Opinion
1321/2017
07-10-2017
1916 Persaud Realty Inc., Petitioner, v. Jessica Lajar, Respondent, DEPARTMENT OF HOUSING PRESERVATION AND DEVELOPMENT Respondent, "JOHN DOE" & "JANE DOE", Respondents-Occupants.
Attorney for Petitioner: Marlowe H. P. Boettcher, Esq. Mark H. Cohen & Associates 1942 Williamsbridge Road Bronx, New York 10461 (718) 933-1710 Attorney for Respondent: Roland Nimis, Esq. Legal Services NYC — Bronx 349 East 149th Street, 10th floor Bronx, New York 10451 (718) 928-3700
Attorney for Petitioner: Marlowe H. P. Boettcher, Esq. Mark H. Cohen & Associates 1942 Williamsbridge Road Bronx, New York 10461 (718) 933-1710 Attorney for Respondent: Roland Nimis, Esq. Legal Services NYC — Bronx 349 East 149th Street, 10th floor Bronx, New York 10451 (718) 928-3700 Diane E. Lutwak, J.
Recitation, as required by CPLR Rule 2219(a), of the papers considered in the review of the Respondent's Motion for Discovery: PapersNumbered Notice of Motion with Attached Affirmation, Affidavit & Exhibits A-E 1 Respondent's Memorandum of Law in Support 2 Affirmation in Opposition & Exhibit A 3 Reply Affirmation 4
Upon the foregoing papers, the Decision and Order on this Motion are as follows: PROCEDURAL HISTORY
Petitioner 1916 Persaud Realty Inc. commenced this holdover eviction proceeding against Respondents Jessica Lajar, John Doe and Jane Doe seeking possession of Apartment 7 at 1916 Crotona Avenue, Bronx, New York by Petition dated January 4, 2017. The Petition states as the basis for the proceeding that the tenancy was terminated on the grounds that the subject apartment is "not subject to the Rent Stabilization Law, Rent Control or any other form of rent regulation, due to high rent vacancy deregulation." See Petition at ¶¶ 10 & 11, and "Thirty (30) Day Notice of Termination" dated October 31, 2016, a copy of which, along with proof of service, is attached to the Petition and incorporated therein by reference.
The Petition was originally returnable on January 25, 2017, was adjourned on that date to February 10, 2017 for Respondent to retain counsel and then adjourned to March 29, 2017 for trial. Respondent's counsel served and filed an Answer dated February 10, 2017 and then made a motion returnable March 29 seeking leave to conduct discovery on her defense of failure to plead the proper regulatory status. The case was then adjourned with a briefing schedule first to May 16 and then to June 16.
Attached to Respondent's motion is a Proposed Request for the Production of Documents demanding the production for inspection and copying of six categories of documents pertaining to the subject premises for the 20-year period of 1998 to the present: (1) leases and lease riders; (2) original and amended registration forms and registration-related documents; (3) records of rents charged and paid; (4) tenant names and dates of occupancy; (5) rent increase related documents, including those concerning any improvements made in the apartment; and (6) any other documents showing rents charged and registered.
Also attached to Respondent's motion is a copy of the rent registration history for her apartment from the New York State Division of Housing and Community Renewal ("DHCR"), which shows that: from 1984 through 2009 the apartment status was Rent Stabliized; in 2010 the apartment status was "PE" — permanently exempt — due to "high rent vacancy"; the registrations for the years 1987 through 1998 were mostly filed by July 31 of the registration year, except for 1988 and 1989 when they were filed on September 15 and August 31, respectively; the registrations for the years 1999 through 2003 were all filed on August 8, 2003; the registrations for the years 2005 through 2010 were all filed on June 6, 2013; the same tenant lived in the apartment from 1984 through 1998 and was charged a monthly rent that increased over that 14-year period from $225 in 1984 to $474.24 in 1998; in 1999 the apartment was registered in the name of a new tenant with a rent reflects a 130% increase over the prior tenant's last rent (raised from $474.24 to $1091.61) with "vac/leas" and "imprvmnt" listed as the reasons for the "differ./change"; starting in 2001 and continuing in each year through 2009 Petitioner or its predecessor-in-interest registered both a "legal regulated rent" and a lower "actual rent paid"; starting in 2001 and continuing in each year through 2009 "Section 8" was listed as one of the reasons for the "differ./change", with "imprvmnts" listed as another reason for the "differ./change" in 2005, 2007 and 2008.
Respondent's attorney argues that the DHCR rent registration history for the subject premises establishes "ample need" under CPLR § 408, New York University v Farkas (121 Misc 2d 281 [Civ Ct NY Co 1983]), and other case law to grant the discovery request, and that courts have regularly granted disclosure in holdover proceedings when the tenant raises a defense of illegal deregulation and/or rent overcharge.
