The following e-filed documents, listed by NYSCEF document number (Motion 003) 52, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77 were read on this motion to/for DISMISS.

In this action alleging residential tenant harassment, violations of the Multiple Dwelling Law ("MDL"), and violation of New York Civil Rights Law ("Civil Rights Law") §§ 70-a and 76-a ("anti-SLAPP statute"), defendants Alminda Justiniano and Justal Realty Group, Inc. move to dismiss plaintiffs' tenth cause of action in the amended complaint, which alleges that defendants' counterclaims violate the anti-SLAPP statute. Plaintiffs oppose the motion and cross-move pursuant to CPLR 3215 for a default judgment against defendants. Defendants oppose the cross-motion.

Pursuant to the Court's order dated May 7, 2025 (NYSCEF Doc. 54), the parties also submit briefs regarding the Court's sua sponte order of February 26, 2025, which directed plaintiffs to deposit their monthly rent payments in an escrow account pending the issuance of a certificate of occupancy for the building (5/7/25 "Escrow Order" [NYSCEF Doc. 41]). Plaintiffs [*2]oppose the Escrow Order and request that they be relieved of its requirements, whereas defendants support it and additionally request the Court to direct plaintiffs to deposit all unpaid rent that has allegedly accrued since they commenced this action in October 2024.

Plaintiffs Pedro Sales, Rodrigo Candia, Melchor Galindo, Jairo Ramirez, and Daniel Lopez are tenants of rent-stabilized apartments in the building owned by defendants located at 306 E 116th Street in Manhattan ("Building") (Amended Complaint ¶ 1 [NYSCEF Doc. 48]). Plaintiffs allege that defendants are barred from collecting rent from them because defendants did not obtain a certificate of occupancy for the Building as required by MDL § 301 (id. ¶¶ 51-67). They also allege that there is a building-wide rent-impairing violation, issued by the New York City Department of Housing Preservation and Development ("HPD") in October 2017, based on a water leak in the Building's fourth floor hallway that has not been corrected (id ¶¶ 68-72).

The Building allegedly suffers from various other defects and disrepair that plaintiffs claim violate the warranty of habitability including, inter alia, water damage, vermin infestations, deteriorating walls, and inconsistent hot water and cooking gas supplies (id. ¶¶ 73-111). Defendants and their agents are also alleged to have engaged in tenant harassment by failing to make repairs to correct hazardous conditions and code violations, performing multiple unpermitted work projects, repeatedly interrupting essential services such as hot water and cooking gas, and making harassing communications and threats to plaintiffs (id. ¶¶ 113-128; 143-164).

Plaintiffs commenced this action on October 22, 2024, seeking declaratory relief, monetary damages, injunctive relief, and attorneys' fees under nine causes of action alleging violations of MDL §§ 78, 301-302, Real Property Law § 235-b, and the New York City Administrative Code. They moved for a temporary restraining order and preliminary injunction on December 23, 2024, requiring defendants to correct certain open violations and alleged conditions, cease from engaging in repair-related harassment, and barring them from refusing to inspect and repair plaintiffs' apartments to correct the open violations (NYSCEF Doc. 11). The Court's February 26, 2025 interim order on that application included the sua sponte Escrow Order (NYSCEF Doc. 41). The Court granted plaintiffs' request for preliminary injunction on May 7, 2025 (NYSCEF Doc. 54).

Defendants filed an amended answer on March 20, 2025, in which they interpose ten counterclaims (Amended Answer [NYSCEF Doc. 46]). The first, second, third, fourth, and sixth counterclaims allege plaintiffs illegally leased their respective apartments to subtenants and seek monetary damages, an accounting, and possession of the plaintiffs' apartments (id. ¶¶ 26-37; 40-41). The fifth counterclaim seeks a declaration that plaintiffs have no right to the relief they seek and that defendants are entitled to recover possession and unpaid rent (id. ¶¶ 38-39). The seventh, eighth, ninth, and tenth counterclaims respectively allege that plaintiffs have caused property damage, engaged in abuse of process and malicious prosecution, participated in conduct constituting a nuisance, and conspired to commit the foregoing (id. ¶¶ 42-53).

Plaintiffs filed their amended complaint on April 9, 2025. It adds a tenth cause of action alleging that defendants' counterclaims violate the anti-SLAPP statute because they were brought in retaliation for plaintiffs' complaints to HPD and the Department of Buildings and their commencement of this litigation, which constitute "public petition and participation" (id. ¶¶ 193-201). Plaintiffs seek recovery of compensatory and punitive damages, costs, and attorneys' fees [*3]pursuant to Civil Rights Law § 70-a.

