Opinion
9528/2018
10-18-2018
HEE JA YANG, Petitioner, v. Alou MACADJI, Respondent.
Law Office of Brian A. Stark, for the Petitioner The Legal Aid Society, Housing Help Program, by Gloria H. Banasco, Esq., for the Respondent
Law Office of Brian A. Stark, for the Petitioner
The Legal Aid Society, Housing Help Program, by Gloria H. Banasco, Esq., for the Respondent
Karen May Bacdayan, J.
Recitation, as required by CPLR 2219 (a), of the papers considered in review of this motion.
Papers Numbered
Order to Show Cause and Affidavits and Exhibits Annexed 1
Answering Affidavits 2
Replying Affidavits 3
After oral argument and upon the foregoing cited papers, the decision and order on this motion is as follows:
BACKGROUND AND PROCEDURAL HISTORY
This is a nonpayment proceeding in which Petitioner claims that Respondent, Alou Macadji, owes $8,200 and that his monthly rent is $1,750 pursuant to a written lease. Respondent answered the proceeding, pro se , and interposed a general denial. Thereafter, Respondent entered into a stipulation on March 1, 2018 providing for a final judgment in the amount of $9,700 based on the monthly rent of $1,750. A warrant subsequently issued. Respondent entered into an additional stipulation, dated April 26, 2018, staying execution of the warrant of eviction for payment of arrears based on a rental amount of $1,750. On June 7, 2018, Respondent's second Order to Show Cause was adjourned by the Court for Respondent to seek legal counsel. The Legal Aid Society, Housing Help Program. appeared in this proceeding on July 2, 2018 at which time the proceeding was adjourned for Respondent's counsel to submit a new Order to Show Cause.
By this Order to Show Cause, Respondent moves to vacate the March 1, 2018, along with its resulting judgment and warrant, as well as the parties' April 26, 2018 stipulation on the grounds that that Respondent was unaware at the time he entered into the stipulations without the assistance of counsel of a potential defense of rent overcharge.
Respondent also moves to dismiss the proceeding pursuant to CPLR 3211 (a) (1) because "documentary evidence clearly establishes Respondent's complete defense to the proceeding," and for an Order "saying Respondent is entitled to a lifetime $1,650 base monthly rent with [Rent Guidelines Board Order] allowances," as well as an award of overcharge with treble damages. (Affirmation of Respondent's counsel, ¶ 68.) Respondent's attorney confirmed at oral argument that Respondent has not moved to serve and file an amended answer.
Regardless, while it would have been the best practice to move for leave to serve and file an amended answer, Respondent's pro se general denial preserves her right to disprove anything that Petitioner must prove as an element of its prima facie case, including that Petitioner is seeking the legal regulated rent. (See Second & E. 82 Realty LLC v. 82nd St. Gily Corp., 192 Misc 2d 55 [Civ Ct, NY County 2002].)
ARGUMENTS
In support of her argument that the stipulations and judgment and warrant herein should be vacated based on Respondent's ill-advised and improvident waiver of significant defenses, Respondent argues, in effect, that her original lease established a legal regulated rent of $1,650 and not a preferential rent that can be revoked because the face of the lease does not set forth the legal regulated rent as well as the preferential rent, and no valid Rent Stabilization Lease Rider preserving the legal regulated rent was attached to the lease when the lease was signed. (Affidavit of Respondent, ¶¶ 4-5; Respondent's Exhibit A.) Respondent further argues that three versions of lease riders purportedly provided to Respondent with his original lease which appeared during the pendency this proceeding (one pursuant to an email request by Respondent's attorney on June 27, 2018, and two copies that were provided directly to Respondent on June 28, 2018 by Petitioner) contain numerous inconsistencies. Respondent argues that these riders were "likely prepared three years after Respondent moved in," and were only drafted in response to Respondent's inquiries. (Respondent's attorney's affirmation, ¶ 32.) Respondent also points to numerous inconsistencies between the Respondent's leases and the DHCR rent registration printouts which raise questions as to the legal regulated rent.
