Opinion
No. 5311/2010.
2012-12-28
Joseph LEBOVITS and Yitzchok Lebovits, Plaintiff, v. 104 DIVISION AVENUE HOUSING DEVELOPMENT FUND CORPORATION, Defendant.
Jonathan S. Roller, Esq., for Plaintiff. Edward J. Filemyr IV, Esq., for Defendant.
Jonathan S. Roller, Esq., for Plaintiff. Edward J. Filemyr IV, Esq., for Defendant.
YVONNE LEWIS, J.
Defendant, 104 Division Avenue Housing Development Fund Corporation, moves, pursuant to CPLR 3212, for an order (1) granting it summary judgment dismissing this action by plaintiffs, Joseph Lebovits and Yitzchok Lebovits, with prejudice and (2) for summary judgment on its counterclaims against the plaintiffs. Those counterclaims seek an order (1) directing each plaintiff to execute the proprietary lease offered to such plaintiff; (2) awarding the defendant (i) a money judgment of $6,043 against plaintiff Joseph Lebovits for his outstanding use and occupancy of Apt. 9 at 104 Division Avenue through May 2012, as well as (ii) awarding the defendant a money judgment of $6,844 against plaintiff Yitzchok Lebovits for his outstanding use and occupancy of Apt. 16 at 104 Division Avenue through May 2012; and (3) granting the defendant reasonable attorney fees from plaintiffs together with costs and disbursements.
Background Facts and Procedural History
(1)
Plaintiff Yitzchok Lebovits became a shareholder of the defendant and executed a proprietary lease with the defendant on December 17, 1998, and plaintiff Joseph Lebovits became a shareholder of the defendant and executed a proprietary lease with the defendant on May 15, 2002. Thereafter, a resolution adopted at a September 4, 2008 shareholders' meeting proposed cancelling all existing proprietary leases and giving each shareholder a uniform, substitute proprietary lease that conforms with the corporation's bylaws. Shareholders subsequently ratified this resolution at a November 19, 2008 meeting. Both plaintiffs at the time of these meetings were more than two months in arrears under their existing proprietary leases. Although he defendant separately contends that it owed no duty to give either plaintiff notice of the November 19, 2008 meeting in view of their arrears status, it also claims that both plaintiffs were advised of the November 19, 2008 meeting by certified mail, return receipt requested, but both plaintiffs failed or refused to claim the notice from the post office.
Mailing of the new form of proprietary lease, as adopted by the resolution ratified on November 19, 2008, occurred to each plaintiff with a request that each one execute it. However, the plaintiffs failed to execute the new proprietary lease, were served on April 16, 2009 with a “Notice to Cure,” failed to comply with such notice, and were subsequently served on July 10, 2009 with a “Notice of Termination” that they also failed to follow. The defendant then initiated a holdover proceeding in July 2009 in the Landlord and Tenant Part of Kings County Civil Court against each Lebovits tenant herein with the captions 104 Division Avenue, HDFC v. Yitzchok Lebovits, Kings County Civil Court, L & T Part, Index No. 83797/09 and 104 Division Avenue, HDFC v. Joseph Lebovits, Kings County Civil Court, L & T Part, Index No. 83798/09.
(2)
This case ensued on March 3, 2010 primarily to stay the pending landlord and tenant holdover proceedings in Kings County Civil Court and to enjoin the defendant from taking any further action to terminate the plaintiffs' proprietary leases until this court's determination of the present action. The plaintiffs concurrently then moved, by order to show cause, seeking a temporary restraining order for the above relief pending hearing and determination of this case. The Hon. Karen B. Rothenberg granted the plaintiffs' show cause order request on March 3, 2010 to the extent of “enjoin[ing], restrain[ing] and stay[ing]” the defendant from “interfering with or obstructing the Plaintiffs' use of their cooperative apartment units located at 104 Division Avenue, Brooklyn, New York” pending hearing of the plaintiffs' motion. This court's June 4, 2010 order then granted a stay conditioned on the plaintiffs paying a portion of the debt owed to the defendant, and the plaintiffs complied with the condition until May 2012.
