Upon the foregoing papers, plaintiff 47 Thames Realty, LLC (Thames Realty) cross moves ^[FN1] for an order, pursuant to CPLR 3212, granting it summary judgment on its first and second causes of action; and/or, pursuant to CPLR 3211, striking defendants' affirmative defenses and first, second, fourth, fifth, sixth, seventh and eighth counterclaims; and/or awarding plaintiff use and occupancy for the subject premises pendente lite; and/or awarding plaintiff attorneys' fees pursuant to their lease agreement; and imposing sanctions on defendants and defendants' counsel.

This case arises from plaintiff-landlord's claim that the defendant-tenant violated her lease by using the premises in question as a residence in violation of zoning laws. [*2]

Thames Realty is the fee owner of a loft building located at 47 Thames Street in Brooklyn, New York ("the building"). Defendant Ellen Robinson, as tenant, and Thames Realty, as landlord, entered into a lease dated November 2005, for the rental of Apartment No. 305 of the building ("the premises"). The first paragraph of the lease provides that the apartment is "to be used and occupied only as a strictly private dwelling apartment by the Tenant for a term of 2 years beginning December 1, 2005." Paragraph 13 of the lease provides as follows:

"CARE OF PREMISES: Tenant shall comply with all rules and regulations of all City Agencies and all City Ordinances relating to this property. The Tenant shall make all repairs required to the apartment, including ranges and refrigerators, whenever damage is a result of the misuse or negligence of the Tenant or any occupant or visitor. The Tenant shall reimburse the Landlord as additional rent, the cost of repairing any damage or for the removal of any violations caused by the Tenant or any occupant or visitor. This paragraph shall also include the public areas of the building."

"Anything the tenant may do or install or use in connection with this lease shall comply with all prevailing laws, rules and regulations and be in conformance with the terms of this lease and shall not violate or interfere with the rights of the fee owner or expose or subject the fee owner to any liability, damage, or increased insurance premiums. Tenant shall not install anything or bring anything into the premises that would damage the floor or exceed the floor load or capacity of the electric wires or system."

According to the parties, as well as zoning maps, the building is located in an M1-1 zoning area, which is designated for light manufacturing. Thus, Thames Realty argues that Ms. Robinson's residential use of the premises violates the zoning laws, and submits documents showing that the New York City Department of Buildings (DOB) has issued a number of violations for the building focusing on the illegal use of the building as a residential building. For example, the DOB issued a violation on May 17, 2005, delivered June 24, 2005, for which the Infraction Code reads "B56 42-00 ILLEGAL USE IN A MANUFACTURING DISTRICT." The violation is described as:

"ILLEGAL USE IN MANUFACTURING DISTRICT. NOTED: APARTMENTS 106, 201, 206, 304, 401, 406 AND 407 EACH HAVE GAS LINE FOR STOVE, 3 PIECE BATH (SINK, TOILET, SHOWER) AND SLEEPING IN A M1-1 DISTRICT. REMEDY: DISCONTINUE ILLEGAL [sic]"

"ILLEGAL USE IN MANUFACTURING DISTRICT. COMMERCIAL BLDG IN INDUSTRIAL BUSINESS ZONE, HAS BEEN CONVERTED TO MULTI CLASS A' APARTMENTS. ON 3RD FLOOR 3D & 3N, ON 4TH FLR 4E NOW CLASS A' APTS WITH 3 PIECE BATHROOM."

Ms. Robinson, on the other hand, submits a DOB document stating that the DOB issued a temporary residential Certificate of Occupancy for the building, effective from July 27, 2005 to October 25, 2005, which states that the building may contain as many as 28 dwelling units. Furthermore, according to documents submitted by Ms. Robinson, Thames Realty sent an application, on or about May 11, 2006, to the Attorney General to "test the market" for 47 Thames Street. Within that application, Perry Finkelman, as managing member of Thames Realty, states that it "intends to effect material alterations to the building so as to create commercial lofts and residential units on said parcel of land . . . and to submit same to the provisions of the Condominium Laws of the State of New York."

Ms. Robinson also submits evidence that there are other tenants with residential leases in the building, and that there are additional residential tenants in the building whose units were fully set up for residential use when the tenant moved in.^[FN2] Moreover, she submits evidence that the building contains "residential amenities," such as a trash chute and a laundry room, presumably maintained by the landlord. According to evidence submitted by Ms. Robinson, various tenants began receiving notices in the spring of 2006 demanding that they move out of the building. She further alleges that, around that time, the laundry room and trash chute were sealed off and the building's cleaning and maintenance were severely curtailed. Ms. Robinson asserts that Thames Realty is attempting to empty the building of its residential tenants in connection with its efforts to convert the building to condominium ownership, alleging that Thames Realty is "engaged in a scheme to defraud" the tenants of the building of their rights.

