Opinion
55498/2019
10-29-2020
138 UNION FEE LLC, Petitioner, v. Melba SITJAR, Respondent.
For Petitioner: Joshua Price and Heather Ticotin For Respondent: Matthew Longobardi
For Petitioner: Joshua Price and Heather Ticotin
For Respondent: Matthew Longobardi
Jack Stoller, J.
138 Union Fee LLC, the petitioner in this proceeding ("Petitioner"), commenced this holdover proceeding against Melba Sitjar, the respondent in this proceeding ("Respondent") and her mother ("Respondent's mother"), seeking possession of 138 Union Street, Apt. 5F, Brooklyn, New York ("the subject premises") on the ground that Respondent's mother surrendered her tenancy. Respondent's mother died during the pendency of this proceeding and the case continued against Respondent. Respondent interposed an answer that, inter alia , raised a dispute with the surrender of Respondent's mother's tenancy and interposed a defense of succession to Respondent's mother's tenancy. The Court held a trial of this matter on September 15, 2020 and September 21, 2020 and adjourned this matter for post-trial submissions to October 15, 2020.
Undisputed facts at trial
Petitioner is the proper party to commence this proceeding. Petitioner and Respondent's mother had previously been in a landlord/tenant relationship subject to the Rent Stabilization Law and pursuant to a lease for the subject premises. The most recent lease was a two-year lease that commenced January 1, 2017 with a rent of $667.08. Respondent and Respondent's mother have a family relationship that qualifies Respondent as a family member for purposes of succession to a rent-stabilized apartment and Respondent resided with Respondent's mother for at least two years before Respondent's mother died, in 2020. Respondent's father also used to the live in the subject premises, but he also died.
On November 29, 2018, Respondent, Respondent's mother, and Respondent's father ("Respondent's family") and Petitioner executed an agreement ("the Agreement"). Respondent's family had not consulted with counsel at any point up to the execution of the Agreement. The Agreement recites, inter alia , that Respondent's mother had been a tenant since 2003 and that Respondent's family initiated a discussion about moving out of the subject premises on November 12, 2018. The Agreement provides that Respondent's family would tender possession of the subject premises to Petitioner on or before February 1, 2019 ("the Deadline"), with time being of the essence; that, in consideration for the timely surrender of possession, Petitioner would pay Respondent's mother $95,650, ten percent of which Petitioner would pay in advance, plus moving expenses up to $8,000; and that if Respondent's family fail to timely tender possession, then Petitioner "shall have the right to possession of the [subject p]remises," Petitioner need not pay the consideration to Respondent's mother, Respondent's mother must disgorge any advance payments to Petitioner, and Respondent's mother would be liable for use and occupancy at a rate of $300.00 per day. The Agreement also stated that during negotiations that led to the Agreement, Respondent's family "were advised" that they may reject an offer to pay them to move, that they may refuse to communicate with Petitioner, that they may contact an attorney, that Respondent's family had a chance to be represented by counsel but chose not to be, and that Petitioner has not harassed Respondent's family.
Petitioner tendered to Respondent a check for $48,240 on January 9, 2019 which Respondent deposited.
The trial record
Petitioner's building manager ("the Manager") testified that Petitioner acquired title to the building in which the subject premises is located ("the Building") in 2018; that he came to meet tenants at the Building because he was at the Building to oversee construction there; that he met Respondent's family and had a friendly relationship with them; that Respondent would confide in him and vent to him; that Respondent told him that she slept on a mat in the living room; that Respondent told him that she wanted more space; that Respondent's father sat in front of the Building when it was warm out and he chatted with him there; that Respondent's father was old; that he helped Respondent's father up the stairs; that he could observe that Respondent's father had a hard time traversing the stairs in the Building; that his observation as such led to a conversation with Respondent's family about a buyout; that he approached Respondent's family about a buyout; that Respondent said to him something to the effect of, "I'm interested if you are" and said that she had to talk to her parents; that he met Respondent's family in the subject premises, where they discussed logistics; that Respondent's family was aware of buyouts in area; that they understood how it worked; that he and his team were thinking of a buyout of $75,000; that Respondent's father wanted $100,000; that he agreed to help Respondent's family find an apartment and pay moving fees; that the conversation had been pleasant; and that he put together two options for them.
