Opinion
Index No. 450151/2015 Motion Seq. No. 012
01-16-2024
CITY OF NEW YORK, Plaintiff, v. NYC MIDTOWN LLC, NY CITY STAY LLC,ERAN SUKI, BENZION SUKY, SALIM ASSA, 15 WEST 55TH ST. PROPERTY LLC,THE LAND AND BUILDING KNOWN AS 15 WEST 55TH ST, BLOCK 1271, LOT 27, COUNTY, CITY AND STATE OF NEW YORK, 19 WEST 55TH ST. PROPERTY LLC,THE LAND AND BUILDING KNOWN AS 19 WEST55TH ST., BLOCK 1271, LOT 25, COUNTY, CITY AND STATE OF NEW YORK, ARBOR REALTY PARTICIPATION LLC,WEST 46TH STREET INVESTORS LLC, THE LAND AND BUILDING KNOWN AS 334 WEST 46TH ST., BLOCK 1036, LOT 47, COUNTY, CITY AND STATE OF NEW YORK, THE LAND AND BUILDING KNOWN AS 336 WEST 46TH ST., BLOCK 1036, LOT 48, COUNTY, CITY AND STATE OF NEW YORK, DIRECT REALTY, LLC,U.S. BANK NATIONAL ASSOCIATION, JOHN AND JANE DOE, Defendants.
Unpublished Opinion
MOTION DATE 01/28/2021.
PRESENT: HON. JAMES E. D'AUGUSTE, JUSTICE
DECISION + ORDER ON MOTION
The following e-filed documents, listed by NYSCEF document number (Motion 012) 656, 657, 658, 659, 660, 661,662, 663, 664, 665, 666, 667, 668, 669, 670, 671,672, 673, 674, 675, 676, 677, 678, 679, 680, 681, 682, 684, 685, 686, 687, 688, 689, 690, 691,693, 694, 695, 696, 697, 698, 699, 700, 701, 702, 703, 704, 705, 706, 707, 708, 709 were read on this motion to/for SUMMARY JUDGMENT.
Plaintiff the City of New York (the "City") commenced this nuisance abatement proceeding seeking to halt alleged illegal transient use and occupancy of apartments in buildings in Manhattan. In this motion, the City seeks summary judgment against the defendants remaining in this action: 1) NYC Midtown LLC, d/b/a 5th Avenue Suites and West 46th Street Apartments (Midtown); 2) NY City Stay LLC (City Stay), and 3) the individuals, Eran Suki (Eran) and Benzion Suky (Ben). The City also seeks permanent injunctive relief, statutory civil penalties, and punitive damages against defendants, jointly and severally. Ben cross-moves for summary judgment dismissing the action against him.
The City alleges as follows. Defendants routinely and continuously offered transient occupancies in four buildings located at 15 West 55th Street (owned by 15 West 55th St. Property LLC), 19 West 55th Street (owned by 19 West 55th St. Property LLC), 334 West 46th Street, and 336 West 46th Street (both owned by West 46th Street Investors LLC). These unlawful rentals were mainly accomplished by using commercial travel platforms (such as Booking.com, Expedia.com, and Travelocity.com) and on proprietary websites set up and operated by defendants themselves (see City of New York v NYC Midtown LLC, 2017 NY Slip Op 31596 [U] [Sup Ct, NY County 2017] [the same case]). Beginning in October 2013, the New York City Department of Buildings (DOB) and the New York City Fire Department (FDNY) issued approximately 100 notices of violations to the owners of the subject buildings due to their violations of building and fire codes resulting from the illegal use of the properties as short-term hotels. The City issued numerous administrative orders directing the owners to terminate the transient use. The danger posed by transient occupancy is briefly described in City of New York v Torkian Group LLC, 2020 NY Slip Op 31048[U], **6 [Sup Ct, NY County 2020], The purpose of these enforcement efforts was to terminate the unlawful transient use (fewer than 30 consecutive days, per Multiple Dwelling Law (MDL) § 4 [8] [a]) of 21 units in four multiple dwelling buildings in which the applicable certificates of occupancy strictly limit residential apartments in the buildings to permanent residential use.
