FILED: NEW YORK COUNTY CLERK 03/03/2016 03:56 PM INDEX NO. 157084/2014 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 03/03/2016 SURREME COURT OF THE STATE OF NEW YORK Index No. 157084/14 COUNTY OF NEW YORK STEFAN NIEBORAK AND NATALIA LIPKINA, et al. W54-7 LLC, -against- Plaintiffs, Defendant. AFFIRMATION JENNIFER A. ROZEN, an attorney licensed to practice in the State of New York, affirms the truth of the following under penalties of perjury: 1. I am a member of Fishman Rozen, LLP, the attorneys for the plaintiffs in this action. I am fully familiar with the facts and circumstances herein and I make this affirmation based on personal knowledge except where otherwise indicated. 2. This affirmation is respectfully submitted in support of Farris Hassan s (one of the named plaintiffs in this action) - intervener s motion for a preliminary injunction immediately staying the holdover proceeding entitled, W54-7 LLC v. Farris Hassan, Index No. 061752/15, which was filed in New York City Civil Court, New York Country, ( holdover ) and which is presently on that court s calendar on March 8, 2016. 3. This affirmation is also offered in support of moving Plaintiff s application to consolidate the holdover with this action. This action and the holdover involve the same Defendant and address many of the common facts and questions of law filed in this Court, pursuant to CPLR 602 (a). 4. In the alternative, and only in the event that the Court declines to consolidate the instant action with the summary holdover proceeding, this affirmation is respectfully submitted in support of Plaintiff s within motion seeking an Order pursuant to Civil Practice Law and Rules ("CPLR") 2201 immediately staying the holdover proceeding
pending determination of the instant action, wherein Plaintiff is seeking declaratory, injunctive, and monetary relief with respect to his rent stabilized tenancy due to Defendant's willful and unlawful attempts to deregulate his apartment and gross rent overcharge. 5. The resolution of this action shall be dispositive of the legal rent for the Plaintiff s apartment, which is a central issue in the holdover proceeding. For this reason, it is of utmost importance that Defendant be enjoined from proceeding with the holdover until the determination of this motion, which certainly ought to be granted. A. PROCEDURAL AND FACTUAL HISTORY OF THIS ACTION 6. Plaintiff Hassan s action was commenced by Summons and Complaint dated July 21, 2014, a copy of which is annexed hereto as Exhibit A. Defendant, by its attorney, then served and filed a notice of appearance and answer dated August 25, 2014, a copy of which is annexed hereto as Exhibit B. 7. Following a motion made on behalf of 14 Plaintiffs, all of whom had an action pending against the same Defendant for the same relief, the Court issued an order dated November 21, 2014 consolidating Plaintiff s action under this index Number. A copy of the decision is annexed hereto as Exhibit C. 8. The subject building is a multiple dwelling containing at least 72 residential units. 9. Starting in the 2003/2004 tax year, and continuing at all times through the present, Defendant began to receive, and continues receiving, real estate tax benefits pursuant to New York City's J-51 Program.
10. It is a matter of public record that the Defendant applied for a tax abatement for the subject building, which was approved in the total amount of $79,830.00, of which $79,830.00 in otherwise payable real estate taxes have already been abated. The J-51 tax abatement period originally extended for a period of twenty years. 11. The complaint further alleges that Defendant's effort to defraud Plaintiff was part of an intentional and knowing scheme to subvert and avoid the provisions of the RSL and RSC, that the Subject Building and all of the apartments therein became subject to the RSL by virtue of Defendant's receipt of J-51 tax benefits, that Defendant was aware that the Subject Building and apartments therein were subject to the RSL, and that Plaintiffs' units were not subject to "luxury" deregulation. 12. The complaint further alleges that Defendant knowingly misrepresented the rent history of Plaintiffs' units, and their regulatory status to DHCR, and brazenly continued such misconduct even after 2009, when Defendant was admittedly on notice of the New York Court of Appeals' decision in Roberts v. Tishman Speyer, 13 N.Y.3d 270, 890 N.Y.S.2d 388 (2009), wherein the Court explicitly and unequivocally stated that apartments covered under the RSL and RSC by virtue of the building owner's receipt of J-51 tax benefits are not subject to the so-called luxury deregulation. B. FACTS SURROUNDING MOVING PLAINTIFF S TENANCY
13. On or about 2011, moving Plaintiff commenced occupancy in apartment 3E in the subject building pursuant to a market rate lease which is annexed hereto as Exhibit D. 14. The moving Plaintiff was provided with a one-year market rate lease, effective through May 31, 2012 at a monthly preferential rent of $2,400.00 and an illegal contract rent of $3,609.74. The plaintiff paid all of the rent due under that lease. 15. The moving Plaintiff s lease was then renewed for a two year period at the market rate of $2,650.00 per month. The plaintiff paid all of the rent due under that lease. 16. The rent increases charged to the plaintiff were significantly higher than the increases approved by the Rent Guidelines Board for each lease renewal period. 17. According to the records of New York State Division of Housing and Community Renewal ( DHCR ), the defendant registered the subject apartment as permanently exempt from rent regulation on or about July 1, 2002 because it converted to a NYC coop/condo. 18. The building is not, and never was a Cooperative or a Condominium and instead is, and, for the relevant time period has been, owned in its entirety by the Defendant. 19. The Defendant falsely and fraudulently listed the subject premises as permanently exempt. The Defendant did so as part of a scheme to avoid the requirements of the Rent Stabilization Law and to charge to and collect an illegal rent for the subject apartment.
