Petitioner commenced this licensee holdover proceeding on or about October 2005, seeking to recover possession of apartment 4 located at 516 West 174th Street, New York, New York. Respondent interposed an affirmative defense in this proceeding asserting that he is a rent stabilized tenant pursuant to the renewal lease which he and Respondent Edita O. Santos signed on March 2, 2004, and which was also signed by the Landlord at the time and then returned to Respondent without objection. After multiple court appearances, including motion practice, the proceeding was scheduled for trial on March 1, 2011. It was referred to this trial part on April [*2]26, 2011, at which time Respondent made the instant motion which was opposed by Petitioner. The Court granted leave to submit written opposition and reply papers.

Respondent filed the instant motion seeking an order from the Court precluding Petitioner from introducing at trial any testimony or documents that would contravene the terms of the 2005 Confirmation Order of the Bankruptcy Court for the Southern District of New York under which Petitioner obtained title to the subject premises from the prior owner 515 West 174th Street Realty Company, as well as precluding Petitioner from introducing hearsay testimony pertaining to the intentions of the now deceased principal of the debtor, Serge Souto, in entering into the lease with Respondent.

Before turning to the merits of this application, this Court must first consider whether it can entertain Respondent's application. Pursuant to the New York City Civil Court Act §110(e), "rules of evidence shall be applicable in actions and proceedings before the housing part." A motion in limine "is a request that a court rule on an evidentiary issue prior to the time that a trial objection is typically interposed when the evidence is offered by a party during a trial" and it "may be made to admit, exclude, or limit evidence." 1-102 Bender's New York Evidence §102.05. It has been recognized that "evidentiary decisions relating to the admission of potentially prejudicial evidence can be made through pretrial motions" and "the power of the court to grant such a motion is normally not mentioned in procedural rules, but found in the inherent power of a court to admit or exclude evidence." People v Michael M., 162 Misc 2d 803, 618 N.Y.S.2d 171 [Sup Ct, Kings County 1994]. Often used in criminal matters, motions in limine are likewise permissible in civil court. See Maliqi v 17 East 89th Street Tenants, Inc., 25 Misc 3d 182, 880 N.Y.S.2d 917 [Sup Ct, Bronx County 1999]. As such, Respondent's application to the Court at this juncture is appropriate, and the Court will make its determination accordingly. Furthermore, the Court finds there was no discernable prejudice suffered by the parties as a result of Respondent's delay in seeking this relief. Accordingly, Petitioner was granted time to oppose the motion.

Respondent makes the following arguments in support of his motion. First, Respondent argues that no leases should be introduced to contradict the Bankruptcy Court Order and that doing so would only amount to a collateral attack on said Order which is precluded by res judicata. Second, Respondent argues that John Souto, son of now deceased Serge Souto, president of 516 West 174th Street Realty, debtor in possession, should be precluded from testifying regarding the intentions of the prior landlord corporation in entering into the subject lease with Respondent because it is hearsay, and it violates the parol evidence rule. In the alternative, Respondent argues that this Court lacks the subject matter jurisdiction to reform a lease should John Souto be allowed to testify and his testimony found to be in compliance with the parol evidence rule.

In opposition, Petitioner contends that the actions and orders of the parties and the court in the Bankruptcy proceeding are factual determinations for trial. Petitioner argues that the issue of Respondent's tenancy was neither raised nor litigated in the Bankruptcy matter, and that as a result there never was a judgment on the merits. In addition, Petitioner argues that it was not a [*3]party to the bankruptcy action, and Respondent's tenancy rights were not decided by the Bankruptcy Court prior to the issuance of its Order. Further, Petitioner contends that because the State of New York has abandoned the theory of privity, its claims are not subject to res judicata. Lastly, Petitioner represents that it will not call any witnesses at trial to testify as to the intentions of Serge Souto when he signed the renewal lease, and it will not seek to offer at trial any testimony which is in violation of the parol evidence rule. Specifically, Petitioner claims it will not seek to offer any testimony to vary, contradict or add to the terms of the lease, and that Respondent's request is nothing more than an unapproved attempt at unapproved pre-trial discovery.

