Recitation, as required by CPLR §2219(A), of the papers considered in the review of petitioner’s motion; (1) to restore this proceeding to the court’s calendar; (2) upon restoration, dismissing respondent’s defenses and claims pursuant to CPLR §3211; (3) awarding petitioner summary judgment pursuant to CPLR §§409 and 3212; (4) in the alternative, compelling-respondent to produce documents; and respondent’s cross-motion for summary judgment pursuant to CPLR §3212:Papers NumberedPetitioner’s Notice of Motion; Affidavit and Affirmation in Support; and Annexed Exhibits 1Respondent’s Notice of Cross-Motion; Affidavit and Affirmation in Support; and Annexed Exhibits 2Petitioner’s Affirmation and Affidavits in Opposition and in Further Support of Its Motion and Annexed Exhibits 3Respondent’s Affirmation and Affidavit in Opposition and in Further Support of its Motion of Law 4DECISION/ORDER Upon the foregoing papers, the Decision/Order of this Court is as follows:207-209 West 107th Street LLC (“Petitioner”) commenced this holdover proceeding against the rent-stabilized tenant of record, “Jane Doe1” (“ respondent”), by Notice of Petition and Petition, dated March 12, 2018, for the premises located at 207 West 107th Street, Apartment 5 W, New York, New York (“premises”) alleging that respondent violated substantial obligations of her tenancy and the terms of the lease by “using the apartment for a business use and/or are renting the apartment and/or a portion of the apartment as a ‘hotel’ or ‘bed and breakfast’ for short-term stays and rentals” and that such use constitutes “profiteering and rent gouging by charging [her] guests sums of money in excess of the rent charged under the lease for the apartment.” Respondent appeared by counsel and interposed a verified answer and, subsequently, a verified amended answer with various defenses, affirmative defenses and counterclaims. The proceeding was marked off calendar pending completion of discovery.Petitioner now moves for an Order dismissing the respondent’s defenses and claims pursuant to CPLR §3211 and for an award of summary judgment against respondent pursuant to CPLR §3212 and in the alternative, seeks an Order, pursuant to a new discovery request. Respondent cross-moves for summary judgment.FACTSThe facts in this proceeding are largely undisputed. Respondent has resided in the premises since 1997, first as a subtenant and, commencing in 2009, as the rent-stabilized tenant of record. Petitioner purchased the subject building in 2016. The premises has three bedrooms. The monthly legal regulated rent (“LRR”) for the premises during the relevant time period is as follows: (a) from July 1, 2013 through June 30, 2015 the monthly LRR was $1,519.03 (or approximately $50.63 per night); and (2) from October 1, 2015 through September 30, 2017, the monthly LRR was $1,622.89 (or approximately $54.10 per night).Parties agree that respondent rented and charged for rooms in the premises by listing same in web sites including Airbnb2 as follows:Dates Nightly Rate Nights Total receivedSept. 19, 2013-Sept. 23, 2013 $145.50 4 $582Sept. 24, 2013-Oct. 23, 2013 $38.47 30 $1,154Dec. 27, 2013-Jan. 1, 2014 $130.00 5 $650April 7, 2014-April 10, 2014 $127.67 3 $383April 18, 2014-April 20, 2014 $131.00 2 $262April 27, 2014-May 26, 2014 $38.33 30 $1,150May 10, 2017-May 14, 2017 $58.25 4 $233May 16, 2017-May 18, 2017 $111.50 2 $213May 19, 2017-May 21, 2017 $111.50 2 $213Respondent claims, and petitioner does not refute, that she “refunded $1,955.61 to 8 of the 9 Airbnb renters representing the amount above the proportionate share of [her] rent-stabilized rent received from such renters, calculated on a daily basis” and was unable to refund “any money to one renter in the amount of $582, who stayed in [her] apartment for 4 days in 2013,” solely as she could not be located (See Exhibit 6 — Respondent’s Affidavit submitted in Support of her Cross-Motion). The prior owner of the subject building did not raise any objections to respondent’s renting of the premises on Airbnb. Respondent has annexed an affidavit [Exhibit 13] to her moving papers from Tomas Milian, a principal and a shareholder of the prior owner, Jeomill, from 2005 to 2014, who stated:“In 2013 and 20141 was aware that [Jane Doe] was undergoing a challenging personal period, and was, on a few occasions, renting an extra room in her apartment on a short-term basis to guests. My father was also aware of this. In no way did he, or I consider it to be a violation of the lease, nor did he or I have any objection to her doing so. As such, I did not request that she stop renting her extra room, nor did any other shareholders of Jeomill make such a request.’”LEGAL ANALYSISDespite petitioner’s application for summary judgment and the undisputed facts in this proceeding, petitioner seeks additional discovery. Pursuant to CPLR 408, discovery in a summary proceeding is permissible only by leave of the court. In determining whether discovery should be allowed, a court will consider whether the movant has shown “ample need” to justify