The Parties' Positions
Plaintiffs' Position
The plaintiffs contend that they have not violated any obligation of the bylaws or the proprietary lease, and that they are lawfully entitled to remain in undisturbed possession pursuant to the terms of the current proprietary lease. They further allege that they were never given notice of the two meetings discussed above, nor that they consented at the two meetings to adopting new proprietary leases for all shareholders. The plaintiffs allege that the defendant's purported failure to give adequate notice of these meetings breached its fiduciary duty, and that the defendant failed to act in good faith. The plaintiffs therefore question the validity of the amended lease.
Defendant's Position
The defendant had failed to answer the complaint until April 4, 2011, over a year after its service on March 3, 2010. The answer asserted a general denial and three counterclaims: the first requested an order directing each plaintiff to sign the proprietary lease duly tendered to him; the second requested an order directing each plaintiff to pay the defendant all outstanding use and occupancy owed to date; and the final counterclaim requested an order granting the defendant reasonable attorney fees. The defendant's motion, as detailed at the outset, sought both dismissal of the plaintiffs' complaint and granting of the counterclaims interposed against the plaintiffs. The defendant contends that the plaintiffs defaulted by failing to reply to the counterclaims served upon them and that they have thus conceded liability on each counterclaim. The defendant also contends that the plaintiffs' complaint reflects a misunderstanding of the requirements and prescriptions of the defendant's bylaws which require no notice to shareholders more than two months in rental arrears at the time of the meetings in question. Alternatively, the defendant contends that, even if the plaintiffs were entitled to notice, both plaintiffs in fact were given such notice.
Plaintiffs' Further Position
The plaintiffs argue in opposition that they were never served with the answer and counterclaims and that their attorney first saw the answer as an exhibit in the defendant's summary judgment motion. Therefore, the plaintiffs contend that the defendant is not entitled to summary judgment on unserved counterclaims. Finally, the plaintiffs dispute the defendant's request for a money judgment by claiming that they have complied with the terms of the court's “so ordered stipulation.”
Defendant's Further Position
The defendant challenges the plaintiffs' opposition to this motion as defectively served via an unauthorized fax (in violation of CPLR 2103[b] [5] ) and belatedly served more than three months after CPLR 2214 permitted. Alternatively, the defendant asserts that, even if these papers in opposition are considered, the opposing affirmation of the plaintiffs' counsel lacks evidentiary value, is thus unavailing and that the plaintiffs therefore fails to raise a triable factual issue. The defendant also reasserts that service of its answer with counterclaims properly occurred, and that the plaintiffs should be estopped from alleging that a paper addressed in compliance with the specific address designated by their attorney is improper.
Discussion
(1)
Defendant's Summary Judgment Motion
Granting summary judgment starts when the moving party makes a prima facie showing of entitlement to judgment as a matter of law by offering sufficient evidence to demonstrate the absence of any material issue of fact (Alvarez v. Prospect Hosp., 68 N.Y.2d 320, 324 [1986] ). Such a prima facie showing shifts the burden to the non-moving party to produce evidentiary proof in admissible form establishing the existence of a triable material issue of fact (Zuckerman v. City of New York, 49 N.Y.2d 557 [1980] ). “The court's function on a motion for summary judgment is to determine whether material factual issues exist, not to resolve such issues” (Ruiz v. Griffin, 71 AD3d 1112, 1115 [2010] [internal quotation marks and citation omitted] ). Summary judgment occurs “when it is clear that no triable issue of fact exists” (Blum v. N.Y. Stock Exch., Inc., 298 A.D.2d 343, 344 [2002],lv denied in part, dismissed in part99 N.Y.2d 572 [2003] ). Determining whether a material issue of fact exists first requires that the “facts must be viewed in the light most favorable to the non-moving party” ( see Vega v. Restani Constr. Corp., 18 NY3d 499, 503 [2012] [internal quotation marks and citation omitted]; see also Nash v. Port Wash. Union Free Sch. Dist., 83 AD3d 136, 146 [2011] [“In determining a motion for summary judgment, the evidence must be viewed in the light most favorable to the nonmoving party”] ).
