Opinion
L & T 50829/20
04-14-2021
1692 ROCKAWAY LLC as assignee of Deo Singh, Petitioner, v. Yudhamann PRASHAD, et al., Respondent.
For Petitioner: Matthew Scott Porges For Respondent: Carl Husbands
For Petitioner: Matthew Scott Porges
For Respondent: Carl Husbands
Jack Stoller, J.
1692 Rockaway LLC, as assignee of Deo Singh, the petitioner in this proceeding ("Petitioner"), commenced this holdover proceeding against Yudhamann Prashad ("Respondent"), Monica Devi Prashad ("Co-Respondent"), and others, the respondents in this proceeding (collectively, "Respondents"), seeking possession of 1692 Rockaway Park, 1st Floor, Brooklyn, New York ("the subject premises") on the ground of a termination of an unregulated tenancy. Respondents interposed an answer with a defense, inter alia , that Respondents have never had a landlord/tenant relationship with Petitioner and that Respondents do not know who Petitioner is or Petitioner's relationship to the subject premises. The Court held a trial on April 9, 2021.
The trial
Petitioner predicated this proceeding on a notice signed by Petitioner's predecessor-in-interest on September 25, 2019 purporting to terminate Respondent's tenancy as of October 31, 2019. Petitioner introduced into evidence a deed dated November 4, 2019 according to which Petitioner's predecessor-in-interest purported to convey title to the house in which the subject premises is located ("the House") to Petitioner. Petitioner commenced this proceeding by a petition verified on December 29, 2019 purporting to be the assignee of Petitioner's predecessor-in-interest.
A controlling party in the LLC that is Petitioner ("the Owner") testified that the House is a two-family house; that Petitioner's predecessor-in-interest is a business partner of his; that Respondents live in the subject premises; and that Respondents have not paid him anything since November of 2018, although he was expecting $2,000 a month. The Owner testified on cross-examination that Respondents came in possession of the subject premises in October of 2018, when he talked to them and gave Respondent permission to move into the subject premises; that there was an agreement that Respondents were going to be month-to-month tenants; that Respondents were supposed to be in the subject premises for three months; that he has not gone to the House since he became an owner of it; that he never sent Respondents a written demand for rent; that there is no written lease; and that he was doing Respondent a favor because Respondent was in the process of buying a property.
Respondent testified that he moved to the subject premises in October of 2018 because he was foreclosed on in Queens; that a corporate entity that he controlled ("Respondent's corporation") owned the House at that time; that the House was in foreclosure; that he had been tricked; that he did not know who the Owner was; that he did not think that he was entering into the subject premises as a tenant to Petitioner or to Petitioner's predecessor-in-interest; and that he never made an arrangement to pay $2,000 to anyone.
Respondent introduced into evidence a recorded mortgage on the House dated March 23, 2016 according to which the mortgagor is Respondent's corporation, which Respondent executed as president of Respondent's corporation. Respondent testified that the mortgage still in effect; that neither Petitioner nor Petitioner's predecessor-in-interest paid the mortgage; and that the pendency of the mortgage means that he is still the owner of the House.
Respondent testified on cross-examination that he has no documents to show that he is currently the owner of the House. Respondent testified on redirect examination that he has commenced an action in Kings County Supreme Court in 2021 where he would litigate his dispute about title to the House.
Co-Respondent testified that Respondents moved into the subject premises on November 19, 2018; that they have lived there continuously since that time; that she does not consider herself a tenant because she believes that she and Respondent own the House; that she made no arrangements to be a tenant with Petitioner or other associated people; and that she never paid rent to anyone.
Co-Respondent testified on cross-examination that Respondent engaged in transactions with regard to the House. Co-Respondent testified on redirect examination that she was aware of a foreclosure and that Petitioner promised to help them with foreclosure and then took advantage of Respondents.
Discussion
As noted above, Respondents' answer pleads that they are not in a landlord/tenant relationship with Petitioner. Parties create a landlord/tenant relationship with one another by a contract — expressed or implied — which defines their rights and obligation. Stern v. Equitable Tr. Co. , 238 NY 267, 269 (1924), Hispano Americano Advert. v. Dryer , 112 Misc 2d 936, 937 (Civ. Ct. NY Co. 1982) (Saxe, J.), Scarborough Manor Owners Corp. v. Robson , 57 Misc 3d 24, 28 (App. Term 2nd Dept. 2017), Bhatti v. Goings , 65 Misc 3d 1231(A)(Civ. Ct. Kings Co. 2019). Petitioner did not introduce into evidence any textbook proof of a landlord/tenant relationship with Respondents, like a lease. Indeed, the Owner testified that Respondents never paid rent. The absence of any such documentation paired with the disputed testimony between the Owner and Respondents as to the existence of any arrangement between them demonstrates that Petitioner did not meet its burden of proving by a preponderance of the evidence that the parties mutually agreed to the terms of a landlord/tenant relationship.
