Opinion
LT 93251/08.
Decided August 11, 2009.
WOLF HALDENSTEIN ADLER FREEMAN HERZ LLP, Attorneys for Petitioner, By: KAMBER BRISBANE, ESQ.
LAW OFFICES OF SANFORD F. YOUNG, P.C., Attorneys for Respondents, Helaine Messer and Theodore Cromwell, By: DENNIS GIACOMO VILELLA, ESQ.
JEFFREY H. ROTH, ESQ., Attorney for Michael Messer.
This summary holdover proceeding was commenced by THE VERMEER OWNERS, INC (Petitioner) and seeks to recover possession of Apartment 2S, at 77 SEVENTH AVENUE, NEW YORK, NEW YORK, 10011 (Subject Premises) based on the allegation that, HELAINE MESSER (Respondent) she has breached her obligations under her proprietary lease. Specifically, Petitioner alleges that there are offensive odors emanating from the Subject Premises, that the Subject Premises is excessively cluttered, and that Respondent has created a moth infestation in and around the Subject Premises. THEODORE COWELL (Undertenant) is an undertenant alleged to be in occupancy, and is the companion of Respondent. This is the second such proceeding instituted by Petitioner against Respondent. A prior proceeding under Index Number 76393/04 was settled pursuant to a probationary stipulation on October 28, 2004.
The Court, as indicated at trial, shall take judicial notice of the prior proceeding and the contents of said Court file.
PROCEDURAL HISTORY
Petitioner issued a Notice of Default dated February 12, 2008 alleging Respondent was
in breach of her proprietary lease, and affording Respondent thirty days to cure said default. On or about April 24, 2008, Petitioner issued a Notice of Termination advising that based on Respondent's failure to cure the proprietary lease was terminated effective May 9, 2008. On August 21, 2008, Petitioner issued an amended Notice of Termination, alleging failure to cure and advising the proprietary lease would be terminated effective September 10, 2008. The Notice of Petition and Petition issued on or about November 12, 2008, and the initial court date was November 26, 2008.
Respondent appeared by counsel on November 26, 2008, and entered into a stipulation
consenting to the jurisdiction of the Court and agreeing to allow Petitioner access to inspect the Subject Premises. The case was set for trial on April 7, 2009, pursuant to a Court order which set a new access date for inspection on April 3, 2009 at 2:30pm, as the inspection had not taken place prior to that date.
Respondent's counsel filed a notice of appearance dated 11/16/08 on behalf of Respondent only. However, in an affirmation submitted to the Court dated January 30, 2009, counsel asserted to represent both Respondent and Undertenant.
On or about April 6, 2009, Respondent submitted an Order to Show Cause for
the Court's signature seeking summary judgment, dismissal of the petition and for leave to file a written answer and bill of particulars. The Court declined to sign the Order to Show Cause, and issued an order that Respondent was deemed to have interposed a general denial as her answer. Respondent's application for an adjournment was denied, and the proceeding was transferred to Part X to be assigned to a trial judge.
On or about April 22, 2009, Respondent again submitted an Order to Show Cause for the Court's signature seeking the identical relief as requested in its April 7, 2009 application. The Court again declined to sign the Order to Show Cause, without prejudice to Respondent's right to move for summary judgment at the conclusion of the trial.
On April 28, 2009, the proceeding was assigned to Part S for trial. The trial commenced, Petitioner was unable to establish its prima facie case, and sought a continuance. The Court granted a continuance over Respondent's objection. The trial continued on May 28, May 29, June 1, June 3, June 8, and concluded on June 22, 2009. At the conclusion of the trial, the Court reserved decision.
During the trial, Respondent moved for dismissal based on Petitioner's failure to name Michael Messer, whom Respondent alleged to be a co-tenant and co-proprietary lessee of the Subject Premises, as a necessary party. The court reserved decision on the motion, and directed that the parties submit memoranda of law on their positions. The parties submitted memoranda of law on the issue, at the conclusion of the trial, on June 22, 2009.
Respondent initially made said motion at the close of Petitioner's prima facie case. At that point the Court found that there was insufficient evidence in the record and denied the motion without prejudice to renewal at the conclusion of trial.
On or about June 23, 2009, Petitioner moved for an order to join Michael Messer, as a necessary party to the proceeding, or alternatively for an order excusing his joinder. The motion was returnable July 6, 2009, and adjourned to July 20, 2009 for the submission of additional papers and argument. On July 6, 2009, Michael Messer appeared in this proceeding through counsel. This decision shall address only the pending motions for dismissal and joinder which are consolidated herein for determination.