On or about July 7, 2006, Thames Realty sent a seven-day notice of termination to Ms. Robinson, stating that her "tenancy at the Subject Apartment is hereby terminated effective July 24, 2006." The notice provided that the reason for the termination is that:

"you have violated a substantial obligation of [the] tenancy at the Subject Apartment in that, you are using or occupying the Subject Apartment in violation of Paragraph 13, 17 ^[FN3] and 59 of your original lease dated [*4]November, 2005 in that you are residing in the Subject Apartment in violation of the subject building's certificate of occupancy as well as in violation of law."

Thames Realty argues that Ms. Robinson's residential occupancy of apartment 305 violates paragraphs 13 and 59 of the lease, which require the tenant to comply with all prevailing laws, rules, and regulations. Thames Realty further contends that the documents it submits evidencing violations issued by the DOB "clearly demonstrate" that Ms. Robinson's use of the premises "is not in compliance with prevailing laws, rules and regulations and are very much interfering with the rights of Plaintiff and both exposing and subjecting the Plaintiff to liability and damages in manifest conflict with paragraph [59] of the Lease."

Thames Realty has not demonstrated that it is entitled to summary judgment here. The lease in this case clearly specifies that the apartment is "to be used and occupied only as a strictly private dwelling apartment," i.e., as a residence. Ms. Robinson also asserts that the apartment was fully set up for residential use when she moved into it. Thus, by using the apartment as a residence, Ms. Robinson was merely abiding by the explicit and specific requirement of the lease as to the purpose of her tenancy. Furthermore, it is not [*5]clear that Ms. Robinson's residential tenancy violates either paragraph 13 or 59 of the lease. Paragraph 13 of the lease, entitled "CARE OF PREMISES," discusses only repairs, not the underlying use of the property. Similarly, paragraph 59 discusses use or installation of materials in the apartment, not the apartment's underlying use. Moreover, in addition to stating that such use or installation shall be in compliance with prevailing laws, rules, and regulations, paragraph 59 states that such use or installation shall be "in conformance with the terms of this lease" (emphasis added). As noted, the lease itself requires Ms. Robinson to use the apartment as a residence.

Furthermore, Ms. Robinson asserts that residential use of the premises may be made legal, and/or that it would be possible for Thames Realty to get a variance allowing residential use of the premises. Ms. Robinson has raised a genuine issue of fact as to this issue. Despite Thames Realty's contentions, the DOB violations do not "clearly demonstrate" anything regarding Ms. Robinson's tenancy under the lease in question, as all of the ECB Violation Details sheets submitted relate to violations that were issued prior to November, 2005, the effective date of the lease. Moreover, the documents submitted by Ms. Robinson indicate that Thames Realty not only obtained a temporary residential certificate of occupancy for the premises, but also applied to the Attorney General to test the market, indicating that it intended to convert the building to residential units. Therefore, there is a question of fact as to whether Ms. Robinson's tenancy is illegal pursuant to the existing zoning laws. Summary judgment must be denied if the existence of an issue of fact is even arguable (Museums at Stony Brook v Village of Patchogue Fire Dept., 146 AD2d 572, 573 [1989]).

For all of the foregoing reasons, Thames Realty's request for summary judgment is denied.

In her verified answer, Ms. Robinson raises eleven affirmative defenses and nine counterclaims. Thames Realty seeks to dismiss all of Ms. Robinson's affirmative defenses ^[FN4] as well as her first, second, fourth, fifth, sixth, seventh and eighth counterclaims.

On a motion to dismiss affirmative defenses pursuant to CPLR 3211 (b), the plaintiff bears the burden of demonstrating that the defenses are without merit as a matter of law (see e.g. Vita v New York Waste Servs., LLC, 34 AD3d 559, 559 [2006]; Town of Hempstead v Lizza Indus., 293 AD2d 739, 740 [2002]). In determining a motion to dismiss a defense, "a defendant is entitled to the benefit of every reasonable intendment of the pleading, which is to be liberally construed. If there is any doubt as to the [*6]availability of a defense, it should not be dismissed" (Warwick v Cruz, 270 AD2d 255, 255 [2000] [internal citation omitted]). A defense should not be stricken where there are questions of fact requiring trial (see e.g. Atlas Feather Corp. v Pine Top Ins. Co., 128 AD2d 578, 578-579 [1987]).

Similarly, on a motion to dismiss a counterclaim, the question is whether the counterclaim states a cause of action (Jackal Holdings, LLC v JSS Holding Corp., 23 AD3d 435, 435 [2005]; CPLR 3211). A counterclaim is to be liberally construed, and the court shall accept as true any facts alleged in the answer and in any submissions in opposition to the motion to dismiss, and accord the nonmoving party the benefit of every possible favorable inference (Jackal Holdings, LLC, 23 AD3d at 435). The motion must be denied if factual allegations are discerned which, taken together, manifest any cognizable cause of action (id.).

