Opinion
85489/2009.
Decided April 26, 2010.
Steven T. Gee, New York City, for petitioner.
Geovanny Fernandez, New York City, for respondents.
For the purposes of disposition, the above two cases have been consolidated because they contain nearly identical facts and law.
I. Facts and Procedural History.
In September 2009, petitioner commenced separate nonpayment proceeding against both respondent-tenants. Petitioner, Chinatown Preservation HDFC, is a not-for-profit corporation that obtained title of the subject premises in February 2007. Yu Hua Chen has resided in Unit 6 of the subject premises since January 2006. Pan De Ming has resided in Unit 11 of the subject premises since October 1999.
Both apartments previously had illegal partition walls creating three bedrooms. In June 2009, the New York City Department of Buildings (DOB) and the Fire Department inspected the subject premises and issued a violation for illegal partition walls. Respondent Chen vacated the premises for approximately one month while the partitions were removed. Petitioner did not charge respondent Chen rent for that time period. Respondent Ming had removed the partition wall previously in response to petitioner's request and was permitted to stay after the inspection. In November 2009, the DOB issued a second violation because respondent Chen reinstalled bunk beds that formed an illegal partition.
A. Denial of Respondents' Motions to Dismiss Nonpayment Petition.
Along with several other tenants in the subject building, respondents commenced an action in September 2009 in New York State Supreme Court, New York County, alleging that petitioner had breached respondents' leases. According to respondents, petitioner failed to provide promised services by not providing three bedrooms and that the petitioner engaged in fraud by engaging in deceptive trade practices to overcharge them. Respondents moved to dismiss or stay their nonpayment petitions in light of the ongoing Supreme Court action. On October 23, 2009, the Honorable David Cohen, in a short written decision, denied both respondents' motions to dismiss the nonpayment petitions. Judge Cohen found that respondents failed to produce any documentary evidence entitling them to a dismissal and that the nonpayment petition in Housing Court and the pending action in Supreme Court are not identical.
B. Petitioner's Pending Cross-Motion to Dismiss Respondents' Counterclaims.
Respondents served verified answers on November 9, 2009, including counterclaims in the answer. The context of the counterclaims is essentially the same as those issues raised in the Supreme Court action. The counterclaims allege that petitioner and/or petitioner's predecessor in interest breached the lease by failing to provide three bedrooms (Answer, Nov. 9, 2009, ¶ 4); overcharged respondents by violating the rent stabilization laws and by charging a broker fee and key money (Answer, Nov. 9, 2009, ¶ 5); failed to provide the services agreed to by the lease, "including but not limited to number of bedrooms" (Answer, Nov. 9, 2009, ¶ 6); and "fraudulently represented subject premises as a 3 bedroom apartment at inception of lease agreement." (Answer, Nov. 9, 2009, ¶ 7.) On November 27, 2009, respondents moved to amend their answers to include a jury demand. On December 8, 2009, petitioner submitted a reply to respondent's answer with affirmative defenses contending a failure to state a cause of action, that the four-year statute of limitations had expired, and that respondents lack privity to maintain their claims against petitioner. (Reply, Dec. 8, 2009, ¶ 2, 4, 6.)
On February 5, 2010, petitioner cross-moved to dismiss or sever respondents' counterclaims. Petitioner cited New York City Civil Court Act § 208(d), which "provides that a party may not interpose or maintain a counterclaim if it does not relate to one of the subdivisions specified in Section 110(a) of NYC Civil Court Act." (Affirmation of Gee, Feb. 5, 2010, ¶ 16.) Petitioner also argued that the lease precludes respondents from interposing counterclaims and that the only exception to the waiver clause would arise if respondents' counterclaim is "inextricably intertwined with the landlord's entitlement to rent, such as breach of warrant of habitability." (Affirmation of Gee, Feb. 5, 2010, ¶ 17-18, 22.) Petitioner argued that dismissing respondents' counterclaims will not result in prejudice. According to petitioner, respondents already commenced an action in Supreme Court alleging the same causes of action. (Affirmation of Gee, Feb. 5, 2010, ¶ 23.) Respondents contend that in their pending Supreme Court action, the Honorable Emily Jane Goodman denied their motion to stay the Supreme Court action "in an oral, unrecorded opinion in Chambers . . . because respondent[s'] claim for diminution of services and overage are Landlord Tenant matters." (Affirmation of Fernandez, Mar. 8, 2010, ¶ 8.) Respondents cite no other justification to support their position that their counterclaims should stand.
