| DiGiorgio v 1109-1113 Manhattan Ave. Partners,LLC |
| 2013 NY Slip Op 00172 [102 AD3d 725] |
| January 16, 2013 |
| Appellate Division, Second Department |
| Vincent DiGiorgio et al., Appellants, v 1109-1113Manhattan Avenue Partners, LLC, et al., Respondents, et al.,Defendant. |
—[*1] Faust Goetz Schenker & Blee LLP, New York, N.Y. (Christopher B. Kinzel ofcounsel), for respondent 1109-1113 Manhattan Avenue Partners, LLC. Kaufman Dolowich Voluck & Gonzo LLP, Woodbury, N.Y. (Matthew J. Mineroand LaTonya S. Sasser of counsel), for respondent CIS Counseling Center, Inc.
In an action, inter alia, for declaratory and injunctive relief, the plaintiffs appeal (1)from so much of an order of Supreme Court, Kings County (Bayne, J.), entered August16, 2011, as granted those branches of the cross motion of the defendant 1109-1113Manhattan Avenue Partners, LLC, which were to dismiss the first, second, third, sixth,seventh, and eighth causes of action insofar as asserted against it pursuant to CPLR 3211(a) (7), and "ordered as a matter of law that the remaining occupants of the premisesleased by 1109-1113 Manhattan Ave. Partners to CIS Counseling Center are deemedlicensees of CIS and are not tenants of the subject premises," and (2) from so much of anorder of the same court entered August 17, 2011, as granted those branches of the crossmotion of the defendants CIS Counseling Center, Inc., and Donna DeCicco which wereto dismiss the first, second, third, fourth, sixth, seventh, and eighth causes of actioninsofar as asserted against those defendants pursuant to CPLR 3211 (a) (7).
Ordered that the order entered August 16, 2011, is reversed insofar as appealed from,on the law, and those branches of the cross motion of the defendant 1109-1113Manhattan Avenue Partners, LLC, which were to dismiss the first, second, third, sixth,seventh, and eighth causes of action insofar as asserted against it are denied; and it isfurther,
Ordered that the order entered August 17, 2011, is modified, on the law, by deletingthe provisions thereof granting those branches of the cross motion of the defendants CISCounseling Center, Inc., and Donna DeCicco which were pursuant to CPLR 3211 (a) (7)to dismiss the first, second, fourth, sixth, seventh, and eighth causes of action insofar asasserted against CIS Counseling Center, Inc., and the sixth, seventh, and eighth causes ofaction insofar as asserted [*2]against Donna DeCicco,and substituting therefor a provision denying those branches of that cross motion; as somodified, the order entered August 17, 2011, is affirmed insofar as appealed from, and itis further,
Ordered that the matter is remitted to the Supreme Court, Kings County, for furtherproceedings before a different Justice; and it is further,
Ordered that one bill of costs is awarded to the plaintiffs, payable by the defendants1109-1113 Manhattan Avenue Partners, LLC, and CIS Counseling Center, Inc.
The plaintiffs alleged that they are tenants of a hotel that is located in Brooklyn andowned by the defendant 1109-1113 Manhattan Avenue Partners, LLC (hereinafterMAP). According to the complaint, MAP leased a section of the hotel, consisting ofapproximately 89 single-occupancy rooms, to the defendant CIS Counseling Center, Inc.(hereinafter CIS), which owns and operates an outpatient substance-abuse treatmentprogram. The plaintiffs alleged that the defendant Donna DeCicco held herself out to bethe "housing director" for CIS at the hotel. In order to obtain housing at the hotel, theplaintiffs were purportedly required to sign "transitional residency agreements," which,among other things, limited their stay at the hotel to six to nine months, and conditionedtheir residency upon adherence to certain "house rules" and regular attendance at theoutpatient substance-abuse treatment program owned and operated by CIS. Thecomplaint alleged that MAP profited from this arrangement by charging CIS nearly sixtimes the legal regulated rent. CIS allegedly profited from the arrangement by collectingrental payments directly from the New York City Human Resources Administration foreach resident, and by charging Medicaid for each substance-abuse treatment sessionattended by the residents.
