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THE REASONABLENESS OF THE COSTS OF TEMPORARILY RELOCATING A TENANT FORCED TO VACATE AN UNINHABITABLE BUILDING MUST BE DETERMINED IN A LIEN FORECLOSURE PROCEEDING, THE LIEN CANNOT BE SUMMARILY DISCHARGED BY FINDING THE COSTS AS STATED IN THE NOTICE OF LIEN FACIALLY UNREASONABLE.

The Court of Appeals, in a full-fledged opinion by Judge Garcia, resolving a conflict between the 1st and 2nd Departments, determined a dispute about the reasonableness of the costs of temporarily relocating a tenant forced to vacate an uninhabitable building, as stated in a Notice of Lien, is not subject to summary disposition but rather must be resolved in a foreclosure proceeding. The 1st Department had erroneously held that such a lien imposed by the NYC Department of Housing Preservation and Development (HPD) could be summarily discharged if the relocation costs stated in the Notice of Lien were deemed unreasonable:

Facial invalidity [of a Notice of Lien] occurs only in limited circumstances not present here. In both cases at issue, the notices of lien contained all required elements under Lien Law § 9 and Administrative Code § 26-305 (4) (a) and were properly filed. While summary discharge is proper when a notice of lien includes non-lienable expenses … , the notices of lien here demonstrated no such defect. The notices stated that they sought “hotel expenses,” “administration costs,” and “relocation costs,” which sufficed to meet the requirement that the notice contain a statement of “the labor performed or materials furnished.” Rather than challenge those categories of expenses as “lienable,” both [property owners] object to the amount claimed for such expenses. Such a dispute is not properly resolved through a summary discharge proceeding. Rivera v Department of Hous. Preserv. & Dev. of the City of N.Y., 2017 NY Slip Op 02587, CtApp 4-4-17

LANDLORD-TENANT (NYC, THE REASONABLENESS OF THE COSTS OF TEMPORARILY RELOCATING A TENANT FORCED TO VACATE AN UNINHABITABLE BUILDING MUST BE DETERMINED IN A LIEN FORECLOSURE PROCEEDING, THE LIEN CANNOT BE SUMMARILY DISCHARGED BY FINDING THE COSTS AS STATED IN THE NOTICE OF LIEN FACIALLY UNREASONABLE)/LIEN LAW (NYC, THE REASONABLENESS OF THE COSTS OF TEMPORARILY RELOCATING A TENANT FORCED TO VACATE AN UNINHABITABLE BUILDING MUST BE DETERMINED IN A LIEN FORECLOSURE PROCEEDING, THE LIEN CANNOT BE SUMMARILY DISCHARGED BY FINDING THE COSTS AS STATED IN THE NOTICE OF LIEN FACIALLY UNREASONABLE)/MUNICIPAL LAW (NYC, THE REASONABLENESS OF THE COSTS OF TEMPORARILY RELOCATING A TENANT FORCED TO VACATE AN UNINHABITABLE BUILDING MUST BE DETERMINED IN A LIEN FORECLOSURE PROCEEDING, THE LIEN CANNOT BE SUMMARILY DISCHARGED BY FINDING THE COSTS AS STATED IN THE NOTICE OF LIEN FACIALLY UNREASONABLE)

DEFENDANT LANDLORD DEMONSTRATED RENOVATIONS TO THE APARTMENT, WHICH WAS ONCE RENT-CONTROLLED, WERE SUFFICIENT TO WARRANT CHARGING MARKET RENT (FIRST RENT), COMPLAINT DISMISSED BASED ON LANDLORD’S DOCUMENTARY EVIDENCE.