Defendants moved by notice of motion on April 29, 2025 to dismiss the Plaintiffs' anti-SLAPP claim (tenth cause of action) (NYSCEF Doc. 52). The notice of motion was returned for correction by the Clerk's office on May 19th, because "[t]he Motion submitted has a missing or incorrect return date and an incomplete place of return" (NYSCEF Doc. 74). A Court conference was held on June 26th, at which the Court directed defendants to correct their notice of motion; defendants filed the corrected notice of motion on July 2nd (NYSCEF Doc. 75). Thereafter, on July 17, 2025, plaintiffs cross-moved for a default judgment based on "Defendants' alleged failure to serve or file any timely response" to the amended complaint (NYSCEF Doc. 61).

In support of their cross-motion, Plaintiffs argue that Defendants' motion to dismiss is untimely despite their initial filing of the notice of motion on April 29th because defendants only filed a corrected version of the notice of motion on July 2nd, outside of the 20-day deadline to file a responsive pleading or motion without leave under CPLR 3012 (a), after the initial document was returned for correction on May 19th. They contend that defendants fail to offer a reasonable excuse for their putative default or a meritorious defense. In opposition, defendants maintain that their initial filing of the motion tolled their time to answer the amended complaint under CPLR 3211 (f) and that plaintiffs waived their right to object to any defects in the form of the motion by failing to do so within the 15-day window provided by CPLR 2101 (f).

A party moving to dismiss pursuant to CPLR 3211 (a) must do so within twenty days of service of the pleading against which the motion is made (see CPLR 3211 [e], 3012 [a]). It is not disputed that defendants filed their original notice of motion on April 29th, twenty days after service of the amended complaint. The Clerk's email returning the initial notice of motion for correction contains specific instructions for correcting the filing, but did not specify a timeline for doing so (NYSCEF Doc. 74). Moreover, during the June 26, 2025 appearance, the Court directed defendants to correct their notice of motion. Plaintiffs do not cite any authority for the proposition that the original filing date was not preserved despite the document's initial defects. The Court therefore finds that defendants timely filed this motion and denies plaintiffs' cross-motion for default judgment.

Defendants argue that plaintiffs' anti-SLAPP claim should be dismissed pursuant to CPLR 3211 (a) (7), for failure to state a claim, because defendants' counterclaims arise out of a private landlord-tenant dispute and associated private conduct rather than a matter of free speech or public petitioning on a matter of public interest. They further argue that plaintiffs' anti-SLAPP allegations are "conclusory and frivolous," and "designed to chill Defendants' lawful access to the Courts and Defendants' exercise of legal rights" (Defs. Affirm. in Supp. ¶ 2 [NYSCEF Doc. 52]). Plaintiffs maintain in opposition that they have engaged in "public petition and participation," as defined by the Civil Rights Law, by making complaints to HPD and the Department of Buildings and by bringing this action.

On a motion to dismiss pursuant to CPLR 3211, "the allegations in the complaint are to be afforded liberal construction, and the facts alleged therein are to be accepted as true, according a plaintiff the benefit of every possible favorable inference and determining only whether the facts alleged fit within any cognizable legal theory" (M & E 73-75 LLC v 57 Fusion LLC, 189 AD3d 1, 5 [1st Dept 2020], lv dismissed 36 NY3d 1086 [2021], citing Leon v [*4]Martinez, 84 NY2d 83, 87-88 [1994]). "A motion to dismiss under CPLR 3211 (a) (7) for failure to state a cause of action must be denied if the factual allegations contained within the four corners of the pleading manifest any cause of action cognizable at law" (M & E 73-75 LLC v 57 Fusion LLC, 189 AD3d at 5).^[FN1]

A SLAPP suit "is brought to intimidate or silence a person who has spoken out about a matter of public interest" (Reeves v Associated Newspapers, Ltd., 232 AD3d 10, 12 [1st Dept 2024]). "The anti-SLAPP law is designed to deter 'strategic lawsuits against public participation' and thereby protect the free exercise of speech, petition and association" (id., citing Civil Rights Law §§ 70-a, 76-a, CPLR 3211[g]-[h]). Civil Rights Law § 76-a (1) (a) defines "an action involving public petition and participation" as "(1) any communication in a place open to the public or a public forum in connection with an issue of public interest" or "(2) any other lawful conduct in furtherance of the exercise of the constitutional right of free speech in connection with an issue of public interest, or in furtherance of the exercise of the constitutional right of petition" (Civil Rights Law § 76-a [1][a][1]-[2]). The constitutional right to petition includes litigation, and "'[m]atters of public interest include judicial proceedings'" (Sweetpea Ventures Inc. v Belmamoun, 231 AD3d 460, 461 [1st Dept 2024], lv dismissed 44 NY3d 962 [2025][citation omitted]; see also Kohler v West End 84 Units LLC, 241 AD3d 1123, 1125 [1st Dept 2025]).