The plaintiffs commenced this putative class action on behalf of themselves andothers similarly situated, inter alia, for a judgment declaring that (1) the single-occupancyrooms in which they were living were subject to rent stabilization in accordance withsection 26-506 of the Administrative Code of the City of New York, and that they werepermanent tenants, as that term is defined by 9 NYCRR 2520.6 (j) (first cause of action),(2) the agreement between MAP and CIS constituted an illusory tenancy (second causeof action), (3) MAP unlawfully harassed them in violation of section 27-2005 (d) of theAdministrative Code of the City of New York (third cause of action), (4) CIS violatedMental Hygiene Law § 22.07 (b) and 14 NYCRR 815.4 (g) and 815.5 (a) (15) by,among other things, forcing and coercing the residents to participate in itssubstance-abuse treatment program (fourth cause of action), (5) the defendants evictedtenants from the hotel without legal process in violation of section 26-521 of theAdministrative Code of the City of New York (fifth cause of action), (6) the transitionalresidency agreements were void pursuant to 9 NYCRR 2520.13 (sixth cause of action),(7) the transitional residency agreements were void as contrary to public policy (seventhcause of action), (8) the transitional residency agreements were void as unconscionablecontracts of adhesion (eighth cause of action), and (9) the defendants violated section27-2043 of the Administrative Code of the City of New York by refusing to install lockson the doors to the individual units occupied by the residents (ninth cause of action).
After the plaintiffs moved for a preliminary injunction and class certification, CISand DeCicco cross-moved, pursuant to CPLR 3211 (a) (7), to dismiss the complaintinsofar as asserted against them for failure to state a cause of action. MAP separatelycross-moved, pursuant to CPLR 3211 (a) (7), to dismiss the complaint insofar as assertedagainst it for failure to state a cause of action. In an order entered August 16, 2011, theSupreme Court granted MAP's cross motion, and, in effect, purported to make adeclaration that the occupants remaining in the hotel were licensees of CIS, not tenants.In an order entered August 17, 2011, the Supreme Court granted the cross motion of CISand DeCicco. The plaintiffs appeal.
Pursuant to CPLR 3001, "[t]he supreme court may render a declaratory judgment. . . as to the rights and other legal relations of the parties to a justiciablecontroversy" (CPLR 3001). "[T]he demand for relief in the complaint shall specify therights and other legal relations on which a declaration is requested" (CPLR 3017 [b]). Amotion to dismiss the complaint in an action for a declaratory judgment "presents forconsideration only the issue of whether a cause of action for [*3]declaratory relief is set forth, not the question of whetherthe plaintiff is entitled to a favorable declaration" (Staver Co. v Skrobisch, 144AD2d 449, 450 [1988]; see Rockland Light & Power Co. v City of New York,289 NY 45, 51 [1942]). Thus, "where a cause of action is sufficient to invoke the court'spower to render a declaratory judgment . . . as to the rights and other legalrelations of the parties to a justiciable controversy, a motion to dismiss that cause ofaction should be denied" (Matter of Tilcon N.Y., Inc. v Town of Poughkeepsie, 87 AD3d1148, 1150 [2011] [citations and internal quotation marks omitted]; see St.Lawrence Univ. v Trustees of Theol. School of St. Lawrence Univ., 20 NY2d 317,325 [1967]; Rockland Light & Power Co. v City of New York, 289 NY at 51).However, where the court, deeming the material allegations of the complaint to be true,is nonetheless able to determine, as a matter of law, that the defendant is entitled to adeclaration in his or her favor, the court may enter a judgment making the appropriatedeclaration (see Hoffman v City of Syracuse, 2 NY2d 484, 487 [1957];German Masonic Temple Assn. v City of New York, 279 NY 452, 457 [1939];Washington County Sewer Dist. No. 2 v White, 177 AD2d 204 [1992]; LawResearch Serv. v Honeywell, Inc., 31 AD2d 900, 901 [1969]). By contrast, if thematerial allegations of the complaint, taken as true, implicate "factual issues such that therights of the parties cannot be determined as a matter of law, a declaration upon a motionto dismiss is not permissible" (Matter of Tilcon N.Y., Inc. v Town ofPoughkeepsie, 87 AD3d at 1151; see Nadel v Costa, 91 AD2d 976 [1983];Verity v Larkin, 18 AD2d 842 [1963]).
