ONE CONTINENTAL AVENUE CORP., Petitioner, v. Matt HOXHAJ, Lumturija Hoxhaj, “John Doe,” “Jane Doe,” Respondents.
Recitation, as required by CPLR § 2219(a), of the papers considered in the review of Respondents' motion for leave to conduct discovery pursuant to CPLR Article 31 and CPLR § 408:
Notice of Motion & Affirmation/Exhibits Annexed 1
Answering Affirmation/Exhibit Annexed. 2
Reply Affirmation 3
Notice of Petition and Petition 4
Verified Answer 5
Upon the foregoing cited papers, the decision and order on Respondents' motion is as follows:
The immediate holdover proceeding based on a “Thirty (30) Day Notice of Termination” was commenced by Notice of Petition and Petition dated February 5, 2019. At the initial court date on February 26, 2019, both parties appeared by counsel and the proceeding was adjourned to April 9, 2019. Prior to the April 9, 2019 court date, Respondents, through counsel, filed a motion to dismiss and for legal fees, costs, and disbursements. After opposition and reply were submitted, Court heard argument on the motion to dismiss on June 18, 2019 and reserved decision. On August 12, 2019, the Court rendered a decision denying the motion to dismiss and permitting Respondent to serve an answer. Subsequently, Respondents served an answer and filed the immediate motion for leave to conduct discovery. Following additional adjournments for opposition and reply, the Court heard argument on the motion for discovery on November 26, 2019 and reserved decision.
Respondents move for leave to conduct discovery on the basis of their allegations that there are at least eight (8) housing accommodations in the subject building and that the building was constructed prior to 1974. See NYC Admin. Code § 26-504; 9 NYCRR § 2520.11. Respondents seek production of documents, including leases, rent rolls, floorplans, certificates of occupancy, annual rent registration statements from DHCR (Division of Housing Community Renewal), and various communications from January 1, 2004 “to the date of the trial of this action [sic].” Respondents also seek depositions of Richard Tanenbaum, Head Officer of Petitioner, and Ralph Davis, Managing Agent of Petitioner, as well as depositions of non-party witnesses, specifically alleged residents of the subject building. In support of the motion, Respondents' counsel annexes affidavits of Matt Hoxhaj, which were originally submitted in support and reply of the motion to dismiss. The affidavits describe the layout of the building and identify at least 8 units being used residentially (although the photographs of apartment doors that were annexed in support of the motion to dismiss and which are described in the affidavits are not annexed to the motion for discovery nor the reply papers in support of it). Petitioner opposes Respondents' motion, arguing that the allegation that there are 8 apartments barebones and conclusory, and that the discovery requests are not “narrowly tailored.”
Under CPLR § 408 (which applies to special proceedings), “leave of court shall be required for disclosure except for a [notice to admit].” The standard that has developed for obtaining leave of court is “ample need,” which is predicated on the demonstration of the six factors first set out in New York University v. Farkas, 121 Misc 2d 643, 468 N.Y.S.2d 808 (Civ. Ct. NY County 1983). The factors are as follows: (1) whether the party seeking discovery has asserted facts to establish a cause of action; (2) whether there is a need to determine information directly related to the cause of action; (3) whether the requested disclosure is carefully tailored and is likely to clarify the disputed facts; (4) whether prejudice will result from the granting of an application for disclosure; (5) whether the prejudice can be diminished or alleviated by an order fashioned by the court for this purpose; and (6) whether the court, in its supervisory role can structure discovery so that pro se tenants, in particular, will be protected and not adversely affected by discovery requests. Farkas, 121 Misc 2d at 647, 468 N.Y.S.2d at 811-812.
Respondents, in their answer, have alleged that the subject premises is subject to rent stabilization. The Petition pleads that the premises are exempt from rent stabilization “as the C of O as [sic] issued after July 1, 1974.” (Petition, ¶ 7).1 Once “tenants put into issue the rent-regulatory status of their apartment, it [is] landlord's burden to prove at trial its allegation that the apartment was not rent regulated.” 124 Meserole, LLC v. Recko, 55 Misc 3d 146(A), 58 N.Y.S.3d 874 (App. Term 2d, 11th & 13th Jud. Dists. 2017); see also TJA Realty, LLC v. Hermosa, 56 Misc 3d 130(A), 63 N.Y.S.3d 307 (App. Term 2d, 11th & 13th Jud. Dists. 2017) (“As tenant's answer took issue with the petition's allegation that the building is not subject to rent regulation, it was landlord's threshold burden to prove its claim.”) (Internal citations omitted). Nevertheless, it remains Respondents' burden to demonstrate ample need for discovery, even where discovery is sought in order to challenge a landlord's claim to an exemption from rent stabilization. See e.g. Mautner-Glick Corp. v. Higgins, 64 Misc 3d 16, 101 N.Y.S.3d 810 (App. Term 1st Dep't 2019); 2701 Grand Assn. LLC v. Morel, 50 Misc 3d 139(A), 31 N.Y.S.3d 924 (App. Term 1st Dep't 2016); 150 W. 82nd St. Realty Assoc., LLC v. Linde, 36 Misc 3d 155(A), 964 N.Y.S.2d 61 (App. Term 1st Dep't 2012); 3630 Holland LLC v. Davis, 2019 NY Slip Op 52160(U) (Civ. Ct. Bronx County 2019); 3440 Broadway BCR LLC v. Greenfield, 64 Misc 3d 1217(A), 2019 NY Slip Op 51194(U) (Civ. Ct. NY County 2019).
