Scott E. Mollen

Partition and Accounting Granted

A plaintiff commenced an action seeking a partition and an accounting. In May 2010, the plaintiff and the defendant had purchased a legal two-family home (property). They held the property as “joint tenants with each owning an undivided one-half interest.” The parties had encumbered the property with a mortgage in the amount of $370,000.

Until July 2016, the plaintiff had occupied part of the property. However, when the property was occupied by rent paying tenants, the defendant collected the rents. The defendant had never “accounted for or shared the rents collected with (plaintiff). Additionally, the defendant had allowed two daughters to occupy part of the property for years without the plaintiff's consent and also had permitted other rent-paying tenants to occupy the property from time to time.

The court explained:

A person holding and in possession of real property as joint tenant or tenant in common, in which he [or she] has an estate of inheritance, or for life, or for years, may maintain an action for the partition of the property, and for a sale if it appears that a partition cannot be made without great prejudice to the owners” (RPAPL 901 [1]). The right to partition is not absolute, however, and when a tenant in common has the right to maintain an action for partition pursuant to RPAPL 901, the remedy is always subject to the equities between the parties…. Thus, the partition may be precluded by the equities presented in a given case…. The right to partition is absolute in the absence of countervailing conditions, and therefore such issues as the interest of the parties and whether partition may be had without great prejudice should first be determined…. An award of summary judgment on a claim for partition is established only where the movant demonstrates its ownership interest and a right to possession under a deed or other instrument of conveyance, favorable equities and that a physical partition cannot be made without great prejudice in cases wherein a sale is demanded….

The court found that the plaintiff had made a prima facie showing of entitlement to a judgment of partition by producing the deed, which established the right to the property as a joint tenant with the defendant. The defendant had argued that the plaintiff's motion for summary judgment on the partition claim was premature “due to outstanding discovery.” Since, the defendant had submitted an affidavit by his counsel which demonstrated “no personal knowledge of the underlying transactions… ,” the court found that the defendant failed to provide an “evidentiary basis to suggest that discovery might lead to relevant evidence.”

The defendant also failed to show that facts necessary to “justify opposition to the motion are exclusively within knowledge and control” of the plaintiff. The “mere hope or speculation that evidence sufficient to defeat a motion for summary judgment may be uncovered during the discovery process is insufficient to deny the motion….”

Moreover, RPAPL 901 “contains no requirement that a party seeking partition must prove that he paid a substantial or any portion of the purchase price or mortgage payments for the property in question.”

The court further stated that since the “partition action is equitable in nature, an accounting is a necessary incident thereto….” It held that given the party's dispute with respect to the proceeds from the sale, “an accounting is necessary to determine the party's respective interests in the property….” Thus, the court granted the motion for summary judgment on the causes of action for a partition and for an accounting.

Weng v. Zhao, Supreme Court, Kings Co., Case No. 514771/2018, decided Jan. 4, 2019, Rivera, J.

Landlord-Tenant—Motion to Dismiss Tenant's Warranty of Habitability Counterclaim Against NYCHA—Denied—Tenant Not Required to File a Notice of Claim Pursuant to GML Section 50-i

The New York City Housing Authority (NYCHA) had commenced a non-payment proceeding. The tenant asserted that he had not received the Notice of Petition and Petition and NYCHA failed to repair conditions in the apartment. NYCHA had moved to dismiss the tenant's counterclaims and for an order permitting NYCHA to discontinue the proceeding. NYCHA argued that the outstanding rent had been paid by the NYC Dept. of Social Services on the tenant's behalf and no rent is due or owed “which would serve as a basis for a set-off of (tenant's) possible abatement claims.” Thus, NYCHA asserted that the tenant was seeking “an affirmative judgment against (NYCHA) and a notice of claim is required.”

NYCHA cited General Municipal Law (GML) §50-i which provides that “[n]o action or special proceedings shall be prosecuted or maintained against the city… unless (a) a notice of claim shall have been made or served upon the city….” and Public Housing Law §157(1) which “requires that at least thirty days has elapsed” or unless 30 days elapses since service of a notice of claim or “that payment of adjustment has been refused.”

The tenant countered that GML §50-i is inapplicable since this matter did not involve an action brought against the city for “personal injury, wrongful death, or damage to real or personal property alleged to have been sustained by reason of the negligence or wrongful act of such party as per the terms of the statute.” The tenant argued that the notice of claim requirement does not apply to “defenses and counterclaims regarding the Warranty of Habitability” (WOH) and “that an abatement is based on a rent set-off and not an affirmative judgment.”

