Opinion
2004-1218 KC.
Decided August 22, 2005.
Appeal by tenant, as limited by his brief, from so much of an order of the Civil Court, Kings County (K. King, J.), dated August 4, 2004, granting reargument and, upon reargument, vacating a stipulation of settlement and final judgment and setting the matter down for trial, as conditioned said relief upon tenant's deposit of $15,000 into court and as denied that branch of tenant's motion seeking to dismiss the petition.
Order insofar as appealed from reversed without costs, stipulation and final judgment unconditionally vacated, and petition dismissed.
PRESENT: PESCE, P.J., PATTERSON and BELEN, JJ.
The record in this "commercial" nonpayment proceeding reveals that, long before this proceeding was commenced, landlord applied for a variance for the 34 existing residential units on the second floor of the subject building, while maintaining the first floor for retail and manufacturing uses. In support of the motion to vacate the stipulation settling this proceeding and to dismiss, tenant averred that he resides in one of the units on the second floor which landlord applied to legalize, and a careful reading of landlord's opposition papers reveals that landlord did not dispute this but instead relied on the commercial nature of tenant's lease. In view of landlord's awareness of the residential use of the premises and of its lack of a residential certificate of occupancy and multiple dwelling registration, a final judgment awarding landlord rent cannot be entered and this nonpayment proceeding must be dismissed (Multiple Dwelling Law §§ 301, 302; 325 [b]; see Matter of Blackgold Realty Corp. v. Milne, 69 NY2d 719; Hart-Zafra v. Singh, 16 AD3d 143 [1st Dept 2005]; Jalinos v. Ramkalup, 255 AD2d 293 [2nd Dept 1998]; but cf. Zane v. Kellner, 240 AD2d 208 [1st Dept 1987] [directing, in a plenary action, payment of use and occupancy into court pendente lite]). Since the registration and certificate-of-occupancy requirements of the Multiple Dwelling Law further the public interest in the safety of buildings and their tenants, tenant's implicit waiver, in the stipulation, of the benefit of these statutes cannot be given effect ( see e.g. Matter of Abramovich v. Board of Educ. Of Cent. Sch. Dist. No. 1 of Towns of Brookhaven and Smithtown, 62 AD2d 252, 254, affd 46 NY2d 450 ["although the waiver of statutory or even constitutional rights has long been recognized as acceptable practice so long as it is done intelligently and voluntarily, no effect will be given to a waiver which violates public policy"]; Esposito v. Ango, 3 Misc 3d 138[A], 2004 NY Slip Op 50555[U] [App Term, 2d 11th Jud Dists]; Meaders v. Jones, 2003 NY Slip Op 51123[U] [App Term, 2d 11th Jud Dists], affd 15 AD3d 490; Nii v. Quinn, 195 Misc 2d 821 [App Term, 2d 11th Jud Dists 2003]). Accordingly, tenant's motion to vacate the stipulation is granted unconditionally and the petition is dismissed.
Inasmuch as, upon tenant's motion to reargue, the court considered the merits of tenant's application and changed its determination, we reject landlord's claim that the order appealed from merely denied reargument and is not appealable ( Buccella v. Hofstra Univ., 288 AD2d 118).
We note that the sympathy of the dissenting Justice for this landlord is misplaced. In light of landlord's knowledge of and acquiescence in the residential use of the premises, landlord's commencement of a "commercial" nonpayment proceeding in an attempt to circumvent the proscriptions of the Multiple Dwelling Law borders upon the sanctionable. In addition, the claim made by the dissenting Justice that "the mere absence of a certificate of occupancy does not relieve a tenant of his obligation to pay rent" is correct only in the commercial context, but, as set forth above, is contrary to both statute and binding case precedent where, as here, the premises is used residentially with the knowledge and acquiescence of the landlord.
Pesce, P.J., and Belen, J., concur.
Patterson, J., dissents in a separate memorandum.
I disagree with the majority's decision to entertain this appeal and to vacate the so-ordered stipulation based on the absence of a certificate of occupancy and a multiple dwelling registration. Accordingly, I respectfully dissent.
As a threshold matter, I would conclude that no appeal lies from the order of the court below. On March 10, 2004, tenant moved, by order to show cause, to vacate a stipulation and for judgment in the amount of $20,800. The court below denied the motion, and tenant moved to reargue. Tenant's motion to reargue was granted on the condition that he deposit $15,000 by August 13, 2004, and the matter was set down for trial on August 24, 2004. The order further directed that in the event of a default in payment, tenant's motion to reargue would be "deemed denied." Tenant defaulted in payment and now appeals from the order conditionally granting him reargument. Because tenant failed to satisfy the condition of the order, his motion for reargument must be "deemed denied" and his appeal should be dismissed, as no appeal lies from an order denying reargument. In any event, even if tenant's appeal were considered on the merits, I would vote to affirm the order below.
It is well-settled that "[s]tipulations of [s]ettlement are favored by the courts and not lightly cast aside" ( Hallock v. State of New York, 64 NY2d 224, 230 [citations omitted]). "Only where there is cause sufficient to invalidate a contract, such as fraud, collusion, mistake or accident, will a party be relieved from the consequences of a stipulation made during litigation" ( id.). In my view, no basis exists to disturb the stipulation at issue here.
Courts have held that noncompliance with the Multiple Dwelling Law does not implicate the Civil Court's subject matter jurisdiction and can be waived by a tenant by stipulation ( see Meaders v. Jones, 15 AD3d 490 [2nd Dept 2005]; 346-52nd Realty, LLC. v. La Estancia, Ltd., 7 Misc 3d 134[A], 2005 NY Slip Op 50684[U] [App Term, 1st Dept]).
Moreover, the mere absence of a certificate of occupancy does not relieve a commercial tenant of his obligation to pay rent ( see 9 Montague Terrace Assoc. v. Feuerer, 191 Misc 2d 18, 19-20 [App Term, 2d 11th Jud Dists 2001]; cf. Nii v. Quinn, 195 Misc 2d 821 [App Term, 2d 11th Jud Dists 2003]), especially where "the tenant cannot demonstrate that any wrongful acts by the landlord materially deprived it of the beneficial use of the premises subsequent to the commencement of the lease" ( Jordache Enterprises, Inc. v. Gettinger Assocs., 182 AD2d 488, 489-490 [1st Dept 1992]). Tenant enjoyed full use of the premises and cannot now rely on the absence of a multiple dwelling registration and a certificate of occupancy to invalidate a so-ordered stipulation and avoid paying rent.
As for the majority's argument that no duty to pay rent exists because the instant nonpayment proceeding is not "commercial," no such finding was made by the court below. To the contrary, the record shows that tenant executed a strictly commercial lease. Without any further factual findings, it cannot be said that the proceeding is not "commercial." At the very least, a hearing should be held for the court below to determine whether landlord knew of and acquiesced in tenant's use of the space as residential ( see A Real Good Plumber, Inc. v. Kelleher, 191 Misc 2d 94, 96 [App Term, 2nd Dept 2002]).