Court Opinion

ID: 9956348
Source: CourtListenerOpinion
Date Created: 2024-04-01 20:12:12.802055+00
Date Added: 2024-06-11T08:15:53.241067
License: Public Domain

Handley v BH Props. NYC, LLC
               2024 NY Slip Op 31019(U)
                     March 26, 2024
           Supreme Court, New York County
        Docket Number: Index No. 150038/2022
                 Judge: Richard G. Latin
Cases posted with a "30000" identifier, i.e., 2013 NY Slip
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                       publication.
                                                                                                                        INDEX NO. 150038/2022
  NYSCEF DOC. NO. 69                                                                                              RECEIVED NYSCEF: 03/27/2024

                                   SUPREME COURT OF THE STATE OF NEW YORK
                                             NEW YORK COUNTY
            PRESENT:             HON. RICHARD LATIN                                                 PART   46M
                                                                                      Justice
            ---------------------------------------------------------------------------------X      INDEX NO.          150038/2022
                STEPHANIE HANDLEY and JOHN J. SAYERS III,
                                                                                                    MOTION DATE         07/05/2023
                                                         Plaintiffs,
                                                                                                    MOTION SEQ. NO.         003
                                                 -v-
                BH PROPERTIES NYC, LLC, 353 WEST 51ST ST., LLC,                                       DECISION + ORDER ON
                                                                                                            MOTION
                                                         Defendants.
            ---------------------------------------------------------------------------------X

            The following e-filed documents, listed by NYSCEF document number (Motion 003) 35, 36, 37, 38, 39,
            40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 64, 65, 67, 68
            were read on this motion to/for                                                      JUDGMENT - SUMMARY                   .

                      In this residential landlord-tenant action, defendants BH Properties NYC, LLC (“BH

            Properties”) and 353 West 51st St., LLC (“353 West”) move for an order (a) striking plaintiffs’

            first, second, third, fourth, and fifth causes of actions contained in the complaint pursuant to CPLR

            3211 (b)1 and 3212; (b) granting defendants summary judgment pursuant to CPLR 3212 (b) on the

            defenses and counterclaims contained in the answer; (c) entering a money judgment against

            plaintiffs for all rent and/or use and occupancy owed through the date this motion is heard, together

            with interest; (d) directing plaintiffs’ attorneys to release the rent and/or use and occupancy

            payments held in escrow to the landlord forthwith, with such sums believed to be in the amount of

            $43,768.35 to date, and such other sums that are received through the date the motion is heard;

            and (e) awarding defendants attorneys’ fees pursuant to the lease between plaintiffs and

            1
             If a defendant purports to seek dismissal of a complaint or part of it under CPLR 3211 (b), the court can disregard
           the mislabeling and treat the motion as made under CPLR 3211 (a), provided that specific subdivision (a) grounds
           upon which defendant is relying are clear from the moving papers, and the plaintiff is not prejudiced by the mislabeling
           (see CPLR 2001).
                150038/2022 STEPHANIE HANDLEY ET AL vs. BH PROPERTIES NYC, LLC ET AL                                   Page 1 of 15
                Motion No. 003

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            defendants. Plaintiffs Stephanie Handley and John J. Sayers, III opposed, and defendants

            submitted a reply. For the reasons set forth below, defendants’ motion is granted in its entirety.

            Factual Background and Procedural History

                   BH Properties is the landlord and lessor of the building located at 353 West 51st St, New

