| Stecher v 85th Estates Co. |
| 2007 NY Slip Op 06807 [43 AD3d 732] |
| September 20, 2007 |
| Appellate Division, First Department |
| Robert Stecher, Appellant, v 85th Estates Company et al.,Respondents. |
—[*1] Seyfarth Shaw LLP, New York (Jerry A. Montag of counsel), for respondents.
Order, Supreme Court, New York County (Leland DeGrasse, J.), entered August 29, 2005,which insofar as appealed from as limited by the briefs, granted defendants' motion to dismiss thesecond and third causes of action for breach of contract, reversed, on the law, without costs, themotion denied and such causes of action reinstated.
The motion court erroneously dismissed the second and third causes of action, which it statedare based on a purported 1992 agreement, as time-barred. Such causes, however, are based ondefendants' refusal to offer plaintiff a renewal lease when his original lease expired on January31, 2004. It was this refusal that was the breach that triggered the running of the statute oflimitations. Thus, this action, which was commenced some four months later, was timelycommenced. We also find no merit to defendants' claim that the March 4, 1992 letter bars thepresent action.
With regard to the separate dissents, plaintiff has not appealed the dismissal of his first causeof action for specific performance of the alleged 1992 agreement, the same relief sought by theplaintiff in Drucker v Mauro (30AD3d 37 [2006], appeal dismissed 7 NY3d 844 [2006]), and an injunction barringdefendants from maintaining a holdover proceeding against him on the ground that the apartmentis no longer his primary residence. Thus, it is not the subject of this appeal and has been relegatedto Civil Court for determination. Nor does he appeal from the dismissal of the fourth cause ofaction for recovery of an alleged $50,000 illegal rent overcharge. Rather, he limits his appeal tothe dismissal of the second and third causes of action. Nevertheless, the dissenters, althoughagreeing that plaintiff may assert his purported right to a renewal lease in defense of the pendingholdover proceeding where the enforceability of the parties' agreement, an issue raised for thefirst time on appeal, will be decided, both seek to prejudge the issue.
In any event, even though a violation of public policy may be raised for the first time onappeal and defendants have raised the issue of unenforceability on that ground in their brief, thiscase is readily distinguishable from Drucker v Mauro since, as already noted, plaintiff'scause of action for specific performance of the alleged agreement has been relegated to CivilCourt for determination and is not the subject of this appeal. There is also no claim that plaintiffobtained anything more than a valid rent stabilized lease and neither party seeks reformation orrescission [*2]of the alleged contract, which was freely enteredinto and acquiesced in for more than 10 years before being finally challenged, as the tenantssought to do in Schultz v 400 Coop. Corp. (292 AD2d 16 [2002]). Rather, plaintiff, in hissecond and third causes of action, is seeking damages for defendants' refusal to renew or extendhis lease of the subject rent stabilized apartment. As noted by this Court in 390 W. EndAssoc. v Baron (274 AD2d 330, 333 [2000]), even where a lease is void, a tenant maypursue a claim with respect to profits obtained by a landlord in violation of the Rent StabilizationLaw. Concur—Andrias, Marlow and Malone, JJ.
Tom, J.P., dissents in separate memorandum as follows: This is an action for breach of anillegal oral contract to issue plaintiff a rent-stabilized lease and lease renewals, in perpetuity. Thecomplaint filed in April 2004 asserts a right to a renewal lease under a tenancy created by apurported 1992 verbal agreement with defendant landlord's principal, Mark Perlbinder. Plaintiffallegedly paid $50,000 in consideration of "his understanding and agreement that he would havethe right to remain in the apartment for as long as he cared to rent it," in apparent disregard ofwhether the apartment was to be used as his primary residence. Defendant alleges that plaintiffmaintains his primary residence in Florida.
Defendant previously brought a holdover proceeding on nonprimary residence grounds,which had been pending in Civil Court for two months when plaintiff commenced this actionalleging breach of the parol agreement and seeking specific performance and monetary damagesof $500,000. Plaintiff's first cause of action seeks specific performance and a permanentinjunction against his eviction. The second and third causes of action allege breach of the 1992oral agreement and seek monetary damages of $500,000 against defendants,[FN1] respectively, for failing to offer plaintiff a renewal lease in January 2004 and for refusing toextend the term of the lease.[FN2] The fourth cause of action seeks recovery of the $50,000 paid by plaintiff in 1992, asserting thatsuch payment constitutes an illegal rent overcharge.