The Court finds that defendants have not met their prima facie burden for dismissal of plaintiffs' anti-SLAPP claim. Plaintiffs sufficiently allege that this is an action involving public petition and participation, and that defendants filed their counterclaims in retaliation for, inter alia, plaintiffs' commencement of this action. The amended complaint sufficiently pleads the other elements required to state a claim under the anti-SLAPP statute, namely that the counterclaims were interposed "without a substantial basis in fact and law" for "the sole purpose of harassing, intimidating, punishing or maliciously inhibiting" plaintiffs' free speech and petition rights (Amended Complaint ¶¶ 198-201; Civil Rights Law § 70-a [1]). Accordingly, defendants' motion to dismiss plaintiffs' tenth cause of action under the anti-SLAPP statute is denied.

The Court's Escrow Order states, in relevant part: "It is undisputed there is no current certificate of occupancy for the building. As such, plaintiffs shall deposit their monthly rent in an escrow account to be maintained by their counsel, until further order of the Court" (NYSCEF Doc. 41 at 2).

In their brief in support of the Escrow Order, defendants argue that allowing plaintiffs' continued possession of their units without requiring them to pay rent is prejudicial and "incentivizes abusive tactics and unlimited delays or prolonged litigation" (NYSCEF Doc. 58 at 1). They claim that plaintiffs cannot assert habitability issues or the absence of a certificate of occupancy as defenses to their obligation to pay rent because they sublet their units without authorization and are "profiteering" by charging subtenants more than the legally regulated rent in violation of Rent Stabilization Code ("RSC") § 2525.6 (b) (id. at 1-2). Defendants invoke [*5]NYC Administrative Code § 27-2115 (h) (1) in support of their request that the Court expand the Escrow Order to direct plaintiffs to deposit all unpaid rent that has accrued since this action was commenced in October 2024.

Plaintiffs argue they should be relieved of the Escrow Order on the grounds that the MDL prohibits the recovery of rent by an owner where a building lacks a certificate of occupancy (NSYCEF Doc. 55 at 1-2, citing MDL §§ 301, 302 [1] [a], b; Chazon LLC v Maugenest, 19 NY3d 410, 415 [2012]). They further oppose the Escrow Order requirement as prejudicial to them, as it denies them the full protection of MDL § 302, which they say contemplates reducing rent to zero in this situation and causes them irreparable harm as they are low-income persons who are denied access to the funds in escrow that they would otherwise use to meet their essential needs. Plaintiffs provide an accounting of the escrowed funds and represent that these sums do not equal the full rent for their respective units because each of them lives and splits rent with roommates, not all of whom are parties to this action or immediate family members (id. at 4-6).

MDL § 301 prohibits the occupation of a multiple dwelling for which a certificate of occupancy has not been issued. MDL § 302 (1) (b) provides that "[n]o rent shall be recovered by the owner of such premises" while it lacks a certificate of occupancy, "and no action or special proceeding shall be maintained therefor, or for possession of said premises for nonpayment of such rent" (see also Matter of GVS Props. LLC v Vargas, 172 AD3d 466, 466 [1st Dept 2019], citing Chazon, 19 NY3d at 415). In the Escrow Order, the Court found no dispute as to the Building's lack of a certificate of occupancy as of February 26, 2025. As Defendants have not furnished any proof that a valid certificate of occupancy for the Building has since been issued and because the language of MDL § 302 (1) (b) is unequivocal, the Court finds that plaintiffs are entitled to vacatur of the Escrow Order at this time.

Defendants' remaining contentions are unavailing. RSC § 2525.6 (b) merely limits the amount of rent a tenant may charge a subtenant and entitles a subtenant to treble damages in the event of a violation; it does not require tenants alleged to have violated it to continue paying rent to a landlord where the building in question lacks a certificate of occupancy. New York City Administrative Code § 27-2115 (h) (1) does not stand for the proposition defendants assert. Rather, it governs the procedure by which a group of lawful occupants may apply to the Court in the event HPD fails to issue a notice of violation within thirty days of an occupant's request. Although MDL § 302-a (3) (c) does require tenants "deposit with the clerk of the court . . . the amount of rent sought" where the tenant alleges a "rent impairing" violation as a defense to non-payment, there is no similar requirement where violations of MDL §§ 301 and 302 are alleged.

Accordingly, it is hereby:

ORDERED that defendants' motion to dismiss plaintiff's tenth cause of action in the amended complaint is DENIED; and it is further

ORDERED that plaintiffs' cross-motion for default judgment against defendants is DENIED; and it is further

ORDERED that that part of the Court's Interim Decision and Order dated February 26, 2025, which sua sponte required plaintiffs to deposit their monthly rent in an escrow account (see NYSCEF Doc. 41 at 2), is hereby vacated nunc pro tunc to the date of the order, and plaintiffs' counsel is directed to return all escrow funds to their clients; and it is further

ORDERED that all parties shall appear by counsel (clients need not appear) for an in-person preliminary conference on January 28, 2026, at 10:00 AM.

This constitutes the decision and order of the Court.