disclosure. See, N.Y.U. v. Farkas, 121 Misc2d 643 [Civ Ct, NY County 1983]. Pursuant to Farkas, “maple need” is demonstrated by the following: (1) whether petitioner has asserted facts to establish a cause of action; (2) whether the movant has demonstrated a need to determine “information directly related to the cause of action”; (3) whether the information requested is “carefully tailored and is likely to clarify the disputed facts”; (4) whether granting disclosure would lead to prejudice; (5) whether the court can alleviate the prejudice; and (6) whether the court can structure discovery to protect pro-se litigants against any adverse effects of a landlord’s discovery requests. Id. at 647.Petitioner has not demonstrated ample need for discovery. Respondent has already provided documents and subjected herself to a deposition. Moreover, the facts of this proceeding are largely undisputed. Respondent admits to the renting of the premises through Airbnb. The crux of the issue is whether such conduct arise to the level of commercialization and profiteering justifying eviction of respondent from the premises. Petitioner has not demonstrated how the proposed discovery would affect the outcome of the legal proceeding or constitutes anything more than a “fishing expedition.”Pursuant to CPLR §3212, summary judgment is a drastic remedy that deprives litigants of their day in court, and it “should only be employed when there is no doubt as to the absence of triable issues.” See Andre v. Pomeroy, 35 NY2d 361 [1974]; see also, Doize v. Holiday Inn Ronkonkoma, 6 AD3d 573 [2d Dept 2004]. The court’s function is not to determine credibility, but to determine if there exists a triable issue, or if arguably there is a genuine issue of fact. See S.J. Capelin Assocs., Inc. v. Global Mfg. Corp., 34 NY2d 338 [1974]. The movant has the initial burden of proving entitlement to summary judgment and upon such proof. the opposing party must show facts sufficient to require a trial of any issue of fact. See Winegrad v. New York Univ. Med. Center, 64 NY2d 851 [1985](citing, Zuckerman v. City of New York, 49 NY2d 557 [1980].)Rent Stabilization Code (“RSC”) Section 2525.6(b) provides that “[t]he rental charged to the subtenant by the tenant shall not exceed the legal rent plus no more than a ten percent surcharge payable to the tenant if the housing accommodation is sublet fully furnished.’” RSC Section 2625.6(f) provides that a landlord “may terminate the tenancy of a tenant who sublets contrary to the terms of this section….”Courts have recently interpreted this provision in the context of Airbnb activities on several occasions. In Goldstein v. Lipetz, 150 AD3d 562 [1st Dept 2017], appeal dismissed, 30 NY3d 1009 [2107], Appellate Division, First Department held “the law is clear that a rent-stabilized tenant who sublets her apartment at market rates to realize substantial profits not lawfully available to the landlord, and does so systematically, for a substantial length of time, places herself in jeopardy of having her lease terminated on that ground, with no right to cure [citations omitted and emphasis added].” In Goldstein, the court affirmed the lower court’s order granting summary judgment to the landlord where it was undisputed that the tenant sublet her apartment to 93 different customers recruited through the Airbnb website for 338 days covering a period of 18 months and realized almost 56 percent profit at nightly rates far in excess of her stabilized rent. The court recognized in instances where respondents have overcharged subtenants, where the illegal subletting generally “has been of short duration (see e.g. Cambridge, 68 AD3d 615, 892 NYS2d 343 [the illegal overcharging of the subtenant lasted less than one month])” a cure is possible. Such cure does not “mean simply the termination of the illegal subletting, but also the refund to the subtenants of the overcharges (citations omitted)” Id.Appellate courts have consistently found Airbnb activity supports an eviction of a tenant where the tenant commercializes a regulated unit. See 335-7 LLC v. Steele, 53 Misc3d 150(A)[App Term, 1st Dept 2016](affirming trial court’s determination that tenant profiteered where tenant listed premises on Airbnb website at $215 per night, provided linens, towels, wifi, television and housekeeping services; that she entered into two dozen separate rentals, totaling at least 120 nights in a 14-month period with groups as large as seven adults staying up to 10 days and paying as much as $375 per one night; and that she reported her Airbnb rental income on Schedule E in her 2009 and 2010 federal income tax returns, while deducting apartment expenses such as laundry supplies, housekeeping, utilities and insurance against this income.); 230 East 48th St. LLC v. Campisi, 59 Misc3d 148(a)[App Term, 1st Dept 2018](affirming trial court’s decision, after trial, that tenants “actions including listing her rent-stabilized apartment on the Airbnb Website at nightly rental rates at $200 per night, and entered into more than one dozen separate rentals totaling 