In the pending Civil Court holdover proceeding to recover possession of the subject dwellingunit, defendant alleged that plaintiff does not use the premises as his primary residence and,apparently, never has. However denominated, the present action seeks to impose upon defendantthe obligation to continue the statutory tenancy indefinitely. Because the right to lease renewalcan be adjudicated in the Civil Court proceeding and because it is dispositive of the assertedbreach of contract, the complaint was properly dismissed on the ground that there is anotheraction pending (CPLR 3211 [a] [4]).[FN3][*3]
On appeal, plaintiff maintains only that his second andthird causes of action should not have been dismissed as untimely under the six-year statute oflimitations applicable to breach of contract (CPLR 213) because the breach of the purportedparol contract occurred when defendant failed to renew the lease in January 2004. However,because the contract bestows a rent-regulated lease on an individual who is not qualified for rentstabilization protection in exchange for an illegal payment of $50,000, it is unenforceable in thecourts as a matter of public policy; thus, what are denominated in the complaint as plaintiff'ssecond and third causes of action seek damages that are unrecoverable.[FN4] Accordingly, I dissent and would affirm the order dismissing the complaint.
The parties do not dispute that plaintiff paid $50,000 for a rent-stabilized apartment thatplaintiff was not obligated to maintain as his primary residence. Thus, the contract sought to beenforced by plaintiff is in clear violation of the Rent Stabilization Law and Code in two materialrespects. First, the payment of $50,000 to obtain the lease constitutes excessive rent (seeEstro Chem. Co. v Falk, 303 NY 83, 87 [1951] ["The obtaining of excessive rents strikes atthe very purpose of the act"]). By waiving the statutory protection against excessive rents, thecontract contravenes Rent Stabilization Code (9 NYCRR) § 2520.13, which expresslyprohibits a tenant from waiving any benefit bestowed under rent stabilization, rendering itstatutorily void and unenforceable as a matter of public policy (see Drucker v Mauro, 30 AD3d37, 41 [2006], lv dismissed 7 NY3d 844 [2006]). Second, the agreement iscalculated to evade requirements for obtaining statutory protection (see 546 W. 156th St. HDFC v Smalls,43 AD3d 7 [2007]), particularly, that the apartment be used as the tenant's primary residence(Rent Stabilization Law of 1969 [Administrative Code of City of NY] § 26-504 [a] [1] [f];NY City Rent and Rehabilitation Law [Administrative Code] § 26-403 [e] [2] [i] [10];see Friesch-Groningsche Hypotheekbank Realty Credit Corp. v Slabakis, 215 AD2d 154,155 [1995]).
The majority fails to acknowledge the illegality of the agreement, reasoning that because theparties did not seek to rescind or reform the contract,[FN5] the issue is not before us. With respect to enforceability, it is irrelevant that, the parties "freelyentered into and acquiesced in [the [*4]contract] for more than 10years," as the majority asserts. Rather, it is axiomatic that a party cannot seek to recover damageson an agreement that violates public policy and is statutorily prohibited (Drucker, 30AD3d at 41; see Austin Instrument v Loral Corp., 29 NY2d 124, 130 [1971] [contractvoidable for economic duress]; Jones Lang Wootton USA v LeBoeuf, Lamb, Greene &MacRae, 243 AD2d 168, 182 [1998], lv dismissed 92 NY2d 962 [1998] [settlementagreement voided as offensive to antisubrogation rule]). However, plaintiff entered into theasserted oral agreement of his own volition and, the record suggests, with the advice of counsel,availing himself of the benefit of his bargain for more than a decade. Thus, he is estopped tocontest his willing participation in the arrangement (see Schultz v 400 Coop. Corp., 292AD2d 16, 20 [2002]).
It is immaterial that neither party previously raised the issue of illegality of the contract. Asthis Court has noted, "There is a long-standing policy of refusing to assist in the enforcement ofagreements that are injurious to the public" (Abright v Shapiro, 214 AD2d 496, 496[1995]). As we explained in Miltenberg & Samton v Mallor (1 AD2d 458, 461 [1956]):"As has been frequently said, the courts [sic], in refusing to enforce these agreements,does so, not because it desires to relieve one of the parties to such an agreement from theobligation that he assumes, but because of the fact that the making of such an agreement is aninjury to the public, and that the only method by which the law can prevent such agreementsfrom being made is to refuse to enforce them. In such a case a court will leave the parties as itfound them. It is well-settled law that parties to a fraudulent or illegal transaction who are inpari delicto may not invoke judicial aid to undo the consequences of their illegal acts"(citations and internal quotation marks omitted).
