Shlomo Karpen, Petitioner, v  Juan Pablo Arevalo et al., Respondents.

Shlomo Karpen, Petitioner, v  Julio Andrade, Respondent.

Civil Court of the City of New York, Kings County, June 10, 2021

Wenig & Saltiel LLP, Brooklyn, for petitioner.

Communities Resist, Inc., Brooklyn, for respondents.

The decision/order on this motion for leave to renew is as follows:

In its prior decision/order dated November 20, 2019 (66 Misc 3d 362 [Civ Ct, Kings County 2019]), this court dismissed the instant personal use proceedings based on the newly enacted Housing Stability and Tenant Protection Act of 2019 (hereinafter, the HSTPA) (L 2019, ch 36) finding the retroactive applicability of the statute to be constitutional and not a violation of petitioner's due process rights. Subsequently, the First Department decided Matter of Harris v Israel (191 AD3d 468 [1st Dept 2021]) which barred retroactive application of part I (L 2019, ch 36, § 1, part I, § 2; Rent Stabilization Law of 1969 [Administrative Code of City of NY] § 26-511 [c] [9] [b]). Petitioner asks this court to vacate its prior dismissal of the proceedings and restore them to the calendar for trial asserting that there has been "a change in the law that would change the prior determination." (CPLR 2221 [e] [2].) Respondents oppose the motion. The reader of this decision/order is presumed to be familiar with the facts of this case and the prior order is incorporated herein by reference.

A motion to renew is based upon new facts not offered on the prior motion that would change the prior determination or shall demonstrate that there has been a change in the law that would change the prior determination. (Foley v Roche, 86 AD2d 887 [2d Dept 1982].) Furthermore, the doctrine of stare decisis requires trial courts in this department to follow precedents set by the Appellate Divisions of another department until the Court of Appeals or this department pronounces a contrary rule. (Mountain View Coach Lines v Storms, 102 AD2d 663 [2d Dept 1984].) This rule does not pertain if the legal question addressed is one of first impression or not expressly decided by{**72 Misc 3d at 854} the higher court. In such circumstances, the concerns of uniformity and consistency do not present themselves. (Mountain View Coach Lines v Storms.)

The Harris proceeding was commenced in September 2016 when the owner sought to recover the apartment for personal use. A possessory judgment was issued in the owner's favor in July 2018 (2018 NY Slip Op 33995[U] [Civ Ct, NY County 2018]) and a warrant of eviction was issued in August 2018 but was stayed pending an appeal to the Appellate Term. Applying part I of the HSTPA which took effect in June 2019, the Appellate Term reversed and remanded the proceeding in December 2019 (65 Misc 3d 155[A], 2019 NY Slip Op 51925[U] [App Term, 1st Dept 2019]). Following Matter of Regina Metro. Co., LLC v New York State Div. of Hous. & Community Renewal (35 NY3d 332 [2020]), the First Department reversed the Appellate Term holding that part I of the HSTPA had been applied retroactively and that such application violated due process:

"However, four months after Appellate Term issued its decision in this proceeding, the Court of Appeals decided Matter of Regina Metro. Co., LLC v New York State Div. of [*3]Hous. & Community Renewal (35 NY3d 332 [2020]), holding that HSTPA part F, relating to rent overcharges, could not be applied to pending cases because 'application of these amendments to past conduct would not comport with our retroactivity jurisprudence or the requirements of due process' (id. at 349).

"We conclude that the same reasoning applies with equal measure to HSTPA part I. Like the amendment in Regina Metro, this amendment 'impair[s] rights owners possessed in the past, increasing their liability for past conduct and imposing new duties with respect to transactions already completed' (id. at 369). Therefore, a presumption against retroactivity applies (id. at 370). The pre-Regina Metro cases notwithstanding, the determination of the Court of Appeals that an owner's increased liability and the disruption of relied-upon repose are impairments to his or her substantive rights precludes any retroactive application of HSTPA part I to this proceeding, where petitioner had spent several years reclaiming all other units{**72 Misc 3d at 855} at the property and was ultimately awarded a judgment of possession to the premises before HSTPA's enactment (id. at 379). '[T]here is no indication here that the legislature considered th[is] harsh and destabilizing effect on [petitioner's] settled expectations, much less had a rational justification for that result' (id. at 383)." (Matter of Harris v Israel, 191 AD3d at 469-470.)

The First Department limited its decision to the specific "proceeding" before it and explained the factual basis for its determination: "where petitioner had spent several years reclaiming all other units at the property and was ultimately awarded a judgment of possession . . . before HSTPA's enactment." Clearly, the pre-HSTPA possessory judgment was central to the First Department's due process analysis.