The "No Counterclaims" Lease Provision

Thames Realty argues that all of Ms. Robinson's counterclaims must be dismissed pursuant to paragraph 33 of their lease, which provides, in relevant part:

"NO COUNTERCLAIMS: If the Landlord commences any legal proceeding or action against the Tenant, the Tenant shall NOT make any counterclaims in such action or proceeding unless it is based on a claim that Landlord has not properly maintained the building or the condition of your apartment."

This is not a summary proceeding and Thames Realty has failed to cite any authority showing that a residential lease provision waiving all counterclaims in a plenary action is

enforceable (see e.g. W & S Assoc. v Absolute Greek, 186 Misc 2d 170, 172 [2000]). Moreover, certain issues raised by the counterclaims appear to be inextricably intertwined with Thames Realty's claims that Ms. Robinson is violating the lease by using the [*7]apartment as a private residence. Accordingly, the court will not dismiss all of Ms. Robinson's counterclaims in this action based upon waiver, but will instead address the affirmative defenses and counterclaims individually.

Failure to State a Cause of Action

Ms. Robinson's first affirmative defense, raised by her answer, is that the complaint fails to state a cause of action. "In this judicial department, a defense that a complaint does not state a valid cause of action cannot be interposed in an answer, but must be raised by appropriate motion pursuant to CPLR 3211 (a) (7)" (Staten Is.-Arlington, Inc. v Wilpon, 251 AD2d 650, 650 [1998], quoting Propoco, Inc. v Birnbaum, 157 AD2d 774, 775 [1990]). Accordingly, Ms. Robinson's first affirmative defense is stricken.

Failure to Register Building

Ms. Robinson's second affirmative defense is that Thames Realty failed to register the building with the New York City Department of Housing Preservation and Development (HPD) as required by law. Thames Realty argues that "given the fact that the Defendant's residential use of the unit is prohibited by law, there exists no requirement to register the building" with HPD. Thames Realty also asserts that any alleged failure to register the building "would have no bearing on the Plaintiff's entitlement to recover possession of this illegal tenancy."

The owner of any multiple dwelling, which is defined as one which is rented or leased or occupied as the residence of three or more families living independently of each other, must file a notice concerning that dwelling (Multiple Dwelling Law §§ 4 [7]; 325 [1]). Ms. Robinson asserts that there are at least three families living independently of each other at the building. Further, the DOB violation sheets submitted by Thames Realty indicate that there appears to be numerous residential units in the building. Therefore, there is at least a question of fact as to whether the building in question constitutes a de facto multiple dwelling. "An owner of a de facto multiple dwelling who fails to obtain a proper certificate of occupancy or comply with the registration requirements of the Multiple Dwelling Law cannot recover for rent or money for use and occupancy," both of which Thames Realty seeks in this case (Jalinos v Ramkalup, 255 AD2d 293, 294 [1998]). Accordingly, Thames Realty has failed to show as a matter of law that there is no merit to this defense, and so the defense is not stricken.

Documentary Evidence/Tenant Rightfully in Possession

Ms. Robinson's third affirmative defense asserts that the complaint is barred in whole or part by documentary evidence, and her seventh affirmative defense states that she is the tenant rightfully in possession and that hence there is no basis for ejectment. Thames Realty contends that Ms. Robinson has failed to allege what document would bar relief in this case. Thames Realty also asserts that the lease is the only relevant document and that the lease demonstrates that Ms. Robinson is an illegal tenant. In opposition, Ms. Robinson notes that the lease is a residential lease, and that it runs until November 30, [*8]2007. Accordingly, she contends that said lease "should be sufficient to demonstrate defendants' complete defense to this action founded upon documentary evidence." The lease in question is, as noted previously, explicitly residential. Hence, Ms. Robinson has made a colorable claim that the lease itself proves that Ms. Robinson is rightfully in possession of the apartment and provides a defense to the allegation that her residential use of the apartment is in violation of the lease.

Thus, Ms. Robinson's third and seventh affirmative defenses are not dismissed.

Rent Stabilization and the Emergency Tenant Protection Act

Ms. Robinson's fourth affirmative defense alleges that the complaint is barred by the Rent Stabilization Law (RSL), the Rent Stabilization Code (RSC), and the Emergency Tenant Protection Act (ETPA). Thames Realty argues that the tenancy in question does not fall under the protection of the Loft Law or the ETPA.^[FN6]

Where a locality has declared a housing emergency, the ETPA applies to regulate residential rents of all housing units that are not expressly exempted, including previously unregulated accommodations (Wolinsky v Kee Yip Realty Corp., 2 NY3d 487, 491 [2004]; McKinney's Uncons. Laws of NY §§ 8623; 8625). The ETPA was enacted to:

"prevent exaction of unjust, unreasonable and oppressive rents and rental agreements and to forestall profiteering, speculation and other disruptive practices tending to produce threats to the public health, safety and general welfare [and] prevent uncertainty, hardship and dislocation" (McKinney's Uncons. Laws of NY § 8622).

