Opinion
42423/2016
03-27-2017
St. Ann's 350, LP, Petitioner-Landlord, v. Alejandrina Almedina, Respondent-Tenant.
Attorney for Petitioner: Isidore Scipio, Esq. 885 Second Avenue, 34th Floor New York, New York 10017 (646) 374-0100 Attorney for Respondent: Puichun Li, Esq. Urban Justice Center 123 William Street, 16th floor New York, New York 10038 (646) 459-3038
Attorney for Petitioner: Isidore Scipio, Esq. 885 Second Avenue, 34th Floor New York, New York 10017 (646) 374-0100 Attorney for Respondent: Puichun Li, Esq. Urban Justice Center 123 William Street, 16th floor New York, New York 10038 (646) 459-3038 Diane E. Lutwak, J.
Recitation, as required by CPLR Rule 2219(a), of the papers considered in the review of the Respondent's Motion to Dismiss: Papers Numbered Order to Show Cause with Attached Affirmation, Affidavit and Exhibits A-F 1 Affirmation in Opposition 2
After argument, upon the foregoing papers and for the reasons stated below, Respondent's motion is granted to the extent of dismissing the Petition and setting the matter down for a sanctions hearing on April 17, 2017 at 9:30 am. BACKGROUND & PROCEDURAL HISTORY
This is nonpayment eviction proceeding commenced by St. Ann's 350, LP against Alejandrina Almedina, the tenant in Apartment 2F at 350 St. Ann's Avenue, Bronx, New York. The Verified Petition is dated June 30, 2016 and asserts that the premises are a multi-family housing project, regulated by the U.S. Department of Housing and Urban Development ("HUD"), which participates in the "Section 8 Substantial Rehab Program". The Petition is dated June 30, 2016 and alleges unpaid rent of $735, comprised of a balance of $47 due for February 2016 and rent at the rate of $172 per month for the four months of March 2016 through and including June 2016. Annexed to the Petition is a copy of Petitioner's written rent demand, dated June 13, 2016, which seeks "The sum of $735.00 for rent owed" and notes that "This sum is detailed in the attached resident ledger".
($172 x 4) + $47 = $735.
The "Tenant Ledger" attached to Petitioner's rent demand spans the period of April 30, 2008 through July 1, 2016 and reflects the following for the relevant months of February 2016 through June 2016: • a zero balance as of February 1, 2016 • rent of $164 billed on February 1, 2016 for the month of February 2016 • rent of $344 billed on April 6, 2016, which appears to be comprised of rent of $172 for each of the months of March and April 2016 • rent of $172 billed on May 1 and June 1, 2016 for each of those months • rent of $903 billed on February 1, March 1 and April 1, 2016 with the notation "Subsidy was terminated Rent s/b $903.00" • rent of $903 reversed on March 1 and April 1, 2016 with the notation "Subsidy was reinstated" • three rent adjustments dated February 17, 2016, one being a credit of $328 and two being charges of $85 and $83, respectively • receipt of payments of:
• $164 credited on each of the three dates of February 22, March 21 and April 18, 2016 (check ## 340, 346 and 350, respectively);• a balance due of $735, the amount stated in the Petition, on each of the following four dates: March 11, 2016, April 18, 2016, May 20, 2016 and June 3, 2016
• $172 credited on each of the two dates of May 20 and June 3, 2016 (check ## 357 and 360, respectively); and
• $8 credited twice on March 11, 2016 and once on April 18, 2016 (check ## 347, 348 and 352, respectively).