Mr. Messer, Respondent's brother, had appeared in the proceeding previously in his capacity as a witness and testified at the trial.
IS MICHAEL MESSER A NECESSARY PARTY? DOES THE FAILURE TO HAVE NAMED HIM IN THIS PROCEEDING REQUIRE DISMISSAL ? SHOULD PETITIONER BE PERMITTED TO ADD HIM AS A PARTY?
As noted above, at the commencement of the trial herein, Petitioner did not produce either the proprietary lease or the stock certificate. Petitioner made attempts to offer secondary evidence as to these documents, but had not laid an appropriate foundation to do so. Petitioner was granted a continuance on April 28, 2009 to perform a diligent search for the missing documents, and take any other steps necessary to proceed with its prima facie case.
On or about May 19, 2008, Petitioner served Respondent with a Notice to Produce the proprietary lease, stock certificates, any assignments or assumptions of the proprietary lease or any documents related thereto. Respondent did not produce any documents in response, and asserted that she did not know the location of such documents.
Up until April 28, 2009, no claim was raised that there was another proprietary lessee for the Subject Premises. The defense of failure to name a necessary party was not included in Respondent's proposed written answer, or as a basis for dismissal or summary judgment in either of the two Orders to Show Cause that Respondent submitted seeking summary judgment herein.
Additionally, Michael Messer was aware of this proceeding from the inception, came to New York for the trial, testified herein, yet never moved to intervene as a party.
FACTUAL FINDINGS AND EVIDENCE
When the trial continued on May 28, 2009, Petitioner had still not been able to locate the original documents. Petitioner offered secondary evidence including several cancelled proprietary leases for other units in the Subject Building, a photocopy of what is asserted to be the proprietary lease with assignments for the Subject Premises (Exhibit 7), and a photocopy of a single page from its stock ledger transfer (Exhibit 8).
Matthew Abisch, a managing agent for the premises, testified that he had conducted a fifteen hour search over two days both at the Subject Building and in his office. Mr. Abisch found a copy of the proprietary lease and assignments in the building file. Mr. Abisch testified that the stock ledger transfer sheet has the signatures of the new shareholders indicating their consent to accept the stock on transfer.
The proprietary lease was issued May 2, 1980, and the original proprietary lessee was Philip Sills. At the back of the exhibit, are several other executed documents. The first is labeled Assignment of Proprietary Lease, purports to be an assignment from Michael Messer to Michael Messer and Helaine Messer, and is dated January 5, 1984. It is purportedly executed by Benedict Messer, as attorney-in-fact for Michael J. Messer. The notary indicated however that the person who's signature was notarized was that of Michael Messer. No power of attorney was annexed, produced at trial or even acknowledged by any witness or party ever to have existed.
Benedict Messer was the father of Respondent and Michael Messer, and is deceased.
The next document annexed is an acceptance of assignment and assumption of lease. This document is also dated January 5, 1984 and is purportedly executed by the same individual, on behalf of Michael Messer, as well as being executed by Respondent. Once again, the notary indicates that individuals signing were Michael Messer and Helaine Messer.
The next document annexed is a Consent to Assignment, wherein Petitioner consented to the assignment of the proprietary lease from Michael Messer to Michael and Helaine Messer, as indicated by the signature of Kay Harrison, as the secretary of Petitioner.
Another set of documents follow. These documents purport to be an assignment, from Aryeh Golan to Michael Messer, acceptance of said assignment and Petitioner's consent to such assignment. These documents are also dated January 5, 1984. The acceptance of assignment is however signed "Michael Messer by Helaine Messer his attorney-in-fact", and again the notary indicates that Michael Messer appeared and executed the document. Again no power of attorney is attached, was ever produced or even acknowledged to have existed.
The stock transfer ledger indicates that for the Subject Premises, Philip Sills was the proprietary lessee from May 2, 1980, followed by: Vera Sensing as of March 26, 1981; and Aryeh Golan as of June 30, 1981; and Michael Messer followed by "M E Messer". Additionally, the column on the transfer ledger titled "Date Became Owner" is filled out for all other proprietary lessees listed on the page other than Michael Messer and "M E Messer". No "E Messer" was ever identified by any witness or other evidence offered during the trial.
The document in evidence as Exhibit 8 is not clearly legible in all portions.
On April 28, 2009, Michael Messer was present for the commencement of the trial. He was excluded from the courtroom after the trial began, as a non-party witness, because Respondent indicated she intended to offer his testimony at trial. No objection was raised at that time that he was a party or entitled to remain.
