Recitation, pursuant to CPLR §2219(a), of the papers considered in the review of this motion:Papers NumberedNotice of motion and affidavits annexed 1Order to Show Cause and affidavits annexedAnswering Affidavit 2Replying affidavits 3ExhibitsStipulationsOtherDECISION/ORDER Petitioner commenced this summary nonpayment proceeding by a petition and notice of petition dated January 3, 2018, alleging rent arrears in the amount of $2,299.84 for a period through January, 2018, at a monthly rent of $1,125.33, though Paragraph Five of the petition indicated the monthly rent charged to Respondent is $997.49. Respondent interposed an answer pro-se with a general denial stating only, “unable to afford the rent.” The proceeding first appeared on the court’s calendar on February 5, 2018, when counsel from Boom! Health Legal Services appeared for Respondent and entered into a stipulation of settlement with Petitioner’s attorney whereby the parties agreed that $2,230.07 was due and owing as all rent through February 2018, and Respondent agreed to pay said amount by March 5, 2018. If not timely paid, Petitioner could restore the proceeding upon eight days written notice to Respondent’s counsel for appropriate relief. The stipulation also stated that “parties reserve their rights to all claims and defenses.”Respondent now moves for an Order, 1) restoring the proceeding to the calendar as per the stipulation of settlement, 2) pursuant to CPLR §3025(b), granting Respondent leave to serve and file the proposed Amended Answer asserting rent overcharge as an affirmative defense and counterclaim, 3) pursuant to CPLR Rule 3212, granting Respondent summary judgment based on his First Affirmative Defense of rent overcharge and denying the relief sought by Petitioner in the instant Petition, because the amount Petitioner alleges as the monthly rent in Paragraph Two of the instant Petition is not the legal regulated rent for the subject apartment – which is subject to the Rent Stabilization Law, and/or 4) setting a date for a hearing on Respondent’s First Counterclaim asserting rent overcharge; or in the alternative, 5) pursuant to CPLR §408, granting Respondent leave to conduct pre-trial discovery regarding Respondent’s affirmative defense and counterclaim asserting rent overcharge; and, 6) granting Respondent such further relief as the Court deems just and proper. Petitioner opposes Respondent’s motion on all counts and seeks reverse summary judgment pursuant to CPLR §3212(b). For the reasons set forth below, the Court grants Respondent’s motion in part and denies the motion in part, and denies Petitioner’s request for reverse summary judgment.Respondent filed a pro-se answer with a general denial and a mere statement that he was unable to afford the rent. Respondent’s counsel now seeks to file an amended answer asserting rent overcharge as an affirmative defense and counterclaim. As stated in CPLR §3025(b), “a party may amend his or her pleading, or supplement it by setting forth additional or subsequent transactions or occurrences, at any time by leave of court or by stipulation or all parties. Leave shall be freely given upon such terms as may be just including the granting of costs and continuances.” Leave to amend the pleadings ‘”shall be freely given’ absent prejudice or surprise resulting directly from the delay,” McCaskey, Davies and Assocs., Inc. V. New York City Health & Hosps. Corp., 59 N.Y. 2d 755, 463 N.Y.S. 2d 434 (1983). Respondent was unrepresented at the time of his initial answer, was likely unaware of possible defenses and counterclaims, and would be prejudiced if denied the ability to amend his answer. As respondent did not have the knowledge or experience to raise possible defenses as an unrepresented litigant, he must now have the opportunity to do so. Respondent’s counsel reserved all claims and defenses in the stipulation of settlement, and it is this Court’s opinion that the defense of overcharge cannot be waived. Petitioner claims in its opposition that Respondent’s affidavit in support fails to make any mention of rent overcharge. However, respondent specifically states that he had not consulted with an attorney and was not aware of any defenses he had. He further stated, “my attorney informs me that my monthly rent exceeds what my landlord is allowed to charge me. Had I known about any of the counterclaims and defenses that I could raise, I would have done so in my answer.” This clearly raises the issue of an improper rent being charged and thus gives rise to a claim of overcharge. As such, respondent’s amended answer is deemed served and filed.Additionally, respondent seeks summary judgment based on his First Affirmative Defense of rent overcharge and for denial of the relief sought by Petitioner in the petition. Respondent claims rent overcharge based on the Department of Housing and Community Renewal (DHCR) rent registration for the subject premises. Respondent moved into the premises pursuant to a two year rent stabilized lease commencing on April 1, 2015. The rent registration annexed as Exhibit D to respondent’s motion listed the rent as $781.48 for the last known registered tenant before respondent moved into the premises, Paul Hardy, for the period of December 1, 2012 through November 30, 2014. The registration then shows a registered rent of $937.78 for the calendar year 2015. The registration indicates that a vacancy increase was taken, yet the name of the tenant and the commencement and end dates of this purported lease are missing. The next registered rent for the year 2016 was for Respondent at $1,125.33 as the legal regulated rent, and $1,000.00 as the preferential rent offered. Another vacancy increase was taken for this lease commencing April 1, 2015 and ending March 31, 2017. Respondent then signed a two year renewal lease for the period of April 1, 2017 through March 31, 2019 at a legal rent of $1,125.33, and