Respondent, Anna Mchedlishvili, moves under CPLR 3212 for summary judgment dismissing this illegal sublet holdover proceeding and awarding rent overcharges in the amount of $49,844.34 plus interest. Respondent also moves for an award of legal fees incurred to defend this proceeding. Petitioner cross-moves for leave under CPLR 408, 3102, and 3107 to conduct disclosure and to compel respondent pay use and occupancy pendente lite.

Respondent's motion for summary judgment dismissing the holdover petition is granted. Petitioner has not proven the existence of a triable issue of material fact regarding respondent's alleged illegal sublet. Respondent's motion for summary judgment for an award for rent overcharges is granted in the amount of $42,178.19. Petitioner's cross-motion for leave to conduct disclosure and for use and occupancy is denied as academic.

Respondent is the tenant of a rent-stabilized apartment located at 605 East 11th Street in New York County. She signed a one-year lease with petitioner commencing on October 1, 2007 and expiring September 30, 2008, at a monthly rent of $1700.00. By notice to cure dated August 2, 2008, petitioner, Luisa Torres, gave respondent 10 days to cure the supposed illegal sublet of her apartment. Petitioner alleged, among other things, that respondent had not resided in, lived in, or slept in the subject apartment since approximately May 1, 2008; that neither petitioner nor her agent had seen respondent at the premises since May 1, 2008; and that "John Doe No.1" and/or "John Doe #2" maintained exclusive and sole occupancy of the subject apartment since May 1, 2008. When respondent did not cure, petitioner served her with a termination notice dated September 12, 2008.

Respondent now moves for summary judgment.

Summary Judgment for Illegal Sublet

Summary judgment is appropriate when no triable issue of material fact exists. (Zuckerman v City of New York, 49 NY2d 557, 562 [1980].) In reviewing a motion for summary judgment, the court views the evidence in the light most favorable to the party opposing the motion. (Ashland Mgt. Inc. v Altair Inv. NA, LLC, 59 AD3d 97, 98 [1st Dept 2008].) The moving party has the initial burden to come forward with proof to enable the court to determine that the party is entitled to judgment as a matter of law. (Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985].) The burden then "shifts to the party opposing the motion for summary judgment to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action." (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986].) Proof that consists of "mere conclusions, expressions of hope or unsubstantiated allegations or assertions [is] insufficient." (Zuckerman, 49 NY2d at 562.)

According to respondent, no illegal sublet of the premises ever occurred. She claims that the supposed illegal subtenant is respondent's mother, who resides in the apartment with her. Respondent also contends that from May through August 2008, she traveled two out of every four weeks for her job as a fashion model. During breaks from work, she states, she split her time between the subject apartment and a beach house on Long Island, New York. Beginning in September 2008, respondent claims, she no longer traveled extensively for work; she returned full time to her apartment.

In opposition to respondent's contentions, petitioner has offered no proof in admissible form to establish that respondent illegally sublet her apartment. The allegations in affidavits from petitioner's daughter, son-in-law, and granddaughter are either conclusory and carry no weight or are inadmissable.

In her affidavit, Antonia Landro, petitioner's daughter, alleges that she helps manage the subject property and that she spends seven days a week at an office in the building from 8:30 a.m. to 4:00 p.m. Landro claims that she did not see respondent at the apartment on "a regular basis" between May 1, 2008 and March 31, 2009; that respondent visited the building during that period only "to collect the rent from her subtenants"; and that respondent never slept in the apartment.