            York, New York (NY St Cts Elec Filing [NYSCEF] Doc No. 37, Complaint, ¶ 3). 353 West is the

            owner of the building (id., ¶ 4). Plaintiffs are tenants and rent Unit 2B (the “Subject Unit”) in the

            building (id., ¶ 5). Plaintiffs alleged they took possession of the subject unit in April of 2005 as

            rent stabilized tenants pursuant to a written lease (id., ¶ 6). Plaintiffs have paid the rent for every

            month they have been in possession from April of 2005 (id., ¶ 8). The subject unit is a duplex

            apartment that was constructed by defendants (id., ¶ 9). To create the duplex apartment, defendants

            took space in the cellar and incorporated it into the subject unit (id., ¶ 10). Plaintiffs live in the

            subject unit with their children and dog (id., ¶ 13). Defendants served plaintiffs with a notice to

            cure alleging that plaintiffs violated their lease by having their dog (id., ¶ 16). Plaintiffs claim the

            subject unit is illegal and does not appear on the certificate of occupancy for the building in its

            present form (id., ¶¶ 25-29). They further claim the subject unit is rent stabilized (id., ¶¶ 30-34).

                   Plaintiffs commenced a declaratory action against defendants. Their first cause of action

            demands a declaratory judgment determining and adjudging that the subject unit is an illegal

            apartment (id., ¶¶ 35-42). The second cause of action demands an injunction directing defendants

            to legalize the subject unit (id., ¶¶ 43-49). The third cause of action demands a declaratory

            judgment that the subject unit is a rent stabilized apartment (id., ¶¶ 50-55). The fourth cause of

            action demands a declaratory judgment that the notice to cure is a nullity that cannot be used as

            the predicate to a lawsuit (id., ¶¶ 43-48). The fifth cause of action demands a judgment against

            defendants for attorney’s fees for no less than $20,000.00 (id., ¶¶ 49-50).

             150038/2022 STEPHANIE HANDLEY ET AL vs. BH PROPERTIES NYC, LLC ET AL                    Page 2 of 15
             Motion No. 003

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                    Defendants filed an answer with counterclaim raising seven affirmative defenses and three

            counterclaims (NYSCEF Doc No. 56, Answer). The first affirmative defense alleges that plaintiffs’

            complaint is barred by the principles of res judicata and/or collateral estoppel (id., ¶ 1). The second

            affirmative defense alleges defendants mistakenly issued plaintiffs rent stabilized leases and

            mistakenly registered the subject unit as stabilized with the Division of Housing and Community

            Renewal (id., ¶ 11). The subject unit is exempt from rent regulation by reason of high rent vacancy

            in accordance with RSL § 26-504.2 (a) (id., ¶ 12). Plaintiffs entered into possession pursuant to a

            REBNY standard form of apartment lease dated April 22, 2005, with a rent charged in the amount

            of $2,400.00 per month, in excess of the deregulation threshold in effect at the time (id., ¶ 13). The

            third affirmative defense alleges plaintiffs have unclean hands and demanded relief in bad faith

            (id., ¶¶ 19-21). The fourth affirmative defense alleges that plaintiffs’ claims are disproven by

            documentary evidence (id. ¶ 22). The building contains a certificate of occupancy dated November

            15, 1984, which states that the cellar contains a “storage and recreation room access to apartment

            above; no sleeping” (id., ¶ 23). The subject unit is not illegal because the certificate of occupancy

            details the basement apartment’s access to the cellar storage and recreation area (id., ¶ 24). The

            fifth affirmative defense alleges that plaintiffs’ fourth cause of action is moot as plaintiffs’ counsel

            was previously notified that the allegations contained in the Notice to Cure would not be further

            pursued (id., ¶¶ 27-35). The sixth affirmative defense alleges that plaintiffs’ first and second causes

            of action related to alleged conditions to the subject unit, for which the Housing Part of the Civil

            Court of the City of New York is the preferred forum for resolution (id., ¶¶ 36-39). The seventh

            affirmative defense alleges plaintiffs’ claims are barred by statute of limitations (id., ¶ 40). In their

            first counterclaim, defendants are seeking a declaratory judgment finding that plaintiffs are not

            subject to Rent Stabilization Law and Code (id., ¶ 47). As to the second counterclaim, defendants

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             Motion No. 003

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            are seeking a monetary judgment against plaintiffs for reimbursement of attorney’s fees and costs

            not less than $50,000.00 (id., ¶ 53). As for the third counterclaim, defendants demand a money

            judgment against plaintiffs for reasonable compensation for the use and occupation of the

            apartment through the duration of this action or vacant possession of plaintiffs’ apartment (id., ¶¶

            54-57).