If Respondents were in a landlord/tenant relationship with any predecessor-in-interest to Petitioner, then Petitioner may conceivably avail itself of the same remedies for the nonperformance of any agreement with Respondents that such a predecessor-in-interest would have had, RPL § 223, a proposition that occasions an evaluation of the nature and origin of Respondents' occupancy of the House. The preponderance of the evidence shows that, at some point in the past, Respondent's corporation held title to the House and Respondents lived in the House because Respondent's corporation held title to it. A natural person cannot be a tenant of a corporate entity that the natural person wholly owns, particularly when the natural person did not enter into a lease with or pay rent to the corporate entity. Friesch-Groningsche Hypotheekbank Realty Credit Corp. v. Slabakis , 215 AD2d 154, 155 (1st Dept. 1995). Cf. Schmaeling v. Schmaeling , 127 Misc 2d 763, 767 (Dist. Ct. Nassau Co. 1985) (there can be no landlord/tenant relationship when the landlord and the tenant are the same person), Bostwick v. Frankfield , 74 NY 207, 214 (1878) (where a greater estate and a lesser estate coincide in the same person and the same right, the lesser estate is merged into the greater estate), Tri-Land Props. v. 115 W. 28th St. Corp. , 267 AD2d 142, 142 (1st Dept. 1999) (an owner-occupant is not a "residential occupant," i.e. a tenant, for purposes of Loft Law eligibility). The absence of a lease between Respondent and Respondent's corporation only reaffirms this authority. Accordingly, Respondents were not in a landlord/tenant relationship with Respondent's corporation, and Petitioner, as a putative successor-in-interest to Respondent's corporation, would not have a landlord/tenant relationship with Respondents to succeed to.
Granted, the analysis above assumes an extent of Respondent's control of Respondent's corporation that was not in the record at trial, even though the record showed that Respondent executed the mortgage on behalf of Respondent's corporation as the president of Respondent's corporation. Even assuming arguendo , then, that the Court could therefore deem Respondents to be tenants of Respondent's corporation, Respondents' continued occupancy upon new owners taking title does not suffice to create a landlord/tenant relationship. United Sec. Corp. v. Suchman , 307 NY 48, 52-53 (1954), Hispano Americano Advert., supra , 112 Misc 2d at, 937, Geist v State of New York , 3 Misc 2d 714, 719 (Ct. Cl. 1956), Eshaghian v. Adames , 28 Misc 3d 1215(A)(Civ. Ct. NY Co. 2010), Gordian v. Donovan , 6 Misc 3d 1028(A)(Civ. Ct. NY Co. 2004), Lyddy v. Ayling , 111 Misc 2d 449, 456 (Civ. Ct. NY Co. 1981). Rather, Respondents would have to attorn to Petitioner as a new owner, i.e., consent to the holding of a new landlord on the same terms as a prior leasehold the tenant had had with the previous landlord. Austin v. Ahearne , 61 NY 6, 15 (1874). A tenant does not attorn to a new landlord when the tenant never paid rent to the new landlord. Ripple's of Clearview, Inc. v. Le Havre Assocs. , 88 AD2d 120, 121-22 (2nd Dept. 1982), Marrero v. Escoto , 145 Misc 2d 974, 976 (App. Term 2nd Dept. 1990). The record at trial does not support the proposition that Respondents attorned to Petitioner as such.
A petition that characterizes an occupant as a tenant fails to state a cause of action upon a failure to prove the existence of a landlord/tenant relationship. Pugliese v. Pugliese , 51 Misc 3d 140(A)(App. Term 2nd Dept. 2016), Stanislaus v. Stanislaus , 61 Misc 3d 1213(A)(Dist. Ct. Nassau Co. 2018). Petitioner did not prove the existence of a landlord/tenant relationship between the parties. Moreover, the predicate notice's characterization of Respondent's holding is important because if occupants act on notices by vacating the rented premises, and the notices are invalid, the occupants not only give up their leasehold but might even risk liability, Second & E. 82 Realty LLC v. 82nd St. Gily Corp. , 192 Misc 2d 55, 59 (Civ. Ct. NY Co. 2002), underscoring the significance of the accuracy of predicate notices.
Accordingly, the Court dismisses this proceeding after trial. The Court notes that dismissal of this cause of action does not deprive Petitioner of a remedy given that the record shows that Petitioner's actual theory of Respondent's occupancy of the subject premises is that Respondent is a former owner who voluntarily conveyed title of the House and then remained in possession, RPAPL § 713(8), but such a remedy applies to an occupancy where no landlord/tenant relationship exists. The dismissal of this proceeding is therefore without prejudice to Petitioner's proper cause of action against Respondent and any defenses Respondents may have thereto. Furthermore, as the Housing Court does not adjudicate questions of title or ownership, Gouverneur Gardens Hous. Corp. v. Silverman , 26 Misc 3d 133(A)(App. Term 1st Dept. 2010), Mattis v. Brockington , 19 Misc 3d 133(A)(App. Term 1st Dept. 2008), Ferber v. Salon Moderne, Inc. , 174 Misc 2d 945, 946 (App. Term 1st Dept. 1997), this decision after trial is without prejudice to the causes of action and defenses of the parties in the Supreme Court litigation between them that Respondent referred to in his testimony.
This constitutes the decision and order of this Court.