Opinion
16/2256
08-21-2017
CLEARVIEW FARMS LLC, Plaintiff v. Jayne WOWKOWYCH, Lindsay Wowkowych and Bradley Bargerstock, Defendants.
Plaintiff–Appellant appeared by Andrew J. Dick, Esq., In House Counsel Defendants–Respondents appeared pro se
Plaintiff–Appellant appeared by Andrew J. Dick, Esq., In House Counsel
Defendants–Respondents appeared pro se
Debra A. Martin, J.
Papers Submitted:
Plaintiff's notice of motion for summary judgment pursuant to CPLR § 3212 and to amend the complaint pursuant to CPLR § 3025, dated September 14, 2016; affirmation of Andrew J. Dick, Esq. with exhibits A–L, affirmed to on September 14, 2016; affidavit of Laurie Stone, with exhibits A–G, sworn to on September 13, 2016; and affidavit of Michelle Fugle, with exhibit A, sworn to on September 9, 2016; and
Plaintiff's notice of motion in limine dated November 16, 2016; and affirmation of Andrew J. Dick, Esq. with exhibits A–I, affirmed to on November 16, 2016; and
Defendants' verified response to both motions, with exhibits A–P, verified on March 13, 2017.
This lawsuit arises out of a landlord-tenant relationship gone awry. Plaintiff alleges that the pro se defendants (the mother, Jayne Wowkowych [Ms. Wowkowych], her college student daughter, Lindsay Wowkowych, and her daughter's fiancée, Bradley Bargerstock), entered into a lease agreement with the plaintiff on or about February 3, 2014 to lease an apartment for 24 months beginning March 1, 2014. The defendants alleged without contrary proof from plaintiff, that Ms. Wowkowych was the primary tenant, and that Lindsay and Bradley needed only temporary housing and stayed only a few weeks. The defendants alleged that plaintiff's manager was aware of this temporary living arrangement but forced them to sign the lease anyway for its entire term.
Ms. Wowkowych presented documentation to plaintiff of a disability and was permitted to keep two service dogs in the apartment. However, at some point the dogs became a point of contention. Ms. Wowkowych alleged harassment by plaintiff's employees, which included police involvement on three separate occasions. As a result of what Ms. Wowkowych concluded was discrimination that caused unhealthy stress, Ms. Wowkowych vacated the apartment. Ms. Wowkowych further alleged that sometime in July 2015, the parties agreed that it was in everyone's best interest if the plaintiff permitted her to break the lease and vacate.
On July 23, 2015, Ms. Wowkowych filed a complaint with the New York State Division of Human Rights (DHR) alleging that the plaintiff unlawfully discriminated and retaliated against her because of her disabilities. Plaintiff denied the charges. Significantly however, the "Event History with Comments" in the DHR file materials noted an email exchange on August 4, 2015: "Sent email to RP [Responding Party] atty re: conciliation; RP atty writes that RP offers to let CP [Complaining Party] out of her lease early." On September 30, 2015, a conference was held at DHR offices with Ms. Wowkowych, Laurie Stone, Property Manager, and plaintiff's attorney, Andrew Dick. The notes of that meeting were lengthy and very detailed, mostly concerning issues of the service dogs. The notes also recited: "She [Ms. Wowkowych] said that she delivered a letter to the respondent stating that she wished to vacate the premises, and she was not charged a fee by respondent for breaking the lease."
In the DHR Final Investigation Report and Basis of Determination, dated October 13, 2015, the Regional Director summarized the respondent's position, including: "According to the respondent, the complainant was allowed to break her lease without penalty at her own request." The Report concluded that there was probable cause to support the allegations of the complaint and the matter was to proceed to the hearing stage.
Subsequently, the parties entered into a Stipulation of Settlement on February 14, 2016, in which Ms. Wowkowych agreed to withdraw her complaint before both DHR and the charges she filed with the United States Department Housing and Urban Development (HUD) in exchange for a payment of $2,500 from plaintiff. The agreement also contained a confidentiality clause and was subject to approval by both the State and Federal agencies. The payment was forwarded by Andrew Dick, Esq., by cover letter dated February 23, 2016.
