SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ------------------------------ X JONATHAN HAYGOOD : PRINCE HOLDINGS 2012 LLC; STEVEN Index No. 155091/2016 Plaintiff, : PROPOSED AMENDED -against- : VERIFIED ANSWER CROMAN; HARRIET CROMAN a/k/a HARRIET : KAHAN CROMAN a/k/a HARRIET KAHAN; OREN : GOLDSTEIN; and JANETH.IANETH DONOVAN : Defendants. : ---------------------------- -- X (" Defendants, Prince Holdings 2012 LLC ("Prince"), Steven Croman, Harriet Croman s/h/a Harriet Croman a/k/a Harriet Kahan Croman a/k/a Harriet K.ahan, Oren Goldstein and Janeth Donovan (collectively, "Defendants") hereby appear in this action by their attorneys, Rosenberg & Estis, P.C., 733 Third Avenue, New York, New York 10017 and for their Amended Verified "Complaint" Answer to the Verified Complaint, dated June 16, 2016 (the "Complaint"), filed by Jonathan (" Plaintiff' Haygood ("Plaintiff"), respond to the specific allegations of the Complaint as follows: L Deny knowledge or information sufficient to form a belief as to the truth of the allegations set forth in Paragraph 1 of the Complaint. 2. Deny the allegations contained in Paragraph 2 of the Complaint, except admit that Prince is the owner of the building located at 309 East 8th Street, New York, New York (the "Building" "Building") and that Prince maintains an office at 632 Broadway, 7th Floor, New York, New York. 3, Deny knowledge or information sufficient to form a belief as to the truth of the allegations set forth in Paragraphs 3. 5 and 83 of the Complaint and respectfully refer the Court.......... --- -to the-records-of4he-new- erk-city-departmentochousing-preservation-and_.development ("HPD") referenced therein for the true and accurate contents thereof. rxk49421%00254cs80 i';~i
4. Deny each and every allegation contained in Paragraphs 4, 6, 7, 9, 10, 19, 22, 23, 34, 41, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52,, 53, 54, 55, 56, 57, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 84, 85, 86, 87, 88, 90, 91, 92, 93, 94, 95 96, 97, 98, 99 and 100 of the Complaint and respectfully refer any questions of law and fact to the Court for determination at trial. 5. With respect to Paragraphs 8, 42 and 89 of the Complaint, no response is required, as each state a conclusion of law reserved for the Court, nevertheless, to the extent a response is required then such allegations are denied and Defendants respectfully refer any questions of law and fact to the Court for determination at trial. 6. Deny the allegations set forth in Paragraphs 11, 15 and 16 of the Complaint, which are patently irrelevant to the within action, and respectfully refer the Court to the record in the matter of Eric T. Schneiderman v Steven Croman, et. al. Supreme Court of the State of New York, New York Count, Index No. 450545/2016, for the true and accurate contents thereof. 7. Deny the allegations set forth in Paragraphs 12, 13 and 14 of the Complaint, which are patently irrelevant to the within action and respectfully refer the Court to the record in the matter of The People ofthe State of New York v. Croman, et. ana Supreme Court of the State of New York, New York County, Case No. 01372-2016, for the true and accurate contents thereof. 8. Admit the allegations contained in Paragraphs 17, 20 and 21 of the Complaint. 9. Deny the allegations set forth in Paragraph 18 of the Complaint and respectfully refer the Court to the deed dated October 16, 2012 between 15 35 Elk LLC., Inc., as grantor/seller and Prince Holdings 2012 LLC, as grantee/buyer, for its terms and legal effect, if... any. RE449424%002s4638081v4 2
10. Deny knowledge or information sufficient to form a belief as to the truth of the allegations set forth in Paragraphs 24, 25,.26, 26, 27, 28 and 40 of the Complaint and respectfully refer the Court to the documents referenced therein and respectfully refer any questions of law and fact to the Court for determination at trial, except admit that there is a lease agreement dated (" Marten" February 15, 2015 (the "Lease"), between Plaintiff and Chloe Marten ("Marten"), as tenants and "Premises" Prince, as landlord, Plaintiff and Chloe Marten for Apartment B (the "Premises") within the Building. 11. Deny knowledge or information sufficient to form a belief as to the truth of the allegations set forth in Paragraphs 29, 30, 31, 32 and 33 of the Complaint and respectfully refer the Court to the documents referenced therein and respectfully refer any questions of law and fact to the Court for determination at trial, except admit that by agreement dated February 29, "Extension" 2016 (the "Extension"), between Plaintiff and Marten, as tenants and Prince, as landlord, Plaintiff and Marten renewed the Lease for an additional one year term. 12. Deny knowledge or information sufficient to form a belief as to the truth of the allegations set forth in Paragraphs 35, 36, 37, 38, 39 and 58 of the Complaint, respectfully refer the Court to the documents referenced therein and respectfully refer any questions of law and fact to the Court for determination at trial. FIRST AFFIRMATIVE DEFENSE 13. Plaintiff has failed to state a cause of action. 14. Accordingly, the Complaint should be dismissed. SECOND AFFIRMATIVE DEFENSE 15. The Complaint was not properly served upon the Defendants. 16. Accordingly, the Complaint should be dismissed as against them. RES"" 9424 %ac25 K6380s zest 3