Antonia Landro does not offer admissible evidence to support any of these claims. She annexes dozens of images taken by security cameras in the building's hallways, entranceway, and the exterior depicting what she alleges are subtenants going in and out of respondent's apartment, but these images do not prove the existence of an illegal sublet. The images do not substantiate handwritten statements appearing below the photos alleging that the individuals pictured stayed for varying periods of time. Likewise, claims that unidentified individuals who were photographed in building common areas were headed to respondent's apartment are inconclusive. Although the images depict various individuals entering and leaving the building, they do not show a pattern pertaining to any particular individual. Thirty-one of the images, some of which depict respondent herself, date to the period between December 25, 2008 and December 31, [*2]2008, during which respondent claims she had guests for the holidays. Petitioner does not challenge respondent's claim. Furthermore, all but four of the images are irrelevant; they were taken after the date of the cure notice and the date of the termination notice. And the four photographs preceding the predicate notices are inconclusive. Only one of these four images, dated August 7, 2008, which depicts an individual in a building hallway, is accompanied by a handwritten caption alleging that the individual stayed in the apartment. The caption states "stranger entering building going towards apt 4c. Individual stayed for one month." (Petitioners Cross-Motion, Exhibit A.) But the image does not show the individual entering the respondent's apartment and the caption does not identify the dates the individual allegedly stayed. Nor does petitioner identify who wrote the caption. No additional images of this individual are provided to establish a pattern of occupancy.

Petitioner also annexes three letters from respondent's neighbors complaining about excessive noise and visitors at respondent's apartment. The letters do not prove an illegal sublet. The first letter, written by Jessica Napoli on December 27, 2008, complains of excessive noise from respondent's apartment. It makes no mention of an illegal sublet. The second letter, also written by Napoli and dated December 30, 2008, states that respondent appears to have been "away" since December 27, 2008, and that in her three-day absence, two individuals seem to have been staying in her apartment. Napoli does not allege, however, that the individuals were subletting respondent's apartment. Napoli's December 30 letter is irrelevant; it describes events occurring after the predicate notices and holdover petition. The third letter, purportedly written by Jason Christmas on December 27, 2008, but unsigned, states that he is worried about the volume of people entering the building and respondent's apartment. Christmas does not allege that respondent is subletting her apartment. Further compounding the lack of value of the three letters is that no statement contained in any of the letters is sworn to under oath. All three letters are inadmissable.

Antonia and Angel Landro's affidavits allege that a conversation between Angel Landro, who is petitioner's son-in-law, and an unnamed cab driver proves that respondent engaged in illegal subletting and profiteering. (See Antonia Landro Aff. in Opp. � 20; Angel Landro Aff. � 10-11.) In his affidavit, Angel Landro claims that a cab driver, dropping off two individuals at the building, told him in November 2008 that the passengers were renting respondent's apartment for $1500.00 a month. Not only is the evidence hearsay, but the conversation, alleging a rental in November 2008, dates to the period after the date of the predicate notices. Additionally, the issue of profiteering is irrelevant. This proceeding is predicated on an alleged illegal sublease, not on alleged profiteering.

Petitioner has not met her burden to produce proof in admissible form sufficient to establish the existence of a genuine issue of material fact. Respondent's undisputed absence from the premises between May 2008 and August 2008 is not, by itself, evidence of an illegal sublet. Likewise, allegations that approximately 40 individuals were seen entering and leaving the apartment during this period is not proof of an illegal sublet; the individuals could have been guests. Other than making conclusory allegations, petitioner has not offered any admissible evidence to support a claim that respondent illegally sublet her apartment. Thus, respondent's motion for summary judgment dismissing the holdover petition is granted.

Summary Judgment for Rent Overcharges

Respondent also moves for summary judgment on her counterclaim awarding rent overcharges for $49,844.34 plus interest.

Respondent signed a one-year rent-stabilized lease at a monthly rent of $1700.00 beginning October 1, 2007 and expiring September 30, 2008. Respondent paid petitioner rent each month from October 2007 through October 2008. Respondent claims that she paid one months' use and occupancy to petitioner in March 2009, without prejudice. Petitioner denies receiving any payments from respondent since November 2008. (See Landro Aff. in Further Support of Cross Motion � 18.) The disputed rent payment in March 2009 is severed from this proceeding without prejudice. Respondent's payments for the other 13 months, totaling $22,100.00, are not in dispute. This proceeding can therefore be decided on summary judgment.

Based on a certified DHCR rent history of the apartment dated October 17, 2008, respondent alleges that the legal regulated rent for the apartment, as registered with DHCR on July 20, 2007, is $513.23. She claims that petitioner overcharged her $1186.77 a month, totaling $15,428.01, covering a period of 13 months.