One week later on March 1, 2016, the plaintiff filed its complaint against the defendants seeking $11,069.52, plus interest and attorney's fees for rent from August 1, 2015 when Ms. Wowkowych vacated, through the end of the lease term. The pro se defendants filed an answer on March 24, 2016 generally denying the allegations and asserting a counterclaim for harassment and frivolous lawsuit seeking $1.5 million in damages because they believed the parties' recent settlement with DHR had resolved all matters pertaining to the leasehold. Plaintiff filed an amended verified complaint on April 11, 2016, without leave of court, to add a fourth cause of action alleging Ms. Wowkowych violated the confidentiality provision contained in the Stipulation of Settlement because her answer to the complaint attached a copy of it. In the amended complaint, plaintiff sought to rescind that settlement and return of the $2,500 payment made to her. Plaintiff then filed its note of issue on May 19, 2016.
The Court's involvement in this case began with the plaintiff's first motion for partial summary judgment dated June 22, 2016 which sought rescission of the Stipulation of Settlement, return of the $2,500, and dismissal of the counterclaim. The motion papers included the pleadings and several exhibits pertaining to the complaint filed by Ms. Wowkowych against plaintiff with DHR. The parties argued the motion at the return date of September 7, 2016. By Order dated September 20, 2016, the court granted the plaintiff's motion dismissing the counterclaim but denied the motion for partial summary judgment without prejudice.
Plaintiff filed a subsequent motion dated September 14, 2016, to amend its complaint a second time to increase the ad damnum for additional damages and attorney's fees, and for summary judgment in the amount of $12,822.22 plus attorney's fees and interest. In support of its motion, plaintiff resubmitted all of the pleadings and DHR records, and included affidavits from two of plaintiff's employees regarding the past due rent, unpaid utility charges, administrative fees allegedly due under the lease, and "pro-rate carpet replacement". At Special Term on November 2, 2016, plaintiff appeared by counsel, Mr. Dick, but defendants did not appear. Thereafter, the defendants contacted the Court and advised that they had not received the plaintiff's motion for summary judgment until after the return date and asked to be heard on the matter. The Court rescheduled the return date for plaintiff's second motion.
After several postponements, the plaintiff's motion for summary judgment along with its motion in limine, which was filed in the interim, were heard on March 29, 2017. During oral argument, the Court granted plaintiff's motion in limine to permit invoices from Rochester Gas & Electric and National Grid to be admitted into evidence at trial without foundational testimony. The Court reserved as to the remainder of plaintiff's motion in limine and summary judgment motion and this decision addresses these outstanding issues.
Decision
Plaintiff's motion for summary judgment seeks to put blinders on the Court by arguing that only the Stipulation of Settlement of the discrimination complaints controls the issues but none of the other DHR records may be considered. Plaintiff's sole contention is that the DHR's final report "is clearly hearsay, and it may not be admitted into evidence for the truth of any matter(s) asserted in it." However, that report and the supportive investigative documents are admissible under the common-law public document exception:
"When a public officer is required or authorized, by statute or nature of the duty of the office, to keep records or to make reports of acts or transactions occurring in the course of the official duty, the records or reports so made by or under the supervision of the public officer are admissible in evidence (Prince, Richardson on Evidence, op cit., at 688)."
( People v. Smith , 258 AD2d 245, 248 [4th Dept 1999].) Here, pursuant to Executive Law § 297 (2) (b), the New York State Human Rights Division was required to conduct an investigation and make a determination of whether probable cause exists. (see Fruit and Vegetable Supreme, Inc. v. The Hartford Steam Boiler Inspection & Ins. Co. , 28 Misc 3d 1128, 1133 [Sup Ct, Kings County 2010].) The report, which was prepared independent of this litigation, was signed by the Regional Director and had sufficient indicia of reliability with respect to the interviews of the parties. The report contained evidence supporting the positions of both parties. Since the report was prepared pursuant to a statutory mandate and is clearly relevant, the defendants will have a right to have it admitted into evidence. ( Kozlowski v. City of Amsterdam , 111 AD2d 476, 478 [3d Dept 1985].)
