil Court in the July 16, 2014 order. Consequently, this court reversed so much of the order dated September 19, 2014 as denied the branch of tenant's motion seeking leave to renew and remitted the matter to the Civil Court for a new determination of that branch of tenant's motion. Thereafter, by order entered April 18, 2018, the Civil Court (Leslie A. Stroth, J.) denied that branch of tenant's motion, finding no basis to grant leave to renew. Tenant now appeals from that order.

         Pursuant to CPLR 2221, a motion for leave to renew "shall be based upon new facts not offered on the prior motion that would change the prior determination" (CPLR 2221 [e] [2]), and "shall contain reasonable justification for the failure to present such facts on the prior motion" (CPLR 2221 [e] [3]; see Renna v. Gullo, 19 A.D.3d 472, 473[2005]). "[A] court of original jurisdiction may entertain a motion to renew or vacate a prior order or judgment even after an appellate court has rendered a decision on that order or judgment" (Tishman Constr. Corp. of NY v. City of New York, 280 A.D.2d 374, 377 [2001], citing Levitt v. County of Suffolk, 166 A.D.2d 421, 423 [1990]), as long as the moving party meets the "heavy burden of showing due diligence in presenting the new evidence to the [lower court]" (Andrews v. New York City Hous. Auth., 90 A.D.3d 962, 963 [2011] [internal quotation marks omitted]).

         Here, the branch of tenant's motion seeking leave to renew was based on her 2013 discovery, after her receipt of the June 14, 2011 letter, that landlord had disregarded the rent stabilization laws and had claimed-in its DHCR registrations from 2005 through 2009, in the initial and renewal leases, in its petition, and, ultimately, in its representations to the Civil Court-false legal maximum rents and that it was charging tenant a "preferential rent." Tenant's receipt of the letter occurred long after she had made her original motion to vacate the stipulations and after the Civil Court had denied that motion and, indeed, the letter was even dated after the Civil Court's May 20, 2011 order. Tenant averred that she had entered into, and the Civil Court had so-ordered, the stipulations in reliance on landlord's false representations and without either tenant or the Civil Court knowing the true legal rent. Tenant's averment is uncontroverted, as landlord has submitted no affidavit during the entire course of these proceedings.

         It is now undisputed that, although the petition did not so state, landlord had applied for and received an RPTL 421-a tax abatement (see 28 RCNY 6-01 et seq.), and that, pursuant to the terms of that program, tenant's apartment is subject to rent stabilization. Since tenant was the first occupant of the premises, in 2005, and the initial rent she paid was $2, 933, that sum became the initial legal regulated rent and all subsequent legal rents should have been calculated from that base (see RSC § 2521.1 [g]; 125 Ct. St., LLC v. Sher, 58 Misc.3d 150');">58 Misc.3d 150 [A], 2018 NY Slip Op 50092[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2018]). [1]

         From 2005 through 2009, landlord variously registered the apartment with DHCR as "high rent vacancy" "permanently exempt," as rent stabilized with a legal maximum rent of $8, 000, and as charging tenant a "preferential rent." These registrations were false and, therefore, "a nullity" (Thornton v. Baron, 5 N.Y.3d 175, 181 [2005]). "A landlord's failure to file a proper and timely annual rent registration statement results in the rent being frozen at the level of the legal regulated rent listed in the last preceding registration statement and, therefore, bars the landlord from collecting any rent in excess of that legal regulated rent until a proper registration is filed" (Samson Mgt., LLC v. Cordero, 62 Misc.3d 129');">62 Misc.3d 129 [A], 2018 NY Slip Op 51879[U], *2 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2018]; see Bradbury v. 342 W. 30th St. Corp., 84 A.D.3d 681, 683-684 [2011]; Jazilek v. Abart Holdings, LLC, 72 A.D.3d 529, 531 [2010]).

         Accordingly, the legal maximum rent remained at the initial legal rent, $2, 933, for the entire relevant period. Not only did tenant owe no arrears at the time that she entered into the stipulations, she had, in fact, overpaid. Moreover, the 2009 renewal lease that she refused to sign misstated the legal maximum rent and contained a proposed illegal rent of $4, 276 (see RSC § 2523.5 [a]). Additionally, because that renewal lease failed to contain the notice that stabilization coverage would expire following the expiration of the tax benefit, tenant was entitled to the protection of rent-stabilized status for the duration of her tenancy (see Rent Stabilization Law of 1969 [Administrative Code of City of NY] § 26-504 [c]; RSC § 2520.11 [o] [2]; Gersten v. 56 7th Ave., LLC, 88 A.D.3d 189');">88 A.D.3d 189 [2011]).

         The Rent Stabilization Code provides that it is "unlawful, regardless of any contract... for any person to demand or receive, any rent for any housing accommodation in excess of the legal regulated rent... in violation of any regulation... under the [Rent Stabilization Law] or this Code" (RSC § 2525.1). Moreover, landlord was required to correctly plead the apartment's regulatory status as subject to RPTL 421-a (see Park Props. Assoc., L.P. v. Williams, 38 Misc.3d 35');">38 Misc.3d 35');">38 Misc.3d 35');">38 Misc.3d 35 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]; Volunteers of Am.-Greater ...


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