1378 Bedford v Watson

Civil Court of the City of New York, Kings County

Decided on May 1, 2026

Index No. CV-011519-17/KI

L. Austin D'Souza, J.

Plaintiff commenced this plenary action to recover $20,750 in alleged unpaid rent from January to November in 2016. Plaintiff is Defendant's former landlord. Defendant leased an apartment located at 1382 Bedford Avenue in Brooklyn. During a bench trial, the Court heard testimony from Edward Gomez, the property manager for Sterling Equities ("Sterling"), which is the company that currently manages the property; Defendant's husband, Carl Foster; and Kenyatta Clarke, the super of the building.

Consistent with CPLR 4213(a), the parties submitted post-trial briefs in-lieu of summations. Since the trial, the Court issued an interim order addressing the two defenses (see 1378 Bedford v Watson, Civ Ct, Kings County, October 15, 2024, D'Souza, J., index No. CV-011519-17/KI). The Court now addresses the merits of the remaining unresolved issues.

FACTS

Undisputed Facts

On March 1, 2010, the presumed owner of the subject building, nonparty Bedford Heights LLC ("Bedford"), and Defendant entered into a lease for the subject apartment (see Plaintiff's exhibit 2). The Bedford lease expired on July 31, 2010 (id.). On June 1, 2011, a different presumed owner of the subject building, nonparty Patricia Mattoon as Receiver, entered into a lease with Defendant for the term of September 1, 2011 through August 31, 2012 for the same apartment (see Plaintiff's exhibit 4). Thereafter, on July 25, 2012, nonparty 1382 Bedford [*2]LLC, as landlord, entered into a "renewal" lease with Defendant for the same apartment for a term beginning August 1, 2012 and ending July 30, 2013 (see Plaintiff's exhibit 5). At some point thereafter, Defendant became a month-to-month tenant until she vacated her apartment.

On or about April 26, 2016, nonparty Cornell Bedford Holdings LLC ("Cornell") brought a nonpayment summary proceeding against Defendant in Kings County Housing Court (see Cornell Bedford Holdings LLC v Kelly Watson [Civ Ct, Kings County, Hous Part, index No. LT-66893-16], notice of petition). Defendant did not answer the petition and a default judgment of possession was issued (id., judgment). No money judgment was issued (id.).

On June 15, 2016, Cornell sold the subject building to Plaintiff (see Plaintiff's exhibit 1, deed). On the same day, Cornell assigned leases for the subject building to Plaintiff (see Plaintiff's exhibit 3, assignment of leases).

On August 3, 2016, Plaintiff moved to be substituted as Petitioner in the nonpayment proceeding in Housing Court. On August 11, 2016, Plaintiff's motion was granted without opposition (see Court exhibit 1).

Trial Testimony

Edward Gomez testified that he has been employed as Sterling's property manager since 2021. He oversees day-to-day operations of the premises, including maintenance and leasing. According to documents maintained in Plaintiff's files, Defendant lived in the subject apartment beginning March 1, 2010. She was evicted on November 10, 2016. She owes approximately $20,750, including an opening balance of $10,625, which was calculated from the assignment of leases given by the prior owner. After having his recollection refreshed, Mr. Gomez testified that $10,625 amount is a running balance from the end of 2015 through the first few months of 2016. On cross-examination, Mr. Gomez said that the $10,625 figure was calculated by the previous management company and includes charges and late fees. He did not have personal knowledge of how the amount was calculated, but the amount was itemized by the previous owner and included in records given to Plaintiff.

Carl Foster testified that he lived with Defendant in the subject apartment in 2016 and they moved out in June 2016. Conditions existed in the apartment that made living there intolerable. The apartment was infested with mice and roaches; Plaintiff repeatedly failed to clear trash that piled up in the hallways; there was no hot water; water continually dripped in the bathtub; there were holes in the floors under the kitchen sink; and the bathtub was clogged. Mr. Foster and Defendant complained to the building manager, Jacob, but the conditions went unresolved and he stopped answering their calls. Mr. Foster and Defendant were never informed at any time during their tenancy that the building's ownership changed hands or that the lease was assigned to Plaintiff. Mr. Foster and Defendant moved out in June 2016 while a nonpayment proceeding was pending in Kings County Housing Court. Jacob told Mr. Foster and Defendant to drop the apartment keys at the former owner's office as they prepared to move out, which they did.

