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Kumiko POTTER v. Joseph P. ATARIEN, et al.

No. 7693/2010.

Decided: March 25, 2011

Queens Legal Services, by Maurice E. Muir, Esq., Sutphin Blvd., Jamaica, for Plaintiff. Sonya M. Kaloyanides, Esq., by James E. Bayley, Esq., New York, for Defendant John B. Rhea, as Chairperson of the NYCHA. Novick, Edelstein, Lubell, Reisman, Wasserman & Leventhal, P.C., by Steven Lesh, Esq., Yonkers, for Defendants Joesph P. Atarien, Atari Realty, and 93 LLC.

Defendant John P. Rhea, the Chairperson of the New York City Housing Authority (“NYCHA”), has moved for an order pursuant to CPLR 3211(a)(7), dismissing the complaint against him for failure to state a cause of action.

Section 8 of the United States Housing Act of 1937, added in 1974, authorizes assistance payments “[f]or the purpose of aiding lower-income families in obtaining a decent place to live.” NYCHA administers a Section 8 Housing Choice Voucher Program for low-income housing in New York City.

On April 23, 2009, NYCHA issued a Section 8 housing voucher to plaintiff Kumiko Potter, a single parent with a twelve-year-old son who suffers from Attention Deficit Hyperactive Disorder. On August 16, 2009, plaintiff Kumiko Potter (“Potter”) and defendant Joseph P. Atarien (“Atarien”), acting on behalf of defendant 93 LLC, entered into a lease for an apartment in a building located at 93–11 Atari Lane, Jamaica, in Queens County, New York.

The lease, whose term ran from October 11, 2009, to September 10, 2010, required monthly rental payments in the amount of $1,261. NYCHA approved plaintiff Potter's request for a tenancy at the apartment, and defendant 93 LLC and NYCHA subsequently executed a Housing Assistance Payments (“HAP”) contract whereby NYCHA agreed to pay $956 per month toward the rent. Pursuant to the HAP contract, defendant 93 LLC promised, inter alia, (1) to lease the apartment to plaintiff Potter and her son for a one-year term, (2) to deliver possession of the apartment to plaintiff Potter, (3) not to charge plaintiff Potter rent in excess of the NYCHA approved rent, (4) not to demand a security deposit in excess of the rent, (5) not to discriminate against defendant Potter, and (6) not to change the terms of the lease without the consent of plaintiff Potter or NYCHA.

On October 19, 2009, NYCHA informed plaintiff Potter that the Section 8 application process had been successfully completed and that she could move into the subject apartment. A few days later, defendant Atarien, however, allegedly told plaintiff Potter that, before he would permit her to move into the apartment, she had to pay a broker's fee in the amount of $1,261 to Michele Mehr Realty, plus one year's rent in advance, plus four months' rent as security. Potter alleges that she never dealt with Michele Mehr Realty. On or about November 16, 2009, plaintiff Potter allegedly informed NYCHA of defendant Atarien's demands, but NYCHA allegedly replied that it could not help her and that she had to resort to litigation.

Without first filing a notice of claim with NYCHA, plaintiff Potter, represented by Queens Legal Services Corporation, began the instant action on or about March 26, 2010. The first cause of action is for the breach of the lease. The second cause of action asserts that defendant NYCHA is liable to the plaintiff, allegedly a third-party beneficiary, for failure to enforce the HAP contract. The third cause of action asserts that defendant 93 LLC, defendant Atari Realty, and defendant Atarien violated Section 8–107 of the New York City Administrative Code by refusing to rent an apartment to a recipient of Section 8 assistance. The fourth cause of action asserts promissory estoppel based on the statements and acts of NYCHA and the other defendants. The fifth cause of action is based on General Business Law section 349, prohibiting deceptive acts and practices in the conduct of a business. The sixth cause of action asserts fraud against NYCHA and the other defendants.

Public Housing Law section 157, in relevant part, provides:

1. In every action or special proceeding, for any cause whatsoever, prosecuted or maintained against an authority, other than a claim arising out of a condemnation proceeding, the complaint or necessary moving papers shall contain an allegation that at least thirty days have elapsed since the demand, claim or claims upon which such action or special proceeding is founded were presented to the authority for adjustment and that it has neglected or refused to make an adjustment or payment thereof for thirty days after such presentment. [emphasis added].

The failure to allege the presentment of a timely notice of claim to NYCHA as required by PHL section 157(1) renders a complaint legally insufficient and warrants its dismissal for failure to state a cause of action (Kovachevich v. New York City Housing Authority, 295 A.D.2d 255 [1st Dept.2002] [tort and breach of contract]; Leon v. New York City Housing Authority, 214 A.D.2d 455 [1st Dept.1995] [constitutional claim]; Reaves v. City of New York, 177 A.D.2d 437 [1st Dept.1991] [tort]; New York City Housing Authority v. Roberts, 2002 WL 759637, 2002 N.Y. Slip Op 50144[U] [App T 1st Dept.2002] [breach of warranty of habitability]; Trio Bronx Inc. v. Hernandez, 2009 WL 3612135, 2009 N.Y. Slip Op 32506[U] [Sup Ct N.Y. County 2009] [breach of contract and tort].)

