Opinion
0741-20
08-03-2021
LORRAINE ARMS APARTMENTS LLC, Plaintiff, v. Cleve C. WILLIAMS, Defendant.
Stephen P. Dewey, Esq., Attorney for Plaintiff, PO Box 2511 Briarcliff Manor, NY 10510, Earl M. Williams, Esq., Attorney for Defendant, 20 East Third Street, Mount Vernon, NY 10550
Stephen P. Dewey, Esq., Attorney for Plaintiff, PO Box 2511
Briarcliff Manor, NY 10510, Earl M. Williams, Esq., Attorney for Defendant, 20 East Third Street, Mount Vernon, NY 10550
Lyndon D. Williams, J.
Plaintiff commenced this action in July 2020 seeking to recover $7,255.52. Plaintiff alleged in the Verified Complaint that the defendant entered into a lease agreement and subsequent lease renewals by which the defendant agreed to pay a monthly rent in the amount of $1,170.13 plus late charges. Plaintiff argues that the defendant failed to provide proper and timely notice of vacatur and that plaintiff did not gain possession of the premises until April 30, 2017. The complaint alleges that defendant owes $1,154.87 for November 2017, and $1,170.13 + $50 late fee each month for January, February, March, April and December 2017.
A default judgment was entered against defendant on February 11, 2021 in the amount of $9,964.05 based upon defendant's failure to answer or appear. Following a traverse hearing held on April 21, 2021, the judgment was vacated on consent of the parties.
Defendant now moves to dismiss on the grounds that the action is barred by res judicata.
Plaintiff opposes the motion and cross moves to amend the Verified Complaint.
Motion to Dismiss - Res Judicata
In support of the motion to dismiss, defendant argues that this action is barred by res judicata. Defendant entered into possession of the premises on May 1, 2013 under a one year lease. Thereafter, the lease agreement has been renewed yearly with a monthly rent of $1,170.13. Defendant affirms that he vacated the premises in January 2017 and all rent was paid in full by him at the time he vacated. Defendant argues that plaintiff commenced a nonpayment action in this court in February 2017 (Index# 0539-17) alleging that he owed arrears for December 2016 and January 2017 and a balance of $470.00 for November 2016. He affirms that he does not owe the amounts stated in the nonpayment petition because he made payments for those months and the plaintiff failed to give him rental receipts. Attached as Exhibit F are checks payable to Lorraine Arms Apts. Check #645, dated November 13, 2016 in the amount of $1,170.13; Memo "Nov Rent" and check #647, dated December 29, 2016 in the amount of $1,170.13; Memo "Dec Rent". Defendant states that at the time the nonpayment petition was filed in February 2017, he was not residing at the premises but living with friends. He also affirms that he had to rent a mail box at Letterbox. Defendant also affirms that he entitled to the return of his security deposit of $1,133.00.
Defendant's counsel argues that the cancelled checks attached as Exhibit F demonstrate that payments were made for November and December of 2016 and January 2017. Counsel argues that the nonpayment proceeding was converted to a holdover proceeding because the defendant no longer resided at the premises, thereby terminating the landlord/tenant relationship. Counsel maintains that any claim for arrears in rent should have been raised in the nonpayment proceeding and is now barred by res judicata as the landlord had the full opportunity to get the relief that is now being sought in this proceeding.
Plaintiff opposes the motion and cross moves to amend the Verified Complaint. In support of the motion, Peter Poccia, Managing Agent for Lorraine Arms Apartments, affirms that in 2017, he retained the services of Attorney Richard McGlynn to commence a nonpayment action against the defendant. He maintains that when the parties appeared in that action on February 28, 2017, the parties consented to convert the matter to a holdover and obtain the judgment of possession and warrant of eviction only, with a stay until March 14, 2017. He states that after the service of a 72 Hour notice by the City Marshal, defendant was ultimately evicted from the premises on April 7, 2017. Accordingly, Mr. Poccia argues that plaintiff is entitled to unpaid rent/ use and occupancy through April 2017. Mr. Poccia maintains that defendant has been fully credit for the two checks #645 and #647 attached to defendant's motion papers and that $5,900.52 in arrears remains due and owing to plaintiff.
