### Moore v Greystone Props. 81 LLC 2024 NY Slip Op 31112(U) April 3, 2024 Supreme Court, New York County Docket Number: Index No. 154133/2017 Judge: Alexander M. Tisch Cases posted with a "30000" identifier, i.e., 2013 NY Slip

Op 30001(U), are republished from various New York State and local government sources, including the New

York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication.NYSCEF DOC. NO. 164 INDEX NO. 154133/2017 RECEIVED NYSCEF: 04/03/2024 

### SUPREME COURT OF THE STATE OF NEWYORK NEW YORK COUNTY PRESENT: HON. ALEXANDER M. TISCH Justice ----------------------X RAYMOND MOORE and PETER DIMARIO, Plaintiffs,

- V - GREYSTONE PROPERTIES 81 LLC, Defendant.

---- ------------------------X PART 18
INDEX NO. 154133/2017 MOTION DATE 04/14/2021 MOTION SEQ. NO. 002 DECISION + ORDER ON MOTION

The following e-filed documents, listed by NYSCEF document number (Motion 002) 3, 31, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 90, 91, 92, 93, 94, 95, 96, 97, 98, 99, 100, 101, 102, 103, 104, 105, 107, 108,110,111,112,113,114,115,116,117,118,119,120,121,122,123,124,125,126,127,128,129, 130,131,132,133,134,135,136,137,139,140,141,142,143,144,145,146,147,148,149,150,151, 152, 153,154,155, 156, 157, 158, 159, 160,161,163 were read on this motion to/for JUDGMENT-SUMMARY 

### BACKGROUND According to the May 4, 2017, complaint (NYSCEF Doc. No. 97), plaintiffs have rented Apartment 43 at 158 West 81st Street in Manhattan from defendant since March 15, 2012. Their initial rent was $2,750 permonth, pursuant to a lease that stated the apartment was not subject to rent stabilization or any otherrelevant law or regulation (2012 Lease, attached as Exhibit Ato AffofAnne Goldrach, NYSCEF Doc. No. 80, although the 2012 Lease has a cover letter referring to it as a "NewLease Renewal"). The complaint explains that, between 2013 and 2017, plaintiffs' monthly rent was increased annually, to $3,100, $3,300, $3,450, $3,600, and finally to $3,636 in 2017. However, plaintiffs assert that "[u]pon review ofthe records ofthe Divisionof Housing and Community Renewal ('DHCR'), otherNew York City Agency records, and review ofthe facts
...the apartment is subjectto Rent Stabilization, and was neverproperly removed from said status or deregulated based on lawful rent increases" (Complaint,

## ,r 9). More

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specifically, plaintiffs pointed out that the last lease registered with DHCRhad beento a tenant named David Turnerin 1997 for $972.51 permonth. Plaintiffs' 2017 complaint alleges they
were overcharged both for the rent and for the initial security deposit, the latter in violation of General Obligations Law § 7-103. Plaintiffs assert causes ofaction for (1) a declaratoryjudgmentpursuantto CPLR 3001 thatthe Apartment is subjectto the Rent StabilizationCode and directing the defendantto issue the plaintiffs a rent stabilized lease at the legal regulated rent; (2) an injunction directing defendantto issue a rent stabilized lease to plaintiffs; (3) money damages for overcharged rent from the entire length oftheir lease ofthe Apartment; (4) treble damages for the overcharged rent, as defendant's conduct was willful; (5) punitive damages; and (6) plaintiffs' legal fees. Defendant generally contends the Apartmenthad been deregulated before plaintiffs movedin, despite defendant's failure to file with DHCRfor deregulation ofthe apartment, because the legal regulated monthly rent for apriortenanthad reached $2,000. Defendants also argue the rent stabilization lawdoes not provide for punitive damages. Around January 18, 2018, defendant moved to dismiss the complaintpursuantto CPLR §§ 3211 (a) (1) and (a) (7). The Court granted the motion, concludingthat the apartment's rent "exceeded the deregulation threshold at the time plaintiffs took occupancy and this claim is barred by the four[-]year statute oflimitations" (NYSCEF Doc. No. 99). The Appellate Division, FirstDepartmentreversed concluding that "defendant landlord only showed its entitlementto collectthe last registered rent for the subject apartment (i.e., $972.51 in 1998), as it failed to comply with the rent registration requirements
.... and did not demonstrate what increases, ifany, it may be entitled to as a legal regulated rent for the apartment" (Moore v Greystone Props. 81 LLC, 176 AD3d 516,516 [1st Dept 2019] [internal citations omitted]). The

