Title: Jemrock Realty Co., LLC. v. Jay Krugman

State: new-york

Issuer: New York Appellate Court

Document:

- 1 -
=================================================================
This memorandum is uncorrected and subject to revision before
publication in the New York Reports.
-----------------------------------------------------------------
No. 59  SSM 59
Jemrock Realty Co., LLC.,
            Respondent,
        v.
Jay Krugman,
            Appellant.
Submitted by Barry J. Yellen, for appellant.
Submitted by Jeffrey Bodoff, for respondent.
New York State Division of Housing and Community
Renewal, amicus curiae.
MEMORANDUM:
The order of the Appellate Division should be reversed,
without costs, the case remitted to that court for further
proceedings in accordance with this memorandum, and the certified
question answered in the negative.
This case turns on the factual issue of whether the
landlord's expenditures for "improvements" were at least equal to
- 2 -
SSM No. 59
- 2 -
the amount (approximately $30,000) necessary to bring the legal
rent above the luxury decontrol threshold.  Contrary to the
contentions of both parties, and to the majority and dissenting
opinions at the Appellate Division, the resolution of that issue
is not governed by any inflexible rule either that a landlord is
always required, or that it is never required, to submit an item-
by-item breakdown, showing an allocation between improvements and
repairs, where the landlord has engaged in extensive renovation
work.  The question is one to be resolved by the factfinder in
the same manner as other issues, based on the persuasive force of
the evidence submitted by the parties.  
Here, the Appellate Term, modifying the contrary
decision of Civil Court, found that the landlord had met its
burden of showing that its expenditures on improvements exceeded
the requisite amount.  The Appellate Division erroneously decided
this question as a matter of law, and did not exercise its power
to review the facts.  We remit to the Appellate Division so that
it may do so.
*   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *
On review of submissions pursuant to section 500.11 of the Rules,
order reversed, without costs, case remitted to the Appellate
Division, First Department, for further proceedings in accordance
with the memorandum herein and certified question answered in the
negative.  Chief Judge Lippman and Judges Ciparick, Graffeo,
Read, Smith, Pigott and Jones concur.
Decided January 14, 2010