The Loft Law (Multiple Dwelling Law Article 7-C) permits conversion of Interim Multiple Dwellings, which are defined as any building once used for commercial, manufacturing, or warehouse purposes and that lack a residential certificate of occupancy (Multiple Dwelling Law § 281). However, the Loft Law is generally limited to buildings that, on December 1, 1981, had been occupied for residential purposes by three or more families living independently of each other since April 1, 1980 (Multiple Dwelling Law § 281). The parties appear to agree that the Loft Law is not applicable to this building. Thames Realty argues that, because the Loft Law does not apply here, the protections of the ETPA do not apply.

In Wolinsky, plaintiff tenants, who had illegally converted their commercially-leased units at their own expense, over a decade after the Loft Law's eligibility period ended, brought suit against their landlord seeking a declaration "that, notwithstanding their illegal use of the space, they [were] protected by the Rent Stabilization Law and Rent Stabilization Code through the ETPA" (Wolinsky, 2 NY3d at 490). The Wolinsky [*9]court found that, reading the Loft Law and the ETPA together, the "tenants' illegal conversions do not fall under the ambit of the ETPA," noting that if the previously-enacted ETPA "already protected illegal residential conversions of manufacturing space, significant portions of the Loft Law would have been unnecessary" (id. at 493). Thereafter, in Gloveman Realty Corp. v Jefferys (18 AD3d 812 [2005]), the Appellate Division, Second Department, citing Wolinsky, held that defendant-tenants' cross motion for summary judgment dismissing the first cause of action for an ejectment "should have been denied" in as much as the tenants "illegally-converted lofts" were not eligible for protection under the Loft Law or the ETPA, even though the landlord knew and approved of the tenants' conversion of the commercial space to residential space (Gloveman, 18 AD3d at 813).^[FN7]

In Wolinsky, the Appellate Division had stated that the ETPA does not apply to residential "tenancies that are illegal and incapable of becoming legal" (Wolinsky, 2 NY2d at 419). Later cases have stated that Wolinsky requires a blanket finding that the ETPA does not apply where the premises are not subject to the Loft Law, even where the residential tenancy may be capable of becoming legal (see e.g. Corastor Holding Co. Inc. v Mastny, 12 Misc 3d 13, *18 [App Term, 2d Dept 2006] ["illegal loft conversions [in an M-1 zoning district] that were not made subject to the Loft Law are not subject to the ETPA"]; Forrester v American Package Co., Inc., 12 Misc 3d 1166(A), *3 [Sup Ct, Kings County 2006]; cf. Duane Thomas LLC v Wallin, 35 AD3d 232, 233 [App Div, 1st Dept 2006] [unit may be subject to rent stabilization where "unit is capable of being legalized"]). However, in a recent case, the Appellate Division, Second Department, held that the ETPA may apply where, among other things, the applicable zoning law "generally permits residential use" (Matter of 315 Berry St. Corp. v Hanson Fine Arts, 39 AD3d 656, 657 [2007]).

The parties agree that the building is in an M1-1 zoning area. New York City Zoning Resolution § 41-11 provides that M1 is a light manufacturing district and that "[n]ew residential development is excluded from these districts, except for joint living-work quarters for artists in M1-5A and M1-5B Districts, dwelling units in M1-5M and M1-6M Districts, and dwelling units in M1-1D, M1-2D, M1-3D, M1-4D and M1-5D Districts, where authorized by the City Planning Commission . . . ." However, the parties dispute whether the zoning laws in question allow this residential use and/or whether residential use of this building could become legal. Thames Realty contends that the zoning laws do not allow residential use as of right. In opposition, Ms. Robinson notes, among other things, that Thames Realty was in fact able to obtain a temporary residential certificate of occupancy, and she argues that Thames Realty could have had the certificate [*10]renewed. In addition, Thames Realty itself has stated that it could get a variance allowing for residential use of the building, although such a variance is not guaranteed, and admits that it is planning to seek a variance allowing for residential use.

A defense should not be dismissed if there is any doubt as to its availability or if there are any questions of fact requiring trial (see e.g. Warwick, 270 AD2d at 255; Atlas Feather Corp., 128 AD2d at 578-579). Given the evidence and arguments raised by Ms. Robinson, including the fact that the owner had previously obtained a residential certificate of occupancy, the court finds that Thames Realty has not demonstrated, as a matter of law, that this defense is without merit. Among other things, Ms. Robinson has raised questions as to whether the existing zoning laws may allow residential use, whether the residential use of this building may become legal, and whether the protection of the ETPA should apply to her tenancy.