In her affidavit in opposition, Antonia Landro contends that the $1700.00 monthly rent is legal because the DHCR filings show that the apartment was registered as vacant from 1999 to 2007. Landro contends that as a result of this eight-year vacancy, petitioner was free to charge fair-market rent. Nothing supports this contention. Under the Rent Stabilization Code (9 NYCRR) � 2522.8 (a), the owner of a rent-stabilized apartment, upon vacancy, is entitled to a vacancy increase. For a one-year vacancy lease, this increase is 20 percent of the earlier legal regulated rent less the sum equal to the difference between a one-year renewal lease guideline percentage increase and a two-year renewal lease guideline percentage increase promulgated by the New York City Rent Guidelines Board. (Id.) The apartment owner is also entitled to a longevity increase when there has not been a vacancy increase on the apartment for eight years or longer. (Id.) This increase is calculated by multiplying the previous legal regulated rent by the product of .6 and the number of years since the last vacancy increase. (Id.) An owner that makes improvements to a vacant apartment may also collect a rent increase totaling 1/40th of the cost of major capital improvements. (See RSC � 2522.4.) Nowhere, however, does the Rent Stabilization Code permit an owner to charge free-market rent after an apartment has been registered vacant for eight years. As such, petitioner's argument is without merit.

A tenant must challenge an overcharge within four years of the first overcharge allegation. (RSC � 2506.1; CPLR 213-a.) Petitioner argues that respondent is time-barred from challenging the overcharge. Respondent first challenged the alleged overcharge in her verified answer dated January 12, 2009. Because the first alleged overcharge occurred in October 2007, she is not barred by the four-year statute of limitations.

Petitioner registered the rent of $513.23 with the DHCR on July 20, 2007. Petitioner charged respondent rent of $1700.00 beginning October 1, 2007. This court finds that the lawful [*3]regulated rent of the apartment is $513.23 and that respondent has been overcharged $1186.77 a month for 13 months, totaling $15,428.01.

Owners who collect a rent overcharge "will be liable to the tenant for a penalty of three times the amount of the overcharge unless the owner establishes by a preponderance of the evidence that the overcharge was neither willful nor attributable to negligence." (RSC � 2506.1 [a] [1]; NYC Admin Code � 26-516 [a] [2] [I].) Petitioner has not alleged facts to support any claim that her overcharge was unwillful or negligent. On October 17, 2008, when respondent obtained a copy of the certified DHCR rent history, petitioner had yet to register the 2008 rent. Antonia Landro claims in her affidavit to have registered the apartment with the DHCR for 2008 and 2009 at a rent of $1700.00 a month. (Antonia Landro Aff. In Opposition to Respondent's Motion � 30.) The proof she supplies to support this claim is an amended 2008 annual registration summary sworn to and certified on April 14, 2009. The registration summary does not identify respondent's apartment or the registered rent. Even if petitioner had registered the rent of $1700.00 with the DHCR in April 2009, this registration would have been made nearly eight months after this proceeding began and three months after respondent first alleged an overcharge. This supports respondent's contention that the overcharge was willful. Thus, the damages of $15,428.01 are trebled, and respondent is entitled to an award of $46,284.03 less eight months' use and occupancy for the period of November 2008 through February 2009 and April 2009 through July 2009. Use and occupancy is calculated at the last registered legal rent of $513.23. Respondent is thus entitled to a money judgment for $42,178.19. As noted above, the disputed month of March 2009 is severed without prejudice.

Respondent is not entitled to prejudgment interest on her award of rent overcharges. Although "[i]nterest on a rent overcharge award is generally authorized from the date of the initial monthly overpayment . . . when treble damages are warranted . . . treble damages are imposed in lieu of interest . . . ." (Mohassel v Fenwick, 5 NY3d 44, 50 [2005].)

Respondent moves for legal fees under paragraph 19 of the parties' lease. Petitioner is liable to respondent for legal fees and costs incurred in connection with defending this proceeding. Respondent may submit new motion papers seeking that relief. The new papers, if submitted, shall contain a breakdown of time spent in this proceeding.

This opinion is the court's decision and order.

Dated: July 16, 2009

J.H.C.