KEW GARDENS PORTFOLIO HOLDINGS, LLC, Petitioner, v. Ronald BUCHELI, Barbara Pinargote, Respondents, and “John Doe” and “Jane Doe,” Respondents-Undertenants.
Recitation, as required by CPLR § 2219(a), of the papers considered in the review of petitioner's motion to strike respondents’ affirmative defenses and counterclaims pursuant to CPLR § 3211(b), to strike respondents’ answer for failure to pay use and occupancy, for sanctions, and/or to amend the petition pursuant to CPLR § 1024:
Notice of Motion & Affirmation/Affidavit/Exhibits Annexed 1 (NYSCEF No. 3-13)
Affirmation in Opposition & Affidavits Annexed 2 (NYSCEF #14)
Affirmation in Reply 3 (NYSCEF #16)
Upon the foregoing cited papers, the decision and order on petitioner's motion is as follows.
This holdover proceeding was commenced in November 2018. The petition pleads that the named respondents are licensees or, in the alternative, squatters. The named respondents, through counsel, made a pre-answer motion to dismiss on the basis that the petition was defective insofar as it pled alternative causes of action. The motion to dismiss was granted by order of the Hon. Sergio Jimenez on May 14, 2019. By decision and order of the Appellate Term, Second Department dated October 2, 2020, the order granting respondents’ motion to dismiss was reversed. See Kew Gardens Portfolio Holdings, LLC v. Bucheli, 69 Misc 3d 129[(A]), 2020 N.Y. Slip Op. 51137[(U]) [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2020]. Subsequently, respondents filed an answer containing affirmative defenses and counterclaims. Petitioner now moves to strike to strike respondents’ answer for failure to pay use and occupancy, to strike the majority of respondents’ affirmative defenses and counterclaims pursuant to CPLR § 3211(b), for sanctions, and/or to amend the petition pursuant to CPLR § 1024. After submission of opposition and reply papers, the court heard argument on December 22, 2020 (via Microsoft Teams) and reserved decision.1
I. Motion to strike answer for failure to pay use and occupancy.
The court first assesses petitioner's motion to strike respondents’ answer for failure to pay use and occupancy. Petitioner annexes a copy of a 2-attorney stipulation dated January 8, 2019, whereby the proceeding was adjourned to February 22, 2019 and respondents were obligated to pay January (2019) use and occupancy by January 25, 2019 and ongoing use and occupancy by the 10th of each month thereafter “without prejudice to either parties[’] claims and defenses.” Petitioner's affiant, Manny Stein, states that respondents failed to pay use and occupancy as required by the January 8, 2019 stipulation and owed $26,440.11 through November 2020.
The court first notes that the January 8, 2019 stipulation is not so-ordered, so is therefore not an order of the court.2 See Will v. County of Nassau, 90 A.D.2d 795, 455 N.Y.S.2d 405 [2d Dept 1982]; Estate of Frank Lamberti, 2007 NY Misc LEXIS 8136, *8 [Sur Ct, Westchester County, November 19, 2007], affd sub nom. Matter of Lamberti v. Angiolillo, 73 A.D.3d 463, 905 N.Y.S.2d 560 [1st Dept 2010]. Since the provision of RPAPL § 745 that permits the dismissal of defenses and counterclaims applies only where the court has directed a deposit of use and occupancy, no such remedy is available here.3 See Front St. Rest. Corp. v. Ciolli, 55 Misc 3d 104, 106 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017]. Moreover, the stipulation's language makes clear that the agreed-to use and occupancy payments are “without prejudice to either parties[’] claims and defenses” and no penalty for failing to pay is set out in the stipulation. See Myrtle Venture Five, LLC v. Eye Care Opt. of NY, Inc., 48 Misc 3d 4, 6 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015] [“[T]he so-ordered stipulation did not provide for the striking of tenant's pleading in event of default, and the court does not have the inherent authority to grant that relief absent such a provision.”]. Accordingly, petitioner's motion to strike respondent's answer for failure to pay use and occupancy is denied without prejudice to any appropriate relief pursuant to RPAPL § 745.
