FILED: NEW YORK COUNTY CLERK 03/08/ :54 AM INDEX NO /2014 NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 03/08/2015

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1 FILED: NEW YORK COUNTY CLERK 03/08/ :54 AM INDEX NO /2014 NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 03/08/2015 SUPREME COURT OF THE STATE OF NEW YORK Index No /2014 COUNTY OF NEW YORK STEFAN NIEBORAK, NATALIE LIPINKA, ALEXANDER LEPINSKY, FARRIS HASSAN, KAROLINE DEUTSCHMANN, ANDREAS DEUTSCHMANN, NATHAN MEEKS, SUHAN JUNAID, JUNHAO LONG, EVAN SACKS, GREG SEXTON, BRYAN HARRIS, NICHOLAS FERGUSON, JOSEPH LARATTA, GREGORY BRYAN, KATY ZHAO, EDMOND WONG, JENNIFER KIM, EN CHIEH CHEN, EDWARD KIM, TIM LIM, ANTHONY KIM, CHEERAG PATEL, PAUL CHOI, XINDI XU, VALERIE WONG, AMY ZHANG, LILIN JIN, CHELSEA ABBAS, BRITTANI FEDE, WENDY SZCZERBIAK, KIMBERLY BARBA, LOV PATEL, VIDUR MITTAL, AND ANKIT CHADHA, -against- Plaintiffs, W54-7 LLC, PLAINTIFFS AFFIRMATION IN OPPOSITION TO DEFENDANT S CROSS- MOTION AND IN FURTHER SUPPORT OF PLAINTIFFS MOTION JENNIFER A. ROZEN, an attorney duly admitted to practice before the Courts of the State of New York, affirms the truth of the following: 1. I am a member of Fishman & Mallon, LLP, the attorneys for the Plaintiffs, listed in the above caption ( the Plaintiffs ). I am fully familiar with the facts and circumstances set forth herein. Defendant. 2. This affirmation is in opposition to the Defendant s cross-motion for an order staying this action and requiring the Plaintiffs to file an application with DHCR for the relief sought herein. The affirmation is also in further support of the Plaintiffs Order to Show Cause for a preliminary injunction enjoining the 1

2 Defendant from commencing summary eviction proceedings in the Housing Court against the Plaintiffs during the pendency of this action as a result of their refusal to sign illegal and improper rent stabilized lease renewals. DEFENDANT IS NOT ENTITLED TO AN ORDER STAYING THIS ACTION OR REMOVAL OF THIS ACTION TO DHCR 3. The Defendant seeks a stay of this action thereby forcing the Plaintiffs to file their claims at DHCR. The Defendant makes the wholly unsupported argument that DHCR should hear the claims because has concurrent jurisdiction and essentially, because it can hear the case. The Defendant fails to cite any relevant authority to support this proposition. 4. In fact, there is a wealth of case law in this jurisdiction to support that the Court not only has jurisdiction to hear this case, but it must retain this case rather than refer it to DHCR for a determination. 5. In an almost identical case involving numerous tenants who were rent stabilized as a result of the landlord s receipt of J-51 tax benefits, Dugan v. London Terrace Gardens, L.P., 34 Misc. 3d 1240, 950 N.Y.S.2d 608, 2011 NY Slip Op 52501(U), 2011 WL (Sup. Ct. N.Y. Co. 2011), aff'd, 101 A.D.3d 648, 955 N.Y.S.2d 873 (1st Dep't 2012), this Court denied defendant's motion to dismiss or stay the action to permit the New York State Division of Housing and Community Renewal (DHCR) to resolve plaintiffs' claims. That decision was affirmed by the First Department. 6. This Court in Dugan specifically found that, [W]hile DHCR's resolution of the issues through rulemaking well might consider all stakeholders' interests, defendant concedes that DHCR in over 18 months still has not amended its rules to conform 2

