Hess v EDR Assets LLC
2019 NY Slip Op 02658 [171 AD3d 498]
April 9, 2019
Appellate Division, First Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
As corrected through Wednesday, May 29, 2019


[*1]
 Michele E. Hess et al., Respondents,
v
EDR Assets LLC et al., Appellants.

Katsky Korins LLP, New York (Adrienne B. Koch of counsel), for appellants.

Newman Ferrara LLP, New York (Roger Sachar of counsel), for respondents.

Order, Supreme Court, New York County (Frank P. Nervo, J.), entered September 7, 2018, which denied defendants' motion to dismiss the complaint or, in the alternative, to dismiss the class action allegations of the complaint, unanimously affirmed, without costs.

The court properly found that the second and third causes of action of the complaint were not moot because there was a justiciable issue regarding the proper method of calculating the amount of the rent overcharges, which, based on the record before the court, DHCR did not determine.

The court did not improvidently exercise its discretion in denying plaintiffs' cross motion for class action status with leave to renew following discovery, based on issues raised by defendants concerning the typicality of a named representative. The court correctly determined that there were common questions of law and fact that predominated over individual issues, such as the proper method of calculating the amount of the rent overcharges and whether defendants engaged in a fraudulent scheme to deregulate the apartments. Moreover, the Court of Appeals has found that class action treatment was superior to individual adjudication in similar situations (see Borden v 400 E. 55th St. Assoc., L.P., 24 NY3d 382, 400 [2014]).

We reject respondent's request for dismissal of this action on the ground that DHCR has primary jurisdiction since the action raises legal issues, including class certification, that must be addressed in the first instance by the court (see Kreisler v B-U Realty Corp., 164 AD3d 1117 [1st Dept 2018], lv dismissed 32 NY3d 1090 [2018]; Dugan v London Terrace Gardens, L.P., 101 AD3d 648 [1st Dept 2012]).

We have considered defendants' remaining arguments and find them unavailing. Concur—Renwick, J.P., Richter, Tom, Kahn, Moulton, JJ. [Prior Case History: 2018 NY Slip Op 32182(U).]