Opinion
L & T 56962/19
08-16-2019
ROCHDALE VILLAGE INC., Petitioner-Landlord, v. Catrina BLACKMAN, Respondent-Tenant.
Henry M. Graham, Esq., Cooper & Paroff, P.C., 80-02 Kew Gardens Road, Suite 300, Kew Gardens, NY 11415, Attorneys for Petitioner Lino Diaz, Esq., Queens Legal Services, 89-00 Sutphin Boulevard, 5th Floor, Jamaica, NY 11435, Attorneys for Respondent
Henry M. Graham, Esq., Cooper & Paroff, P.C., 80-02 Kew Gardens Road, Suite 300, Kew Gardens, NY 11415, Attorneys for Petitioner
Lino Diaz, Esq., Queens Legal Services, 89-00 Sutphin Boulevard, 5th Floor, Jamaica, NY 11435, Attorneys for Respondent
Clinton J. Guthrie, J.
Recitation, as required by CPLR § 2219(a), of the papers considered in the review of Respondent's motion to dismiss pursuant to CPLR § 3211(a), and, in the alternative, to file an amended answer pursuant to CPLR § 3025(b) and Petitioner's cross-motion for discovery:
Papers Numbered
Notice of Motion & Affirmation/Affidavit/Exhibits Annexed 1
Notice of Cross-Motion & Affirmation (in Support & Opposition)
Affidavit/Exhibits Annexed 2
Affirmation in Opposition to Cross-Motion & Reply 3
Upon the foregoing cited papers, the decision and order on Respondent's motion and Petitioner's cross-motion is as follows:
PROCEDURAL HISTORY
The immediate nonpayment proceeding was commenced by Notice of Petition and Petition dated March 21, 2019. The Petition alleges that Respondent is a tenant in the premises, which is a Mitchell-Lama cooperative apartment. Respondent filed a pro se Answer on March 28, 2019. On the first court date, April 10, 2019, Queens Legal Services appeared for Respondent and the proceeding was adjourned to May 23, 2019. Before the May 23rd court date, Respondent (through counsel) served a motion to dismiss and/or, in the alternative, to file an amended answer. On May 23rd, the proceeding was adjourned for opposition, reply, and a cross-motion. On June 19, 2019, the Court heard argument on Respondent's motion and Petitioner's cross-motion, which seeks discovery, and reserved decision.
RESPONDENT'S MOTION & PETITIONER'S CROSS-MOTION
Respondent's motion seeks dismissal of the proceeding pursuant to CPLR § 3211(a)(1), (a)(2), (a)(7), and/or (a)(8), primarily on the basis that Petitioner is barred from collecting arrears dating to 2012 under the six-year statute of limitations in CPLR § 213(2). In the alternative, Respondent moves pursuant to amend Respondent's pro se Answer pursuant to CPLR § 3025(b). Petitioner opposes Respondent's motion to dismiss and cross-moves for discovery pursuant to CPLR § 408, seeking Respondent's 2012 tax returns. Respondent opposes Petitioner's cross-motion for discovery.
ANALYSIS
Respondent's Motion to Dismiss
Under CPLR § 213(2), "an action upon a contractual obligation or liability, express or implied, except as provided in section two hundred thirteen-a [actions for rent overcharge] or article 2 of the uniform commercial code; or article 36-B of the general business law" must be commenced within six (6) years. Respondent argues that the $6,037.02 sought as "2012 Adjusted Rent As per Income Verification" in the Petition is time-barred pursuant to § 213(2) because it was not pursued until the commencement of the immediate proceeding in 2019 (over 6 years after 2012).
