New York Cases January 03, 2019: Jims Realty LLC v. Barrett

Case Description

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Tenebaum Berger & Shivers, LLP, Attorneys for Petitioner, 26 Court Street, Penthouse, Brooklyn, New York 11201, (718) 596-3800

Mirkin & Gordon, PC, Attorneys for Respondent, 98 Cutter Mill Road, Great Neck, New York 11021, (516) 466-6030

John Zhuo Wang, J.

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In this licensee-holdover proceeding, Petitioner JIMS Realty LLC (JIMS) moves pursuant to CPLR R. 3212 for summary judgment. Respondent Durine Barrett (Durine) opposes the motion.

FACTUAL AND PROCEDURAL BACKGROUND

JIMS, the owner, seeks possession of the subject premises known as 451 Kingston Avenue, Apt 1C in Brooklyn. It is undisputed that the premises is rent-stabilized and that the tenant-of-record was Durine's mother, Inez Barrett (Inez). Inez passed away from cancer in or around August 2004. Durine, who is herself 73-years-old, alleges that she has lived at the premises for some 40 years. She asserts a succession defense in this proceeding.

On July 10, 2018, Durine submitted to an examination before trial. At her deposition, Durine testified that she moved into the premises in 1978 after emigrating from Jamaica. Durine also testified that her mother, who passed away in her nineties, gave her a power of attorney. Toward the end of Inez's life, Durine paid her mother's bills and, at the request of her ailing mother, signed a renewal lease on her behalf.

It is undisputed that, following Inez's death, Durine executed at least six renewal leases in her mother's name from September 2004 through November 2016. The term of most

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recent renewal lease expired on December 31, 2018. When asked at her deposition if she notified anybody at the landlord's office of her mother's passing, Durine answered in the negative.

But Durine also testified at her deposition that the "first landlord said it was okay for me to stay there" and that the superintendent and "workers" were aware of Inez's passing. When asked whether she thought it was a problem to sign for someone else who is no longer living, she replied that she was her mother's "proxy." And when pressed as to what it meant to be a "proxy," she answered "[t]o sign her documents, legal documents for her." Lastly, when asked if she believed it was "wrong" to continue signing renewal leases in her deceased mother's name, she said "no" and followed up by stating "I never ... willfully do it ... I thought it was okay. Because the prior landlord was there and he said it was okay so I didn't know."

ARGUMENTS

On its motion, JIMS argues that summary judgment is warranted on its petition. Moreover, JIMS contends that Durine's succession defense fails as a matter of law and relies on the First Department's decision in Third Lenox Terrace Associates v. Edwards , 91 A.D.3d 532, 937 N.Y.S.2d 41 (2012) to support its contention that the date Inez permanently vacated the premises must be the expiration of the most recent renewal lease ( i.e. December 31, 2018). Because it is impossible for Durine to establish that she resided with

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her mother for the relevant period prior to December 31, 2018, Petitioner contends that, under Third Lenox , her succession defense is unavailing. Additionally, JIMS relies on the affidavit of its vice-president, Akiva Metal. Although it is undisputed that Inez died four months before JIMS purchased the premises on January 1, 2005, Metal nevertheless states in his affidavit that "I have not seen nor do I believe that Durine lived in the Subject Premises two years prior to the prior tenant's death" (Metal aff, ¶ 5). Metal also avers that Durine is "new" to the premises.

In opposition, Durine contends that JIMS' motion should be denied because her assertion that she continuously resided in this rent-stabilized premises for over 40 years is essentially uncontroverted. Namely, Durine points out that Metal fails to allege the basis for his personal knowledge for his averments — especially since JIMS came into ownership of the building after

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the relevant period. Further, Durine contends that because Petitioner has undisputedly been accepting and cashing rent payments in her name since 2001, JIMS waived its right to contest her succession defense. In support of her assertion of co-residency with Inez, Durine annexes a printout from the New York City Board of Elections of her purported voting record history, which reflects the subject premises as her home address. Lastly, Durine avers that she had no intention of deceiving her landlord; rather, she misunderstood her role as Inez's "proxy."