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First Department further concludedthat plaintiffs' claims for rent overcharges and treble damages were timely under CPLR213-a and remitted the case to this Court (id.). Now, defendant moves for summaryjudgment on all claims and the plaintiffs cross-move for summaryjudgmenton the questions ofrent stabilization and rent overcharge, treble damages, and legal fees, along with otherrelief. DISCUSSION Summaryjudgmentis a drastic remedy whichwill be granted only whenthe party seeking summaryjudgmenthas establishedthatthere are no triable issues offact (see CPLR 3212 [b]; Alvarezv ProspectHosp., 68 NY2d 329 [1986]; Sillman v Twentieth Century-Fox Film Corporation, 3 NY2d 395 [1957]). To prevail, the party seeking summaryjudgmentmust make
aprima facie showing ofentitlementtojudgmentas a matter oflawtendering evidentiary proof in admissible form, which may include deposition transcripts and otherproofannexed to an attorney's affirmation (seeAlvarezvProspectHosp., supra; Olan v FarrellLines, 64 NY2d 1092 [1985]; Zuckerman v City of New York, 49 NY2d 557 [1980]). Absent a sufficient showing, the court should deny the motion without regard to the strength ofthe opposing papers (see Winegrad vNew York Univ. Med. Ctr., 64 NY2d 851 [1985]). Once the initial showing has been made, the burden shifts to the party opposing the motion for summaryjudgmentto rebutthe primafacie showingby producing evidentiary proof in admissible form sufficientto require a trial ofmaterial issues offact (see Kaufman v Silver, 90 NY2d 204, 208 [1997]). Although the court must carefully scrutinize the motionpapers in a light most favorable to the party opposing the motion and must give that party the benefit of every favorable inference (see Negri v Stop & Shop, 65 NY2d 625 [1985]) and summary judgment should be denied where there is any doubt as to the existence ofa triable issue offact

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(see RotubaExtruders, v Ceppos, 46NY2d 223, 231 [1978]), and bald, conclusory assertions or speculation and "[a] shadowy semblance ofan issue" are insufficientto defeat a summary judgmentmotion (SJ CapalinAssoc. v Globe Mfg. Corp., 34 NY2d 338,341 [1974]; see Zuckerman v City of New York, supra; Ehrlich vAmericanMoninger Greenhouse Mfg. Corp., 26 NY2d 255, 259 [1970]). Lastly, "[a] motion for summaryjudgment should not be granted where the facts are in dispute, where conflicting inferences may be drawn from the evidence, or where there are issues ofcredibility" (Ruiz v Griffin, 71 AD3d 1112 [2d Dept 201 OJ, quoting Scott v LongIs. Power Auth., 294 AD2d 348 [2d Dept 2002]). 

### Defendant'sPrima Facie 

### Case In its motion, defendant contends the claims are untimely as CPLR § 213-a, as it existed at the time this action commenced, limitedrent actions to a four-year lookback period. Substantively, defendant argues the apartment was properly deregulated and the rents charged the plaintiffs were legitimate. Defendant submits copies ofa rent-stabilized lease and a renewal lease to someone after David Turner (who was the tenant in 1997), tenant Cheryl Hunter (NYSCEF Doc. No. 84-85). Hunter's rent underthe 2000-2002 renewal lease was $2101.34 (NYSCEF Doc. No. 85). 

