GRIFFIN UNITS LLC v. John Doe and Jane Doe, Undertenants.

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Supreme Court, Appellate Term,

GRIFFIN UNITS, LLC, Respondent, v. Keir WALKER, Appellant, John Doe and Jane Doe, Undertenants.

Decided: March 31, 2009

PRESENT:  WESTON PATTERSON, J.P., RIOS and STEINHARDT, JJ. Aaron David Frishberg, New York City, for appellant. Tenebaum & Berger LLP, Brooklyn (David M. Berger of counsel), for respondent.

Appeal from an order of the Civil Court of the City of New York, Kings County (George Michael Heymann, J.), dated October 23, 2007, deemed from the final judgment of the same court entered October 23, 2007 (see CPLR 5512 [a];  Neuman v. Otto, 114 A.D.2d 791, 495 N.Y.S.2d 43 [1985] ).   The final judgment, entered pursuant to the order granting landlord's motion for summary judgment and denying Keir Walker's cross motion to dismiss, awarded landlord possession in a summary proceeding brought pursuant to RPAPL 713(7) (see 17 Misc.3d 1118(A), 2007 N.Y. Slip Op. 52053(U), 2007 WL 3086035 [2007] ).

Final judgment affirmed without costs.

In this licensee summary proceeding (RPAPL 713[7] ) filed on or about October 3, 2006, landlord contends that appellant Keir Walker is a licensee of the deceased tenant of record, Cynthia Reed, and that appellant's right to occupy the subject premises terminated upon Reed's death.   In opposition, appellant asserts that he is the eldest son of Cynthia Reed and entitled to succeed to her rent-stabilized tenancy by virtue of his contemporaneous co-occupancy of the apartment for the requisite statutory period, prior to her death on April 25, 2006 (see Rent Stabilization Code [9 NYCRR] § 2523.5[b] [1] ).

Prior to landlord's initiation of the subject licensee proceeding, appellant, on August 7, 2006, filed a complaint with the Division of Housing and Community Renewal (DHCR) alleging entitlement to a renewal lease in his own name.   Appellant's complaint was denied by DHCR by order dated December 20, 2006, which, in relevant part, stated:

“After consideration of all the evidence in the record, the Rent Administrator finds that:

On August 7, 2006, the complainant, Keir Walker, filed a lease violation complaint, alleging that after the death of his mother, Cynthia Walker, on April 25, 2006, the owner refused to recognize his succession rights to the subject apartment.

On September 8, 2006, a copy of the tenant's complaint was served on the owner.   In response, the owner stated that the complainant has not submitted any proof to support his claim of succession rights to the subject apartment.

On November 9, 2006, a copy of the owner's response was forwarded to the tenant and the complainant was requested to submit additional information and documentation to establish succession rights to the subject apartment.   To date, the complainant failed to respond.   Based on the above, the Rent Administrator determines that the complainant, Keir Walker, has not been able to provide sufficient proof to establish his succession rights for the subject apartment in accordance with the provisions of Section 2523.5(b)(1) of the Rent Stabilization Code. Therefore, Keir Walker[ ] is not entitled to a renewal lease for the subject apartment.

Therefore, it is ordered that the relief requested is denied, and/or this proceeding is terminated.”

After DHCR issued its determination, landlord moved for summary judgment.   In support of its application for summary judgment, landlord argued that appellant was barred by collateral estoppel and res judicata from raising a defense to the licensee proceeding premised upon succession rights.

Appellant opposed landlord's motion, contending that he had not received any requests from DHCR relative to his complaint.   In support of his right of succession, appellant submitted various documents, including copies of his federal tax returns for the period of 2003 through 2005, demonstrating his claimed residence at the subject premises for more than two years prior to the death of Cynthia Reed.

The Civil Court found that appellant was precluded by the DHCR determination from raising his succession rights claim as a defense to the licensee proceeding, denied the cross motion to dismiss and granted landlord's motion for summary judgment (see 17 Misc.3d 1118(A), 2007 N.Y. Slip Op. 52053(U), 2007 WL 3086035 [2007] ).

 Landlord's motion for summary judgment was properly granted.   The Rent Stabilization Law of 1969 (§ 26-516[b] ) and the Rent Stabilization Code (RSC) (9 NYCRR § 2526.2[a] ) grant the State Division of Housing and Community Renewal (DHCR) the authority to issue orders appropriate for the enforcement of the Rent Stabilization Code (see Matter of Mountbatten Equities v. New York State Div. of Hous. & Community Renewal, 226 A.D.2d 128, 130, 640 N.Y.S.2d 82 [1996] ). Pursuant to RSC § 2523.5(a), a landlord is obligated to offer a tenant a renewal lease, and, if the tenant is deceased, a family member of the deceased tenant can be named to the renewal lease (RSC [9 NYCRR] § 2523.5[b][1] ).   If a landlord fails to comply with its obligation to provide a renewal lease, the tenant or the family member may apply to DHCR for an order directing the landlord to provide such a renewal (id. at § 2527.1).

