Opinion
103390/10.
November 24, 2010.
Decision and Order
Recitation, as required by CPLR § 2219 [a] of the papers considered in the review of this (these) motion(s):
Papers Numbered
Defs' n/m (3211) w/NW affirm, IV affid, exhs .......................... 1 Pltff's atty affirm (RSN) ............................................. 2 Pltff's opp w/FDD affid ............................................... 3 Defs' reply w/MJB affirm, exhs ........................................ 4Upon the foregoing papers, the decision and order of the court is as follows:
Defendants move, pursuant to CPLR 3211 (a) (1), (2), (3) and/or (7), to dismiss the complaint on the grounds of (1) a defense based upon documentary evidence; (2) lack of subject matter jurisdiction; (3) lack of capacity to sue; and (4) failure to state a cause of action. Defendants also seek sanctions upon plaintiff and her counsel, pursuant to Part 130 of the Uniform Rules of the New York Trial Courts.
Background:
Plaintiff was a residential tenant at 135 William Street, Apartment 11B, New York, New York. Defendant Metro Loft Management LLC (Metro) is the property manager and agent for the owner of said property, defendant 135 William Street Associates, LLC (135 William). Defendant Jacqueline Verdier is the assistant property manager for Metro. The other named defendants represent organizations involved with other properties located in the lower Manhattan financial district that had been converted from commercial space to residential properties. They all have the same principal place of business at 20 Exchange Place, Suite 1100, New York, New York, and are all managed by Metro. Plaintiff believes that Metro and the other named entities are owned by the same individuals and that these properties are among the most desirable living space in the financial district.
In this action, plaintiff seeks for herself personally, and for a class of others similarly situated, a declaratory judgment, declaring that defendants extracted application and administrative fees which constituted an unlawful restriction on occupancy in violation of the Roommate Law, Real Property Law (RPL) § 235-f. In addition, plaintiff seeks a declaration that the defendants' conduct in charging plaintiff and class members fees to occupy the premises without disclosing the existence of the Roommate Law is a deceptive practice within the meaning of General Business Law (GBL) § 349. Plaintiff seeks a permanent injunction, forbidding defendants from charging fees inconsistent with the Roommate Law, and an award of actual damages for the illegal fees charged plaintiff and other members of the class in violation of the above-named statutory provisions.
The complaint alleges that on or about June 6, 2008, the defendant Metro required plaintiff to pay a $75 application fee and $250 administration fee in order to occupy a three bedroom apartment at 135 William Street. Plaintiff alleges in the complaint that she paid the fees, based upon a representation from her co-tenant Lisa "Ginny"Pena and defendant Jacqueline Verdier that, unless the fees were paid, plaintiff's occupancy of the apartment would be unlawful, and that the landlord would terminate the lease. Plaintiff claims that her occupancy of the apartment with Ms. Pena, the existing leasehold tenant of the apartment, was in accord with the existing lease and would have been legal, under the Roommate Law. Plaintiff asserts that, consequently, the fees assessed were in improper restriction on occupancy in violation of that law, and that she was damaged thereby.
In plaintiff's affidavit, she indicates that another assistant property manager from Metro, Melissa Crumley, not Jacqueline Verdier, told her that she had to be on the lease in order to occupy the apartment. In plaintiff's memorandum of law, she claims that defendant Verdier has no personal knowledge of the events surrounding her becoming a tenant at the building, because she was not as yet employed by Metro. Clearly, this admission indicates that Jacqueline Verdier was not responsible for the claims of improper fees at the time plaintiff took up residence in the building.
Defendant presents documentary evidence that indicates that in February 2006, Ms. Pena and her husband, Aviv Siso, entered into a lease for the subject apartment for the period commencing April 6, 2006 and ending April 30, 2007. The lease provided as follows:
Owner agrees to lease to You Apartment 11B . . . in the building at 135 William Street, Borough of Manhattan, City and State of New York. You shall use the Apartment for residential use only. The Apartment may be occupied by the tenants named above and by immediate family of the tenant or tenants and by occupants as defined in and only in accordance with Real Property Law § 235-f.