C. Denial of Respondent's Motion to Consolidate.
On November 27, 2009, respondents moved to consolidate the instant proceeding with three similar cases involving tenants in the same building, all also represented by respondents' attorney. The Honorable Brenda Spears denied respondents' motion to consolidate the instant cases, along with a fifth additional tenant, on November 23, 2009, under Index No. L T 85492/2009. After considering petitioner's affirmation in opposition and respondents' reply affirmation in support, this court denied respondent's motion to consolidate on December 8, 2009, in short written decision holding that this court is collaterally estopped from granting the relief that Judge Spears denied. The six nonpayment proceedings, all involving nearly identical motions, have been sent to different resolution parts. The proceedings involving respondents Chen and Ming were assigned to this court.
D. Respondent Chen's Motion for Leave to Conduct Disclosure.
On December 4, 2009, the Honorable Joseph Capella denied respondent Chen's subpoena request, holding that a "[t]rial subpoena must specify documents sought with reasonable particularity. This subpoena is actually a request for discovery." (Order Denying Subpeona, Capella, J. [Hous Part, Civ Ct, NY County Dec. 4, 2009].) On December 30, 2009, respondents Chen and Ming moved for leave to conduct disclosure under CPLR 408; sought a stay until the production of documents is completed; and included a jury demand in their amended answers. Respondent Chen also asked in limine that the November 2009 DOB violation be excluded at trial along with evidence concerning respondent Chen's alleged construction of bunk beds because respondent Chen contends that this evidence would be substantially prejudicial.
On February 5, 2010, respondent Ming withdrew his motion to conduct disclosure without prejudice. Respondent Chen's motion to conduct disclosure is still pending and must be decided.
E. Respondents' Pending Motions for Summary Judgment and to Amend Answers.
On March 5, 2010, respondents moved for summary judgment on their counterclaims for breach of lease, diminution of services, fraud, and overcharge. Petitioner argues that summary judgment was not appropriate. According to petitioner, material issues of fact are in dispute, and respondents failed to meet their burden to satisfy summary judgment.
Respondents also moved for leave to file an amended answer to include a jury demand and allegations that petitioner filed a holdover petition against respondents in April 2009 that was discontinued after petitioner allegedly anonymously called the DOB to report the illegal partition walls. Respondents additionally request summary judgment granting respondent attorney fees from the April 2009 holdover from petitioner.
F. Stipulation Agreements.
On January 6, 2010, the parties entered a stipulation for respondents' payment without prejudice of the full amount of rent allegedly due to petitioner as of January 31, 2010, to be held by respondent's attorney.
II. Petitioner's Cross-Motion to Dismiss or Sever Respondents' Counterclaims.
Petitioner's argument that the Housing Part lacks jurisdiction over respondents' counterclaims is weak at best. Although the Housing Part does have limited jurisdiction under New York City Civil Court Act § 110 (a), the Civil Court "is the preferred forum for the resolution of landlord-tenant disputes where the tenant may obtain full relief in a pending summary proceeding." ( All 4 Sports Fitness, Inc. v Hamilton, Kane, Martin Enter., Inc. , 22 AD3d 512, 513 [2d Dept 2005].)