The Manager testified that he set up a second meeting with Respondent's family that included Respondent's brother and then a third meeting a week later; that Respondent's family agreed to a particular option; that he retained counsel to draft the Agreement; that he came to the subject premises with a notary to execute the Agreement; that he went through the language of the Agreement with Respondent's family; that the interaction was friendly; that he gave Respondent's family a deposit of about $9560 to show good faith; that Respondent's family needed to open up a bank account to receive the payment; that the bank flagged the payment as a fraud and access to funds became an issue; that he and Respondent eventually worked the problem out; that he made a second payment, the one for $48,240, to Respondent's family before they moved out because they were moving to another apartment, a two-bedroom apartment in Canarsie with a separate bedroom for Respondent ("the Other Apartment"), and they needed to pay their rent in advance for one or two years because Respondent's family didn't have credit; that he brought Respondent's family multiple boxes; that he helped them throw stuff away; that Respondent's family got the key to the Other Apartment but they didn't move there; that Respondent's family told him that they decided that they didn't want to move out; and that Respondent's brother called him and said that he had harassed Respondent's family.
The Manager testified that he contemporaneously approached another family in another apartment in the Building ("the Other Family") with a buyout offer there as well; that he did not buy the Other Family out; that he renewed the Other Family's lease; that the Other Family remains in possession to this day; and that he never started a summary proceeding against the Other Family.
The Manager testified that, in reliance on the Agreement, he had construction plans drawn up, he talked to an architect and a structural engineer about structural work and renovation, he bought boxes, although he did not spend that much buying boxes, and he incurred travel expenses to the Building.
The Manager testified that he sent Respondent's mother a renewal lease in October of 2018, before his negotiation with Respondent's family; that he did not start litigation against Respondent's family before his negotiation with them; and that he did not threaten to evict Respondent's family before the negotiation with them.
The Manager testified on cross-examination that he only knows about the lease renewal from conversations with colleagues; that he approached Respondent's family with the buyout offer; that he is not aware of the provision of the Housing Maintenance Code concerning buyout offers; that Respondent knew there was construction in the Building; that he assumed that construction was disruptive to tenants in the Building, as a boyfriend of someone from the Other Family talked about it being loud and shaking a party wall in the Building; that he told Respondent to keep conversations between her and him confidential; that he did not tell her not to consult with an attorney; that he did not tell her that she couldn't have an attorney present for the negotiations; that he provided Respondent with the Agreement before it was executed, although he did not remember the time frame; that he was spending two days a week at the Building at the time that he was taking cabs to the Building, sometimes to talk to Respondent's family and sometimes for another reason; that he did not have cause to commence litigation against Respondent's family at the time; and that he primarily dealt with Respondent.
That statute is codified at N.Y.C. Admin. Code § 27-2004(a)(48)(f-2).
Respondent introduced into evidence a text that the Manager sent Respondent dated November 27, 2018 confirming Respondent's father's name.
The Manager testified on redirect examination that he wanted the Agreement to be confidential because he did not want other tenants in the Building to know about it, as Petitioner had a finite budget for buyouts and that he did not mean for Respondents to not speak to an attorney.
The Court granted Respondent's application to qualify Respondent's counsel's director of social work practice ("the Psychotherapist") as an expert witness in the field of psychotherapy. The Psychotherapist testified that she knows Respondent; that Respondent's counsel's office worked with Respondent to open up a public assistance case for her; that she supervised a social work intern who worked with Respondent; that she met with Respondent for an hour and a half; that she evaluated Respondent; that Respondent has a "crippling" mental illness, which causes her to hear voices and experience hypervigilance and disassociation; and that Respondent's illness complicates if not prevents Respondent from holding down a job and even from procuring other means of support like public assistance. The Psychotherapist testified on cross-examination that her diagnosis is preliminary and that she is not a treatment provider.
