Opinion
L & T 73194/14
04-17-2014
Seward Park Housing Corp., Petitioner, v. Flowers on Essex, LLC, Respondent.
Attorney for Petitioner Peter Axelrod, Esq. Axelrod Fingerhut & Dennis 260 Madison Avenue New York, New York 10016 Attorney for Respondent Steven R. Talan, Esq. 11 Carling Drive Garden City Park, NY 11040
Attorney for Petitioner
Peter Axelrod, Esq.
Axelrod Fingerhut & Dennis
260 Madison Avenue
New York, New York 10016
Attorney for Respondent
Steven R. Talan, Esq.
11 Carling Drive
Garden City Park, NY 11040
Paul A. Goetz, J.
Recitation as Required by CPLR § 2219(a): The followingPapers Numbered: papers were read on this Order to Show Cause for a Stay.
Notice of Motion...............................................................................................1
Affirmation and Affidavit in Support with Exhibits (A-E)...................................2
Notice of Cross-Motion....................................................................................3
Affirmation in Support with (untabbed) Exhibits (A-B) ...................................4
Reply Affirmation in Support of Motion and Opposition to Cross-Motion . . . .5
Upon the foregoing cited papers, Respondent's motion, dated February 19, 2015, (returnable March 12, 2015), for an order staying the action pending transfer of this proceeding to Supreme Court for consolidation with a Supreme Court action pending between the parties under Index No. 160256/14; or in the alternative dismissing the petition, pursuant to : RPAPL § 741(3) on the grounds that the petition does not properly described the premises sought to be recovered; RPAPL § 741(2) on the grounds that the petition fails to state respondent's interest in the premises and its relationship to Petitioner with regard to the premises; RPAPL § 741(1) on the grounds that the petition fails to state the interest of petitioner in the premises from which removal is sought; and on the grounds that the Notice of Petition and Petition were not properly served is DENIED.
Petitioner initiated this licensee summary hold-over proceeding to regain possession of "the fenced in portion of courtyard behind stores located in [the] building known as 357-389 Grand Street as depicted as cross-hatched area on annexed floor plan accessed through 365 Grand Street . . ."
After this proceeding was initiated, Respondent brought an action in Supreme Court seeking, inter alia, equitable relief and reformation of the Lease "due to contradictions [in the lease] and [Petitioner's] misstatements of fact which are beyond the scope of [a] summary proceeding and could be extinguished because they are beyond the jurisdiction of the Civil Court." By Order dated November 14, 2014, Supreme Court denied without prejudice Respondent's request to consolidate this proceeding with the Supreme Court case. Supreme Court decided that it would "defer to the Housing Court's determination of whether it is appropriate for such court to decide the issue of interpretation of the subject lease to include the disputed backyard' space . . . "
In support of the instant motion Respondent's managing member alleges that Petitioner's agent represented to him that the leased premises included the street level storefront at 365 Grand Street along with the basement and "outdoor courtyard space". Respondent's managing member alleges that the inclusion of these areas "was a material term to induce [Respondent] to enter into the lease." Respondent argues that the parties lease requires interpretation beyond its four corners and that this Court lacks jurisdiction to resolve inconsistencies in the lease because this Court is without authority to exercise equitable jurisdiction. Based on this argument Respondent asks for a determination by this Court that its jurisdiction "does not extend to provide for the equitable relief of reforming the parties' written lease agreement" and a stay pending transfer of this proceeding to Supreme Court.
There is no dispute that Petitioner as landlord and Respondent's president executed a "Standard Form of Store Lease" in May, 2010 for premises identified as 365 Grand Street. There is also no dispute that Respondent erected a fence around the circumference of the subject outdoor courtyard in late 2011/early 2012. According to Respondent the lease contains several discrepancies or inconsistencies including: identifying the parties as Seward Park Housing Corporation as owner and "To Be Named, Address to be Provided, as Tenant"; a description of the demised premises as "365 Grand Street in the building known as 357-389 Grand Street" but with no further description of the premises; paragraph 79.3 of the lease rider wherein "[t]he demised premises are strictly limited to the basement premises, as described, and are not inclusive of any common areas or other space located within the building which Tenant may or may not be occupying including but not limited to hallways, the ground floor store, storage areas, or bathrooms"; paragraph 79.6 of the lease rider wherein " [tenant] acknowledges that it has been informed by Owner that any diagram attached to this Lease, if any, is solely for the purpose of generally identifying the Premises and Owner has made no representation and is unwilling to make any representation and nothing in the Lease shall be deemed or construed to be a representation or covenant as to the dimensions and the area contained in the Premises." Respondent concludes that these discrepancies or inconsistencies show that it is not possible to accurately determine what premises were rented by Petitioner to Respondent, therefore, requiring reformation of the lease, a remedy not available in Civil Court.