Respondent's original lease was for the term of June 1, 2015 — May 31, 2016 at a monthly rental of $1,650.
The lease rider received by Respondent's attorney from Petitioner's attorney annexed at Respondent's Exhibit E is missing pages 5 and 7 of 8 and does not contain a signature or date. The lease rider received by Respondent from Petitioner annexed at Respondent's Exhibit F is also missing page 7 of 8, but contains a page entitled "Appendix" which is signed and dated June 2, 2015 inside a box which states, "I have received a copy of this rider." The lease rider received by Respondent from Petitioner annexed at Respondent's Exhibit G contains a markedly different page 3 ("Status of Apartment and Last Tenant"). In sum, it is patently unclear which, if any , of the riders is a rider that Respondent may have received when he signed the original lease.
Petitioner opposes Respondent' motion to vacate the stipulation on the basis that stipulations of settlement should not be lightly set aside, that a large sum of money is owed, and Respondent has had several opportunities to resolve this proceeding. Petitioner does not address Respondent's potentially meritorious defenses, or that branch of Respondent's motion seeking dismissal of the proceeding.
DISCUSSION
The only rent set forth on the face of Respondent's original lease for a one-year term from June 1, 2015 to May 31, 2016 is the monthly rent of $1,650. The lease itself does not preserve a higher legal regulated rent. Respondent will have a viable overcharge claim if Petitioner cannot establish that the rent sought in the Petition is the legal regulated rent. (Matter of 10th St. Assocs., LLC v. New York State Div. of Hous. & Community Renewal, 110 AD3d 605 [1st Dept 2013] [finding that a landlord could not revoke alleged preferential rent upon lease renewal as there was no mention of a preferential rent in original lease]; Hillside Park 168 LLC v. Khan , 59 Misc 3d 736 [Civ Ct, Queens County 2017] [dismissing holdover proceeding based on failure to sign a renewal lease where original lease did not provide for both a higher legal regulated rent and a lower preferential rent]; see also Matter of Majestic Props. LLC, [NY St Div of Hous & Community Renewal] Administrative Review Docket No. DR110015RO [2015]; Rent Stabilization Code [9 NYCRR] § 2521.2 [b] ["Such legal regulated rent as well as preferential rent shall be set forth in the vacancy lease or renewal lease pursuant to which the preferential rent is charged"].)
While stipulations of settlement are favored by the courts and are not lightly cast aside (see Hallock v. State of New York , 64 NY2d 224 [1984] ), courts maintain the discretionary power to relieve a party of an agreement "if it appears that the stipulation was entered into inadvisedly or that it would be inequitable to hold the parties to it." ( Tabak Assocs. LLC v. Vargas, 48 Misc 3d 143[A], 2015 NY Slip Op 51314[U] [App Term, 1st Dept 2015] [internal quotations omitted].) The Appellate Term in this department has held that the Civil Court is wrong to hold a pro se respondent to the terms of a stipulation where "documentary evidence showing the existence of an arguably meritorious rent overcharge claim" is later submitted with the assistance of counsel. ( 2701 Grand Assn. LLC v. Morel , 50 Misc 3d 139[A], 2016 NY Slip Op 50163[U] [App Term, 1st Dept 2016] [overturning the lower court determination to hold a previously unrepresented to the terms of stipulation where the tenant later demonstrated potentially meritorious rent overcharge claims with the assistance of counsel]; Vargas , 2015 NY Slip Op 51314[U] ; see also Berco Realty LLC v. Thiombiano , 45 Misc 3d 129[A], 2014 NY Slip Op 51564[U] [App Term, 1st Dept 2014] ; Striver 140 v. Cruz , 1 Misc 3d 29 [App Term, 1st Dept 2003] [affirming lower court's order "insofar as it vacated the stipulation executed by pro se tenants and permitted them to defend the nonpayment proceeding on the merits" where the tenants had "made a prima facie showing of defenses based upon breach of the warranty of habitability and rent overcharge"].)