The First Department, over an extensive dissent, determined plaintiff landlord was entitled to dismissal of tenant’s complaint (based on documentary evidence). The complaint alleged the landlord was not entitled to charge market rent (“first rent”) but rather the apartment was subject to rent control. The landlord demonstrated that renovations, including the addition of a second floor, substantially altered the apartment such that first rent could be charged:

The documentary evidence submitted by landlord was designed to refute plaintiff’s claim that the conversion of the apartment into a duplex did not meet the criteria for first rent or high rent vacancy deregulation. A landlord may charge first rent, pursuant to the Rent Stabilization Code, where the landlord “substantially alters the outer dimensions of a vacant housing accommodation, which qualifies for a first rent equal to or exceeding the applicable amount qualifying for deregulation” (9 NYCRR 2520.11[r][12]) which in this case, was $2,000 or more per month” (9 NYCRR 2520.11[r][4]). Stated somewhat differently, first rent is permitted “when the perimeter walls of the apartment have been substantially moved and changed and where the previous apartment, essentially, ceases to exist, thereby rendering its rental history meaningless” … . This Court has described the test for whether alterations qualify for first rent as “reconfiguration plus obliteration of the prior apartment’s particular identity” … . * * *

Landlord satisfied its burden of demonstrating that it made the necessary improvements to qualify for first rent, since it established that it substantially altered the character of the apartment by connecting it to the new penthouse. * * *

We similarly find that the documents submitted by landlord established that it properly claimed a rent increase based on the costs of its project to substantially increase the space in the apartment. Dixon v 105 W. 75th St. LLC, 2017 NY Slip Op 02504, 1st Dept 3-30-17

 

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LANDLORD (SUBLESSOR) DID NOT OWE A DUTY TO PLAINTIFF’S SUBROGEE TO PREVENT A MENTALLY ILL TENANT FROM SMOKING IN THE APARTMENT WHERE A FIRE STARTED.

The Second Department determined defendant nonprofit did not owe a duty of care to plaintiff’s subrogee for the actions of a tenant which apparently started a fire in the tenant’s apartment. Defendant nonprofit leased apartments to tenants suffering from mental illness. The tenants lived independently with little supervision:

Under limited circumstances, the relationship between a lessor and a lessee can give rise to a duty of care inasmuch as the lessor “must exercise reasonable care not to expose third persons to an unreasonable risk of harm” … . … [T]he relevant inquiry [is] whether the defendant, as sublessor, exposed the plaintiff’s insured in this case to an unreasonable risk of harm. Moreover, in evaluating the existence and scope of the duty of care, we are mindful that where, as here, the action involves only property damage, “the public policies, factors, and other analytical considerations used in setting the orbit of duty are different from those at play in cases involving physical injury” … .

Under the circumstances presented, the defendant established, prima facie, that it owed no duty to the plaintiff’s insured to take affirmative steps to prevent the tenant from smoking in the demised premises … . The evidence showed, inter alia, that all participants in the defendant’s housing program had to be able to live independently, and the degree of oversight provided by the defendant under the terms of its agreement with the tenant was limited. …

“[I]n the absence of fault or a specific contract provision to the contrary, neither the landlord nor the tenant is obligated to perform repairs after a fire” … . Here, the defendant established its prima facie entitlement to judgment as a matter of law dismissing the breach of contract cause of action by showing that the subject lease did not impose an obligation on it to repair the premises after a fire … , or to answer in damages for a fire caused by its sublessee … . Tower Ins. Co. of N.Y. v Hands Across Long Is., Inc., 2017 NY Slip Op 02082, 2nd Dept 3-22-17

 

NEGLIGENCE (LANDLORD DID NOT OWE A DUTY TO PLAINTIFF’S SUBROGEE TO PREVENT A MENTALLY ILL TENANT FROM SMOKING IN THE APARTMENT WHERE A FIRE STARTED)/INSURANCE LAW (LANDLORD DID NOT OWE A DUTY TO PLAINTIFF’S SUBROGEE TO PREVENT A MENTALLY ILL TENANT FROM SMOKING IN THE APARTMENT WHERE A FIRE STARTED)/LANDLORD-TENANT (LANDLORD DID NOT OWE A DUTY TO PLAINTIFF’S SUBROGEE TO PREVENT A MENTALLY ILL TENANT FROM SMOKING IN THE APARTMENT WHERE A FIRE STARTED)

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LEASE PROVISION ALLOWING THE COLLECTION OF RENT AFTER EVICTION BY SUMMARY PROCEEDINGS VALID AND ENFORCEABLE.