THIRD AFFIRMATUlE DEFENSE 17. Carol Ryals ("Ryals"), a rent stabilized tenant, occupied the Premises beginning in or about 1984, according to registration records on file with DHCR. 18. Ryals vacated the Premises on or about June 30, 2014, pursuant to a surrender agreement, a copy of which is annexed hereto as Exhibit "A." 19. Ryals last legal regulated rent, per DHCR registration records was $533.82. 20. On or about February 15, 2015, Plaintiff and Marten commenced occupancy of the Premises and Defendants were entitled to a statutory vacancy allowance based upon the Rent Guidelines Board Order ("RGBO") then in effect. Pursuant to RGBO 46, Defendants were permitted to increase the last Ryals legal regulated rent by 18.25% based upon the initial one year (plus two week) term of the Lease. 20 Additi.onally, because Ryals had been in occupancy since at least 1984, Defendants were permitted to charge and collect a long term vacancy allowance of 18.6% (.6% per year for the 31 years during which time Defendants had not taken a vacancy allowance) pursuant to Rent Stabilization Code (RSC) 2522.8(a) and Rent Stabilization Law ("RSL") 26-511c.(5-a). 22. The initial rent chargeable to Plaintiff and Marten, absent consideration of an increase based upon permitted Individual Apartment Improvements ("IAls"), was thus $730.53 ($533,82 + [18.25% + 18.6%] 196.71 = $730.53). 23. Pursuant to RSC 2522.4(a)(1), an owner is entitled to an increase in rent based upon IAls, When IAIs are completed while an apartment is vacant, tenant consent to the installation and the concomitant rent increase is not required. An increase for IAls equaling 1/40th of the demonstrated cost of those improvements is allowed.......... REX49424'iUO25%638081v4 4
24. Defendants were permitted an IAI increase based upon the substantial rehabilitation of Premises, including new appliances and an upgrade to the electrical system, 25. Casur M&M Inc. ("Casur") performed a total rehabilitation/renovation of Premises prior to the tenant's assumption of occupancy, pursuant to a construction contract. The cost for this work totaled $64,143.93, paid in full by Defendants to Casur. The payment was in increments of 20%, 20%, 55% and 5% as follows: a) $12,828.78 - check #508, dated 12/12/14, per pmt. authorization memo dated 12/11/14; b) $12,828.78 - check #527, dated 12/23/14, per pmt. authorization memo dated 12/22/14; c) $35,279.16 - check #595, dated 3/6/15, per pmt. authorization memo dated 3/5/15.. 3/5/15; and d) $3,207.21 - check #742, dated 10/2/15, per pmt. authorization memo dated 10/1/15. 26. All rehabilitation work was performed prior to the occupancy of the Premises by Plaintiff and Marten, notwithstanding certain payments for that work occurring after the commencement date of the Lease. 27. The above referenced construction contract, payment authorizations, the check registers and copies of the canceled checks made payable to Casur in full payment for the work performed are annexed hereto collectively as Exhibit "B." 28. Appliances were purchased and installed by "top Electronics Center, DBA (" Stop" Appliances Connection ("Stop") prior to the occupancy of the Premises by Plaintiff and Marten. expenditure for the goods and services supplied by Stop totaled $5,609.24. Annexed as Exhibit "C" are copies of two January 20, 2015 invoices from Stop and copies of canceled checks, 4569 and #579, dated 2/9/15 and 2/18/15 respectively totaling... $5,609.24 in payment of those invoices. RFh<is424 40025%638081v4 5
29. - Casur performed a building-wide electrical upgrade for all 17 apartments in the Building, at a total invoiced cost to Defendants of $73,175.00. Defendants did not pass along the costs incurred to the tenants in occupancy of the Building by seeking a Major Capital Improvement ("MCI") rent adjustment from DHCR. As a result, a pro-rata portion of the expense (1/17th, as there are 17 apartments in the subject building) is attributable to the Premises. Annexed as Exhibit "D" are copies of contractor Casur's "Application and Certification for Payment, AIA Document G702" pertaining to the building-wide electrical upgrade and the canceled checks, 4383 and #596, dated 8/15/14 and 3/6/15 totaling $65,857.50 in payment of all but the remaining $7,317.50 of the total invoiced cost. 30. Defendants are entitled to an IAI allowance equaling 1/40th of the following: a) $64,143.93 - Total apartment rehabilitation/renovation; b) $5,609.24 - Appliance expenditures; and e) $3,873.97 - The pro-rata cost of the electrical upgrade, based upon proof cost' of payment of $65,857.50 of the total cost. 31. One fortieth of the demonstrated and documented IAI expenses of $73,627.14 equals $1,840.68. That sum added to the previously calculated initial rent permitted ($730.53) results in the Defendants being permitted to legally charge Plaintiff and Marten a rent of $2,571.21. 32. Because the permitted initial rent exceeded the then applicable luxury deregulation threshold of $2,500.00 per month, the Premises was no longer subject to rent regulation. 33, Plaintiff and Marten's initial rent of $2,695.00 was therefore a free market rent, -- notabjecttotegulatiorrand accordingly; Plaintiff and Marten vere-notovercharged. Rski9424%002J%638081v4 6
