201 East 164th Street Associates LLC v. Calderon

Recitation, as required by C.P.L.R. §2219(a), of the papers considered in review of this motion. Papers Numbered Notice of Motion — NYSCEF Doc. 24; Affirmation in Support — NYSCEF Doc. 25; Memorandum of Law in Support — NYSCEF Doc. 26; Supporting Exhibits A-I — NYSCEF Docs. 27-35; Affirmation in Opposition — NYSCEF Doc. 37; Affidavit in Opposition — NYSCEF Doc. 38; Reply Memorandum of Law — NYSCEF Doc. 39. DECISION/ORDER After oral argument on October 23, 2023, and upon the foregoing cited papers, the decision and order on this motion is as follows: DISCUSSION Relevant Facts The relevant facts are largely undisputed: the respondents’ initial rent stabilized lease runs from July 15, 2002 through July 31, 2003,¹ reflecting a rent of $1,557.50. Nestled under the material terms is the following language: “[i]f a preferential rent is being charged, the amount of the preferential rent is set forth in the attached rider.”² $975 per month was charged for that first lease term. The lease is signed by both parties, but the rider is only signed by the respondents. Thereafter, lease renewals running through September 30, 2015 note both a legal regulated rent and a lower preferential rent. This is reflected in the DHCR Rent Registration.³ The 2013 renewal was the last lease offered until the one preceding this case. Petitioner purchased the subject building in January 2019 and its February 2019 lease renewal offer does not include a preferential rent.⁴ Respondents refused to sign the renewal and this case ensued. Respondent now moves for summary judgment dismissing the case.⁵ Respondent’s argument is straightforward — that the rider grants a preferential rent for the duration of the tenancy, is incorporated by reference into the lease and, as such, the renewal offered improperly revoked the preference. Petitioner’s opposition is simple — that the rider is unenforceable because it is not signed. Petitioner posits that its predecessor’s intent was not to offer a “lifetime” preferential rent. Summary Judgment Standard Summary judgment is a drastic remedy, to be granted only where the moving party has demonstrated the absence of any material issues of fact and then only if the non-moving party fails to establish the existence of material issues of fact which require a trial. (see Pirelli v. Long Island R.R., 226 AD2d 166, 166, 641 NYS2d 240 [1st Dept 1996]; Vega v. Restani Constr. Corp., 18 NY3d 499, 503, 965 NE2d 240 [2012]; Genesis Merchant Partners, LP v. Gilbride, Tusa, Last & Spellane, LLC, 157 AD3d 479, 481, 69 NYS3d 30 [1st Dept 2018] (summary judgment denied if any doubt as to existence of triable issues of fact)). When deciding a summary judgment motion, facts are to be viewed in the light most favorable to the non-moving party. (see Howell v. City of New York, 39 NY3d 1006, 1009, 202 NE3d 569 [2022]). Respondent’s proof must meet a minimum standard before the court considers the sufficiency of petitioner’s opposition. (see Alvarez v. Prospect Hospital, 68 NY2d 320, 324, 501 NE2d 572 [1986]). This matter turns on whether the preferential rent rider is effective. Respondent asks the court to find that the rider is incorporated by reference into the lease as a matter of law. The rider reads in relevant part as follows: The monthly legal regulated rent for this apartment is $1557.50. Renter acknowledges that this agreement shall in no way affect the monthly legal regulated rent for the subject apartment. Owner reserves the right to calculate the rental amount for future vacancy leases for this apartment based upon this monthly legal regulated rent. Instead of the legal regulated rent set forth above, Owner agrees to charge and Renter agrees to pay a monthly preferential rent of $975.00, and shall pay this same amount as a security deposit. If Renter chooses to renew the terms of this lease, this preferential rent amount, plus all other lawful increases, shall be used to calculate all applicable increases to establish the renewal rent. Thereafter, each successive renewal rent shall be calculated based upon increases to the most recently established renewal rent for as long as the Renter remains in occupancy. Increases in Renter’s security deposit shall equal increases in Renter’s renewal rent.