In opposition, Petitioner's assistant secretary explains that 365 Grand Street is a self contained ground level store with a basement located in a building known as 357-389 Grand Street which is a one story building with eight commercial tenants. Each store has its own distinct postal address and each premises is described by its postal address. Significantly, Respondent's reply affidavit does not directly dispute this description but nonetheless concludes "it should be clear that the Lease Agreement requires reformation and not merely interpretation'". Petitioner points out that paragraph 75.1 of lease rider obligates Respondent to use the premises "for the retail sale of flowers, potted plants and related accessories." Annexed to Petitioner's affidavit in opposition are photographs that Petitioner asserts show Respondent is using the courtyard not for the sale of flowers but as an event space. Respondent's reply affidavit does not directly refute that he is using the courtyard as an event space and even suggests that he might use it to stage occasional art shows. After its recitation of the facts, Petitioner's affidavit in opposition includes an extensive legal argument with case citations.Petitioner's counsel is reminded that pursuant to 22 NYCRR § 208.11(b)(1) "[a]ffidavits shall be for a statement of the relevant facts, and briefs shall be for a statement of the relevant law." and "courts strongly disapprove of legal arguments contained in affidavits." (Chrome Corporate Management Group, LLC v Pfeil, 2009 NY Misc LEXIS 5750 *20; 2009 NY Slip Op 31217(U) **14 [Sup Ct NY Co 2009]).
Civil Court's Jurisdiction
Except under certain limited circumstances, Civil Court lacks jurisdiction to grant equitable or nonmonetary relief. Wilen v Harridge House Associates, 94 AD2d 123125 (1st Dep't 1983); Pereira v Cooper Square Mutual Housing Association II, 2012 NY Misc LEXIS 4424 *11 (Sup Ct NY Co 2012). Instances where Civil Court has authority to grant equitable relief are found in CCA § 212-a (declaratory judgments involving obligations of insurers and de novo review under Part 137 of the Rules of the Chief Administrator of the Courts) and CCA § 213 (rescission or reformation of transactions where the subject matter involves a sum not in excess of $25,000).
Relief, however, must be distinguished from claims and defenses. With respect to claims and defenses, Civil Court has jurisdiction over "any defense to a cause of action or claim asserted by any party, whether such defense be denominated or deemed legal or equitable in nature." (New York City Civil Court Act ["CCA"] § 905). Furthermore, Real Property Actions and Proceedings Law ("RPAPL") § 743 provides in pertinent part that "[t]he answer [in summary landlord-tenant proceedings] may contain any legal or equitable defense or counterclaim." These two statutes lend support to the long recognized preference that Civil Court resolve landlord-tenant issues ( Simens v Darkish, 105 AD3d 686 [1st Dept 2013] [citations omitted]; Brecker v 295 Central Park West, Inc., 71 AD3d 564, 565 [1st Dept 2010]; Cox v J.D. Realty Associates, 217 AD2d 179 [1st Dept 1995]) and "[i]f the tenant is unable to obtain complete relief in Civil Court, then the jurisdiction of Supreme Court is still available." ( Cox, 217 AD2d at 181).