Petitioner does not explain why the Housing Part would not have jurisdiction over respondents' counterclaims. New York City Civil Court Act § 110 (a) provides that tenants may allege defenses in two situations: (1) when a landlord fails to make repairs under RPAPL 755, and (2) when there are serious violations under MDL § 302-a. ( See NY Civ. Ct. Act § 110 [a] [5].) Thus, if a tenant alleges that the landlord's failure to make repairs constructively evicts the tenant, or "is, or is likely to become, dangerous to life, health, or safety," then the court may stay a proceeding for nonpayment of rent. (RPAPL 755 [1] [a].) Similarly, if premises contain a rent-impairing violation that constitutes a present or future "fire hazard or a serious threat to the life, health or safety of occupants thereof," then the tenants may plead the affirmative defense of a breach of habitability in a nonpayment proceeding as long as they also deposit with the court clerk a check for the rent amount sought. (MDL § 302-a [2] [a], [3] [c].) Respondents counterclaim for rent overcharge, diminution of services, fraud, and breach of contract. Respondents do not allege that petitioner failed to make repairs and thus constructively evicted them, or that the apartment contains a rent-impairing violation. Thus, respondents' counterclaims fall outside the explicitly allowed affirmative defenses. Petitioner fails to argue that respondents' counterclaims do not relate to any provision in New York City Civil Court Act § 110.
Petitioner also contends that the lease provision containing a waiver for counterclaims bars respondents' counterclaims. Generally, "[c]ourts enforce lease provisions precluding a tenant from interposing a counterclaim unless the counterclaim is inextricably intertwined with the landlord's entitlement to rent or possession of subject apartment of the underlying proceeding." ( Wai Chan v Gao Xiao Ying, 10 Misc 3d 1065[A], 2005 NY Slip Op 52166 [U], *3 [Hous Part, Civil Ct, NY County Dec. 23, 2005].) Waivers of counterclaims are enforceable, especially in summary proceedings, because "the character of summary proceedings, which are designed to expeditiously resolve disputes between landlord and tenant, would be undermined if tenants were permitted to litigate complex counterclaims in the context of summary proceedings." ( Bomze v Jaybee Photo Suppliers, Inc., 117 Misc 2d 957, 958 [App Term 1st Dept 1983].) If the tenant asserts a breach of the warrant of habitability in the counterclaim, however, waiver clauses in residential leases are not generally enforced. ( E.g., Sutton Fifty-Six Co. v Fridecky, 93 AD2d 720 [1st Dept 1983] [allowing counterclaim for breach of warrant of habitability where tenants stopped paying rent when brick wall blocked light, air, and ventilation from premises].) Here, respondents do not allege breaches of the warrants of habitability.
Respondents' claims that the waiver provision was not knowing, intelligent, and voluntary fails because respondents signed the leases and there is no showing that they did not have a full opportunity to read and understand the leases. That respondents do not speak English does not preclude the enforcement of the lease. Respondents' request for a hearing into the voluntariness of the waiver clause is denied. Only Supreme Court, in any event, has the jurisdiction to reform a lease.
Another exception to enforcing a waiver clause arises if a respondent can demonstrate that a counterclaim is so inextricably intertwined to the nonpayment proceeding that the counterclaims "bear directly upon the landlord's right to possession." ( Lucas v Florent, Inc. , 19 Misc 3d 760 , 762-63 [Hous Part, Civ Ct, NY County 2008].) Counterclaims "inextricably intertwined" with the petitioner's claims will not be dismissed. ( Id.) This is so because "joint resolution of the claims will expedite disposition of the entire controversy, avoid multiplicity of other lawsuits between the parties to accomplish the same result, do speedy justice for all and eliminate greater delay and expense.'" ( Ring v Arts Intl, Inc. , 7 Misc 3d 869 , 881 [Hous Part, Civ Ct, NY County 2005], quoting Haskell v Surita, 109 Misc 2d 409, 414 [Hous Part, Civ Ct, NY County 1981].)