### It is undisputed that, at the time, luxury deregulation was allowed whenthe rent for an apartment exceeded $2000 (see fact-sheet-36-02-2020.pdf [ny.gov] 1). Defendantjustifies the increase from $972.51 to $2101.34 by stating that defendant was entitled to a longevity bonus of$81.69, a two-year vacancy lease increase of20%, or $194.50, and an Individual Apartment Improvement (IAI) increase of$811.44. In support ofthis last increase, defendant submits 77 pages ofbills, purchase orders, and canceled checks (NYSCEF Doc. No.

1Available at https:/ /hcr.ny.gov/system/files/documents/2020/1 I/fact-sheet-36-02-2020.pdf 154133/2017 MOORE, RAYMOND vs. GREYSTONE PROPERTIES 81 LLC Motion No. 002

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83). Defendantfurther states thatthe apartment was vacant in 2002 and 2003 and thatthe next tenant, Evan Hirsch, with a lease dated August 8, 2002, paid $2,100 permonth in rent under a lease that stated the apartment was not subject to rent stabilization (First Hirsch Lease, NYSCEF Doc. No. 86). Defendant also provides copies ofsubsequenttenants' non-rent-stabilized leases (NYSCEF Doc. Nos. 85-93). Defendanthas made aprima facie case that the apartment was deregulated and it was entitled to charge the rent it charged plaintiffs. The burden then shifts to the plaintiffs. Timeliness The Court first addresses the threshold issue thatthe challenge is untimely. Underthe law that existed prior to 2019, "[a]n action on a residential rent overcharge shall be commenced within four years ofthe first overcharge alleged and no determination ofan overcharge and no award or calculation ofan award ofthe amount ofany overcharge may be based upon an overcharge having occurred more than four years before the action is commenced. This section shall preclude examination ofthe rental history ofthe housing accommodationpriorto the four-year period immediately preceding the commencement ofthe action" (CPLR 213-a [2012]). Therefore, "absent fraud, an overcharge was to be calculated by using the rent charged onthe date four years prior to filing ofthe overcharge complaint (the lookback period) as the 'base date rent"' (Matter of ReginaMetro. Co., LLCvNew YorkState Div. of Haus. & Community Renewal, 35 NY3d 332, 348 [2020] [Regina]). PartF ofthe Housing Stability and TenantProtection Act of2019 (HSTPA) extended the lookback period to six years. In its 2019 decision in this case, the First Department applied the
new six-year lookbackperiod (see Moore v Greystone Props. 81 LLC, 176 AD3d at 516). The following year, however, the Court ofAppeals in Reginaheld that the six-yearperiod did not

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### apply retroactively (see Matter o_f ReginaMetro. 

### Co., LLC, 

### 35 NY3d at 349-350, 361). Therefore, the 2012 version ofthe limitations period applies to the case at hand (see Matter of Bazan vNew York State Div. o_f Haus. & CommunityRenewal, 

### 189 AD3d 495, 496 [1st Dept 2020]).2 

### By its terms, the limitationsperiod "commencesto run withthe first overcharge alleged" (Matter of Brinckerhoff vNew YorkState Div. o_f Haus. & CommunityRenewal, 

### 275 AD2d 622, 622 [1st Dept 2000] [internal quotation marks and citation omitted]). Plaintiffs' complaint is dated May 4, 2017. Fouryears earlier, plaintiffs were the tenants ofrecord under a lease dated March 15, 2012, for rent of$2,750 per month, overthe deregulationthreshold (see 

### Complaint, NYSCEF Doc. No. 97, 14;Plaintiffs' Lease, NYSCEF Doc. No. 80, 13). 

### According to the complaint, plaintiffs renewed their lease on April 1, 2013, at
arent of$3,100permonth (Complaint, 15). Further, plaintiffs' leases consistently have stated the apartment is not subject to rent stabilization. Underthe four-year limitations period, therefore, the defendant's motion for summaryjudgment dismissing the suit should be granted, the plaintiffs' cross-motion for summaryjudgment should be denied, and the suit should be dismissed as untimely. Fraud 

### Only ifthere was evidence that defendant "engaged in a fraudulent scheme to deregulate" the apartment canthe Court go beyond the four-year limitations period when it examines the apartment's rental history (Nolte v BridgestonAssoc. LLC, 

### 167 AD3d 498,498 [1st Dept 2018] [applying pre-HSTPA law]). In their opposition and in support oftheir cross-motion,3

### plaintiffs

2 Due to Regina, the First Department's order in Moore is notbinding on this issue. 3 Plaintiffs argue thatthey should prevail on their claim regardless ofwhether the Court applies the HSTPA, with its six-year lookback period, orthe four-year limitations period that existed before its enactment. However, because of the ruling in Regina, this Court only evaluates the pre-HSTPA law for this purpose (see Regina, 35 NY3d at 349- 350, 361).