From December 2013 through May 2015, the Environmental Control Board (ECB) held about 19 hearings on transient use related violations at the buildings. The violation notices were dated 2013, 2014, and 2015. The ECB sustained all the violations (NYSCEF 677, 678). By February 2015, defendants allegedly disobeyed multiple orders directing discontinuance of their illegal transient hotel business. Defendants were also not paying the administrative fines imposed by the ECB and were not properly certifying the violations as having been corrected. As a result, the City commenced this civil enforcement nuisance abatement proceeding on February 5, 2015, and a temporary restraining order ("TRO"), which was thereafter superseded by a preliminary injunction. The City states that the use of the buildings as transient hotels "seemed to stop (mostly if not completely)" after injunctive relief was granted. While the City continued to find unlawful transient use at the buildings, "it did not appear that [defendants] were responsible, at least not after the" units used for transient occupancy were surrendered to the buildings' owners in February and March 2015 (NYSCEF 658, affirmation in support of motion, at 16 n 8).
The ownership structure of the buildings initially places Ben as the principal of defendant Direct Realty LLC, which previously owned the 46th Street buildings. Eran is the member, principal, and sole employee of Midtown and City Stay. In December 2013, Direct Realty was sold to the current owner, West 46th Street Investors LLC. After the sale, Direct Realty LLC was dissolved. The litigation against the current owners was resolved several years ago (NYSCEF 561). Regarding the defendants against whom the City is now moving, Midtown, City Stay, Eran, and Ben, the City alleges that, despite good faith efforts on both sides, the parties have been unable to reach a settlement. Therefore, the action is required to be resolved on its merits with a determination of this motion.
The City asserts that Ben, Eran, Midtown, and City Stay ran the transient business. They advertised and booked the transient accommodations. Midtown leased units in the buildings and then leased them to transient users. City Stay and Midtown managed the accommodations and provided guest services. Eran and Ben are brothers, although each spells the last name differently. The City claims that Ben and Eran are liable in their personal capacities for creating the public nuisances, while they contend that only the companies are liable. Further, Ben asserts that he was not involved in the transient business at all.
The City seeks: 1) a permanent injunction enjoining Eran and Ben, in their individual capacities, and Midtown and City Stay from using or permitting the use of any of the units in the four buildings or anywhere in New York City for transient use and occupancy, and from advertising transient occupancies at any buildings in New York City where such occupancies are not legally authorized, pursuant to Consumer Protection Law (CPL) § 20-703, codified at Administrative Code of City of NY [Administrative Code] § 20-700, et seq.
2) $478,000 in civil penalties of $1,000 a day for every day that the public nuisance was maintained, from October 17, 2013 (the date that the first transient use violations issued) to February 6, 2015 (when the TRO issued), a period of 478 consecutive days, pursuant to the Nuisance Abatement Law (NAL) § 7-706 (h), codified at Administrative Code § 7-701, et seq.
3) $239,000 in civil penalties of $500 a day pursuant to CPL § 20-703 (b); and 4) punitive damages of $100,000.
The City claims that the monetary penalties are substantial enough to act as a deterrent without being unreasonably severe or impermissibly punitive.
The City's Evidence and Defendants' Opposition
Eran, Midtown, and City Stay oppose the motion collectively. Ben opposes the motion separately and takes no position on plaintiff's motion against Midtown, City Stay, and Eran. The City's affirmation lists its evidence showing that defendants created and maintained public nuisances (NYSCEF 658, starting at ¶ 84). In addition to citing instances where Midtown leased apartments from the LLC owners, the City produces evidence that, on April 19, 2014, Eran filed an application for a New York State sales tax certificate of authority stating therein that it was for the purpose of starting a new business, named NY City Stay LLC, of which he was a member and which would provide short term hotel accommodations in New York City, and would be member managed (id., ¶ 99).