Moreover, plaintiff has not submitted any evidence to prove the terms of his alleged verbalagreement with defendant's principal (see Cobble Hill Nursing Home v Henry & WarrenCorp., 74 NY2d 475, 482 [1989], cert denied 498 US 816 [1990] [definiteness ofcontract essential to enforcement, and proof of its terms "is particularly significant where specificperformance is sought"]). "The party seeking to enforce a contract bears the burden to establishthat a binding agreement was made and to prove the terms of the contract" (Allied SheetMetal Works v Kerby Saunders, Inc., 206 AD2d 166, 169 [1994]; Paz v Singer Co.,151 AD2d 234, 235 [1989]). The only proof of the agreement between the parties is its partperformance. However, plaintiff does not explain how such part performance can bedistinguished from adherence to statutory requirements governing the rent-stabilized tenancy soas to be deemed " ' "acts of part performance which go along with, relate to, and confirm theagreement" ' " (see Eden Temporary Servs. v House of Excellence, 270 AD2d 66, 67[2000], quoting Bright Radio Labs. v Coastal Commercial Corp., 4 AD2d 491, 494[1957], affd 4 NY2d 1021 [1958], quoting Wheeler v Reynolds, 66 NY 227, 232[1876]). Finally, plaintiff does not allege that the parol agreement contemplates recovery ofextraordinary damages beyond the usual and customary remedy of directing the issuance of arenewal lease (see 1009 Second Ave. Assoc. v New York City Off-Track Betting Corp.,248 AD2d 106, 108 [1998], lv dismissed 92 NY2d 947 [1998]).
This action is nothing more than a landlord-tenant dispute involving defendant's obligation tooffer plaintiff a renewal lease, which is an issue governed by the Rent Stabilization Law andCode. The Court of Appeals has made clear that "Civil Court has jurisdiction of landlord tenantdisputes (see CCA 204) and when it can decide the dispute, as in this case, it is [*5]desirable that it do so" (Post v 120 E. End Ave. Corp., 62NY2d 19, 28 [1984] [Yellowstone injunction], citing Lun Far Co. v AylesburyAssoc., 40 AD2d 794 [1972]). As Post notes, "If the tenant is unable to obtaincomplete relief in Civil Court, then the jurisdiction of Supreme Court is still available"(id., citing Wilen v Harridge House Assoc., 94 AD2d 123 [1983][Yellowstone injunction]). Neither the parties nor the majority offer any reason why theissues raised by this controversy cannot be resolved in the summary proceeding before CivilCourt. Since plaintiff asserts no basis for injunctive or declaratory relief available only inSupreme Court, this action is merely an artifice to prevent the dispute from being decided in thedesignated forum (Cox v J.D. Realty Assoc., 217 AD2d 179, 180 [1995], citing NYConst, art VI, § 15 [b]; CCA 204, 110).
Plaintiff's claim that the oral agreement was breached by the failure to renew (or extend) hislease involves only a single breach of contract. The several alternative remedies of injunction andmonetary damages that he seeks all arise from the claim that he is entitled to indefinite renewalof his lease and are not severable (see Matter of Cine-Source, Inc. v Burrows, 180 AD2d592, 594 [1992]; Goldberg v Eastern Brewing Co., 136 App Div 692, 693 [1910]).Merely because counsel might draft a complaint to restate a single claim under various theoriesof contract—and even tort—does not serve to create distinct causes of action, as thisCourt has repeatedly held (see e.g. McMahan & Co. v Bass, 250 AD2d 460, 462 [1998],lv denied and dismissed 92 NY2d 1013 [1998]; Megaris Furs v Gimbel Bros.,172 AD2d 209, 211 [1991]).