In opposition, Petitioner argues that Respondent has failed to establish the requisite "ample need" in that "the request is not narrowly tailored to clarify disputed facts, discovery will serve only to prejudice the Petitioner by unreasonably delaying the proceedings, and there is no reasonabl[e] way to alleviate that prejudice through an order of the court." Affirmation in Opposition at ¶ 8. With regard to Respondent's first, third and fourth discovery requests, Petitioner states that "Respondent was given copies of any and all leases entered into for the subject premises," id. at ¶ 10, that "[i]t is unclear what information the Respondent can learn from seeing the last 20 years of leases for the subject premises, id. at ¶ 13, "[w]hether or not the Respondent has been paying rent since 1998 is entirely inconsequential to the proceeding", id. at ¶ 18, and, with regard to Respondent's request for prior tenants' names and dates of occupancy, that "[a]gain, it is unclear how this will 'determine information directly related to the cause of action' when this is in fact a month-to-month holdover", id. at ¶ 20. With regard to Respondent's second, fifth and sixth discovery requests, Petitioner argues that the documents requested are all "freely and publicly available at the DHCR office or online."
On reply, in addition to reiterating that ample need for discovery has been shown, Respondent's attorney counters that the only lease and lease rider Respondent has a copy of is her own, not those of any prior tenants, which are needed because "Petitioner's retroactive registrations and steep rent increases establish Respondent's improper deregulation claim and the leases underlying those registrations are necessary to adjudicate the claim." Reply Affirmation at ¶ 10. Similarly, the rent records and names and dates of prior tenants are needed "to determine whether the rent history is consistent with Petitioner's rent registration history," id. at ¶ 12, and "to determine whether Petitioner improperly deregulated the apartment," id. at ¶ 14. Respondent further argues that the only document underlying her claim of illegal deregulation is the DHCR's rent registration statement for her apartment, and the requested documents are not available to the public but rather "are in Petitioner's exclusive possession". Id. at ¶ 18. DISCUSSION
In summary proceedings, a party requesting discovery must obtain leave of court (CPLR § 408 ) and to obtain such leave, must demonstrate "ample need." Antillean Holding Co v Lindley (76 Misc 2d 1044, 1047, 352 NYS2d 557 [Civ Ct NY Co 1973]). In determining whether a party has established ample need, courts consider a number of factors, not all of which need to be present in every case, including: whether the movant has asserted facts to establish a claim or defense; whether there is a need to determine information directly related to the claim or defense; whether the requested disclosure is carefully tailored and likely to clarify the disputed facts; whether prejudice will result from granting leave to conduct discovery; and whether any prejudice caused by granting a discovery request can be diminished by an order fashioned by the court for that purpose. See New York University v Farkas (121 Misc 2d 643, 647, 468 NYS2d 808 [Civ Ct NY Co 1983]).
Courts have regularly granted disclosure in eviction proceedings when there are disputes as to whether an apartment is subject to Rent Stabilization and/or there is a rent overcharge. See, e.g., 2701 Grand Assn LLC v Morel (50 Misc 3d 139[A], 31 NYS3d 924 [App Term 1st Dep't 2016])(reversing lower court which had denied tenants' motion to vacate stipulation and to file an amended answer and finding that, "Tenants also demonstrated ample need for limited discovery relating to the apartment improvements that were the basis of the $891 rent increase"); Aimco 322 E 61st St LLC v Brosius (50 Misc 3d 10, 12, 21 NYS3d 803, 805 [App Term 1st Dep't 2015])(reversing lower court which had denied tenant's motion for discovery and finding that "Tenant demonstrated ample need for limited discovery relating to the apartment improvements that were the basis for the purported deregulation"); 150 W 82nd St Realty Assoc v Linde (36 Misc 3d 155[A], 964 NYS2d 61 [App Term 1st Dep't 2012])(affirming lower court's order granting discovery to tenant who had "demonstrated ample need for limited discovery relating to the apartment improvements that were the basis of the $1,061 rent increase"); 75 Post Realty LLC v Chavez (L & T # 73077/16, NYLJ 1202792096995 [Civ Ct NY Co June 20, 2017])(granting discovery where respondent-tenant alleged that the DHCR's rent registration statement showed a "pattern of fraud necessitating a look back period beyond four years"); Ruradan Corp v Natiello (21 Misc 3d 1129[A], 873 NYS2d 515 [Civ Ct NY Co 2008])(granting motion for discovery where tenant "has set forth a good faith argument that the premises may in fact be subject to rent regulation" and that "any information that may exist to further support said claim [of] the prior use of the premises and related unit, recouped renovations prior to occupancy, rent history lies solely in the hands and control