93RD BUILDING CORP v. HEFTI (2024)

Order, Supreme Court, New York County (Paul A. Goetz, J), entered on or about September 23, 2022, which, to the extent appealed from as limited by the briefs, granted plaintiff landlord's motion to strike defendant tenant's jury demand, unanimously modified, on the law, to deny the motion insofar as the tenant's counterclaims asserted personal injury or property damage (the 16th, 17th, 20th, 21st, and 22nd counterclaims), those counterclaims severed without prejudice for a separate action in which the tenant may demand a jury trial, and otherwise affirmed, without costs.

In general, the tenant waived her right to a trial by jury by entering into the parties’ lease, which contains a valid jury waiver clause “for any matter concerning this Lease or the Apartment” (see Sherry Assoc. v. Sherry–Netherland Inc., 273 A.D.2d 14, 15–16, 708 N.Y.S.2d 105 [1st Dept. 2000]).  Furthermore, although the tenant's initial lease had expired, making her a statutory tenant, the jury waiver carried over into the statutory tenancy (see Gersten v. 56 7th Ave. LLC, 88 A.D.3d 189, 199, 928 N.Y.S.2d 515 [1st Dept. 2011], appeal withdrawn 18 N.Y.3d 954, 944 N.Y.S.2d 482, 967 N.E.2d 707 [2012]).

However, the lease expressly excepts from the jury waiver “actions for personal injury or property damage” (see Sherry Assoc., 273 A.D.2d at 15–16, 708 N.Y.S.2d 105;  Leav v. Weitzner, 268 A.D. 466, 468, 51 N.Y.S.2d 775 [1st Dept. 1944]).  Therefore, the tenant's counterclaims asserting personal injury and property damage should be severed from this proceeding and tried separately (see Holrod Assoc. v. Tomanovits, 120 Misc.2d 551, 552, 467 N.Y.S.2d 494 [App. Term, 1st Dept. 1983];  cf.  Barrow v. Bloomfield, 30 A.D.2d 947, 947, 293 N.Y.S.2d 1007 [1st Dept. 1968]).

Contrary to the tenant's position otherwise, there is no basis to invalidate an initial lease without a finding of fraud (see Drucker v. Mauro, 30 A.D.3d 37, 43, 814 N.Y.S.2d 43 [1st Dept. 2006], lv dismissed 7 N.Y.3d 844, 823 N.Y.S.2d 772, 857 N.E.2d 67 [2006]).  Although the Department of Housing and Community Renewal previously found that the tenant was entitled to a rent-stabilized lease, both the Department and the article 78 court also specifically found that there was no evidence of a fraudulent scheme to deregulate the premises.  These findings are conclusive at this time, and we reject the tenant's efforts to relitigate that issue by advancing an argument that the lease, including its jury trial waiver, is invalid (see Ryan v. New York Tel. Co., 62 N.Y.2d 494, 500–501, 478 N.Y.S.2d 823, 467 N.E.2d 487 [1984]).

Because there was no motion to dismiss the counterclaims, we need not address the landlord's arguments that certain counterclaims are time-barred or otherwise barred by the terms of the lease.

We have considered the remaining arguments and find them unavailing.