Here, Respondent claims the lease between the parties must be reformed to, inter alia, fully describe the premises rented as including the subject outdoor courtyard. Respondent alleges that the reformation is required because Petitioner's agent represented to him that the leased space includes the courtyard but that the lease fails to include the courtyard. Allegations such as Respondent's "may be interposed as defenses in the context of [this] holdover proceeding . . ." (Blutreich v Amalgamated Dwellings, 46 AD3d 352, 353 [1st Dept 2007]). In Blutreich the tenants alleged that their lease was terminated in bad faith and not in accordance with the cooperative's governing documents. The First Department held that these claims could be asserted in the holdover proceeding and that in the event that the tenants "prevail in the holdover proceeding, they will still be entitled to seek any additional relief to which that determination entitles them, possibly including [a] permanent injunction . . ." (Id.). Respondent's claim that a lease provision was left out is similar in character to the tenants' claims Blutreich that they were treated unfairly and not in accordance with the cooperative's governing documents both are equitable defenses assertable in a holdover proceeding. Therefore, under the statutes and controlling authority cited above, Respondent may assert its defense that the lease does not comport with the agreement reached by the parties in this proceeding. Moreover, in the event that Respondent prevails on its equitable defense and the value of reforming the lease exceeds this Court's jurisdictional limitation amount of $25,000.00 pursuant to CCA § 213, Respondent "will still be entitled to seek any additional relief to which that determination entitles [it in Supreme Court]." (Id.).
The Court notes that although Respondent's moving papers suggest it may rely on a defense grounded in fraud, Respondent's answer (with sixteen affirmative defenses) does not allege a fraud defense, much less state the circumstances constituting fraud in detail as mandated by CPLR § 3016(b).
Finally, the Court also notes that although not addressed in the parties' papers, there is a question whether the use of the outdoor courtyard space is permissible for anything other than as an outdoor courtyard space. Because, contrary to Petitioner's assertion that "the fact that the courtyard was never previously rented to anyone does not forever bar Petitioner from renting its own space if it[] so decides to in the future," use of the court yard space is limited to its legally permissible use. The certificate of occupancy issued by the New York City Department of Buildings [DOB], governs the legal use of a building. (NYC Charter § 645[d]). NYC Adm Code § 28-118.1 provides in pertinent part that [n]o building or open lot shall be used or occupied without a certificate of occupancy issued by the commissioner [of DOB]." NYC Adm Code § 28-118.3 mandates the issuance of a new certificate of occupancy if the occupancy or use of a building or lot is changed. Therefore, in the event that Respondent prevails on its defense that the lease must be reformed to include the outdoor courtyard, Respondent must also show that its six foot high enclosure and use of the space is permitted under the existing certificate of occupancy for the premises because "New York courts typically do not assist parties in taking advantage of their own wrongs" ( New York Hospital Medical Center of Queens v Microtech Contracting Corp., 22 NY3d 501, 509 [2014]) by enforcing their illegal contracts. ( Haimowitz v Pollack, 116 AD3d 1003 [2nd Dept 2014]).
Accordingly, Respondent's application for a determination that this Court does not have jurisdiction and for a stay pending transfer of this proceeding to Supreme Court is denied.
Dismissal of the Petition Pursuant to RPAPL § 741
RPAPL § 741(3) requires Petitioner to describe in the petition "the premises from which removal is sought." An adequate description of the premises is one that accurately describes the exact location of the premises in sufficient detail to allow a marshal executing a warrant to locate the premises at issue and effectuate the eviction without additional information. (Sixth Street Community Center, Inc. v Episcopal Social Services, 19 Misc 3d 1143(A) [Civ Ct NY Co 2008] [citations omitted]).
Paragraph four of the petition describes the premises as "the fenced in portion of courtyard behind stores located in building known as 357-389 Grand Street as depicted as cross-hatched area on annexed floor plan accessed through 365 Grand Street, New York, New York 10002 . . ." Annexed to the petition is a diagram with cross-hatched markings identified as "red fence area". On one side of the "red fence area" is what is labeled as "Seward Park High School", on another side of the "red fenced area" is something labeled "MTA vent", on a third side is "shed Bialy" and on the fourth side is an area that runs the length of the "red fence area" identified as the "access walkway". Photographs annexed to Petitioner's opposition papers described as depicting the premises sought (and not disputed by Respondent in its reply papers) show a red cement area enclosed by a tall wooden red fence.
The Court finds that the petition adequately describes the premises. The marshal will be able to locate the premises with the description that the area sought is behind the building known as 357-389 Grand Street and is accessed through 365 Grand Street. The marshal will be able to effectuate the eviction because the diagram depicts the area Petitioner seeks to recover as the "red fence area" (which it is undisputed is in fact red) and it shows what surrounds the "red fence area". Therefore, the Court determines that the marshal would not need any additional information to locate the premises and effectuate the eviction. (Sixth Street Community Center, 19 Misc 3d at 1143[A]).
