Recitation, as required by CPLR §2219(a), of the papers considered in the review of Respondent’s Motion.PAPERS NUMBEREDRespondent’s Notice of Motion, Affirmation in Support, & Exhibits (“A” – “E”) 1, 2,Petitioner’s Notice of Cross-Motion, Affirmation in Support of Cross-Motion and in Opposition to Motion, Two Affidavits, & Exhibits (“A”-”J”) 3, 4, 5, 6,7Affirmation in Opposition (to cross-motion) and reply (to motion) & Exhibits (“A”-”E”) 8DECISION/ORDER Upon the foregoing cited papers, the Decision and Order is as follows: This is a nonpayment proceeding, where the petition originally alleged that respondent was rent stabilized. Subsequently, by two attorney stipulation dated April 11, 2018, the petition was amended to reflect petitioner’s claim that “the premises is not subject to rent stabilization due to high rent with the rent exceeding $2500 in 2013″. Respondent now moves for discovery on the issue of the rent and alleged deregulation, as well as an order deeming respondent’s proposed Notice to Take Deposition, and Notice to Produce Documents, duly served. Petitioner cross-moves for denial of respondent’s motion in its entirety; for summary judgment on the ground that the subject premises is not rent regulated; and for the striking of respondent’s third defense and second and third counterclaims, which allege an illegal rent and rent overcharge. For the numerous reasons set forth below, respondent’s motion is granted to the extent indicated below and petitioner’s cross motion is denied in its entirety.This proceeding contains several allegations of fact, which only serve to underscore serious issues regarding how both petitioner and its predecessors have run the subject building, as well as the manner in which rents were determined for the subject premises. Initially, the court notes that it has been presented with three separate and distinct leases for respondent covering the same period from February 1, 2017 through May 31, 2018. as follows:(a) A lease listing Andrea Pearl Montgomery (sued herein as Montgomerre), Esteban Aguirre and Julia Byon, signed by all parties on February 1, 2017 (Exhibit “J” to petitioner’s cross-motion). This lease breaks down monthly rental obligations as such Montgomery ($1100.00); Aguirre ($1200.00) and Byon ($1050.00)1(b) A lease provided by respondents at the request of the court, solely in the name of Andrea Pearl Montgomerie at a monthly rent of $1100.00; and(c) A lease provided by respondent at the request of the court, in the names Andrea Pearly Montgomerie, Esteban Aguirre Gonzalez, Juliana Paola Forero and Julia Selgi Byon, signed by all parties at various times between January 2017 and May 2017 (except Forero who initialed). This lease breaks down monthly rental obligations as such Montgomerie ($1100.00); Gonzalez ($1350.00); Byon ($1275.00) and Forero (no rent indicated).The rent history for the subject premises as registered with the DHCR lists monthly rents as follows:(a) 1994 and 1995 – $380.22:(b) 1996 through 1998 – NO REGISTRATION;(c) 1999 through 2003 – $1250.00 with each year noting “VA 01/15/2003″. In addition, in 2002, the tenant is listed as “RS” (rent stabilized) with the following notation “1044.00 Section 8 VAC/LEAS 04/01/2002 03/31/20032“;(d) 2004 through 2010 NO REGISTRATIONS;(e) 2011 through 2013 Registrations with NO RENT with each year noting “VA 07/25/2014″3;(f) 2014 – Registration with NO RENT and the notation “PE 07/25/2014 EXEMPT FIRST RENT IMPROVEMENT”;(g) 2015 and 2016 “EXEMPT APARTMENT – REG NOT REQUIRED”.Petitioner claims that the subject premises are deregulated under former Section 2526.1(a)(3)(iii) of the Rent Stabilization Code, which was amended in 2014. Petitioner attaches a lease agreement commencing September 1, 2013 and ending August 21, 2014 with tenants Roy Bersheshtat and Jason Avni at $3200.00 per month. Petitioner claims that this was a “First Rent” lease and that the subject premises became exempt from rent stabilization as a result of “either the tenancy of Messers Bersheshtat and Avni or upon their vacancy-since when the next tenant entered into possession the lawful rent was above the deregulation threshold in effect at the time” (see paragraphs 7-10 of the affirmation of petitioner’s attorney in opposition to the motion and in support of the cross-motion)4.Section 2526.1 (a)(3)(iii). before it was amended stated as follows:Where a housing accommodation is vacant or temporarily exempt from Regulation pursuant to section 2520.11 of this Title on the base date, the regulated rent shall be the rent agreed to by the owner and the first rent stabilized tenant taking occupancy after such vacancy or temporary exemption, and reserved in a lease or rental agreement; or in the event a lesser amount is shown in the first registration for a year commencing after such tenant takes occupancy, the amount shown in such registration, as adjusted pursuant to this code” (emphasis supplied)5.Petitioner tries, unsuccessfully, to convince this court that the lease with Messers Bersheshtat and Avni qualifies as a “first rent” lease. In support of its position, petitioner provides an Affidavit from Mr. Avni, which the court finds does not bear upon the issue. The fact that Mr. Avni claims to have resided in the subject premises and paid the $3200.00 rent per month does not establish the alleged deregulation. Curiously, neither Mr. Avni, nor petitioner’s agent, presented any proof of these payments, which only occurred a few years ago.What matters, and what petitioner fails to address, is the fact that:(a) no vacancy registrations were filed during the years in question, only retroactively, to indicate that the apartment was allegedly vacant, thereby putting a potential tenant on notice that there might be a “first rent” in play;(b) There is no indication either in the registration in 2014, or the so-called “first lease”, that the premises were rent stabilized as required under RSC. Section 2526.1 (a)(3)(iii). Also, the lease failed to contain a rent stabilized rider as required by the Rent Stabilization Code;(c)The Registration in 2014 is both contradictory to petitioner’s position and lists the basis for deregulation in the alternative i.e. FIRST RENT and IMPROVEMENT. Moreover, if the lease entered into for $3200.00 per month was a “first lease” as claimed by petitioner then the 2014 registration could not contain the notation “PE” or “permanently exempt” as the first tenancy after vacancy was still subject to rent stabilization.6 M & E Christopher LLC v. Godfrey, 47 Misc. 3d 1230(A) (App. Term. 1st Dep’t 2016). Notably, Godfrey, supra, was decided under the former Section 2526(a)(3)(iii) and cited Gordon v. 305 Riverside Corp., 93 A.D.3d 590 (App. Div. 2012) for the finding that the foregoing section “necessarily presumes that the first tenant after a vacancy [or temporary exemption] is offered a rent stabilized lease”. Here, none was offered;(d) There is no evidence that petitioner gave respondent or her predecessor a written notice explaining how the rent exceeded the requisite threshold for high-rent decontrol, as required by the Rent Stabilization Law Section 26-504.2(b); and(e) There appears to be a question as to whether Messrs Bersheshtat and Avni ever occupied the subject premises. As noted by respondent, there is no record of their occupancy including any maintenance of a utility account per the national grid.In deciding petitioner’s cross-motion this court notes that certain well-founded principles of law regarding summary judgment must inform any decision regarding a summary judgment request. For example, the courts have repeatedly held that “[t]he function of the court upon summary judgment is issue finding not issue determination” (Sillman v. Twentieth Century-Fox Film Corp., 3 N.Y.2d 395 (1957)). Furthermore, a court should not grant summary judgment if there is any doubt or existence of a triable issue of fact (Moskowitz v. Garlock, 23 A.D. 2d 943 (3rd Dep’t 1965)). In addition, all factual inferences must be drawn in favor of the nonmoving party Barr v. Cty of Albany, 50 N.Y. 2d 247 (1980); Byrnes v. Scott, 175 A.D. 2d 786 (1st Dep’t 1991)). Denial of summary judgment is required if the party opposing summary judgment shows facts sufficient to require a trial (Zuckerman v. New York, 49 N.Y.2d 557 (1980)).Here, there are serious issues regarding respondent’s potential status as a rent-regulated tenant, as well as the legality of the rent being charged. Furthermore, as noted above many additional issues exist regarding the various leases, and Mr. Bersheshtat and Mr. Avni’s connection, if any, to the subject premises. This court determines that triable