Plaintiff may assert his purported contract right to renewal of his lease in defense to theholdover proceeding pending in Civil Court. Because the Housing Part must decide whetherdefendant is obligated to renew plaintiff's lease, determination of this issue will have collateralestoppel effect (Buechel v Bain, 97 NY2d 295, 304 [2001], cert denied 535 US1096 [2002] [parties bound by prior determination of their contract rights despite their failure tolitigate them]; see also Schwartzreich v E.P.C. Carting Co., 246 AD2d 439, 441 [1998][res judicata]). Permitting multiple actions to go forward predicated on the same breach ofcontract (failure to offer plaintiff a renewal lease) offends the rule that a cause of action may notbe split to advance different theories of recovery or to pursue different forms of relief (seeid.; Miller v Vanderlip, 285 NY 116, 125 [1941]) and creates the potential forconflicting rulings on an identical issue (see World Point Trading PTE. v CreditoItaliano, 225 AD2d 153, 161 [1996]; Bank of Tokyo-Mitsubishi, Ltd., N.Y. Branch vKvaerner a.s., 243 AD2d 1, 9 [1998] [arbitration]). As stated in Perry v Dickerson(85 NY 345, 347-348 [1881]), "There can be but one recovery for an injury from a single wrong,however numerous the items of damage may be, and but one action for a single breach of acontract."
In view of this analysis, it is unnecessary to reach defendant's argument that this action isbarred by the terms of a 1992 written release, in which plaintiff agreed to hold defendantharmless for any adverse consequences resulting from actions taken by him to obtain the subjectleasehold. It need only be observed that the existence of this document hardly strengthensplaintiff's case for recovery of damages against defendant.
Accordingly, the order dismissing the complaint should be affirmed.
McGuire, J., dissents in a separate memorandum as follows: Pursuant to a lease executed inJanuary 1992, plaintiff leased a rent stabilized apartment [*6]fromdefendant 85th Estates Company (the Company), the net lessee of the building in which theapartment is located. According to plaintiff, defendant Perlbinder, a principal of the Company,demanded that plaintiff pay $50,000 as a condition to obtaining the lease. The $50,000 paymentwould also serve as consideration for defendants' promise continually to renew the lease foradditional terms. Plaintiff allegedly paid this $50,000 "fee" to Perlbinder in early February 1992,thereby entering into the alleged agreement which is at the center of this appeal.
By a notice dated September 16, 2003, the Company notified plaintiff that it did not intend torenew plaintiff's previously renewed lease that was to expire on January 31, 2004. The Companyclaimed that it would not renew the lease because plaintiff was not using the apartment as hisprimary residence. In February 2004, the Company commenced a nonprimary residence holdoverproceeding in the Civil Court of the City of New York, seeking possession of the premises anduse and occupancy from plaintiff for the period of the holdover.
On April 30, 2004, plaintiff commenced this action against defendants asserting four causesof action. The first cause of action sought to enjoin the Company from prosecuting the holdoverproceeding and specific performance of the agreement, i.e., defendants' promise to renew thelease. The second and third causes of action, which are materially indistinguishable, soughtdamages for defendants' breach of the agreement, i.e., defendants' failure to renew the lease. Thefourth cause of action sought damages based upon defendants' violation of the rent stabilizationlaws prohibiting excessive rents and overcharges. Defendants moved to dismiss the complaintpursuant to CPLR 3211, asserting that plaintiff's cause of action seeking specific performance ofthe agreement should be litigated in the holdover proceeding and that the remaining causes ofaction seeking damages were time-barred. Supreme Court granted the motion in its entirety anddismissed the complaint. Plaintiff appeals, as limited by his brief, from those portions of theorder which dismissed his second and third causes of action.