The court noted that the heading of GML §50-i reads “Presentation of tort claims; commencement of action.” The statute further provides that “no action or special proceeding shall be prosecuted or maintained against a city, county, town, village… for personal injury, wrongful death, or damage to real or personal property alleged to have been sustained by reason of the negligence or wrongful act of such city… unless, (a) a notice of claim shall have been made and served upon the city…” and at least 30 days have elapsed. The court held that GML §50-i applies when the party “affirmatively sues the City of New York involving tort or negligence claims and not matters where (tenant) seeks to enforce his (WOH claims).”

The court explained that “where litigants affirmatively sue the city and where an affirmative judgment would be substantial, a notice of claim is required….” Additionally, a notice of claim “is required in cases where litigants sue the city in actions bases on tort or negligence.” The court also noted that judicial precedents hold that there can be “no limitation” on a “tenant's right to make a claim pursuant to the (WOH) against any landlord…” and such rule “includes the City of New York….”

The court also explained that the requirements of RPL §235-b (WOH) “may not be qualified or eliminated by lease provisions.” The court observed that “[c]ompelling the tenants to first supply written notice critically circumscribes their ability to assert important rights which the Legislature intended them to have….” The court further opined that requiring tenants to serve a notice of claim would “render the tenants' ability to bring suit for breach of the (WOH) ephemeral, for even if, as the tenants here contend, ample and timely oral notice of the alleged deficiencies in the premises had been given to the landlord, their claim could be defeated simply because they neglected to give additional written notice. Tenants cannot be bound to adhere to a notice requirement which not only runs counter to the intent and spirit of §235-b, but purports to divest them of an inalienable substantive statutory safeguard.”

Thus, the court held that GML §50-i and Public Housing Law §157(1) are inapplicable. The court emphasized that the tenant's counterclaim is “neither based in tort or negligence and to place a restriction on (tenant) in asserting his (WOH) would seem to be against public policy.”

The court also held that NYCHA's receipt of the outstanding arrears should not compel a different result. There were still some “outstanding sums owed.” The court stated that “[e]ven if there were no outstanding arrears, (tenant) still has a right to pursue” his WOH counterclaim.

The court also denied NYCHA's motion to discontinue the proceeding. The court noted that a party may only discontinue a claim after a responsive pleading has been served, with leave of court pursuant to CPLR §3217(b). The court explained that generally, courts “will not compel a party to continue a litigation except when substantial rights of other parties have accrued, an injustice would be done to them by permitting the discontinuance….” Here, the court saw a possibility that the tenant could be prejudiced if the proceeding were discontinued and therefore the court denied the motion to discontinue the proceeding. The court also denied NYCHA's motion to dismiss the tenant's counterclaim.

N.Y.C. Hous. Auth. v. Joseph, Civil Court, New York Co., Case No. 15438/2017, decided Jan. 4, 2019, Asforis, J.

Landlord-Tenant—Rent Overcharges—Owner Improperly Took Apartment Out of Rent Stabilization—Landlord Failed to Prove That It Spent $31,000 on Individual Apartment Improvements—Tenant Awarded Treble Damages Plus Attorney Fees

 A tenant sought a rent-stabilized lease, recovery of rent overcharges, treble damages and legal fees. The landlord had registered the apartment as “exempt from rent stabilization on grounds of 'high rent vacancy' and 'improvements' with a legal regulated rent of $2,000.00 or more.” The landlord claimed that the apartment had been properly deregulated because the landlord spent $31,586.13 on individual apartment improvements (IAIs) to raise the monthly rent from $1,222.68 in 2002 to more than $2,000. The tenant claimed that the rent increases were improper because the landlord had not spent the monies claimed on IAIs or that the funds had been spent on “duplicative improvements.”

The court explained that “[d]efendants are entitled to a rent increase equal to 1/40th of the total cost of any qualifying improvements made or new furnishings installed in (the apartment).” N.Y.C. Admin. Code §26-511(c)(3); 9 N.Y.C.C.R.R. §2522.4(A)(1). Defendants are not entitled, however, to an increase for any improvements or replacements to furnishings and equipment that have yet to exceed their useful life. N.Y.C. Admin. Code §26-511(c)(3); N.Y.C.R.R. §2522.4(A) (11). Nor are defendants entitled to an increase for any work constituting repair or regular maintenance of the apartment…. Defendants must substantiate the IAI with documentation demonstrating what work actually was performed and the amounts spent, … but need not present an item-by-item breakdown of the cost of each improvement.”

Following a trial, the court held that a landlord contractor “failed to substantiate” a bill for $18,996 in general contracting work in plaintiff's apartment.” A plumbing bill for $8,950.13 was also unsubstantiated. The landlord's contractor witness had not personally performed the work on the apartment, had not personally observed any of the alleged installation of concrete flooring, had made no final job inspection and had taken no pictures of the work during its progress. Additionally, the landlord's contractor had been convicted under a RICO statute for a “commercial bribery” felony. The court stated that the landlord's contractor's testimony essentially was based on “nothing more than, at best, his presumption that the work was done because he billed for it.”