⁶ As an initial matter, the rider contemplates a preferential rent for the duration of respondents’ tenancy. (see Rosenshein v. Heyman, 18 Misc. 3d 109, 112 [App Term, 2nd & 11th Jud. Dists. 2007]; United West LLC v. Marguiles, 12 Misc. 3d 1159(A), 2 [Civ Ct, New York County 2006], aff’d 16 Misc. 3d 132(A) [App Term, 1st Dept. 2007]). Indeed, in Marguiles, the rider in question contained the same language as the one in this case. This type of preferential rent cannot be revoked. (see Colonnade Management LLC v. Warner, 11 Misc. 3d 52, 53 [App Term, 1st Dept. 2006]; Von Rosenvinge v. Wellington Fee, LLC, 19 Misc. 3d 1118(A), 4 [Sup Ct, New York County 2008]). Consequently, renewal offers that purport to revoke the preference are properly refused, since the offer runs afoul of the requirement that renewal leases be offered under the same terms and conditions as the expiring lease. (see Rosario v. Diagonal Realty LLC, 8 NY3d 755, 761 [2007]; Century Operating Corp. v. Popolizio, 60 NY2d 483, 488, 458 NE2d 805 [1983]; see also Sixth Lenox Terrace Associates v. Schneider, 37 Misc. 3d 796, 798 [Civ Ct, New York County 2012] (“A landlord may not maintain a holdover proceeding based on the tenant’s refusal to sign a lease if it contains an illegal rent”)). The critical question is whether respondent has established that the rider is part of the lease as a matter of law. Respondent Established Their Prima Facie Right to Summary Judgment The summary judgment movant must tender sufficient evidence to demonstrate absence of any material issues of fact. (see Stonehill Capital Mgmt., LLC v. Bank of the W., 28 NY3d 439, 448, 68 NE3d 683 [2016]). Such evidence must be in admissible form and may include “affidavits by persons having knowledge of the facts [and] reciting the material facts.” (Bruck v. 51st Homes Realty, Inc., 65 Misc. 3d 201, 204, 106 NYS3d 575 [Sup Ct, Kings County 2019], citing Bank of N.Y. Mellon v. Gordon, 171 AD3d 197, 97 NYS3d 286 [2nd Dept. 2019]; Saunders v. J.P.Z. Realty, LLC, 175 AD3d 1163, 1164, 109 NYS3d 244 [1st Dept 2019]). Here, respondent swears it was her “understanding” that she was entitled to a preferential rent for the duration her tenancy based on the rider and her “dealings” with the prior landlord. (see NYSCEF Doc. 32). It is undisputed that the higher and lower rent amounts were registered with DHCR and that renewal leases [and accompanying registrations] note both a preferential rent and a higher legal rent. (see NYSCEF Docs. 30, 33). The prior landlord never attempted to revoke the preferential rent for more than sixteen and a half years. Respondent argues that a lease is a contract and contracts may comprise of several documents, not all of which must be signed. This “doctrine” of incorporation by reference is noted in the Restatement (Second) of Contracts. It reads in relevant part as follows, Where the signature of the party to be charged is made or adopted with reference to an unsigned writing, the signed and unsigned writings together may constitute a memorandum. It is sufficient that the signed writing refers to the unsigned writing explicitly or by implication, or that the party to be charged physically attaches one document to the other or encloses them in the same envelope. Even if there is no internal reference or physical connection, the documents may be read together if in the circumstances they clearly relate to the same transaction and the party to be charged has acquiesced in the contents of the unsigned writing. This