In his reply papers, Respondent contends that an evidentiary ruling prior to trial is appropriate and that this request could not be made before now. In addition, Respondent asserts that no prior evidentiary determination has been made in this proceeding. Respondent contends that he has presented this Court with additional evidence, which was not available when the case was before Judge Finkelstein, the Appellate Term and Judge Hahn. Specifically, Respondent has now presented this Court with Petitioner's verified factual responses to his Notice to Admit and has provided certified copies of numerous certified documents from the Federal Bankruptcy Court proceeding. Respondent argues that the Bankruptcy Court Order is res judicata because Respondent's tenancy was specifically pleaded in the Bankruptcy matter and covered by two settlements in the Bankruptcy Court proceedings which included the Order. Further, in his responses to the Notice to Admit Petitioner admitted participating in the Bankruptcy Court proceedings. Moreover, Respondent was named and served in the Bankruptcy proceeding by the prior landlord, and Respondent intervened in the Bankruptcy proceeding by filing a complaint and initiating an adversary proceeding. Notwithstanding that Respondent's tenancy was actually pleaded in the Bankruptcy matter, Respondent avers that res judicata operates not only to matters that were actually put in issue but also matters that might have been put in issue. As such, Respondent contends that Petitioner specifically assumed Respondent's lease pursuant to the order of the Bankruptcy Court.

This Court must determine whether as Respondent asserts, res judicata bars Petitioner from challenging the validity of the lease as well as Respondent's tenancy rights, if any, pursuant to said lease. Res judicata requires that "when a matter in controversy between parties has been submitted to a competent judicial tribunal, its decision thereon is final between the parties until it has been reversed, set aside or vacated; and the rule of res judicata applies not only to the judgments of courts, but to all judicial determinations, whether made by courts in ordinary actions, or in summary or special proceedings, or by judicial officers in matters properly submitted for their determination." Brown v City of New York, 21 Sickels 385, 1876 WL 12243 [1876]; see also EDP Medical Computer Systems, Inc. v U.S., 480 F3d 621 [2007] ("res judicata, or claim preclusion, a final judgment on the merits of an action precludes the parties and their privies from relitigating issues that were or could have been raised in that action").

Respondent correctly asserts that "a judgment in one action is conclusive in a later one not only as to any matters actually litigated therein, but also as to any that might have been so litigated, [*4]when the two causes of action have such a measure of identity that a different judgment in the second would destroy or impair rights or interests established by the first." Schuykill Fuel Corp. v B. & C. Nieberg Realty Corp., 250 NY 304, 306-307, 165 NE 456 [1929]. In the bankruptcy context, the doctrine of res judicata is similarly enforced such that "a final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action" (internal citations omitted). D.A. Elia Const. Corp. v Damon & Morey, LLP, 389 BR 314 [WD NY 2008]. In addition to the factors that courts consider to determine whether the doctrine of res judicata bars a subsequent action such as whether the prior decision was on the merits, the litigants were the same parties, the prior court was a competent jurisdiction and the causes of action the same, courts in the bankruptcy context consider "whether an independent judgment in a separate proceeding would impair, destroy, challenge, or invalidate the enforceability or effectiveness of a reorganization plan." Id. See also Corbett v MacDonald Moving Services, Inc., 124 F3d 82, [2nd Cir 1997] and Miller v Meinhard-Commercial Corporation, 462 F2d 358 [5th Cir 1972] ("an arrangement by a bankruptcy court has the effect of a judgment rendered by a district court, and any attempt by the parties or those in privity with them to relitigate any of the matters that were raised or could have been raised therein is barred under the doctrine of res judicata") (internal citations omitted).

A Bankruptcy Court confirmation order is a final order such that "the ability to achieve finality is essential to the fashioning of effective remedies" and "equitable mootness serves as a prudential doctrine that is invoked to avoid disturbing a reorganization plan once implemented." In re Charter Communications, Inc., 2011 WL 1344553 [SD NY 2011] (internal citations omitted); see also In re Chateaugay Corp., 988 F2d 322, 325 [2nd Cir 1993]. Notwithstanding the finality of confirmation orders of the Bankruptcy courts, the United States Bankruptcy Code provides for the revocation of an order of confirmation. Pursuant to § 1144 of the Bankruptcy Code, "on request of a party in interest at any time before 180 days after the date of the entry of the order of confirmation, and after notice and a hearing, the court may revoke such order if and only if such order was procured by fraud." 11 U.S.C.A. § 1144. The order revoking an order of confirmation "shall contain such provisions as are necessary to protect any entity acquiring rights in good faith reliance on the order of confirmation; and revoke the discharge of the debtor" such as to provide the appropriate relief. Id.

Furthermore, a trustee (or in cases where no trustee is appointed, the debtor in possession) may assume or reject an unexpired residential lease, including a rent-stabilized or rent-controlled lease, at any time prior to the plan confirmation (emphasis added). 11 U.S.C.A. § 365(d)(2). Once an unexpired lease is assumed it becomes estate property and is assumed with its burdens and benefits. Matter of Village Rathskeller, Inc., 147 BR 665, 671, [SD NY 1992].