On June 1, 2009, Respondent sought a continuance to present the testimony of Michael Messer. Petitioner objected to Mr. Messer being able to testify on the grounds that he had not been excluded from the Courtroom during the entire trial. The objection was overruled, as the Court after reviewing the minutes from the initial court date found that he had in fact been excluded as a nonparty witness.
The trial was adjourned to June 3, 2009 for Michael Messer's testimony. Michael Messer testified on June 3, 2009. Mr. Messer indicated that at the time of his testimony, he had been in New York for approximately nine days, and that during the trial he was staying with Respondent at the Subject Premises. Mr. Messer stated that he had come to New York expressly for the trial.
Mr. Messer is a retired physician, and has lived in California, for the last thirty-seven years. Mr. Messer has never lived in the Subject Premises, nor has he ever paid maintenance for the Subject Premises. Mr. Messer testified that he is Respondent's brother, and that he has an ownership interest in the Subject Premises.
Mr. Messer testified that he and Respondent bought the Subject Premises together, but acknolwedged that, to the best of his recollection, he had never received a proprietary lease or stock certificate for the Subject Premises. Mr. Messer further acknowledged that his signature did not appear on the proprietary lease(Exhibit 7) or the stock ledger transfer (Exhibit 8), and asserted that he did not believe he had ever seen these documents prior to the trial. Mr. Messer testified that his father's name was Benedict C. Messer, and that his father died in 1997.
Mr. Messer doesn't recall where he was on January 5, 1984, the date indicated on the proprietary lease and stock transfer ledger, as the date of transfer to Respondent, but acknowledges that he was not in New York at the closing for the Subject Premises. Mr. Messer remembers discussing with his father and Respondent at the time their intention to purchase the Subject Premises. Mr. Messer testified that based on these discussions it was his understanding that he would be a fifty-percent owner of the Subject Premises. Mr. Messer has no records showing he paid anything for the purchase of the Subject Premises, but asserts that the monies for the purchase of the Subject Premises came from his father. Mr. Messer believes the purchase price for the Subject Premises was approximately $119,000.00.
Mr. Messer stated that he understood the proceeding to concern two issues, whether Respondent had violated her obligations under the proprietary lease, and whether his rights as a shareholder had been established. Mr. Messer received no predicate notices concerning any lease violations, was aware that Petitioner was seeking to evict Respondent and take back possession of the Subject Premises, and was aware that Respondent was in arrears on maintenance payments.
Mr. Messer testified that he had also been in the Subject Premises in the spring of 2008, and acknowledged that at that period the Subject Premises was cluttered and contained more items then appropriate.
Mr. Messer is aware that Petitioner had instituted litigation against Respondent, prior to this proceeding, because Respondent had advised him of same. Mr. Messer never appeared in those proceedings, either pro se or through counsel. Mr. Messer testified that he did not believe it was necessary to hire an attorney, because Respondent was represented by counsel, and that she would be representing Mr. Messer's interests in addition to her own. Mr. Messer stated that he never provided Petitioner with an address where he could be located, because he had no reason to do so.
Mr. Messer acknowledged that he had discussed this proceeding with Respondent's counsel on numerous occasions, and testified that he had loaned Respondent money in the Spring of 2007, to hire an organizer to help get rid of clutter in the Subject Premises.
Other documents were offered in evidence relative to the claim that Michael Messer is a proprietary lessee and necessary party. Exhibit J is a 1098 form for the 2008 tax year. Mr. Abisch testified that this form indicates the fair share of the percentage of mortgage interest paid by shareholders for the mortgage on the building, and that this document was generated by Petitioner for all shareholders. The document is addressed to M. H. Messer. Exhibits E1 and E2 are similar forms sent by Petitioner to "M. Messer" at the Subject Premises for the 2004 and 2007 tax years. Additionally, it appears undisputed that monthly maintenance bills have been and continue to be generated in the name of "M. . H. Messer" ( see eg. Exhibit D).
Mr. Abisch testified that such forms are generated and addressed based on whatever information is already in Petitioner's computer system, and that such information may not match the actual shareholder. Mr. Abisch testified that this is particularly true where there have been changes in the identity of the shareholder due to death marriage or other such events.
Mr. Abisch testified that he did not know who M Messer was, but asserted that Petitioner believed that M Messer was Respondent's deceased father.
DISCUSSION
CPLR § 1001(a) provides that necessary parties are "(p)ersons who ought to be parties if complete relief is to be accorded between the persons who are parties to the action or who might be inequitably affected by a judgment in the action . .".
