Opinion
14817 Index No. 160494/17 Case No.2021–01276
12-09-2021
Michele E. HESS et al., Plaintiffs–Respondents, v. EDR ASSETS LLC, et al., Defendants–Appellants. [And Another Action]
Kucker Marino Winiarsky & Bittens, LLP, New York (Nativ Winiarsky of counsel), for appellants. Newman Ferrara LLP, New York (Roger A. Sachar of counsel), for respondents.
Kucker Marino Winiarsky & Bittens, LLP, New York (Nativ Winiarsky of counsel), for appellants.
Newman Ferrara LLP, New York (Roger A. Sachar of counsel), for respondents.
Kapnick, J.P., Moulton, Gonza´lez, Rodriguez, Pitt, JJ.
Order, Supreme Court, New York County (Frank P. Nervo, J.), entered March 10, 2021, which granted plaintiffs’ motion to certify this matter as a class action, unanimously affirmed, with costs.
We decline to consider defendants’ argument that, as a matter of law, they did not engage in a fraudulent scheme to deregulate units because they merely delayed in re-registering the units after the Court of Appeals decided Roberts v. Tishman Speyer Props., L.P., 13 N.Y.3d 270, 890 N.Y.S.2d 388, 918 N.E.2d 900 (2009), as this argument presents factual issues that were not submitted to the motion court (see Mable v. 384 E. Assoc., LLC, 175 A.D.3d 1127, 1129, 107 N.Y.S.3d 284 [1st Dept. 2019] ).
To the extent that the record permits review, we reject defendants’ argument on the merits. Plaintiffs assert that defendants, while enjoying J–51 tax benefits, failed to re-register the units until years after Roberts was decided and applied retroactively, waited over a year to re-register units after being notified by DHCR that they had to do so, took steps to comply only after their scheme was uncovered, and continued to inform tenants that the units were not subject to regulation even after DHCR notified them otherwise. Contrary to defendants’ contention, plaintiffs have alleged more than a mere delay in re-registering units, and their allegations, if proven, may support application of the default formula (see Montera v. KMR Amsterdam LLC, 193 A.D.3d 102, 105–109, 142 N.Y.S.3d 24 [1st Dept. 2021] ; Nolte v. Bridgestone Assoc. LLC, 167 A.D.3d 498, 498–499, 90 N.Y.S.3d 159 [1st Dept. 2018] ). The case of Gridley v. Turnbury Vil., 196 A.D.3d 95, 149 N.Y.S.3d 243 (2d Dept. 2021) is inapposite.
We have considered defendants’ remaining arguments and find them unavailing.