Respondents' counterclaims are for rent overcharge, diminution of services, fraud, and breach of contract. Although some overcharge counterclaims have been found to be inextricably intertwined and thus permitted despite contrary lease provisions, this is not always the case. ( E.g., Yanni v Bruce Brandwen Productions, Inc., 160 Misc 2d 109, 112 [Hous Part, Civ Ct, NY County 1994] [holding that overcharge counterclaim is inextricably intertwined where administrative review previously established a willful overcharge but failed to compute the amount owed to respondent].) If the counterclaims for overcharge are for a large amount that go back several years and the landlord's claim is for a "relatively small amount of rent," then allowing the counterclaims "would only serve to turn this proceeding from summary to protracted and bog down its disposition.'" ( Lucas v Florent, 19 Misc 3d at 763, quoting Ring v Arts Intl, 7 Misc 3d at 881.) In Lucas, the court held that although the respondent's tax overcharge counterclaim was intertwined "to the extent that the overpayment may offset the claim," because the claim would require the Housing Part to conduct hearings on the tax certiorari proceedings, the counterclaim should be severed to preserve the integrity of the summary proceeding. ( Id.)
Here, respondents' counterclaims for overcharge relate back to alleged violations of the Rent Stabilization Code between the prior landlord and respondent Ming in 1999 and between the prior landlord and a prior tenant in 2002 for respondent Chen. Petitioner's claim for nonpayment of rent dates back one year to April 2009. Although a finding in respondents' favor might allow an abatement in the amount of rent due to petitioner, respondents' counterclaims for overcharge are not inextricably intertwined with petitioner's current entitlement to rent. Further, allowing respondents' counterclaims would require this court to engage in complicated and protracted proceedings that would bog down this court's judicial resources. Especially because these exact allegations are the subject matter of a pending action in the Supreme Court, respondents are not prejudiced by the dismissal of their counterclaim for alleged overcharge. Thus, respondents' argument that the four-year statute of limitations for raising an overcharge complaint should not apply is now academic in this proceeding and must be taken up in the Supreme Court action.
Respondents' counterclaims for diminution of services and breach of contract regarding petitioner's alleged failure to provide three bedrooms are arguably inextricably intertwined with petitioner's entitlement for rent. In these claims, respondents allege that because respondents no longer enjoy three bedrooms, they are not required to pay rent, at least in the previously agreed-upon amount, to petitioner. Petitioner argues that it requested for safety reasons the removal of the walls when it learned the walls were illegal (Affirmation of Gee, Mar. 8, 2010, ¶ 6) and that "the fact that an illegal wall had to be removed from the subject premises, possibly installed by Respondent, would not entitle him to a reduction of rent for diminution of services." (Affirmation of Gee, Mar. 8, 2010, ¶ 11.) These are issues for trial. The resolution of these issues in respondents' favor might result in an abatement in the amount of rent due to petitioner. Thus, petitioner's motion is denied in regard to respondents' counterclaims for diminution of services and breach of contract.
Respondents' counterclaim for fraud is procedurally deficient. The entirety of respondent's allegation of fraud is that "Petitioner and or petitioner's predecessor in interest fraudulently represented subject premises as a 3 bedroom apartment at inception of lease agreement." (Answer, Nov 9, 2010, ¶ 7.) Under CPLR 3016, allegations of fraud must be pleaded in particularity in that "the circumstances constituting the wrong shall be stated in detail." To demonstrate common-law fraud, respondents must "assert the misrepresentation of a material fact, which was known by [petitioner] to be false and intended to be relied on when made, and that there was justifiable reliance and resulting injury." ( Braddock v Braddock , 60 AD3d 84 , 86 [1st Dept 2009].) Respondents failed to meet this burden with their conclusory allegation. As discussed below, respondents in their summary-judgment motion request leave to amend their answers to include a jury demand and a fifth counterclaim. Respondents' proposed amendments to their answers also include separate affirmative defenses and counterclaims, and amend the substance of their counterclaim for fraud, while leaving the affirmative defense of fraud as above. Respondents' new counterclaim for fraud is that "Petitioner and or petitioner's predecessor in interest committed fraud by misrepresenting subject premises as a three (e) bedroom apartment. Respondent has been injured and suffered damages as a result of same fraudulent conduct." (Proposed Amended Answer, Mar. 5, 2010, ¶ 20-21.) Even as amended, respondents fall short of pleading fraud with particularity. Thus, their counterclaim alleging fraud is stricken. In any event, this court does not have the jurisdiction to consider counterclaims of fraud. Respondents' counterclaim for fraud is severed for a plenary action, and in this regard the court notes that respondents allege fraud in their pending Supreme Court action.