DISCUSSION

"Summary judgment is a drastic remedy, to be granted only where the moving party has tendered sufficient evidence to demonstrate the absence of any material issues of fact" ( see Vega v. Restani Const. Corp. , 18 N.Y.3d 499, 503, 942 N.Y.S.2d 13, 965 N.E.2d 240 [2012] ). The court's function is "issue-finding, rather than issue-determination" ( Sillman v. Twentieth Century-Fox Film Corp. , 3 N.Y.2d 395, 404, 165 N.Y.S.2d 498, 144 N.E.2d 387 [1957] ), and the evidence must be construed in the light most favorable to the non-moving party ( see Ortiz v. Varsity Holdings, LLC , 18 N.Y.3d 335, 340, 937 N.Y.S.2d 157, 960 N.E.2d 948 [2011] ). Once a movant meets its initial burden on summary judgment, the burden shifts to the opposing party "to show facts sufficient to require a trial of any issue of fact" ( Zuckerman v. City of New York , 49 N.Y.2d 557, 562, 427 N.Y.S.2d 595, 404 N.E.2d 718 [1980] ).

"If an offer is made to a tenant [of a rent stabilized housing accommodation pursuant to a renewal lease within the applicable time frame] and such tenant has permanently vacated the housing accommodation, any member of such tenant's family who has resided with the tenant in the housing accommodation as a primary residence for a period of no less than two years immediately prior to the permanent vacating of the housing accommodation by the tenant, or from the inception of the tenancy or commencement of the relationship, if for less than such periods, shall be entitled to be named as a tenant on the renewal lease" ( see 9 NYCRR § 2523.5 [b][1] ). In other words, succession rights are afforded to a family member of the tenant of record if that individual can prove that she primarily resided in the subject premises for, as relevant here, at least two years immediately prior to the tenant's permanent vacatur ( see e.g.

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Pavel v. Fischer , 21 Misc. 3d 143(A), 2008 WL 5146963 [App. Term, 2d Dept. 2008] [emphasis added] ).

"Succession is in the spirit of the statutory scheme, whose goal is to facilitate the availability of affordable housing for low-income residents and to temper the harsh consequences of the death or departure of a tenant for their ‘traditional’ and

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‘non-traditional’ family members" ( see Murphy v. New York State Div. of Hous. and Community Renewal , 21 N.Y.3d 649, 653, 977 N.Y.S.2d 161, 999 N.E.2d 524 [2013] [discussing succession generally] ). "The regulation should be liberally construed to carry out the reform intended and spread its beneficial effects as widely as possible" ( Jourdain v. New York State Div. of Hous. and Community Renewal , 159 A.D.3d 41, 45, 70 N.Y.S.3d 239 [2d Dept. 2018] ).

In Jourdain , the mother of the tenant-of-record claimed succession rights before the New York State Department of Housing and Community Renewal (DHCR). It was undisputed that the mother, who was in her 70's, had lived with at the premises since the inception of the tenancy and would have been entitled to succeed the tenancy at the time the tenant-daughter vacated. But it was also undisputed that the mother had executed a renewal lease in her daughter's name one year after she moved out of the apartment. The expiration of the term in the renewal lease was more than two years after the daughter's actual vacatur date.

Relying on the aforementioned First Department's decision in Third Lenox , DCHR denied the Jourdain mother's administrative complaint. She then commenced an Article 78 in Supreme Court. The court annulled DHCR's determination, and the landlord appealed. Importantly, on appeal, DHCR changed its original position and supported the mother's succession claim.

The Second Department in Jourdain summarized the issue before them as follows: "We are asked to determine whether a family member who had been residing in an apartment with the tenant for years and had the right to seek succession when the tenant moved out of the apartment lost that right by virtue of the fact that the tenant continued to pay the rent and executed a renewal lease after moving out" ( see Jourdain , 159 A.D.3d at 42, 70 N.Y.S.3d 239 ).

At the outset, Jourdain declared that "[t]he purpose of the succession rule is to prevent displacement of family members who have been residing with tenants at housing accommodations

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for long periods of time" ( see 159 A.D.3d at 47, 70 N.Y.S.3d 239 ). Jourdain also emphasized that DHCR's promulgation of succession rights under the Rent Stabilization Code was meant "to protect those who, in its experience as sole administrator of residential rent regulation and adjudicator of eviction disputes, are most in need of protection against loss of their homes in a continuing housing emergency" ( supra at 45, 70 N.Y.S.3d 239 ).