Respondent testified that she has lived in the subject premises all of her 41 years; that her parents had problems traversing the stairs up to the fourth floor of the Building, where the subject premises is; that Respondent's mother's highest level of education was sixth grade; that Respondent's mother spoke Tagalog and conversational English; that Respondent's mother could read and write simple things in English; that Respondent helped Respondent's mother read; that Respondent's father had a first-grade education; that Respondent's father spoke Tagalog and conversational English; that all that Respondent's father was capable of writing was his name and simple arithmetic; that Respondent's father would always ask her to read anything that he had to sign; that she attended college for four years although she did not get a degree; that she is not employed; that she was employed for five months as a cashier in 2015; that she left her employment after having had a nervous breakdown after having been bullied by co-workers; that her source of income is public assistance starting in February of 2020; that before that she was supported by her parents when they were alive and Respondent's brother; that she and her parents had no credit record; that she is disabled, having experienced flashbacks, bad dreams, and disassociations; that a "disassociation" means that she feels like she watches her body but does not feel like she is there; that in the fall of 2018, she was feeling depressed, didn't want to do anything or go anywhere, was stressed out about money, and was worried about where she would get her next meal; that she gets traumatic auditory hallucinations when she is stressed; that she met the Manager in October of 2018 when he was talking to Respondent's father outside the Building; that when Respondent's father then went upstairs, she mentioned to the Manager that she didn't want to see Respondent's father suffering going upstairs; and that she "muttered" out of frustration that she was sick of living with her parents, that she wanted to move to New Jersey with her boyfriend, and that she didn't have an actual plan to move out.
The Manager sent Respondent a text message on November 13, 2018, asking if Respondent if her parents knew why he was coming because he did not want to "shock" them. Respondent testified that the Manager subsequently spoke to Respondent's family in the subject premises; that the Manager said that he had a "great opportunity" for them when he offered the buyout; that the Manager said that under no circumstances could she tell anyone and that she couldn't have any lawyer present during any negotiations; that the Manager said that there was going to be construction in the Building, that no one's leases were going to be renewed, and that everyone had to leave because all of the apartments would be gutted and renovated; that the Manager said that he had lived in an apartment that got renovated and that if they stayed there they would have pipes coming out of the floors, things coming out of the walls, and electrical wires coming out of the walls; that she felt that construction was dangerous; that she thought that everybody had to leave; that Respondent's mother had been the one who signed leases for the subject premises; that she hadn't seen a lease renewal offer at this time; that she didn't know anything about the Rent Stabilization Law; that she had never been brought to Housing Court; that she thought an occupant without a lease would have to move out; that she thought that she would be forced into the street with all of her belongings because she saw that with her boyfriend's neighbor in New Jersey; that her parents were oblivious and just followed what she was talking about; that the Manager offered $30,000; and that she suggested $100,000.
Respondent testified that the Manager came to the subject premises with the Agreement, which was the first time that she had seen the Agreement; that the Manager did not show the Agreement to her while they waited for twenty minutes for a notary to come; that when a notary came, the Manager told her to look over the Agreement; that she looked at it for a few minutes; that it looked like any standard document; that she signed the Agreement; that she was feeling anxious and wanting to get it over with; that she was having auditory hallucinations that were getting louder, including a girl telling her that she had to leave, and the voice of someone who had abused her in the past who threatened to kill her if she didn't sign; that she disassociated when she signed the Agreement, meaning that she was in an automatic mode and out of her body for a minute or two; and that neither of her parents read the Agreement, but they signed it.
Respondent testified that the Manager presented her a check in her name; that she had to open a bank account to deposit the check; that she asked the Manager for help in finding another apartment; that the Manager did help her; that she found the Other Apartment, a two-bedroom apartment, through a real estate agent whose phone number the Manager sent her; that the landlord of the Other Apartment demanded payment of two years' of rent in advance; that she told Respondent's brother; that she and Respondent's brother looked at the Agreement; that it didn't look right; that Respondent's brother told her to call the Manager and say that they were not going to take the Other Apartment; that she called the Manager and asked him not to contact her anymore; and that she does not have some portion of the money to pay back to Petitioner.