Moreover, in this case, unlike in Wolinsky, Gloveman, or Corastor, it was Thames Realty itself (or its predecessor) who allegedly converted many of the units in the building to residential use (see e.g. Otus v Northside Dev., L.L.C., 12 Misc 3d 1186(A), *4 [Sup Ct, Kings County 2006] [ETPA may apply where, among other things, conversion to residential use preceded tenancy in question]). According to affidavits submitted by Ms. Robinson, she and at least one other tenant in the building found that their units were fully set up for residential use when they moved in. As it was the owner, not the tenants, who allegedly converted the units to residential use in this case, it is difficult to see how giving tenants the protection of the ETPA in this case would "foster future illegal conversions," as was one of the policy concerns underlying the decision in Wolinsky (Wolinsky, 2 NY3d at 493).

Furthermore, Thames Realty's admission that it intends to try to convert the building to residential use indicates that applying the ETPA to these tenants would not "undermine legitimate municipal zoning prerogatives" (Wolinsky, 2 NY3d at 493), as the building may well become residential whether or not the ETPA applies here. Thames Realty's stated intention to attempt to convert the building to residential use also undermines its own claimed concern for upholding the integrity of the manufacturing zoning designation. Finally, unlike in either Wolinsky or Gloveman, the lease in this case is explicitly residential, giving Ms. Robinson a greater argument than the tenants in Wolinsky or Gloveman that her landlord should not be able to evade the protections of the ETPA or the RSL and RSC.

Given all of the circumstances and considering the broad purpose of the ETPA, Ms. Robinson has demonstrated that there is at least a question as to whether the ETPA and the RSL may apply in this case (see e.g. Matter of 315 Berry St. Corp., 39 AD3d at 657 [unit was subject to the protection of ETPA and RSL where landlord "knew of and acquiesced in the unlawful conversion, at the expense of the occupants, of the unit from commercial to residential use, [where] the applicable zoning generally permits residential use, and [where the landlord] sought legal authorization to convert the premises to such [*11]use during the pendency of this proceeding"]; Otus, 12 Misc 3d 1186(A), *4 [ETPA may apply where zoning laws permitted residential use, conversion to residential use preceded tenancy in question, and where owner had commenced process of converting building into condominiums]; 480-486 Broadway LLC v No Mystery Sound, Inc., 11 Misc 3d 1056(A), **3-4 [Civ Ct, NY County 2006] [premises may be subject to protection of ETPA, even where Loft Law does not apply, if residential tenancy is capable of becoming legalized]).

Accordingly, Ms. Robinson's fourth affirmative defense is not dismissed.

Failure to Exhaust Administrative Remedies

Ms. Robinson's fifth affirmative defense asserts that Thames Realty failed to pursue and exhaust its administrative remedies. Thames Realty complains that Ms. Robinson fails to specify what administrative remedy it failed to exhaust and asserts that she "can point to no bar that would bar the Plaintiff from commencing this action." Ms. Robinson argues that a landlord is required to file an application with the New York State Division of Housing and Community Renewal (DHCR) in order to remove an apartment from rent stabilization (Rent Stabilization Code § 2524.50). As noted above, Ms. Robinson has demonstrated that there is at least a colorable claim that the tenancy in question may be subject to rent stabilization and so, this regulation may apply. Hence, this affirmative defense is not dismissed.

General Business Law § 352-eeee

Ms. Robinson's sixth affirmative defense asserts that Thames Realty's claims are barred by General Business Law § 352-eeee, which is part of the Martin Act. General Business Law § 352-eeee deals with the conversion of a building to a cooperative, and provides, in relevant part:

"It shall be unlawful for any person to engage in any course of conduct, including, but not limited to, interruption or discontinuance of essential services, which substantially interferes with or disturbs the comfort, repose, peace or quiet of any tenant in his use or occupancy of his dwelling unit or the facilities related thereto" (General Business Law § 352-eeee [4]).

Ms. Robinson does not raise the Martin Act as a counterclaim, but rather as an affirmative defense. She asserts that Thames Realty has taken steps to convert the building to condominium ownership by filing the application to test the market with the Attorney General, and alleges that, in that application, Thames Realty concealed the residential use of many units in the building, and is attempting to empty the building of its residential tenants. As courts have allowed the Martin Act to be raised as an affirmative defense in Housing Court proceedings (see e.g. Arkansas Leasing Co. v Gabriel, 3 Misc [*12]3d 46, 47-48 [App Term, 2d Dept 2004]), this defense is not dismissed.