In his affidavits (NYSCEF 694, 699), Eran does not deny that Midtown leased apartments from the owner LLCs and then leased them to transient users or that City Stay was involved in the business. He does not deny signing the leases on behalf of Midtown and that, at times, he signed leases without reference to his position in Midtown. He does claim that all his activities regarding transient occupation were done on behalf of Midtown and City Stay and not in his individual capacity.
Eran and Ben both claim that Ben is not and, all times relevant to this case, was not a member or manager of Midtown or City Stay or an employee or affiliated in any way with those LLCs or the transient business. During the time relevant to plaintiff's claims, Ben had no association or involvement with any of the properties related to this action (NYSCEF 693, Ben's affidavit).
As evidence of Ben's liability, the City notes that, on December 9, 2013, Midtown leased ten apartments for two years in the buildings on West 46th Street. West 46th Street Investors LLC, executed the leases as lessor. At that time, Direct Realty, which Ben owned, still owned the buildings (NYSCEF 658, ¶ 90). According to the City, the fact that West 46th Street Investors LLC executed the leases as lessor for buildings that were owned by Ben shows that Ben, and Eran were together involved in the business of transient accommodations.
Ben was a defendant in another nuisance abatement action, as noted in this Court's decision (City of New York, 2017 NY Slip Op 31596[U], *27-28 n 20; NYSCEF 516). The City says that it commenced that action because of Ben's active and direct role in conducting illegal short-term occupancies in 96 units in a building and his position as a principal of the LLCs that owned the building and operated the transient rental business (NYSCEF 658, ¶ 103). In the resulting settlement, Ben agreed that he and his companies would be permanently enjoined from engaging in said activity in New York City.
From October 2013 until this action commenced in February 2015, the City's inspections revealed transient use in all four buildings. All the orders to discontinue transient use were disobeyed (NYSCEF 658, ¶ 115). At the ECB hearings, defendants never submitted evidence to challenge the cited transient use. Instead, they falsely claimed that they had corrected the violations and discontinued all transient use at the buildings (id, ¶ 116).
At each ECB hearing, the representative for the respondents is required to designate one individual or firm upon whom to serve the decision. At six of the hearings conducted from June through October 2014, the designated individual was Ben. The hearings concerned the buildings at 15 and 19 West 55th Street and one on West 46th Street (NYSCEF 658, ¶ 125; NYSCEF 678). Ben was the sole party served with the ECB decisions from those hearings. The City claims that this evidence shows that Ben participated in illegal activity in all the buildings, not only the ones on 46th Street.
City Stay's financial records show that in 2013 Ben and/or his wife received monetary payments from City Stay in the form of a "commission" of $38,000 earned from rentals, and $8,623 for travel expenses, including a series of payments made for "Ben's driver" (NYSCEF 658, ¶ 177; NYSCEF 661, 662). This is evidence of Ben's involvement in City Stay's transient rentals.
Ben and Eran state that the $38,000 was Ben's finder's fee for introducing City Stay to current ownership and that it was unrelated to transient occupancy and that Ben's receipt of that money does not mean that he participated in arranging transient stays.
In 2013, 2014, and after transient use leases were surrendered to the current building owners in 2015, principals of new ownership emailed DOB and FDNY violations and notices of ECB hearings to Eran and Ben. In the emails, Ben and Eran were instructed to take care of the notices pursuant to Ben's and Eran's agreement to handle all their transient use-related violations resulting from Midtown renting apartments in the buildings. In replies, defendants "assumed responsibility to answer the notices of hearing and to correct the charged violations pursuant to their agreement" (NYSCEF 658, ¶ 126, NYSCEF 679).
Defendants deny the City's contention that these emails show that Eran and Ben agreed to assume responsibility for transient use violations in the buildings. They claim that the email exchanges merely show that Ben and Eran agreed to defend new ownership against the violation charges. Ben states that most of those communications were sent not to him, but to Eran and requested action by him, because Eran was the sole member and manager of Midtown and City Stay. Ben was copied on a few emails because "owing to my prior ownership of and affiliation with [the 46th Street] buildings, I might have information or documents or photographs relevant to their inquiries" (NYSCEF 693, ¶ 20).