Respondent introduced into evidence a text that the Manager sent to Respondent on November 15, 2018 saying, "hey Melba, just a reminder to keep this conversation confidential" and a text she sent the Manager asking him if Petitioner would still be her landlord if she moved.
Respondent testified on cross-examination that, at the time that the Agreement was signed, she thought moving out was the best thing for both her parents; that she thought it was in Respondent's father's best interest to move to an apartment on a lower floor; that this belief motivated her to enter into the Agreement; that her boyfriend lives in New Jersey; that she was planning on marrying her boyfriend and moving out; that living in the subject premises is now her plan, as her boyfriend has been living with his mother and his two siblings; that she has no access to the money Petitioner gave her at the time of her testimony; that she didn't sign a lease for the Other Apartment; that she gave the landlord of the Other Apartment $4,500 to secure it; that the landlord of the Other Apartment changed her mind about having Respondent's family move in; that Petitioner let her use the key to the Other Apartment but would not let her have the key; that the manager said that she couldn't discuss the Agreement with neighbors; and that the Manager said that under no circumstances was she to have an attorney present during any negotiations.
A text message from Respondent to the Manager dated January 10, 2019 says that she successfully used the key to the other apartment.
Respondent testified on redirect examination that she has no actual plans to move to New Jersey with her boyfriend; that she is not even sure about her boyfriend moving in to the subject premises now, as he is noncommittal; that the rent for the other apartment was $2,000; that her monthly household income at the time from Respondent's father's Social Security was $700; that she told the Manager that the key to the Other Apartment worked because the agent told her to tell Petitioner that; that she never actually had the keys to the Other Apartment; and that the construction was what was motivating her to sign the Agreement.
Discussion
The Court may enforce an out-of-court agreement of a rent-regulated tenant to surrender an apartment for consideration when a landlord otherwise had cause to evict a tenant, when the tenant obtains the advice of counsel, and when the tenant was the party that initiated the negotiation leading to an agreement. Merwest Realty Corp. v. Prager , 264 AD2d 313, 313-14 (1st Dept. 1999).
The evidence reveals some ambiguity over whether the Manager or Respondent initiated negotiations. The Manager testified that he approached both Respondent's family and the Other Family about a buyout, evidence that is consistent with the Manager taking the initiative, although Respondent also testified that she had volunteered to the Manager that she did not like her living arrangement in the subject premises, that she wanted to move in with her boyfriend, and that she felt bad that Respondent's father had to walk up four flights of stairs to get to the subject premises. Be that as it may, the Manager's text of November 13, 2018 asking Respondent if her parents knew why he was coming to the subject premises demonstrates that Respondent's mother, who was the tenant of record at the time as per the lease in evidence, did not initiate negotiations.
No party disputes, however, that Petitioner had no legal cause to seek possession of the subject premises from Respondent's family at the time of the negotiation over the Agreement, or that Respondent's family did not have counsel any time from initial contact up to their execution of the Agreement, while Petitioner retained counsel to draft the Agreement.
Respondent appeared by counsel at the trial, however.
Not only does Respondent's family's lack of representation militate against an enforcement of the Agreement, Dzaferovic LLC I v. Hernandez , N.Y.L.J., August 24, 2018 (Civ. Ct. Queens Co.), Paniccioli v. Div. of Hous. & Cmty. Renewal , 15 Misc 3d 1107(A)(S. Ct. Kings Co. 2007), but Respondent also asserts that the Manager specifically told her not to consult counsel which, if true, would seriously endanger Petitioner's case. Compare Reid v. DDEH, 103 East 102 LLC , 20 Misc 3d 1113(A)(S. Ct. NY Co. 2008) (misleading a tenant into believing that the tenant has no other option but to vacate a rent-stabilized apartment voids an out-of-Court surrender). The Manager contested Respondent's testimony that he affirmatively told her not to seek counsel. The New York City Housing Maintenance Code, as amended on December 2, 2015, more than two years before the events described here, assists in resolving this factual dispute.