Respondent through counsel moves for leave to file an Amended Answer, dismissal of the petition for failure to state a cause of action and sanctions. Respondent asserts that the petition should be dismissed because at all relevant times she has paid her share of the rent, which was set at $164 per month from May 2015 through February 2016 and then increased to $172 per month as of March 2016. Respondent's Affidavit at ¶¶ 4, 10 and 11. Respondent has attached to her motion papers copies of the following documents to corroborate her assertion that her share of the rent was $164 in February 2016 and then increased to $172 as of March 2016: • letter from Petitioner dated 3/10/2015 notifying Respondent that her rent payment, effective May 1, 2015, "has been adjusted to $164.00" • letter from Petitioner dated 01/01/2016 notifying Respondent, inter alia, that it "will soon be time for your annual recertification" and that if she responds to the notice after 03/10/2016 Petitioner has the right under her lease "to implement any rent increase resulting from the recertification without providing you a 30-day written notice" • "Owner's Certification of Compliance with HUD's Tenant Eligibility and Rent Procedures", HUD form # 50059 A, signed by Petitioner's agent on 1/17/2016 and by Respondent on 3/82016, reflecting a "Tenant Rent" of $172 with an "Effective Date" of 01/17/2016 and an "Anticipated Voucher Date" of 03/01/2016 • letter from Petitioner dated 4/05/2016 notifying Respondent that her rent payment, effective March 1, 2016, "has been adjusted to $172.00" • copies of eight cancelled checks numbered 340, 346, 347, 348, 350, 352, 357, 360 (all of which are credited on Petitioner's "Tenant Ledger" as described above)
Respondent's moving papers do not specify under which section of the CPLR she is seeking relief. The Notice of Motion seeks dismissal "for failure to state a cause of action", which implies that the motion is brought under CPLR 3211(a)(7). However, Respondent also requests dismissal with prejudice, which implies that Respondent might have intended to bring the motion under CPLR 3212 given that a CPLR 3211(a)(7) motion cannot result in dismissal with prejudice. See Hendrickson v Philbor Motors, Inc (102 AD3d 251, 955 NYS2d 384 [2d Dep't 2012]). The court is treating the motion as one for dismissal under CPLR 3211(a)(7) and not as one for summary judgment under CPLR 3212, which, under CPLR 3211(c), would require the court to first provide notice to both sides of its intent to do so. See, e.g., Rovello v Orofino Realty Co (40 NY2d 633, 357 NE2d 970, 389 NYS2d 314 [1976]).
Further, to the extent the arrears, if any, may have arisen due to a problem with her 2016 Section 8 subsidy recertification process, Respondent alleges that she fully complied with the recertification procedures and was never notified of any termination of her Section 8 benefits. Respondent's Affidavit at ¶¶ 5-9, 12.
Respondent's attorney raises four arguments: First, based on Respondent's timely rent payments, which Petitioner's rent ledger reflects were received and credited, the petition should be dismissed for failure to state a claim. Second, Respondent should have a zero balance on her rent ledger because she timely recertified for her Section 8 benefits. Third, even if Respondent's Section 8 subsidy had been terminated, Petitioner is required to retroactively apply the rental assistance subsidy and any rent discrepancy is not her responsibility. Fourth, even if Respondent recertified in an untimely manner she cannot be evicted through a nonpayment proceeding and Petitioner "must pursue a non-possessory judgment, a repayment plan, or a holdover proceeding based on material noncompliance."
In support of her request for sanctions, Respondent references a prior nonpayment proceeding which Petitioner brought against her earlier in 2016, L & T # 29573/2016, in which "Petitioner alleged that I owed arrears even though their own records showed that I had paid my Section 8 rent portion." Respondent's Affidavit at ¶ 14. The court's database indicates that the Petition in that prior proceeding was filed on May 18, 2016, Respondent filed an Answer on May 23, 2016 and the case was discontinued at the first court appearance on May 26, 2016.
After several adjournments of Respondent's motion with a briefing schedule for opposition and reply papers, the motion was deemed submitted after argument on March 16, 2017. At the court's request, on that date Petitioner's counsel submitted a statement to support his oral argument requesting permission to discontinue the case. In his written statement, Petitioner's counsel asserts that "The Program which [Petitioner] relies on for sending late letters to starting a case has been inoperable since November 2016." Petitioner's counsel further explains that due to the "malfunction" of the Program ("Yardi") it has not been able to start any new cases since December 2016. DISCUSSION
Motion to Dismiss
On a motion to dismiss under CPLR § 3211(a)(7) for failure to state a cause of action, the court is required to afford a liberal construction to the pleading and ascertain whether it alleges facts which fit within any "cognizable legal theory." Leon v Martinez (84 NY2d 83, 614 NYS2d 972 [1984]). The court must "accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory." Id. (84 NY2d at 87-88). A court may consider evidentiary material submitted by a defendant (or, the court notes, a respondent in a special proceeding under CPLR Article 4) in support of a motion to dismiss pursuant to CPLR 3211(a)(7). Sokol v Leader (74 AD3d 1180, 1181, 904 NYS2d 153[2nd Dep't 2010]). When evidentiary material is considered on such a motion, and the motion has not been converted to one for summary judgment, "the criterion is whether the [plaintiff] has a cause of action, not whether he [or she] has stated one, and, unless it has been shown that a material fact as claimed by the [plaintiff] to be one is not a fact at all and unless it can be said that no significant dispute exists regarding it . . . dismissal should not eventuate." Guggenheimer v Ginzburg (43 NY2d 268, 275, 372 NE2d 17, 401 NYS2d 182[1977). See, e. g., Leak v Live Well Fin, Inc (145 AD3d 992, 993, 44 NYS3d 477 [2nd Dep't 2016]).