Defendants argue that the City fails to prove entitlement to summary judgment because the extent to which defendants were able to control the activities of the premises is a question of fact. They assert that after the four buildings were purchased between November 20 to December 24, 2013 (NYSCEF 658, ¶ ¶ 84, 85) they had no control over the buildings. Notably, Eran also points out that control of the units used for transient rentals were surrendered to the owners of the buildings after this action began in February 2015. Defendants also contend that should this Court find liability for transient occupancies then maximum civil penalties are not warranted, and a specific amount should be determined at trial. Relying on City of New York v Taliaferrow (158 A.D.2d 445 [2d Dep't 1990], they assert that damages should be determined at trial. In support of their assertion that a trial on damages should be conducted, they note that the City seeks civil penalties for 478 consecutive days from October 17, 2013, to February 6, 2015, although the ownership of the four buildings was not the same during the entire time.
Under NAL § 7-706 (h), if a finding is made upon trial or upon a motion for summary judgment, that defendant "intentionally conducted, maintained or permitted a public nuisance" a penalty not exceeding $1,000 a day may be awarded. Defendants claim that a finding of intention requires a trial. They allege that, after receiving notices of violations, Ben and Eran worked with a third-party to resolve the violations and submit certificates of corrections. According to defendants, evidence that defendants acted to mitigate the violations contravenes claims that they intentionally conducted, maintained, or permitted the public nuisances and raises a question of fact as to intention.
Defendants further contend that a permanent injunction is inappropriate because the City does not show the necessary elements of irreparable harm or a balancing of the equities in its favor. NAL § 7-724 provides that the purpose of a disposition shall be to deter the public nuisance from recurring at the place cited in the action or at any other location under the legal control of a defendant named in the action. The defendants figuring in this motion are not owners or lessees. They do not control the apartments used for transient occupancy. Hence, defendants argue, there is no risk of injury which could arise absent a permanent injunction. Moreover, the City has an adequate remedy at law (see Scotto v Mei, 219 A.D.2d 181, 184 [1st Dep't 1996]).
The City alleges that defendants violated CPL § 20-703 by running online ads to carry on their business. Defendants contend that the City has little evidence that they advertised shortterm accommodations at the buildings, as the City offers only one online advertisement.
Ben's cross-motion for summary judgment is based on the same arguments as his opposition to the City's motion. Ben also argues that the City has no evidence that he was involved in creating transient occupancies, which he contends is limited to proof that Ben was the prior owner of the buildings on 46th Street and the brother of a possibly liable person.
Summary Judgment Standard
The party moving for summary judgment must establish its cause of action or defense sufficiently to warrant the Court directing judgment in its favor as a matter of law (CPLR 3212 [b]; VisionChina Media Inc. v Shareholder Representative Servs., LLC, 109 A.D.3d 49, 58 [1st Dep't 2013]). This standard requires that the movant make a prima facie showing of entitlement to judgment as a matter of law, by advancing sufficient admissible evidence to demonstrate the absence of any material issues of fact (Madeline D'Anthony Enters., Inc. v Sokolowsky, 101 A.D.3d 606, 607 [1st Dep't 2012]). If the movant succeeds in showing a prima facie case, the opposing party can defeat the motion by advancing evidence that shows there are issues of fact that must be determined at trial (IDX Capital, LLC v Phoenix Partners Group LLC, 83 A.D.3d 569, 570 [1st Dep't 2011], affd 19 N.Y.3d 850 [2012]).