This lease was then renewed for a term commencing May 1, 2007 and ending April 30, 2009. In 2008, Ms. Pena and Mr. Siso divorced. He left the apartment, and Ms. Pena remained in tenancy. Ms. Pena contacted the landlord by e-mail about arranging for plaintiff to come join her in the apartment as a tenant. The documentation offered by defendants shows that Mr. Siso paid both the application fee of $75, and the $250 administration fee. Defendants contend that they had a right and obligation, under the Patriot Act, to investigate new tenants for the safety and security of the building and its residents, that the application fee was intended to cover the costs of such investigation under said obligation, and that the fee was paid directly to the firm that was employed to conduct the investigation. The documentation presented by defendants confirms that the fee was paid by Mr. Siso to the investigation firm and a copy of the investigation report was attached to defendants' reply. Defendants further assert that the administrative fee was for the drafting of the lease modification.
Thereafter, the parties executed an amended lease, which included Ms. Decatrel as a full fledged tenant with all the rights under the lease. Then, the lease was renewed only by Ms. Pena and plaintiff for an additional six months from May 1, 2009 to October 31, 2009. It appears from emails submitted by the parties that there was another renewal lease or extension for a further six months until April 30, 2010, but the defendants did not include the renewal or extension in the documents on the motion.
In plaintiff's affidavit in opposition to the motion, she acknowledges that Mr. Siso paid the fees for her, but she claims it was as a matter of convenience, and that later she reimbursed him for the monies he laid out on her behalf.
Plaintiff alleges that in January 2010, when Ms. Pena announced that she wished to leave the apartment and move to Rhode Island, because she had lost her job and could not afford to remain, the plaintiff approached Jacqueline Verdier of Metro in an exchange of e-mails, inquiring as to plaintiff's "position on our lease and the process to have someone replace Ginny should she move out." She then further emailed that, "I want to take over the lease should Ginny/Lina decide to leave. I do have someone to take over her part." Jacqueline Verdier replied to both tenants, plaintiff and Ms. Pena, as follows:
The proposed new tenant was Randall S. Newman, counsel for plaintiff.
The landlord would potentially allow Ginny to be replaced by another tenant on the lease agreement through the end of the current lease term (April 30, 2010). He is requiring, however, a full application from the prospective tenant and an updated application from Francoise to determine if this would be approved.
I have attached the application that would need to be completed in full, including all requested backup documentation. There is a $75 application fee per applicant (although I will waive the fee for Francoise) and a $250 administrative fee that is charged to the apartment to make all of the changes to the lease assuming everything is approved.
Plaintiff alleges that this was a further attempt to restrict occupancy by the improper imposition of fees in derogation of the Roommate Law. Plaintiff also claims that the fees, even if appropriate, were excessive.
The Parties' Contentions:
Defendants contend that, in the first instance, the transactions complained of never implicated the Roommate Law, in that plaintiff was always presented as an additional tenant under the lease, and not as a potential roommate, and that she lacks standing to challenge the propriety of the fees, because she never paid them to defendants, as reflected in the documentary evidence.
Plaintiff maintains that, she always wanted to be just a roommate, with no obligations under the lease as such, that under the Roommate Law, she had a right to become Ms. Pena's roommate, under the terms of the 2007 lease, and that the defendants erred in requiring that she become a full tenant and pay the fees associated therewith. Plaintiff asserts that she has paid the fees through Mr. Siso, whom she reimbursed, and so was damaged by the conduct of the defendants. In addition, she seeks equitable relief in the form of a permanent injunction, mandating that the landlord be prohibited from charging Roommate Fees as a condition of occupancy, when such occupancy is consistent with the Roommate Law.
Law and Analysis:
The plaintiff is alleging two separate violations of the Roommate Law. The first violation stems from the demand that she become a tenant as opposed to a roommate. The second violation arises from the refusal of the landlord to allow her to place a roommate in occupancy with her after the removal of Ms. Pena.
The Roommate Law, RPL § 235-f provides in pertinent part as follows:
2. It shall be unlawful for a landlord to restrict occupancy of residential premises, by express lease terms or otherwise, to a tenant or tenants or to such tenants and immediate family. Any such restriction in a lease or rental agreement entered into or renewed before or after the effective date of this section shall be unenforceable as against public policy.