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stress that the Court is notlimitedby the four-year lookback period when a landlord has engaged in fraud (Vendaval Realty, LLCv Felder, 67 Misc. 3d 145 [A], 2020 NY Slip Op 50786 [U], *1- 2 [App Term, 1st Dept 2020]). Plaintiffs argue, "[t]here is compelling indicia offraud" here, and the court should examine the entire rental history (NYSCEF Doc. No. 110,

## ,r 34). "Fraudconsists ofevidence ofa representation ofmaterial fact, falsity, scienter, reliance and injury" (Regina Metro. Co., LLCvNew YorkState Div. of Haus. andCommunity Renewal, 35 NY3d 332,426 [2020] quoting Vermeer Owners v Guterman, 78 NY2d 1114, 1116 [1991];
see e.g. AmbacAssur. Corp. v Countrywide Home Loans, Inc., 31 NY3d 569 [2018]; Pasternack
vLaboratory Corp. of Am. Holdings, 27 NY3d 817, 827 [2016]). "Anincrease in rent and failure to registerthe apartment with [DHCR], standing alone, are insufficient to establish a colorable claim ofa fraudulent scheme to deregulate the apartment (Ampim v 160 E. 48th St. OwnerIILLC, 208 AD3d 1085, 1085-1086 [1st Dept 2022]; accordHess v EDRAssets LLC, 217 AD3d 542, 543 [1st Dept 2023]). Plaintiffs have notprovided sufficient additional evidence to satisfy their burden and make aprima facie case offraud. Plaintiffs contendthat the defendant "clearly
... removed the Premises from rent regulation" in approximately 1997 and that the subsequentregistrations showing an "RS" designation, reflecting that the Premises' status remained "Rent stabilized" were incorrect (AffofRonald D. Hariri, NYSCEF Doc. No. 110,

## ,r 15) and simultaneously take the position thatthe RS designation onthe recent filings was correct and the defendant engaged in fraud in 1997 by "remov[ing] the Premises from rent stabilization" (id., 

## ,r 34). Plaintiffs rely on Vendaval (67 Misc 3d 145 [A] at *2 ), but that case is distinguishable, as that court had found that fraud existed, not simply because the landlord did not inform renters that the apartment was rent stabilized and failed to file timely registrations, but

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because "the documentary proofotherwise reveal[ed] a pattern ofunsubstantiated and unexplained increases inrent." Thatis notthe situation in the instant matter. Plaintiffs' reliance on other caselaw is similarly unpersuasive. In Simi/is Mgt. LLCv Dzganiya (71 Misc 3d 129 [A], 2021 NY Slip Op 50245 [U] [App Term, 1st Dept 2021]), the Appellate Term, First Department, found triable issues offact withrespectto the question of fraud because ofthe size ofthe rent increase, which may have been as much as 73% in a single year but was falsely reported as spread over several years, the extremely limited evidence substantiating the landlord's claim ofimprovements meriting increases, and the landlord's failure to provide a lease rider explaininghow ithad computedthe rent. Here, defendant has provided extensive evidence ofthe improvements andthere is no evidence that the prior leases were not legitimate. The vacancy lease defendant issued to Hunter, moreover, containedthe requisite rider explaining howthe landlord had computed the newrent (see Hunter 1998 Lease, attached
as Exhibit E to Goldrach Aff., NYSCEF Doc. No. 84, 