Here, the first cause of action was sufficient to invoke the Supreme Court's power torender a declaration as to whether the rooms in the hotel in which the plaintiffs wereliving were subject to rent stabilization (see Administrative Code of City of NY§ 26-506), and whether the plaintiffs were permanent tenants (see 9NYCRR 2520.6 [j], [m]). Since a declaration of this nature would resolve "an actualcontroversy" (Watson v Aetna Cas. & Sur. Co., 246 AD2d 57, 62 [1998][internal quotation marks omitted]; see Chanos v MADAC, LLC, 74 AD3d 1007 [2010])between the plaintiffs and MAP, in its capacity as the alleged owner of the hotel (seeAdministrative Code of City of NY § 26-512), as well as between theplaintiffs and CIS, in its capacity as the alleged sublessor of the disputed rooms(see 9 NYCRR 2505.7 [b]), the Supreme Court erred in directing the dismissalthe first cause of action insofar as asserted against MAP and CIS.
The second cause of action was sufficient to invoke the Supreme Court's power torender a declaration as to whether the alleged agreement between MAP and CISconstituted an illusory tenancy (see generally Matter of Badem Bldgs. v Abrams,70 NY2d 45, 52-53 [1987]; Primrose Mgt. Co. v Donahoe, 253 AD2d 404, 406[1998]; Matter of Avon Furniture Leasing v Popolizio, 116 AD2d 280 [1986];Stutt v Unique Restorations Co., 96 AD2d 1039 [1983]). As a declaration of thisnature would resolve a justiciable controversy between the plaintiffs, on the one hand,and MAP and CIS, on the other, the Supreme Court erred in directing the dismissal of thesecond cause of action insofar as asserted against those defendants.
The amended complaint also was sufficient to invoke the Supreme Court's power torender a declaration as to whether the plaintiffs were unlawfully harassed by MAP, inviolation of Administrative Code of the City of New York § 27-2005 (d)(see Administrative Code of City of NY § 27-2004 [a] [48] [e], [g]).Accordingly, the Supreme Court erred in granting that branch of MAP's cross motionwhich was to dismiss the third cause of action insofar as asserted against it. However, theamended complaint was insufficient to state a cause of action against CIS and DeCiccobased on an alleged violation of Administrative Code of the City of New York §27-2005 (d). Consequently, the Supreme Court correctly granted that branch of themotion of CIS and DeCicco which was to dismiss the third cause of action insofar asasserted against them.
Contrary to the contention of CIS, the plaintiffs may maintain an action for ajudgment declaring that CIS violated provisions of the Mental Hygiene Law (see e.g.Heard v Cuomo, 80 NY2d 684 [1993]; Marilyn S. v Independent Group Home Living Program, Inc.,73 AD3d 892 [2010]). Furthermore, the amended complaint was sufficient to allegea cause of action for a judgment declaring that CIS violated Mental Hygiene Law§ 22.07 (b) and 14 NYCRR 815.4 (g) and 815.5 (a) (15). Accordingly, theSupreme Court erred in granting that branch of the cross motion of CIS and DeCiccowhich was to dismiss the fourth cause of action insofar asserted against CIS.
The sixth, seventh, and eighth causes of action were sufficient to invoke the Supreme[*4]Court's power to render a declaration as to whetherthe transitional residency agreements were void pursuant to 9 NYCRR 2520.13, invalidas against public policy (see Estro Chem. Co. v Falk, 303 NY 83, 87 [1951];Cvetichanin v Trapezoid Land Co., 180 AD2d 503, 504 [1992]), and void asunconscionable contracts of adhesion (see Morris v Snappy Car Rental, 84 NY2d21, 30 [1994]; Matter ofLove'M Sheltering, Inc. v County of Suffolk, 33 AD3d 923 [2006]),respectively. Since the amended complaint effectively alleged that MAP, CIS, andDeCicco participated in the enforcement of the transitional residency agreements, theSupreme Court erred in directing the dismissal of the sixth, seventh, and eighth causes ofaction insofar as asserted against those defendants.
Furthermore, since the material allegations of the complaint, taken as true, implicatefactual issues such that the rights of the parties could not be determined as a matter oflaw, the court erred by, in effect, purporting to make a declaration, upon these crossmotions to dismiss the complaint, that the remaining occupants of the premises leased byMAP to CIS were licensees of CIS and were not tenants at the subject premises (seeMatter of Tilcon N.Y., Inc. v Town of Poughkeepsie, 87 AD3d at 1151; Nadel vCosta, 91 AD2d 976 [1983]; Verity v Larkin, 18 AD2d 842 [1963]).
The plaintiffs' remaining contentions are without merit.
In light of repeated statements made by the Supreme Court during oral argument,which exhibited bias against the plaintiffs, we remit the matter to the Supreme Court,Kings County, for further proceedings before a different Justice. Skelos, J.P., Balkin,Chambers and Miller, JJ., concur.