II. Motion to strike affirmative defenses and counterclaims pursuant to CPLR § 3211(b).
Petitioner moves to strike eleven of respondents’ twelve affirmative defenses and all three counterclaims pursuant to CPLR § 3211(b). Pursuant to CPLR § 3211(b), “[a] party may move for judgment dismissing one or more defenses, on the ground that a defense is not stated or has no merit.” In reviewing a motion to dismiss a defense or defenses under the statute, “the court must liberally construe the pleadings in favor of the party asserting the defense and give that party the benefit of every reasonable inference [and] if there is any doubt as to the availability of a defense, it should not be dismissed.” Staropoli v. Agrelopo, LLC, 136 A.D.3d 791, 792 [2d Dept 2016]. However, defenses that consist only of “conclusions of law without any supporting facts” are subject to dismissal. Fireman's Fund Ins. Co. v. Farrell, 57 A.D.3d 721, 723, 869 N.Y.S.2d 597 [2d Dept 2008].
Petitioner first seeks to dismiss respondents’ first affirmative defense, based on lack of personal jurisdiction. The first affirmative defense states that petitioner failed to comply with RPAPL § 735 in service of the predicate notice and petition and notice of petition. The court first notes that service of a predicate notice does not affect personal jurisdiction in a summary proceeding. See 156 Nassau Avenue HDFC v. Tchernitsky, 62 Misc 3d 140[(A]), 2019 N.Y. Slip Op. 50059[(U]) [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2019]; Wasserman v. Kwiecinski, 54 Misc 3d 136[(A]), 2017 N.Y. Slip Op. 50112[(U]) [App Term, 2d Dept, 9th & 10th Jud Dists 2017]. In order to challenge personal jurisdiction, a party must set forth a “sworn, nonconclusory denial of service” of the notice of petition and petition. Tzifil Realty Corp. v. Temammee, 46 Misc 3d 144[(A]), 2015 N.Y. Slip Op. 50196[(U]) [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]; see also Rox Riv 83 Partners v. Ettinger, 276 A.D.2d 782, 783, 715 N.Y.S.2d 424 [2d Dept 2000]. Respondents’ first affirmative defense is wholly conclusory and does not include any specific details in support of the denial of service pursuant to RPAPL § 735. Consequently, respondents’ first affirmative defense, based on lack of personal jurisdiction, is dismissed.4
Respondents’ second affirmative defense is lack of subject matter jurisdiction based upon an assertion that petitioner failed to comply with RPAPL § 721. Petitioner seeks to dismiss this defense based on lack of particularity. Although frequently misunderstood, “Civil Court is vested with subject matter jurisdiction over housing matters by statute.” 170 West 85th Street Tenants Ass'n v. Cruz, 173 A.D.2d 338, 339, 569 N.Y.S.2d 705 [1st Dept 1991]; see also 136-76 39th Ave., LLC v. Ai Ping Wu, 55 Misc 3d 128[(A]), 2017 N.Y. Slip Op. 50363[(U]) [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017]; NYC Civil Court Act (CCA) § 204. Respondents’ bare assertion that petitioner failed to comply with RPAPL § 721, which addresses who may bring a summary proceeding, does not impact the subject matter jurisdiction of this court. Accordingly, respondents’ second affirmative defense is dismissed.
Respondents’ third affirmative defense alleges that petitioner failed to personally deliver the petition, notice of petition, and the predicate notice upon respondents. The court has previously held that respondent's personal jurisdiction defense is dismissed, so will not separately pass upon the allegation regarding the petition and notice of petition here. Pursuant to RPAPL § 713, a 10-day notice to quit is not required to be served by personal delivery. Instead, service must be made pursuant to RPAPL § 735, which permits substitute service and conspicuous place service (if upon a reasonable application admittance cannot be obtained), in addition to personal delivery. Therefore, a denial of personal delivery alone is insufficient to challenge service of the predicate notice to quit.5 As a result, respondents’ third affirmative defense is dismissed.6
Respondents’ fourth affirmative defense alleges that the petition is jurisdictionally defective under RPAPL § 741 insofar as it: fails to attach required notices, does not contain/state the required contents and facts, and/or fails to state how required notices were given to respondents. Although lacking in specificity, this defense is effectively one sounding in failure to state a cause of action. Since such defenses are regarded as “ ‘harmless surplusage,’ ” the court denies petitioner's motion to dismiss respondents’ fourth affirmative defense. Butler v. Catinella, 58 A.D.3d 145, 150, 868 N.Y.S.2d 101 [2d Dept 2008] [quoting Citibank [S.D.] N.A. v. Coughlin, 274 A.D.2d 658, 660, 710 N.Y.S.2d 705 [3d Dept 2000]].
