Carrano v. Colon

Recitation as required by CPLR 2219(a), of the papers considered in the review of the Petitioner’ motion to strike, for summary judgment or in the alternative, for use and occupancy: Papers: Numbers Petitioner’s Motion, Affirmation in Support, and Exhibits              12-25 Respondent’s Affirmation in Opposition and Exhibits  30-33 Petitioner’s Reply (Affirmation in Further Support)        34 Court File Passim DECISION/ORDER Petitioner filed this instant holdover proceeding on or about January 11, 2023, seeking final judgment and possession of the premises located at 25 St. Marks Avenue, Apt #2, Brooklyn, New York 11217, from Respondents-licensee, Maritza Colon a/k/a Maritza Castro, Henry Colon, Christina Colon, David Colon, and Marilyn C. Scorcia; as well as John Doe and Jane Doe as Undertenants. The premises is not legally rent stabilized, but in 1992, there was a binding contract entered into by the then owner and tenants whereby the tenancy was to be considered rent stabilized. Petitioner predicated its holdover proceeding upon service of a 10-day notice to quit. On March 20, 2023. Himmelstein McConnell Gribben & Joseph, LLP by David Hershey-Webb, filed a notice of appearance on behalf of Respondent Maritza Colon. On April 13, 2023, Respondent filed an answer asserting that the tenancy is subject to rent stabilization per the agreement entered into by her parents and the former owner, and that rent stabilization confers succession rights to her. On July 20, 2023, Petitioner filed the instant motion. On September 15, 2023, Respondent filed opposition. On October 3, 2023, Petitioner filed an affidavit in further support of their motion. On October 5, 2023, the Parties argued their motions before the court and the motion was marked submitted. Background: The facts of this case are not typical. The subject premises is located in a 3-unit building and therefore is not subject to rent stabilization by law. However, in 1992, the tenants of records, Jose and Juanita Castro (collectively “the Castros”), who had been living at the subject premises since 1964 and therefore arguably were rent-controlled tenants, entered into a stipulation (hereinafter “the 1992 stipulation”) granting them “a rent stabilized lease for the period February 1,1992-January 31, 1993 at a monthly rental of $450. Respondents [were thereby] deemed rent stabilized tenants, entitled to all rights of the rent stabilization law including renewal leases.¹” (emphasis in the original). The stipulation also stated that “ Petitioners specifically agree not to commence any actions to seek the subject apartment for their own use or the use of their immediate family. This provision will not apply to a bona fide sale of the premises by all petitioners to a third party(s). Petitioners agree that any sale will be made in good faith.”² In 2004, the Petitioner, who is the successor of the Landlord/Petitioner who entered into the 1992 stipulation, sought to terminate the Castros tenancy on the basis that he was not a party to the 1992 stipulation and therefore, it was not binding upon him. The matter made it to the Appellate Division, Second Department and the court found as follows: “The Appellate Term properly reversed the final judgment of possession and granted that branch of the tenants’ cross motion which was for summary judgment dismissing the petition. Contrary to the petitioner’s contention, when read as a whole, the stipulation relied upon by the tenants merely sought to confer upon them, by way of an express contract referring to the rent stabilization law, the same rights afforded tenants protected by the rent stabilization law…. There is no merit to the petitioner’s contention that he was not bound by the lease renewal provision of the stipulation since he was not a party to it and it did not contain language explicitly providing that it was to be binding on the successors to the former landlord and owner. The terms of the stipulation evidenced the intent of the parties to the agreement that the lease renewal provision run with the land, and the agreement touched and concerned the premises.” Matter of Carrano v. Castro, 2007 NY Slip Op 08221 [44 AD3d 1038] (Oct. 30 2007). (emphasis added) As such, the Castros were permitted to remain in the subject premises with all the rights afforded to rent stabilized tenants, with the most recent renewal lease issued for the term October 6, 2020 to October 5, 2022 at a rent of $793.99 per month.³ Tenant Jose Castro passed away on October 11, 2021. Tenant Juanita Castro passed away on October 17, 2022. At the time of Juanita Castro’s death, Respondents were in possession of the apartment and were served with the predicate notices commencing the instant holdover. The question before the court is whether the stipulation entered into between the Petitioner’s predecessor in interest and the Castros which created a contractual rent stabilized tenancy includes the right of succession. The Court finds that it does. Analysis: There is no dispute that the Castros had a contractual rent stabilized tenancy.