Unclean Hands

As her eighth affirmative defense, Ms. Robinson alleges that Thames Realty's claims are barred by the doctrine of unclean hands.^[FN8] "The doctrine of unclean hands applies when the complaining party shows that the offending party is guilty of immoral, unconscionable conduct and even then only when the conduct relied on is directly related to the subject matter in litigation and the party seeking to invoke the doctrine was injured by such conduct" (Kopsidas v Krokos, 294 AD2d 406, 407 [2002] [internal quotation marks and citations omitted]). Thames Realty argues that this defense must be stricken as Thames Realty is "certainly not guilty of immoral, unconscionable conduct." Ms. Robinson argues that Thames Realty has engaged in such conduct including the latest action "claiming that the tenant should be ejected for living in the apartment [and] for violating a residential lease that the landlord drafted and entered into and which permits only residential use."

A reasonable fact-finder could find that a landlord's drafting and executing an explicitly residential lease and then attempting to evict the tenant based upon her residential use of the premises is immoral and unconscionable. Accordingly, this defense is not stricken.

Retaliatory Eviction

As her ninth affirmative defense and eighth counterclaim, Ms. Robinson asserts that the current action was taken in retaliation against her in violation of Real Property Law § 223-b, which provides, in relevant part:

"No landlord of premises or units to which this section is applicable shall serve a notice to quit upon any tenant or commence any action to recover real property or summary proceeding to recover possession of real property in retaliation for:

"a. A good faith complaint, by or in behalf of the tenant, to a governmental authority of the landlord's alleged violation of any health or safety law, regulation, code, or ordinance, or any law or regulation which has as its objective the regulation of premises used for dwelling purposes or which pertains to the offense of rent gouging in the third, second or first degree; or

"b. Actions taken in good faith, by or in behalf of the tenant, to secure or enforce any rights under the lease or rental agreement, under section two hundred thirty-five-b of this chapter, or under any other law of the state of New York, or of its governmental subdivisions, or of the United States [*13]which has as its objective the regulation of premises used for dwelling purposes . . . ."

In opposition, Ms. Robinson alleges that her attorney sent a letter on July 28, 2006, objecting to Thames Realty's alleged "threat to recover possession of the apartment." Assuming, arguendo, that said letter would constitute an action taken to secure her rights under the lease pursuant to the statute, Ms. Robinson has failed to show that there was any retaliatory action taken here. Thames Realty sent the notice to quit to Ms. Robinson on July 7, 2006, and filed the instant action on July 26, 2006, both actions being prior to the Ms. Robinson's sending the July 28, 2006 letter. Thus, Thames Realty's actions in this case could not have been taken in retaliation for that letter.^[FN9]

Accordingly, Ms. Robinson's ninth affirmative defense and eighth counterclaim, both alleging retaliatory eviction, are hereby dismissed.

Fraud and Misrepresentation

In her tenth affirmative defense, Ms. Robinson asserts that Thames Realty's complaint is barred by fraud and misrepresentation as Thames Realty has no immediate right to possession of the premises. In her sixth counterclaim, Ms. Robinson asserts that Thames Realty engaged in fraudulent business activity in violation of General Business Law § 349 et seq.

Thames Realty argues that Ms. Robinson has failed to state a cause of action for fraud, pursuant to CPLR 3016 (b), which requires any pleading alleging a cause of action based upon misrepresentation or fraud to state the "circumstances constituting the wrong" in detail. In her opposition, Ms. Robinson alleges that Thames Realty made misrepresentations to the Attorney General and this court that the building in question contains only commercial tenants. However, Ms. Robinson has failed to allege any misrepresentations that were made to her, that she relied on those misrepresentations, or that she was injured by those misrepresentations (see e.g. Ozelkan v Tyree Bros. Envtl. Servs., Inc., 29 AD3d 877, 878 [2006] [fraud cause of action requires, among other [*14]things, reasonable reliance on the misrepresentation and injury]).^[FN10]

Accordingly, Ms. Robinson's tenth affirmative defense and sixth counterclaim are dismissed.

Predicate Notice

As her eleventh affirmative defense, Ms. Robinson asserts that Thames Realty failed to serve her the proper notice required by law to terminate the tenancy. Thames Realty asserts that it served a proper notice pursuant to paragraph 17 of the lease, which provides that the landlord may terminate the tenancy, upon seven days written notice, based upon the tenant's failure to comply with the obligations or rules and regulations of the lease. Ms. Robinson does not dispute that Thames Realty served her with a seven-day notice to quit, as described above. However, she contends that the notice was inadequate because, among other things, it fails to set for a "proper factual basis for termination" in as much as the claim that Ms. Robinson violated the lease by her residential use of the apartment is "completely spurious and unfounded." Ms. Robinson also asserts that the notice failed to meet the requirements for failure to renew a rent stabilized lease pursuant to Rent Stabilization Code §§ 2524.2-2524.3.