Respondents’ fifth affirmative defense alleges that petitioner “has failed to comply with the required predicate notices.” The defense does not state how petitioner has failed to comply. Since the Appellate Term has specifically held that the notice to quit is legally sufficient, the court determines that there is no merit to respondent's fifth affirmative defense and it is hereby dismissed. The court declines to impose sanctions pursuant to 22 NYCRR § 130-1.1, as requested by petitioner. Respondents’ counsel, however, is cautioned that any future attempt to challenge the sufficiency of the notice to quit (excepting reargument or appeal of the Appellate Term's decision) may subject respondents and/or counsel to sanctions.
Respondents’ sixth affirmative defense states that the instant action [sic] is time-barred by laches. An equitable defense, laches requires the existence of four primary elements: “(1) conduct by an offending party giving rise to the situation complained of, (2) delay by the complainant asserting his or her claim for relief despite the opportunity to do so, (3) lack of knowledge or notice on the part of the offending party that the complainant would assert his or her claim for relief, and (4) injury or prejudice to the offending party in the event that relief is accorded the complainant.” Dwyer v. Mazzola, 171 A.D.2d 726, 727, 567 N.Y.S.2d 281 [2d Dept 1991]. Respondents’ laches defense does not include facts articulating any of the required laches elements. Accordingly, it is wholly conclusory and must be dismissed.
Respondents’ eighth affirmative defense seeks dismissal of the proceeding on the basis that petitioner has waived its right to proceed through acceptance of rent checks and lease renewal offers and acceptances. Petitioner argues that the defense is meritless insofar as rights arising from rent stabilization must come via statutory means, rather than waiver or estoppel. While petitioner's position is an accurate one, waiver may nonetheless bar a landlord from evicting an individual as a licensee where intentional acts, such as acceptance of rent, have been taken to create a tenancy. See e.g. 317 West 77th, Inc. v. PERA, 1990 NY App Div LEXIS 16873 [App Term, 1st Dept 1990] [citing Jefpaul Garage Corp. v. Presbyterian Hosp. in NY, 61 N.Y.2d 442, 448, 474 N.Y.S.2d 458, 462 N.E.2d 1176 ]; Avdi Realty LLC v. DeLaRosa, 63 Misc 3d 1213[(A]), 2019 N.Y. Slip Op. 50514[(U]) [Civ Ct, Bronx County 2019]. Accordingly, respondents’ eighth affirmative defense is not lacking in merit as stated and petitioner's request to dismiss the defense is denied.
Respondents’ ninth affirmative defense states that petitioner has failed to use available means to mitigate damages. Since this is a holdover proceeding seeking possession of the subject residential premises, the court is unable to discern any relevant applicability of mitigation of damages.7 As a result, respondents’ ninth affirmative defense lacks merit and is hereby dismissed.
Respondents’ tenth affirmative defense states that petitioner has failed to join a necessary party. The answer does not include specific information about who the purported necessary party is. Respondents’ opposition papers now state that Miriam Bucheli, Rodolfo Bucheli, and Ruby Gallardo are necessary parties who were not named or served. Initially, it should be noted that the opposition papers state that Rodolfo Bucheli (also referred to as Rodrigo Bucheli) died in April 2020. Therefore, any relevant claims that he may have had in this holdover proceeding have been extinguished. See CPLR 1015.8
As for Miriam Bucheli, she states in her affidavit in opposition that she moved into the subject premises in 1995 and has resided there “openly and notoriously” since then. (Miriam Bucheli Affidavit, ¶¶ 2-3). A court may consider evidence submitted on a motion made pursuant to CPLR § 3211(b) (see CPLR § 3211(c)); however, when a party challenges the factual basis of a defense, the party defending against the motion must “come forth with sufficient evidence to raise an issue of fact with respect to the defense.” Becker v. Elm Air Conditioning Corp., 143 A.D.2d 965, 965-966, 533 N.Y.S.2d 605 [2d Dept 1988]. A necessary party is one “who ought to be [a party] if complete relief is to be accorded between the persons who are parties to the action or who might be inequitably affected by a judgment.” CPLR 1001(a). It is well established that a subtenant is not a necessary party to a summary proceeding, even if he or she may be a proper party. See e.g. FS 45 Tiemann Place LLC v. Gomez, 38 Misc 3d 135[(A]), 2013 N.Y. Slip Op. 50132[(U]), 967 N.Y.S.2d 866 [App Term, 1st Dept 2013]; Triborough Bridge & Tunnel Auth. v. Wimpfheimer, 165 Misc 2d 584, 586, 633 N.Y.S.2d 695 [App Term, 1st Dept 1995]; Parkash 2125 LLC v. Galan, 61 Misc 3d 502, 511 [Civ Ct, Bronx County 2018]. Nonetheless, here, respondents argue that Miriam Bucheli is a necessary party because of the length of her occupancy, her interactions with the landlord (including past litigation), and her relationship with the former tenant, Jorge Alban. The affidavits submitted are sufficient to raise an issue of fact as to a potential succession claim by Miriam Bucheli (see 645 Bklyn Realty, LLC v. Beecher-Sakil, 2021 N.Y. Slip Op. 50085[(U]), 70 Misc.3d 138(A) [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2021]), so the court declines to dismiss respondents’ tenth affirmative defense insofar as it relates to Miriam Bucheli.