## 14 ofRider and Rider end note). The ruling in Sandlow v 305 Riverside Corp. (69 Misc 3d 893 [Sup Ct, NY County 2020], affdas mod201 AD3d 418 [1st Dept 2022]) on which plaintiffs also rely, is not relevant because after plaintiffs submitted theirpapers that decision was modified by the First Department, which determined that there was no showing offraud (see Sandlow v 305 Riverside Corp., 201 AD3d 418). Evidence oflmprovements
As far as plaintiffs challenge defendant's assessments ofIAis and major capital improvements (MCis), the lawin effect when defendant assessed the IAI increases states: "Any claimed MCI or individual apartment improvement cost must be supportedby adequate documentationwhich should include at least one ofthe following: 1) Cancelled check(s) contemporaneous
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withthe completion ofthe work; 2) Invoice receipt marked paid in full contemporaneous withthe completion ofthe work; 3) Signed contract agreement; 4) Contractor's affidavit indicating that the installation was completed and paid in full. Whenever it is found that a claimed cost warrants further inquiry, the processormay request that the ownerprovide additional documentation
.... Where proofis not adequately substantiated, the difference betweenthe claimed cost and the substantiated cost will be disallowed" (DHCRPolicy Statement 90-10 [June 26,1990]). As stated above, to showthat workwas performed for apartment 43, defendant has submitted a 77-page exhibit including copies ofpurchase orders, invoices, and checks from late 1997 and early 1998. These evidence substantial work being done onthe apartment during the period in question.4 In their challenge to the IAis, plaintiffs file a letter from defendant dated September 6, 2017, in which defendant stated that DHCRgranted a $10.02 increase perroompermonth for the installation ofapartment entry doors and common area windows (NYSCEF Doc. No. 124). However, the September 2017 letter does not supportplaintiffs' position. Instead, it addresses an MCI application defendant submitted on December20, 2016, for building-wide improvements including the replacement ofall apartment doors and ofthe windows in the common areas. There is no indication that the referenced MCI application is related to the IAI increases defendant assessed 18 years earlier in the Hunter lease. Further, although DHCRdenied a

4 The Courtnotes that there were duplicate copies ofone bill, for $109.82 (NYSCEF Doc. No. 83, *16-17, 75-77), and that some ofthe pages were unreadable in part. However, the duplicate amount is de minimis, and the unreadable pages generally were accompanied by other documents, such as invoices and canceled checks, that adequately substantiated the amounts claimed. Therefore, these problems "donot constitute indicia offraud" (Matter of Haskin vNew York State Div. of Haus. & CommunityRenewal, 203 AD3d 603,604 [1st Dept 2022]; see also Begium v Mateo Prods., Inc., 138 AD3d 479,480 [1st Dept 2016] [gaps in defendant's evidence had not justifiedgranting ofcross-motion for summaryjudgment]). This is especially true as the rent stabilization laws do not require the landlord to maintain IAI records indefinitely (see Fuentes v Kwik RealtyLLC, 186 AD3d 435, 438 [1st Dept 2020]).

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### portion ofthe application, defendant sent plaintiffs the DHCR decision, by which it apparently abided.As a further challenge to the IAis, plaintiffs file the affidavit ofGary Horowitz, who states he is a licensed architect and he inspected the premises on March 28, 2017, at plaintiffs' request (NYSCEF Doc. No. 121).5 

### Horowitz opines the improvements would have cost $12,000, rather than $32,457.60, and that defendant performed the work around 1991. He states that, in 1991, the kitchen renovations would have cost $118.00 per square foot and the bathroom renovations would have cost $30.00 per square foot. He contends that no otherrenovations occurred in 1998, and notes thathe did not find any building permits for electrical orplumbing work. Plaintiffs contend thatthe Horowitz affidavit establishes the claimed increases were fraudulent. The Court concludes that the Horowitz affidavit

- only one page ofwhich discusses the architect's conclusions

- is insufficient to create an issue offact in oppositionto defendant's evidentiary support. Otherthan stating that the cabinets, appliances, floors, and fixtures "appear to have been renovated circa 1991" (NYSCEF Doc. No. 121, 