The Second Department determined the clause in the lease which allowed the landlord to collect rent after eviction by summary proceedings was valid and enforceable:

“Although an eviction terminates the landlord-tenant relationship, the parties to a lease are not foreclosed from contracting as they please” … . “Where a lease provides that a landlord is under no duty to mitigate damages after its reentry by virtue of its successful prosecution of a summary proceeding, and that the tenant remains liable for damages, [the tenant] remain[s] liable for all monetary obligations arising under the lease'” … . Here, the lease did not obligate the plaintiff to mitigate damages after a dispossession by summary proceeding and specifically provided that [tenant] would remain liable for rent after eviction. In addition, the lease clearly stated that if [tenant] breached the lease, the plaintiff was not precluded from any other remedy in law or equity. Consequently, the lease did not limit the plaintiff to recovery of only pretermination rent in the event that it commenced a summary eviction proceeding to regain possession of the premises … . L’Aquila Realty, LLC v Jalyng Food Corp., 2017 NY Slip Op 02027, 2nd Dept 3-22-17

LANDLORD-TENANT (LEASE PROVISION ALLOWING THE COLLECTION OF RENT AFTER EVICTION BY SUMMARY PROCEEDINGS VALID AND ENFORCEABLE)/CONTRACT LAW (LANDLORD-TENANT, LEASE PROVISION ALLOWING THE COLLECTION OF RENT AFTER EVICTION BY SUMMARY PROCEEDINGS VALID AND ENFORCEABLE)

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TREE CUTTING NOT COVERED, PILE OF DEBRIS NOT A STRUCTURE, OUT OF POSSESSION LANDLORD NOT LIABLE UNDER LABOR LAW 200.

The Second Department, in the course of a decision addressing the exclusivity of a Workers’ Compensation recovery and Labor Law 240(1), 241(6) and 200 causes of action, noted that tree cutting was not covered under Labor Law 240(1) and a pile of debris was not a structure within the meaning of Labor Law 240(1) and 241(6). The court further noted that defendant (LLC), as an out of possession landlord, was not liable under Labor Law 200 for either the manner in which work is done or a dangerous condition:

The Supreme Court … properly granted that branch of the respondents’ motion which was for summary judgment dismissing the causes of action alleging violations of Labor Law §§ 240(1) and 241(6) insofar as asserted against the LLC, as tree cutting and removal are not activities covered by those statutory provisions … , and the evidence established, as a matter of law, that the mound of old tennis court clay, sand, rocks, and other construction debris was not a “structure” under the Labor Law … . Moreover, the respondents established, prima facie, that the tree cutting and removal was ” routine maintenance outside of a construction or renovation context'” … . …

The Supreme Court also properly granted that branch of the respondents’ motion which was for summary judgment dismissing the causes of action alleging a violation of Labor Law § 200 and common-law negligence insofar as asserted against the LLC. “Labor Law § 200 is a codification of a property owner’s common-law duty to provide workers at a site with a reasonably safe place to work” … . To the extent that the plaintiff’s claims are based on the manner in which the work was performed, the respondents established, prima facie, that the LLC did not have authority to supervise or control the means and method of the work … . Likewise, to the extent the plaintiff’s claims were based on a dangerous condition on the premises, by presenting the lease between the LLC and the camp, the respondents also established, prima facie, that the LLC, as an out-of-possession landlord, was not responsible for the plaintiff’s injuries … . The LLC relinquished control of the subject property to the camp and placed all responsibility for landscaping and maintenance work on the camp … . Although the LLC reserved a right of entry under the lease, here, this did not provide a sufficient basis on which to impose liability upon the LLC for injuries caused by a dangerous condition, as the condition did not violate a specific statute, nor was it a significant structural or design defect … . Derosas v Rosmarins Land Holdings, LLC, 2017 NY Slip Op 02019, 2nd Dept 3-22-17

LABOR LAW-CONSTRUCTION LAW (TREE CUTTING NOT COVERED, PILE OF DEBRIS NOT A STRUCTURE, OUT OF POSSESSION LANDLORD NOT LIABLE UNDER LABOR LAW 200)/TREE CUTTING (LABOR LAW-CONSTRUCTION LAW, TREE CUTTING NOT COVERED, PILE OF DEBRIS NOT A STRUCTURE, OUT OF POSSESSION LANDLORD NOT LIABLE UNDER LABOR LAW 200)/STRUCTURE (LABOR LAW-CONSTRUCTION LAW, TREE CUTTING NOT COVERED, PILE OF DEBRIS NOT A STRUCTURE, OUT OF POSSESSION LANDLORD NOT LIABLE UNDER LABOR LAW 200)/LANDLORD-TENANT (LABOR LAW-CONSTRUCTION LAW, TREE CUTTING NOT COVERED, PILE OF DEBRIS NOT A STRUCTURE, OUT OF POSSESSION LANDLORD NOT LIABLE UNDER LABOR LAW 200)