RPAPL § 741(2) requires Petitioner to state in the petition "[R]espondent's interest in the premises and his relationship to [P]etitioner with regard thereto." Paragraph five of the petition states that "[a]s of July 30, 2014, the Respondent's right to occupy the premises, if said Respondent had the right to occupy the premises, terminated for the reasons set forth in the Notice of Termination of License annexed hereto and incorporated herein . . ." The Notice of Termination of License ("Notice") is annexed to the petition. The Notice states that the Petitioner granted Respondent a license to traverse through the courtyard, that a fence has been erected that encloses the courtyard, that the Petitioner has not consented to the enclosure and that Petitioner revokes any license that was granted to Respondent to use the courtyard. Respondent argues this description of Respondent's interest in the courtyard does not accurately reflect its interest. According to Respondent, although not stated in the parties' lease, the premises Respondent rented from Petitioner includes the courtyard.
CPLR § 3013 provides:
Statements in a pleading shall be sufficiently particular to give the court and parties notice of the transactions, occurrences, or series of transactions or occurrences, intended to be proved and the material elements of each cause of action or defense.
Since CPLR § 3013 requires Petitioner to give notice to Respondent and the Court of the facts it intends to prove to wit Petitioner revoked Respondent's license to use the courtyard, Petitioner complied with the requirements of RPAPL § 741(2). Taking Respondent's argument to its logical conclusion would require Petitioner to describe in the petition the facts Respondent intends to prove. CPLR § 3013 and RPAPL § 741(2) read together do not place this obligation on Petitioner. Rather, it is Respondent's obligation to state in its answer the facts it intends to prove to wit that although not stated in the parties' lease, the premises Respondent rented from Petitioner includes the courtyard.
While the notice of motion states that Respondent is moving under RPAPL § 741(1) for dismissal, Respondent's moving papers do not address this portion of its motion. RPAPL § 741(1) requires Petitioner to "[s]tate the interest of the petitioner's in the premises from which removal is sought." Paragraph one of the Petition alleges that "Petitioner is authorized to maintain this proceeding." Paragraph two of the petition alleges that "Petitioner is the Owner and Landlord of the Premises in which the demised premises form a part." Petitioner's allegation that it is the owner and landlord of the premises sufficiently states Petitioner's interest in the premises. (See Dream Team Associates, LLC v Broadway City, LLC, 2003 NY Misc LEXIS 592, 2003 NY Slip Op 50594(U) [Civ Ct NY Co 2003]).
Accordingly, Respondent's motion to dismiss on the grounds that petition is defective pursuant to RPAPL § 741 is denied.
Improper Service
Respondent's fourth affirmative defense asserts "[u]pon information and belief, this court lacks jurisdiction over this action because of petitioner's failure to properly serve the Notice of Petition and Petition upon the Respondent." The Court notes that Respondent confuses subject matter jurisdiction and personal jurisdiction over the Respondent. Failure to properly serve Respondent deprives the Court of personal jurisdiction over Respondent (See Wells Fargo Bank, NA v Sheila Edwards, 95 AD3d 692 [1st Dept 2012]) but does not deprive the court of subject matter jurisdiction over the action or proceeding. (Security Pacific National Bank v Evans, 31 AD3d 278 [1st Dept 2006] [observing "[t]he question of subject matter jurisdiction is a question of judicial power: whether the court has the power, conferred by the Constitution or statute, to entertain the case before it.] [internal quotations and citations omitted]).
Respondent's conclusory denial of service in its answer is insufficient to rebut the affidavit of service by Petitioner's process server. (Benson Park Associates LLC v Herman, 93 AD3d 609 [1st Dept 2012]). Likewise, the absence of an affidavit from Respondent affirmatively stating that it was not served precludes the Court from making a finding of improper service. (EBC Amro Asset Management Limited v Kaiser, 265 AD2d 161 [1st Dept 1998]).
Accordingly, Respondent's motion to dismiss based on improper service of the Notice of petition and Petition is denied.
Based on the foregoing, it is hereby
ORDERED that Respondent's motion is DENIED in its entirety; and it is further
ORDERED that the proceeding is restored to the Part 52 trial calendar for Tuesday, May 12, 2015 at 9:30am.
This constitutes the Decision and Order of the Court.
Dated: April 17, 2014
ENTER:
_____________________________________
PAUL A. GOETZ
J.C.C.