Once a complaint is filed, DHCR is empowered to issue an order either granting or denying the relief requested (id. at § 2527.6), which is thereafter subject to administrative review upon the filing of a petition by a party (id. at § 2529.1).

In the case at bar, appellant filed a complaint with DHCR, which resulted in an unfavorable determination predicated on his failure to submit sufficient evidence.   He thereafter failed to petition DHCR for a modification of the order which denied his entitlement to a renewal lease.   Accordingly, under the circumstances presented, the Civil Court properly held that appellant was barred by res judicata from relitigating in housing court the question of his succession to his mother's rent-stabilized lease.

 The doctrine of res judicata is applicable even if the order is taken by default (see Eagle Ins. Co. v. Facey, 272 A.D.2d 399, 707 N.Y.S.2d 238 [2000] ) or even if further investigation would disclose that an erroneous determination was made based upon a party's oversight (see Matter of Reilly v. Reid, 45 N.Y.2d 24, 28, 407 N.Y.S.2d 645, 379 N.E.2d 172 [1978] ).

Accordingly, the order is affirmed.

As the majority correctly holds, the New York State Division of Housing and Community Renewal (DHCR) has concurrent jurisdiction over succession-rights claims to rent-stabilized apartments, and had the authority to adjudicate appellant's complaint (Pavel v. Fischer, 21 Misc.3d 143(A), 2008 N.Y. Slip Op. 52452(U), 2008 WL 5146963 [App. Term, 2d & 11th Jud. Dists. 2008];  cf. Cox v. J.D. Realty Assoc., 217 A.D.2d 179, 637 N.Y.S.2d 27 [1955] [DHCR has concurrent jurisdiction over claims for succession rights to rent-controlled apartments] ).   However, the issue on this appeal is whether, under the particular circumstances of this case, collateral estoppel effect should be given to DHCR's determination.   An analysis of the relevant factors leads to the conclusion that the determination should not be given such effect.

“[T]he doctrine of collateral estoppel is a flexible one that is premised on fairness” (Casolino v. Baynes, 157 A.D.2d 699, 700, 549 N.Y.S.2d 797 [1990];  see Eveready Ins. Co. v. Asante, 153 A.D.2d 874, 545 N.Y.S.2d 585 [1989] ).  “The equitable doctrine of collateral estoppel is grounded on the facts and realities of a particular litigation, rather than rigid rules” (Buechel v. Bain, 97 N.Y.2d 295, 303, 740 N.Y.S.2d 252, 766 N.E.2d 914 [2001] ).   The Court of Appeals has set forth the test for determining whether collateral estoppel effect should be given to an agency's determination when the party resisting the application of the doctrine claims that he was not given a full and fair opportunity to litigate before the agency:

“A determination whether the first action or proceeding genuinely provided a full and fair opportunity requires consideration of the “realities of the [prior] litigation”, including the context and other circumstances which * * * may have had the practical effect of discouraging or deterring a party from fully litigating the determination which is now asserted against him.”   (People v. Plevy, 52 N.Y.2d 58, 65 [436 N.Y.S.2d 224, 417 N.E.2d 518].)   Among the specific factors to be considered are the nature of the forum and the importance of the claim in the prior litigation, the incentive and initiative to litigate and the actual extent of litigation, the competence and expertise of counsel, the availability of new evidence, the differences in the applicable law and the foreseeability of future litigation.  (Gilberg v. Barbieri, 53 N.Y.2d 285, 292 [441 N.Y.S.2d 49, 423 N.E.2d 807];  Schwartz v. Public Administrator, 24 N.Y.2d 65, 72 [298 N.Y.S.2d 955, 246 N.E.2d 725].)”

(Ryan v. New York Tel. Co., 62 N.Y.2d 494, 501, 478 N.Y.S.2d 823, 467 N.E.2d 487 [1984];  see also Matter of Hee K. Choi v. State of New York, 74 N.Y.2d 933, 550 N.Y.S.2d 267, 549 N.E.2d 469 [1989] ).

In the instant matter, appellant was not represented by counsel in the DHCR proceeding and did not fully participate therein.   No hearing was held, and no evidence was submitted by either side.   Appellant claims that he did not receive the letter from DHCR requesting additional documentation.   In any event, even if appellant had received the letter, given “the context and other circumstances” (Ryan at 501, 478 N.Y.S.2d 823, 467 N.E.2d 487), including, in particular, the fact that landlord had already commenced this summary proceeding, appellant may well have believed that the issue would be adjudicated in the court and that there was no need for him to further prosecute the DHCR proceeding which he had initiated.   In addition, appellant has demonstrated the availability of evidence to support his claim, and he stands to lose an important property right without a determination on the merits.   In these circumstances, consideration of the realities of the prior litigation and a balancing of the relevant factors lead to the conclusion that appellant should be afforded an opportunity to have his claim heard on the merits.

Accordingly, the final judgment should be reversed, so much of the underlying order as granted landlord's motion for summary judgment vacated, and landlord's motion denied.

WESTON PATTERSON, J.P. and RIOS, J., concur. STEINHARDT, J., dissents in a separate memorandum.