Because the mother's long-term, co-residency with her daughter would have entitled her to succession had it been asserted at the time the daughter actually vacated, the Jourdain court determined that denying succession rights under the circumstance was not in keeping with DHCR's intent in promulgating the regulation. In other words, the date the tenant-daughter "permanently vacated" under § 2523.5 was the date she actually vacated, rather than date the renewal lease expired.

Moreover, although it initially relied on Third Lenox in denying the mother's administrative complaint, DHCR later reversed its own position on appeal. The court construed DHCR's new position as interpreting § 2523.5 to favor the Jourdain mother's succession claims despite misrepresentations made of her daughter's actual vacatur date. Jourdain thus reasoned that its holding was simply according deference to DHCR's interpretation of its own regulation under the circumstance.

Relatedly, Jourdain examined the effect that fraud or misrepresentation has on succession claims in this Department. In

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Third Lenox and its progeny, a would-be successor's affirmative misrepresentation of the tenant's actual vacatur date from the housing accommodation constitutes fraud that, over an extended number of years, results in undue prejudice to the landlord in prosecuting an eviction claim ( see Jourdain , 159 A.D.3d at 48, 70 N.Y.S.3d 239 citing Third Lenox , 23 Misc. 3d 126(A), 2009 WL 806812 [App. Term, 1st Dept. 2009], affd, 91 A.D.3d 532, 937 N.Y.S.2d 41 [1st Dept. 2012] ). Such fraudulent conduct, which rises to the level of a "persistent and systematic pattern of deception" ( see e.g. S. Pierre Assoc. v. Mankowitz , 17 Misc. 3d 53, 54, 844 N.Y.S.2d 552 [App. Term, 1st Dept. 2007] ), operates as a waiver of any succession claim and, accordingly, bars it as a matter of law ( see e.g. Third Lenox , 91 A.D.3d 532, 937 N.Y.S.2d 41 [1st Dept. 2012] ).

But Jourdain distinguished Third Lenox from its own case. Namely, Jourdain held that, where a family member can show

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long-term residency at the premises and an entitlement to succession at the time the tenant actually vacated, imposing a bar to that family member's succession claim may be inappropriate. Rather, Jourdain ruled that the misrepresentation is but one factor to be considered ( 159 A.D.3d at 48, 70 N.Y.S.3d 239 ).

The Jourdain court held that the execution of one renewal lease by the daughter after moving out of the apartment did not "necessarily" indicate an attempt to deceive the landlord. Significantly, the court found that the mother — who would have been entitled to succeed at the time the tenant moved out — had "nothing to gain" by misrepresenting that her daughter still lived there ( Jourdain , at 48, 70 N.Y.S.3d 239 ). Moreover, that the landlord was not prejudiced by the misrepresentation or delay became, "most importantly," the reason why the Jourdain court found that no waiver occurred ( id. at 48-49, 70 N.Y.S.3d 239 ).

Jourdain stands for the proposition that barring succession claims in this Department requires a review of the totality of circumstances, such as the duration of the occupancy at the premises, the likelihood that succession would have been granted had the claim been timely interposed, any "pattern" of fraud evincing an intent to deceive, and the prejudice to the landlord ( see e.g. ELK 300 E 83 LLC v. Dowd , [52 Misc.3d 131(A) ] 2016 N.Y. Slip Op. 50976[U] [2016 WL 3501072] [App. Term, 1st Dept. 2016] [affirming lower court's decision that "totality of the circumstances" of a tenant's vacatur must be taken into account in determining whether the misrepresentation constitutes a per se waiver of a succession claim]; Westchester Plaza Holdings, LLC v. Boyd , 60 Misc. 3d 1230(A) [2018 WL 4266806] [N.Y. City Ct., Westchester County, 2018] [citing totality of circumstances in holding that succession had been shown under Jourdain ] ). "Most importantly," Jourdain found, is whether sufficient prejudice has been shown.