For these purposes, affirmative defenses and counterclaims are "all fundamentally counterclaims . . . [and] the court's decision on each counterclaim will also be applicable to the correlating affirmative defense." ( Lucas v Florent, 19 Misc 3d at 762.)
III. Respondent Chen's Disclosure Requests.
Disclosure in a summary proceeding "is allowed only by leave of court . . . because discovery tends to prolong an action and is therefore inconsistent with the expeditious nature of a special proceeding." ( Plaza Operating Partners Ltd. v. IRM (U.S.A.) Inc., 143 Misc 2d 22, 23 [Hous Part, Civ Ct, NY County 1989].) A trial court has broad discretion to grant or deny disclosure requests but must "balance the needs of the party seeking discovery against such opposing interests as expedition and confidentiality." ( Town of Pleasant Valley v. New York State Bd. of Real Property Services, 253 AD2d 8, 16 [2d Dept 1999].) Disclosure requests that are "material and necessary" and which concern "any facts bearing on the controversy which will assist preparation for trial by sharpening the issues and reducing delay and prolixity" shall be granted. ( Id.)
Respondent Chen's disclosure requests seek information concerning the vacancy lease improvements, excessive first rent after rent control, key money, and broker fees. (Affirmation of Fernandez, Dec. 30, 2009, ¶ 13-14.) These requests, only pertinent to respondent's counterclaims for overcharge, are now academic and thus denied.
Respondent Chen seeks "any deed, together with any document showing relationship" between the petitioner and his predecessors in interest, the Asian-American Housing Development Fund Company (AHDFC) and Nancy Mak. (Affirmation of Fernandez, Dec. 30, 2009, ¶ 15.) Deeds are public records. Accordingly, respondent Chen's request for the deed is denied because it is available to her. Further, the deed is attached as Exhibit A in petitioner's cross-motion. Respondent Chen also requests any contracts or correspondence "related to any indemnification of any condition at subject premises" between petitioner and the prior owner to determine whether petitioner was aware of the condition of the subject premises when petitioner obtained title. (Affirmation of Fernandez, Feb. 8, 2010, ¶ 6-7.) Respondent Chen is not entitled to any alleged indemnification agreements between petitioner and the prior owner.
Respondent Chen also requests any videotape and pictures taken by petitioner when the DOB came to premises on June 25, 2009. (Affirmation of Fernandez, Dec. 30, 2009, ¶ 16.) Respondent argues that his request is critical to his defense that petitioner "knew or should have known that subject premises were a 3 bedroom apartment at time petitioner . . . purchased subject premises." (Affirmation of Fernandez, Feb. 8, 2010, ¶ 5.) Because petitioner purchased the building in 2007 and the DOB inspection took place in 2009, the inspection pictures are not necessarily probative of whether the petitioner was aware that the premises contained three bedrooms. Testimony of individuals with personal knowledge should suffice. Respondent's request is denied.
Respondent Chen also asks this court in limine to exclude evidence about the alleged construction of bunk beds or the November 2009 DOB violation alleging erecting partitions as prejudicial to her. Respondent argues that the DOB violation is "not an indication of fact" (Affirmation of Fernandez, Dec. 30, 2009, ¶ 23) and would be substantially prejudicial because of petitioner's allegation that "since respondent allegedly built bunkbeds, respondent built partitions that are the subject of respondent's diminution in services claim." (Affirmation of Fernandez, Dec. 30, 2009, ¶ 23.) Petitioner also noted that "Respondent's counsel . . . has already admitted in open court that his clients installed the bunkbeds in the apartment which caused the issuance of this vacate order." (Affirmation of Gee, Mar. 8, 2010, ¶ 7.) Petitioner opposes the exclusion of the November 2009 DOB violation because "respondent has provided no valid basis to exclude such evidence" and argues that the fact-finder should determine the relevance of the DOB violation at trial. (Affirmation of Gee, Jan 6, 2010, ¶ 44.) Respondent Chen's in limine motion to exclude the evidence of the November 2009 DOB violation is denied for now but may be considered by the trial judge, who will determine at trial the relevance of the violation.
