Civil Court of the City of New York, New York County, January 21, 2020

Fischman & Fischman, New York City (Doreen Fischman of counsel), for petitioner.

Mobilization for Justice, Inc., New York City (Michael Pereira of counsel), for respondent.

The decision/order in these consolidated motions is as follows:

This is a holdover proceeding. According to the notice to cure, respondent is in violation [*2]of a substantial obligation of his tenancy. Specifically, the notice indicates that it has "come to the Landlord's attention" that respondent is occupying the premises for residential use in violation of the building's certificate of occupancy (C of O). The C of O for the building shows that the first floor contains art studios not permissible for living and several commercial stores. The subject premises are described as apartment 1A on first floor. According to the petition, respondent is a month-to-month tenant living in a multiple dwelling building but the tenancy is not subject to rent regulation. However, the subject building per the multiple dwelling registration has 16 class "A" residential units and was built before 1974. (Respondent's exhibits L, M.)

Pursuant to an October 12, 2018 decision of the Honorable Judge Daniele Chinea, petitioner was ordered to respond to respondent's notice to produce documents within 45 days of service and filing of notice of entry of the decision. Judge Chinea found that the rent regulatory status of the subject premises was relevant to petitioner's holdover action. The matter was marked off calendar.

Now, petitioner moves to restore the matter and for summary judgment. Specifically, petitioner contends that it is entitled to summary judgment because the subject premises are being used for residential purposes in violation of the C of O, that it has proved its prima facie case with certified copies{**66 Misc 3d at 438} of the deed^[FN1] and multiple dwelling registration, and that respondent occupied the premises pursuant to a written lease which has expired. (Exhibits B, E, F.) According to Elizabeth Novotny, petitioner's managing agent, while the matter was marked off calendar, it made an application to the New York City Department of Buildings (DOB) to convert the commercial studio space to a class "A" apartment for residential use. (Novotny aff ¶ 22.) Ms. Novotny states that DOB denied the application. DOB found in a notice of objection dated January 25, 2019, that converting the studio on the first floor to residential use is contrary to the zoning resolution for zoning district C6.^[FN2] (Novotny aff ¶ 23; exhibit D, notice of objections.) On the bottom of the notice of objection form there is language from DOB indicating that applicant can address the objections with the plan examiner. Then, according to petitioner, it engaged the services of an architect to apply to DOB to convert the unit's use from commercial to residential use. (Novotny aff ¶ 24.) Its proof of such application to DOB is annexed to the motion-in-chief. (Exhibit G.) Then, suddenly without further justification, petitioner leaps forward to conclude that the mere filing of the application by its architect has exhausted its right to seek to utilize the premises for residential use. Hence, it claims its application has been totally denied. However, there is no proof in exhibit G that the application was denied and, even if it was, there is no proof that petitioner has exhausted its remedies to convert the unit. Actually, respondent in opposition argues that petitioner can try to get a variance and has failed to do so. (Romano aff ¶15.)

Summary judgment is appropriate where the movant establishes the claim by tender of evidentiary proof in admissible form sufficiently to warrant the court as a matter of law to direct [*3]judgment in its favor. (Rodriguez v City of New York, 31 NY3d 312, 317 [2018]; Friends of Animals v Associated Fur Mfrs., 46 NY2d 1065 [1979].) The failure to make such a prima facie showing requires denial of the motion regardless of the sufficiency of the opposing papers. (Alvarez v Prospect Hosp., 68 NY2d 320 [1986].) In determining the motion, the court must be mindful that summary judgment is a drastic remedy{**66 Misc 3d at 439} and should not be granted when there is any doubt as to the existence of a triable issue. (Rotuba Extruders v Ceppos, 46 NY2d 223, 231 [1978].)

Here, petitioner has not submitted admissible evidentiary proof to warrant summary judgment in its favor as to the illegal occupancy for several reasons. First, some of the documents submitted in support of the motion are not admissible evidentiary proof or are contradictory. For example, the deed for the subject building submitted in support of the motion is a copy and not an original certified copy of the deed nor is the C of O an original certified copy. (Exhibits B, E.) Also, there is conflicting information on the building's zoning district being either M1-5 or C6-2A.

