| Bradbury v 342 W. 30th St. Corp. |
| 2011 NY Slip Op 04512 [84 AD3d 681] |
| May 31, 2011 |
| Appellate Division, First Department |
| John Bradbury, Respondent-Appellant, v 342 West 30thStreet Corp., Appellant-Respondent. |
—[*1] Bierman & Palitz LLP, New York (Mark H. Bierman of counsel), forrespondent-appellant.
Order and judgment (denominated an order), Supreme Court, New York County (Emily JaneGoodman, J.), entered May 12, 2009, after a nonjury trial, to the extent appealed from, declaringthat the subject apartment was rent stabilized, that the legal monthly rent chargeable to plaintiffin January 2002 was $1,390.87 per month and that defendant had willfully overcharged plaintiff,and directing the entry of a money judgment in plaintiff's favor in the amount of $58,476.48,representing rent overcharges and treble damages, plus interest, costs and disbursements,unanimously modified, on the law, to declare that the legal monthly rent chargeable to plaintiff inJanuary 2002 was $402.43, the amount of the money judgment vacated, and the matter remandedfor recalculation of the money judgment consistent with this opinion, and otherwise affirmed,without costs. Appeal from order, same court and Justice, entered January 18, 2010, whichdenied plaintiff's motion to resettle or reargue the May 12, 2009 order and judgment,unanimously dismissed, without costs, as taken from a nonappealable paper.
In or about April 2001, Dolce Sosa, the former tenant, moved out of apartment 5R at 346West 30th Street in Manhattan. At the time her tenancy ended, she was paying $402.43 permonth under a rent-stabilized lease. On December 24, 2001, plaintiff tenant and defendantlandlord entered into a lease for the apartment. The lease term began on January 1, 2002 andended on December 31, 2003, and the monthly rent was $2,000. Plaintiff was not informed thatthe apartment was rent stabilized, nor did the lease include a rent stabilization rider.
Records from the Division of Housing and Community Renewal (DHCR) show that the rentregistration statement for the former tenant, filed in 2001, listed a legal regulated rent of $402.43as of April 1 of that year. In 2002 and 2003, plaintiff was sent annual rent registration noticesstating that the legal regulated rent for the apartment, as of April 1 of each of those years, was$2,000 per month. The DHCR records confirm that defendant registered the apartment as rentstabilized in both 2002 and 2003 at a monthly rent of $2,000. The records do not reflect whetherdefendant filed any subsequent rent registration statements.
In December 2003, plaintiff commenced this action alleging that defendant had willfullyovercharged him an amount above the legal regulated rent. Plaintiff sought a judgment declaringthat the apartment was subject to rent stabilization and that his legal regulated rent was to be[*2]calculated on the basis of the previous regulated rent of$402.43 per month. Plaintiff also sought a judgment for treble damages for a willful overcharge.Defendant claimed that, after the former tenant vacated the apartment and before plaintiff'stenancy began, defendant spent at least $90,000 to renovate the apartment. Defendant maintainedthat as a result of these improvements, along with other permissible increases, the lawful monthlyrent was in excess of $2,000, which allowed for luxury decontrol of the apartment and removalfrom rent stabilization.
The matter went to trial, and in a decision dated November 29, 2007, the court determinedthat the apartment was subject to the Rent Stabilization Law. The court found that the testimonyof defendant's principal, Anthony Argento, was "unbelievable in all material matters" and"unworthy of belief." The court also rejected most of the other defense witnesses' testimony,finding that two of them had lied on the stand. The court concluded that bills and invoices werefabricated for the litigation and that at least one forged document was submitted to the court. Insum, the court stated that defendant's case was "a sham, filled with perjury, forgery, [and]fabrications all designed not only to raise the rent of the apartment . . . to anunlawful level, but to mislead the plaintiff, counsel and the Court." The court rejected defendant'sclaimed renovation costs of $90,000 and found instead that defendant had spent no more than$34,000. The court also found that plaintiff's unlawful $2,000 rent was imposed willfully andintentionally.
