Opinion
No. 100131/13/13.
10-10-2014
Jeffrey RUSKAUP and Brooke Ruskaup, Plaintiffs, v. CONTEMPO ACQUISITION LLC, Defendant. Contempo Acquisition LLC, Plaintiff, v. Jeffrey Ruskaup and Brooke Ruskaup, Defendants.
Joshua C. Price, Esq., The Price Law Firm LLC, New York, for Ruskaups. Steven B. Sperber, Esq., Sperber Denenberg & Kaplan, PC, New York, for Contempo.
Joshua C. Price, Esq., The Price Law Firm LLC, New York, for Ruskaups.
Steven B. Sperber, Esq., Sperber Denenberg & Kaplan, PC, New York, for Contempo.
Opinion
BARBARA JAFFE, J.
The litigation between these parties arises from the following facts: On March 20, 2003, by referee's deed, Contempo acquired a building located at 268 West 132nd Street, in Manhattan (Affirmation of Steven B. Sperber, Esq., dated June 24, 2014 [Sperber Aff.]; Affidavit of Anthony Mehran, dated June 24, 2014 [Mehran Affid.], Exh. A, Index No. 100131/2013), and filed plans with the Department of Buildings to rehabilitate and renovate the interior of the building (id., Exh. B). After obtaining a permit on January 14, 2004 (id. ), Contempo commenced work on the premises.
By lease dated October 2, 2012, the Ruskaups rented a one-bedroom apartment within the building from Contempo for a monthly rent of $1,800 beginning November 1, 2012 and expiring on October 31, 2013. (Id., Exh. C). Contempo had not and has not obtained a certificate of occupancy. (Mehran Affid.). The Ruskaups paid only the first month's rent. (Id. ).
On or about January 18, 2013, the Ruskaups commenced the first above-captioned action, seeking: 1) a declaration that the apartment is illegal in that it constitutes an illegal conversion and has no certificate of occupancy, thereby relieving them of their obligation to pay rent; 2) an injunction directing Contempo to legalize the apartment; 3) a declaration that the apartment is rent-stabilized; 4) a money judgment and treble damages for a rent overcharge; 5) attorney fees; and 6) damages for a breach of the warranty of habitability. (Affirmation of Joshua C. Price, Esq., dated June 13, 2014 [Price Aff.]; Affidavit of Jeffrey Ruskaup, dated June 1, 2014 [Jeffrey Ruskaup Affid.], Exh. B, Index No. 100131/2013).
On or about January 22, 2013, Contempo commenced a nonpayment proceeding against the Ruskaups in the housing part of the Civil Court of the City of New York. (Contempo Acquisition da/k/a Contempo Acquisition LLC v. Jeffrey Ruskaup, Index No. L & T 52857/13).
On February 4, 2013, the Ruskaups served their summons and complaint on Contempo through the Secretary of State of the State of New York. (Price Aff., Exh. C).
On February 5, 2013, Contempo's application for a certificate of no harassment was denied, with the proviso that Contempo cannot reapply for the certificate for three years. (Sperber Aff., Exh. E).
On March 24, 2013, at the request of Contempo's counsel, the Ruskaups emailed him a copy of their summons and complaint along with the affidavit of service. (Price Aff., Exh. D).
On December 6, 2013, Contempo's summary proceeding against the Ruskaups was dismissed on the ground that there was no certificate of occupancy. (Sperber Aff., Exh. F).
On or about February 6, 2014, Contempo commenced the second above-captioned action against the Ruskaups for ejectment and use and occupancy arising from the same facts. (Sperber Aff., Exh. G). By verified answer, the Ruskaups interpose affirmative defenses and counterclaims that mirror the causes of action advanced in the first captioned action. (Price Aff., Exh. F).