Taking the statements made in opposition to the motion as true, as required on a summary judgment motion (Creighton v Milbauer, 191 A.D.2d 162, 166 [1st Dep't 1993]), the Court finds that the City has nonetheless proved a prima facie case against defendants, and against Ben and Eran, individually. The City has sufficiently shown that during the relevant time period defendants were operating or permitting the operation of short-term occupancies in Class "A" buildings and creating public nuisances in violation of Multiple Dwelling Law to § § 4.8 (a), 304, 306, NAL § § 7-703 (d), (1), 704, 7-706 (h), 724, CPL § § 20-701 (a), 20-703 (b) (e), NY City Building Code [Administrative Code of City of NY, tit 28] § § 28-105.1, § 28-118.3.1, 28-118.3.2, 28-205.1, 28-210.1, and provisions of the New York City Fire Code.
Advertising Transient Apartments
The CPL applies to transient rentals (City of New York v Smart Apts. LLC, 39 Misc.3d 221, 225 [Sup Ct, NY County 2013]). Both the MDL and CPL prohibit advertising apartments in Class A multiple dwellings for non-permanent rentals (MDL § 121 [1]; CPL § 20-701 [a]).
The City produces evidence that defendants violated the CPL. The City states that, during discovery, defendants completely failed to respond to the City's request for information about advertising the transient accommodations at the four buildings (NYSCEF 706). Even after defendants were compelled to respond, "they merely admitted" that they advertised online and provided the names of three websites, Booking.com; expedia.com; and Airbnb.com. Yet, they still failed to provide which dates those ads were run on those, or any other, websites and to provide copies of any documents related to advertising, marketing, and promoting (see City v NYC Midtown LLC, 2017 NY Slip Op 31596[U], at *51).
The evidence used for the City's TRO application shows that, as of January 2015, defendants were continuing to advertise and book reservations over the internet (NYSCEF 4, Nagel affirmation, ¶ ¶ 21, 61, 120). The City's investigations revealed advertising on a City Stay website in November 2014 and February 2015 (id., ¶ 132) and revealed advertising on eight different websites in October and November 2014 and February 2015 (id, ¶ ¶ 137-138, 141, 147-148, 151).
Individual Liabilities of Ben and Eran
"'[A] corporate officer who participates in the commission of a tort may be held individually liable, regardless of whether the officer acted on behalf of the corporation in the course of official duties and regardless of whether the corporate veil is pierced'" (Peguero v 601 Realty Corp., 58 A.D.3d 556, 558 [1st Dep't 2009], quoting Espinosa v Rand, 24 A.D.3d 102, 102 [1st Dep't 2005][emphasis omitted]; Retropolis, Inc. v 14th St. Dev. LLC, 17 A.D.3d 209, 211 [1st Dep't 2005] ["[A] corporate officer who participates in the commission of a tort can be held personally liable even if the participation is for the corporation's benefit"]).
Joint and several liability lies against every person who creates a public nuisance or participates in its creation or maintenance (State of New York v Fermenta ASC Corp., 160 Misc.2d 187, 195 [Sup Ct, Suffolk County 1994]; Penn Cent. Transp. Co. v Singer Warehouse &Trucking Corp., 86 A.D.2d 826, 828 [1st Dep't 1982]). A corporate officer "who controls corporate conduct, and thus is an active individual participant in that conduct," may be liable for the public nuisance caused by the corporation (State of New York v Shore Realty Corp., 759 F.2d 1032, 1052 [2d Cir 1985]).
The City correctly states that the liability of Ben and Eran does not depend on whether they were acting in their capacity as members or officers of their LLCs. Even if they acted on behalf of or through their LLCs, their liability depends on whether they created or participated in the nuisance-creating activity (Restatement [Second] of Torts § 834). Eran states that he was a member and manager of Midtown and City Stay, the arrangers of the transient stays (NYSCEF 694, ¶ 10). He does not deny that he managed these companies.