An offer like the one that the Manager made to Respondent's family constitutes harassment unless, at the time of the Manager's initial contact with Respondent's family, Petitioner disclosed in writing, inter alia , that Respondent's family could consult with an attorney. N.Y.C. Admin. Code § 27-2004(a)(48)(f-2). Had Petitioner complied with the statute, the Court could much more easily resolve the dispute between Respondent and the Manager over whether he affirmatively discouraged her from consulting an attorney. Petitioner's noncompliance with the statute only gains more saliency in light of the Manager's text to Respondent urging her to keep their negotiations confidential, giving rise to an ambiguity about consulting counsel that the Manager did not clarify in the multiple text and email communications between him and Respondent in the record.
The extent of Petitioner's compliance with N.Y.C. Admin. Code § 27-2004(a)(48)(f-2) as such raises questions of public policy and equitable concerns, which also bear upon the Court's evaluation of the Agreement. 686 W. 204th St. LLC v. Athanasios, 44 Misc 3d 143(A)(App. Term 1st Dept 2014), BJW LLC v. Chung , 2018 N.Y.L.J. LEXIS 832, *8-10 (Civ. Ct. Kings Co.), Bravo Realty Corp. v. Lewis , 2004 N.Y.L.J. LEXIS 2966, *7-9 (Civ. Ct. NY Co.) The Agreement actually does include some disclosures required by N.Y.C. Admin. Code § 27-2004(a)(48)(f-2). However, the record does not show that Respondent's family received any disclosures at the time of the initial contact between the Manager and Respondent's family as required by the statute. Moreover, the preponderance of the evidence shows that Respondent's family first saw the Agreement on the date that they signed it, as the Manager sent Respondent a text two days before the execution of the Agreement to confirm Respondent's father's name, showing that Petitioner was still having the Agreement prepared up to that time. The Agreement also omits some of the disclosures required by the statute, such as the median asking rent for an apartment in the same community district as the subject premises and that Respondent's family's current employment and credit history may impact their ability to rent another apartment.
The Manager testified that he was unaware of N.Y.C. Admin. Code § 27-2004(a)(48)(f-2). Assuming arguendo the truth of this testimony, the Manager's ignorance of the law would not excuse Petitioner's failure to comply with it. Casale v. City of NY, 95 AD3d 744, 745 (1st Dept. 2012). Be that as it may, the Agreement shows obvious references to the statute. Paragraph 12(b) of the Agreement stated that Respondent's family had been advised that they may refuse contact with Petitioner, which would bar further contact for 180 days, the same language found in N.Y.C. Admin. Code § 27-2004(a)(48)(f-2)(5), and that Respondent's family may consult a guide called "the ABC's of Housing" provided by the Department of Housing Preservation and Development of the City of New York, the same guide that N.Y.C. Admin. Code § 27-2004(a)(48)(f-2)(3) refers to. The wording in the Agreement that almost verbatim tracks the statutory language demonstrates Petitioner's awareness of N.Y.C. Admin. Code § 27-2004(a)(48)(f-2). The extent of Petitioner's knowledge of the statute but disregard of it in pursuit of the Agreement exacerbates the inequity of enforcing the Agreement.
The Legislature enacted N.Y.C. Admin. Code § 27-2004(a)(48)(f-2) to advance a policy of protecting tenants from harassment by buyout offers, Local Law 83/2015(2)(b), finding, inter alia , that "some tenants do not understand their rights with respect to buyout offers, including their right to reject such an offer and remain in their apartment or to seek guidance from an attorney" and that "disclosure of certain factual and uncontroversial information in connection with buyout offers protect[s] tenant[s] from confusion or deception." Local Law 82/2015(3) (b). The record shows that Respondent and her family members had been living in a rent-regulated apartment on a long-term basis, were not employed, did not have a bank account, had no credit, and were so disconnected from the realities of an apartment search that Respondent texted the Manager to ask if Petitioner would still be her landlord if she moved. If Respondent was not the intended beneficiary of the protections the Legislature sought to enact, it is difficult to imagine who would be. The course of conduct that led to the Agreement therefore violated public policy, with implications for its enforceability. Compare Gutfreund v. DeMian , 227 AD2d 234, 234-35 (1st Dept. 1996) (a party may not recover for breach of a contract that violates a statute enacted for public protection). Petitioner's violation of public policy, in combination with Respondents' family's lack of counsel and Petitioner's lack of any ground to terminate Respondent's family's tenancy renders the Agreement unenforceable as a prima facie matter, even in the face of ambiguity about which party initiated negotiations.