Plaintiff Potter argues, in several ways, that PHL section 157(1) does not apply to the case at bar. These arguments have no merit. First, General Municipal Law section 50–e, concerning the service of a notice of claim, applies “[i]n any case founded upon tort where a notice of claim is required by law as a condition precedent to the commencement of an action or special proceeding against a public corporation,” and the plaintiff's second and fourth causes of action do not sound in tort (emphasis added). General Municipal Law section 50–e, however, is not the statute requiring the presentment of a claim to NYCHA.

While § 50–e refers generally to public corporations, not just municipal corporations, nonetheless it is not the statute which actually requires a notice of claim. It contemplates the existence of some other statute that will make a notice of claim a condition precedent to suit. If such a statute exists, then § 50–e provides the uniform rules for the notice of claim, notwithstanding any inconsistent general law, local law or charter provisions.

(15 N.Y. Prac, New York Law of Torts § 17:26 [footnotes omitted] ).

PHL section 157(1) is the statute actually requiring the presentment of a claim to NYCHA before suit, and the statute expressly requires the presentment to be made “[i]n every action or special proceeding, for any cause whatsoever” (emphasis added).

Second, while the notice of claim requirements of General Municipal Law section 50–e do not apply where the plaintiff primarily seeks equitable relief and only incidentally seeks monetary damages (see, Rist v. Town of Cortlandt, 56 AD3d 451 [2nd Dept.2008]; Smith v. Town of Long Lake, 40 AD3d 1381 [3rd Dept.2007]; Stanton v. Town of Southold, 266 A.D.2d 277 [2nd Dept.1999] ), PHL section 157(1), the statute that actually makes presentment of a claim to NYCHA a condition precedent to suit, applies, nevertheless, to “any cause whatsoever” (emphasis added).

The language of PHL section 157(1) is broad enough to encompass equitable claims, and, the equitable relief exception is thus unavailable to plaintiff Potter (see, Picciano v. Nassau County Civil Service Comm'n, 290 A.D.2d 164 [2nd Dept.2001] ). Although the plaintiff's attorney asserts that “[n]owhere in the complaint does the plaintiff seek money damages from NYCHA,” the prayer for relief demands, inter alia, “actual and punitive damages” without a specification of parties.

Third, while state notice of claim requirements do not apply to federal civil rights claims (see, Pendleton v. City of New York, 44 AD3d 733 [2nd Dept.2007]; Welch v. State, 286 A.D.2d 496 [2nd Dept.2001]; Zwecker v. Clinch, 279 A.D.2d 572 [2nd Dept.2001] ), plaintiff Potter has asserted only state claims for breach of contract, promissory estoppel, and fraud against defendant NYCHA. The plaintiff, moreover, did not show that the United States Housing Act of 1937 preempts PHL section 157(1). Plaintiff's causes of action, though they concern a federal program, do not allege municipal actions that allegedly violated her federal civil and constitutional rights under 42 USC section 1983 so as to dispense with the notice of claim requirement (see, Montano v. City of Watervliet, 47 AD3d 1106 [3rd Dept.2008] ).

The plaintiff's reliance on Disabled in Action of Metropolitan New York v. Trump Intl. Hotel & Tower (2003 WL 1751785 [SDNY 2003] ) is misplaced because that case involved the issue of whether, under Title III of the Americans with Disabilities Act, the plaintiffs had to notify the appropriate state or local agency 30 days before filing suit against a hotel owner.

Fourth, although there is an exception to the notice of claim requirement where a plaintiff has brought an action not only to assert a private right, but also to vindicate a public interest (see, Picciano v. Nassau County Civil Service Commn., 290 A.D.2d 164, supra; Wallikas v. Harder, 67 F Supp 2d 82 [NDNY 1999] ), plaintiff Potter's conclusory allegations that she brought this action to vindicate a public interest do not suffice. Indeed, under all of the circumstances of this case, including the budgetary constraints upon NYCHA, plaintiff Potter's joinder of the Housing Authority to this case will not have a significant public benefit. Moreover, her primary concerns are redressing her own personal injuries and preventing NYCHA from terminating her Section 8 voucher. While all litigation may have a general deterrent effect on future misconduct, the disposition of this case will not directly affect the rights of others (see, Picciano v. Nassau County Civil Service Commn., 290 A.D.2d 164, supra; Wallikas v. Harder, 67 F Supp 2d 82, supra.)

Accordingly, the defendant NYCHA's motion to dismiss the complaint is granted only as to defendant John B. Rhea, as Chairperson of the NYCHA.

The foregoing constitutes the decision, opinion, and order of the Court.


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