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BUILDING RESIDENTS CAN BRING CLASS ACTION AGAINST OWNERS-MANAGERS ALLEGING NEGLIGENCE IN PREPARATION FOR SUPERSTORM SANDY.

The First Department determined the residents of a building met the requirements for a class action suit alleging negligent failure to secure the building prior to Superstorm Sandy:

The court properly concluded that plaintiffs satisfied the criteria of CPLR 901, and the factors enumerated in CPLR 902 support class certification.

It is undisputed that the building has more than 400 residential apartments above 15 floors of commercial space. Thus, the numerosity requirement is met and joinder of all class members is impracticable … .

The commonality requirement is also satisfied in that the proof at trial will consist of evidence of defendants’ efforts to prevent damage in advance of the storm and to repair damage after the storm. Since the class consists of tenants of the building, common questions predominate over individual questions concerning the amount and type of damages sustained by each class member … . Any differences in proof with respect to the applicability of the warranty of habitability in Real Property Law § 235-b as between residential tenants and commercial tenants is insufficient to overcome the significant common questions, and the court may, in its discretion, establish subclasses … .

The claims of the putative class representatives are typical of the class’s claims since each resides or leases space in the building and their injuries, if any, derive from the same course of conduct by defendants … . Moreover, the record reflects that they are sufficiently informed about the facts, have no conflicts of interest with the class they seek to represent, and are able to act as a check on counsel … . Roberts v Ocean Prime, LLC, 2017 NY Slip Op 01974, 1st Dept 3-16-17

 

CIVIL PROCEDURE (BUILDING RESIDENTS COULD BRING CLASS ACTION AGAINST OWNERS-MANAGERS ALLEGING NEGLIGENCE IN PREPARATION FOR SUPERSTORM SANDY)/CLASS ACTIONS (BUILDING RESIDENTS COULD BRING CLASS ACTION AGAINST OWNERS-MANAGERS ALLEGING NEGLIGENCE IN PREPARATION FOR SUPERSTORM SANDY)/LANDLORD-TENANT (BUILDING RESIDENTS COULD BRING CLASS ACTION AGAINST OWNERS-MANAGERS ALLEGING NEGLIGENCE IN PREPARATION FOR SUPERSTORM SANDY)/SUPERSTORM SANDY (BUILDING RESIDENTS COULD BRING CLASS ACTION AGAINST OWNERS-MANAGERS ALLEGING NEGLIGENCE IN PREPARATION FOR SUPERSTORM SANDY)

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QUESTION OF FACT WHETHER LANDLORD’S AGENTS WERE AWARE OF THE DOG’S VICIOUS PROPENSITIES IN THIS DOG-BITE CASE, LANDLORD’S SUMMARY JUDGMENT MOTION SHOULD NOT HAVE BEEN GRANTED.

The Second Department, reversing Supreme Court in this dog-bite case, determined there was a question of fact whether the landlord’s (Fowler LLC’s) agents knew of the vicious propensities of a dog on the premises:

“To recover against a landlord for injuries caused by a tenant’s dog on a theory of strict liability, the plaintiff must demonstrate that the landlord: (1) had notice that a dog was being harbored on the premises; (2) knew or should have known that the dog had vicious propensities, and (3) had sufficient control of the premises to allow the landlord to remove or confine the dog” … . “Vicious propensities include the propensity to do any act that might endanger the safety of the persons and property of others” … . “Evidence tending to prove that a dog has vicious propensities includes a prior attack, the dog’s tendency to growl, snap, or bare its teeth, the manner in which the dog was restrained, and a proclivity to act in a way that puts others at risk of harm” … .

