Opinion
84987/2016
04-08-2019
13 EAST 9TH STREET LLC, Petitioner, v. Charles SEELIG, Respondent.
For Petitioner: Thomas Fleishell For Respondent: Iris Bromberg
For Petitioner: Thomas Fleishell
For Respondent: Iris Bromberg
Jack Stoller, J.
13 East 9th Street LLC, the petitioner in this proceeding ("Petitioner"), commenced this summary proceeding against Charles Seelig, the respondent in this proceeding ("Respondent"), seeking a money judgment and possession of 13 East 9th Street, Apt. 4F, New York, New York ("the subject premises") on the basis of nonpayment of rent. Respondent interposed an answer, raising defenses and counterclaims of breach of the warranty of habitability, harassment, tender and refusal, and laches. The Court held a trial of this matter on September 12, 2018, October 26, 2018, and February 15, 2019, and then adjourned the matter for post-trial submissions to March 26, 2019.
Petitioner proved that it is the proper party to commence this proceeding; that the parties are in a landlord/tenant relationship with one another; that Respondent is subject to the Rent Control Law; and that Petitioner has complied with the registration requirements of MDL § 325.
Petitioner introduced into evidence a certified record from the New York State Division of Housing and Community Renewal ("DHCR") dated June 4, 2010 showing that the maximum collectible rent ("MCR") for the subject premises is $ 800.74. The MCR is the rent that a landlord of a rent-controlled tenant can actually charge the rent-controlled tenant. Matter of White v. New York State Div. of Hous. & Community Renewal , 2013 NY Slip Op. 30747(U) n. 2 (S. Ct. NY Co. 2013), Matter of COD, L.L.C. v. New York State Division of Housing and Community Renewal , 2008 NY Misc. LEXIS 7756 (S. Ct. NY Co. 2008). The DHCR record also shows that Respondent has a Senior Citizen Rent Increase Exemption ("SCRIE"). The SCRIE program freezes the beneficiary' rent. N.Y.C. Admin. Code § 26-509(b)(1). To compensate a landlord who is barred from collecting rent increases from a SCRIE-qualified tenant, the City grants the landlord a real property tax abatement in an amount equal to the rent increase exemption. N.Y.C. Admin. Code § 26-509(c)(1), 83rd St. Apt. Co., LLC v. Shaustyuk , 50 Misc 3d 110, 111 (App. Term 2nd Dept., 2015), citing Jadam Equities, Ltd. v. Stupp , 182 Misc 2d 666, 667 (S. Ct. NY Co. 1999). The DHCR record shows that Respondent's SCRIE limited the rent Petitioner could collect from him to $ 440.44.
Petitioner introduced into evidence a rent ledger ("the ledger"). The ledger shows that Respondent did not owe any rent as of September 30, 2012. The ledger calculates a rent arrears amount for Respondent from October of 2012 through February of 2019 at a monthly rent of $ 440.44.
The ledger in evidence goes through September of 2018. The parties stipulated as to rent amounts from October of 2018 through February of 2019.
Respondent introduced into evidence, and Petitioner did not rebut, a document from the New York City Housing Authority ("NYCHA") showing that Respondent is a recipient of a federal housing subsidy for the subject premises pursuant to 42 US.C. § 1437f, colloquially known as "Section 8." Under the Section 8 program, NYCHA pays the difference between the total rent for an apartment, called a "contract rent," and a share of the rent that NYCHA determines that a tenant can afford. See 24 C.F.R. § 982.1(a), Soumas v. Gregg , 57 Misc 3d 135(A)(App. Term 1st Dept. 2017). The evidence shows that, of the MCR of $ 800.74, Respondent's share is $ 279.00 and NYCHA's share is $ 521.74.
While the petition does not plead the existence of a Section 8 subsidy, the petition pre-dates the onset of the subsidy.
Even though Petitioner cannot obtain a judgment against Respondent for nonpayment of NYCHA's share of the rent, Soumas , supra , 57 Misc 3d at 135(A), Pinnacle Bronx W., LLC v. Jennings , 29 Misc 3d 61 (App. Term 1st Dept. 2010), Prospect Place HDFC v. Gaildon , 6 Misc 3d 135(A)(App. Term 1st Dept. 2005), the ledger bases Respondent's arrears on a monthly rent liability of $ 440.44 rather than Respondent's share of $ 279.00. The ledger further credits payments of $ 558.44 every month from May of 2017 through February of 2019. If Respondent's share of the rent as per Section 8 was only $ 279.00, the ledger's use of $ 440.44 implicates its reliability. Even if the Court disregards the amount charged as per the ledger and only considers the rent credits, the ledger does not make clear whether the monthly credits of $ 558.44 per month are payments from Respondent. If they are, then they would be accruing a credit to be applied to his outstanding balance pre-dating Respondent's Section 8 subsidy and thus would affect the amount of a judgment Petitioner would be entitled to.