Likewise, for the same reasons of reliability, the DHR documents would also be admissible under the business record exception. (see Niagara Frontier Transit Metro System, Inc. v. County of Erie , 212 AD2d 1027, 1028 [4th Dept 1995].) The Court has the authority to take judicial notice and provide a foundation for admitting records of a particular business where the records "are so patently trustworthy as to be self-authenticating." ( Elkaim v Elkaim , 176 AD2d 116, 117 [1st Dept 1991] [internal quotation marks and citations omitted]; see also Asare v. Ramirez , 5 AD3d 193, 194 [1st Dept 2004].)
In addition, contained within the report is the plaintiff's admission that it permitted Ms. Wowkowych to break her lease without penalty at her own request. This statement is an admission because it was made by an employee of the plaintiff who was appearing on behalf of the plaintiff in the DHR proceeding and had authority to make the statement on the principal's behalf. (see Loschiavo v. Port. Auth. Of NY & N.J. , 58 NY2d 1040, 1041 (1983) ; Fruin–Colnon Corp. v. Niagara Frontier Transp. Auth. , 180 AD2d 222, 234 (4th Dept 1992.)" ‘In a civil action [,] the admissions by a party of any fact material to the issue are always competent evidence against [it], wherever, whenever or to [whomever] made’ ( Reed v. McCord , 160 NY 330, 334, 54 NE 737 )." ( Smolinski v. Smolinski , 78 AD3d 1642, 1644 [4th Dept 2010].)
Turning to the issue of plaintiff's motion for summary judgment, the issue before the Court is whether the defendants breached the lease or were permitted by the plaintiff to terminate the lease early without penalty. The Court finds that there is ample evidence to support the defendants' position that they were allowed to vacate without penalty, as stated by plaintiff's employees several times to the DHR. Plaintiff does not refute making these statements and does not address the matter in its papers. Plaintiff's counsel cannot refute them without making himself a material witness. The Stipulation of Settlement indicated that it had to be approved by both DHR and HUD. Under these circumstances, plaintiff's failure to correct the statement by the DHR Regional Director in her Final Report if it was in error and remain silent on this critical issue, can be deemed an admission. (see Keefner v. City of Albany , 77 AD2d 747, 748–749 [3d Dept 1980].) In contrast is a DHR note that indicated plaintiff contacted DHR on 9/4/2015 to advise of an error in a DHR's conference notice, which was then corrected, proving that plaintiff was aware of the process and the importance of corrective action.
If the Court did not dismiss plaintiff's claims for unpaid rent and utilities incurred after defendants' vacated the premises, it would be necessary to consider the disqualification of Mr. Dick or any other member of the In House Counsel's Office as attorneys for the plaintiff. (see Jozefik v. Jozefik , 89 AD3d 1489, 1490 [4th Dept 2011].); Rules of Professional Conduct rule 3.7.)
Furthermore, the Court finds that the settlement reached by the parties was a surrender by operation of law because the plaintiff and defendants took action "inconsistent with the landlord tenant relationship which indicated their intent to deem the lease terminated." ( Fragomeni v. Aim Services, Inc. , 135 AD3d 1272, 1273 [3d Dept 2016].) Ms. Wowkowych communicated her need to vacate and plaintiff's acceptance of the surrender without penalty was confirmed by communication of such to DHS, an independent third-party. Under these circumstances, tenants are not liable for rent arrears or the gas and electric charges when there is a surrender by operation of law. (see Chili Venture LLC v. Stahl , 54 Misc 3d 461, 465 [Rochester City Court 2016]citing Chestnut Realty Corp. v. Kaminsky , 132 AD3d 797, 798 [2d Dept 2015] and Benderson v. Poss. , 142 AD2d 937, 937 [4th Dept 1988].)
Accordingly, the Court denies the plaintiff's motion for summary judgment on the issue of any unpaid rent or administrative fees after the premises were vacated in July 2015, or any charges associated with the rent reduction agreement. Furthermore, since defendants were not in possession after that, no utility payments are owed for that period. Therefore, pursuant to CPLR 3212 (b), the Court grants summary judgment in favor of defendants on these issues. (see Housing Opportunities Made Equal, Inc. v. Pataki , 277 AD2d 888, 888 [4th Dept 2000].) This decision also renders moot the plaintiff's motion to increase the addendum.