By order and judgment entered May 12, 2009, the court declared that the last lawful rent was$402.43 in 2001. The court then calculated that defendant was entitled to an $80.49 vacancyincrease, a $57.95 longevity increase and a renovations increase of $850 (1/40 of the $34,000renovations cost) and that therefore the legal monthly rent chargeable to plaintiff at the start ofhis tenancy in January 2002 was $1,390.87. The court found that, since this amount did notexceed $2,000, the apartment was still subject to rent stabilization. The court concluded thatdefendant had overcharged plaintiff by $609.13 per month (the difference between $1,390.87, therent found by the court, and $2,000, the rent plaintiff had paid) for a total overcharge of$20,101.29. The court also concluded that the overcharge was willful and intentional, entitlingplaintiff to treble damages, for a total of $58,476.48. Both parties appeal from the May 12, 2009order and judgment.
Defendant failed to meet its burden of proving the cost of the renovations made to theapartment to justify the rent it charged plaintiff (see Matter of Graham Ct. Owners Corp. v Division of Hous. & CommunityRenewal, 71 AD3d 515 [2010]). The trial court's determination that defendant spent nomore than $34,000 in renovations is supported by a fair interpretation of the evidence.Defendant's witnesses and documents presented credibility issues, and the record sufficientlysupports the trial court's resolution of those issues in plaintiff's favor. Defendant also failed toestablish that the rent overcharges were not willful so as to avoid treble damages (9 NYCRR2526.1 [a] [1]; Matter of RiversideEquities, LLC v New York State Div. of Hous. & Community Renewal, 58 AD3d 534[2009], lv denied 13 NY3d 709 [2009]).
Although the trial court correctly calculated the amount of the vacancy, longevity andrenovations increases that defendant would otherwise have been entitled to, we neverthelessconclude that defendant's intentional filing of two knowingly false rent registration statementswas not a "proper" filing as required by section 26-517 (e) of the Rent Stabilization Law of 1969(Administrative Code of City of NY) and bars defendant in this case from collecting any rent inexcess of the legal regulated rent in effect as of the date of the last preceding rent registrationstatement (id.).[*3]
Owners of rent-stabilized apartments are required to fileannual rent registration statements with DHCR listing, among other things, the name of thetenant in each regulated apartment along with the current rent on the registration date (seeAdministrative Code § 26-517 [a], [f]; Rent Stabilization Code [9 NYCRR] §2528.3). An owner's failure to file a "proper and timely" annual rent registration statement barsthe owner from collecting "any rent in excess of the legal regulated rent in effect on the date ofthe last preceding registration statement" until such time as a proper registration is filed(Administrative Code § 26-517 [e]; see also 9 NYCRR 2528.4 [a]). Where anowner fails to file a "proper and timely" registration, until such registration is filed, the rent isfrozen at the legal regulated rent listed in the preceding registration statement (see Jazilek v Abart Holdings, LLC, 72AD3d 529, 531 [2010]).
Here, although defendant filed rent registration statements in 2002 and 2003 listing thepurported legal regulated rent as $2,000, the trial court's findings, which we now affirm, establishthat those filings were intentionally false. The trial court concluded that defendant willfully andintentionally charged plaintiff the incorrect rent of $2,000 and that the maximum allowable rentwas $1,390.87. The court further found that defendant's entire case was "a sham, filled withperjury, forgery, [and] fabrications" and was "designed . . . to raise the rent of theapartment . . . to an unlawful level," a level that would remove the unit from theprotections of rent stabilization.
In light of these findings, we conclude that defendant's 2002 and 2003 DHCR filings werenot "proper" within the meaning of Administrative Code § 26-517 (e). This Court recentlyupheld the imposition of a rent freeze in a similar situation (see Jazilek v Abart Holdings, LLC, 72 AD3d 529 [2010],supra [rent registration statement listing a legal rent in excess of the highest possible legalrent was defective and not a "proper" filing]; see also Thornton v Baron, 5 NY3d 175, 181 [2005] [rentregistration statement listing illegal rent was a nullity]). Because defendant failed to file properstatements in 2002 and 2003, and because the record does not show that any such properstatements were subsequently filed, defendant was barred from collecting any rent in excess ofthe last properly registered rent, i.e., the $402.43 rent listed in the 2001 registration. Accordingly,the matter should be remanded for a recalculation of the amount of the money judgment.
The court's order denying plaintiff's motion to resettle or reargue is not appealable (Parker v Marglin, 56 AD3d 374,374-375 [2008]; Kubick v Kubick, 261 AD2d 300 [1999]).
We have considered the parties' remaining contentions and find them without merit.Concur—Mazzarelli, J.P., Acosta, DeGrasse, Richter and Manzanet-Daniels, JJ.