Fowler met its prima facie burden for judgment as a matter of law by demonstrating that it was not aware, nor should it have been aware, that the dog had any vicious propensities … . However, in opposition to the motion, the plaintiff raised a triable issue of fact as to whether nonparties John Martel and Carlos Ortez were Fowler’s agents such that their knowledge of the dog’s alleged vicious propensities could be imputed to Fowler … . Kraycer v Fowler St., LLC, 2017 NY Slip Op 01345, 2nd Dept 2-22-17

 

ANIMAL LAW (DOG-BITE, QUESTION OF FACT WHETHER LANDLORD’S AGENTS WERE AWARE OF THE DOG’S VICIOUS PROPENSITIES IN THIS DOG-BITE CASE, LANDLORD’S SUMMARY JUDGMENT MOTION SHOULD NOT HAVE BEEN GRANTED)/DOG-BITE (LANDLORD, QUESTION OF FACT WHETHER LANDLORD’S AGENTS WERE AWARE OF THE DOG’S VICIOUS PROPENSITIES IN THIS DOG-BITE CASE, LANDLORD’S SUMMARY JUDGMENT MOTION SHOULD NOT HAVE BEEN GRANTED)/LANDLORD-TENANT (DOG-BITE, QUESTION OF FACT WHETHER LANDLORD’S AGENTS WERE AWARE OF THE DOG’S VICIOUS PROPENSITIES IN THIS DOG-BITE CASE, LANDLORD’S SUMMARY JUDGMENT MOTION SHOULD NOT HAVE BEEN GRANTED)/AGENCY (DOG-BITE, QUESTION OF FACT WHETHER LANDLORD’S AGENTS WERE AWARE OF THE DOG’S VICIOUS PROPENSITIES IN THIS DOG-BITE CASE, LANDLORD’S SUMMARY JUDGMENT MOTION SHOULD NOT HAVE BEEN GRANTED)

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QUESTION OF FACT WHETHER ASSAILANT WAS AN INTRUDER WHO ENTERED BUILDING THROUGH A BROKEN DOOR.

The Second Department determined questions of fact precluded summary judgment in favor of the landlord (New York City Housing Authority, NYCHA) in this assault liability case. Plaintiff-tenant alleged she was assaulted by an intruder who entered the apartment building through a broken door:

“Landlords have a common-law duty to take minimal precautions to protect tenants from foreseeable harm, including foreseeable criminal conduct by a third person” … . Recovery against a landlord for an assault committed by a third party requires a showing that the landlord’s negligent failure to provide adequate security was a proximate cause of the injury … . “In premises security cases particularly, the necessary causal link between a landlord’s culpable failure to provide adequate security and a tenant’s injuries resulting from a criminal attack in the building can be established only if the assailant gained access to the premises through a negligently maintained entrance. Since even a fully secured entrance would not keep out another tenant, or someone allowed into the building by another tenant, plaintiff can recover only if the assailant was an intruder” … .

Here, in support of its motion for summary judgment dismissing the complaint, NYCHA failed to demonstrate its prima facie entitlement to judgment as a matter of law. The deposition testimony of the plaintiff submitted in support of the motion raised issues of fact regarding whether the door was operating properly prior to, and on the day of, the incident, and whether [the assailant] was an intruder who gained access to the premises through a negligently maintained entrance … . Ramos v New York City Hous. Auth., 2017 NY Slip Op 01244, 2nd Dept 2-15-17

 

NEGLIGENCE (QUESTION OF FACT WHETHER ASSAILANT WAS AN INTRUDER WHO ENTERED BUILDING THROUGH A BROKEN DOOR)/LANDLORD-TENANT (LIABILITY FOR ASSAULT, QUESTION OF FACT WHETHER ASSAILANT WAS AN INTRUDER WHO ENTERED BUILDING THROUGH A BROKEN DOOR)/ASSAULT (LANDLORD-TENANT, NEGLIGENCE, QUESTION OF FACT WHETHER ASSAILANT WAS AN INTRUDER WHO ENTERED BUILDING THROUGH A BROKEN DOOR)

LEASE WAS NOT AN ATTEMPT TO THWART (NYC) RENT CONTROL AND WAS THEREFORE VALID AND ENFORCEABLE.