See footnote 1.
If, however, as seems likely, the ledger's monthly credits of $ 558.44 reflect NYCHA's payments of the Section 8 share of the rent, the ledger's continued billing of $ 440.44 raises troubling questions. Does Petitioner's continued billing Respondent at a rate of $ 440.44 a month mean that Petitioner continues to receive a tax abatement covering the difference between $ 440.44 and the MCR of $ 800.74, that is, $ 360.30, at the same that Petitioner is receiving NYCHA's Section 8 share, covering more than the entire MCR? If so, Petitioner bears responsibility for the consequences of such double-dipping. See 48 W. 138th Ltd. Pshp. v. Stupp , 270 AD2d 132, 133 (1st Dept. 2000). To be clear, the record does not show whether Petitioner is collecting tenders of rent that would reduce the outstanding balance or whether Petitioner is collecting a tax abatement pursuant to a SCRIE at the same time that Petitioner is collecting NYCHA's Section 8 — or both, or neither.
A cause of action for nonpayment of rent sounds in contract. Solow v. Wellner , 86 NY2d 582, 589-90 (1995), Rutland Rd. Assoc., L.P. v. Grier , 2017 NY Misc. LEXIS 1025 (App. Term 2nd, 11th, and 13th Dists. 2017), Underhill Ave. Realty, LLC v. Ramos , 49 Misc 3d 155(A)(App. Term 2nd Dept. 2015), Fasal v. La Villa , 2 Misc 3d 137(A)(App. Term 1st Dept. 2004), Fucile v. LCR Dev., Ltd. , 2011 NY Slip Op. 32256(U)(Dist. Ct. Nassau Co.). A party seeking relief on a contract bears the burden of proving at trial the specific facts entitling it to relief, Azoulay v. Cassin , 128 AD2d 660, 661 (2nd Dept. 1987), Roshodesh v. Plotch , 35 Misc 3d 1241(A)(S. Ct. Queens Co. 2012), 1045 Anderson Ave. HDFC v. Mack , 3 Misc 3d 1109(A)(Civ. Ct. Bronx Co. 2004), including, naturally, facts supporting a monetary award, J. R. Loftus, Inc. v. White , 85 NY2d 874, 877 (1995), Crippen v. Adamao , 165 AD3d 1227, 1229 (2nd Dept. 2018), to a degree of "reasonable certainty." City of NY v. State , 27 AD3d 1, 4 (1st Dept. 2005). The preponderance of the evidence does not support an award of a judgment based upon an amount of arrears certain. Petitioner has therefore failed to meet its burden and the Court dismisses Petitioner's cause of action of nonpayment of rent. To the extent that poor bookkeeping occasions Petitioner's failure to meet its burden, the Court dismisses the nonpayment proceeding without prejudice. Raine v. Viacom Int'l , 224 AD2d 362, 363 (1st Dept. 1996) (the trial court, in settling judgment, correctly dismissed a plaintiff's claims without prejudice, because the disposition was based on lack of evidence which might become available at some point in the future), Kilduff v. Donna Oil Corp. , 74 AD2d 562, 563 (2nd Dept. 1980) (where a plaintiff has failed to establish a prima facie case, but it appears that proof which would support a prima facie case is available, the complaint should be dismissed without prejudice). The Court dismisses Respondent's defenses of laches and tender and refusal as moot, also without prejudice to renewal if Petitioner again seeks relief against Respondent on nonpayment of rent.
Respondent has interposed a counterclaim sounding in breach of the warranty of habitability, which the Court may consider even in the absence of an extant cause of action for nonpayment of rent. Dunbar Owner LLC v. Jones , 54 Misc 3d 134(A)(App. Term 1st Dept. 2017), Heights 170 LLC v. York , 29 Misc 3d 138(A)(App. Term 1st Dept. 2010), ALP Realty Corp. v. Huttick , 160 Misc 2d 76, 77 (App. Term 1st Dept. 1994), R & O Management Company v. Ahmad , 12 Misc 3d 85, 86 (App. Term 2nd Dept. 2006). Such a cause of action is predicated on, inter alia , the "rent reserved under the lease." Park West Management Corp. v. Mitchell , 47 NY2d 316, 329, cert. denied , 444 U.S. 992 (1979), Elkman v. Southgate Owners Corp. , 233 AD2d 104, 105 (1st Dept. 1996). Whatever shortcomings the ledger sustains, the monthly rent for the subject premises, as per the DHCR order, remains $ 800.74 as the MCR. As the "rent reserved under the lease" comprises the basis for a rent abatement, it is that contract rent, in this case $ 800.74, and not a lesser share, whether by Section 8 or SCRIE, that constitutes the basis of a rent abatement. Committed Cmty. Assocs. v. Croswell , 250 AD2d 845, 846 (2nd Dept. 1998).
