REICHENBACH v. JACIN INVESTORS CORP (2021)

Order, Supreme Court, New York County (Robert D. Kalish, J.) entered September 24, 2019, which denied defendants' motion to dismiss the claims of Erika Abrams (Abrams) pursuant to CPLR 3211, unanimously affirmed, without costs.

The motion court properly denied dismissal of Abrams's cause of action on the grounds that she is barred from asserting these claims by virtue of a settlement of a prior proceeding between Abrams and defendant Jacin Investors Corporation, N.V. (Jacin N.V.) in New York Civil Court, Housing Part, for rental arrears and a judgement of possession. By stipulation, Abrams agreed to make installment payments in satisfaction of the claim for rental arrears and agreed that the apartment was not rent stabilized. In exchange, Jacin N.V. agreed to renew her free-market lease.¹

Under Rent Stabilization Code (RSC) (9 NYCRR) § 2520.13, and this Court's holding in Drucker v. Mauro, 30 A.D.3d 37, 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), an agreement by the tenant to waive the benefit of any provision of the Rent Stabilization Law or Code is void. Here, defendants maintain that Abrams was represented by counsel in the negotiation of the stipulation in Housing Court, and therefore the exception to the RSC 2520.13 would apply, insofar as it “allows tenants to withdraw claims through a negotiated settlement, or with the approval of the DHCR or a court, or where the tenant is represented by counsel” (see Borden v. 400 E. 55th St. Assoc., L.P., 24 N.Y.3d 382, 397, 998 N.Y.S.2d 729, 23 N.E.3d 997 [2014], citing RSC 2520.13). Given the procedural posture of the action, however, the motion court properly determined that the documentary evidence did not establish as a matter of law that the stipulation did not violate RSC 2520.13 (see e.g. Jazilek v. Abart Holdings, LLC, 72 A.D.3d 529, 532, 899 N.Y.S.2d 198 [1st Dept. 2010] [“it cannot be presumed that in so-ordering the stipulation, the Housing Court was making any finding that the stated monthly rent was the legal regulated rent”]).

We also note that while under the limited exceptions set forth in RSC 2520.13, a stipulation may resolve claims for overcharges, the parties themselves are not the arbiters of whether the apartment is subject to rent stabilization in the first instance (Kattan v. 119 Christopher LLC, 180 A.D.3d 566, 566, 120 N.Y.S.3d 12 [1st Dept. 2020], lv dismissed 35 N.Y.3d 1004, 125 N.Y.S.3d 678, 149 N.E.3d 439 [2020] [“plaintiffs' rights under the rent stabilization laws do not arise from the stipulation but under the relevant statutes that confer rent stabilization protections on them”]). Accordingly, the question of the extent to which the stipulation may be enforced under RSC 2520.13, cannot be resolved on a motion to dismiss.

We have considered defendants' remaining contentions and find them unavailing.

FOOTNOTES

1.   In November 2018, Jacin N.V. commenced a second holdover proceeding against Abrams. That proceeding was voluntarily discontinued in April 2019.