Recitation, as required by C.P.L.R. §2219 (a), of the papers considered in the review of these motions.Papers NumberedNotice of Motion, Affirmation and Affidavit, Exhibits 1-3Cross Motion, Opposition 9Reply and Opposition 11Exhibits 4-8, 10, 12-14DECISION/ORDER Upon the foregoing cited papers, the decision and order on these motions are as follows:Petitioner commenced this holdover proceeding on July 18, 2018 after serving respondent, Leisa Murray, with a 30-Day notice terminating her tenancy effective June 30, 2018. Respondent appeared by counsel and interposed an answer dated September 13, 2018 asserting three affirmative defenses: failure to state a cause of action; failure to plead the regulatory status of the building; and breach of the warranty of habitability. Respondent also asserted two counterclaims: illegal rent overcharge, and breach of the warranty of habitability. No other Respondent appeared in this proceeding.On September 26, 2018, respondent filed a motion for leave to conduct discovery pursuant to CPLR §408. Petitioner cross-moved on October 24, 2018 requesting an order striking respondent’s first and second defenses and awarding petitioner costs and attorney’s fees.Respondent argues that leave to conduct discovery should be granted because the subject apartment was illegally removed from rent stabilization and respondent was overcharged for rent. Respondent states that petitioner has documentation in its’ possession which respondent needs to defend her claim. Respondent maintains that the rent history of the subject premises is imprecise and void of detail necessary to establish a proper deregulation, and there is reason to believe that the apartment should still be subject to rent stabilization.Petitioner opposes respondent’s request for discovery stating that respondent’s defense is subject to laches because the decontrolled status of the apartment has been in place since approximately 2003. Additionally, petitioner states that respondent has resided in the subject apartment for more than eight years and has paid the rent without asserting any claims of rent overcharge. Moreover, in its’ motion, petitioner seeks to strike respondent’s first and second defenses based upon the doctrine of laches. Petitioner also requests attorney’s fees and costs.In reply, respondent argues that there is no prejudice to petitioner since petitioner would have to produce the requested documents at the time of trial to establish the regulatory status of the apartment building. Additionally, respondent opposes petitioner’s cross-motion and argues that the doctrine of laches is not applicable in cases where the regulatory status of the subject premises is in question.Under CPLR §408, a party requesting discovery in a summary proceeding must obtain leave of court and demonstrate ample need to conduct discovery. New York University v. Farkas, 121 Misc. 2d 643, 468 N.Y.S.2d 808 [Civ Ct, New York County 1983] citing Antillean Holding Co v. Lindley, 76 Misc. 2d 1044, 1047, 352 N.Y.S.2d 557 [Civ Ct, New York County 1973]). In determining whether a party has established ample need, a number of factors are considered including “(1) whether the movant 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 likely to clarify the disputed facts; (4) whether prejudice will result from granting leave to conduct discovery; (5) whether any prejudice caused by granting a discovery request can be diminished by an order fashioned by the court for that purpose; and (6) whether the court, in its’ supervisory role, can structure discover so that pro se tenants will be protected.” Id at 811-812.Disclosure has been granted in summary proceedings where a party has disputed whether an apartment is subject to rent stabilization and/or, where there is a claim of rent overcharge. M & E Christopher LLC v. Godfrey, 2015 NY Slip Op 50897(U) [Civ Ct, New York County 2015]. However, according to CPLR §213-a, “an action in a residential rent overcharge proceeding shall be commenced within four years of the first overcharge alleged and no determination of an overcharge and no award or calculation of an award of the amount of any overcharge may be based upon an overcharge having occurred more than four years before the action is commenced.” It should be noted, however, that “the court can examine the rental history of an apartment beyond this four-year period where respondent sets forth a colorable claim of fraud”. Elliot Holding Co. LLC v. Gomez, NYLJ, Jun. 12, 2017 at 29 [Civ Ct 2017] citing Matter of Grimm v. State of N.Y. Div. of Hous. & Community Renewal Off of Rent Admin., 15 NY3d 358, 912 N.Y.S.2d 491 [Ct. of Appeals 2010]. Additionally, “an increase in rent alone will not be sufficient to establish a colorable claim of fraud, and a mere allegation of fraud alone, without more, will not be sufficient to require further inquiry.” Id. At 375.The subject apartment was registered with the Division of Housing and Community Renewal as rent stabilized from 1984 through 2001. In 2000, petitioner increased the legal registered rent from $1,344.96 to $1,874.96 based on improvements to the apartment. Petitioner later registered the apartment as exempt from rent stabilization during the period between 2001 until 2002, and the apartment was listed as exempt from rent stabilization from 2003 to present day. The last legal regulated rent was $1,912.46 in 2001, less than the $2,000.00 threshold in effect at that time, and since then, the apartment has been listed as exempt. Respondent also provided exhibits which established that petitioner previously filed a non-payment proceeding against respondent under index number 53887-18 in which petitioner asserted that the subject apartment was subject to rent stabilization.Based on the foregoing, respondent has established ample need for discovery in this proceeding. Respondent has sufficiently stated a claim for an alleged illegal deregulation and rent overcharge. Respondent has also established that the need for discovery is directly related to these claims, and that petitioner, as the sole owner of the apartment building, is in possession of the documents requested by respondent. Additionally respondent has carefully tailored the discovery requests to determine whether the rent increases for improvements to the apartment resulted in the correct rent increase that made the apartment eligible for deregulation.In its cross-motion, petitioner states that respondent’s first and second defenses are barred by the doctrine of laches. Additionally, petitioner moves for an order granting attorney’s fees and costs. Case law has established that the equitable defense of laches can be asserted by a party to bar the enforcement of a right where there has been an unreasonable delay that results in prejudice to its’ adversary. Dante v. 310 Assocs, 121 A.D.2d 332, 503 N.Y.S.2d 786 [1st Dept 1986]. In Capruso v. Village of Kings Point, 23 NY3d 631, 992 NYS2d 469 [Ct of Appeals, 2014], the Court of Appeals defined laches as “such neglect or omission to assert a right, as taken in conjunction with the lapse of time, more or less great, and other circumstances causing prejudice to an adverse party.”Petitioner’s opposition and cross-motion did not provide any information contradicting the claims of illegal deregulation on rent overcharge, and merely asserts that respondent’s discovery request should be denied simply because it requests information beyond four years. Petitioner has not established that the defense of laches is applicable in this situation. Respondent’s conduct did not create the conditions which brought about a defense of illegal deregulation and rent overcharge. Additionally, respondent was led to believe that the subject apartment was not subject to rent stabilization because of leases issued by petitioner which respondent, now represented by counsel, challenges as a result of inconsistencies within the registration of the subject apartment. Moreover, petitioner did not lack notice of these claims as similar claims were raised in the previous non-payment proceeding initiated by petitioner which was later discontinued following a similar request for discovery. Furthermore, petitioner’s claim of prejudice is outweighed by the fact that the claim of deregulation is unsubstantiated.Respondent has established ample need to obtain information relevant to determine the correct regulation status of the subject premises. Additionally, as similarly decided in 2115 Wash. Realty, LLC v. Hall, 2017 NY Slip Op 50573(U) [Civ Ct, Bronx County 2017], this court finds that respondent has asserted sufficient facts to raise a colorable defense of rent overcharge which warrants the examination of documents dating back more than four years.Accordingly, respondent’s motion for leave to conduct discovery is granted. Petitioner’s cross motion is denied. This matter is marked off calendar for discovery and may be restored by motion or stipulation of the parties.This constitutes the decision and order of the court.Dated: February 14, 2019Brooklyn, New York