FOURTH AFFIRMATIVE DEFENSE 34. Upon information and belief, Defendants have a complete defense based upon documentary evidence. 35. Accordingly. the Complaint should be dismissed. FIFTH AFFIRMATIVE DEFENSE 36. Upon information and belief, Defendants have always acted in good faith. Further, upon information and belief, all of actions negate the presumption of willfulness and evidence good faith reliance on the applicable laws 37. Accordingly, the Complaint should be dismissed. SIXTH AFFIRMATIVE DEFENSE of' 38. Plaintiff's claims and causes of action are barred, in whole or in part, by the doctrine of unjust enrichment. 39. Accordingly, the Complaint should be dismissed. SEVENTH AFFIRMATIVE DEFENSE 40. The relief sought by the Complaint is barred in that there is an adequate remedy at suffci' law available to Plaintiff and Plaintiff will not suffer irreparable harm absent injunctive relief. 41. By reason of the foregoing, the first, third and fourth causes of action in the Complaint, seeking injunctive relief, must be dismissed. EIGHTH AFFIRMATIVE DEFENSE 42. The Complaint fails to name a party necessary to the above-captioned action 43. By reason ofthe foregoing, the Complaint must be dismissed. NINTH AFFIRMATIVE DEFENSE 44. The causes of action set forth in the Complaint are barred, in whole or in part,... because Plaintiff lacks standing to assert claims on behalf of individuals not a party to the above- RE\49424\OO2i\638081v4 7
captioned action, Plaintiff purports to assert claims or seeks damages in connection with harm alleged to have been suffered by Marten. 45. By reason of the foregoing, the Complaint must be dismissed. TENTH AFFIRMATIVE DEFENSE 46. The third and fourth causes of action set forth in the Complaint are barred, in whole or in part, because Plaintiff lacks standing pursuant to General Business Law 349 and/or New York City Consumer Protection Law 20-700. 47. By reason of the foregoing, the third and fourth causes of action in the Complaint must be dismissed. ELEVENTH AFFIRMATIVE DEFENSE 48. Defendants, Steven Croman, Harriet Croman a/k/a Harriet Kahan Croman a/k/a 'Individuals" Harriet Kahan, Oren Goldstein and Janeth Donovan (collectively, the "Individuals") are not proper parties to this action. 49. The Individuals are not parties to the Lease or the Extension, nor do the Individuals have any possessory interests in the Premises. 50. By reason of the foregoing, the Complaint must be dismissed as to the Individuals. FIRST COUNTER-CLAIM 51. Defendants are entitled to an award of attorneys' fees, costs and disbursements in a sum to be determined by the Court but, in no event, less than $10,000.00. RE'i494 430025%638081v4 8
. M respeelfull)r WHEREFORE, Defendants respectfully request dismissal of the Complaint, an award of attorney's fees, costs and disbursements, as applicable, together with such other and further relief as this Court deems just and proper. Dated: New York, New York ROSENBERG 4 ESTIS, P.C. October 27, 2016.4ttorneys Attorneys for Defendants n By: r~'6 j.7) E Cori  Rosen 733 Third Avenue New York, New York 10017 (212) 867-6000 TO: GRIMBLE & LOGUIDICE, LLC Attorneys for Plaintiff 217 Broadway, Suite 304 New York, New York 10007 (212) 349-0450 Attention: Shaina %cissnlan, Esq........................... BE44942-"<0025 %838081v4 9
LIMITED LIABILITY COMPANY VERIFICATION STATE OF NEW YORK ) ) ss.: COUNTY OF NEW YORK ) JANETH DONOVAN being duly sworn deposes and sap's' says: 1. I am one of the defendants in the above action, and I am the Managing Agent of Prince Holdings 2012, LLC, a defendant herein. 2. 1 have read the annexed Amended Verified Answer and know the contents thereof; and the same is true to my own knowledge, except as to those matters therein stated to be alleged on information and belief, and as to those matters I believe them to be true. The source of Jiig' BQ' my information Alj11PkkliClilldkl and belief DMJlQl is the books VLPM&2 ' 1U. d records of Md:fendant, gdl Bt&UQ Prince I kl1h 6 Holdings ' ' ~ "* ~ ' ~': 2012, LLC. AN TH DON VAN Sworn to before me 6315 AT day of October, 2016 NOTAR PUBLIC Elizabeth Serrano-.Rodriguez Notary Public, State of New York No, OiSE8tSO231 Qualified in New York County Commission Expires Jaa.20, 2011.' RE\49424\002S\638081v4.".E3494244002536".Be83:-4.-q