Similarly in the Harris decision, the First Department cited two personal use cases in which a newly enacted statute was applied on appeal despite a judgment of possession and certificate of eviction having already been issued. (See Matter of McMurray v New York State Div. of Hous. & Community Renewal, 72 NY2d 1022 [1988]; Matter of Cirella v Joy, 69 NY2d 973 [1987].) Thus, the Court of Appeals' due process analysis was directly informed by the fact that the landlord's right to possession had been granted to only be stripped away by application of the newly enacted statute. Relying on the Regina decision, the First Department adopted the factual underpinning of the Court of Appeals' due process analysis. Thus, its citation of the postjudgment posture of the proceeding before it was not merely dicta. In a summary proceeding, the judgment of possession is the central relief sought as it annuls the relationship of landlord and tenant. The judgment of possession fixed the rights and obligations of all parties to the proceeding. As noted by the Harris Court, vacating the judgment of possession after the enactment of the HSTPA destabilized petitioner's "settled expectations."

As persuasively argued by respondents, there are two possible readings of the Harris decision. First, part I of the statute operated retroactively because of the owner's pre-HSTPA judgment and, in such postjudgment cases, retroactive application does not comport with due process. Second, part I of the statute operates retroactively when applied to any pending case, whether pre or postjudgment, and such application does not comport with due process. The briefs of the parties to Harris support the first interpretation.{**72 Misc 3d at 856}

Petitioner owner in Harris argued that "[o]riginally, the trial court vindicated Petitioner-Appellant's then-existing right to repossess his real property for personal use, culminating in the [*4]issuance of a warrant of eviction against respondent." (See brief for petitioner-landlord-appellant in Matter of Harris v Israel, 191 AD3d 468 [2021], available at 2020 WL 8371146, *13-14.) The owner noted that the effective date provisions of the HSTPA did not expressly restore a landlord/tenant relationship "where said relationship had been severed prior to the law's enactment." (Id. at *18-19.) Again, the owner directly connected his successful appellate argument to the existence of a judgment of possession, the annulling of the landlord/tenant relationship by issuance of a warrant, and the expectations and rights created by these facts.

The petitioner owner in Harris went on to suggest an interpretation of the legislature's intent that would comport with constitutional due process: the statute "would apply Part I to all occupants who, at the time the law was enacted, either (1) had a lease in effect, or (2) were otherwise not subject to a warrant of eviction." (See reply brief for petitioner-landlord-appellant in Matter of Harris v Israel, 191 AD3d 468 [2021], available at 2020 WL 8371148, *9-10.) Ultimately, the Harris Court did not explicitly adopt this view of legislative intent but did rule that retroactive application of the HSTPA "impair[s] rights owners possessed in the past, increasing their liability for past conduct and imposing new duties with respect to transactions already completed." The right before the Harris Court was the petitioner owner's right to repossess the property for personal use based on the judgment of possession entered by the court prior to the enactment of the HSTPA. The new duties were clearly the reinstatement of the landlord/tenant relationship and concomitant rent regulated contract.

The facts of the instant proceeding are distinguishable from those in Harris. Here, petitioner has not obtained a judgment of possession. Thus, his rights have not been adjudicated and fixed by the courts. The landlord/tenant relationship is intact until the court affirms petitioner's right not to renew the rent regulated lease. Contrary to petitioner's contention, the prejudgment posture of this proceeding is more than "a distinction without a difference." As noted earlier, the judgment of possession is the central relief sought in this summary proceeding.{**72 Misc 3d at 857}

The application of a new statute to a pending case is not automatically retroactive. (Regina at 365-367.) "A statute does not operate retrospectively merely because it is applied in a case arising from conduct antedating the statute's enactment, or upsets expectations based in prior law." (Landgraf v USI Film Products, 511 US 244, 269 [1994] [internal quotation marks and citation omitted].) A new statute's application in a pending case is retroactive only when it "takes away or impairs vested rights acquired under existing laws, or creates a new obligation, [or] imposes a new duty." (Landgraf at 269.) If, on the other hand, it "affects only 'the propriety of prospective relief' or the nonsubstantive provisions governing the procedure for adjudication of a claim," the new statute operates prospectively. (Regina at 365, quoting Landgraf, 511 US at 273.)

Looking back at Harris, the First Department concluded that application of part I operated retroactively in that proceeding as it increased the owner's liability for past conduct and imposed new duties as previously discussed. The due process violation was directly rooted in the issuance of the judgment of possession and its vacatur by the courts. In the instant proceeding, a judgment of possession has not issued. The rights of the parties have not been determined. Applying the HSTPA to this prejudgment proceeding does not take away or impair the vested rights of petitioner herein. Petitioner does not "have in any particular rule an interest so vested as to entitle it to keep the rule unchanged." (I. L. F. Y. Co. v Temporary State Hous. Rent Commn., 10 NY2d 263, 270 [1961].) This court's interpretation of the Harris decision draws a sensible line from the pre-Regina jurisprudence to the application of part I of the newly enacted [*5]HSTPA.

This court holds that the Harris decision is not a change in law for prejudgment proceedings and is distinguishable from the instant case. As a question of first impression for the Second Department, the court hereby denies the renewal motion and adheres to its prior decision and order.