            Parties’ Contentions

            Defendants’ Motion

                      Defendants contend that plaintiffs’ first and second causes of action should be dismissed

            because the subject unit is not illegal (NYSCEF Doc No. 52, Memorandum of Law in Support,

            Noah E. Levenson, Esq. (memo), at 7). The certificate of occupancy dated November 15, 1984,

            and the approved plans for the certificate of occupancy filed with the Department of Buildings

            make it clear that the subject unit is not contrary to the certificate of occupancy (id.). Plaintiffs are

            using the subject unit contrary to the certificate of occupancy by using the cellar recreational space

            for a children’s bedroom (id.). Plaintiffs cannot benefit from misuse that they caused (id.).

                      With their moving papers, defendants submitted the affidavit of Billy Chen, a licensed

            architect (“Chen Affidavit”) (NYSCEF Doc No. 36). Chen concluded that the current layout of the

            subject unit conforms to the certificate of occupancy (id., ¶ 11). A certificate of occupancy is used

            to verify the number of apartment units on each floor, together with any other accessory use for

            the building on that floor. A certificate of occupancy does not define the size of an apartment unit

            or the size of the accessory space (id., ¶ 12). The certificate of occupancy states that the recreation

            room cannot be used for sleeping (id., ¶ 13). Plaintiffs’ allegation in the complaint that the owner

            illegally created a duplex apartment, or that the subject unit is not on the certificate of occupancy

            is plainly contradicted by the certificate of occupancy, which states that the recreational space is

             150038/2022 STEPHANIE HANDLEY ET AL vs. BH PROPERTIES NYC, LLC ET AL                     Page 4 of 15
             Motion No. 003

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            connected to the above residential apartment on the basement level (id.). Chen confirmed that the

            shower in the cellar is unlawful, however, the existence of the shower did not render the entire unit

            unlawful or in violation of the certificate of occupancy (id., ¶ 14). According to Chen, plaintiffs’

            use of the subject unit is unlawful and contrary to the certificate of occupancy (id. ¶ 16). The

            certificate of occupancy states “no sleeping,” and the tenant’s unlawful use of the cellar for

            sleeping purposes is a violation of occupancy (id.).

                      Defendants argue that plaintiffs’ third cause of action must be stricken because they

            discontinued their claims of rent regulation in the prior DHCR proceeding, thus the claims are

            barred by res judicata (NYSCEF Doc No. 52., at 9). Additionally, the subject unit was erroneously

            registered as rent stabilized. Lastly, the subject unit was deregulated because of high rent vacancy

            prior to commencement of plaintiffs’ tenancy (id., at 11). Plaintiffs entered possession of the

            subject unit pursuant to an exempt lease dated April 22, 2005, at a rent of $2,400 per month, more

            than the deregulation threshold in effect at the time (id., at 14). Plaintiffs had until April 22, 2009,

            to challenge the vacancy lease rent in the amount of $2,400.00 but failed to do so (id.). Plaintiff

            may not in 2021 challenge the registered rent of 1998 in the amount of $1,962.00, and the

            registered rent in 1999 which was in excess of the deregulation threshold in effect at the time (id.

            at 15).

            Plaintiffs’ Opposition

                      In opposition, plaintiffs failed to oppose defendants’ arguments in support of the dismissal

            of the third, fourth, and fifth causes of action. They first contend that defendants’ failure to submit

            a statement of facts is a violation of 22 NYCRR 202.8-g and should result in the automatic denial

            of the motion (NYSCEF Doc No. 54, Affirmation in Opposition of Joshua C. Price, Esq. (opp aff),

            id., at 4). They further state that when a party fails to provide a response to the statement of

             150038/2022 STEPHANIE HANDLEY ET AL vs. BH PROPERTIES NYC, LLC ET AL                    Page 5 of 15
             Motion No. 003