A statute of limitations runs from the time that a cause of action accrues. The Court of Appeals has held that "[a]n action accrues ... when all of the facts necessary to sustain the cause of action have occurred, so that a party could obtain relief in court." Vigilant Ins. Co. of Am. v. Housing Auth. of City of El Paso, Tex. , 87 NY2d 36, 43 (1995). Respondent argues that Petitioner's cause of action accrued in 2012, since that was the "time the income affidavit submission process was to be completed." In support, Respondent attaches an HCR [Division of Homes and Community Renewal] Management Bureau Memorandum dated February 15, 2012, which describes the income review procedure pertaining to Calendar Year 2011. According to the Memorandum, each Housing Company (under the Public Housing Finance Law) was required to submit by September 3, 2012 the following documents: each occupant's Annual Affidavit of Family Income, a Housing Company Summary Sheet, and a set of Surcharge Information Tabulation Sheets. Additionally, the Housing Company Instructions included with the Memorandum states that all tenants were to complete and return income affidavits by April 30, 2012, and notification of tenants of any surcharges was to occur by June 1, 2012 (and actual assessment of the surcharges was to be effective July 1, 2012). Therefore, since the surcharge being imposed on Respondent here was supposed to be charged as of July 1, 2012, Respondent argues that this is when Petitioner's cause of action for the 2012 charge first accrued.
In opposition, Petitioner argues that the cause of action instead accrued when Petitioner was notified by the State of New York in late 2018 (as a result of an audit) that there were discrepancies regarding the income information that Respondent submitted in 2012, which resulted in a surcharge being assessed. Petitioner does not submit any proof of the means by which it received notification by the State of New York or what specific information about the "discrepancies" that it received. Instead, Petitioner seeks, via its cross-motion, discovery in the form of Respondent's 2012 tax returns, which, it argues, "will confirm that Respondent is over income, and the amount reported to Petitioner on her income affidavit was not proper."
Petitioner's attorney states in his affirmation that Respondent's failure to submit necessary forms with applicable fees resulted in the discrepancy; Petitioner's affiant, Debrena Reid, an agent for Petitioner, however, merely states that Petitioner was notified by the State of New York in 2018 that there were "discrepancies" regarding the information reported in 2012.
Petitioner also argues that equitable estoppel bars Respondent's statute of limitations defense insofar as "Respondent's actions of wrongdoing, misrepresentation, fraud or misconduct reasonable [sic] induced Petitioner from filing an action prior to the expiration of the statute of limitations." (Citing Wiesel v. 310 East 46 LLC , 62 AD3d 516 (1st Dep't 2009). However, Petitioner's opposition papers are devoid of any actual evidence of specific wrongdoing, misrepresentations, fraud or misconduct on Respondent's part. At most, there are conclusory references to misrepresentations to be inferred from the "discrepancies" in income that were discovered in 2018. Devoid of specificity, these references do not demonstrate that equitable estoppel is applicable here. Wiesel , 62 AD3d at 517.
As for the central dispute about when Petitioner's cause of action for the 2012 rent surcharge accrued, both parties overlook the regulatory scheme governing income determinations and rent setting for Mitchell-Lama tenants. Under 9 NYCRR § 1727-2.6(a), "[t]he failure, neglect or refusal of a tenant or cooperator to furnish information concerning their income or that of any household member, or to cooperate in the verifying of such reported income, will be assumed to indicate excess income. In such cases, rent will be raised to the maximum in the surcharge schedule." In the Petition, Petitioner acknowledges that this surcharge (which it also refers to as an "additional tax") has been imposed on Respondent. However, 9 NYCRR § 1727-2.7 specifically refers to the "effective date" of rent changes: "The housing company shall establish an effective date for all rent changes resulting from annual income reviews. Each tenant or cooperator whose rent is being changed will be given notice of such change one calendar month prior to this date. Such notice shall also be given to tenants or cooperators whose rent is being changed to maximum surcharge rent for failing to submit required proof." (Emphasis added).
In addition, 9 NYCRR § 1727-3.3 states that "Any later increase or decrease from [the] actual rent [included in the lease] resulting from either a change in tenant's or cooperator's income or a duly authorized general rent increase, shall be in accordance with the requirements of this chapter ." (Emphasis added). Although 9 NYCRR § 1727-2.7 is found in a separate subpart, it appears in the same chapter as 9 NYCRR § 1727-3.3 (Chapter IV — State Assisted Housing Constructed by Private Enterprise).
