Recitation, as required by CPLR §2219(a), of the papers considered in the review of respondents’ motion for an order pursuant to CPLR 3025(b), granting leave to amend their answer and pursuant to CPLR §408 granting leave to conduct discovery. Papers Numbered Notice of Motion and Affidavits Annexed 1 Order to Show Cause and Affidavits Annexed Answering Affidavits 2 Replying Affidavits 3 Exhibits Other DECISION/ORDER Upon the foregoing papers, the Decision/Order on this motion is as follows: Background Petitioner commenced the instant nonpayment proceeding by notice of petition and petition. Prior to commencement petitioner served a rent demand dated June 21, 2018 seeking arrears from June 2016 at $289.20; July 2016 at $2,500.00; August 2016 to July 2017 at $2,600.00 per month; August 2017 to December 2017 at $2,700.00 per month and $98.00 in legal fees for a total of $63,787.20. Respondent Steve Starosta interposed a pro se answer on August 1, 2018 alleging that the pleadings were not served as required by law. The Court conducted a traverse hearing and by order dated December 21, 2018, found that the notice of petition and petition as well as the predicate notice were served in accordance with the RPAPL and set the matter down for trial. Starosta and Matt Geraldi (“respondents”), who retained counsel prior to the traverse hearing, now move to amend the pro se answer and for leave to conduct discovery. Discussion Respondents’ proposed amended answer contains defenses of laches, statute of limitations and improper rent demand. The answer also includes affirmative defenses alleging failure to provide reasonable accommodation, improper deregulation and improper apartment registration and rent overcharge. Respondents also seek to counterclaim for rent overcharge and attorneys’ fees. A motion for leave to amend is committed to the sound discretion of the court. Colon v. Citcorp Inv. Servs., 283 AD2d 193 [1st Dept 2001]. The motion will be granted in the absence of prejudice, surprise or unless the proposed amendment is palpably insufficient or patently devoid of merit. CPLR 3025(b); Lucido v. Mancuso, 49 AD2d 220 [2nd Dept 2008]. “Prejudice has been defined as a special right lost in the interim, a change in position, or significant trouble or expense that could have been avoided had the original pleading contained the proposed amendment”. Ward v. City of Schenectady, 204 AD2d 779 [3rd Dept 1994]. Lateness which is not accompanied by significant prejudice to the other side is not a barrier to the amendment. Edenwald Contracting Co. v. City of New York, 60 NY2d 957 [Ct App 1983]. Respondents argue that petitioner would not be prejudiced by allowing them to amend Starosta’s answer which was devoid of any substantive meritorious defenses. Petitioner in opposition argues that respondent’s second, and third proposed affirmative defenses and first counterclaim which relate to the alleged improper deregulation of the apartment lacks merit. In support of its position, petitioner notes that the apartment reached the luxury deregulation threshold in 2004 and was rented to three different tenants before respondents took possession in 2009. Petitioner asserts that respondents cannot now challenge the regulatory status to the apartment fifteen years after it was deregulated since there is no evidence or even an allegation of fraud. Moreover petitioner would be prejudiced if respondents were granted this relief. The branch of the motion seeking discovery should also be denied based on respondents’ failure to allege a cause of action for improper deregulation or overcharge. It is undisputed that petitioner moved respondents into the subject apartment upon respondents’ request to relocate to the first floor or to a building with an elevator to accommodate Geraldi’s disability. Their prior apartment was rent stabilized and rented for approximately $800.00 less than the subject apartment. These differences raise a question as to whether the subject apartment was in fact a reasonable accommodation. Additionally, some of the arrears sought here accrued more than two years before the proceeding was commenced. Respondents allege that petitioner’s rent history reveals that some of the arrears actually accrued more than six years before the rent demand was served. For these reasons, respondent’s laches and statute of limitations defenses cannot be said to completely lacking in merit. Petitioner’s contention that respondent cannot challenge the rent registration beyond four years is unavailing. While the absence of a fraudulent scheme to deregulate does limit review of an apartment’s rent history to four years in an overcharge claim, no such proscription exists when an apartment’s regulatory status is challenged. Gersten v. 56 7th Avenue LLC, 88 AD3d 189 [1st Dept 2011]. Moreover, the apartment’s registration history shows that the rent jumped from $789.46 to $1,668.22 in 1998 based solely on a vacancy increase. This $878.76 jump allowed the apartment to reach the deregulation threshold seven years later. The proposed defenses also cannot be said to come as a surprise to petitioner. Petitioner is aware of when the arrears began to accrue and the alleged differences between respondents’ former apartment and the current one. Significantly, petitioner does not refute respondents’ claim that his son assured them that they would “work things out” when they expressed concerns about the difference in rent between the their former apartment and the current one. Respondents have also demonstrated ample need for most of the disclosure they seek. New York University v. Farkas, 121 Misc2d 643 [Civ Ct NY 1983]. While discovery is generally not granted in nonpayment proceedings, there is no absolute bar to this relief where, as here, the proceeding is not a garden variety holdover. See, e.g. ABJ 340 LLC v. Maldonado, 2019 NYLJ LEXIS 2404 [Civ Ct Bx]. Respondent has demonstrated through the registration history that petitioner has taken rental increases which removed the apartment from regulation. The explanation offered for the major increase does not justify the amount charged. As a result, respondent seeks to depose petitioner and his son and seeks the production of documents related to improvements made to the apartment dating back to 1998. There is ample need for this information as it would shed light on the propriety of the rent increases, the deregulation of the apartment and the sums sought by petitioner in this proceeding. Antillean Holding Co. v. Lindley, 76 Misc. 2d 1044 [Civ Ct NY 1983]. Respondents also seek documents pertaining to their tenancy. With the exception of the rent ledgers, there is not ample need for these documents as they are not within petitioner’s exclusive control. Conclusion Based on the foregoing, the motion is granted as noted above. Respondents’ proposed amended answer is deemed served and filed. Petitioner is to respond to the document demand, with the exception of numbers 23, 24 and 25 within twenty days of receipt of this order. Thereafter, Felix Bernardo and Felix Bernardo Jr. Shall make themselves available for examinations before trial at respondents’ counsel’s office at a dates and times to be determined by the parties. The matter is marked off calendar pending completion of discovery. This constitutes the decision and order of the Court. SO ORDERED Dated: July 17, 2019 New York, New York