I agree with the majority's tacit conclusion that the second and third causes of action cannotbe addressed by the Civil Court in the context of the holdover proceeding. "The only issue beforethe court [in a holdover proceeding] is the right of possession as of the time of thecommencement of the proceeding" (2 Dolan, Rasch's Landlord and Tenant—SummaryProceedings § 30:3, at 419 [4th ed] ["Tenant Wrongfully Holding Over"] [emphasisadded], citing Jones v Gianferante, 305 NY 135, 139 [1953] ["(A) summary proceedingunder (former) article 83 of the Civil Practice Act is of purely possessory character, and the onlyissue before the court was as to the right of possession]).[FN1]While the court in the holdover proceeding can also award the landlord any rent that may beunpaid and, for a period of occupancy during which no rent is due, the fair value of use andoccupancy of the premises (RPAPL 741 [5]), it has no jurisdiction over any other claims betweenthe parties (see Allyn v Markowitz, 83 Misc 2d 250, 252 [Rockland County Ct 1975] ["Ina special proceeding pursuant to (RPAPL) article 7 . . . , a court has no jurisdictionto adjudicate a monetary claim (by lessor against lessee for damage to the demised premises)"];Carver v Crowe & Co., Inc., 202 Misc 899, 899 [App [*7]Term, 1st Dept 1952] [civil court in summary proceeding "had nojurisdiction to adjudicate as to the alleged indebtedness of the tenant to the landlords for fuel,which was no part of the rental obligation"]; 2 Dolan, Rasch's Landlord andTenant—Summary Proceedings § 29:7, at 406-407 [4th ed]; 89 NY Jur 2d, RealProperty—Possessory Actions § 3; see also Romea v Heiberger & Assoc.,163 F3d 111, 116 [2d Cir 1998] ["The landlord may also recover unpaid rent owed by the tenantin an Article 7 proceeding. But it can only do this as a matter ancillary to the court's jurisdictionto hear a claim to recover possession"]; see generally Ross Realty v V & A Fabricators, Inc., 42 AD3d 246[2d Dept 2007]).
While the issue of whether the apartment is plaintiff's primary residence must be adjudicatedin the holdover proceeding in Civil Court, that court is without jurisdiction to adjudicateplaintiff's claims seeking damages for the alleged breach of the agreement, the only claims beforeus on this appeal (i.e., the second and third causes of action). Civil Court can only pass on theissue of whether the apartment is plaintiff's primary residence. Although Civil Court's finding onthat issue would preclude the parties from relitigating it in Supreme Court, such finding by CivilCourt would not have any impact on plaintiff's action in Supreme Court for damages stemmingfrom the alleged breach of the agreement. For this reason, there is no impermissible splitting of asingle claim.[FN2]
In any event, the agreement is unenforceable on the ground that it is void as a matter ofpublic policy. Initially, while the majority correctly notes that defendants did not raise this issuebefore Supreme Court, we may nevertheless consider it (Matter of Niagara WheatfieldAdm'rs Assn. [Niagara Wheatfield Cent. School Dist.], 44 NY2d 68, 72 [1978] ["Where acontract [*8]provision is arguably void as against public policy,that issue may be raised for the first time at the Appellate Division by a party, or by the court onits own motion"]; Matter of Maiore v City of Buffalo, 78 AD2d 979 [1980]; seePeople v Knowles, 88 NY2d 763 [1996]).
Turning to the substance of this argument, the public policy underlying the Rent StabilizationLaw "is to provide an adequate supply of affordable housing in the City of New York" (Drucker v Mauro, 30 AD3d 37, 40[2006], appeal dismissed 7 NY3d 844 [2006]), "so as to ameliorate . . .dislocations and risk of widespread lack of suitable dwellings" (390 W. End Assoc. vHarel, 298 AD2d 11, 15 [2002] [internal quotation marks omitted]). Thus, "[i]t is wellsettled that the parties to a lease governing a rent-stabilized apartment cannot, by agreement,incorporate terms that compromise the integrity and enforcement of the Rent Stabilization Law.Any lease provision that subverts a protection afforded by the rent stabilization scheme is notmerely voidable, but void" (Drucker v Mauro, 30 AD3d at 39 [citations omitted]).
In Drucker, the parties entered into a lease and rider pursuant to which the plaintiffsrented an apartment from the defendant. The lease and rider included provisions setting the rentat a rate in excess of that established by the Division of Housing and Community Renewal(DHCR) and entitling the plaintiffs to perpetual renewal of the lease. The pertinent provisions ofthe rider represented the settlement of a dispute regarding the defendant's failure timely to offerthe plaintiffs a renewal lease and claims involving the rent and repairs and renovations. Inresponse to the defendant's efforts to obtain luxury decontrol of the apartment, the plaintiffscommenced an action seeking a declaration that the lease and rider were enforceable and toenjoin the defendant from applying for luxury decontrol of the apartment.