As Ms. Robinson has demonstrated that there is, at least, an issue of fact as to whether her residential status violates the terms of the lease and whether the apartment may be subject to rent regulation, there is a question of fact as to whether the notice served in this case comports with the requirements of the lease and the Rent Stabilization Code (see e.g. Chinatown Apts. v Chu Cho Lam, 51 NY2d 786, 788 [1980]). Accordingly, this defense is not dismissed.

Covenant of Quiet Enjoyment

Ms. Robinson's first counterclaim asserts that Thames Realty has "breached the covenant of quiet enjoyment." Thames Realty argues that this claim cannot be maintained because the tenant has not been evicted. "To establish a breach of the covenant of quiet enjoyment, a tenant must show actual or constructive eviction" (34-35th Corp. v 1-10 Indus. Assoc., LLC., 16 AD3d 579, 580 [2005]). "A constructive eviction occurs where the landlord's wrongful acts substantially and materially deprive the tenant of the beneficial use and enjoyment of the leased premises" (Grammer v Turits, 271 AD2d 644, 645-646 [2000]).In this case, Ms. Robinson is still in possession of the apartment, and has failed to plead any facts indicating that she has been deprived of the beneficial use or enjoyment of the premises. Accordingly, her first counterclaim is dismissed.

Covenant of Good Faith and Fair Dealing

Ms. Robinson's second counterclaim asserts that Thames Realty has breached their [*15]lease as well as the covenant of good faith and fair dealing implied in all contracts. Thames Realty argues that "this claim fails since, in the matter herein, the lease has terminated pursuant to its terms." However, there is a question of fact as to whether Thames Realty has the right to seek to terminate the lease. Moreover, a reasonable jury could find that the Thames Realty "sought to prevent performance of the contract or to withhold its benefits" (Aventine Inv. Mgt. v Canadian Imperial Bank of Commerce, 265 AD2d 513, 514 [1999]) from Ms. Robinson by attempting to evict her for using the apartment as a residence when the lease explicitly requires her to do so. Accordingly, her second counterclaim is not dismissed.

Malice

As a fourth counterclaim, Ms. Robinson asserts that Thames Realty's conduct was "motivated solely by malice or a desire to inflict injury by unlawful or wrongful means as required to force Defendant into surrendering tenancy rights thereby causing Defendant damage."^[FN11] In her opposition, Ms. Robinson does not explicitly address this claim, and does not explain what legal cause of action is implicated by this counterclaim or what facts would support such a claim. Accordingly, her fourth counterclaim is dismissed (see CPLR 3013).

Racketeer Influenced and Corrupt Organizations Act (RICO)

As a fifth counterclaim, Ms. Robinson asserts that Thames Realty has conspired to use "illegal activities of fraud and false claims to deprive [] others of property." In her answer,

Ms. Robinson elaborates that Thames Realty and unidentified co-conspirators "entered into an agreement, by which Plaintiff agreed to assist the co-conspirators in the removal of tenants so that the Plaintiff and its co-conspirators could empty apartment units of tenants in occupancy" and secure financial gain by increasing the building's sales price while affording the co-conspirators rental units free from rent regulation. Ms. Robinson alleges that, on information and belief, Thames Realty and the co-conspirators have engaged in at least two unlawful acts as part of its racketeering enterprise within the last ten years. Ms. Robinson further asserts that Thames Realty and its principals or members and co-conspirators and other persons have used the United States Postal Service "on several occasions in April, May, June, July and August of 2006 to further their fraudulent activities" of forcing tenants out of the building. Ms. Robinson alleges that Thames Realty "threatened to cause" tenants to suffer loss if they did not relinquish their leaseholds, and that Thames Realty "did cause the tenants to suffer harm."

Ms. Robinson further asserts that Thames Realty and co-conspirators made false filings with the Attorney General, and that they have committed mail fraud "by mailing correspondence to Defendant, other tenants or persons, and the Attorney General in or about April, May, June, July and August of 2006." Ms. Robinson also alleges that [*16]Thames Realty and the co-conspirators furthered their racketeering enterprise by asserting false claims against Defendants and other tenants and with the Attorney General's office. Ms. Robinson says that she has suffered and will suffer financial loss as a result of Thames Realty's conduct, and charges that Thames Realty has violated 18 USC § 1962 (b), (c), and (d). Thames Realty argues on several grounds that Ms. Robinson's complaint fails to properly plead a civil RICO violation

The RICO statutes were enacted to make it unlawful for someone to earn income from a pattern of racketeering activity to be used to: (1) acquire an interest in, establish or operate an enterprise involved in interstate commerce; (2) acquire or maintain an interest in such enterprise through a pattern of racketeering activity; (3) conduct or participate in the conducting of such enterprise through racketeering activity; and (4) conspire to do any of the foregoing acts (Simpson Elec. Corp. v Leucadia, Inc., 72 NY2d 450, 453 [1988]).^[FN12] [*17]

Although civil liability may be predicated upon a violation of the RICO statute (see 18 USC § 1964 [c]), civil RICO claims are subject to heightened pleading requirements (Besicorp Ltd. v Kahn, 290 AD2d 147, 151 [2002] [civil RICO claims subject to heightened pleading requirements because RICO claims are the "litigation equivalent of a thermonuclear device"] [internal quotation marks and citations omitted], lv denied 98 NY2d 601 [2002]; see also CFJ Assoc. of NY v Hanson Indus., 274 AD2d 892, 896 [2000]). Ms. Robinson has failed to meet these heightened standards.