The tenant's expert witness testified that the value of the alleged renovations were significantly less than the landlord had claimed and many of the alleged renovations had either not been performed as represented or were “not done at all.”

The court explained that the landlord had the burden in the residential overcharge proceeding to prove the claimed improvements and that in this case, the landlord had failed to meet that burden. The tenant's expert had not done “invasive tests” on walls and floors. However, he asserted that based on his expertise and knowledge, as well as “readily observable results,” invasive testing was not necessary.

The landlord had also failed to introduce evidence that the IAI work claimed in 2002 did not “duplicate” IAI work that had been done in 1994 and 1997 as noted on a DHCR rent history or that work in 1994 and 1997 “of unknown nature outlasted its useful life.”

Since the landlord failed to substantiate that its contractor had actually done $18,996 worth of work in the apartment or that work was not duplicative of prior IAIs and the landlord had failed to substantiate that its plumbing and electrical work also qualified as IAIs, the court held that the landlord had illegally removed the apartment from rent stabilization and the tenant was entitled to a stabilized lease and damages.

The court further explained that treble damages should be imposed if the overcharges were willful and that overcharges are “presumed willful.” Here, the landlord failed to rebut the presumption that the charges were willful. The court calculated the rent overcharges and trebled that amount, resulting in an overcharge damage award of $818,165.64. The court also awarded the tenant legal fees.

Rossman v. Windermere Owners LLC, Supreme Court, New York Co., Case No. 108350/2011, decided Jan. 4, 2019, Nervo, J.

Landlord-Tenant—Landlord Held in Civil Contempt—$1,400 Sanction Imposed

 A tenant moved to hold a landlord in contempt for failure to comply with a default order which required repairs in the tenant's premises. The court had ordered a schedule for repairs and access and had also ordered that the tenant “complete a judicial inspection request so that a report as to compliance would be available on December 10, 2018.”

The court's prior order required that the landlord “abate the conditions in an inspection report generated by the New York City Department of Housing Preservation and Development (HPD) on February 15,2018.” The report cited 89 violations, including 4 “C” violations for the absence of “gas and heat in the premises.”

The tenant had testified that she lived in the premises for approximately eight years and that her cooking gas “had been interrupted since December 2017.” She testified that the interruption required that she and her adult son “eat most of their meals outside of the home or they were reduced to canned foods that could warmed through non-gas reliant appliances.” The tenant asserted that she had to spend $350 per month for more food than she would have had to spend had she been provided with cooking gas. The premises also lacked a working “smoke or CO2 detector and there are several leaks in the home.”

The tenant explained that the landlord became “contemptuous of her requests for repairs and indicated that he would no longer maintain the property appropriately.” Moreover, the tenant is a “disabled person who has suffered strokes and pneumonia and she is concerned that these conditions worsen her health.”

The landlord made “conclusory statements as to his failure to receive the original order to show cause, as well as the instant motion.” The landlord further argued that the tenant knew that the landlord “did not live at the address listed in his expired registration.” The court noted that such factors were “irrelevant as the requirement to provide an accurate address to the (HPD) is provided at MDL §325 and MHC 27-2097.” Here, the tenant had served the last address provided by the landlord and the landlord has since “renewed his expired registration at the subject premises.” The landlord had not argued that he lacked the “financial inability to sustain the property free of violations.” The landlord claimed that the conditions were “currently repaired or they were never in violation of the Housing Maintenance Code.”

The court held that the landlord was guilty of civil contempt. The court found that the service of the original order to show cause and the instant motion were proper. The court then explained that “a finding of civil contempt requires the petitioner to establish that the respondent violated a lawful, clear mandate of the court, of which they had knowledge, and that such violation resulted in prejudice to the petitioner's rights. Additionally, a finding of civil contempt does not require a finding of contemnor's willful violation of the underlying order. The mere act of disobedience, regardless of motive is sufficient to sustain a finding of civil contempt.”

The court concluded that the landlord violated a “lawful, clear mandate of this court, was properly served, and that this violation resulted in prejudice to the petitioner's rights, in that she suffered violations of the Housing Maintenance Code that impacted her financially and may have negatively impacted her health. The purpose of civil contempt is to redress the right of an aggrieved party.” Thus, the court held that the tenant had demonstrated that the landlord's failure to provide “basic services requires redress.”

Citing NY CLS Jud. §773 “which provides for fees and expenses being recoverable,” the court held the landlord in contempt and imposed sanctions in the amount of $1,400.

Smith v. Okopomo, Civil Court, Bronx Co., Case No. 2880/2018, decided Jan. 15, 2019, Bryan, J.

Scott E. Mollen is a partner at Herrick, Feinstein.