In reversing an order of Supreme Court declaring that the lease and rider were enforceable,this Court determined that the lease and rider were unenforceable and void as a matter of publicpolicy. The Court, citing the well-established rule that landlords and tenants are prohibited fromentering into agreements that effectively deregulate rent stabilized apartments, found that theplaintiffs waived impermissibly the protections afforded by the Rent Stabilization Code becausethe rider provided for rent that exceeded the amount established by DHCR and allowed forperpetual, unconditional renewal of the lease. The Court reasoned that judicial recognition andenforcement of such agreements could "adversely affect both the legal rent and the regulatedstatus of . . . dwelling unit[s] for future occupants" (id. at 40) andconcomitantly undermine and "erode the entire statutory scheme of the Rent Stabilization Law"(id. at 42).
While the agreement at issue here did not impose upon plaintiff monthly rental obligations inexcess of the legal regulated amount, it did involve a one-time $50,000 payment that served asboth a condition to obtaining the lease and consideration for the promise continually to renew thelease for additional terms. The agreement violates the public policy underlying the RentStabilization Law because it purports to allow plaintiff to rent the apartment regardless ofwhether it serves as his primary residence (see Rocky 116 v Weston, 284 AD2d 139[2001]; Park Towers S. Co. v Universal Attractions, 274 AD2d 312 [2000]; see also Thornton v Baron, 5 NY3d175 [2005]; Draper v Georgia Props., 94 NY2d 809 [1999]; 390 W. End Assoc.v Harel, supra; 390 W. End Assoc. v Baron, 274 AD2d 330[2000]).[FN3]Thus, the agreement is void and plaintiff's [*9]right to remain inpossession of the apartment, i.e., right to renewal of the lease, hinges on the outcome of thenonprimary residence holdover proceeding. Since the entire agreement is void, plaintiff's secondand third causes of action, both of which seek damages for breach of the agreement, wereproperly dismissed.
390 W. End Assoc. v Baron (supra), cited by the majority, affords no supportfor its position. In Baron, plaintiff landlord commenced an action against defendanttenant seeking a declaration that the defendant's apartment was exempt from rent regulationbecause the defendant was not using the unit as his primary residence. The parties entered into aconsent judgment pursuant to which the defendant acknowledged that the apartment was not hisprimary residence, that the unit was exempt from the Rent Stabilization Law, and that anysubsequent lease between the parties would similarly be exempted from rent stabilization. Theparties then entered into a lease that provided for automatic renewals and allowed the defendantto sublease the unit to any person who did not use it as his or her primary residence. Rent for theunit was set at an amount several times the rent-stabilized rate. The defendant subsequentlysubleased the unit, at a rent in excess of the rent the defendant was charged under the primelease, to a couple, the Thorntons, who did use the unit as their primary residence. Three yearsafter they entered into the sublease, the Thorntons brought a rent overcharge action against thedefendant on the ground that they were charged and paid rent well in excess of the legal rent asestablished by the Rent Stabilization Law. The plaintiff, which was not a party to the overchargeaction, moved to vacate the consent judgment and rescind the prime lease so that it could offerthe Thorntons a rent-stabilized lease.
This Court, reversing an order of Supreme Court denying the motion, determined that theprime lease was invalid since it violated the public policy underpinning the Rent Stabilization[*10]Law. Specifically, the Court noted that the lease, whichpermitted the defendant to lease the unit on the condition that he not use it as his primaryresidence, had the effect of deregulating the unit. For this reason, the Court granted the plaintiff'smotion to vacate the consent judgment. In addition, because it was "concerned that plaintiff mayhave benefited unjustly at the Thorntons' expense" (id. at 333), it did so "withoutprejudice to the assertion of any claims among the parties and/or the Thornton tenants withrespect to profits obtained in violation of the Rent Stabilization Law" (id.). Thus, theCourt did nothing more than acknowledge that rent paid by the Thorntons over the legal rentcould potentially be recovered.
I would not, of course, want to prejudge either the merits of the claim or the statute oflimitations issue that would arise, but it may be that plaintiff, like the Thorntons inBaron, has a viable claim to recover all or some portion of the $50,000 payment.Plaintiff's second and third causes of action, however, do not seek to recover the $50,000payment. Indeed, plaintiff's fourth cause of action seeks that relief and, as the majority notes,plaintiff does not "appeal from the dismissal of the fourth cause of action for recovery of analleged $50,000 illegal rent overcharge." The second and third causes of action—the onlyclaims before us—seek damages stemming from the breach of the agreement. In sum,Baron provides no support for the majority's conclusion that plaintiff's second and thirdcauses of action are viable.
Accordingly, I would affirm the order insofar as appealed from.
