FILED: NEW YORK COUNTY CLERK 08/13/ :25 PM INDEX NO /2014 NYSCEF DOC. NO. 96 RECEIVED NYSCEF: 08/13/2018

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1 SUPREME COURT OF THE STATE OF NEW YORK APPELLATE DIVISION: FIRST DEPARTMENT X X r' JOCELYN NOLTE, Index No /14 -against- Plaintiff-Respondent, PREARGUMENT STATEMENT BRIDGESTONE ASSOCLATES LLC, Defendant-Appellant X 1 & 2. The title of the action and the full name of the original parties are set forth in the caption. There have been no changes in the parties. 3. Attorneys for Appellant Bridgestone Associates, LLC: BORAH, GOLDSTEIN, ALTSHULER, NAHINS & GOIDEL, P.C. 377 Broadway New York, new York (212) Attorneys for Respondent Jocelyn Nolte: HIMMELSTEIN, MCCONNELL, GRIBBEN, DONOGHUE & JOSEPH LLP 15 Maiden Lane New York, New York (212) This is an appeal from an order of the Supreme Court, New York County. 6. This is an action by a residential tenant seeking a declaration that an apartment is subject to the Rent Stabilization Law, damages and related relief. 7. The order appealed from entered August 6, 2018 adhered to a prior order of the court which declared that the premises are subject to the Rent Stabilization Law, found a rent 1 of 13

2 overcharge, determined that the rent overcharge was the result of fraud, established a rent utilizing the Thornton default formula, and directed a hearing to determine legal fees and the amount of damages and treble damages. 8. Reversal and/or modifications ofthe order and is sought on the grounds that there is insufficient evidence to find fraud, use of the default formula is inappropriate and a lack of evidentiary support for a finding of willful overcharge for the case to be decided as a matter of law. 9. A copy of the order appealed from is annexed as exhibit A. An appeal has been perfected to this proceeding. A copy of the preargument statement for the perfected appeal is annexed as exhibit B. Dated: New York, New York August 8, 2018 Yours, etc. BORAH, GOLDSTEIN, ALTSCHULER, NAH S & GOIDEL, C. &Pg. jvi PAÛL N. GRUBER Attorneys for Defendant-Appellant 377 Broadway New York, New York (212) TO: Himmelstein, McConnell, Gribben, Donoghue & Joseph LLP Attorneys for Plaintiff-Respondent 15 Maiden Lane New York, New York (212) of 13

3 EXHIBIT A 3 of 13

4 NDEX NO. 16 C321/2014 (FILED NEW YORK COUNTY CLERK 08/06/ :39 PMI NYSCEF DOC. NO. 93 REC.EI'ÆD NYSCEF: 3 8 / C 6 j2018 SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. KATHRYN E. FREED PART IAS MOTION 2. Justice X X INDEX No /2014 JOCELYN NOLTE, - v - Plaintiff, MOTION SEQ. NO. 002 BRFDGESTONE ASSOCIATES LLC, Defendant. DECISION AND ORDER â -XX The following e-filed documents, listed by NYSCEF document number (Motion 002) 75, 76, 77, 78, 79, 80, 81, 82, , 85, 86, 87, , 90, 91 were read on this motion to/for RENEWAL AND REARGUMENT Upon the foregoing documents, it is order that the motion is decided as follows. Defendant landlord moves for renewal and reargument of the decision, order and judgment of this Court dated October 4, 2017 and entered October 5, 2017 (the Order) The Order determined, in relevant part, that plaintiff's apartrnent, located 640 Fort Washington Avenue, Apt. 5B, New York, New York, was subject to rent stabilization pursuant to in Roberts v Tishman Speyer Props., LP. (13 NY3d 270 [2009]) (Roberts), and that plaintiff was entitled to money damages for rent overcharges. To calculate those overcharges, this Court set the base date as October 22, 2010, four years prior to commencement of this action, and set the base date rent at $1, per month, because the defendant and its predecessor engaged in fraud in connection... with rent increases for the apartment, its deregulation in 2008, and defendant s failure to reregister the apartment as rent-stabilized until January This Court also ruled that the base date rent /2014 NOLTE, JOCELYN vs. BRIDGESTONE ASSOCIATES LLC Page 1 of 6 Motion No of 6 4 of 13