In opposition to motion, Richard McGlynn affirms that he was retained by the plaintiff to commence various nonpayment proceedings against the defendant, including representation on Index # 0539-17. He asks that the court take judicial notice that Hon. Nichelle Johnson acknowledged that the tenant appeared and that plaintiff consented to seek possession of the premises only, but reserved its right to address unpaid rent in a plenary action. He argues that the primary goal of summary proceeding actions is possession and that obtaining monetary judgments is secondary. Counsel McGlynn maintains that rather than bog down the court's landlord tenant part with trials for money, the remaining monetary award is often sought in a plenary action. He argues that res judicata does not apply as the actual rental arrears were not addressed or waived by plaintiff in the summary proceeding.
Plaintiff's counsel, Stephen P. Dewey affirms that Hon. Nichelle Johnson clearly noted on the court file in the underlying proceeding that the tenant/defendant appeared, that the parties consented to a final judgment of possession only, and that petitioner reserved its right to commence a plenary action. Accordingly, counsel argues, that no money judgment was entered and the principle of res judicata does not apply to this plenary action.
This court must now determine if this action is barred by res judicata. Res judicata , or claim preclusion, " ‘operates to preclude the renewal of issues actually litigated and resolved in a prior proceeding as well as claims for different relief which arise out of the same factual grouping or transaction and which should have or could have been resolved in the prior proceeding" ( Licini v. Graceland Florist, Inc. , 32 A.D.3d 825, 826, 821 N.Y.S.2d 234 [2d Dept. 2006] (quoting Koether v. Generalow , 213 A.D.2d 379, 380, [623 N.Y.S.2d 328, 2d Dept. 1995] ; see Singleton Management v. Compere , 243 A.D.2d 213, 215, 673 N.Y.S.2d 381 [1st Dept. 1998]. "Additionally, under New York's transactional analysis approach to res judicata , ‘once a claim is brought to a final conclusion, all other claims arising out of the same transaction or series of transactions are barred, even if based upon different theories or if seeking a different remedy’ " ( Matter of Hunter , 4 N.Y.3d 260, 269, 827 N.E.2d 269, 794 N.Y.S.2d 286 [2005] (quoting O'Brien v. City of Syracuse , 54 N.Y.2d 353, 357, 429 N.E.2d 1158, 445 N.Y.S.2d 687 [1981] ). However, the procedural rule prohibiting claim preclusion/claim splitting may not be enforced under certain circumstances. Restatement Second of Judgments § 26 lists several exceptions to the general rule of claim splitting.
In the underlying nonpayment proceeding commenced in February 2017, plaintiff sought to recover possession of the premises for nonpayment of rental arrears in the amount of $2,910.26, representing arrears from December 2016, January 2017 and February 2017. On February 28, 2017, the plaintiff/landlord and defendant/tenant appeared. Defendant stated that he was still in possession of the premises. The defendant claimed that he did not owe any rent. The petitioner sought to convert the matter to a holdover proceeding and reserve its right to commence a plenary proceeding to recover the unpaid rent. The Court (J. Johnson) granted a final judgment of possession and reserved the petitioner/landlord's right to commence a plenary action. The Court file clearly states "FJ Poss only (petitioner reserves the right to commence a plenary action) stay to 3/14/17". A judgment and warrant was entered on March 31, 2017.
The Legislature devised the statutory scheme of summary proceedings to provide landlords with a simple, expeditious and inexpensive means of regaining possession of premises ( Parkchester Apts. Co. v Hawkins , 111 Misc 2d 896, 447 N.Y.S.2d 194 [1st Dept. 1981]; Zenila Realty Corp. v Masterandrea , 123 Misc 2d 1, 472 N.Y.S.2d 980 [Civ Ct, NY County 1984].)