Here, there is no allegation in the "Three Day Notice to Tenant" (rent demand), the Petition, nor in Petitioner's opposition papers that Respondent was ever provided with the required notice (pursuant to 9 NYCRR § 1727-2.7 ) that the maximum surcharge from the 2012 audit would be imposed at least one calendar month prior thereto (or at any time). In the absence of any allegation or proof that the notice, which is a necessary condition precedent for the collection of the 2012 surcharge under the applicable regulations, was given to Respondent, Petitioner lacks a cause of action for collection of the surcharge. See, e.g. , Starrett City, Inc. v. Brownlee , 22 Misc 3d 38, 874 N.Y.S.2d 663 (App. Term 2d Dep't 2008) (Vacating default judgment and dismissing nonpayment proceeding where required HUD [United States Department of Housing and Urban Development] notices were deficient); SEBCO IV Assoc. LP v. Colon , 63 Misc 3d 1227(A), 2019 NY Slip Op 50765(U) (Civ. Ct. Bronx County 2019) (Finding that proceeding to collect market rent could not be maintained where required notices under the HUD Handbook had not been delivered) (citing, inter alia , Matter of Henry Phipps Plaza S. Assoc. v. Quijano , 137 AD3d 602 (1st Dep't 2016) ); Remeeder Houses LP v. Myrick , 2019 LEXIS 1251, NYLJ, Apr. 17, 2019 at 34 (Civ. Ct. Kings County 2019) (Dismissing nonpayment proceeding seeking full market rent where required HUD notices were not served).
Consequently, the Court does not make a finding on whether the statute of limitations bars recovery at this time. See, e.g., ("[R]elief can be granted to a petitioner only where all the elements of the petitioner's cause of action have been made out, a requirement which is sometimes referred to as ‘jurisdictional’ ") (Citations omitted).
Although Petitioner also seeks a balance of the January 2019 rent, the February 2019 rent, and legal and late fees, the 2012 surcharge accounts for $6,037.02 of the $7,831.95 sought in the rent demand (over 77% of the total). A proper rent demand is a "statutory prerequisite to a nonpayment proceeding" and "must ‘set forth the approximate good faith amount of rent owed’ and ‘fairly apprise the tenant of the periods for which rent is allegedly due and in what amounts.’ " EOM 106-15 217th Corp. v. Severine , 62 Misc 3d 141(A), 2019 NY Slip Op 50068(U) (App. Term 2d, 11th & 13th Jud. Dists. 2019) (citing Dendy v. McAlpine , 27 Misc 3d 138(A), 911 N.Y.S.2d 691 (App. Term 2d, 11th & 13th Jud. Dists. 2010) and Pantigo Professional Ctr., LLC v. Stankevich , 60 Misc 3d 133(A), 2018 NY Slip Op 51039(U) (App. Term, 9th & 10th Jud. Dists. 2018) ). Since the 2012 surcharge, which constitutes a substantial majority of the arrears sought in Petitioner's rent demand, is not collectible herein, the rent demand does not "set forth a good faith amount of rent owed." See EOM 106-15 217th Corp. , 62 Misc 3d 141(A), 2019 NY Slip Op 50068(U) ; Rochdale Vil. Inc. v. Sterling , 63 Misc 3d 1208(A); 2019 NY Slip Op 50438(U) (Civ. Ct. Queens County 2019) ; 56-11 94th St. Co. L.L.C. v. Jara , 64 Misc 3d 1212(A), 2019 NY Slip Op 51121(U) (Civ. Ct. Queens County 2019).
Accordingly, since the rent demand is defective and may not be amended at this juncture (see Chinatown Apts. v. Chu Cho Lam , 51 NY2d 786 (1980) ), Respondent's motion to dismiss is granted pursuant to CPLR § 3211(a)(7). Respondent's motion to file an amended answer is denied as moot and without prejudice. Petitioner's cross-motion for discovery is denied as moot and without prejudice. The immediate proceeding is dismissed as per the determinations made herein.
THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.