Pavia v. Couri

(Sup. Ct. NY Cty. 7/12/04)

We represented: Plaintiff/Landlord

Hon. Joan A. Madden, J.S.C.

DECISION and ORDER      Plaintiffs George Pavia and Antonia Pavia (the "Pavias") move, by order to show cause, for an order (1) directing defendants to pay use and occupancy for the premises which is the subject action from November 2002 to date and ongoing use and occupancy, (2) directing defendants to provide the Pavias with the keys and security access code for their apartment, and (3) vacating any stay of discovery. Defendant James Couri ("Couri"), who is pro se, and his wife, defendant Marlene Couri, who is represented by counsel, oppose the motion.

     Couri also cross moves for an order (i) directing the Pavias to immediately comply with the DHCR order to register the Building under the rent stabilization law, and to pay Couri all sums due and owing pursuant to the DHCR order in accordance with the DHCR orders, (2) directing the Pavias to immediately issue Couri a rent stabilized lease with a two year rider covering his apartment, (3) denying Pavia relief pending the outcome of various matters brought by Couri before the DHCR, and (4) appointing a Referee.

Background

     The Pavias are the owners of 18 East 73rd Street in Manhattan (hereinafter "the Building"), and reside on the top floor of the Building. Defendants reside in Apartment 3-B. Defendants entered into a two-year lease with the Pavias for the period between October 15, 1996 through October 14, 1998, at an initial rent of $1,750.00 per month. The lease was subsequently renewed for another two-year term at a rent of $1,855.00 per month.

     In July, 2000, Couri filed a challenge to the initial rent with the New York State Division of Housing and Community Renewal ("DHCR") alleging that the rent "exceeded the fair market rent." The Pavias countered that the Building was not subject to rent stabilization as it went through a substantial rehabilitation in 1989-1990 within the meaning of Section 2520.Ii(e) of the Rent Stabilization Code.

     By decision dated November 13, 2002, the Rent Administrator determined that the Building was subject to the rent stabilization code, and found that the Pavias charged $35.00 per month more than the legal regulated rent for period between October 15, 1998 and November 14. 20021 for a total overcharge of $1,715.00, and that the Pavias collected excess security from Couri in the amount of $1,680.00. Thus, the total amount due Couri was $3,716.62.

     The Rent Administrator found that the overcharge was not willful, and did not award treble damages. The Rent Administrator directed that the owner of the Building refund of credit Couri for any rent in excess of the legally regulated rent and to offer Couri a "renewal lease, along with a Rent Stabilization rider, for one or two years, at the tenant's option, based on the legally regulated rent of $1,820.00."

     This action was commenced on November 15, 2002, by Order to Show Cause in which the Pavias sought to compel access to defendants' apartment in order to fix a water leak. The first cause of action seeks damages in the amount of $25,000, allegedly caused as a result of the water leak; the second cause of action seeks an order directing defendants to provide the Pavias with a set of keys to defendants' apartment; and the third cause of action seeks an order requiring defendants to give them access to the apartment to fix the leak.2 Defendants subsequently answered the complaint and asserted counterclaims alleging harassment by the Pavias. The Pavias have replied to the counterclaims asserted by defendants.

     In the meantime, the Pavias filed a petition for administrative review ("PAR") of the Rent Administrator's determination. The DHCR upheld the Rent Administrator's determination and directed the Pavias to register the subject building under rent stabilization. The Pavias then brought an Article 78 proceeding challenging the DHCR's determination, which was pending at the time that plaintiffs made this motion seeking use and occupancy. On April 23, 2004, Justice Diane A. Lebedeff denied and dismissed the petition for Article 78 relief. However, the Pavias have not complied with DHCR's orders requiring them to provide defendants with a rent stabilized lease and to register the Building under the rent stabilization laws.

     During the time that the Pavias were appealing the Rent Administrator's determination Couri continued to tender rent to the Pavias in the amount of $I,855.00. The Pavias forwarded the checks to counsel, who rejected the checks and returned them to Couri, with an explanation that his creation of a nuisance in violation of the lease prevented the acceptance of the checks.3 As of June 2003, Couri began to tender the checks to his own counsel.