Kenyatta Clarke, Plaintiff's rebuttal witness regarding the defense of breach of warranty of habitability, testified that he became the super of the subject building on June 15, 2016, after the Plaintiff took over as owner of the building. Mr. Clarke never communicated with the Defendant or Mr. Foster, nor did he ever hear any complaints about conditions in the apartment. Defendant's apartment remained locked until November 10, 2016, when the Plaintiff gained access. Upon entry, there was no pest infestation and the hot water appeared to be working after the gas was turned back on.

ANALYSIS

The complaint alleges two causes of action: (1) unpaid rent through November 2016 totaling $20,500, which was increased to $20,750 at trial; and (2) legal fees, costs, and disbursements of approximately $10,000 (see Complaint). The answer raised three affirmative defenses: (1) breach of the warranty of habitability; (2) constructive eviction; and (3) that no legal fees are permitted pursuant to Real Property Actions & Proceedings Law ("RPAPL") § 702 (see Answer).

At the close of Plaintiff's case in chief at trial, Defendant moved to dismiss the entire case by oral application on two grounds relating to Plaintiff's cause of action for rent arrears. First, Plaintiff failed to prove that a lease was in place for the period of the alleged default in rent payments and a lease is needed because the subject apartment was rent stabilized. Second, Plaintiff failed to prove, as it was required to do pursuant to Multiple Dwelling Law ("MDL") § 325, that the apartment was registered with the New York City Department of Housing Preservation and Development ("HPD"). In opposition, Plaintiff opposed the oral application and argued that the case can be considered one of either rent arrears or use and occupancy, which does not require a lease. Additionally, Plaintiff asserted that it was unable to get certified records showing that it complied with MDL § 325 for 2016 because those records are unavailable. Defendant responded by citing to Harris v Corbin (79 Misc 2d 971, 971 [App Term, 2d Dept 1974]), which held that a landlord who fails to comply with MDL § 325 can only get a possessory judgment and not one for rent arrears. It also held that a landlord may not relabel an action for rent arrears as one for use an occupancy to evade MDL § 325 (id.). The Court reserved decision on Defendant's motion to dismiss and gave the parties an opportunity to submit post-trial briefs on their respective arguments.The principle issues before the Court are: (1) whether Plaintiff properly introduced evidence sufficient to prove the rent owed prior to their ownership (i.e. was foundation laid sufficient to accept records showing money owed to Plaintiff's predecessor?); (2) whether Plaintiff proved rent owed to it after it took ownership; (3) whether Plaintiff was obligated to prove registration with HPD as part of its prima facie case; (4) whether the defense of breach of warranty of habitability was proven; (5) whether the defense that Defendant actually surrendered the property on June 30, 2016; and (6) whether Plaintiff is entitled to attorney's fees.

Interim Order

The Court issued an Interim Order addressing the following defenses: Plaintiff's failure to prove compliance with the New York Multiple Dwelling Law ("MDL"), the lack of a lease, and [*3]whether the Court could accept submission of documents related to the MDL post-trial (see 1378 Bedford v Watson, Civ Ct, Kings County, October 15, 2024, D'Souza, J., index No. CV-011519-17/KI). The Court dismissed the defense of failure to provide a written lease covering the time period at issue (id.). The Court reopened the trial record to hold an evidentiary hearing on whether the Court should accept the Plaintiff's belated records proving its compliance with the MDL (id.). Thereafter, the parties settled the issue and stipulated to allowing in the records into evidence and waived the evidentiary hearing (see Stipulation).