issues of fact exist as to the deregulation of the subject premises and whether any fraudulent scheme to remove the premises from regulatory status existed. Therefore, petitioner’s motion must be denied in its entirety7.The court further notes, and this is currently unclear, that if petitioner is relying on IAI’s in any way to support its claim of deregulation. It is the owner’s burden to prove that each of the improvements were actually made and went beyond ordinary repairs (see Mayfair York Co. v. N.Y. State Div. of Hous. & Cmty. Renewal, 240 A.D. 2d 158 (1st Dep’t 1997); Matter of Graham Court Owners Corp. v. Div. of Hours. & Cmty. Renewal, 71 A.D. 3d 515 (1st Dep’t 2010)).As to respondent’s motion in chief, in order to obtain discovery in a summary proceeding, a party must establish “ample need”, (see Matter of Georgetown Unsold Shares, LLC v. Ledet, 130 A.D. 3d 99 (2d Dep’t 2015); Lonray, Inc. v. Newhouse, 229 A.D. 2d 440 (App. Div. 1996) (2d Dep’t 1996)). The Factors a court must consider in determining a motion for discovery in a summary proceeding are: (1) whether a party seeking discovery has asserted-facts to establish a cause of action or defense; (2) whether there is a need to determine information directly related to the cause of action or defense; (3) whether the requested discovery is closely tailored and is likely to clarify the disputed facts; (4) whether prejudice will result from the granting of the application for discovery; and (5) whether the court can fashion or condition the ordered discovery to alleviate any resulting justice (see see Matter of Georgetown Unsold Shares. LLC v. Ledet 130 A.D.3d 99 (2d Dep’t 2015); New York University v. Farkas, 121 Misc. 2d 643 (Civ. Ct. New York County 1983)).There is no gainsaying that discovery is warranted here. Respondent requires discovery to help determine to determine if there is any underpinning for petitioner’s position that the subject premises are deregulated, and what the alleged legal rent for the subject premises should be. Moreover, where there is a question of fraud, a tenant is permitted to go beyond the four-year statutory limit contained in RSC Section 2526.1 (see Matter of Grimm v. State of N.Y. Div. of Hous, & Cmty. Renewal Office of Rent Admin., 15 N.Y.3d 358 (2010); Thornton v. Baron, 5 N.Y. 3d 175 (2005)).This court has reviewed the proposed Notice to Take Deposition, as well as the documents contained therein and finds the deposition of Joel Stein warranted as and the documents in the notice relevant. This court also finds need for respondent to conduct the deposition of third party witness. Jason Avni vis-a-vis his connection to the subject premises and possibly petitioner or its agents8. Accordingly, respondent’s motion is granted in its entirety and this court further directs and orders that:(a) By September 28, 2018, petitioner is to provide all documents requested in the Notice of Deposition to respondent’s counsel to the extent that petitioner is in possession of same or can obtain them through a reasonable effort. In addition to the documents requested, petitioner shall also provide all proof of rental payments, jointly or severally, by Roy Bersheshtal and Jason Avni for the subject premises by such date;(b)By September 28, 2018, petitioner is to provide respondents counsel with all information as to the current whereabouts of Jason Avni so respondent’s counsel may serve a subpoena upon Jason Avni to appear for a deposition, which shall be scheduled prior to November 30, 2018 at the offices of respondent’s counsel, or any other reasonable location convenient for respondents. Said deposition shall commence at 2PM and continue each day until completed. Such information shall include any contact information, including the telephone number and address that enabled petitioner to contact Mr. Avni for his Affidavit;(c) The deposition of Joel Stein (originally scheduled for July 13, 2018) shall take place no later than October 31, 2018 at the offices of petitioner’s counsel, or at a mutually convenient location, commencing at 2PM and continuing each day until completed.This proceeding is marked off calendar pending completion of discovery to be restored by stipulation or by motion on eight days written notice. This constitutes the Decision and Order of the Court.DATEDSeptember 13, 2018