Contrariwise, the allegations about Miriam Bucheli's mother, Ruby Gallardo, are insufficient to raise an issue of fact as to whether she is a necessary party. The affidavits submitted do not state when she moved into the subject premises, nor how long she lived with the former tenant of record, Mr. Alban. Upon this evidence, Ms. Gallardo is at most a proper party to this proceeding. Triborough Bridge & Tunnel Auth., 165 Misc 2d at 586, 633 N.Y.S.2d 695.9
Respondents’ eleventh affirmative defense states generally that the petition fails to set forth a cause of action. As the court held as to the fourth affirmative defense, this defense is harmless surplusage and, as a result, the court declines to dismiss it. Butler, 58 A.D.3d at 150, 868 N.Y.S.2d 101; see also Mazzei v. Kyriacou, 98 A.D.3d 1088, 1089, 951 N.Y.S.2d 557 [2d Dept 2012].
Finally, respondents’ answer includes an improperly-labeled and duplicative “seventh affirmative defense.” This is actually the twelfth affirmative defense and is based on a breach of the warranty of habitability. Since this proceeding only seeks possession and not rent or use and occupancy in the petition, the warranty of habitability defense is not germane and is dismissed without prejudice.
Petitioner also moves to strike respondents’ counterclaims. The first counterclaim seeks attorney's fees pursuant to (as relevant here) Real Property Law (RPL) § 234.10 This statute creates a reciprocal right to attorney's fees for tenants where a lease provides for the landlord's entitlement to fees in the event of a breach of the lease. See Graham Ct. Owner's Corp. v. Taylor, 24 N.Y.3d 742, 28 N.E.3d 527 . Respondents’ attorney's fees counterclaim only alleges frivolous conduct by petitioner as a basis for the fees, rather than a lease between the parties. Accordingly, respondents’ first counterclaim is dismissed without prejudice.
Respondents’ second counterclaim seeks costs and the imposition of sanctions resulting from purportedly frivolous conduct by petitioner, citing to 22 NYCRR § 130-1.1. The frivolous conduct complained of is commencement of this proceeding without merit. Since the Appellate Term, Second Department has reversed the granting of a motion to dismiss this proceeding, the court infers a lack of frivolousness in the commencement of this proceeding (without assessing the ultimate merits). As a result, respondents’ second counterclaim is dismissed without prejudice to any claims regarding future conduct.
Respondents’ third counterclaim conflates retaliatory eviction and frivolous conduct (and cites to two provisions, NYC Admin. Code §§ 8-109 and 27-2115, that have no relevance to this proceeding). It does not set forth a nonconclusory claim for either retaliatory eviction or sanctions resulting from frivolous conduct. Accordingly, the third counterclaim is dismissed without prejudice.
III. Motion to amend the petition and substitute respondent pursuant to CPLR § 1024
The final prong of petitioner's motion seeks to amend the petition and substitute Ruby Gallardo (who has already appeared through counsel) in place of “Jane Doe” as a respondent in this proceeding pursuant to CPLR § 1024. CPLR § 1024 provides that:
“A party who is ignorant, in whole or in part, of the name or identity of a person who may properly be made a party, may proceed against such person as an unknown party by designating so much of his name and identity as is known. If the name or remainder of the name becomes known all subsequent proceedings shall be taken under the true name and all prior proceedings shall be deemed amended accordingly.”
Petitioner claims (through the affidavit of its manager, Manny Stein) that it was unaware of the identity of Ms. Gallardo when the proceeding was commenced. Although respondents’ opposition papers dispute this allegation through the affidavits of Ronald and Miriam Bucheli, there has been no motion (or even defense) by any respondent asserting a misuse of CPLR § 1024. Consequently, since Ms. Gallardo has appeared and made her identity known as an occupant, it is appropriate under CPLR § 1024 to substitute her as “Jane Doe” and amend the pleadings accordingly. The final prong of petitioner's motion is therefore granted.