1. Plaintiff is Not Entitled to Rent Owed Before It Took Ownership

Defendant contends that Plaintiff failed to prove its prima facie case for rent arrears before Plaintiff took over as owner of the subject premises. Defendant argues that Plaintiff did not introduce any testimony from any person who maintained the records supporting the rent allegedly owed prior to Plaintiff's ownership. Plaintiff purchased the property and assumed the leases by deed executed on June 15, 2016 and filed June 24, 2016. Defendant contends that Plaintiff presented no evidence about the accuracy of rent amounts owed for the period prior to the assignment. Plaintiff's ledger was admitted into evidence (see Plaintiff's exhibit P6). The first line of the ledger shows $10,625 as a past due balance from May 2016 (id.). Plaintiff contends that Defendant owes this amount as a result of the assignment. Plaintiff submitted no rent bills, invoices, communications or testimony tending to show that rent was owed, demanded, unpaid and outstanding for any time prior to it taking ownership of the premises.

Judicial Notice of the Housing Court case

Plaintiff asks that the Court take judicial notice of the filings in LT-66893-16/KI in which Plaintiff's predecessor in interest—and later Plaintiff, themselves—pursued Defendant in Housing Court for unpaid rent (see Cornell Bedford Holdings LLC v Kelly Watson [Civ Ct, Kings County, Hous Part, index No. LT-66893-16]). The petition, filed in April of 2016, sought $8,625. The petition was granted on default on June 3, 2016. However, no money judgment was issued in that case (id.). Additionally, the Defendant contests the validity of the arrears owed to Plaintiff's predecessor. Therefore, it is inappropriate to take judicial notice of a fact that is disputed (see Michael R. Gianatasio, PE, P.C. v City of New York, 159 AD3d 659, 660 [1st Dept 2018]). Consequently, this Court will not draw any inferences about the rent owed based on the filings in that case.

Plaintiff's Ledger

Plaintiff seeks admission of its rent ledger under the business records exception to the rule prohibiting out of court hearsay (see Plaintiff's exhibit P6). Defendant objected. Notably, Plaintiff's ledger begins on May 1, 2016 with an entry of a charge of $10,625 with the description ":Posted by QuickTrans (dpo)" (id.). The ledger contains three lines entered on June 1, 2016: a charge of $1,875 with the description ":Posted by QuickTrans (recsec)," a charge of $2,000 with the description ":Posted by QuickTrans (rent)," and a payment of $1,875 with the description "chk# :QuickTrans :Posted by QuickTrans" (id.). Thereafter, each month from July 2016 through November 2016 has a $2,000 charge for rent (id.). Plaintiff took ownership of the [*4]property by deed executed June 15, 2016.

"A proper foundation for admission of a business record must be provided by someone with personal knowledge of the maker's business practices and procedures" (Ingber v Martinez, 191 AD3d 959, 961 [2d Dept 2021]). "[T]he proponent of the record must first demonstrate that it was within the scope of the entrant's business duty to record the act, transaction or occurrence sought to be admitted" (Matter of Leon RR, 48 NY2d 117, 122-23 (1979)). "In addition, each participant in the chain producing the record, from the initial declarant to the final entrant, must be acting within the course of regular business conduct or the declaration must meet the test of some other hearsay exception" (id.). The record must also be made "at the time of the act, transaction, occurrence or event, or within a reasonable time thereafter" (CPLR 4518 [a]).

Here, in support of offering its rent ledger into evidence, Mr. Gomez testified that he was familiar with Plaintiff's recordkeeping procedures and that he was familiar with the file in question. He testified that employees in the office entered charges for rent and fees at or near the time that the charge accrued. He also testified about the first line in the ledger, for $10,625, stating that he had no personal knowledge regarding that figure. Absent establishing personal knowledge of the origin of the contents, a document cannot be introduced as a business record (see 1140 LLC v Meis Studio Inc., 2023 NY Slip Op 33739(U) [Sup Ct, New York County 2023], affd as modified on other grounds 225 AD3d 516 [1st Dept 2024]) [The Court denied admission of a ledger because the proponent failed to lay a foundation for admissibility by specifying that he was familiar with the record keeping practices or procedures of plaintiff's or any other party that may have created the rent ledger].

Plaintiff did not lay a proper foundation to authenticate the charges transferred from Plaintiff's predecessor as represented in the first line of the ledger as $10,625. In fact, Plaintiff submitted a "transaction register" (see Plaintiff's exhibit P7) into evidence, presumably prepared by Plaintiff's predecessor in interest. The transaction register did not reflect any outstanding rent balance, though it does reflect a deposit of $1,875. This casts further doubt as to the reliability of the first line, because Plaintiff submitted a document with a transfer for Defendant, but it only reflects a credit and no debt.