In fact, any "agreement by [a] tenant to waive the benefit of any provision of the [Rent Stabilization Law] or [Rent Stabilization Code] is void." ( Rent Stabilization Code [9 NYCRR] § 2520.13. This protection has been applied by the Court of Appeals to stipulations of settlement entered within the context of housing court proceedings. (Jazilek v. Abart Holdings LLC , 893 NY3d 943 [2008]; see also Drucker v. Mauro , 30 AD3d 37 [2006] [holding that an agreement in a settlement which waives a benefit of the Rent Stabilization Code is "unenforceable as a matter of public policy, even if it benefits the tenant"].)
As Respondent has demonstrated a potentially meritorious overcharge claim which was improvidently and inadvisably waived without the benefit of counsel, the stipulations and the judgment and warrant herein are vacated. It would work to Respondent's considerable prejudice, in that he could be evicted for monies he does not owe, were he not permitted to litigate this proceeding on the merits. ( 2722 8th LLC v. Watson , 10 Misc 3d 140[A], 2006 NY Slip Op 50038[U] [App Term, 1st Dept 2006] [reversing lower court which had denied tenant's motion to vacate a stipulation where tenant, "now represented by counsel, has submitted documentary evidence which shows the existence of possible defenses to landlord's rent claim" and finding that "the judgment should have been vacated and the stipulation set aside to allow tenant to defend the nonpayment proceeding on the merits"].)
However, while Respondent has established good cause for vacatur of the stipulations, judgment and warrant, Respondent has not met the standard for dismissal pursuant to CPLR 3211 (a) (1), even without formal opposition from Petitioner. Dismissal pursuant to CPLR 3211 (a) (1) should be granted "only if the documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter of law." ( Leon v. Martinez, 84 NY2d 83, 88 [1994].) Moreover, the defendant has the burden of showing that the relied-upon documentary evidence "resolves all factual issues as a matter of law, and conclusively disposes of the plaintiff's claim," ( Fortis Fin. Servs., LLC v. Fimat Futures USA, Inc. , 290 AD2d 383, 383 [1st Dept 2002] ), and "utterly refutes plaintiff's factual allegations." ( Mill Fin., LLC v. Gillett , 122 AD3d 98, 103 [1st Dept 2014] ; see also 1820 First Ave. Inc. v. Mendoza , 2015 NY Slip Op 31776[U] [Civ Ct, NY County 2015].) The evidence annexed to Respondent's moving papers, most notably the lease riders, are not, as is required on a motion to dismiss pursuant to CPLR 3211 (a) (1), "unambiguous and of undisputed authenticity." ( Fontanetta v. Doe , 73 AD3d 78, 86 [2d Dept 2010].) Thus, Respondent has not conclusively established, such as would warrant dismissal of the proceeding at this stage of the litigation, that her legal rent should be no more than $1,650 plus lawful increases rather than the $1,750 claimed by Petitioner.
CONCLUSION
For the foregoing reasons, Respondent's motion to vacate the stipulations, judgment and warrant herein is granted.
Respondent's motion for dismissal pursuant to CPLR 3211 (a) (1) is denied without prejudice to renewing it at trial where Petitioner will have the burden of proving as an element of its prima facie case that it is seeking the legal regulated rent. Respondent's requests for orders finding a "lifetime" preferential rent, an overcharge, and treble damages are also denied without prejudice.
As Respondent has not moved for any other relief, this constitutes the Decision and Order of this Court, copies of which will be mailed to the parties or delivered in court. The parties are to appear in Part E, Room 420, on November 30, 2018 at 9:30 a.m. for settlement or trial. If the parties intend to engage in motion practice, it should be concluded by this date in accordance with the rules of the Part.