When the petitioner/landlord agreed to let the respondent/tenant remain in the premises through March 14, 2017, without seeking use and occupancy or a trial, and sought to convert the nonpayment to a holdover action, it was evident to the Court that the priority was to obtain possession of the unit and not a monetary judgment. In that case, there had not been a final judgment deciding the merits of the arrears/unpaid rent due to plaintiff. Although the petitioner had an opportunity to litigate unpaid arrears due through February 2017 and to seek use and occupancy in the summary proceeding, the petitioner, on the record, sought permission from this Court to forego the claim for a monetary judgment and reserve its right to pursue the claim for unpaid rent in a separate plenary action. This was clear acknowledgment by the parties and this Court, express or implied, that the merits of the unpaid rent claim has yet to be decided.
The Court finds that the principle of res judicata is inapplicable to this proceeding because the parties never litigated the merits of the rental arrears claims. Furthermore, while the defendant argues that plaintiff had an opportunity to litigate the outstanding rent due to plaintiff in the summary proceeding, the Court finds that "[i]t would be inequitable to preclude a party from asserting a claim under the principle of res judicata , where, as in this case, ‘[t]he court in the first action has expressly reserved the plaintiff's right to maintain the second action" ( Landau, PC v LaRossa, Mitchell & Ross , 11 N.Y.3d 8, 862 N.Y.S.2d 316, 892 N.E.2d 380 [2008] (citing Parker v Blauvelt Volunteer Fire Co. , 93 NTY2d at 349, quoting Restatement (Second) of Judgments § 26 [1] [b] ).
Restatement (Second) of Judgments § 26 (1) provides:
When any of the following circumstances exists, the general rule of § 24 [merger and bar] does not apply to extinguish the claim, and part or all of the claim subsists as a possible basis for a second action by the plaintiff against the defendant....
(b) the court in the first action has expressly reserved the plaintiff's right to maintain the second action.
Lorraine Arms Apartment has yet to have its day in court to litigate the merits of its unpaid rent claim against the defendant. Accordingly, the defendant's motion to dismiss on res judicata grounds is denied ( Landau, P.C. v LaRossa , 11 N.Y.3d 8, 862 N.Y.S.2d 316, 892 N.E.2d 380 ; see E.R. Butler & Co. v Wyeth Inc. , 2020 NYLJ LEXIS 1869, 2020 WL 7389146 [Sup Ct. New York Co. 2020].
Motion to Amend Verified Complaint
Plaintiff moves to amend the Verified Complaint. In support of the motion, Mr. Poccia affirms that the Verified Complaint must be amended to correct a typographical error and clarify rent plus added rent. He affirms that he did not fully clarify how the legal fees and security deposit are applied. He states that Paragraph 5 should be amended so that December’ s monthly rent properly states the year as 2016 and not 2017 and further amended as follows:
Rental arrears due and owing: $5,900.52
Attorney fees for plenary action: $2,505.00
Less security deposit: -$1,350.00
TOTAL: $7,255.52
CPLR 3025 (b) provides that leave to amend the complaint "shall be freely given." The cross motion to amend the Verified Complaint is granted on consent of the parties.
The parties are directed to appear for a pre-trial conference on August 25, 2021 at 2:00pm.
This constitutes the Decision and Order of this Court.
The Court considered the following papers on this motion: Notice of Motion, dated, June 10, 2021; Affidavit in Support; Affirmation in Support; Exhs A-J. Notice of Cross-Motion, dated June 22, 2021; Dewey Affirmation in Opposition and In Support of Cross Motion; McGlynn Affirmation in Opposition; Affidavit in Opposition and In Support of Cross-Motion; Exhs.1-8. Supplemental Affirmation in Opposition, dated July 8, 2021.
Affirmation in Reply, filed July 8, 2021.