79 nights in 10 months, with up to 5 guests per rental, collecting as much as $366 per night, more than four times the tenant’s daily rent of $90″ amply supported the trial court’s conclusion that tenant commercialized her apartment, an incurable violation of the RSL [citing, Goldstein v. Lipetz.]; West 148 LLC v. Yonke, 11 Misc3d 40 [App Term, 1st Dept 2006]; Brookford, LLC v. Penraat, 2014 NY Lexis 5476 [S. Ct, NY County 2014).Most recently, in Aurora Assoc. LLC v. Hennen, 157 AD3d 608 [1st Dept 2018], a landlord commenced an ejectment action against a tenant for subletting rooms through use of the Airbnb website. In deciding the appeal of an order denying landlord’s motion for summary judgment, Appellate Division, First Department held, that the landlord did not demonstrate its entitlement to summary judgment as the petitioner was unable to provide proof sufficient to determine “that the nature and frequency of the rentals amounted to profiteering, warranting termination of the lease [emphasis added].”In other contexts, courts have held that a rent-stabilized tenant is not subject to eviction where the tenant’s renting of the premises does not rise to the level of profiteering and the tenant has cured. See Cambridge Development, LLC v. Staysna, 68 AD3d 614 [1st Dept 2009](Appellate Division, First Department affirmed Appellate Term’s modification of trial court’s order of permanently staying execution of the warrant of eviction because “circumstances presented [did] not warrant termination of tenant’s 16-year rent-stabilized tenancy” where tenant overcharged the subtenant, the tenancy was to be of short duration and, upon learning of the illegality of the rent being charged, tenant promptly cured any violation of RSC Section 2525.6(b) by immediately agreeing with the subtenant to offset his future rent and utility payments at the legal rate against the full amount of his initial overpayment); see also, 54 Greene St. Rlty Corp. v. Shook, 8 AD3d 168 [1st Dept 2004], appeal denied, 4 NY3d 704 [2005] (finding that an overcharge on a sublet was “small” and the-record did not contain evidence of bad faith or intent to profiteer); Central Park West Realty LLC v. Stocker, 1 Misc3d 137[A][App Term, 1st Dept 2004](holding the conduct, though a violation of the lease and rent-stabilization law, did not rise to the requisite level to justify forfeiture of long-term tenancy” and stating that “[i]t is well-settled equitable principle that the court do not look favorably upon the forfeiture of leases);” and Roxborough Apts. Corp. v. Becker, 11 Misc3d 99 [App Term, 1st Dept 2006](finding that the total overcharge of roommates totaling 107 percent collectively, of the rent did not rise to the level of profiteering requiring eviction of the long-term tenant without giving him an opportunity to cure).”FACTUAL ANALYSISThe court declines to consider admitted Airbnb activity in the subject premises which occurred prior to petitioner’s purchase of the building in 2016. Neither petitioner nor the prior owner commenced legal proceedings within a reasonable period after the activity occurred, thereby waiving their right to do so. Assuming arguendo, that a waiver did not occur, respondent produces evidence that the former owner acquiesced to such activity.Petitioner herein purchased the subject building in 2016 and, since then, the parties agree that respondent sublet the premises through Airbnb to three parties for a total of eight nights. Respondent rented the premises for the following time periods: from May 10, 2017 through May 14, 2017 for four nights at $58.25 per night; From May 16, 2017 through May 18, 2017 for two nights at $111.50 per night; and from May 19, 2017 through May 21, 2017 for two nights at $111.50 per night. Respondent’s daily LRR during this period was $54.10. Respondent collected a total $659 for eight nights from renters in May 2017 while her LLR for eight nights was $432.80, a difference of $226.20. Moreover, respondent alleges and petitioner does not dispute that all monies collected in excess of the legal rent were refunded prior to commencement of this proceeding.Based upon a review of the facts before the court, it finds that respondent’s Airbnb activity was episodic in nature. Respondent’s attempt to “cure” the overcharge by refunding payments to her subtenants, while laudable, does not, in and of itself, give rise to a judgment in her favor. It is of more import that there is no evidence respondent commercialized the premises, profiting on any large scale basis from her rent-stabilized status. Respondent’s collection of $226.00 above the LRR over a period of years is not grounds for forfeiture of her long-term rent-stabilized tenancy.CONCLUSIONBased upon the foregoing, the court denies petitioner’s motion for summary judgment discovery, and related relief and grants respondent’s cross-motion for summary judgment. The court dismisses the proceeding with prejudice to petitioner’s claims against respondent. This constitutes the order and decision of the court.Dated: April 30, 2019New York, New York