Here, the defendant has made a prima facie showing of its entitlement to summary judgment. The defendant's bylaws specifically state that notice be given “to each shareholder entitled to vote at such meeting” (emphasis added). The bylaws also specify that “[n]o shareholder shall be eligible to vote ... who is shown on the books or management accounts of the Corporation to be more than two months delinquent in payments due the Corporation under the Proprietary Lease.” Both plaintiffs at the time of the shareholders' meetings in question were more than two months in arrears under their proprietary leases. Therefore, the defendant has shown through its exhibits that the plaintiffs were not entitled to notice of the shareholders' meetings because they were not entitled to vote at such meetings.Nonetheless, the defendant has shown that both plaintiffs were given notice in the manner prescribed by their signed proprietary leases, but each failed to retrieve said notice from the post office. Paragraph 8.01 and 27 of the proprietary leases signed by Yitzchok Lebovits and Joseph Lebovits, respectively, detail the manner for giving notice and provide for notice, addressed to the shareholder at the designated address in the defendant corporation's building, by certified mail, return receipt requested. These provisions also deem notice given on the date when mailed and make no mention of requiring actual receipt of notice.
The Appellate Division, Second Department has approved service by certified mail coupled with a party not obtaining the notice letter from the post office ( see 232 Broadway Corp. v. Calvert Ins. Co., 149 A.D.2d 694, 695 [1989] [“(s)ince the plaintiff was at fault in failing to claim the certified letter, it cannot raise its nonreceipt as a defense to complying with its obligations under the policy”]; Greyhound Capital Corp. v. EDP Med. Computer Sys., 147 A.D.2d 674, 675 [1989] [the defendant was sent notice by certified mail in accordance with the terms of the agreement; failed to retrieve the letter from the post office; and because such failure “was occasioned by its own fault, it cannot now raise its non-receipt of the notice as a defense”] ). The Appellate Division, First Department similarly stated in Gryphon Dom. VI, LLC v. APP Intl. Fin. Co., B.V., 41 AD3d 25, 32 [2007] that “[a] defendant may not frustrate service by failing to claim certified mail.” Accordingly, each plaintiff's failure to receive notice resulted from his own fault, and each may not raise non-receipt of the notice as a defense.The defendant has thus supported its position by producing evidence that it gave notice in the designated manner and that each plaintiff failed or refused to claim the notice from the post office. The defendant has met the burden of making a prima facie showing of entitlement to summary judgment.
(2)
The burden thus shifted to the plaintiffs, the non-moving parties, to produce evidentiary proof in admissible form establishing the existence of a material issue of fact requiring a trial of the action ( see Zuckerman, 49 N.Y.2d at 560). However, the plaintiffs have interposed no such argument against the defendant's summary judgment motion. Instead, the plaintiffs focus on procedural issues pertaining to service of the answer, but such service properly occurred by mailing the answer to the plaintiff's attorney at the address such counsel, himself designated in the complaint's signature block. Such designated address contained no suite number.A similar situation had arisen in People v. Godoy (180 Misc.2d 771 [Crim Ct, N.Y. County1999] ) involving service to “67 Wall Street, New York, N.Y. 10005” and a claim of no receipt by the defendant's attorney, possibly attributable to omitting a suite number from the mailing address ( Id. at 774). The decision noted that failing to include a suite number may explain why notice was never received by counsel, but still held that such fact alone does not make service improper. “It is a point beyond dispute that the United States Postal Service delivers to addresses regardless of whether an apartment or suite number is included in the address” ( id.). The decision also noted that “defendant's attorney does not assert that other mail addressed to him solely at 67 Wall Street' is typically returned to sender” ( id.). Likewise, here, the plaintiff's attorney makes no such assertion that other mail addressed to him solely at “26 Court Street” is typically returned to sender.
Furthermore, CPLR 2103(b) authorizes service upon an attorney “by mailing the paper to the attorney at the address designated by that attorney for that purpose ... [and that] service by mail shall be complete upon mailing ...” Service in this case, as mentioned, occurred to the address designated by the plaintiffs' attorney in the complaint's signature block. The plaintiffs' counsel complains that the affirmation of service contains no suite number, but he designated no suite number in the signature block. The affirmation of service accompanying the answer and counterclaims therefore raise the presumption that proper mailing occurred, and merely denying receipt, itself fails to raise a triable question regarding proper service (Kihl v. Pfeffer, 94 N.Y.2d 118, 122 [1999] [“a properly executed affidavit of service raises a presumption that a proper mailing occurred, and a mere denial of receipt is not enough to rebut this presumption”] ).