In the instant matter, Respondent contends that the Bankruptcy Court's 2005 Confirmation Order operates as a bar in this proceeding to the introduction of any lease documents other than the one assumed by Petitioner because the Confirmation Order has the effect of a judgment, and because the introduction of other lease documents would otherwise serve as a collateral attack on the confirmation order in contravention of the United States Bankruptcy Code. [*5]

The finality of Bankruptcy Court orders and proceedings precludes this Court from considering any testimony at trial that would contravene the Order. The issue of Respondent's tenancy is one that was taken up by the Bankruptcy Court or should have been raised with the Bankruptcy Court, and Petitioner had the opportunity to challenge it then. Petitioner and its privies had the opportunity to move to "revoke" the Order within 180 days after the date of its entry, but did not elect to do so. This window of time, which has now long passed, is strictly construed even where the "fraud is discovered beyond that deadline." In re Calpine Corporation, 389 BR 323 [SD NY 2008]. Moreover, Petitioner's argument that New York has abandoned privity is without merit. Privity extends to "persons who were not parties to the previous action but who were connected with it to such an extent that they are treated as if they were parties." All Terrain Properties, Inc. v Hoy, 265 AD2d 87, 705 N.Y.S.2d [1st Dept 2000]. Petitioner falls under the category of parties who were connected to the prior landlord through the Bankruptcy Court proceedings such that it is now treated as if it were a party to that action.

In addition, the Bankruptcy Code provides a trustee or debtor in possession the opportunity to assume or reject contracts and leases entered into prior to the bankruptcy, subject to court approval (emphasis added). 11 USCA § 365(a). The party seeking to assume an executory contract or lease has the burden of proof and must show that the contract is one subject to assumption and that all of the requirements for assumption have been met. See In re Truffles of Sarasota, Inc., 30 BR 666, 669 [1983]. An unexpired lease for residential property may be assumed or rejected at any time prior to confirmation of a plan which is made by motion to the Bankruptcy Court in a plan of reorganization. 11 USC § 365(d)(2); see also In re Burger Boys, Inc. 94 F3d 755, 763 (Bankruptcy Court vacated the district court's order allowing debtor to assume the lease without making a formal motion). Rejection of a contract or lease allows a trustee or debtor in possession to abandon burdensome property, and it prevents a lease from becoming property of the bankruptcy estate. See United States v Dewey Freight Systems, 31 F3d 620, 621 [8th Cir 1994]. Courts use the business judgment rule to examine a lease and its surrounding circumstances and apply their best business judgment to determine if the contract or lease would be beneficial or burdensome. See In re Orion Pictures Corp., 4 F3d 1095, 1098 [2nd Cir 1993]; see also In re Riodiozio, Inc., 204 BR 417, 424 [SD NY 1997] (Bankruptcy Court held that debtor must demonstrate net benefit to the estate to obtain court approval of the assumption or rejection of an executory contract).

The reorganization process under Chapter 11 of the Bankruptcy Code is one that involves several prerequisites. This Court finds that the issue of the validity of Respondent's 2004 lease renewal is one that should have been raised in the Bankruptcy Court. Petitioner had the opportunity to raise the issue of Respondent's tenancy in the Bankruptcy Court but did not. Instead, Petitioner "assumed" Respondent's lease when it clearly had the opportunity to "reject" it. Petitioner had the opportunity to challenge said lease, but failed to do so, and instead said lease renewal became part of the estate. Based on the foregoing, this Court finds that the Order of the Bankruptcy Court confirming the lease must stand, and as a result the Court will not allow Petitioner to introduce at trial any testimony or documents that would contravene the terms of the Order because it is res judicata and would consist of a collateral attack on the Order. See Pinciss v 60 [*6]East Equities, Inc., 256 AD2d 169, 681 NYS2d 535 [1st Dept 1998] (appellants failed to establish that they were not afforded a full opportunity to litigate the validity of their leases within the bankruptcy proceeding and were estopped from relitigating the issue as a defense to the present action). In addition, based on Petitioner's representations, this Court will not allow Petitioner to introduce any witnesses at trial to testify to the intentions of Serge Souto when he signed the renewal lease, as well as any testimony that violates the parol evidence rule (specifically, any testimony to vary, contradict, or add to the terms of said lease). Petitioner may however proceed with any other proofs to sustain its burden at trial in this holdover proceeding subject to the admissibility of such proofs.

This matter is restored to the Part P calendar, Room 1127 A, on August 12, 2011, at 9:30 a.m. If no settlement is reached, the parties should be prepared to proceed with trial.

This constitutes the decision and order of this Court.

Dated: July 7, 2011

___________________________

Hon. Cheryl J. Gonzales, J.H.C.