CPLR § 1001(b) provides that if a person is a necessary party and jurisdiction over him cannot be obtained absent his consent ". . . the court, when justice requires may allow the action to proceed without his being made a party." The statute further specifies certain criteria for the Court's consideration in determining whether to allow the action to proceed. The criteria include what available remedies exist for Petitioner in the event of dismissal, potential prejudice from non-joinder to Respondent or the person not joined, whether the prejudice may have been avoided, and whether an effective judgment may be rendered in the absence of the person who is not joined.
In discussing the purpose behind these statutes the Court of Appeals has held ". . The fundamental purpose of these devices was . . . but to implement a requisite of due process — the opportunity to be heard before one's rights or interests are adversely affected ( Martin v. Roman 47 NY2d 486, 490[ citations omitted]).
While the statute contemplates dismissal as a possibility, the Court of Appeals has held that dismissal for failure to join a necessary party should only be a last resort ( Saratoga County Chamber of Commerce v. Pataki, 100 NY2d 801). The Court held that requiring dismissal was appropriate only in two instances, either to prevent inconsistent judgments in multiple litigations or to prevent a party from being adversely affected absent notice and an opportunity to be heard ( Id).
This holding has been incorporated into summary proceedings, and where joinder is feasible, the CPLR mandates joinder rather than dismissal ( see eg Washington Mutual Bank v. Hanspal 836 NYS2d 491 [2007]).
In this proceeding, Mr. Messer knew of the litigation, but elected not to assert his rights as a party herein. His own testimony was that he did not feel that it was necessary to hire an attorney to defend his position because his sister hired an attorney and would protect both of their interests. Mr. Messer has had notice of this proceeding and the allegations regarding breach of lease from the inception of the proceeding, as well as in 2004 based on the previous litigation. Mr. Messer assisted Respondent in an attempt to cure the breach of lease alleged, consulted with the attorney Respondent hired, appeared in Court and offered testimony, and affirmatively chose not to seek to intervene as a party as he did not believe that the protection of his ownership interest required it.
Thus as the Court of Appeals found in Saratoga of the two rationales enunciated for dismissal "(n)either purpose applies here ( Supra at 820)." There is no danger of inconsistent judgments, nor has Mr. Messer been deprived of either notice or an opportunity to be heard.
Additionally, neither Respondent, nor Mr. Messer ever raised the issue prior to the commencement of the trial in this proceeding, which has been pending in this Court since November 2008. Had Respondent or Mr. Messer raised the issue in a more timely fashion, the prejudice associated with either dismissal or joinder would have been minuscule compared to the potential prejudice and waste of resources now at play as a result of Respondent first raising the issue at the conclusion of Petitioner's prima facie case. This Court conducted a long trial and many of the residents of the Subject Building took time out to testify. Notwithstanding the foregoing, a motion to dismiss based on failure to name a necessary party may be made at any stage of the proceedings ( Estate of Prospect v. New York State Teacher's Retirement System 13 AD3rd 699; CPLR § 3211(10)).
It has not been established conclusively that Mr. Messer is a proprietary lessee and shareholder of the Subject Premises, and no stock certificate was produced at trial. Possession of a stock certificate in one's name is prima facie evidence of ownership in a cooperative (UCC 8-102(4) (7)). "UCC 8-106(b) provides that a purchaser . . . obtains control over a certificated security in registered form if the security is delivered to the purchaser and the certificate is indorsed or if the certificate is registered on the books of the corporation in the purchasers name ( Guccione v. Guccione NYLJ March 30, 1999, p. 33, col. 1)."
The documents that are in evidence show many irregularities as pertains to Mr. Messer's alleged ownership interest. These include the fact that a notary purportedly verified Michael Messer's presence, when in fact he was not present, and reference two power of attorneys for him one in favor of his father, another in favor of Respondent, neither one of which was ever actually produced or even alleged to have existed.
It was argued by Petitioner that Benedict Messer was in fact the co-tenant or shareholder, and that upon his death in 1997 the remaining interest went to Respondent. However, other than a reference to Benedict Messer as attorney in fact for Mr. Messer, on the proprietary lease, and Mr. Messer's allegation that Benedict Messer paid for the purchase of the Subject Premises, The record contains no evidence to support this claim.
The record contains no evidence as to whether the proprietary lessees are joint tenants or tenants in common, and whether an estate should have been considered a necessary party based on Petitioner's allegations regarding the proprietary lease.