Petitioner introduced evidence regarding its detrimental reliance on the Agreement. However, Petitioner did not prove how much it spent in consulting fees regarding a potential renovation of the subject premises. Nor did the Manager's travel expenses to the Building amount to an injury, given his presence at the Building anyway to supervise the construction there. And while Petitioner also did not prove how much, if anything, it spent on boxes it gave to Respondent's family, it is hard to imagine any such amount constituting actionable detrimental reliance.
The reasons stated above, as argued and addressed by the parties, constitute sufficient grounds for the Court to decline to enforce the Agreement. In dicta, the Court notes that one other aspect of the Agreement reveals how one-sided it is, to the point of being unconscionable. The Agreement provides that time is of the essence for Respondent's family to vacate possession of the subject premises by the Deadline and that on breach, not only would Petitioner be able to obtain possession of the subject premises, but Respondent's family would forgo the consideration Petitioner otherwise would have been paying them.
The Agreement is a contract. Assuming arguendo a breach of a contract, Petitioner would have remedies. One possible remedy would just relieve Petitioner from its obligation to pay Respondent's family anything. U.W. Marx, Inc. v. Koko Contracting, Inc. , 124 AD3d 1121, 1122 (3rd Dept. 2015), J. Petrocelli Constr., Inc. v. Realm Elec. Contractors, Inc. , 15 AD3d 444, 446 (2nd Dept. 2005). In such a scenario, Respondent's family would remain in possession of the subject premises and Petitioner would keep its money. Another possible remedy would be to sue Respondent's family for breach, which would entitle Petitioner to damages arising from the breach. Kapoor v. AWI Wireless, LLC , 159 AD3d 1027, 1030 (2nd Dept. 2018).
If damages, the remedy at law, would be inadequate to compensate Petitioner for Respondent's breach, then Petitioner may seek the equitable remedy of specific performance, Burke v. Bowen, 40 NY2d 264, 267 (1976), Zahler v. Niagara Cty. Chapter of NY State Asso. for Retarded Children, Inc., 112 AD2d 707, 708 (4th Dept. 1985), which is in this case would be Respondent's surrender of the subject premises. However, in order to obtain specific performance, Petitioner would bear the burden of proving that it was ready, willing, and able to perform its obligations under the Agreement. GLND 1945, LLC v. Ballard, 172 AD3d 1330, 1331 (2nd Dept. 2019). The Agreement, however, would let Petitioner have its cake and eat it, too, enabling Petitioner to both keep the money and evict Respondent, a compounding of remedies that does not accord with equity. Lavington v. Edgell , 127 AD2d 155, 158 (1st Dept. 1987). Cf. Morgan Stanley Mortg. Loan Tr. 2006-13ARX v. Morgan Stanley Mortg. Capital Holdings LLC , 143 AD3d 1, 9 (1st Dept. 2016) ("even for ordinary breach of contract claims, equity may require an award of monetary damages in lieu of specific performance")(emphasis added).
Granted, enforcement of a specific performance remedy by means such as this proceeding incurs damages such as legal fees. If an actual loss as such is difficult to determine precisely, parties to a contract may provide for the payment of liquidated damages upon its breach. Fitzpatrick v. Fitzpatrick , 139 AD3d 1002, 1003 (2nd Dept. 2016). However, Petitioner may only collect such liquidated damages if they bear a reasonable proportion to Petitioner's actual loss. Id. Otherwise, the damages amount to an unreasonable penalty. Id. The amount of loss the Agreement provides that Respondent would bear is at least $95,650, which bears no discernible relation to any loss Petitioner would incur upon Respondent's family's breach.
The Court takes judicial notice that similar provisions as the kind referenced here in the Agreement occur in settlements of summary proceedings with buyouts. However, in those cases, tenants are receiving consideration, because they face a risk of eviction without a payment if they do not settle. As noted above, Petitioner had no basis to evict Respondent's family at the time of the execution of the Agreement.