5 NYSCEF DOC. NO. 96 RECEIVED NYSCEF: INDEX NO / /13/2018 [FILED : NEW YORK COUNTY CLERK 08/06/ :39 Pli NYSCEF DOC. NO. 93 RECEIVED NYSCEF: 08/06/2018 must be frozen until corrected rent registration statements were filed with the Division of Housing and Community Renewal (DHCR). Defendant claims entitlement to renewal, based on the First Department's decision in Taylor v 722 Realty lassoes, LP. (151 AD3d 95 [1" Dept 2017]) which, defendant contends, sets forth the correct calculation for setting the base date rent in a similar post-roberts case. Renewal is denied. The Taylor case was decided on May 25, 2017, five months prior to the Order, and was considered by this Court in reaching its determination. This appellate decision does not, in any event, constitute a "change in the law that would change the prior determination" (CPLR 2221 [e} [2J). The facts of Taylor are very different from those herein. As the First Department noted in Taylor, "the owner in its motion for summary judgment disproved any fraud in the setting of rent when [the plaintiffs} first took occupancy. Plaintiffs' assertions of possible fraud in connection with the apartment improvements made in 2000 are pure speculation" (151 AD3d at ). The owner of the apartment in the Taylor case provided documentation of the actual improvements to the apartment that justified a $ increase to the rent upon its vacancy by the last rentstabilized tenant (id.) Here, however, defendant provided no such proof to explain the $ increase in rent in Plaintiff challenges that aspect of the motion which seeks reargument pursuant to CPLR 2221 (d) as untimely, contending that this motion was e-filed on November 9, 2017, thirty-six days after the e-filing of the Order with notice of entry on October 5, CPLR 2221 (d) (3) provides that a motion for leave to reargue "shall be made within thirty days after service of a copy of the order determining the prior motion with written notice of its entry." Defendant contends that the motion is timely, because the plaintiff also served a copy of the Order with notice of entry by regular U.S. mail on October 5, 2017 and thus, pursuant to CPLR 2103 (b) (2), defendant had an /2014 NOLTE, JOCELYN vs. BRIDGESTONE ASSOCIATES LLC Page 2 of 6 Motion.No of 6 5 of 13

6 .. NEW. PPRK. INDEX NO /2C14 FILED: YORK COUNTY CLERK 08/06/ :39 PM NYSCE F DOC. NO. 93 RECEIVED NYsCEF: 08/06/2018 extra five days to make the motion. Defendant also contends that the timely filing of a notice of appeal on October 18, 2017 permits the court to entertain a motion to reargue. This motion was filed 35 days after the e-filing of the Order with notice of entry. not 36 days as plaintiff argues. "The day from which a time period runs is excluded in the computation" (Siegel, NY Practice, 202 at [50' ed 2010], citing General Construction Law 20). However, plaintiff is correct that the motion is untimely by five days. This action was commenced under the mandatory e-filing program pursuant to which parties are required to serve their papers electronically (Uniform Rules for Trial Cts [22 NYCRR] bb [c][1]). That plaintiff also elected to serve a copy of the notice of entry by regular mail did not extend defendant's deadline to file a motion for reargument (Woodward v Millbrook Ventures LLC (148 AD3d 658 [1" Dept 2017]). Despite the de minimis delay in making this motion, this Court has the discretion to reconsider its prior interlocutory rulings during the pendency of the action (Liss v Trans Auto Sys., 68 NY2d 15, 20 [1986]; Garcia v The Jesuits of Fordham, 6 AD3d 163, 165 [1"t Dept 2004]), especially where the movant has filed a timely notice of appeal and is not seeking an end-run around the strict appeal deadlines (Leist v Goldstein, 305 AD2d 468, 469 [2d Dept 2003]). Defendant's delay should also be excused as mandatory electronic filing is still relatively new. Indeed, the consensual electronic filing rules had provided that "a party may... utilize other service methods" (22 NYCRR b [f] [2] [ii]) and at least one court construed this language as allowing the recipient the benefit of the CPLR time frames (Global Custom Integrations. Inc. v JDP Wholesale Enters.. Inc., 40 Misc 3d 909 [Sup Ct, Westchester County 2013]). Defendant contends that the court misconstrued the law and facts to find indicia of fraud, because defendant followed DHCR's deregulation precedent prior to the Roberts decision, NOLTE, JOCELYN vs. BRIDGESTONE ASSOCIATES LLc Page 3 of 6 Motion No of 6 6 of 13