20. After 2002, the Defendant failed to file any registrations for the subject apartment with DHCR. 21. Moving Plaintiff was never provided with the rider required by RSL 26-504(c) advising him of the J-51 tax benefits. As a result, there can be no serious question that the apartment remains subject to rent stabilization even after the J-51 Benefit expires and that the moving Plaintiff is entitled to a declaratory judgment establishing the proper legal rent for the subject apartment. C. PROCEDURAL HISTORY OF THE SUMMARY HOLDOVER PROCEEDING 22. On or about April 8, 2015, Defendant commenced a summary holdover proceeding entitled W54-7 LLC v. Farris Hassan, Index No. 061752/15 in the Civil Court of the City of New York, New York State against the moving plaintiff. ( holdover ) A copy of the Notice of Petition and Petition is Annexed hereto as Exhibit E. 23. The moving Plaintiff appeared in the holdover by my office and interposed an answer denying the central allegations in the petition, asserting a number of affirmative defenses and asserting counterclaims for a rent overcharge under the rent stabilization code and harassment. A copy of the Verified Answer is attached hereto as Exhibit F. 24. The attorneys of record for the Defendant in this action also represent the Defendant in the holdover. 25. The Notice of Termination issued to moving Plaintiff alleges that: [T]he facts are that you have rented a portion of the rent stabilized apartment for terms less than thirty (30) consecutive days, at a rent that is
greater than the prorated rent stabilized rent to a series of guests who are not related to you. You have advertised the subject apartment on the Airbnb.com website on the internet to an extent and duration that constitutes incurable rent profiteering 26. The Defendant s central claim in the holdover is that the moving Plaintiff is charging and/or has charged more than the legal rent. As set forth above and in the Complaint, the legal rent is the very thing that Plaintiff seeks to have determined in the instant action. 27. Accordingly, the Housing Court cannot properly decide whether the moving Plaintiff is in violation of the rent stabilization code unless and until the legal rent has been set by this Court. 28. The holdover is set for either all purposes or to be sent to Part X for trial on March 8, 2016 at 9:30a.m. Annexed hereto as Exhibit G is a printout from the Housing Court s website showing the return date. D. THE HOLDOVER SHOULD BE REMOVED AND CONSOLIDATED WITH THIS ACTION BECAUSE THE CASES INVOLVE COMMON ISSUES OF LAW AND FACT 29. Consolidation of separate actions is appropriate where the cases address common questions of law or fact. CPLR 602 (a). In the instant case, the moving Plaintiff seeks to consolidate the holdover with this action because the facts of each are so intertwined that they must be decided together. 30. Further, pursuant to CPLR 602 (b), matters pending in two separate courts may be consolidated in the court with broader jurisdiction: "[w]here an action is pending in the Supreme Court it may, upon motion, remove to itself an action pending in another court and consolidate it or have it tried together with that in the Supreme
Court." 31. Consolidation is appropriate where there are common legal and factual issues, identity of the parties in the actions/proceedings sought to be consolidated, and consolidation will result in a complete disposition of all claims arising out of the same set of transactions or circumstances. Moore v. Chase Manhattan Bank, 217 A.D.2d 419, 419, 629 N.Y.S.2d 41, 41 (2d Dep't, 1995); Le Sannom Building Corp. v. Lassen, 173 A.D.2d 249, 250, 569 N.Y.S.2d 451 (1 st Dep't, 1991). 32. Consolidation under CPLR 602 (a) will further the interests of justice and judicial economy where separate proceedings address common questions of fact or law. Perini Corp. v. WDF, 33 A.D.3d 605 (Second Dept., 2006) (holding that consolidation of two actions filed by separate plaintiffs in separate counties to recover damages based on breach of contract related to the same construction project and addressing similar acts or omissions of defendant was appropriate); Brown v. Cope, 99 A.D.3d 746, 952 N.Y.S.2d 220 (Second Dept., 2012). 