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            material facts that the factual assertions made in a plaintiff’s statement of material facts are deemed

            admitted (id., at 2). Second, plaintiffs contend that the subject unit is illegal because (a) the door

            from the Cellar to the Existing Storage area does not bear a fire label and the closing device does

            not fully close the door; (b) the ducted ventilation for the kitchenette on the basement level has

            been sealed, eliminating the mechanical means of exhaust which the drawings submitted by

            defendants required; (c) there is stacked laundry washer and dryer in a closet next to the kitchenette

            – and there is no associated plumbing permit for the washer and dryer; (d) there is a shower in the

            bottom of the unit that was installed by defendants illegally; (e) the requirement for natural light

            for Habitable Rooms is not satisfied; (f) no means of mechanical ventilation were observed and

            the single window in the Recreation Room, which is a double hung window, does not satisfy the

            requirements for natural ventilation for Occupiable Rooms; (g) the exterior court does not have

            any means of egress which is contrary to the drawings; (h) the exterior court does not have proper

            lightings as was required by the drawings; and (i) there are open violations with HPD in respect to

            the exterior court and the cellar ceiling (id., at 4-5). Lastly, plaintiffs claim defendants’ motion was

            made without the aid of discovery and therefore should be denied (id., at 5).

                     Additionally, plaintiffs submitted the affidavit of Daniel K. Henkel, a licensed architect

            (“Henkel Affidavit”) (NYSCEF Doc No. 56). Henkel checked the property on NYC Housing

            Preservation & Development’s website, which has three violations listed (id., ¶ 17). Two of the

            violations are related to the exterior of the building and one violation is related to the Cellar ceiling

            (id.).

            Defendants’ Reply

                     Defendants contend that the only issue of fact plaintiffs raise is whether the subject unit is

            legal (NYSCEF Doc No. 64, Memorandum Reply of Stephane J. Avouac, Esq. (reply memo), at

             150038/2022 STEPHANIE HANDLEY ET AL vs. BH PROPERTIES NYC, LLC ET AL                     Page 6 of 15
             Motion No. 003

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            3). This argument only opposes defendants’ motion seeking dismissal of the first and second

            causes of action (id.). Additionally, plaintiffs’ opposition fails to oppose the portion of defendants’

            motion seeking an order directing plaintiffs’ attorneys to release the rent and/or use and occupancy

            payments held in escrow (id.). Defendants argue that the Henkel affidavit does not rebut Chen’s

            findings that the subject unit has a valid certificate of occupancy, and merely raises potential HPD

            violations (id., at 5). Defendants do not have the ability to cure the alleged illegality, because

            plaintiffs’ use of the unit’s recreational room for sleeping purposes is the basis of the illegality (id.,

            at 4).

                     As to plaintiffs’ arguments regarding 22 NYCRR 202.8-g, defendants argue that it is only

            where a statement of facts was submitted in support of a motion for summary judgment by the

            moving party, and not opposed by the non-moving part, that the facts alleged by the moving party

            are deemed admitted by the non-moving party (id, at 6). They further contend that plaintiffs have

            not presented any precedential support for the proposition that failure to provide a statement of

            facts in support of its motion created an admission of facts by the moving party (id.). They

            additionally argue that a moving party’s failure to include a statement of material facts pursuant to

            22 NYCRR 202.8-g (2) does not render a motion procedurally defective for three reasons: (i) 22

            NYCRR 202.8-g (a) does not require that a motion be denied for failing to comply; (ii) the court

            should disregard a defect in the form of papers, if a substantial right of a party is not prejudiced to

            CPLR 2101 (f) and 2001; and (iii) the court in an action may waive compliance with 22 NYCRR

            202.8-g pursuant to 22 NYCRR 202.1 (id., at 6-7).