doctrine “is grounded on the premise that the material to be incorporated is so well known to the contracting parties that a mere reference to it is sufficient” (Chiacchia v. National Westminster Bank, 124 AD2d 626, 628, 507 NYS2d 888 [2nd Dept. 1986]). However, the referenced document is required to be described in the contract such that it is identifiable “beyond all reasonable doubt.” (see Von Ancken v. 7 East 14 L.L.C., 171 AD3d 440, 441, 98 NYS3d 32 [1st Dept. 2019], quoting Shark Information Servs. Corp. v. Crum & Forster Commercial Ins., 222 AD2d 251, 252, 634 NYS2d 700 [1st Dept. 1995]; Kenner v. Avis Rent A Car Sys., 254 AD2d 704, 704, 678 NYS2d 213 [4th Dept. 1998]; Maines Paper & Food Service, Inc. Keystone Associates, 134 AD3d 1340, 1342, 23 NYS3d 398 [3rd Dept. 2015]). In Shark Information Servs. Corp, the court refused to find another document was incorporated into an insurance policy because “the policy as issued gives every appearance of being a complete statement of the terms, conditions, and limitations of coverage and makes no obvious reference to any unincluded endorsement, much less one containing so critically important an exclusion from coverage.” (22 AD2d at 252). Conversely, here, there is clear reference to the rider. Furthermore, the parties’ understanding that $1,557.50 is a “legal regulated rent” and $975 a “preferential rent” is nowhere written in the lease. As such, the lease is not a “complete” statement of the contract, and reference to the rider is required.⁷ Additionally, “oblique reference” to other documents “is insufficient to meet this exacting standar.” (Eshaghpour v. Zepsa Industries, Inc., 174 AD3d 440, 441, 2019 NY Slip Op 05490 [1st Dept. 2019] (“oblique reference to an otherwise unidentified Terms and Conditions page, which was never provided to plaintiff, is insufficient to meet this exacting standard”)). The lease here directly references the acknowledged rider. Leases, of course, are contracts. (see Matter of Missionary Sisters of Sacred Heart, Ill v. New York State Div. Of Hous. and Community Renewal, 283 AD2d 284, 288, 724 NYS2d 742 [1st Dept. 2001]; Geraci v. Jenrette, 41 NY2d 660, 665, 363 NE2d 559 [1977]). Critically, in the absence of language to the contrary, there is an argument that the first rent charged and paid is, in fact, the “legal” rent, regardless of a higher amount also being listed in the lease.⁸ (see BT Commercial Corp v. Blum, 175 AD2d 43, 44, 572 NYS2d 10 [1st Dept. 1991] (“[A]n ambiguity in a contract must be construed against the party who drafted it.”); Lai Ling Cheng v. Modansky Leasing Co., 73 NY2d 454, 460, 539 NE2d 570 [1989]). While respondent does not directly make this argument, petitioner’s predecessor obviously benefitted from the very rider it seeks to disavow. (see e.g. Rania Mesiskli, LLC v. New York State Div. of Hous. & Community Renewal, 166 AD3d 625, 627 [2nd Dept. 2018] (where vacancy lease did not state the monthly rent was preferential or set forth another legal rent, DHCR finding that renewals must be based on the rent charged and paid affirmed); Asal Realty LLC v. Kaune, 67 Misc. 3d 1201(A), 5 [Civ Ct, Bronx County 2020] (“The Code requires that both the legal regulated rent and the preferential rent ‘be set forth in the vacancy lease or renewal lease pursuant to which the preferential rent is charged.’ 