Ben says that he does not fit the definition of liable persons under the MDL. Liability for violating the MDL can be imposed only on a person who violates or assists in the violation (MDL § 304 [1]). Person is defined as "the owner, mortgagee or vendee in possession, assignee of rents, receiver, executor, trustee, lessee, agent or any other person, firm or corporation directly or indirectly in control of a dwelling or part thereof' (MDL § 304 [11]). Owner is an "agent, or any other person, firm or corporation, directly or indirectly in control of a dwelling" (MDL § 4 [44]). In addition, pursuant to Administrative Code § 28-205.1, liability for violating the Building Code lies on the owner, person in charge, "or any other person who commits or assists in any such violation or who maintains any building." These definitions fit both Eran and Ben. At the very least, Ben was a person directly or indirectly in control of a dwelling.
Ben owned Direct Realty, the LLC that owned the buildings on 46th Street. While Ben claims no involvement with Midtown and City, and no participation in any transient rentals, he does not claim that he did not control the activities of his own LLC or that he was not involved in it. Rampant transient rentals were taking place in his buildings, so even if he did not directly participate in arranging them, he knew or should have known about them. He does not claim that he did not know. As stated elsewhere, "[i]t seems inconceivable that a substantial number of units in the Subject Buildings were used for transient occupancy without... defendants' knowledge, or at least willful blindness ..." (City of New York v Big Apple Mgt. LLC, 2019 NY Slip Op 31046[U], *14-15 [Sup Ct, NY County 2019]). A landlord, such as Ben, is presumed to have knowledge of how his property is being used (City of New York v Castro, 143 Misc.2d 766, 768 [Sup Ct, NY County 1989], affd 160 A.D.2d 651 [1st Dep't 1990]; City of New York v Capri Cinema, 169 Misc.2d 18, 28 [Sup Ct, NY County 1995]).
Ben's claim that he is exempt from personal liability fails as to the buildings on 46thStreet. He is liable for nuisances on those properties that subsisted from October 17, 2013 to February 6, 2015, that were created before he sold Direct Realty. The conveyance of property on which there is a nuisance does not release the creator of the nuisance from liability for its creation and continuance (81 NY Jur 2d, Nuisances § 55; Restatement [Second] of Torts § 840A [1]), even though control passes to the purchaser (State of New York v Ole Olsen, Ltd., 38 A.D.2d 967, 968 [2d Dep't 1972]). All defendants are liable for the nuisances that they created during the relevant time and the nuisances that subsisted during the relevant time that existed due to activity taken before the relevant time.
Ben denies the City's claim that he continued to have an interest in the 46th Street buildings after selling them. In fact, Ben may have continued to have this interest in these properties after they were sold (see City of New York, 2017 NY Slip Op 31596[U], **9 n 11 [Ben may have continued to possess an equity interest in Direct Realty]), and the City asserts that Ben participated with his brother in arranging rentals in all four buildings, not only his buildings on 46th Street. The City points to Ben's alleged agreement with new ownership, and Ben's statement that he received a fee from City Stay. Ben's direct or indirect continued participation in the unlawful transient renting of apartments will be resolved as a component of a damages trial this Court will hold in this matter.
Defendants' intentions do not need to be determined at trial. While NAL § 7-706 (h) conditions a monetary penalty on a finding that defendants intentionally permitted a nuisance, "An action for public nuisance, unlike a claim for private nuisance, does not require proof of a specific state of mind such as negligence or intent to harm; a plaintiff 'is liable for maintenance of a public nuisance irrespective of negligence or fault'" (Matter of Nassau County Consol. MTBE (Methyl Tertiary Butyl Ether) Prod. Liab. Litig, 29 Misc.3d 1219 [A], 2010 NY Slip Op 51892(U), *6 [Sup Ct, Nassau County 2010]), quoting State of New York, 759 F.2d at 1051).
Permanent Injunction and Monetary Penalties
The parties dispute the scope of permanent injunctive relief that is properly awarded in this action. Defendants claim that an injunction should only cover the four subject buildings, while the City seeks a permanent injunction covering the entirety of New York City.