             150038/2022 STEPHANIE HANDLEY ET AL vs. BH PROPERTIES NYC, LLC ET AL                     Page 7 of 15
             Motion No. 003

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            Discussion

            A. Defendants’ Motion is Not Defective

                   At the outset, plaintiffs argue that defendants failed to submit a statement of undisputed

            material facts, therefore their motion should be denied as procedurally defective pursuant to 22

            NYCCRR 202.8-g (a). However, the absence of a separate statement of undisputed material facts

            is not fatal to a motion for summary judgment. Pursuant to 22 NYCRR 202.8-g (a), the court is

            afforded with discretion as to whether such statement is required. This court declines to deny the

            motion on the procedural basis of defendants’ failure to include a statement of undisputed material

            facts and will resolve this matter on its merits (see 22 NYCRR 202.8-g [e]).

            B. Plaintiffs’ Rent Regulation Cause of Action is Not Barred by Res Judicata

                   Defendants’ claim the DHCR Order should be given a preclusion effect (see NYSCEF Doc

            No. 52, at 8-9). “Res judicata, or claim preclusion, precludes a party from litigating a claim where

            a judgment on the merits exists from a prior action between the same parties, involving the same

            subject matter; the doctrine applies even if the later claim is based on a different theory or seeks a

            different remedy, so long as it arises out of the same transaction” (Martinez v JRL Food Corp.,

            194 AD3d 488, 488 [1st Dept 2021], citing Matter of Josey v Goord, 9 NY3d 386, 389-390 [2007]).

            Under res judicata or claim preclusion, “a valid final judgment bars future actions between the

            same parties on the same cause of action” (Shah v 20 E. 64th St., LLC, 198 AD3d 23, 39 [1st Dept

            2021], quoting Parker v Blauvelt Volunteer Fire Co., 93 NY2d 343, 347-348 [1999]). The DHCR

            order terminating the proceeding, cannot be construed to be the kind of final judgment for res

            judicata purposes as the complaint was withdrawn (see NYSCEF Doc No. 48).

             150038/2022 STEPHANIE HANDLEY ET AL vs. BH PROPERTIES NYC, LLC ET AL                  Page 8 of 15
             Motion No. 003

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            C. Summary Judgment

                    “[T]he proponent of a summary judgment motion must make prima facie showing of

            entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the

            absence of any material issues of fact” (Ayotte v Gervasio, 81 NY2d 1062, 1063 [1993], quoting

            Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]). “[F]ailure to make such a showing requires

            a denial of the motion, regardless of the sufficiency of the opposing papers” (Ayotte, 81 NY2d at

            1063 [internal quotation marks and citation omitted]). “Once this showing has been made,

            however, the burden shifts to the party opposing the motion for summary judgment to produce

            evidentiary proof in admissible form sufficient to establish the existence of material issues of act

            which require a trial of the action” (Alvarez, 68 NY2d at 324; see also Zuckerman v City of New

            York, 49 NY2d 557, 562 [1980]). “[M]ere conclusions, expressions of hope or unsubstantiated

            allegations or assertions are insufficient” (Zuckerman, 49 NY2d at 562). “Summary judgment

            should not be granted where there is any doubt as to the existence of a factual issue or where the

            existence of a factual issue is arguable” (Forrest v Jewish Guild for the Blind, 3 NY3d 295, 315

            [2004]; see also American Home Assur. Co. v Amerford Intl. Corp., 200 AD2d 472, 473 [1st Dept

            1994]). “On a summary judgment motion, facts must be viewed in the light most favorable to the

            non-moving party” (Vega v Restani Constr. Corp., 18 NY3d 499, 503 [2012] [internal quotation

            marks and citation omitted]).

               I.      Plaintiffs’ First and Second Causes of Action

                    Plaintiffs’ first and second causes of action seek a declaratory judgment that the subject

            unit is illegal and seek an injunction to legalize the subject unit (see Complaint, ¶¶ 35-49).