Despite the irregularities surrounding the execution of the proprietary lease, and the lack of documentation in the record conclusively establishing that Mr. Messer is a proprietary lessee, Petitioner asks the Court to rely on said proprietary lease in establishing its prima facie case. Additionally, Petitioner's records indicate that there are two proprietary lessees for the Subject Premises, and Petitioner has designated those proprietary lessees as "M" "H" Messer in monthly maintenance bills, as well as other documents. The proprietary lease relied upon by Petitioner asserts that Michael Messer is a shareholder. Petitioner can not simultaneously assert that the proprietary lease is valid as to Respondent, but invalid as to Michael Messer, particularly given that the document relied upon by Petitioner asserts that Respondent was the assignee of Michael Messer.
It is well settled that a co-lessee is a necessary party to a summary proceeding ( Williams v. Somers 91 AD2d 545 [1st Dept. 1982]; In re Roswick 231 BR 843 [ under New York law a co-tenant with a one half interest in cooperative apartment was a necessary party in summary eviction proceeding for non-payment of rent]; Chen v Dickerson 17 Misc 3d 61 [App. Term, 2007][ co-tenant is a necessary party to summary non-payment proceeding]; Lozynskyj v Leland 9 Misc 3d 133 [A][App Term 2005]; Watersview Owners Inc. v Paciemo 13 Misc 3d 130 [A][App Term 2006]; Giacalone v Tatun 17 Misc 3d 130 [A][App Term 2007]). Even if the Court ultimately determines that Mr. Messer is not a proprietary lessee, at the very least, he may have an interest that could be adversely impacted by an determination in this proceeding after trial.
Based on the foregoing, the Court finds that Michael Messer is a necessary party pursuant to CPLR 1001(a). Generally in summary proceedings the inquiry ends there. "Summary proceedings are almost always based on claims which require service before, and as a predicate to commencement of the proceedings, of notices to cure and/or terminate tenancy. . . . (W)here a necessary party to the proceeding (is) also entitled to a predicate notice, but not served with it, joinder of the party after the commencement of the proceeding obviously will not be feasible. ( Stanford Realty Assoc. v. Rollins 161 Misc 2d 754, 758)." Thus while the statute mandates joinder, even where the party has a defense that may ultimately lead to dismissal, in summary proceedings courts have often simply dismissed the proceeding when the issued is raised.
However, in this case the issue of predicate notices may not result in dismissal of the proceeding. The proprietary lease in paragraph 44 provides that "Any notice by the Lessor to any person named as Lessee shall be sufficient, and shall have the same force and effect, as though given to all persons named as Lessee." As the Subject Premises is a Cooperative, and the tenancy not otherwise subject to regulation, as long as the predicate notices were sufficient under the terms of the proprietary lease, to terminate the interest of Mr. Messer, dismissal is not mandated. As Petitioner correctly points out unlike summary nonpayment proceedings or holdover proceedings involving regulated tenancies, in this case there are no City or State statutes that afford Mr. Messer any greater rights then he is entitled to under the proprietary lease. Under the proprietary lease the notices served on Respondent are effective and binding as to Mr. Messer as well.
CPLR 401 provides that after the commencement of a summary proceeding no party may be joined without leave of court. Furthermore, CPLR 1001(a) mandates that "(w)hen a necessary party is subject to the jurisdiction of the court' . . . the court order him summoned'. It does not provide for consideration of discretionary factors, such as whether the party will assert defenses that will result in dismissal after joinder. As long as it is possible to obtain jurisdiction over the party, the court is mandated to join the necessary party and remit for further proceedings ( Windy Ridge Farm v. Town of Shandaken 11 NY3d 725 , 727[citations omitted)." See also Matter of Romeo v. New York State Dept. Of Educ. 41 AD3d 1102 (3rd Dept 2007)( joinder of necessary party is mandatory where party is subject to jurisdiction of the court).
Mr. Messer has appeared in this proceeding, through counsel and submitted papers in opposition to Petitioner's motion. As such, he is subject to the Court's jurisdiction and can be made a party. Therefore, Petitioner is directed to serve an amended notice of petition and petition on Mr. Messer's attorney and Respondent within ten days of the date of this decision. Mr. Messer shall have ten days from the receipt of the amended pleading to serve and file a written response.
All parties are directed to appear before the Court on September 9, 2009, in Part S, Room 820, at 9:30 am for a status conference, and to address any applications to open the record for additional testimony or documentary evidence as may be appropriate.
This constitutes the decision and order of this Court.