9 NYCRR §2521.2(b).”); see also Hillside Park 168 LLC v. Khan, 59 Misc. 3d 736, 744 [Civ Ct, Queens County 2017]). Petitioner’s reliance on the fact that the rider is unsigned is misplaced. As stated above, unsigned writings may be part of a contract. The Court of Appeals has permitted signed and unsigned writings to be read together, provided they clearly refer to the same transaction. (see Crabtree v. Elizabeth Arden Sales Corp., 305 NY48, 55-56, 110 NE2d 551 [1953] (“…[A]t least one writing, the one establishing a contractual relationship between the parties, must bear the signature of the party to be charged, while the unsigned document must on its face refer to the same transaction as that set forth in the one that was signed.”); West-Herr Ford, Inc. v. Tax Appeals Tribunal of State of New York, 16 AD3d 727, 729, 791 NYS2d 193 [3rd Dept. 2005]). Overall, petitioner’s attempts to distance itself from the rider strain credulity. For instance, when petitioner refers to the rider as the “preferential rent page of the lease” and alleges its predecessor did not sign that page on purpose, (see NYSCEF Doc. 38, par. 10), it is acknowledging that the rider was part of the lease package. “In these circumstances,…a renewal lease had been created, notwithstanding that landlord had not signed the renewal lease and delivered it back to tenant.” (Perez Realties, LLC v. Ottley, 42 Misc. 3d 148(A), 1, 2014 NY Slip Op 50399(U) [App Term, 2nd, 11th, & 13th Jud. Dists. 2014]); see also 1997 Marcy Ave., Inc v. Clinkscale, 16 Misc. 3d 78, 80, 842 NYS2d 147 [App Term, 2nd & 11th Jud. Dists. 2007]). Furthermore, other fundamental rules of contract interpretation require the same finding — that the rider is incorporated into the lease. Leases, like other contracts, must be read as a whole, with different terms harmonized whenever possible. (see Himmelberger v. 40-50 Brighton First Rd. Apts. Corp., 94 AD3d 817, 818, 943 NYS2d 118 [2nd Dept. 2012]; Teliman Holding Corp. v. VCW Associates, 211 AD3d 499, 500, 180 NYS3d 109 [1st Dept. 2022]). “A reading of the contract should not render any portion meaningless.” (Beal Sav. Bank v. Sommer, 8 NY3d 318, 324, 865 NE2d 1210 [2007]; RM 14 FK Corp. v. Bank One Trust Co., N.A., 37 AD3d, 272, 274, 831 NYS2d 120 [1st Dept. 2007]). Thus, “[t]he rules of construction of contracts require [the court] to adopt an interpretation which gives meaning to every provision of a contract or, in the negative, no provision of a contract should be left without force and effect.” (Muzak Corp. v. Hotel Taft Corp., NY2d 42, 46, 133 NE2d 688 [1956]; Macy’s Inc. v. Martha Stewart Living Omnimedia, Inc., 127 AD3d 48, 54, 6 NYS3d 7 [1st Dept. 2015]). The lease here becomes ambiguous without the rider because it contains two different rent amounts. Furthermore, the language referencing the rider would be rendered entirely superfluous were the rider not part of the lease. Such a reading is unreasonable, implicating another rule of contract construction — that unreasonable results should be avoided whenever possible. (see Hsieh v. Pudge Corp., 122 AD2d 198, 199, 505 NYS2d 163 [2nd Dept. 1987], citing Fleishman v. Ferguson, 223 NY 235, 241, 119 NE 400 [1918]). “A court should not adopt an interpretation which will operate to leave a provision of a contract without force and effect. An interpretation that gives effect to all the terms of an agreement is preferable to one that ignores terms.” (Ruttenberg v. Davidge Data Systems Corp., 215 AD2d 191, 196, 626 NYS2d 174 [1st Dept. 1995] (internal quotations and citations omitted); Platinum Equity Advisors, LLC v. SDI, Inc., 51 Misc. 3d 1230(A), 7, 2016 NY Slip Op 50887(U) [Sup Ct, New York County 2016] (Court may reject contract interpretation that ignores common sense, and could lead to absurd results that would leave another portion of the contract without meaning), citing Greenwich Capital Fin. Prods., Inc. v. Negrin, 74 AD3d 413, 415, 903 NYS2d 346 [1st Dept. 2010]). Given the above, the court finds that respondent has met their burden and established their prima facie entitlement to summary judgment. Petitioner Does Not Raise Triable Issues of Fact A party opposing summary judgment must lay bare their proof and present evidentiary facts sufficient to raise a genuine triable issue of fact. (see Zuckerman v. City of New York, 49 NY2d 557, 562, 404 NE2d 718 [1980]; Adam v. Cutner & Rathkopf, 238 AD2d 234, 239, 656 NYS2d 753 [1st Dept. 1997]). Conclusory