            Defendants have established that the subject unit is not illegal by submitting a copy of the

            certificate of occupancy for the building dated November 15, 1984, the plans for the cellar

             150038/2022 STEPHANIE HANDLEY ET AL vs. BH PROPERTIES NYC, LLC ET AL                Page 9 of 15
             Motion No. 003

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            submitted to the Department of Buildings, and the Chen Affidavit (see NYSCEF Doc Nos. 36, 38,

            and 39). Chen, after inspection of the subject unit and cellar, opined that the current layout of the

            subject unit is in conformity of the certificate of occupancy, and it is the tenant’s use of the cellar

            for sleeping purposes contrary to the certificate of occupancy (see NYSCEF Doc No. 36). “Where

            an owner . . . leases a premises free from violations to a tenant [and] where violations occur as a

            result of the tenant’s misuse, rather than mere use of the premises, it [is] grossly unfair to deny the

            owner the right to collect rents and the right to dispossess” (Matter of Caravetto v Springfield, 54

            Misc. 2d 759, 761 [Suffolk Dist Ct 1967]).

                   In opposition, plaintiffs failed to raise a triable issue of fact. The Henkel affidavit merely

            alleges “series of examples of ways in which” the subject unit “was not constructed in the manner

            that the law required” (see NYSCEF Doc No. 56). “Averments merely stating conclusions, of fact

            or of law, are insufficient to defeat summary judgment” (Banco Popular N. Am. v Victory Taxi

            Mgt., 1 NY3d 381, 383-384 [2004] [internal quotation marks and citations omitted]). Henkel

            proffered violations related to the exterior of the building and one related to the cellar ceiling and

            concluded “there are more violations that would be added if [subject unit] was inspected by New

            York City” (see NYSCEF Doc No. 56). Henkel’s “[m]ere conclusory assertions, devoid of

            evidentiary facts, are insufficient to defeat a well-support summary judgment motion, as is reliance

            upon surmise, conjecture or speculation” (Grullon v City of New York, 297 AD2d 261, 263-264

            [1st Dept 2002] [internal quotation marks and citations omitted]).

                   Furthermore, plaintiffs’ claim that defendants filed the motion without the aid of any

            discovery is meritless. Defendants’ motion was not premature, as plaintiffs failed to demonstrate

            “that discovery might lead to relevant evidence or that the facts essential to justify their opposition

            to the motion were exclusively within defendants’ knowledge and control” (see Bacchus v Bronx

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             Motion No. 003

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            Lebanon Hosp. Ctr., 192 AD3d 553, 554 [1st Dept 2021] [citations omitted]). “The mere hope that

            evidence sufficient to defeat a motion for summary judgment may be uncovered during the

            discovery process is insufficient to deny such a motion” (Laporta v PPC Commercial, LLC, 204

            AD3d 538, 539 [1st Dept 2022] [internal quotation marks and citations omitted]). Based on the

            foregoing, the subject unit is declared legal. Moreover, as plaintiffs’ declaratory judgment claim

            regarding the legality of the unit is without merit, plaintiffs’ second “cause of action for injunctive

            relief has no legal basis and is dismissed” (see 300 Wadsworth LLC v New York State Div. of Hous.

            & Community Renewal, 210 AD3d 454, 456 [1st Dept 2022], lv denied 40 NY3d 901 [2023]

            [citations omitted]).

               II.      Plaintiffs’ Third Cause of Action and Defendants’ First Counterclaim

                     Plaintiffs’ third cause of action seeks a declaratory judgment to determine and adjudge the

            subject unit rent stabilized because defendants have filed an annual registration statement with

            DHCR (see Complaint, ¶¶ 51 - 55). Contrary to defendants’ assertion, plaintiffs’ claim is not barred

            by the statute of limitations. “[A] tenant should be able to challenge the deregulated status of an

            apartment at any time during the tenancy” (Matter of 150 E. Third St LLC v Ryan, 201 AD3d 582,

            583 [1st Dept 2022], lv dismissed 39 NY3d 935 [2022] [citations omitted]; see also Gersten v 56