3 to Roberts v. Tishman Speyer Props., L.P., 13 NY3d at Were the court to grant a stay, plaintiffs might lose their apartments without rent regulation while waiting indefinitely for DHCR to act. For these reasons alone, such an indefinite stay would be inequitable, denying plaintiffs a prompt and permanent adjudication of their claims. C.P.L.R. 2201; Nezry v. Haven Ave. Owner LLC, 28 Misc 3d 1226, 2010 WL , at *5 (Sup. Ct. NY Co. 2010). 7. This Court went on in Dugan to find that, No authority, however, supports the dismissal or stay of a court action until an administrative proceeding resolves the issues raised, except in the following circumstances. (1) The legislature specifically has conferred exclusive, rather than primary, jurisdiction on the administrative agency to resolve the issues in the first instance. Sohn v. Calderon, 78 NY2d at ; Wong v. Gouverneur Gardens Hous. Corp., 308 AD2d at & n.*; Vazquez v. Sichel, 12 Misc 3d 604, 607 (Civ. Ct. NY Co. 2005). See Capers v. Giuliani, 253 AD2d 630, (1st Dep't 1998); County Dollar Corp. v. Douglas, 160 AD2d 537, 538 (1st Dep't 1990); Pocantico Home & Land Co., LLC v. Union Free School Dist. of Tarrytowns, 20 AD3d 458, (2d Dep't 2005). (2) Plaintiffs seek referral to the agency for resolution of their claims. Crimmins v. Handler & Co., 249 AD2d 89, 91 (1st Dep't 1998). See Missry v. Ehrlich, 1 Misc 3d 723, 731 (Civ. Ct. NY Co. 2003). (3) An administrative proceeding relating to the issues preceded the court action or still is pending. Wong v. Gouverneur Gardens Hous. Corp., 308 AD2d at 302, 305; Davis v. Waterside Hous. Co., 274 AD2d at 319; Nasaw v. Jemrock Realty Co., 225 AD2d at 386. See Acosta v. Loews Corp., 276 AD2d at 218;Missry v. Ehrlich, 1 Misc 3d at Like the defendant in Dugan, the Defendant here does not contend that any of the circumstances necessary to support a stay of this action or removal to DHCR exist here. This Court has found repeatedly that DHCR does not have exclusive jurisdiction over this type of action. There is no proceeding previously or currently pending at DHCR and the Plaintiffs are not seeking referral to DHCR. Importantly, no coordination between the instant action and DHCR's proceeding is necessary. There is no risk of inconsistent dispositions, 3

4 nor will any DHCR determinations be forthcoming to inform the court. See, Wong v. Gouverneur Gardens Hous. Corp., 308 AD2d at 303; Davis v. Waterside Hous. Co., 274 AD2d at ; Missionary Sisters of the Sacred Heart v. Meer, 131 AD2d 393, 395 (1st Dep't 1987). Instead, the Defendant is forum shopping in an attempt to indefinitely delay a resolution of this matter. 9. The Defendant s only other argument in support of a stay of this action is that DHCR has expertise rent regulation. However, this argument is equally unavailing. In the landmark J-51 case, Roberts v. Tishman Speyer Props., L.P., 13 NY3d 270 at , the Court of Appeals found not only that DHCR's interpretation of the very statutory requirements at issue here was at variance from DHCR s application of the statute, but also that interpretation of those statutory requirements, does not call upon us to interpret a statute where "specialized knowledge and understanding of underlying operational practices or... an evaluation of factual data and inferences to be drawn therefrom" is at stake such that we should defer to the administrative agency's interpretation. Id. at 285 (quoting KSLM-Columbus Apts., Inc. v. New York State Div. of Hous. & [*7]Community Renewal, 5 NY3d 303, 312 (2005)). 10. The Court of Appeals in Roberts specifically found that, [W]here the issue requires accurate reading and analysis of statutes and apprehension of legislative intent, there is no basis for reliance on an administrative agency's expertise. Roberts v. Tishman Speyer Props., L.P., 13 NY3d at Additionally, there is no question that application of statutory standards and determination of whether they have been followed are regularly within the 4