* * *
4. Any lease or rental agreement for residential premises entered into by two or more tenants shall be construed to permit occupancy by tenants, immediate family of tenants, occupants and dependent children of occupants; provided that the total number of tenants and occupants, excluding occupants' dependent children, does not exceed the number of tenants specified in the current lease or rental agreement, and that at least one tenant or tenants' spouse occupies the premises as his primary residence.
Section 1 (b) defines an "occupant" as "a person, other than a tenant or a member of tenant's immediate family, occupying a premises with the consent of the tenant or tenants." As indicated above, the lease agreement between the landlord and Ms. Pena and Mr. Siso allowed for an unrelated person to occupy the premises in accord with RPL § 235-f.
According to the allegations in the complaint, while the lease appears to permit occupancy by a roommate, the tenants and plaintiff were told otherwise by Metro, based on a representation by Ms. Verdier. However, as plaintiff now concedes Ms Verdier was not employed by Metro at the subject time, and plaintiff now claims that it was another representative of Metro, Ms. Crumley, who made the subject representation. Whether or not the representation was made, and by whom, is not an issue at present. The court must accept the plaintiff's correction of the allegations in the complaint for purposes of this motion. So too, must it consider plaintiff's clarification of how she paid the application and administration fees. At this juncture, plaintiff is entitled to all inferences, and it will remain for the trial to determine the actual facts.
Defendant's argument that plaintiff and her co-tenants always wanted her occupancy to be that of a tenant is not conclusively demonstrated by the documentary evidence, which is equivocal, particularly in light of the alleged preceding misrepresentation that her occupancy would be unlawful, if not under the lease.
Whether a party has capacity or standing to bring suit is a threshold issue ( Society of Plastics Indus, v County of Suffolk, 77 NY2d 761). In order to have standing, plaintiff must allege an injury in fact that falls within her zone of interest ( Matter ofHebel v West, 25 AD3d 172 [3d Dept 2005]). Here, defendants assert that there was no injury in fact, because the documentary evidence conclusively demonstrates that Mr. Siso, and not plaintiff, paid the fees. The affidavit of plaintiff indicates that Mr. Siso was acting as an agent for plaintiff, a disclosed principal, so that there is an injury in fact relating to plaintiff's zone of interest with regard to the statute in question. Under such circumstances, plaintiff has sufficiently stated a claim for a declaratory judgment.
Moreover, as to the second claim under the statute, plaintiff also alleges an injury in fact since she is directly financially affected by her inability to bring in a roommate to defray part of the expenses of the apartment, because of the restrictions imposed by the fees that do not accord with the Roommate Law.
The cause of action for under GBL § 349 is, however, dismissed because plaintiff alleges the landlord engaged in a deceptive practice by telling plaintiff her that her occupancy of the apartment would be unlawful unless she became a party to the lease and, by implication, that she could not be a roommate under RPL § 235-f. In the recent First Department case ofAguaiza v. Vantage Properties, LLC, 69 AD3d 422 [1st Dept 2010], the court held that allegations of unlawfully deceptive acts and practices under General Business Law § 349 presented only private disputes between landlords and tenants, and not consumer-oriented conduct aimed at the public at large, as required by the statute (see also, City of New York v Smokes-Spirits.Com, Inc., 12 NY3d 616, 621). Thus, plaintiff's facts do not support a consumer-related transaction within the ambit of GBL § 349 and, therefore, defendants' motion is granted and the second cause of action is dismissed.
Since plaintiff has sufficiently alleged facts that would support viable claims for declaratory and injunctive relief as well as for damages, the motion to dismiss is otherwise denied as is the application for the imposition of sanctions. Defendants shall answer the remaining complaint no later than ten (10) days after entry of this decision/order.
Conclusion
In accordance with the foregoing,
It is hereby
ORDERED that the motion to dismiss the complaint is denied as to the first cause of action but granted as to the second cause of action; the second cause of action is hereby severed and dismiss; and it is further
ORDERED that defendants shall answer the remaining complaint no later than ten (10) days after entry of this decision/order; and it is further
ORDERED that the preliminary conference will be held on JANUARY 13, 2011 at 9:30 a.m. in Part 10, 60 Centre Street, Room 232; and it is further
ORDERED that the application for sanctions is denied; and it is further
ORDERED that any relief requested that has not been expressly addressed is hereby denied; and it is further