As to the claim for damages arising from having to change the lock and replace the carpets, the Court denies summary judgment to plaintiff and grants it to the defendants because it appears from plaintiff's exhibits that defendants' security deposit was retained for that purpose. Furthermore, based on the affidavit of Laurie Stone, the damages to the carpet were observed in September 2015, so were known at the time of Ms. Stone's participation at the meeting with DHR on September 30. Her silence on the issue at the time plaintiff was on record in allowing Ms. Wowkowych to vacate without penalty is proof that those charges were either waived or deemed covered by the security deposit.
It follows that plaintiff's motion for rescission of the settlement agreement must also be denied. The remedy for rescission "lies in equity and is a matter of discretion" which the Court under these circumstances declines to invoke. ( Symphony Space v. Pergola Properties, 88 NY2d 466, 485 [1996].) By commencing this action, plaintiff "opened the door" and left the defendants with no option other than to raise the DHR proceedings and settlement as a defense. In addition, the "unclean hands doctrine rests on the premise that one cannot prevail in an action to enforce an agreement where the basis of the action is ‘immoral and one to which equity will not lend its aid’ ( Muscarella v. Muscarella, 93 AD2d 993, 994, 461 N.Y.S.2d 621 )." ( Smith v. Long , 281 AD2d 897, 898 [4th Dept 2001].) Here, the plaintiff either told the defendants and DHR it permitted Ms. Wowkowych to quit the lease without penalty or permitted a false impression that it had done so in order to extinguish the charges of discrimination and the DHR and HUD investigations. The timing of the settlement and payment of $2,500 to Ms. Wowkowych on February 23, 2016, and one week later commencing litigation against her seeking $11,069.52 plus interest and attorney's fees, belies some level of intent to deceive. Under these circumstances, the plaintiff does not have "clean hands" and is not entitled to equitable relief.
Although the Court grants summary judgment to all the defendants, the different status of Lindsay and Bradley warrants further comment. The Court finds that the plaintiff's contract with these two young adults was an unconscionable bargain that cannot be enforced. "An unconscionable bargain is ‘one such as no [person] in his [or her] senses and not under delusion would make on the one hand, and as no honest and fair [person] would accept on the other’ ( Christian, 42 NY2d at 71, 396 N.Y.S.2d 817, 365 N.E.2d 849 [internal quotation marks omitted] )." ( Colello v. Colello , 9 AD3d 855, 859 [4th Dept 2004].) The doctrine of unconscionability is a flexible one having roots in equity and entails a demonstration of "an absence of meaningful choice on the party of one of the parties together with contract terms which are unreasonably favorable to the other party." ( Lister Elec., Inc. v. Inc. Vil. Of Cedarhurst , 108 AD2d 731, 733–34 [2d Dept 1985].) Here, Lindsey, a college student who needed to live with her mother for a few weeks, was clearly not in a position to bargain. Further, there was "an imbalance in the understanding and acumen of the parties." ( State of New York v. Wolowitz , 96 AD2d 47, 67–68 [2d Dept 1983].) The Court finds that these individuals would not have knowingly become liable for a two-year lease of an apartment they did not intend to occupy as tenants during that time period. It is significant to note that plaintiff did not refute the defendants’ testimony that Lindsay and Bradley only resided in the apartment for a few weeks and that Ms. Wowkowych was the tenant in chief and the sole source of payment.
Therefore, it is hereby:
ORDERED, that plaintiff's motion for summary judgment seeking a judgment in its favor against the defendants in the amount of $12,822.22 along with disbursement, costs and attorney's fees is denied; and it is further
ORDERED, that plaintiff's motion in limine is denied; and it is further
ORDERED, that pursuant to CPLR 3212 (b), as there are no material questions of fact at issue and as a matter of law, defendants are entitled to and are granted summary judgment in their favor and the amended complaint is dismissed in its entirety against all defendants, with prejudice.