5 court's province. See, Vazquez v. Sichel, 12 Misc 3d at 612 (citing Missionary Sisters of the Sacred Heart v. Meer, 131 AD2d at ; State of New York v. Winter, 121 AD2d 287, 289 (1st Dep't 1986)). 12. In the instant case, the Defendant has employed a whole host of strategies to delay a determination of this case on the merits. The instant motion is another example of its attempt to shirk responsibility for stealing hundreds of thousands of dollars from the tenants involved in this action, and from New York City taxpayers. The Plaintiffs should not have to wait several years for a determination on the rent stabilized status of their units, their legal rent and a determination on their overcharge awards. Moreover, the Plaintiffs chose their forum by filing the instant action in this Court and based on the binding authority cited herein, there is no question that the Court must hear their claims. 13. The Defendant has cited absolutely no authority to support a stay of this action or the removal of this case to DHCR and simply avers that because DHCR has the authority to hear such cases, it should. The Defendant s motion must be denied. The Court Should Grant the Preliminary Injunction 14. The Defendant s arguments opposing the preliminary injunction are equally unavailing. The Defendant cites Post v. 120 East End Ave. Corp., 62 N.Y.2d 19 (1984) to support the proposition that, Preliminary Injunctions in Supreme Court are not normally granted in housing court matters and are not favored by the courts. First, that language does not appear anywhere in the 5

6 Court of Appeals decision cited by the Defendant. Secondly, Post is a decision that was issued 31 years ago and well before the existence of the technology used to blacklist tenants, causing irreparable harm to them. Lastly, this case was decided on the heels of the enactment of RPAPL 753, which, for the first time, allowed tenants to seek a stay in housing court when they were in imminent threat of eviction. Post has absolutely no application here. 15. The Defendant does not deny the fact that if it is permitted to file separate actions in housing court against the Plaintiffs, they will suffer irreparable harm. Nor does the Defendant bother to address the fact that at least six Justices of this Court have recently granted Temporary Restraining Orders and/or Preliminary Injunctions to residential tenants seeking to avoid such harm. The Defendant failed to address, let alone distinguish this case from any of the cases cited in the Plaintiffs Moving papers. Instead, the Defendant cites a few outdated cases that are not even remotely on point. The Defendant also makes the wholly unsupported argument that granting a preliminary injunction here will somehow open the floodgates to litigants. 16. Importantly, the Defendant does not dispute that there is a strong likelihood of success on the merits because it undisputedly received j-51 tax benefits and the subject apartments are subject to rent stabilization. 17. Because the Plaintiffs have clearly established the threat of irreparable harm and a likelihood of success on the merits, the Supreme Court should grant the Plaintiff s motion for a Preliminary Injunction preventing the 6

7 Defendant from commencing actions against the Plaintiffs in housing court for their refusal to execute illegal and improper lease renewals. 18. It would be duplicative and a waste of judicial resources to litigate multiple cases dealing with the same central issues in multiple and separate forums, as the Defendant seems to suggest the parties should do. Allowing the Defendant to do so would also create the risk of inconsistent dispositions and it would also be prohibitively costly for the Plaintiffs to hire counsel to litigate this action as well as any housing court action brought. 19. On the other hand, there is no harm whatsoever to the Defendant resulting from the preliminary injunction and in fact the Plaintiffs have continued to pay rents, which are much higher than the legal rents since this case has been filed. Notably, the Defendant does not even allege, let alone show that it will suffer any harm if the Court grants a preliminary injunction. 20. Indeed, the Defendant could have interposed a counterclaim seeking possession of the subject apartments as soon as the complaint was filed. Instead and in response to this lawsuit, the Defendant has begun to issue improper Rent Stabilized leases to the Plaintiffs, which are higher than the legal rent, thereby admitting that the Plaintiffs will succeed on the merits of this case. 21. The Defendant s cross-motion is nothing more than a transparent attempt to delay a resolution of this matter indefinitely by forcing the Plaintiffs to start over by filing applications at DHCR while simultaneously defending themselves in housing court. 7

8 WHEREFORE, it is respectfully requested that the Court issue a preliminary injunction, barring the Defendant from commencing summary eviction proceedings in the New York City Housing Court against the Plaintiffs for their refusal to execute improper and illegal renewal leases during the pendency of this action. It is also respectfully requested that the Court deny the Defendant s cross-motion in its entirety. Dated: New York, NY March 8, 2015 JENNIFER A. ROZEN 8