IV. Respondents' Motions for Summary Judgment.
Respondents move for summary-judgment on their first, second, third, and fifth counterclaims, as amended. Respondents' first and second counterclaims for breach of lease and diminution of services allege that because petitioner allegedly promised respondents three-bedroom apartments, petitioner must either provide three-bedroom apartments for respondents, regardless of the illegal partition walls, or allow respondents a rent abatement. Respondents' third counterclaim, for rent overcharge, relates to allegations that the prior landlord charged a broker fee and key money and raised the rent in a manner inconsistent with the rent stabilization laws. Respondents also request hearings to determine the damages for each counterclaim. Respondents further argue that "petitioner has failed to provide an affidavit of person with knowledge to contradict respondent's sworn statement on respondent's counterclaims, sufficiently established to warrant the court to direct judgment. CPLR 3212 (b)." (Affirmation of Fernandez, Mar. 31, 2010, ¶ 10.)
Respondents' third counterclaim, for overcharge, was dismissed above. Therefore, respondents' summary judgment motions on their third counterclaim are academic. Fraud, respondents' fourth counterclaim, as amended, is the only counterclaim on which respondents do not seek summary judgment. However, respondents' counterclaim for fraud was also dismissed above. Respondents' fifth counterclaim involves the proposed amendment to respondents' answer, alleging that respondents were injured by the prior holdover petition and requests legal fees and damages under RPL § 234. This counterclaim is discussed below. Thus, the only remaining counterclaims to be discussed under summary judgment are respondents' first and second counterclaims alleging breach of lease and diminution of services.
To prevail under CPLR 3212, a moving party must demonstrate that summary judgment is appropriate because only legal questions exist. ( Zuckerman v City of New York, 49 NY2d 557, 562.) The court's duty "is not to resolve issues of fact, but merely to determine if such issues exist." ( Matter of Atiram, 25 Misc 3d 1241[A], 2009 NY Slip Op 52534 [U], at *1 [Sur Ct, Kings County Dec. 16, 2009].) The court must deny a summary-judgment motion unless it "clearly appear[s] that no material triable issue of fact is presented." ( Daliendo v Johnson, 147 AD2d 312, 317 [2d Dept 1989].) This is true even if the opposing party defaults on a summary-judgment motion. ( Liberty Taxi Mgt., Inc. v Gincherman , 32 AD3d 276 , 277 n * [1st Dept 2006].)
Material issues of fact are in dispute. The central factual dispute is whether petitioner or either respondent is responsible for constructing illegal partitions and bunk beds in the subject apartment and whether petitioner's removal of the illegal partitions should entitle respondents to a rent abatement. Respondents allege that they took possession of three-bedroom apartments from a prior landlord and that petitioner is required to provide a three-bedroom apartment. Respondents' leases do not specify the number of bedrooms in the subject apartments. Petitioner alleges that respondents are responsible for constructing the illegal partitions and bunk beds and are not entitled to a rent abatement. Petitioner contends that respondents' attorney admitted that respondent Chen reinstalled the bunk beds, a reinstallation that resulted in the second DOB violation. These are issues for trial. Respondents do not demonstrate that judgment as a matter of law is warranted, and do not cite any law, but instead raise issues of fact. Respondents' summary-judgment motions are denied.
V. Respondents' Motions to Amend Answers to Include Jury Demands and Fifth Counterclaim.
Respondents also move for leave to file a second amended answer to include a jury demand and allegations that petitioner had commenced and discontinued a prior holdover petition in April 2009 that injured the respondents.
Respondents' petitions to amend their answers and include a jury demand is denied because respondents failed to include a jury demand in their answers and accordingly waived the right to a jury trial under New York City Civil Court Act § 1303. Respondents' claim that there was "continuing litigation" when respondents filed their answers does not excuse their failure to assert a timely jury demand.