Therefore, while Plaintiff's ledger (see Plaintiff's exhibit P6) was admitted into evidence, the Court precludes the portion for which no foundation was laid—i.e. the first line on the ledger, about which Plaintiff's witness had no personal knowledge. Consequently, the alleged amount of arrears that predated Plaintiff's ownership of the subject premises is precluded from the judgment.

2. Plaintiff is Entitled to Rent Owed After It Took Ownership

Plaintiff seeks also seeks a judgment for unpaid rent for five months after it took ownership. Plaintiff took ownership on June 15, 2016 and received leasing assignments from the seller on that date. The assignment of leases contains a "rent roll" which describes Defendant's tenancy as month-to-month with a rent amount of $2,000 per month (see Plaintiff's exhibit P3). Plaintiff introduced a lease that expired on July 31, 2011 into evidence (Plaintiff's exhibit P2).

Defendant raised the defense that there was no lease in place at the time for which Plaintiff seeks rent. Defendant contends that the lack of a lease for the period in question is fatal to the prima facie case. The Court rejected this defense in its Interim Order (see 1378 Bedford v Watson, Civ Ct, Kings County, October 15, 2024, D'Souza, J., index No. CV-011519-17/KI).

A grantee who receives an assignment of leases is entitled to all the rights under the lease (see Real Property Law ("RPL") § 223). Therefore, subject to Defendant's other defenses, Plaintiff has proved its entitlement to judgment for rent that accrued after June 15, 2016 until November 30, 2016, when it took possession of the unit.

3. The Warranty of Habitability Defense Was Not Proven

To obtain damages on the ground that the landlord violated the warranty of habitability (see RPL § 235-b), Defendant must prove "that the premises had been unfit for human habitation, or that the condition of the premises had deviated from the uses reasonably intended by the parties, by offering proof as to the dates, severity and duration of the conditions complained of . . . and to show that [the landlord] had notice of the conditions complained of" (Sinclair v Ramnarace, 36 Misc 3d 150[A] [App Term, 2d Dept, 9th & 10th Jud Dists, 2012]).

Defendant did not submit any documentary evidence—neither pictures, nor HPD records, nor any other records—of the conditions violating the warranty of habitability. Mr. Foster testified that the faucets in the bathtub leaked and caused an overflow; that holes in the cabinets under the kitchen sink allowed vermin to infest the apartment; and that the unit frequently was without hot water. He also testified that it was the prior owner's policy that complaints be directed to the manager, Jacob. Mr. Foster and Defendant frequently complained to Jacob and notified the owner of the conditions by those means.

Defendant argues that the rent arrears should be reduced by 50% as a result of the condition of apartment. Defendant submitted no other proof of the conditions besides the testimony of Defendant's witness. However, Defendant's witness's recollection of the condition of the apartment and, therefore, his credibility, was called into question during cross-examination. Mr. Foster admitted on cross-examination to being confused about the trash collection method in the building, whether or not there was a trash chute in the building. Plaintiff's evidence regarding conditions comes from Ms. Clarke's testimony about the pests and water. But Ms. Clarke did not see the unit at all until about three and a half months after Defendant and Mr. Foster vacated the unit.

Based on the weight and credibility of the evidence presented the Defendant did not prove with competent evidence the existence of conditions along with notice and offer of access to prove the defense of breach of warranty of habitability.

4. The Surrender Defense Was Not Proven

To establish a defense of surrender, the defendant must establish that there was an agreement to end the tenancy. This can be shown, for example, by showing a receipt or through a [*5]signed surrender agreement. "[A] tenant is relieved of its obligation to pay full rent due under a lease where it surrenders the premises before expiration of the term and the landlord accepts its surrender" (Spinelli's Pizza, Inc. v G&T1 Corp., 208 AD3d 420 [1st Dept 2022] [emphasis added]).