assertions, even if believable, are not sufficient, (see Ehrlich v. American Moninger Greenhouse Mfg. Corp., 26 NY2d 255, 259, 257 NE2d 890 [1970]), and non-controverted facts may be deemed admitted. (see Kuehne & Nagel, Inc. v. Baiden, 36 NY2d 539, 544, 330 NE2d 624 [1975]; Tortorello v. Carlin, 260 AD2d 201, 206, 688 NYS2d 64 [1st Dept. 1999]). Petitioner fails to raise triable issues of fact. Notably, there is no affidavit from anyone with personal knowledge. (see Musler v. Hall, 214 AD3d 77, 81, 185 NYS3d 45 [1st Dept. 2023] (affidavits not based on personal knowledge lack probative value)). This absence is especially glaring since petitioner alleges direct contact with the prior owner. (see NYSCEF Doc. 38, par. 10). Petitioner does not, for instance, controvert respondent’s understanding that the preferential rent was for the duration of their tenancy. (see NYSCEF Doc. 32, par. 15). If anything, the opposition papers bolster respondent’s claims by acknowledging the rider was included with the lease. (see NYSCEF Doc. 38, par. 10 ["…they did not sign the permanent preferential rent page of the lease purposefully."] (emphasis added)). Petitioner’s attempt to manufacture an issue of fact by claiming the prior owner did not intend to offer a permanent preferential rent also falls short. Even if there were a supporting affidavit from someone with personal knowledge, “mere assertion by one that contract language means something to him, where it is otherwise clear, unequivocal and understandable when read in connection with the whole contract, is not in and of itself enough to raise a triable issue of fact.” (Ruttenberg v. Davidge Data Systems Corp., 215 AD2d at 193; New York City Off-Track Betting Corp. v. Safe Factory Outlet, Inc., 28 AD3d 175, 177-78, 809 NYS2d 70 [1st Dept. 2006]). In any event, the best evidence of what parties intend is what they put into writing. (see Greenfield v. Philles Records, Inc., 98 NY2d 562, 569, 780 NE2d 166 [2002]; Riverside South Planning Corporation v. CRP/Extell Riverside, L.P., 60 AD3d 61, 66, 869 NYS2d 511 [1st Dept. 2008]). Nor does petitioner find refuge in the few cases it cites to for the proposition that the rider is not effective because it is not signed. In R.S.A. Distribs. v. Milford Plaza Assoc. the lease agreement was not signed by the lessor. (see 209 AD2d 329, 619 NYS2d 17 [1st Dept. 1994]). Here, there is a signed contract [lease] and the unsigned rider [by the landlord] is incorporated by reference into the lease.⁹ In short, petitioner fails in every way to make a cogent argument that the rider is not part of the lease or that the rider is a nullity because it is unsigned by the landlord. CONCLUSION Based on the above, the court finds that the lease and rider together form an unambiguous contract. (see Greenfield v. Philles Record, Inc, 98 NY2d at 570 (a contract is unambiguous if the language is reasonably susceptible to only one meaning); CDC Development Props, Inc. v. American Independent Paper Mills Supply Company, Inc., 184 AD3d 623, 624, 125 NYS3d 722 [2nd Dept. 2020]). The “subsequent construction and interpretation…are issues of law within the province of the court.” (NRT New York, LLC v. Harding, 131 AD3d 952, 954, 16 NYS3d 255 [2nd Dept. 2015]; see also COD LLC v. Ljuljdjuraj, Civ Ct, New York County, March 15, 2023, J. Stoller, Index. No. 308455/2021 (“…outcome of this case turns on interpretation of the lease, which does not require a trial.”), affirmed 2023 NY Slip Op 51305(U) [App Term, 1st Dept. 2023]). Consequently, the summary judgment motion is granted because the renewal offer was not made on the same terms and conditions as the expired lease. Judgment shall enter in respondents’ favor dismissing the case. The pending discovery motion [mot. seq. 1] is denied as moot. This constitutes the decision and order of the court. It will be posted on NYSCEF. SO ORDERED, Dated: December 4, 2023