INDEX NO. 100131/13
The Ruskaups move pursuant to CPLR 3215 for an order granting them a default judgment against Contempo and setting the matter down for an inquest on reasonable damages. (Price Aff.). Contempo opposes the motion and cross moves for an order dismissing the complaint, or in the alternative, an order compelling acceptance of a late answer. (Sperber Aff.). The Ruskaups oppose. (Affirmation in Opposition of Joshua C. Price, Esq., dated July 7, 2014). It is undisputed that until seven months before this action was commenced, the parties were litigating substantially the same issues in the nonpayment proceeding.
Pursuant to CPLR 3215(f), to obtain judgment by default, the movant must file proof of service of the summon and complaint, along with proof of the facts constituting the claim, the default, and the amount due. If the plaintiff fails to seek entry of a default judgment within a year after the default, “the court shall not enter judgment but shall dismiss the complaint as abandoned ... unless sufficient cause is shown why the complaint should not be dismissed.” (CPLR 3215[d] ).
Where a corporation is served via the Department of State, the application for a default judgment must also be supported by an affidavit stating “that an additional service of the summons by first class mail has been made upon the defendant corporation at its last known address at least twenty days before the entry of judgment .” (CPLR 3215[g][4][I] ). If the moving party seeks a default judgment more than a year after the default, a reasonable excuse for the delay must accompany the motion along with a demonstration of the merits of the complaint. In 222 First Avenue Realty Inc. v. Vijax Fuel Oil Corp., the Court held that the defendants had demonstrated sufficient cause for delay where “the various parties were pursuing their interests in [another] action involving the same issues.” (213 A.D.2d 238 [1st Dept 1995] ).
The Ruskaups argue that given Contempo's failure to answer their complaint which, they maintain has merit, they are entitled to the entry of a default judgment. In support, they offer Jeffrey Ruskaup's June 1 affidavit in which he sets forth the merits of the complaint, and an affidavit of service demonstrating that the summons and verified complaint was served on the Secretary of State of the State of New York. (Price Aff., Exh. C).
In opposition, Contempo maintains that the complaint must be dismissed as abandoned, as a default judgment was not entered within a year after an answer was due, and absent the required additional mailing. (Sperber Aff.).
The Ruskaups allege in reply that their delay in seeking a default judgment is justified by the litigation that was ongoing in the Housing Part. Contempo observes that instead of seeking a judgment during the seven months following the dismissal of the nonpayment proceeding, the Ruskaups pursued their claims as counterclaims in the second above-captioned matter, without explanation.
Having neither offered proof nor alleged that their summons was mailed to Contempo, the Ruskaups have failed to comply with CPLR 3215(g)(4)(I). That counsel emailed Contempo's counsel a copy of their summons and complaint is immaterial.
However, as Contempo commenced the second above-captioned action against them only two months after the dismissal of the housing court matter, and as all three matters concern the same facts and issues, it cannot be said that the Ruskaups abandoned this action.
For these reasons, the Ruskaups's motion for a default judgment is denied, and Contempo's cross motion to dismiss the action as abandoned is denied
II. INDEX NO. 151104/14
A. Prior action pending
Claiming that the first captioned action has been abandoned by the Ruskaups, Contempo argues that there is no longer any prior action pending and thus, the Ruskaups's first affirmative defense must be dismissed. The Ruskaups rely on the litigation pending in the housing part as justifying their failure to proceed on the first action. In reply, Contempo distinguishes the first action from this action given the differing causes of action and relief sought.
As its motion to dismiss the prior pending action is denied (see supra, I.), there is no basis for striking this affirmative defense. However, as it is undisputed that the two actions concern the same issues, their consolidation is appropriate. (David D. Siegel, Practice Commentaries, McKinney's Cons Laws of NY, CPLR C3211:19 [court may, sua sponte, order consolidation of actions rather than dismissal for prior action pending] ).