a preferential rent of $997.49. Respondent seeks summary judgment alleging Petitioner illegally claimed two vacancy increases for the premises between the prior tenant of record and Respondent, and seeks overcharge pursuant to §26-516 and §26-517(e) of the Rent Stabilization Code for failure to file a proper and timely rent registration, barring Petitioner from collecting any rent in excess of the legal regulated rent in effect on the last preceding registration.Section 2522.8(3) of the Rent Stabilization code provides that vacancy increases may not be implemented more than one time in any calendar year, notwithstanding the number of vacancy leases entered into in such year. Petitioner claims in its opposition that a lease existed between the tenancies of Paul Hardy and Respondent. In support of its claim, Petitioner presents a lease attached as Exhibit E to its opposition papers for a tenant, Ernesto De Jesus, at the subject premises commencing July 15, 2014 and ending July 14, 2016. Respondent casts doubt on the validity of this lease, as it commenced before the expiration of Paul Hardy’s lease, and Respondent’s lease would have commenced eight months into Mr. De Jesus’s tenancy. Respondent also includes as Exhibit A to his reply papers a LexisNexis public Records search for Ernesto De Jesus listing his apartment as 3L in the subject building rather than 8L, the subject premises. It is not for the Court at this juncture to determine if the lease for Mr. De Jesus is legitimate. Instead, this is an issue of fact to be determined at trial. Though Respondent’s counsel states in reply that Respondent is not seeking to vacate the stipulation of settlement, the Court finds it is wholly illogical to seek summary judgment on the issue of overcharge without vacating the stipulation. As a triable issue of fact has been presented, the branch of Respondent’s motion seeking summary judgment is hereby denied, the stipulation is deemed vacated and the proceeding will be set down for trial.Alternatively, Respondent sought discovery regarding his claims for rent overcharge. The proposed demand for production of documents, attached to Respondent’s motion as Exhibit I, sought the production of but not limited to leases, riders, rent registrations filed with DHCR, and rent receipts from December 1, 2012 through the present. Discovery is permitted in a special proceeding only by leave of court pursuant to CPLR §408. Discovery may be granted in summary proceedings upon a showing of ample need and if such disclosure will not unduly delay the proceeding, though “the ends of justice ought not be sacrificed to speed.” 42 West 15th Street Corp, v. Friedman. v. 2085 Misc. 123 (App. Term 1st Dept. 1955). Ample need may be established upon a showing that special circumstances exist which warrant discovery. Harris V. Bigelow, 135 Misc. 2d 331, 515 N.Y.S. 2d 176 (Civ. Ct. Kings Co. 1987) citing Clark v. Kellogg, N.Y.L.J., 7/28/82, p. 6, col. 2 (App. Term 1st Dept.). Six factors to be considered in determining whether ample need has been established were set forth in New York University v. Farkas, 121 Misc. 2d 643, 468 N.Y.S. 2d 808 (Civ. Ct. N.Y. Co. 1983). The six determining factors are: “(1) whether in the first instance, the petitioner has asserted facts to establish a cause of action; (2) whether there is a need to determine information directly related to the cause of action; (3) whether the requested disclosure is carefully tailored and is likely to clarify the disputed facts; (4) whether prejudice will result from the granting of an application for disclosure; (5) whether the prejudice can be diminished or alleviated by an order fashioned by the court for this purpose; and (6) whether the court, in its supervisory role can structure discovery so that pro-se tenants in particular, will be protected and not adversely affected by a landlord’s discovery requests.” The documentation sought dates back to the last lease registered for a designated tenant before Respondent’s tenancy, which was 2012. The general rule is a four year look back period from the date of the claim for a rent overcharge. However, exceptions have been created by both the courts and amendments to the Rent Stabilization Code that will allow a review beyond the four year time period where a sufficient showing has been made that a landlord has engaged in a fraudulent scheme tainting the amount of rent charged on the base date. Matter of Grimm v. State of NY Div. of Housing & Community Renewal Off. Of Rent Administration, 15 N.Y.S. 3d 358 (2010). As the court stated in Grimm, “What is required is evidence of a landlord’s fraudulent scheme to remove an apartment from the protections of rent stabilization.” (id at 367). Though this Court will not determine if the lease of Ernesto De Jesus for the subject premises is a valid, legitimate lease, its complete absence from the DHCR rent registration causes it to be questionable at best, and the Court finds discovery appropriate. The documents demanded such as lease renewals, lease riders, rent records, and documentation regarding rent increases are solely in the possession of Petitioner, closely tailored to Respondent’s overcharge defense, and should not prejudice Petitioner.Accordingly, Respondent’s motion is granted in part and denied in part in accordance with the above decision. The proposed amended answer is deemed served and filed, and petitioner is to comply with respondent’s discovery demand within thirty days of service of this decision with notice of entry, or explain why it cannot comply with any of the demands by a sworn statement. Once discovery has been completed, the proceeding may be restored to the calendar by stipulation or motion by either party for trial.This is the decision and order of the Court.Dated: Bronx, New YorkMay 22, 2018The Court thanks Alisa Kreig for her work in the researching and writing of this decision.