33. Courts must consolidate separate but related proceedings where not doing so could result in inconsistent rulings. Kallas v. Milberg Weiss, 61 A.D.3d 451, 876 N.Y.S.2d 389 (First Dept., 2009)(holding that separate arbitration proceedings arising out of same partnership agreement and involving common issues of law and fact should be consolidated). In the actions at issue here, if the Court reviews them separately the risk of inconsistent rulings should be avoided, especially given how closely related the legal and factual questions are. 34. Where a court deems consolidation inappropriate but separate proceedings still share enough common questions of law or fact, a court may still order a joint trial.
Rogin v. Rogin, 90 A.D.3d 507, 936 N.Y.S.2d 109 (First Dept., 2011)(holding that a summary non-payment proceeding and a supreme court action seeking injunctive relief should be tried jointly where ex-husband s obligation to pay his ex-wife s rent was both an equitable claim in supreme court and a defense in housing court); Brown v. Cope, supra (finding that joint trial rather than consolidation appropriate where two separate plaintiffs injured in the same auto accident). 35. There is no question that the legal rent is different than the rent charged by the Defendant and that Moving Plaintiff has been overcharged. In fact, on or about July 31, 2014 the Defendant attempted to refund only a portion of the moving Plaintiff s overcharge. Because that amount was incorrect, the moving Plaintiff rejected that check. (Attached as Exhibit H) 36. This action seeks an order determining the legal rent for the subject apartment. The Defendant seeks to evict the moving Plaintiff based on the allegation that he is profiteering by charging more than the legal rent, which has not yet been determined by this Court. Additionally if and when the moving Plaintiff collected any compensation for sharing his apartment there was no legal rent set for the unit, so a question exists as to whether Defendant can even maintain a claim under the profiteering section of the rent stabilization code. There is no question that the actions share both common questions of law and underlying facts. 37. The instant action and the holdover are a perfect example of cases that not only should be consolidated, but must be. In fact, it is impossible for the Housing Court to even make a proper determination on the holdover unless and until this Court has a chance to issue a decision in this case and establish the rent for the moving Plaintiff s
apartment. There is no question that judicial economy would be best served by consolidating all of the actions described herein to address the identical facts and common legal questions. E. THE EVICTION PROCEEDING SHOULD BE REMOVED AND CONSOLIDATED WITH THIS ACTION BECAUSE DEFENDANTS WILL NOT SUFFER PREJUDICE TO A SUBSTANTIAL RIGHT AS A RESULT 38. Where common questions of law or fact exist and no prejudice would result, consolidation or joint trial is in the interests of judicial economy. E.g. NYC Asbestos Litigation v. Brookfield Properties Corp., 99 A.D.3d 410, 951 N.Y.S.2d 154 (First Dept., 2012)(holding that defendant failed to establish that it would be prejudiced by consolidation of separate plaintiffs tort claims against Colgate-Palmolive based on alleged presence of asbestos in a consumer cosmetic product). 39. When common questions of fact or law are found, a motion to consolidate must be granted absent a showing of prejudice to a substantial right by the party opposing the motion. Brown v. Cope, supra. 40. There is no question that the Defendant will not suffer any prejudice if this action is consolidated with the holdover. Moving Plaintiff however may suffer prejudice since he may face eviction from his home if the Court is not able to make a determination in this action. 41. Importantly, Defendant has unclean hands, because for years it knowingly and willfully collected significantly more than the legal rent for at least 14 units in the building. While it was enjoying excess rents and a generous tax abatement, the