To state and maintain a cause of action for nonpayment of rent, the petition must state the facts upon which the proceeding is based. RPAPL § 741(4). Further, the predicate rent demand required by RPAPL § 711(2) must "clearly inform the tenant of the particular period for which a rent payment is allegedly in default and the approximate good faith sum of rent assertedly due for each such period." Schwartz v Weiss-Newell (87 Misc 2d 558, 561, 386 NYS2d 191 [Civ Ct NY Co 1976]), quoted in 542 Holding Corp v Prince Fashions, Inc (46 AD3d 309, 848 NYS2d 37 [1st Dep't 2007]). A proper predicate rent demand is a condition precedent to commencement of a nonpayment proceeding and cannot be amended nunc pro tunc. Chinatown Apts v Chu Cho Lam (51 NY2d 786, 787, 412 NE2d 1312, 433 NYS2d 86 [1980]); Cypress Ct Assoc v McLauren (33 Misc 3d 1203[A], 938 NYS2d 226 [Civ Ct Kings Co 2011]); Vartarian v Brady (184 Misc 2d 333, 707 NYS2d 285 [Civ Ct NY Co 1999]); Parkchester Apts Co v Walker (1995 NY Misc LEXIS 738, 213 NYLJ 123 [Civ Ct Bx Co 1995]).
Dismissal is warranted because the Petition alleges rent arrears of $735 without asserting facts which fit within any "cognizable legal theory" under which Respondent could owe said sum. Leon v Martinez, supra. Rather, this is a case in which "a material fact as claimed by the [petitioner] to be one is not a fact at all and no significant dispute exists regarding it ." Guggenheimer v Ginzburg, supra. While the Petition asserts that Respondent owes rent arrears of $735, comprised of $172 per month for the months of March through June 2016 plus a balance of $47 for the month of February 2016, Petitioner's own "Tenant Ledger" - a copy of which Petitioner attached to its rent demand which, in turn, it attached to the Petition - establishes unequivocally that Respondent paid the $172 she was charged for each of the months of March through June 2016 and that she owes no rent for those months. That $172 was the correct amount of Respondent's rent in those months is clear not only from Petitioner's ledger but also from Petitioner's letter dated April 4, 2016, the HUD form # 50059 A and Respondent's cancelled checks, evidentiary materials which Respondent has provided copies of and which this court can consider on this motion to dismiss. Sokol v Leader, supra.
As for February 2016, Petitioner's ledger begins on the first of that month with a zero balance followed by a charge of $164 which Respondent paid and Petitioner credited on February 22. While the ledger is murky as to what else transpired later that month regarding Respondent's Section 8 subsidy, the ledger in no way supports or justifies the claim in the Petition that Respondent owed an additional $47 for the month of February 2016. If the alleged arrears for the month of February 2016 were due to a problem with Respondent's 2016 Section 8 subsidy recertification process, or for some other reason, Petitioner failed properly to articulate such a claim in its Petition or predicate rent demand.
$164 is the amount which, as reflected in Petitioner's ledger, Respondent had been paying since May 2015, and which Petitioner's letter of March 10, 2015 advised her to pay as of that month.