Second, simply because an apartment is illegally occupied does not render it exempt from rent stabilization,^[FN3] thereby warranting no grounds under the Rent Stabilization Code for termination of the tenancy. Courts have found that even where occupancy of an apartment is illegal, or a violation has been placed for the illegal occupancy, the Rent Stabilization Code bars termination of the tenancy unless the apartment cannot be legalized. (C & E Assoc. LLC v Hernandez, 239 NYLJ 98, 2008 NY Misc LEXIS 3087 [Civ Ct, NY County 2008].)

Here, respondent in his affidavit in support of his cross motion submits that petitioner has not presented evidence that it tried to obtain a variance^[FN4] for a zoning modification from the DOB and Board of Standards and Appeals to legalize his apartment.{**66 Misc 3d at 440} This is especially appropriate since his apartment already fits in with the residential nature of the building and neighborhood. (Romano aff ¶¶ 14, 15.) Therefore, he argues that petitioner has thus far not exhausted its remedies to legalize the unit.

Based on all the above, this court finds that petitioner has failed to show in its motion papers and exhibits^[FN5] for summary judgment that as a matter of law it warrants judgment in its favor nor has it shown that it truly exhausted its remedies to have the building's certificate of occupancy amended or that it would be unduly burdensome to do so. (Zaccaro v Freidenbergs, 10 Misc 3d 143[A], 2006 NY Slip Op 50096[U] [App Term, 1st Dept 2006]; 625 W. End, Inc. v Howard, 2001 NY Slip Op 40496[U] [App Term, 1st Dept 2001].) Accordingly, petitioner's motion for summary judgment is denied.

First, respondent cross-moves for summary judgment arguing that the subject premises are rent-stabilized, and petitioner failed to plead the correct regulatory scheme. He argues that petitioner has no cause of action to evict him, under the Rent Stabilization Law. Specifically, respondent contends that petitioner did not serve him with the required predicate notice to support a cause of action for illegal use. Further, respondent claims that petitioner was the one who created the illegal occupancy by renting to him the subject premises for residential use in 2010. (Romano aff ¶ 3.) When he moved into the subject premises, the landlord offered him a lease. (Romano aff ¶ 4.) The unit has a kitchen, bathroom, small area for living room and bedroom with its own entrance and exit. (Romano aff ¶ 6.)

Petitioner in opposition relies on Wolinsky v Kee Yip Realty Corp. (2 NY3d 487 [2004]) for the proposition that commercially leased units that were converted to residential units were denied rent stabilization coverage by the Court of Appeals. However, petitioner's reliance on Wolinsky is misplaced for the reasons discussed below. First, the building in Wolinsky was located in a zoning district in which it could not be legally converted to residential. Here, the subject building already has 16 class A residential units per the C of O, and the zoning allows mixed commercial and residential use. Second, the units{**66 Misc 3d at 441} in Wolinsky involved loft spaces, whereas, the unit here, it is an artist studio. Third, in Wolinsky there was no residential C of O, unlike here, there is a C of O and it authorizes residential use.

In order for this court to grant respondent's motion for summary judgment, there needs to be a determination solely on the papers whether or not his tenancy is rent regulated. If respondent is rent-stabilized, then clearly he is entitled to judgment in his favor dismissing the petition, because the petition does not state grounds for eviction under the Rent Stabilization Code. (See 9 NYCRR 2524.1 [a].) While this court agrees with respondent's legal argument that basic conditions such as age and the number of residential units in a building may create a presumptive determination of rent stabilization, the certificate of occupancy and zoning provisions of this subject building do not make such presumptive determination automatic. If this court solely on the papers were to follow the presumptive finding that the subject premises are rent-stabilized because they are located in a building built before 1974, and there are more than six residential units in the building, then it would essentially equate to it granting a variance for residential use of the subject premises without administrative authorization. (Schwartz v Seidman, 2003 NY Slip Op 51277[U], *12-13 [Civ Ct, NY County, Sept. 19, 2003, index No. L & T 83950/2001].) The Board of Standards and Appeals is the appropriate administrative forum for such relief and not this court. Along with this reasoning, it extends that herein there needs to be a trial on all the issues with specific focus on whether petitioner has exhausted its ability to legalize the subject [*5]premises before DOB and the Board of Standards and Appeals. Accordingly, respondent's cross motion for summary judgment is denied.