Defendant refused to provide any of the benefits it was required to provide under the rent stabilization laws. The Defendant should not now be permitted to use the rent stabilization code to evict the moving Plaintiff. 42. Additionally, there is no question that, consolidation would save all parties and their counsel considerable time and expense by streamlining the litigation related to the same underlying facts. F. IN THE EVENT THE COURT DECLINES TO REMOVE AND CONSOLIDATE THE HOLDOVER IT SHOULD STAY THAT PROCEEDING PENDING A DETERMINATION IN THE INSTANT ACTION 43. Pursuant to CPLR 2201, this Court may grant a stay of the instant holdover summary proceeding. See CPLR 2201 ( Except where otherwise prescribed by law, the court in which an action is pending may grant a stay of proceedings in a proper case, upon such terms as may be just."). 44. It is well-settled that "where the decision in one action will determine all the questions in the other action, and the judgment on one trial will dispose of the controversy in both actions," a stay is appropriate. Hope's Windows v. Albro Metal Products, 93 A.D.2d 711, 712, 460 N.Y.S.2d 580 (1" Dep't, 1983), citing Pierre Associates, Inc. v. Citizens Casualty Co of N.Y., 32 A.D.2d 495, 497, 304 N.Y.S.2d 158 (1 st Dep't, 1969), Medical Malpractice Ass'n v. Methodist Hospital of Brooklyn, 64 A.D.2d 558, 559, 407 N.Y.S.2d 488 (1 st Dep't, 1978). 45. This Court has routinely applied CPLR 2201 to cases that are pending in the Supreme Court, where a building owner has initiated a summary eviction proceeding in housing court. Diallo v. Grand Bay Assocs. Enterprises, Inc., 64
A.D.3d 428, 429, 882 N.Y.S.2d 413, 414 (1 st Dep't, 2009) (trial court erred in denying stay of eviction proceeding because the decision in pending Supreme Court action would be conclusive of the eviction proceeding); Reynolds v. DHCR, 199 A.D.2d 15, 604 N.Y.S.2d 567 (1 st Dep't, 1993) (tenant would be caused irreparable harm if landlord's nonpayment proceeding were to be determined before the overcharge complaint that was pending before DHCR). In 1422 Com. v. Rosenfeld, 44 A.D.3d 451, 842 N.Y.S.2d 909 (1 st Dep't, 2007) (building owner initiated a declaratory action, which was stayed pending the determination of holdover proceeding that had previously been initiated, which sought "much of the same relief sought in the declaratory action). 46. In the instant proceeding, Plaintiff is seeking declaratory, injunctive, and monetary relief regarding Defendant's improper, unlawful issuance of leases, which included gross, willful rent overcharges. Namely, Plaintiff has asked this Court to determine the proper legal regulated rent for his apartment as a result of Defendant's fraudulent scheme to de-regulate Plaintiff s apartments. 47. The decision in this action will determine all of the questions that exist, as part of the holdover proceeding that Defendant has filed against moving Plaintiff, and judgment on a trial in the instant action, if a trial were to take place, would dispose of the controversy in both this action, which is already pending, and Defendant's imminent summary eviction proceedings. 48. Therefore, an Order staying the holdover against moving Plaintiff is appropriate and necessary.
49. Pursuant to Uniform Rule 202.7, moving Plaintiff s counsel notified Defendant s counsel via electronic mail to: eliot.cherson@rhcrlaw.com, on March 3, 2016 that we intended to file this Order to Show Cause on Thursday, March 4, 2016 at 10:00 a.m. Eliot Cherson, attorney for Defendant confirmed via email that he intends to meet me there. 50. No prior request for the relief sought herein has been made. WHEREFORE, it is respectfully requested that this Court issue an Order, (a) immediately staying the summary holdover proceeding filed against moving Plaintiff in New York City Civil Court and removing said proceeding from housing court and consolidating that action with the present proceeding, or, in the alternative, (b) staying the holdover proceeding pending determination of the instant action, and (c) for any other relief this Court deems just. Dated: March 3, 2016 New York, New York JENNIFER A. ROZEN To: Jeffery M. Steinitz Rappaport, Hertz, Cherson & Rosenthal, P.C. 118-35 Queens Boulevard, 9 th Floor Forest Hills, New York 11375