7 FILED : NEW YORK COUNTY CLERK 08/06/ :39 PM INDEX NO /2014 NYSCEF DOC. NO. 93 RECEIVED NYSCEF: 08/06/2018 allegedly received no guidance from DHCR concerning re-regulation and rent registration filing until 2016, and relied on pre-base date, rent-stabilized rent history to assess the legal rent post- Roberts. First, this Court did not, as defendant contends, rule that a mere allegation of fraud is sufficient to look beyond the four-year statute of limitations of CPLR 213-a. The Court of Appeals' decision in Matter of Grimm v State of N.Y. Div. of Hous. 4 Community Renewal Off Of Rent Admin. (15 NY3d 358, 366 [2010}), cited at pages 7 and 8 of the Order, makes this point very clearly. In the case at bar, plaintiff presented evidence to support her allegation of fraud, and none of this evidence was refuted by defendant. Second, defendant takes issue with the court's finding that "[t}he apartment was illegally deregulated on September 1, 2008" (Order at 5). This Court recognizes that defendant did not know that the luxury deregulation of apartments in buildings receiving J-51 tax benefits was illegal until Roberts rejected, almost a year later, DHCR's 1996 administrative interpretation ofthe luxury decontrol and J-51 tax abatement laws. However, New York City landlords were certainly aware - of its ramifications when the First Department ruled, in its August 2011 decision in Gerstein v 56 7"' Ave. LLC, 88 AD3d 189, 198 [15" Dept 2001]), that Roberts had retroactive application. At the very latest, landlords had such knowledge in March 2012, when the appeal of the First Department's order in Gerstein was withdrawn (see Taylor v 728 Realty Assocs., LP. (15I AD3d at 101 ["making it clear from that point forward that owners had an obligation to retroactively restore affected apartments to rent stabilization and register them"]). This Court did not fault defendant for failing to take action in 2008, 2009 or even 2012, but rather for waiting until January 2017, on the day its opposition to plaintiff's motion for summary judgment was due, to file registration statements for the apartment with DHCR. NOLTE, JOcELYN vs. BRIDGESTONE ASSOCIATES LLC Page 4 of 6 Motion bio of 6 7 of 13

8 FILED : INDEX NO /2014 NEW YORK COUNTY CLERK 08/O6/ :39 PM NYSCEF DOC. NO. 93 RECEIVED NYSCEF: 08/06/2018 Third, defendant contends that this Court erred in relying on the affidavit of Christopher), Leahy, submitted by the plaintiff to establish that the large jump in rent, from $ per month in 1999 to 51,400 per month in 2000, was not justified by any individualapartmentimprovements (IAls). Defendant contends that Mr. Leahy's affidavit is speculative and merely raises issues of fact which cannot be determined on summary judgment. However, as the court previously noted, the affidavit in question was submitted by a contractor familiar with the cost of renovation projects in New York City, detailed in nature and completely unrefuted by the defendant. Indeed, plaintiff sought evidence of any IAIs for the apartment through discovery, but no documentation was ever - forthcoming from defendant. plaintia" Finally, defendant takes issue with this Court's ruling that plaintiff's rent must be frozen at $1, per month until it files corrected registration statements with DHCR (Order at 9), contending that there is no statutory basis for extending a rent freeze beyond January 5, Defendant argues that section (e) of the Rent Stabilization Law permits late registrations and prospectively eliminates the rent freeze. However, in Matter of 215 W. 88"' St. Holdings LLC v New York State Div. of Hous. 4 Community Renewal (143 AD3d 652, 653 [1" Dept 2016]), the court stated: "RSC provides that an owner who filed an improper rent registration is barred from collecting rent in excess of the base date rent, and is retroactively relieved of that penalty upon filing a proper registration only when 'increases in the legal regulated rent were lawful except for the failure to file a timely registration added).'" "' (emphasis added) Having considered each of the defendant's arguments in support of reargument, this Court adheres to its prior determination in all respects. Therefore, in light of the foregoing, it is hereby: /2014 NOLTE, JOCELYN vs. BRiDGESTONE ASSOCIATES LLC Page 5 of 6 Motion No of 6 8 of 13

9 FILED : NEW YORK COUNTY CLERK 08/06/ :39 INDEX NO /2014 PM NY5CEF DOC. NO. 93 RECEIVED NYSCEF: 08/06/2018 ORDERED that that aspect of defendant's motion seeking renewal of the Order is denied; and it is further ORDERED that that aspect of defendant's motion seeking reargument of the Order is granted, and, upon reargument, the court adheres to its prior determination in all respects; and it is further ORDERED that this constitutes the decision and order of the court. 7/19/2018 DATE THRYNE. FREED,J.S.C. CHECK ONE: CASE D1SPOSED X NON FINAL DISPOSITION GRANTED X DENIED GRANTED IN PART OTHER APPLICATION: SETTLE ORDER SUBMIT ORDER CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY ' APPOINTMENT REFERENCE J NOLTE. JOCELYN vs. BRIDGESTONE ASSOCIATES LLC Page 6 of 6 Motion No of 6 9 of 13