of petitioner"); IWC 879 Dekalb, LLC v Walsh (46 Misc 3d 1227[A], 13 NYS3d 850 [Civ Ct Kings Co 2015])(granting discovery to tenants who "asserted facts to establish a defense that the Apartment was improperly deregulated and that they may have been overcharged; that they have a need to obtain information regarding all rents charged, and rent increases imposed, from 2004 to the present, as well as documentation regarding the tenancies during that period"); Ruradan Corp v Natiello (21 Misc 3d 1129[A], 873 NYS2d 515 [Civ Ct NY Co 2008])(granting discovery motion where tenant "has set forth a good faith argument that the premises may in fact be subject to rent regulation" and that "any information that may exist to further support said claim [of] the prior use of the premises and related unit, recouped renovations prior to occupancy, rent history lies solely in the hands and control of petitioner"); 480-486 Broadway, LLC v No Mystery Sound, Inc (11 Misc 3d 1056[A], 815 NYS2d 494 [Civ Ct NY Co 2006], aff'd on other grounds, 851 NYS2d 57, 2007 NY Misc LEXIS 6326 [App Term 1st Dep't 2007])(permitting tenant to conduct discovery to support its claim of Loft Law protection). Events beyond the four-year statute of limitations may be considered to determine whether the apartment is regulated, Gersten v 56 7th Ave LLC (88 AD3d 189, 199-201, 928 NYS2d 515 [1st Dep't 2011]); East West Renovating Co v NY State Div of Hous & Cmty Renewal (16 AD3d 166, 791 NYS2d 88 [1st Dep't 2005]), and to determine "whether a fraudulent scheme to destabilize the apartment tainted the reliability of the rent on the base date," Matter of Grimm v State of New York Div of Hous & Community Renewal Off of Rent Admin (15 NY3d 358, 367, 938 NE2d 924, 929, 912 NYS2d 491, 496 [2010]).
Petitioner acknowledges the availability of discovery in proceedings such as this one but asserts in a conclusory manner that Respondent has failed to establish ample need, Affirmation in Opposition at ¶ 8, the requested documents "are freely and publicly available at the DHCR office or online", id. at ¶ 22, and the document production request is "a fishing expedition", id. at ¶ 14. The Court disagrees and finds that Respondent has established ample need to obtain information from Petitioner relevant to her defense of failure to plead the proper regulatory status of the premises. Irregular information recorded in the DHCR's Apartment Registration Statement for Respondent's apartment raises a number of questions as to the correctness of the "Permanently Exempt" status registered in 2010:
Why was the 1999 registration — which reflects a 130% increase over the rent registered in 1998 - not filed until the year 2003, along with the registrations for the four years of 2000 through 2003?
Why were the registrations for the six years of 2005 through 2010 — including the "Exempt/High Rent Vacancy" registration for 2010 — not filed until June 6, 2013?
Why were "imprvmnt" and "Section 8" listed as the reasons for the difference/change in the rent in the four years of 2003, 2005, 2007 and 2008?
Why are there differences in the "legal regulated rent" and "actual rent paid" for the nine years of 2001 through 2009 yet nothing recorded in the "preferential rent" column?
Respondent has established ample need to secure answers to these questions from Petitioner as they go to the heart of the key issue in this holdover proceeding — whether or not Respondent's apartment was legally deregulated or whether it is still Rent Stabilized. Respondent's request for the opportunity to inspect and copy six categories of fundamental rent-related documents pre-dating the commencement of Respondent's tenancy is carefully and narrowly tailored and likely to resolve this issue. However, the court in an exercise of discretion and for the sake of economy is paring down the request to a more appropriate time frame of 1998 through 2010, the year the apartment was registered with the DHCR as "permanently exempt", without prejudice to Respondent's right to seek additional discovery for the time period after 2010 if documents produced give rise to further questions that warrant an opportunity to inspect and copy documents dating after 2010. Petitioner will not be prejudiced by the Court granting Respondent's request for these documents — which Petitioner should have within its possession - and should be able to make them available for inspection and copying promptly, well prior to the first adjourned date currently available in Part K. CONCLUSION
Accordingly, the Court grants Respondent's motion for leave to conduct discovery and directs Petitioner to comply by July 31, 2017 with the Document Production Request annexed to Respondent's motion papers, for the period of 1998 through and including 2010. This proceeding is hereby restored to the Court's calendar on August 22, 2017 for settlement, trial or further motion practice on notice pursuant to the CPLR. Copies of this Decision & Order will be provided in court to the parties' respective attorneys or placed in their courthouse mail slots. This constitutes the Decision and Order of this Court. Diane E. Lutwak, Hsg. Ct. J. Dated: Bronx, New York July 10, 2017