Footnote 1: Plaintiff does not disclose howdamages are calculated.
Footnote 2: The distinction between thesepurported causes of action is not immediately apparent.
Footnote 3: The "illegal overcharge" allegedin the fourth cause of action, which is not before us, can also be adjudicated in Civil Court. Thus,it was unnecessary for Supreme Court to rule on this issue. The court was correct, however, instating that the action on the overpayment, alleged by plaintiff to have been made in 1992, istime-barred (CPLR 213-a).
Footnote 4: This presumes that merelyasserting a right to monetary damages in the alternative to specific performance serves to createdistinct causes of action, the remedy sought in all instances being predicated on the selfsamebreach of contract.
Footnote 5: While the complaint does notexpressly seek rescission, the fourth cause of action seeks to recover the amount paid asconsideration. Granting such relief would effect rescission by placing plaintiff in status quo ante,thereby vitiating the contract (see Curtis Props. Corp. v Greif Cos., 212 AD2d 259, 265[1995] ["the promises of both parties to a bilateral contract must be supported byconsideration"]).
Footnote 1: RPAPL 711 was derived from,among other things, former article 83 of the Civil Practice Act. Since the RPAPL did not changethe Civil Practice Act in this respect, Jones remains valid precedent (see 2 Dolan,Rasch's Landlord and Tenant—Summary Proceedings § 29:7, at 406 n 36 [4th ed]).
Footnote 2: I agree with Justice Tom'sassertion that plaintiff "may assert his purported contract right to [perpetual] renewal of his leasein defense to the holdover proceeding," however meritless that defense may be (see infra). That such a defense may be raised in the holdover proceeding, however, does notcompel the conclusion that plaintiff's causes of action to recover damages for the alleged breachof the agreement must be raised in the same proceeding. As this Court stated in a related context,"the 'narrow doctrine' prohibiting the splitting of a cause of action (see Murray, Hollander,Sullivan & Bass v HEM Research, 111 AD2d 63, 66 [1985]) does not preclude the tenantfrom seeking damages in an action separate from that in which he had sought to be restored topossession" (Rodriguez v 1414-1422 Ogden Ave. Realty Corp., 304 AD2d 400, 401[2003]; see Wood v Chenango County Natl. Bank & Trust Co., 282 App Div 283, 286[1953] ["There should be one action only to settle the rights of the parties, when all rights canbe properly determined in a single action" (emphasis added, internal quotation marks andcitation omitted)]; Gilbert v Village of Larchmont, 280 App Div 1000 [1952] [same]).The majority asserts that I "seek to prejudge" the issue of plaintiff's potential defense in theholdover proceeding based on his alleged right, under the agreement, to perpetual renewal of thelease. To the contrary, however, I am judging in this action an issue of law that is properly beforeus: whether the agreement is void as a matter of public policy.
Footnote 3: The agreement may violatepublic policy for a separate reason. Some portion of the $50,000 payment—whatever thatportion may be—was paid to obtain the lease and would appear to be, in substance,additional rent (see Munro v Syracuse, Lake Shore & N. R.R. Co., 200 NY 224, 232[1910] ["Rent is the compensation for the use of land"]; 1 Dolan, Rasch's Landlord andTenant—Summary Proceedings § 12:1, at 523-524 [4th ed] ["Rent"] ["Rent is thecompensation to be paid by a tenant for the use and occupation of land, or for the right thereto"(footnotes omitted)]; Black's Law Dictionary 1322 [8th ed 2004] [defining "rent" as"(c)onsideration paid . . . for the use or occupancy of property"]). Under onepossible approach, whether the agreement resulted in rent charges exceeding the lawful rentwould depend upon both the amount of the monthly rent plaintiff actually was paying relative tothe maximum monthly rent that lawfully could be charged and whether there is some coherentbasis for considering some portion of the $50,000 payment to represent additional payments ofmonthly rent. Alternatively, the inherent difficulties of making such calculations might support aprophylactic rule invalidating such a lump-sum payment on the ground that it threatens a corepurpose of the legislative scheme (see Drucker, 30 AD3d at 40, quoting Estro Chem.Co. v Falk, 303 NY 83, 87 [1951] ["The obtaining of excessive rents strikes at the verypurpose of the act"]). Happily, I need not wrestle with these issues given my conclusion that theagreement violates public policy for an independent reason.