As to the first Farkas factor, although Respondents have not asserted facts to establish a cause of action per se, their answer and the affidavits annexed as exhibits to the motion for leave to conduct discovery are sufficient to “put into issue” the issue the rent-regulatory status of the subject premises. See 124 Meserole, LLC v. Recko, supra. This determination is bolstered by the fact that, as the Court noted in its Decision/Order denying Respondents' motion to dismiss, Petitioner's claimed exemption, regarding the issuance of the C of O [certificate of occupancy] after June 1, 1974, is inartfully pled.
As for whether there is a need to determine information directly related to the rent-regulatory status of the subject premises, it has been acknowledged by the Court of Appeals that “[r]ent stabilization provides assistance to a specific segment of the population that could not afford to live in New York City without a rent regulatory scheme.” Matter of Santiago-Monteverde, 24 NY3d 283, 290 (2014). Therefore, the issue of potential rent stabilization coverage is of compelling importance. See e.g. Henry v. Kingsberry, 2020 NY Slip Op 50175(U) (App. Term 2d, 11th & 13th Jud. Dists. 2020) (“[T]he petition must set forth the tenant's regulatory status, because this status may determine the scope of the tenant's rights.”) (Internal citations omitted); Beverly Holding NY, LLC v. Blackwood, 63 Misc 3d 160(A), 2019 NY Slip Op 50877(U) (App. Term 2d, 11th & 13th Jud. Dists. 2019) (A tenant subject to rent stabilization “can be evicted only upon one of the grounds set forth the Rent Stabilization Code (9 NYCRR) § 2524.3 and only after being served with the notices required under 2524.2 of the Code.”) (Internal citation omitted). Here, the number of housing accommodations in the subject building, as well as information regarding issuance and contents of any certificates of occupancy, are germane to the ultimate determination of whether the subject premises are exempt from rent stabilization. See e.g. Beverly Holding NY, LLC v. Blackwood, supra; 124 Meserole, LLC v. Recko, supra; Robrish v. Watson, 48 Misc 3d 143(A), 26 N.Y.S.3d 216 (App. Term 2d, 11th & 13th Jud. Dists. 2015); Rashid v. Cancel, 9 Misc 3d 130(A), 2005 NY Slip Op 51585(U) (App. Term 2d & 11th Jud. Dists. 2005).
In assessing whether Respondents' discovery demands are carefully tailored and likely to clarify disputed facts, the Court first assesses the document production requests. Initially, the Court does not find the production of all requested documents going back to 2004 to be warranted. Matt Hoxhaj's affidavits address the purported current usage of units for residential purposes; the affidavits do not indicate that any different usage was made going back to the commencement of his tenancy in 2004. As for the specific documents requested, the Court finds the leases between Petitioner and Respondents, the leases for all units in the building, the rent rolls for the subject building, the floorplans for the subject building, certificates of occupancy, and DHCR annual rent registration statements (Requests No. 1, 3, 4, 5, 6, and 7) to be carefully tailored to clarify the issue of whether the subject premises are exempt from rent stabilization. The remainder of the documents requested (all documents “relating to Respondents' residence,” and general information about witnesses and documents to be relied upon at trial by Petitioner) are not carefully tailored and are not likely to clarify the exemption issue without being unduly burdensome. The Court holds that a “carefully tailored” timeframe for production of Requests # 1, 3, 4, 5, and 7 to be July 1, 2015 through August 23, 2019 (which effectively covers consecutive 2-year lease periods prior to the filing of Respondents' motion). As for the certificates of occupancy (Request #6), the Court holds that production of all issued after July 1, 1974 is appropriate, insofar as Petitioner's claimed exemption (suggesting new construction or substantial rehabilitation) specifically references the issuance of a certificate of occupancy after July 1, 1974.
As for the requested depositions of Mr. Tanenbaum, Mr. Davis, and the non-party residents of the building, Respondents' motion does not specify what information they possess or are likely to disclose, other than cursory references to “the number of residential units in the building” and “whether the other units in the building are being used for residential or commercial use, as well as show whether or not there are tenants who occupy more units than alleged by Petitioner.” Since these matters are all addressed through the documents that are to be produced, the Court holds that at this juncture, the depositions would be unduly burdensome and unlikely to clarify issues regarding the rent regulatory status of the building.2
In order to reduce prejudice upon the parties and to ensure that the discovery process is expeditious (thus addressing the fourth, fifth, and sixth Farkas factors), Petitioner shall produce the documents specified herein by March 31, 2020 and the proceeding will be restored for all purposes, including trial, on April 17, 2020 at 9:30 AM. In the event that Respondents seek to compel discovery compliance and/or move for further discovery, they must move by order to show cause no later than April 9, 2020.
In accordance with the foregoing determinations, Respondent's motion for leave to conduct discovery is granted to the extent stated herein. The proceeding is restored for all purposes, including trial, on April 17, 2020 at 9:30 AM.
THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
1. The Court notes that Respondents' motion does not contain copies of either the Petition or the Answer. The Court has taken judicial notice of those pleadings, which are in the court file.
2. This determination is without prejudice to Respondents' right to seek depositions or further disclosure, if appropriate, upon production of the documents specified above.
Clinton J. Guthrie, J.
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