B. Motions for summary judgment
As the parties' respective motions address the same issues, they are resolved as follows:
Although it is undisputed that there is no lease between the parties and that the Ruskaups have not paid rent since December 2012, Contempo has nonetheless failed to establish, prima facie, its right to an ejectment, absent a showing that the tenancy is not rent stabilized. (Cf. 47 Thames Realty, LLC v. Rusconie, 85 AD3d 853 [2d Dept 2011] [plaintiff did not meet prima facie burden for cause of action to eject defendants as it did not demonstrate that defendants fell outside coverage of Emergency Tenant Protection Act] ). However, whether the Ruskaups's tenancy is or should be considered rent-stabilized must be resolved by the Division of Housing and Community Renewal (DHCR). (See Olsen v. Stellar W. 110, LLC, 96 AD3d 440 [1st Dept 2012] [in tenant's action seeking declaration that tenancy subject to Rent Stabilization Law, court dismissed complaint given DHCR's jurisdiction to determine issue]; Davis v. Waterside Housing Co., Inc., 274 A.D.2d 318 [1st Dept 2000] [same]; see eg Sohn v. Calderon, 78 N.Y.2d 755 [1991] [DHCR had exclusive jurisdiction over matter where owner sought declaration that he could demolish building, evict rent-controlled tenants, and refrain from offering rent-stabilized tenants renewal leases, and issuance of no-harassment certificates] ).
Accordingly, both actions are stayed pending determination by the DHCR as to the nature of the Ruskaups's tenancy. (See Eli Haddad Corp. v. Cal Redmond Studio, 102 A.D.2d 730 [1st Dept 1984] [court properly stayed ejectment action, where owner also sought use and occupancy and attorney fees, and tenant counterclaimed for declaratory judgment that it was protected by the Loft Law, pending determination by New York City Office Loft Enforcement on issue of whether tenancy protected by Loft Law; “where there is an administrative agency which has the necessary expertise to dispose of an issue, in the exercise of discretion, resort to a judicial tribunal should be withheld pending resolution of the administrative proceeding.”] ).
Pending a determination by DHCR, the Ruskaups are directed to pay use and occupancy to Contempo. (See Eli Haddad Corp., 102 A.D.2d at 731 [requiring tenant to pay use and occupancy pending Loft Board determination “accommodates the competing interests of the parties in affording necessary and fair protection to both parties, to the tenant through possession, pending determination of the issue by the Loft Board, and, at the same time, to the landlord by requiring the tenant to pay the landlord for use and occupancy”] ). The amount of use and occupancy shall be determined at a hearing.
III. CONCLUSION
Accordingly, it is hereby
ORDERED, that in Index No. 100131/13, plaintiffs' motion for a default judgment and defendant's cross motion to dismiss are both denied; defendant's cross motion to compel acceptance of a late answer is granted and defendant is directed to serve its answer on plaintiffs within 20 days of the date of this order; it is further
ORDERED, that in Index No. 151104/14, plaintiffs' motion to dismiss the action on the ground of prior action pending is denied and the matter of Ruskaup v. Contempo Acquisition LLC, Index No. 100131/13 shall be jointly tried with Contempo Acquisition LLC v. Ruskaup, Index No. 151104/14, pending in this court; it is further
ORDERED, that within 30 days of entry of this order, the plaintiffs in Ruskaup v. Contempo Acquisition LLC shall file and pay the fee for a Request for Judicial Intervention, to which shall be attached a copy of this order, it is further
ORDERED, that within 30 days from entry of this order, the plaintiffs in Ruskaup v. Contempo Acquisition LLC shall serve a copy of the order with notice of entry upon the Clerk of the Trial Support Office (Room 158); it is further
ORDERED, that upon payment of the appropriate calendar fees and the filing of notes of issue and statements of readiness in each of the above actions, the Clerk of the Trial Support Office shall place the aforesaid actions upon the trial calendar for a joint trial; it is further
ORDERED, that in Index No. 151104/14, plaintiff's and defendants' motions for summary judgment are stayed pending a determination by the DHCR, and the parties are directed to notify the court once a determination has been made; and it is further
ORDERED, that the parties are directed to appear for a hearing on use and occupancy within the next 30 days, and to contact jointly the Part 12 clerk to determine the date and time of the hearing.