A city-wide permanent injunction is the proper relief to be granted. Defendants ignored repeated notices of violations directing discontinuance of illegal occupancies and the curing of fire safety violations. In light of their open defiance of lawful mandates, the only way for the City to be sure that defendants will not recommence their unlawful conduct in the four buildings, or anywhere in New York City, is through permanent injunctive relief, pursuant to NAL § 7-706 (a). The City contends that, due to the nature of Ben and Eran's portable transient business, it would serve no purpose to have the injunctive relief limited to the four buildings. In fact, Ben previously agreed to such a city-wide injunction against himself in another nuisance abatement action (see so-ordered stipulation in City of New York v U.S. Suite Mgt., LLC, Sup Ct, NY County, July 18, 2017, Ramos, J.: index No. 450084/2015; NYSCEF 670). Without a citywide permanent injunction defendants could re-enter in their own or any other name to conduct business there (City of New York v Mor, 261 A.D.2d 185, 187 [1st Dep't 1999]). In fact, this case shows that Ben did re-enter the transient business, in violation of the stipulation in the other case.
A permanent injunction may issue on a summary judgment motion (see City of New York v 74 84 O'henry Inc, 2011 NY Slip Op 32745[U], *7-8 [Sup Ct, NY County 2011]). In addition, the personal fault of the owner is not a material consideration upon an application for injunctive relief (City of New York v Castro, 160A.D.2d651, 652 [1st Dep't 1990]). The stoppage of the nuisance causing activity does not render the claim for a permanent injunction moot or preclude the award of monetary penalties (City of New York v Mor, 261 A.D.2d 185, 185-186 [1st Dep't 1999]).
The usual three-part test for injunctive relief does not apply when the basis of a nuisance is a violation of an ordinance, code, or law (State of New York v Monoco Oil Co., 185 Misc.2d 742, 750 n 4 [Sup Ct, Monroe County 2000]; see City of New York v Bilynn Realty Corp., 118 A.D.2d 511, 512-513 [1st Dep't 1986]). "[W]here a municipality is authorized to enjoin public nuisances as defined in the Nuisance Abatement Law, the commission of the prohibited act is sufficient to sustain the injunction" (New York v Castro, 143 Misc.2d 766, 768 [Sup Ct, NY County 1989], affd 160 A.D.2d 651 [1st Dep't 1990]).
Defendants argue that a city-wide injunction is inappropriate since NAL § 7-724 provides that the purpose of a disposition shall be to deter the public nuisance from recurring at the place cited in the action or at any other location under the legal control of a defendant named in the action and not to deter generally such nuisance from occurring elsewhere. The Court finds that a city-wide injunction which could only be applicable to locations under these defendants' legal control would be specific to them and would not be an instance of general deterrence. Also, given that at least three of the defendants (Eran and his LLCs) continued to arrange transient rentals throughout the relevant period, the Court finds that a city-wide injunction is appropriate. The injunction applies to the four defendants.
The City contends that statutory civil penalties and common law punitive damages are needed to protect the public interest by discouraging similar misconduct in the future, either by those defendants or by any person thinking of engaging in similar conduct. The City seeks a penalty of $1,000 a day from October 17, 2013 (the date that the first transient use violation was issued at one of the buildings) to February 6, 2015 (when this Court issued its TRO and the City no longer found defendants engaged in transient use of the Subject Buildings), a period consisting of 478 consecutive days. While the Court is finding liability on the part of the defendants, it concludes that the appropriate amount of an award to the City shall be determined after an evidentiary hearing, where parties can provide proofs impacting the quantum of damages awarded in this matter. Finally, Ben's cross-motion is denied without prejudice to his ability to present proof regarding his contention that he was not directly involved in the unlawful transient rentals of apartments, which could potentially impact the quantum of damages imposed upon him individually.
Accordingly, it is hereby ordered that the City's motion for summary judgment and Benzion Suky's cross-motion for summary judgment are resolved by granting the City's motion to the extent of granting it a permeant injunction, finding defendants' liable for advertising, operating, or permitting the operation of unlawful short-term occupancies, and providing that the issue of damages will be determined at trial.
This constitutes the decision and order of this Court.