167 8th Ave. LLC v Goldstein
2025 NY Slip Op 25260 [88 Misc3d 14]
December 2, 2025
Supreme Court, Appellate Term, First Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
As corrected through Wednesday, April 29, 2025
167 8th Avenue LLC, Respondent,
v
Jared Goldstein, Appellant.
Supreme Court, Appellate Term, First Department, December 2, 2025
PROCEDURAL SUMMARY
Appeal from an order and two judgments of the Civil Court of the City of New York, New York County (Daniele Chinea, J.), each entered on or about August 5, 2024. The order and judgments, after a nonjury trial, awarded petitioner possession and a recovery of $234,300 in a nonpayment summary proceeding. The appeal brings up for review so much of an order of that court, dated March 20, 2023, which dismissed respondent's fifth and sixth affirmative defenses and second counterclaim.
HEADNOTES
Landlord and Tenant — Rent Regulation — Fraudulent Deregulation
In a nonpayment summary proceeding in which respondent tenant's affirmative defenses and counterclaim alleging that the premises were rent-stabilized and that he had been overcharged were dismissed in an interlocutory order, amendments to the Rent Stabilization Law and Code that went into effect while the action was still pending which related to establishing fraud in the context of a rent regulatory scheme prompted reconsideration of respondent's claims. The amendments, in implementing the intent of the legislature to discourage and penalize fraud against the rent regulatory system itself, as well as individual tenants, permit courts to consider records of any age or type, going back to any date that may be relevant, to establish whether an apartment was properly deregulated. Accordingly, reconsideration of respondent's claims on a complete record under the new "totality of the circumstances" approach in determining whether an owner has knowingly engaged in a fraudulent scheme to remove an apartment from rent stabilization protections was warranted.
APPEARANCES OF COUNSEL
Ari Mor, New York City, for appellant.
David B. Tendler, New York City, for respondent.
OPINION OF THE COURT
Final money judgment (Daniele Chinea, J.), entered on or about August 5, 2024, reversed, with $30 costs, tenant's fifth and sixth affirmative defenses and second counterclaim reinstated, and matter remanded for further proceedings. Appeal from final judgment of possession (Daniele Chinea, J.), entered on or about August 5, 2024, dismissed, without costs, as moot. Appeal from order (Daniele Chinea, J.), entered on or about August 5, 2024, dismissed, without costs as subsumed in the appeal from the final money judgment.
The possessory issues raised on this appeal have been rendered moot since tenant was evicted during the appeal's pendency (see Makas v Russo, 237 AD2d 762, 762-763 [3d Dept 1997]). Therefore, the appeal from the final judgment of possession is dismissed. Although the money judgment was satisfied, there was no "compromise or agreement not to pursue an appeal" (Matter of Seagroatt Floral Co. [Riccardi], 78 NY2d 439, 448 n [1991]). Thus tenant's right to pursue the appeal of the monetary claims was not terminated.
The interlocutory order dated March 20, 2023, among other things, dismissed tenant's fifth and sixth affirmative defenses and second counterclaim, alleging that the premises are rent-stabilized and that he has been overcharged. This order "necessarily affected" the subsequent final money judgment and thus is reviewable on appeal (see Siegmund Strauss, Inc. v East 149th Realty Corp., 20 NY3d 37, 43 [2012]).
We note that subsequent to the court's March 2023 order, but while this action was still pending, the legislature enacted amendments to the Rent Stabilization Law and Code relating to establishing fraud in the context of the rent regulatory scheme. These amendments apply to all claims pending as of {**88 Misc3d 16}December 22, 2023, including tenant's claims herein (L 2023, ch 760; L [*2]2024, ch 95; Gomes v Vermyck, LLC, 238 AD3d 26 [2d Dept 2025]). As relevant here, the amendments direct the courts to return to the fraud analysis in Thornton v Baron (5 NY3d 175 [2005]) and Matter of Grimm v State of N.Y. Div. of Hous. & Community Renewal Off. of Rent Admin. (15 NY3d 358 [2010]) in implementing "the intent of the legislature to discourage and penalize fraud against the rent regulatory system itself, as well as against individual tenants" (L 2023, ch 760, § 1, part B, § 1), and also permit us to consider "records of any age or type, going back to any date that may be relevant" to establish whether an apartment was properly deregulated (L 2024, ch 95, § 4; L 2023, ch 760, § 1, part B, § 2 [a]; see Reichenbach v Jacin Invs. Corp., 237 AD3d 446 [1st Dept 2025]).
Based upon these amendments enacted after Civil Court's decision, the motion and cross-motion with respect to the aforementioned defenses and counterclaims should be reconsidered by Civil Court on a complete record (see Hadzovic v Buckley Sch. in the City of N.Y., 238 AD3d 487, 489 [1st Dept 2025]; 13 E. 124 LLC v Taylor, 236 AD3d 562, 563 [1st Dept 2025]), under the new "totality of the circumstances" approach in determining whether an owner has "knowingly engaged" in a fraudulent scheme to remove an apartment from rent stabilization protections (see Cox v 36 S Oxford St, LLC, 237 AD3d 604, 605, 606 [1st Dept 2025]; Alekna v 207-217 W. 110 Portfolio Owner LLC, 241 AD3d 414, 415 [1st Dept 2025]).
We do not pass upon tenant's application for discovery, which was denied as moot below. Our disposition is without prejudice to tenant renewing his application for such relief in Civil Court.
We have considered tenant's remaining arguments and find them either unpreserved or unavailing.