     In or about July 16, 2003, Couri was served with a notice of termination of his tenancy pursuant to Rent Stabilization Code ? 2524(b). The notice alleged that Cour! was committing a nuisance in the Building by, inter alia, (i) sending harassing letters no Mr. Pavia containing insults, racial slurs, and threats directed at Mr. Pavia; (ii) making harassing telephone calls involving threats and abusive language; (iii) engaging in a letter writing campaign of unfounded complaints directed against Mr. Pavia and sent no various individuals and entities, including, the New York Bar Association, New York Times, other tenants in the Building, and the New York City Police Department; and (iv) harassing tenants in the Building, including one tenant who eventually abandoned his apartment as the result of such harassment. The notice purported to terminate Couri's tenancy on August 7, 2003.

     The Pavias then moved to amend their complaint to add a cause of action for ejectment based on the allegations in the termination notice. By decision and order dated January 30, 2004, this court granted the motion to amend.

     The Pavias now seek an order directing that Couri pay use and occupancy in the amount of the legally regulated rent set by the DHCR for the period from November 2002 to the present and until the underlying action is resolved. The Pavias assert that they refused to accept rent from Couri to preserve their rights to evict defendants based on Couri's conduct creating an alleged nuisance.

     In opposition, defendants argue that the Pavias are not entitled to use and occupancy since they have not complied with the DHCR's order directing that Couri be given a rent-stabilized lease and that the Building be registered as rent stabilized. They also argue that there are various violations at the Building violations which should prevent an award of use and occupancy, and point out that the amended complaint does not seek rent or use and occupancy. Couri also cross moves for various relief including compliance with the DHCR order.

Discussion

     An owner may recover use and occupancy in either a plenary action, (Real Property Law ?220) or in a summary proceeding (Real Property Actions and Proceedings Law ? 741 (5)). When, as here, the premises is subject to the Rent Stabilization Law, the amount of use and occupancy is limited to the legally regulated rent. See6 Greene Street Assoc. v. Robbins, 256 AD2d 169 (1st Dept 1998); Ansonia Assoc. vo Bozza, 186 Misc2d 845 (App. Term 1st Dept 2000). Additionally, under the Rent Stabilization Code, the failure to follow the registration requirements prevents the owner from "applying for or collecting any rent in excess of: the base date rent, plus any lawful adjustments allowable prior to the failure to register." See Rent Stabilization Code ? 2528.4 (a). Here, the DHCR found that the base date rent (i.e. as of July 10, 1996 or four years prior to Couri's filing a proceeding) was $1,600 per month and that with allowable increases, the legally regulated rent for the apartment was $I,820 per month from October 15, 1998 to date.

     The DHCR also required the Pavias to provide Couri with a rent stabilized lease and directed him to register the building under the rent stabilization law. As Pavia has not complied with the DHCR order, the issue for the court is whether Pavla should be awarded use and occupancy in the amount of the legally regulated rent under these circumstances.

     "The obligation to pay for use and occupancy does not arise from an underlying contract between the landlord and occupant." Eighteen Assoc. LLC v. Nanjim Leasing Corp., 257 AD2d 559, 559-560 (2d Dept 1999) (citations omitted). Instead, it has been held that "an occupant's duty to pay the landlord for its use and occupancy of the promises is predicated upon the theory of quantum meruit, and is imposed by law for the purposes of bringing about justice without reference to the intention of the parties." Id., at 560 (citations omitted).

     Thus, in determining whether an owner is entitled to use and occupancy, the court examines whether the equities warrant the granting of such relief. See Haberman v. Singer, 3 AD3d 188 (1st Dept 2004); Sima Realty v. Philips, 282 AD2d 394 (1st Dept 2001). Like the instance action, Haberman, involved a dispute between a rent stabilized tenant and a landlord regarding the around of legal rent. In 1983, the Conciliation and Appeals Board ("CAB") decided in favor of the tenant and rolled back the rent amount, issued an order directing the landlord to offer the tenant a renewal lease, and no return the tenant's excess security deposit. After the landlord's petition for Article 78 relief was dismissed, the landlord failed to comply with the CAB's order for twelve years. The landlord also rejected the tenant's rent checks, and commenced several eviction proceedings in Housing Court and Supreme Court actions based on the tenant's alleged nonpayment of rent.