Respondent introduced into evidence a letter to Petitioner dated May 25, 2016 stating that he was only paying $ 135.41 in rent because he had to spend $ 305.03 repairing his stove. However, Respondent's testimony was that he sent a reduced amount for October of 2014 rent due to stove repair. Moreover, Respondent may avail himself of a so-called "repair and deduct" remedy if Petitioner has "willfully refused" to repair the stove. Katurah Corp. v. Wells , 115 Misc 2d 16, 17 (App. Term 1st Dept. 1982). Respondent has not met his burden of proving an entitlement to a rent abatement for this condition or a repair and deduct remedy.
Respondent introduced into evidence summonses from the New York City Department of Buildings ("DOB") for use of apartments in the building in which the subject premises is located ("the Building") for short-term rentals. Respondent testified that transient guests sometimes open his door, which irritates him and that sometimes people smell funny. Respondent testified on cross-examination that that's the only impact on his habitability. Whatever violations of the law transient use of the building may have occasioned, Respondent has not proven that such use diminished the habitability of the subject premises and the Court does not award a rent abatement for condition.
Respondent introduced into evidence a letter dated January 27, 2016 complaining about noise from a washing machine. A stipulation in this proceeding dated May 8, 2017 ("the May 2017 stipulation") included Respondent's allegations that, inter alia , Petitioner must abate noise and vibrations from washer/dryers in the unit above the subject premises. Respondent testified that washing machines vibrate and make it hard for him to sit down and shook furniture in the subject premises, sometimes as early as 4:00 a.m. This evidence is insufficient to prove how often this condition impaired the habitability of the subject premises. The Court therefore does not have a sufficient record upon which to base an award of a rent abatement.
The May 2017 stipulation included Respondent's request that Petitioner remove a lock from a basement door. Respondent testified that the lock on the basement door prevents him accessing a fuse box and prevents phone service providers from accessing connections necessary to address issues Respondent had with phone service. Logically, a lock on a basement door in and of itself does not impact the habitability of the subject premises; it is the consequences of lack of access that do. The record is insufficient to show dates that Respondent did not have electricity. The Court notes that Respondent at one point testified about texting Petitioner, which raises the question about the effect of any interruptions of phone service through a connection to a landline. Accordingly, the Court does not award a rent abatement for this condition.
Respondent testified that the subject premises had inadequate heat and hot water; that he notified Petitioner by calling and texting and complaining to the Department of Housing Preservation and Development of the City of New York ("HPD"); and that he heated the subject premises himself with a space heater and an oven. Respondent introduced into evidence records of complaints Respondent made to HPD about heat and hot water, dated November 8, 10, 22, and 23 of 2017, December 2, 24, 30, and 31 of 2017, January 2, 5, 15, 17, 24, 29, and 31 of 2018, February 1, 4, 10, 13, and 19 of 2018, and March 2, 2018. Respondent also introduced into evidence a log he kept when he experienced inadequate heat, with entries as such on December 26, 29, and 31 of 2016, January 3, 5, 7, 8, 14, 15, 16, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, and 31 of 2017, February 1, 2, 3, 4, 5, 6, 7, 8, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 25, 26, 27, and 28 of 2017, and March 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, and 13 of 2017.
Respondent testified on cross-examination that HPD did not place violations for lack of heat and hot water because his use of the space heater and oven heated the subject premises, compelling the conclusion that HPD inspected the subject premises after Respondent complained. However, Petitioner is required to supply central heating of the subject premises, N.Y.C. Admin. Code § 27-2028, or an approved electric heating unit. N.Y.C. Admin. Code § 27-2032. N.Y.C. Admin. Code § 27-2029(a) requires dwellings with such central heat to "be furnished so as to maintain" heat at certain temperatures. Therefore, if the temperature in the subject premises was otherwise adequate but the source of heat in the subject premises was a space heater and an oven, Petitioner would have still been in violation of the Housing Maintenance Code and an HPD inspector should have placed violations. HPD's affirmative failure to place violations leaves the only evidence of inadequate heat as the testimony of an interested witness and a heat log that does not record temperatures. Respondent has therefore not met his burden of proving the existence of a condition warranting a rent abatement.
Respondent introduced into evidence violations of the New York City Housing Maintenance Code that HPD placed on the subject premises, including an "A" violation placed on October 17, 2014 for defective surfaces in kitchen and the following "B" violations: one placed on December 31, 2012 for "broken surfaces, violations placed on October 27, 2013 for a leak in the ceiling, defective surfaces in ceiling, and Petitioner's need to paint, one placed on July 30, 2014 for a leak in the ceiling, and violations placed on October 6, 2017 for a water leak in the ceiling and broken defective surfaces on the ceiling and wall. Respondent testified on cross-examination that Petitioner eventually corrected the leak damage demonstrated by these violations; that he did not know when he complained to Petitioner about these violations; and that when he complained to Petitioner, Petitioner would not fix the underlying leak causing the problem, but would patch the ceiling.