Alternatively, respondent argues that the petitioner has another option available to legalize the premises. He argues that pursuant to the amended Loft Law (Multiple Dwelling Law § 281 [5]), there is a qualifying window period under which residential units may qualify for coverage as interim multiple dwelling. This qualifying new window period pertains to units in buildings like the subject building with more than three residential units between January 1, 2008, and ending in December 31, 2009. (Madeline D'Anthony Enters., Inc. v Sokolowsky, 101 AD3d 606, 607 [1st Dept 2012].)

Second, respondent cross-moves for partial summary judgment on his rent overcharge claim in his answer. Respondent{**66 Misc 3d at 442} contends that the document production indicates that petitioner began residentially renting the subject premises, at least as early as 2003 with an initial monthly rent of $1,190. Also, he contends that petitioner failed to provide him or any other former tenants with rent-stabilized leases, and petitioner is prohibited from collecting any rent increase whatsoever. Therefore, he argues that the legal rent on the base date of his overcharge claim should be at most $1,190. For all the reasons discussed in the denial of respondent's cross motion for summary judgment, the request for partial summary judgment on rent overcharge is denied as there are issues of fact warranting a trial on the matter.

Lastly, respondent cross-moves pursuant to CPLR 3124 to compel compliance with Judge Daniele Chinea's discovery order dated October 12, 2018. Also, respondent cross-moves pursuant to CPLR 3126 for penalties against petitioner for noncompliance with the order. Specifically, respondent asserts that petitioner did not provide the following: (a) information relating to tax credits granted to the subject building (i.e., J-51 tax abatement), (b) whether it has attempted to obtain a variance, and (c) rent ledgers showing the rents in effect when he first moved into the building relevant to the rent overcharge claim.

Petitioner in opposition argues that there is no basis for relief under CPLR 3124 and 3126. According to Elizabeth Novotny in her affidavit in opposition to the cross motion, petitioner produced a "plethora of documents" in response to the notice to produce and even points to respondent's exhibits G and H in the cross motion which contain copies of their responsive documents to the notice to produce.

This court has thoroughly reviewed respondent's exhibits G and H and did not come across tax credit documents for the subject building (i.e., J-51 tax abatement), or any variance applications nor rent ledgers showing the rents in effect when respondent first moved into the building. Petitioner's counsel in her response to notice (respondent's exhibit G at 6 ¶ 9) indicates that there are no tax credits related to the building. However, this is contradicted by Elizabeth Novotny's prior statement in another affidavit where she admits the building received a J-51 tax abatement, after substantial rehabilitation. (Respondent's exhibit E, Novotny aff ¶¶ 25, 26.) Hence, {**66 Misc 3d at 443}petitioner needs to explain this contradiction in a supplemental affidavit. Also, petitioner must explain why it failed to provide copies of rent ledgers showing the rents in effect when respondent first moved into the building and reasoning why no variances have been sought to legalize the unit. All of the outstanding responses must be provided to respondent's counsel within 30 days of the date of this decision and order.

The court declines to penalize petitioner under CPLR 3126, as petitioner substantially complied with Judge Chinea's discovery order and petitioner's behavior does not rise to the level [*6]of being "willful and contumacious."

Ordered: petitioner's motion for summary judgment is denied. Ordered: respondent's cross motion for summary judgment is denied. Ordered: respondent's cross motion for partial summary judgment is denied. Ordered: respondent's cross motion to compel is granted in part and denied in part.

"In order to obtain a variance, New York City Zoning Resolution § 72-21 provides that five requirements must be met: (a) there must be unique physical circumstances, including irregularity, narrowness or shallowness of lot size or other physical conditions peculiar to the zoning lot, and that as a result of such conditions, practical difficulties or unnecessary hardship arise in complying strictly with the use or building provisions of the Zoning Resolution; (b) the land in question cannot yield a reasonable return if used only for a purpose allowed by the Zoning Resolution; (c) the variance, if granted, will not alter the character of the neighborhood or district where the land is located; (d) the practical difficulties or unnecessary hardship have not been created by the owner (except that, where all other findings are made, the purchase of a zoning lot subject to the restrictions sought to be varied shall not itself constitute a self-created hardship); and (e) the variance is the minimum necessary to afford relief." (Matter of SoHo Alliance v New York City Bd. of Stds. & Appeals, 264 AD2d 59, 62 [1st Dept 2000], affd 95 NY2d 437 [2000].)