Here, Defendant's witness testified that he and Defendant vacated and surrendered the property in June of 2016. Mr. Foster states that he and Defendant followed the procedures outlined to them by Plaintiff's predecessor. However, Defendant offered no evidence that the landlord accepted their surrender. In fact, the procedure that they described offered no opportunity for the landlord to accept or reject the surrender. Defendant's account is also not credible because she was aware that a nonpayment case had been filed against her. It is not credible that Defendant believed that the landlord would agree to release her from the tenancy, discharging any obligation to pay rent arrears, much less that the landlord's ascent would be offered tacitly. Put simply, there was no agreement regarding surrender. Therefore, the defense of surrender is dismissed.

5. Plaintiff is Entitled to Attorneys' Fees

Finally, Defendant contends that attorney's fees are not available because they are prohibited by RPAPL 702. RPAPL 702 states that "[n]o fees, charges or penalties other than rent may be sought in a summary proceeding." Plaintiff is not barred from recovering attorney's fees in a related plenary action (see Caprice Assoc. v Martel, 81 Misc 3d 704 [Sup Ct, New York County 2023]). In Caprice Associates, Justice Lebovits detailed the legislative history of RPAPL 702 and RPL 234. Not only is there no prohibition on attorney's fees in a plenary action for rent, but also, a party may seek attorney's fees for the prior Housing Court matter in a subsequent plenary action (id.).

Here, Plaintiff seeks attorney's fees directly incurred by it for this plenary action. New York follows the "American Rule," which provides that "a prevailing party may not collect [attorney's fees] from the [non-prevailing party] unless an award is authorized by agreement between the parties, statute or court rule" (Baker v Health Mgt. Sys., 98 NY2d 80, 88 [2002] (internal quotation marks and citation omitted)).

Plaintiff correctly points out that the lease provides for attorney's fees to the prevailing party (see Plaintiff's exhibit 2). Section A of paragraph 19 of the lease describes the owner's right to fees and subsection (5) of the lease describes that right to include "[a]ny legal fees and disbursements for legal action or proceeding brought by Owner against You because of a Lease default by You or for defending lawsuits brought against Owner because of your actions" (id.). Likewise, section B of paragraph 19 describes the Tenant's right to "collect reasonable legal fees and expenses incurred in a successful defense by You of a lawsuit brought by Owner against You or brought by You against Owner to the extent provided by Real Property Law, section 234" (id.).

The lease contains provisions for each party to have some claim to legal fees. Defendant, in her answer, did not enter a counterclaim for legal fees; therefore, there is no need to analyze [*6]whether this Decision and Order should be considered the result of a "successful defense."

Since Plaintiff proved some of its causes of action, it is a prevailing party entitled to a hearing on attorney's fees.

In light of the foregoing, it is hereby

ORDERED that the Clerk of the Court is directed to enter judgment in Plaintiff's favor for $10,000.00 in rent for the months July 2016 through November 2016 plus costs and disbursements; Plaintiff's other causes of action are dismissed with prejudice; it is further

ORDERED that Platiniff is entitled to pre-judgment interest, however, interest shall be suspended from the date of trial until the filing date of this Decision and Order by the Clerk of the Court; it is further

ORDERED that Plaintiff shall file and serve an affirmation with supporting documentation regarding the amount of attorney's fees sought within 30 days of the date of filing of this Decision and Order; Defendant shall file and serve an affirmation in opposition, if any, within 30 days of receipt thereafter; and Plaintiff shall file and serve reply, if any, within 14 days of receipt of the opposition. Additionally, all parties shall email a courtesy copy of their papers to enilsson@nycourts.gov. Thereafter, the Court will set a hearing on attorney's fees to be held over Microsoft Teams; it is further

ORDERED that all objections and motions that the Court reserved decision on at trial that were not addressed in this Decision and Order are hereby overruled; and it is further

ORDERED that, within 30 days of entry of this Decision and Order, Plaintiff's counsel shall serve a copy of this Decision and Order on Defendant and file a notice of entry upon the Clerk of this Court.

This constitutes the Decision and Order of the Court.

Dated: May 1, 2026

Brooklyn, NY

HON. L. AUSTIN D'SOUZA

Judge, New York City Civil Court