A class "A" violation is "non-hazardous" pursuant to N.Y.C. Admin. Code § 27-2115(c)(1) ; a class "B" violation is "hazardous" pursuant to N.Y.C. Admin. Code § 27-2115(c)(2) ; and a class "C" violation is "immediately hazardous" pursuant to N.Y.C. Admin. Code § 27-2115(c)(3). Notre Dame Leasing LLC v. Rosario , 2 NY3d 459, 463 n.1 (2004).
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The preponderance of the evidence shows that violations relating to leaks and consequent damage occurred, that Respondent informed Petitioner of the violations, and that HPD placed violations for these conditions from December 31, 2012 through October 6, 2017, 57 months. The most that the record shows that these conditions diminished the habitability of the subject premises by was fifteen percent. Fifteen percent of $ 800.74 for 57 months is $ 6,846.27.
HPD also placed a "B" violation for inadequate hot water on October 27, 2013 and a "C" violation for inadequate hot water on June 5, 2015. The evidence is unclear as to whether this condition persisted on a continuous basis from October of 2013 through June of 2015. However, the violations remain pending with HPD through the date of the trial and Respondent proved that he made ongoing complaints about the same condition, compelling the reasonable inference that Respondent endured inadequate hot water for at least half of the months from November of 2013 through February of 2019. Inadequate hot water entitles Respondent to a rent abatement of 15%. Port Chester Hous. Auth. v. Mobley , 6 Misc 3d 32 (App. Term 1st Dept. 2004). Fifteen percent of $ 800.74 for 32 months is $ 3,843.52. The total abatement the Court awards is $ 10,689.79.
Respondent also counterclaims for harassment. Respondent testified, and Petitioner did not rebut, that, rather than work with Respondent to obtain a Section 8 subsidy, a member of Petitioner knocked on his door and offered to get a studio apartment in Respondent's name in Brooklyn or Queens. Respondent testified that he rejected that offer. Respondent introduced into evidence a letter that he sent Petitioner dated September 8, 2016 referring to the buyout offer. Respondent testified that Petitioner again spoke to him about having Respondent move out, this time to Danbury, Connecticut. Respondent introduced into evidence another letter Respondent sent to Petitioner, this one dated September 20, 2016, stating that he did not want to move to Connecticut.
The New York City Housing Maintenance Code, amended in December 2, 2015, before Petitioner initiated contact with Respondent about surrendering the subject premises, defines "harassment," in part, as contacting a tenant to induce the tenant to vacate the tenant's apartment unless the owner making such contact makes a number of disclosures in writing, including, inter alia , that the tenant may reject an offer and that the tenant may seek guidance of counsel. N.Y.C. Admin. Code § 27-2004(a)(48)(f-2). Petitioner did not rebut Respondent's evidence that it engaged in the conduct that Respondent described, which constitutes harassment as defined, supra .
The Housing Maintenance Code entitles tenants to seek to have housing maintenance code violations placed on the subject premises, to seek an order from a Court restraining an owner from engaging in such conduct, and to impose civil penalties payable to the New York City Commissioner of Finance. N.Y.C. Admin. Code § 27-2115(m)(2), 226-228 E. 26th St. LLC v. Rhodes , 2008 NY Misc. LEXIS 7516 (Civ. Ct. NY Co. 2008). N.Y.C. Admin. Code § 27-2115(m)(2) provides that, upon a finding of harassment, the Court shall impose a civil penalty of not less than $ 2,000.00 and not more than $ 10,000.00. The Court therefore directs Petitioner to restrain from engaging in any conduct in violation of N.Y.C. Admin. Code § 27-2004(a)(48)(f-2). The Court imposes a penalty of $ 3,500.00 on Petitioner, payable to the New York City Commissioner of Finance.
Accordingly, it is
ORDERED that Petitioner's cause of action for nonpayment of rent is dismissed without prejudice, and it is further
ORDERED that Respondent's defenses of laches and tender and refusal are dismissed as moot without prejudice, and it is further
ORDERED that the Court awards Respondent a judgment against Petitioner on Respondent's counterclaim sounding in breach of the warranty of habitability in an amount of $ 10,689.79 through February of 2019, and it is further
ORDERED that Petitioner has harassed Respondent, and that Petitioner restrain from engaging in any conduct in violation of N.Y.C. Admin. Code § 27-2005(d), and that Petitioner pay a penalty of $ 3,500.00, payable to the New York City Commissioner of Finance.
The parties are directed to pick up their exhibits within thirty days or they will either be sent to the parties or destroyed at the Court's discretion in compliance with DRP-185.
This constitutes the decision and order of this Court.