In accordance with the foregoing determinations, it is hereby ordered that: (1) petitioner's motion to strike respondents’ answer for failure to pay use and occupancy is denied without prejudice; (2) petitioner's motion to dismiss respondents’ affirmative defenses and counterclaims pursuant to CPLR § 3211(b) is granted to the extent of dismissing respondents’ first, second, third, fifth, sixth, ninth, eleventh, and twelfth (warranty of habitability) affirmative defenses and respondents’ first, second, and third counterclaims (all counterclaims dismissed without prejudice)11 ; (3) petitioner's motion for sanctions pursuant to 22 NYCRR § 130-1.1 is denied; and (4) petitioner's motion to substitute Ruby Gallardo in place of “Jane Doe” and amend the pleadings accordingly pursuant to CPLR § 1024 is granted. This proceeding will be restored to the Part E calendar for a conference on September 16, 2021 at 10:30 AM. The attorneys of record will receive a Microsoft Teams invitation by email. This Decision/Order will be filed to NYSCEF. Petitioner's attorney shall serve a copy of the Decision/Order upon John Doe at the subject premises by first class mail no later than August 24, 2021.
THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
1. On December 28, 2020, Governor Andrew M. Cuomo signed the COVID-19 Emergency Eviction and Foreclosure Prevention Act (“EEFPA”), which stayed all pending eviction proceedings for sixty (60) days. See L 2020, ch 381 (Part A, § 2). On January 18, 2021, multiple respondents submitted financial hardship declarations to the court, which further stayed this proceeding through May 1, 2021. See EEFPA, Part A, § 6. Upon the EEFPA being amended and extended through August 31, 2021 via L 2021, ch 104, the stay was similarly extended. However, on August 12, 2021, the US Supreme Court enjoined enforcement of Part A of the EEFPA. See Chrysafis v. Marks, 594 US ––––, ––– S.Ct. ––––, ––– L.Ed.2d ––––, 2021 WL 3560766 . As a result of the injunction, the stay is no longer in effect and this Decision/Order is now being issued.
2. The court did not have the court file at the time of argument but received the file back from the Appellate Term after decision was reserved. Upon review of the file, the court has confirmed that the original January 8, 2019 stipulation is not so-ordered.
3. The court acknowledges that the prior version of RPAPL § 745 applies to this proceeding, since it was commenced before June 14, 2019. See L. 2019, c. 36, § 17 (Part M); L. 2019, c. 39, § 34 (Part Q).
4. The court also notes that respondents failed to raise lack of personal jurisdiction in their pre-answer motion to dismiss, so it is waived in any event. See CPLR § 3211(e).
5. The court observes that the affidavit of service annexed to the notice to quit alleges conspicuous place service.
6. The court nonetheless stresses that service of a predicate notice is a condition precedent to a summary holdover proceeding and must be established by a petitioner to obtain its ultimate relief. See Parkview Apts. Corp. v. Pryce, 58 Misc 3d 155[(A]), 2018 N.Y. Slip Op. 50187[(U]) [App Term, 2d Dept, 9th & 10th Jud Dists 2018]; 716 Realty, LLC v. Zadik, 38 Misc 3d 139[(A]), 2013 N.Y. Slip Op. 50194[(U]), 969 N.Y.S.2d 806 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013].
7. Real Property Law (RPL) § 227-e, which addresses mitigation of damages, is only applicable when a tenant vacates a premises in violation of the terms of a lease.
8. Although CPLR § 1015 requires that the court order substitution (i.e. of an estate) where claims are not extinguished, the court can discern no claims germane to this proceeding relating to Rodolfo (Rodrigo) Bucheli that would survive his death.
9. In a later portion of this Decision/Order, the court grants petitioner's motion to substitute Ms. Gallardo as a respondent in place of “Jane Doe” pursuant to CPLR § 1024.
10. The other two provisions cited by respondents as a basis for attorney's fees, NYC Admin. Code § 8-109 and 42 USCA § 3610(a)(1), have no applicability to this holdover proceeding.
11. Additionally, while the court has determined that the tenth affirmative defense is not dismissed in its entirety, it is potentially meritorious only to the extent of the allegation that Miriam Bucheli is a necessary party.
Clinton J. Guthrie, J.
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