Jury-waiver provisions in a lease are valid. ( See Waterside Holding Corp. v Lask, 233 AD 456, 457 [1st Dept 1931].) Respondents offer an unconvincing argument that because they do not speak English, they could not intelligently waive their rights to a jury. When respondents signed they lease, they bound themselves to its terms, and "[n]ot to have read the contract or to have had it read to [them] before signing, if that be a fact as [they] testified, furnishes no basis for [their] repudiation of any of its terms." ( James Talcott, Inc. v Wilson Hosiery Co., 32 AD2d 524, 525 [1st Dept 1969].) Respondent also argued that 24 CFR 966.6 (f) precludes a jury-waiver clause in the lease because petitioner is a "nonprofit whose purchase of subject building was completed exclusively with public dollars, including federal public dollars." (Reply Affirmation of Fernandez, Mar. 5, 2010, ¶ 13.) Even though petitioner used federal money to purchase the subject building, 24 CFR 966.6 lists prohibited lease provisions, and subsection (f) provides that the prohibited lease provision is "Authorization of the landlord's lawyer to appear in court for the tenant and waive the right to a trial by jury." ( 24 CFR 966.6 [f].) Paragraph 17 of respondents' lease states that "Landlord and Tenant agree not to use their right to a Trial by Jury in any action or proceeding brought by either, against the other, for any matter, concerning this Lease or the apartment." (Lease, Ex. C, Affirmation of Gee, Jan 6, 2010.) The CFR does not preclude any waiver of the jury right. It precludes the landlord's lawyer from acting on behalf of the tenant to waive the jury right. Thus, the lease contains a valid waiver, and respondents' motion to amend their answers to include a jury demand is denied. To the extent that respondents seek to reform their lease to excise their jury waiver clause, they must do so in Supreme Court.
As discussed above, respondents also move to amend their answers to include a fifth counterclaim and request summary judgment on that counterclaim. The substance of respondents' fifth counterclaim is:
19. Petitioner began and then discontinued a Petition — Holdover proceeding in this Court. That is, petitioner filed same petitioner (attached herein as Exhibit B) in April 2009. Thereafter, in June 2009, petitioner discontinued same proceeding. Respondent suffered injury and damages as a result of same Petitioner — Holdover proceedings. See Respondent's Affidavit, paragraph 15, attached herein. Further, the initial lease agreement, subsequently renewed (attached herein with renewal as Exhibit H) permits an award of legal fees in a summary eviction proceeding. Further, Real Property Law Section 234 permits respondent to recover attorney fees and costs by way of counterclaim in another action or proceeding commenced by petitioner — the method of relief elected herein by respondent.
20. Accordingly, respondent respectfully requests a determination by this Court, after of hearing of attorney fees and costs incurred by respondent resulting from Holdover proceedings commenced in April 2009 and discontinued by petitioner in June 2009.
(Affirmation of Fernandez, Mar. 5, 2010, ¶ 19-20.) RPL § 234 provides that when a lease contains a provision allowing for the recovery of attorney fees, there is an implied "covenant by the landlord to pay to the tenant the reasonable attorneys' fees and/or expenses incurred by the tenant . . . in the successful defense of any action or summary proceeding commenced by the landlord against the tenant arising out of the lease." However, petitioner discontinued the prior nonpayment petition, without prejudice, before respondents served an answer. (Affirmation of Gee, Apr.1, 2010, ¶ 48.) A discontinuance of a nonpayment proceeding without prejudice, before respondents respond, does not qualify as a "successful defense." Thus, respondents' motion to amend respondents' answer to add a fifth counterclaim is denied, and respondents' motion for summary judgment on their fifth counterclaim is denied as academic.
For the foregoing reasons, petitioner's motion to dismiss or sever counterclaims is GRANTED in regard to respondents' counterclaims for overcharge and fraud and DENIED in regard to respondents' counterclaims for diminution of services and breach of contract. Respondent Chen's motion for leave to conduct disclosure is DENIED. Respondents' motions for summary judgment are DENIED. Respondents' motions for leave to amend their answers to include a jury demand and fifth counterclaim are DENIED.
These proceedings are adjourned for trial to May 13, 2010.
This opinion is the court's decision and order.