The First Department, in a full-fledged opinion by Justice Tom, determined the lease in question was not an attempt to thwart rent control and was therefore valid and enforceable. The lease related to three apartments which were leased at different times to the defendant-tenant, who combined them into a single unit. Two of the apartments were rent-controlled and one was rent-stabilized and it was unclear at the time the lease was drawn what law applied:

… [T]his case is clearly unique because unlike the many cases where we invalidated leases seeking to circumvent the rent laws, here the parties truly did not know the rent-regulated status of the combined apartments. It appears that there were two rent-controlled apartments that were combined with a rent-stabilized apartment sometime in 1977. Fundamentally, in the foregoing cases there was no uncertainty about the rent-regulated status of the apartments and no question that the parties knowingly attempted to circumvent the rent laws. In contrast, the parties in this matter were unsure about the status of the combined apartment. This confusion was well founded and even supported by the fact that the parties received conflicting determinations concerning the legal status of this apartment from Rent Administrators … regarding the apartment’s status. Furthermore, the lease contemplated the possibility that the apartment could not be treated as intended by the parties. Indeed, while the lease provided for the combined apartments to move from rent control to rent stabilization, the parties explicitly recognized that they might be “prohibited or precluded” from enforcing their intended procedure. This is quite different from those leases which purposely sought to skirt the law and had no regard for the rent regulation scheme whatsoever. In other words, this agreement contemplated not that both parties would evade regulatory coverage but that they would seek approval of their agreement … . Thus, this case is distinguishable from those involving leases which knowingly and purposely sought to evade the rent laws. Here, there was no intent by the parties to the lease agreement to circumvent the rent laws. 204 Columbia Hgts., LLC v Manheim, 2017 NY Slip Op 00425, 1st Dept 1-19-17

LANDLORD-TENANT (LEASE WAS NOT AN ATTEMPT TO THWART (NYC) RENT CONTROL AND WAS THEREFORE VALID AND ENFORCEABLE)/RENT CONTROL (NYC) (LEASE WAS NOT AN ATTEMPT TO THWART (NYC) RENT CONTROL AND WAS THEREFORE VALID AND ENFORCEABLE)/LEASES (LEASE WAS NOT AN ATTEMPT TO THWART (NYC) RENT CONTROL AND WAS THEREFORE VALID AND ENFORCEABLE)

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NYC RENT STABILIZATION RULES DO NOT APPLY TO A BUILDING CONVERTED FROM COMMERCIAL TO RESIDENTIAL USE AFTER 1974.

The Second Department, in a full-fledged opinion by Justice Dickerson, determined the exemption from (New York City) rent stabilization rules for housing units constructed after January 1, 1974, applied to defendant’s post-1974 conversion of a commercial building to residential units:

… [Supreme Court] found that the defendant had made a prima facie showing that the complex was exempt from rent stabilization by demonstrating that its renovations had converted the complex from commercial to residential use, and that it had paid for a majority of the conversion costs. The court further found that the plaintiffs had failed to raise a triable issue of fact as to whether the complex was subject to rent stabilization. In this regard, the court reasoned that the 75% requirement of Rent Stabilization Code § 2520.11 did not apply where a commercial building was converted to residential use. We affirm. * * *

The plaintiffs contend that … they raised a triable issue of fact as to whether the defendant failed to replace 75% of the systems … in accordance with section 2520.11(e)(1) of the Rent Stabilization Code… . We disagree. The most natural reading of the … 75% requirement is that it is applicable in situations where an owner purports to substantially rehabilitate an existing residential building, and not in situations where a commercial building is converted to residential use. Bartis v Harbor Tech, LLC, 2016 NY Slip Op 08831, 2nd Dept 12-28-16

 

LANDLORD-TENANT (NYC RENT STABILIZATION RULES DO NOT APPLY TO A BUILDING CONVERTED FROM COMMERCIAL TO RESIDENTIAL USE AFTER 1974)/MUNICIPAL LAW (NYC RENT STABILIZATION RULES DO NOT APPLY TO A BUILDING CONVERTED FROM COMMERCIAL TO RESIDENTIAL USE AFTER 1974)/RENT STABILIZATION (NYC RENT STABILIZATION RULES DO NOT APPLY TO A BUILDING CONVERTED FROM COMMERCIAL TO RESIDENTIAL USE AFTER 1974)

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