     The decision in Haberman arose out of yet another Supreme Court action commenced by the landlord August 2000 seeking use and occupancy of the apartment for an eight year period based on the rent amount set by the CAB. The trial court dismissed the action for use and occupancy, and the Appellate Division, First Department affirmed, writing that "It]he landlord's undeniable attempt to frustrate the purposes of the Rent Stabilization Law militates against the intervention of equity on his behalf." 3 AD3d at 192.

     Here, as in Haberman, the circumstances of this case involve an owner who has failed to comply with an administrative order regarding the rights of a rent stabilized tenant. And, as in Haberman, the tenant's tender of rent was rejected by the owner. At the same time, however, the court recognizes that, unlike in Haberman, the Pavias' request for Article 78 relief was only recently denied. And, as the Pavias are seeking to eject defendants, their refusal to accept rent is not without a legal basis. Moreover, defendants continue to occupy their Apartment, and it cannot be said on this record that defendants have suffered from a decrease in services which would warrant denying use and occupancy or reducing the amount of the legally regulated rent. Additionally, the failure to plead use and occupancy is not a basis for denying such relief.

     Taking all these factors into account, the court finds that the Pavias are not entitled to use and occupancy until they provide proof of compliance with the DHCR's order requiring them to give Couri a rent stabilized lease, and to register the Building in accordance with the rent stabilization laws, or upon further order of this court. However, as Couri continues to occupy the apartment and the dispute between the parties has not yet been resolved, he should be required to deposit with the Clerk of the Court (i) past use and occupancy for the period November 2002 to the present in the amount of $1,820.00 per month, less the $3,716.62 owed to Couri for overcharges together with the excess security amount found by the Rent Administrator, and (ii) on the 15th day of each month thereafter future use and occupancy in the amount of $1,820.00. That being said, Couri has until August 16, 2004, no suggest an alternative to the Clerk of the Court, such as a lawyer's escrow account, for the deposit of use and occupancy.

     Couri's cross motion is denied except to the extent that the court has found that the Pavias are not entitled to use and occupancy until they comply with the DHCR's order.

     Next, the Pavias' request that Couri provide them with keys to defendants' apartment is denied. Under the circumstances of this case, given the level of hostility between the parties, and that the Pavias have already been granted access no fix the leak that provided the basis for his action, the Pavlas have not made a sufficient showing that they are entitled to an injunction granting the ultimate relief sought in their second cause of action. Zanqhi v. Stake, 204 AD2d 313 (2d Dept. 1994). Notably, the Pavias cite no legal authority entitling them to the keys and, instead rely on a provision in a lease that they maintain has been terminated. And, as there appears to be no neutral third party who could be given the keys, if access is needed in the event of an emergency it will have to be gained without the benefit of keys.

     Finally, the Pavias' request that any stay of discovery be lifted is moot since Couri's summary judgment motion was denied pursuant to the court's decision and order dated June 28, 2004.

Conclusion

     In view of the above, it is

     ORDERED that the Pavias' motion seeking use and occupancy is denied; and it is further

     ORDERED that on or before August 23, 2004, Couri is directed to deposit with the Clerk and this Court (1) past use and occupancy for the period November 2002 to the present in the amount of the legally regulated rate of $1,820.00 per month, less the $3,716.62 owed to Couri for overcharges together with the excess security amount found by the Rent Administrator, and (ii) future use and occupancy in the amount of $1,820.00 per month, on the 15th day of each month4, until further order of the court; and it is further

     ORDERED that Couri has until August 16, 2004, to propose to this court an alternative to depositing the use and occupancy payments with the Clerk of the Court; and it is further

     ORDERED that the Pavias' motion for an order requiring defendants provide the keys to their apartment is denied; and it is further

     ORDERED that the Pavias' request that any stay of discovery be lifted is denied as moot; and it is further

     ORDERED that the cross motion is denied except as set forth herein.

DATED: July 12, 2004

                    J.S,C.

1Since Couri was not offered another lease after the second lease for a two-year term expired on October 14, 2000, the DHCR considered Couri's occupancy to be on a month to month basis.
2 The cause of action regarding access to the defendants' apartment to fix the water leak is moot as such access has already been provided.
3There is a dispute between the parties as to weather Couri enclosed a check with each of the letters sent to the Pavias in which he purported to pay the rent.
4 If the 15th is on a weekend, the deposit shall be made on the first weekday after the 15th day.