ST NICHOLAS 24 LLC v. CHAVEZ LUJAN (2024)

Appeal from order (Jean T. Schneider, J.), dated March 1, 2021, deemed an appeal from the judgment (same court and Judge), entered on the same date, and so considered (see CPLR 5520[c]), judgment affirmed, with $25 costs. Judgment (same court and Judge), entered May 10, 2022, affirmed, without costs. Appeal from order (same court and Judge), dated July 13, 2020, dismissed, without costs, as subsumed in the appeal from the March 2021 judgment.

The trial court's finding that landlord engaged in a fraudulent scheme to deregulate the subject apartment was based on a fair interpretation of the evidence (see Claridge Gardens v Menotti, 160 AD2d 544, 544-545 [1990]). The trial evidence showed, and the court specifically found that “[landlord] and its predecessors deliberately hid the regulatory status of the apartment from their tenants by claiming that the apartment was deregulated when it was actually registered with the DHCR and omitted the required riders that would have demonstrated to a tenant that the apartment was still subject to regulations.” Furthermore, “[landlord] offered no evidence at the trial that would have justified deregulation either in 2010, when the rent charged was $2,200, still below the deregulation threshold in effect at that time, or in 2011 when [tenant] signed her first lease” (see Matter of Grimm v State of NY Div. of Hous. & Community Renewal Off. of Rent Admin., 15 NY3d 358, 366-367 [2010]; Butterworth v 281 St. Nicholas Partners, LLC, 160 AD3d 434 [2018]; Vendaval Realty, LLC v Felder, 67 Misc 3d 145[A], 2020 NY Slip Op 50786[U] [App Term, 1st Dept 2020]). We note that landlord produced no witnesses at trial, including the agent subpoenaed by tenant.

Landlord's claim that tenant failed to prove all the elements of fraud was not raised below, and is thus unpreserved for appellate review (see CPLR 5501[a][3]; Hulsen v Morrison, 206 AD2d 459, 460 [1994]). In the circumstances, we need not consider the applicability of subsequent legislation clarifying that “there need not be a finding that all of the elements of common law fraud ․ were satisfied in order to make a determination that a fraudulent scheme to deregulate a unit was committed” (L 2024, ch 95, § 2-a; see L 2023, ch 760).

Because the court found that there was fraud, it properly applied the default formula in determining the legal rent (see Matter of Grimm v State of NY Div. of Hous. & Community Renewal Off. of Rent Admin., 15 NY3d at 365—366; Davis v Graham Ct. Owners Corp., 211 AD3d 629, 630 [2022], lv denied 40 NY3d 902 [2023]).

We sustain the judgment for attorneys' fees as landlord offered no substantial argument on appeal concerning that judgment, which was largely based upon stipulated facts.

We have considered landlord's remaining arguments and find them, to the extent preserved, unpersuasive.

THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.

Per Curiam.

All concur.