Ms. Robinson appears to base her RICO claim on mail and wire fraud. However, among other things, her complaint does not specifically identify the allegedly fraudulent statements, or when they were made, or identify those responsible for them "as required under the heightened RICO pleading requirements" (CFJ Assoc. of NY, 274 AD2d at 896). Ms. Robinson does provide further details in her opposition, indicating that she is referring to: (1) the June 8, 2006 submission by Thames Realty to the Attorney General which she alleges falsely states that the building was empty except for a few commercial tenants; and (2) "false and fraudulent termination notices" sent to Ms. Robinson. However, the allegations are still bereft of details. For example, Ms. Robinson "failed to specify what defendants allegedly obtained as a consequence of the fraud . . . and how the purpose of each such mailing fit within defendants' fraudulent scheme. Moreover, the complaint failed to allege how there was reliance on the allegedly fraudulent representation or that such reliance caused [Ms. Robinson's] injury" (Besicorp Ltd., 290 AD2d at 151 [internal citations omitted]). Indeed, as Ms. Robinson apparently knew that all of the allegedly false misrepresentations were in fact false, it is difficult to understand how she could have relied on any of the alleged misrepresentations. In addition, Ms. Robinson does not identify any of the alleged co-conspirators. Thus, "[w]ith these allegations subject to a heightened pleading requirement, the lack of particularity in asserting the claim [is] fatal" (id.), and so the RICO counterclaim is dismissed.

Warranty of Habitability

As her seventh counterclaim, Ms. Robinson asserts that Thames Realty "breached the warranty of habitability in failing to maintain the premises in a habitable condition" (see Real Property Law § 235-b). Thames Realty argues that this claim is not properly raised because this action is one primarily for possession and because there is no valid lease in this case. While courts have held that breach of the warranty of habitability is not a defense in a holdover proceeding, the claim has been allowed to provide a defense where, as here, the landlord seeks money for use or occupancy of the premises (see e.g. King Enter. Ltd. v Mastro, 2001 NY Slip Op 40162 [U] [Hous Part, Civ Ct, NY County 2001]; City of New York v Candelario, 156 Misc 2d 330, 332 [App Term, 2d Dept 1993], affd in part and revd in part on other grounds, 223 AD2d 617 [2006]). Moreover, [*18]Thames Realty has failed to establish as a matter of law that there is no valid lease in this case. Accordingly, this counterclaim is not dismissed.

Other Relief

Thames Realty also seeks to order Ms. Robinson to pay use and occupancy pendente lite, and to pay attorneys' fees pursuant to the lease and as a sanction for raising a frivolous RICO claim. As Thames Realty has not established that Ms. Robinson has defaulted on the lease, it has not established that it is due attorneys' fees pursuant to the lease. Similarly, Thames Realty has not established that Ms. Robinson's assertion of the RICO claim was entirely frivolous or undertaken in bad faith, and so the court, in its discretion, declines to award costs or sanctions (see e.g. Broich v Nabisco, Inc., 2 AD3d 474, 475 [2003]; W.J. Nolan & Co., Inc. v Daly, 170 AD2d 320, 321 [1991]).

As to Thames Realty's request for use and occupancy, Ms. Robinson has raised various defenses, such as failure to register a multiple dwelling and breach of the warranty of habitability, which may affect Thames Realty's right to recover money for use and occupancy of the apartment. Thus, pending the final determination of this action, and without prejudice to either side's mutual legal claims, Ms. Robinson is directed to deposit with the Clerk of the Court the sum of $1,269.28 per month during the pendency of this action.^[FN13]

Accordingly, Thames Realty's cross motion is granted only to the extent that: (1) Ms. Robinson's first, ninth and tenth affirmative defenses are dismissed; (2) Ms. Robinson's first, fourth, fifth, sixth and eighth counterclaims are dismissed; and (3) Ms. Robinson is ordered to deposit with the Clerk of the Court the sum of $1,269.28 per month for the period commencing August 1, 2006 and continuing during the pendency of this action. Thames Realty's cross motion is otherwise denied.

This constitutes the decision and order of the court.

E N T E R,

J. S. C.