It bears noting that Jourdain deemed that the mother — by virtue of her status as a traditional family member — had "nothing to gain" from deceiving the landlord. This determination raises the possibility that non-traditional family members may face a more difficult burden overcoming the Third Lenox rule. Yet, this interpretation comports with Jourdain's holding that prejudice is paramount to the analysis, since a non-traditional family member's misrepresentation over time compounds the prejudicial effect on the landlord. Specifically, it is more difficult to obtain evidence to rebut proof of emotional and financial interdependence years after the date upon which a

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tenant vacated. Indeed, the only case cited by Jourdain

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where prejudice was a dispositive factor involved a non-traditional family member seeking succession ( Jourdain , citing to Mankowitz , 17 Misc. 3d 53, 55, 844 N.Y.S.2d 552 [App. Term, 1st Dept. 2007] [over 10 year delay prevented landlord from undertaking a "contemporaneous investigation into the emotional and financial underpinnings of respondent's nontraditional family member succession claim"] ).

In view of Jourdain's multi-factor analysis, JIMS failed to meet its burden on the instant motion. Namely, and in accordance with Jourdain's mandate that § 2523.5 be "liberally construed to carry out the reform intended and spread its beneficial effects as widely as possible," Durine's testimony at her deposition that she has lived at the rent-stabilized premises for over 40 years — encompassing the relevant, two-year period prior to Inez's death — militates against barring her succession rights as a matter of law ( compare Jourdain , supra at 47, 70 N.Y.S.3d 239 ["we can discern no reason why the DHCR would intend to deny succession rights to a family member who had been residing in a unit for a long period of time merely because there was a period of time when the named tenant no longer resided there but still maintained some connection to the property"] ).

This Court also holds that the simple assertion of prejudice is insufficient to deny succession as a matter of law in view of a family member's long-term, co-residency with the tenant of record prior to the date that tenant actually vacated. Indeed, JIMS does not actually allege in its moving papers what prejudice it suffered by Durine's misrepresentations. In any event, Durine's status as a traditional family member limits the prejudice to JIMS since she, like the Jourdain mother, also had nothing to gain by deceiving Petitioner ( see e.g. Riverton Assoc. v. Knibb , 11 Misc. 3d 14, 15, 811 N.Y.S.2d 854 [App. Term, 1st Dept. 2005] [despite two-renewal leases in which respondent forged tenant's signature, given the "persuasive" showing of respondent's long-term co-occupancy with her grandmother, "any fraud or irregularities committed in the aftermath of the grandmother's death cannot reasonably be said to have caused petitioner any discernible prejudice in the prosecution of its eviction claim"] ).

Drawing all inferences in favor of the non-movant, as this Court must, there is no indication in the record that Durine intended to deceive JIMS by signing renewal leases in her mother's name. For this reason, JIMS' reliance on Mankowitz

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is misplaced. Unlike the Mankowitz respondent, who offered "no explanation" for engaging in a "course of deception" that was "studied and purposeful," Durine, a 73-year-old who allegedly emigrated to this country in her mid-30's, testified that she believed that she was permitted to "sign legal documents" in Inez's name as her "proxy" — as she had done when her mother was too ill to sign them herself. Contrary to the "persistent and systematic pattern of deception" carried out by the non-traditional family member in Mankowitz , a triable issue of fact exists as to whether Durine's misrepresentations to JIMS were borne out of ignorance, rather than an intent to deceive. Any questions as to her credibility on this issue are not appropriately resolved on a motion for summary judgment ( see S. J. Capelin Assoc., Inc. v. Globe Mfg. Corp. , 34 N.Y.2d 338, 341, 357 N.Y.S.2d 478, 313 N.E.2d 776 [1974] ).

Lastly, Durine raises genuine material issues of fact as to whether Petitioner had notice of her long-term occupancy of the premises during the relevant period. Namely, Durine testified at her deposition that JIMS's predecessor had actual knowledge of her occupancy with Inez. Coupled with the undisputed fact that JIMS accepted

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rent for the past 13 years — all in Durine's own name without protest or inquiry — sufficient questions of fact exist as to whether Petitioner may now be heard to oppose her succession claim ( see Jols Realty Corp. v. Nunez , 43 Misc. 3d 129(A), 2014 WL 1344451 [App. Term, 2d Dept. 2014] ; see also 354 E. 66th St. Realty Corp. v. Curry , 26 Misc. 3d 130(A), 2010 WL 118213 [App. Term, 1st Dept. 2010] ).

This Court has considered the remainder of the arguments raised on the motion and considers them to be without merit. Accordingly, it is

Ordered that Petitioner JIMS Realty LLC's motion for summary judgment is denied; and it is further

Ordered that the parties and attorneys are directed to appear in Part J on February 5, 2018 at 9:30 for trial/settlement.