The plaintiffs also contend that CPLR 3012(a) governs service of the defendant's answer with counterclaims. However, “[t]he answer is an interlocutory paper; so is a reply. Each is served on the attorney for the adverse party and by the methods listed in CPLR 2103(b). As a rule, neither has to be served in the same manner as a summons” (Connors, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C3012:5). Hence, compliance occurred with 2013(b) requirements by mailing of the answer to the address that the plaintiffs' counsel designated, and no basis exists for a traverse hearing regarding the propriety of service on each of the plaintiffs. Consequently, the plaintiffs have failed to show through admissible evidence the existence of some material fact requiring a hearing on the service issue. Therefore, the branch of the defendant's summary judgment motion seeking dismissal of the plaintiffs' complaint and concurrently dissolving the stay herein warrants approval.
(3)
The defendant contends that the plaintiffs defaulted by failing to respond to its counterclaims and thus have conceded liability on each of the counterclaims. Nonetheless, the defendant's own failure to respond to the plaintiffs' summons and complaint for over a year justifies giving the plaintiffs a further opportunity to respond and object to the counterclaims. In addition, the Appellate Division, Second Department has stressed “public policy favoring the resolution of cases on the merits” (Arias v. First Presbyt. Church in Jamaica, 97 AD3d 712, 712 [2012] ).
In addition, transferring the remaining branch of the defendant's motion, seeking summary judgment on its counterclaims, to Kings County Civil Court for joinder with the pending landlord and tenant holdover proceedings against the plaintiffs, appears the appropriate approach. Kings County Civil Court, though, lacks subject matter jurisdiction to grant the injunctive relief that the defendant seeks in its first counterclaim, namely, to direct the plaintiffs to sign the proprietary leases tendered to them. “As a general rule, [e]xcept for proceedings for the enforcement of housing standards (C[ivil] C[our]t A[ct] 110 [a][4]; 203[o] ) and applications for certain provisional remedies (CCA 209 [b] ), the New York City Civil Court may not grant injunctive relief” ( Tobin v. Beaaro, Inc., 31 Misc.3d 127[A], 2011 N.Y. Slip Op 50446[U] [App Term, 2d, 11th & 13th Jud Dists 2012] [internal quotation marks omitted] citing Topaz Realty Corp. v. Morales, 9 Misc.3d 27, 28 [App Term, 2d & 11th Jud Dists 2005]; see also Green v. Lakeside Manor Home for Adults, Inc., 30 Misc.3d 16 [App Term, 2d, 11th & 13th Jud Dists 2010] ). Consequently, the first counterclaim warrants dismissal, which means that the plaintiffs will face eviction unless they opt to sign the amended proprietary leases. The Kings County Civil Court has the power to resolve the two remaining counterclaims, seeking outstanding use and occupancy charges allegedly owed by Yitzchok Lebovits and Joseph Lebovits as well as reasonable attorney's fees, in conjunction with adjudicating related relief in the pending landlord and tenant holdover proceedings against them. Accordingly, it is
ORDERED that the branch of the defendant's summary judgment motion to dismiss the plaintiffs' action is hereby granted, and the complaint is hereby dismissed; and it is further
ORDERED that this court's stay, granted by order dated June 4, 2010, is hereby dissolved; and it is further
ORDERED that the remaining branch of the defendant's motion for summary judgment on its counterclaims is hereby denied as more fully set forth below, and the plaintiffs are hereby granted leave to answer or to move to dismiss the counterclaims in Kings County Civil Court within 20 days after service on them of this order with notice of entry; and it is further
ORDERED that the defendant's counterclaims are hereby severed from this action, the first counterclaim seeking injunctive relief is hereby dismissed without prejudice to renew, if so advised, after final resolution of the related proceedings in Kings County Civil Court, and the defendant's second and third counterclaims are hereby transferred to Kings County Civil Court for joinder with the pending landlord and tenant holdover proceedings against the plaintiffs herein, namely, 104 Division Avenue, HDFC v. Yitzchok Lebovits, Kings County Civil Court, L & T Part, Index No. 83797/09 and 104 Division Avenue, HDFC v. Joseph Lebovits, Kings County Civil Court, L & T Part, Index No. 83798/09 (collectively, the Civil Court Proceedings); and it is further
ORDERED that the Clerk of this Court is hereby directed to transfer the file in this case to the Transfer Clerk of Kings County Civil Court forthwith so that the severed portion of this matter, along with the Civil Court Proceedings, may be placed on Kings County Civil Court's L & T Part Calendar.
This constitutes the decision and order of the court.