The Agreement also would charge Respondent's family use and occupancy at a rate of $300 a day for every day they remained in the subject premises past the deadline set therein. At a monthly rate of $667.08, Respondent's mother's rent-stabilized rent amounts to a daily rate of $21.93, so the use and occupancy set by the Agreement represents an increase of more than 1,300%. A contract that effectively would guarantee one party the benefit of performance (even if delayed) while denying the breaching party consideration — which moreover would apply to Respondent even if she performed one day late — together in the same contract that would then increase Respondent's liability for use and occupancy of the subject premises thirteenfold is not a contract between parties with equal bargaining power. While $95,460 is reasonable consideration for possession of the subject premises, zero for possession one day past the Deadline is not reasonable, especially without any apparent injury to Petitioner.
Petitioner argues that Respondent's acceptance of over $50,000 undermines any argument Respondent may have against enforcement of the Agreement. When similarly-situated tenants also received portions of buyouts, Courts still declined to enforce the buyout agreements involved, although in those instances the scale of money involved was either much less than in this case, Grasso v. Matarazzo, 180 Misc 2d 686, 689 (App. Term 2nd Dept. 1999) (a tenant did not return $2,500), or the tenant had offered to return the money. ABJ Milano LLC v. Howell, 61 Misc 3d 1037 (Civ. Ct. NY Co. 2018), BravoRealty Corp. , supra , 2004 N.Y.L.J. LEXIS at 2966, *7-9. Even when the Court would otherwise refrain from enforcing an illegal contract, the Court may still take into consideration the extent that nonenforcement would unilaterally enrich one party. Murray Walter, Inc. v. Sarkisian Bros., Inc. , 107 AD2d 173, 177 (3rd Dept. 1985) (the Court should consider, inter alia , the "cruelty of the forfeiture"). A tenant keeping more than $50,000 is different than a tenant keeping $2,500. Respondent testified that the money was not available to her and no evidence in the record shows that Respondent paid or offered it back to Petitioner. Moreover, Respondent testified that she paid $4,500 to another landlord to secure the Other Apartment even though she testified that that landlord changed her mind about allowing Respondent's family to move in there, which does not fully explain why Respondent would not be able to recover that amount.
If the Court would not enforce the Agreement then, the Court has some options regarding how to deal with Respondent's retention of the money. If the Court just dismissed this proceeding, Respondent would receive a windfall, which the law does not favor. Id. , Unger v. Leviton , 5 Misc 3d 925, 929 (S. Ct. Nassau Co. 2004). The Court could dismiss this proceeding without prejudice to Petitioner's plenary cause of action, but that would relegate Petitioner to possibly lengthy litigation against Respondent, and the record indicates that a money judgment would not be enforceable against her. The legal authority disfavoring windfalls to similarly-situated individuals renders this result unsatisfactory.
Respondent's return of the money to Petitioner would of course resolve this situation, but the record on trial of this matter makes unclear why Respondent cannot do that, just as the record leaves unresolved the problem of why Respondent cannot recover the deposit she left with the landlord of the Other Apartment. Respondent raises in her post-trial memorandum the possibility of determining that the amount that Respondent has been paid could be a possessory judgment in favor of Petitioner. While this remedy has some equitable appeal, the record at trial is insufficient to identify an amount certain, a timeline, and the actual availability of funds.
Respondent's post-trial memorandum refers to an amount being in escrow by counsel for Respondent's mother, and the parties referred to this in pre-trial conferences, but such information is technically dehors the trial record and, in any event, is incomplete.
Accordingly, the appropriate remedy on these particular facts requires development of facts that are not now in the record. Accordingly, the Court shall restore this matter for a conference to ascertain if additional fact-finding is necessary. See CPLR § 4404 (the Court, on its own initiative, may, inter alia , order a new trial of a separable issue). The Court will pick a conference time in email consultation with attorneys for the parties. The Court holds its final decision on this matter in abeyance pending the conference.
This constitutes the decision and order of this Court.