Pavia v. Couri
(Sup. Ct. N.Y. Cty. 2/9/05)
We represented: Plaintiff/Landlord
Hon. Joan A. Madden, J.S.C.
DECISION and ORDER Plaintiff James Couri ("Couri") moves, by order to show cause, for an order, inter alia, (i) reducing rents on his apartment in accordance with an order of the DHCR order, (ii) staying the collection of use and occupancy and the effect of this court's July 12, 2004 decision and order ("the original decision") and, (iii) directing a reduction in rents. Plaintiffs oppose the motion, which is denied.
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 2520.11 (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 to 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 or 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 $1,855.00. The Pavias forwarded the checks to counsel, who rejected the cheeks 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 Couri was committing a nuisance in the Building by, inter alia, (i) sending harassing letters to 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 to 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 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 moved for 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 asserted that they refused to accept rent from Couri to preserve their rights to evict defendants based on Couri's conduct creating an alleged nuisance.
Couri opposed the motion and cross moved for various relief, including an order directing that the Pavias immediately comply with the DHCR order to register the Building under the rent stabilization laws.
By decision and order dated July 12, 2004 this court wrote that the Pavias' failure to follow the registration requirements did not prevent them from collecting rent, but rather barred them o 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). The court noted that 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 $1,820 per month from October 15,1998 to date.
Nonetheless, the court held that the equities of the case did not warrant the requiring Couri to pay the Pavias use and occupancy since such payment was predicated on "a theory of quantum meriut, and is imposed for by law for the purpose of bringing about justice…." Eighteen Assoc. LLC v. Nanjim Leasing Corp., 257 AD2d 559, 560 (2d Dept 1999); Haberman v. Singer, 3 AD3d 188 (1 st Dept 2004). On the other hand, the court recognized that the defendant continue to occupy their Apartment, had potentially meritorious claim for ejectment against defendants and that the record did not indicate that the defendants had suffered from a decrease in services which would warrant denying use and occupancy or reducing the amount of the legally regulated rent.
Taking all these factors into account, the court found that the Pavias were not entitled to use and occupancy until they provided 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, the court also found that as Couri continued to occupy the Apartment, and that the dispute between the parties had not yet been resolved, that Couri should be required to deposit with the Clerk of the Court (1) past use and occupancy for the period from November 2002 to present at the legally regulated rate of $1,820 per month, less the $3,716.62 owed to Couri for overcharges together with the excess security amount found by the Rent Administrator, and (2) future use and occupancy in the amount of $1,820 per month. The court permitted Couri to suggest an alterative to the court, such as a lawyer's escrow account, for the deposit of use and occupancy.
Couri now moves, by order to show cause, for relief from the court's decision and other related relief for a reduction of rents, based on the Pavias' failure to register the Building and the issuance of certain additional notices of violation by the Department of Buildings regarding a greenhouse at the Building. On September 16, 2004, the court's signed Court's order to show cause and temporarily stayed the Pavias from collecting rents or use and occupancy, and staying the effect of the court's July 12, 2004 order requiring Couri to deposit use and occupancy with the Clerk of the Court.
Upon reviewing the record in this case, the court finds that while Couri has provided the court with evidence of notices of violation issued by the Department of the Buildings such notices alone are not sufficient to relieve Couri from payment of use and occupancy at the legal rate as set by the DHCR, particularly as defendants continue to reside at the Apartment. Notably, Couri provides no evidence of that the DHCR has reduced the legal rent based on any violations. In addition, it is unclear that the issue regarding the reduction of rent is properly before the court. In any event, Couri submits insufficient evidence that a reduction of rent is waranted based on the alleged violations concerning the greenhouse. Finally, as the payments for past and future use and occupancy are to be deposited into the court and rather than paid to the Pavias, defendants will not be prejudiced by depositing such amounts with the court pending the resolution of this action.4
Accordingly, it is
ORDERED that Couri's motion is denied in its entirety; and it is further
ORDERED that all stays are hereby rescinded and vacated; and it is further
ORDERED that on or before March I1, 2005, Couri is directed to deposit with the Clerk and this Court (i) 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 Court 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 I5th day of each month5, until further order of the court.
DATED: February 9, 2005
1 Since Couri was not offered another lease after the second lease for a two-year- term expired on October 14, 2000, the DI-ICR 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.
3 There is a dispute between the parties as to whether Couri-enclosed a check with each of the Ietters sent to the Pavias in which he purported to pay the rent.
4 Although the July I2, 2004 order permitted Couri to suggest an alternative to depositing the money with the court, such as a lawyer's escrow fund, the parties could not agree on appropriate alternative for the placement of the funds. Accordingly. Couri will be required to deposit the money with the court.
5 If is on a weekend, the deposit shall be made on the first weekday after the 15th day.