### ,i 9 [a], see 

### ,i 9 [b] ["looks to have last been renovated
..."]), Horowitz does not explain his conclusion that the improvements occurred in 1991, when all the bills and other evidentiary support relate to work done in 1997 and 1998 and when he did not inspect the apartment until 2017 (see Rios Cruz vMall Props., Inc., 

### 145 AD3d 463,463 [1st Dept 2016] [finding that engineer's report "was oflittle probative value" where inspection ofaccident site occurred years afterthe accident in question]). He provides only conclusory assertions regarding the basis ofhis knowledge and cites no pertinent guidelines (see Acosta v ConsolidatedEdison Co. ofNY, Inc., 

### 117 AD3d 475,476 [1st Dept

5 Plaintiffs did not file a copy ofHorowitz's curriculum vitae with this motion, but the Court was able to locate it in the file for defendant's earliermotion to dismiss (NYSCEF Doc. No. 3I).

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### 2014]; Sarmiento v C & EAssoc., 

### 40 AD3d 524, 526 [1st Dept 2007] [failure to cite to standards that support expert assertions rendered affidavit inadequate]). Even had his testimony been credible, his assessment ofthe cost "does not prove thatthe work was not performed" (Sand/ow, 

### 201 AD3d at 420). Also, Horowitz does not describe his records search other than to say that it
was "diligent" (NYSCEF Doc. No. 121, ,i 7). Plaintiffs also argue thatbecause defendant didnot file an updated rentregistration statement with DHCR, leaving DHCR'srecords reflecting a last stabilized rent of$972.51 per month, the rent should be frozen atthat amount (see 

### Rent Stabilization Code §2524 [a]). However, defendant filed arent registration statement with DHCRon March 3, 2021 (NYSCEF Doc. No. 94). Under Rent Stabilization Code (RSC § 

### 2528.4), the rent is retroactively unfrozen uponthe filing aproperregistration when "increases in the legal regulated rent were lawful except for the failure to file a timely registration" (GradyvHessertRealty, L.P., 

### 178 AD3d 401, 404 [1st Dept 2019] [internal quotation marks and citation omitted]; see Matter a/Cardonav New YorkState Div. of Haus. & CommunityRenewal, 

### 214 AD2d 393, 394 [1st Dept 1995] [ determining that the subsequent filing ofrent registration statements "prospectively eliminate[]" the rent freeze]). Plaintiffs' argument that the 2021 registration statement refers to all the tenants
as "rent stabilized" is also unpersuasive. However, plaintiffs misunderstand the import ofthe registration requirement. Once the apartment is exempt from rent stabilization, it does not matter ifthe "landlord subsequently mistakenly registeredthe apartment as stabilized" because rent stabilization status is governed by statute (3505 BWAYOwnerLLCvMcNeely, 

### 72 Misc 3d 1, 4 [App Term 1st Dept 2021]). Further, a mere failure to comply with Department ofBuildings requirements "[does] not establish a sufficient indicia offraud" (Bazan, 

### 189 AD3d at 496).

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CONCLUSION INDEX NO. 154133/2017 RECEIVED NYSCEF: 04/03/2024



### Forthe reasons above, the Court grants the defendant's motion and dismisses the complaint. The Court, for the same reasons, denies plaintiffs' cross-motion for summary judgment. The Court has considered all ofthe parties' remaining arguments and finds them without merit. Accordingly, it is ORDERED that defendant's motion for summaryjudgmentis granted and the action is dismissed with costs and disbursements to defendant as taxed by the Clerk upon the submission ofan appropriate bill ofcosts; and it is further ORDERED thatplaintiffs' cross-motion for summaryjudgmentis denied; and it is further ORDERED that the Clerk is directedto enterjudgment accordingly.

4/3/2024

DATE CHECK ONE: ALEXANDER M. TISCH, J.S.C.

APPLICATION: CHECK IF APPROPRIATE: CASE DISPOSED GRANTED**□** DENIED SETTLE ORDER INCLUDES TRANSFER/REASSIGN

# ~ NON-FINAL DISPOSITION GRANTED IN PART SUBMIT ORDER FIDUCIARY APPOINTMENT

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