⁴ The stipulation that granted the rent stabilization status says, “Respondents are hereby deemed rent stabilized tenants, entitled to all rights of the rent stabilization law, including renewal leases.”⁵ Despite this, the Petitioner asks the Court to find that the plain language of the stipulation does not confer succession even though succession is a right of the rent stabilization law. The fundamental rule of contract interpretation is that agreements are construed in accord with the parties’ intent, and the best evidence of what parties to a written agreement intend is what they say in their writing. Banco Espirito Santo S.A. v. Concessionario Do Rodoanel Oeste S.A., 100 A.D. 3 100 (AD 1st 2012). See also Hartford Acc. & Ind. Co. v. Wesolowski, 33 NY2d 169, 171-172 (The parties’ intention should be determined from the language employed, and where the language is clear and unambiguous, interpretation is a matter of law to be determined solely by the court); Bethlehem Steel Co. v. Turner Constr. Co., 2 NY2d 456 (It has long been the rule that when a contract is clear in and of itself, circumstances extrinsic to the document may not be considered and that where the intention of the parties may be gathered from the four corners of the instrument, interpretation of the contract is a question of law and no trial is necessary to determine the legal effect of the contract.) There is no ambiguity in the language of the 1992 stipulation. It clearly states that the Castros were being given a rent stabilized tenancy and they were “entitled to all rights of the rent stabilization law…” A written agreement that is clear and unambiguous on its face must be enforced according to the plain meaning of its terms. Banco Espirito at 106. See also W.W.W. Assoc. v. Giancontieri, 77 N.Y.2d 157, 162, 565 N.Y.S.2d 440, 566 N.E.2d 639 (1990). The plain meaning of “all the rights of the rent stabilization law” encompasses the right of succession. Despite what seems obvious on its face, Petitioner urges this Court to ignore the language and instead to find that the Parties’ failure to explicitly state that the Castros’ rent stabilized tenancy included succession rights means that they do not, and that even if the court found that succession rights were included, the court should find such an inclusion to be in violation of the Rule Against Perpetuities (“RAP”). The court rejects both arguments. As stated supra, the 1992 stipulation is clear as to its intent and meaning. With respect to the failure to explicitly state that succession was contemplated, the court again looks to the language of the 1992 stipulation. The 1992 stipulation was drafted by two attorneys — sophisticated parties — who had the ability to chart their own course. The attorneys explicitly agreed that the Castros would receive “all the rights of the rent stabilization law” emphasizing “all the rights” by underlining them. They then went on to limit the Petitioner’s ability to seek to recover the premises under the owner’s use exception. There were no limitations placed on the Respondents at all. The doctrine of expressio unius est exclusion alterius, supports a finding that a lack of enumerated rent stabilized protections implies that as stated, all the rent stabilized protections apply, or in other words, the lack of any specific carveouts for the Castros meant that there were none. See Nelson v. Roberts, 304 A.D.2d 20 (A D 1st 2003). Finally, Petitioner’s argument that the RAP prohibits a reading that would grant succession also fails. First, it has been established that the RAP does not apply to renewal leases. See Bleecker St. Tenants Corp. v. Bleecker Jones, LLC, 945 N.E.2d 484 (N.Y. 2011). Second, in overturning the lower courts’ decision granting a final judgment of possession in Petitioner’s favor, the Appellate Division in Carrano stated “the terms of the stipulation evidenced the intent of the parties to the agreement that the lease renewal provision run with the land, and the agreement touched and concerned the premises.” Matter of Carrano. Thus finding that the lease renewal provision is appurtenant and as such are not in violation of the RAP. See Symphony Space v. Pergola Props., 88 N.Y.2d 466, 480 (1996). As the Court finds that the plain language of the 1992 stipulation granted the right of succession, the Petitioner’s motion to strike and for summary judgment is hereby denied. The portion of Petitioner’s motion seeking an Order for Use and Occupancy is deemed moot as the parties have agreed via two-attorney stipulation dated August 31, 2023, that Respondent would begin paying use and occupancy pendente lite at the current rent beginning August 2023 and thereafter.⁶ The matter is hereby restored to the calendar and scheduled for a hearing for all purposes December 12, 2023 9:30 am, Part S, Rm 602. The foregoing is the Decision/Order of this court. SO ORDERED Dated: November 13, 2023