10 EXHIBIT B 10 of 13

11 SUPREME COURT OF THE STATE OF NEW YORK APPELLATE DIVISION: FIRST DEPARTMENT X JOCELYN NOLTE, Index No /14 -against- Plaintiff-Respondent, PREARGUMENT STATEMENT BRIDGESTONE ASSOCIATES LLC, Defendant-Appellant X X 1 & 2. The title of the action and the full name of the original parties are set forth in the caption. There have been no changes in the parties. 3. Attorneys for Appellant Bridgestone Associates, LLC: BORAH, GOLDSTEIN, ALTSHULER, NAHINS 5 GOIDEL, P.C. 377 Broadway New York, new York (212) Attorneys for Respondent Jocelyn Nolte: HIMMELSTEIN, MCCONNELL, GRIBBEN, DONOGHUE& JOSEPHLLP 15 Maiden Lane New York, New York (212) This is an appeal from an order and judgment of the Supreme Court, New York County. 6. This is an action by a residential tenant seeking a declaration that an apartment is subject to the Rent Stabilization Law, damages and related relief. 11 of 13

12 7. The court below declared that the premises are subject to the Rent Stabilization Law, found a rent overcharge, determined that the rent overcharge was the result of fraud, established a rent utilizing the Thornton default formula, and directed a hearing to determine legal fees and the amount of damages and treble damages. 8. Reversal and/or modifications of the order and judgment is sought on the grounds that there is insufficient evidence to find fraud, use of the default formula is inappropriate and a lack of evidentiary support for a finding of willful overcharge. 9. There is no related appeals pending. A copy of the order and judgment appealed from is annexed as exhibit A. Dated: New York, New York October 13, 2017 Yours, etc. BO, GOLDSTEIN, ALTSCHULER, NA/II S & GOIDEL, P.C. N. GRUBER ttorneys for Defendant-Appellant 377 Broadway New York, New York (212) TO: Hirnmelstein, McConnell, Gribben, Donoghue & Joseph LLP Attorneys for Plaintiff-Respondent 15 Maiden Lane New York, New York (212) of 13

13 NYSCEF DOC. NO. 96 ATTORNEY'S CERTIFICATION Index Nol60321/14 Year 20 RECEIVED NYSCEF: ADMISSION 08/13/2018 OF SERYit STATE OF NEW YORK,COUNTY OF. SUPREME COURT OF THE STATE OF NEW YORK The undersigned acknowledges recei APPELLATE DIVISION: FIRST DEPARTMENT the within The unkersi ned, an attorney admitted to practice in the State of New York, does pur- hereby certify, on JOCELYNNOLTE suant to Secüon 2105 CPLR, that I have compared at the within.. < r Plaintiff-Respondent, o' A with the original and have found it to be a true and... Attorney(s)' complete copy thereof. -against- Attorney(s) for Daud: 20 BRIDGESTONE ASSOCIATES LLC, by: ~~~4~~~I~\ ~ Typeor Prnt NameBelowSignature Defendant-Appellant. O AFFIDAYlT OF SERVICE B3 9 Sir(s) NOTICE OF ENTRY OR SETTLEMENT icheck and completeappropriatebox and sectionj STATE OF NEW Y ORK 1 Madam(s): PLEASE T AKE NOTICE that a of which the within is a (true) (certified) copy D NOTICE OF ENTRY C was duly entered in the within named court On 2 on 20 PREARGUMENT STATEMENT the within 2 > D NOTICE OF SETTLEMENT Z upon 2 will be presented for settlement to the Hon. COUNTY OF bei am not a party to this action; 1 an of agè; I reside at one of the judges of the within named court at the Courthouse at BORAH, I GOLDSTEIN,ALTSCHULER, the attorney(s) for NAHINS & GO[DEL,P.C. action, at on 20 Anorney(s)Óefendan efendant-a pellant o' Office at clock M. and )ost Office Address the address designated by said attar purpose 377 BROADWAY by depositing a true copy o Dared: 20 in a NEW YORK, NY Postpaid, properly addressed 1 official Yours, etc., (212) depository under the excl F Ax N U M BE R: (212) 334-O960 custody of the United States Postal BoRAH,GOLDSTEIN,ALTSCHULER, the State of New York. Please refer all communications NAHINS&GOlDEL,P.C. Attorney(s) for Esq. TFÃUL N. GRUBER Typeor Print NameBel Office and Post Office Address Ext. To: Attorney(s) 377 BROADWAY NEW YORK, NY or: Esq. (212) Ext. F Ax N U M BE R: (212) 334-O960 for To: Sworn to before me this day of Attorney(s) for 13 of 13