In sum, the Petition must be dismissed as it fails to state a cause of action for rent arrears of $735 accruing during the period in question (February through June 2016) and is based upon a fatally flawed rent demand. The Petition with its attachments, corroborated by the additional documents provided by Respondent, discredit any claim that the rent demand contains a good faith sum of rent "assertedly due for each such period," Schwartz v Weiss-Newell, supra.
Based on the above, it is not necessary for the court to address the issues of whether Respondent timely recertified for her Section 8 benefits; whether any rent discrepancy due to a problem with Respondent's subsidy recertification is Respondent's responsibility; and whether, even if Respondent had recertified in an untimely manner, she can be evicted through a nonpayment proceeding or whether Petitioner instead "must pursue a non-possessory judgment, a repayment plan, or a holdover proceeding based on material noncompliance."
The arguments of Petitioner's attorney regarding Petitioner's malfunctioning computer program are misplaced. That the data base upon which Petitioner relies "has been inoperable since November 2016" is of no moment. This proceeding is based upon a defective Petition and rent demand which long pre-date the alleged malfunctioning of Petitioner's computer program.
Motion for Sanctions
Respondent seeks the imposition of sanctions against Petitioner for its frivolous conduct in commencing this proceeding and then refusing to discontinue it "despite being shown proof of [Respondent's] rent payments." Attorney's Affirmation in Support at ¶ 42.
Section 130-1.1(a) of the Rules of the Chief Administrative Judge ("the Rules"), 22 NYCRR § 130-1.1(a), authorizes a court, in its discretion, to award to any party or attorney "costs in the form of reimbursement for actual expenses reasonably incurred and reasonable attorney's fees, resulting from frivolous conduct . . ." The Rules also provide that "[i]n addition to or in lieu of awarding costs, the court, in its discretion may impose financial sanctions upon any party or attorney . . . who engages in frivolous conduct . . ., which shall be payable as provided in section 130-1.3 of this Part." Id. The court may award such costs or impose such financial sanctions "against either an attorney or a party to the litigation or against both." Id. § 130-1.1(b).
In determining whether to impose the penalties authorized by Section 130-1.1(a), the Court must determine whether Petitioner's commencement of this nonpayment proceeding, and then its refusal to discontinue the case after being shown proof that all rent due from Respondent had been paid, is "frivolous" within the meaning of the Rules. Conduct is considered "frivolous" if "(1) it is completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law; (2) it is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another; or (3) it asserts material factual statements that are false." Id. § 130-1.1(c). As noted above, the Petition itself — with the rent demand and Tenant Ledger attached thereto — is defective on its face as it demonstrates that the alleged unpaid rent of $688 for the months of March through June 2016 at the rate of $172 per month had in fact been paid. Any claim that Petitioner may have for additional rent of $47 due for the month of February 2016 — whether due to a problem with Respondent's Section 8 subsidy recertification or for some other reason - was not properly asserted. Respondent's counsel served its motion on Petitioner's counsel on October 3, 2016, and it is apparent that rather than acknowledging that Respondent had paid her share of the rent in full for the period sued for in the Petition, conceding the defects in the Petition and rent demand and dropping the case, Petitioner's counsel sought adjournments to file opposition papers which he only did at the court's instruction on March 16, 2017. Further, it appears that Petitioner filed this proceeding on the heels of a prior proceeding which made the same claim as the one made herein and which Petitioner had discontinued.
Accordingly, Respondent's application for sanctions is granted to the extent of setting the matter down for a hearing to provide Petitioner, its agents and counsel with a reasonable opportunity to be heard prior to a final determination on whether Petitioner and its attorneys engaged in frivolous conduct; the precise frivolous conduct engaged in; whether costs and/or sanctions pursuant to 22 NYCRR 130-1.1 should be imposed on Petitioner and/or its attorneys; and, if so, the appropriate amount of said costs and/or sanctions. CONCLUSION
Accordingly, the Petition is dismissed without prejudice, the proceeding is restored to the court's calendar on April 17, 2017 at 9:30 am for a sanctions hearing and Respondent's request for leave to amend her answer is denied as moot. The court is mailing copies of this Decision and Order to counsel for both parties. This constitutes the Decision and Order of this Court. Dated:March 27, 2017 Bronx, New York Diane E. Lutwak, Hsg. Ct. J.