            7th Ave. LLC, 88 AD3d 189, 199 [1st Dept 2011], appeal withdrawn 18 NY3d 954 [2012]). High-

            rent vacancy deregulation is warranted where, after a stabilized apartment becomes vacant, its

            legal regulated rent exceeds $2,000.00 ($2,500.00 after June 24, 2011), inclusive of vacancy

            increase allowances and increases permitted for landlord improvements (Altman v 285 W. Fourth

            LLC, 31 NY3d 178, 185-186 [2018]). This court may look at the rental history surrounding the

            deregulation of plaintiffs’ apartment in 1998 to determine whether the subject unit was properly

            deregulated (see Matter of Kostic v New York State Div. of Hous. & Community Renewal, 188

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            AD3d 569, 569 [1st Dept 2020] [“Regardless of its age, an apartment’s rent history is always

            subject to review to determine whether a unit is rent-stabilized”] [citations omitted]).

                   Defendants established that the subject unit was deregulated before plaintiffs took

            occupancy in 2005. Defendants’ evidentiary submissions demonstrated that plaintiffs’

            predecessors, occupied the subject unit as rent-stabilized tenants from 1996 through the time of

            their vacancy in 1998, and that the legal rent at the time of the predecessors’ vacancy, $1,962.00

            per month, plus the 20% increase allowance brought the legal rent to $2,354.40, above the $2,000

            threshold then in effect (see RSL § 26-504.2 [a]). The registered rents on file with the DHCR for

            the years immediately prior to the commencement of plaintiffs’ tenancies met that threshold (see

            NYSCEF Doc No. 45). Moreover, the lease includes a rider with a provision where the parties

            agreed that the subject unit is a “non-stabilized apartment” (see NYSCEF Doc No. 42). The subject

            unit’s rent-stabilized status is not determined merely because plaintiffs signed a lease and renewal

            lease indicating the same (see Heller v Middagh St. Assoc., 4 AD3d 332, 332 [2d Dept 2004] [court

            properly dismissed claim that by attaching rent stabilization riders to leases or tendering renewal

            leases using rent stabilization forms, defendant contractually agreed to confer rent-stabilized status

            on subject apartments]; see also NYSCEF Doc Nos. 21 and 22). “[R]ent stabilization coverage is

            a matter of statutory right and cannot be created by waiver or estoppel” (Matter of Trainer v State

            of N.Y. Div. of Hous. & Community Renewal, 162 AD3d 461, 462 [1st Dept 2018] [internal

            quotation marks and citations omitted]). Plaintiffs merely alleged in their complaint that

            defendants have filed an annual registration statement with DHCR every year. This allegation is

            meritless as the registration does not render the subject unit rent stabilized (see 3505 BWAY Owner

            LLC v McNeely, 72 Misc 3d 1, 4 [App Term, 1st Dept 2021] [landlord mistakenly registering the

            subject unit as stabilized does not warrant a contrary result] [citations omitted]).

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                      As defendants established the subject unit was properly deregulated and plaintiffs have not

            opposed, summary judgment on defendants’ first counterclaim is granted, and the subject unit is

            declared non-rent stabilized.

               III.      Plaintiffs’ Fourth and Fifth Causes of Action and Defendants’ Second and Third
                         Counterclaims

                      No relief remains to be granted with respect to plaintiffs’ fourth cause of action as

            defendants are not pursuing the notice to cure. Plaintiffs’ final cause of action seeks an award of

            attorney’s fees. “[A]ttorney’s fees are incidents of litigation and a prevailing party may not collect

            them from the loser unless an award is authorized by agreement between the parties, statute or

            court rule” (Sage Sys., Inc. v Liss, 39 NY3d 27, 30-31 [2022] [internal quotation marks and

            citations omitted]). CPLR 8101 further provides that “[t]he party in whose favor a judgment is

            entered is entitled to costs in the action, unless otherwise provided by statute or unless the court

            determined that to do so allow costs would not be equitable, under all of the circumstances.” It has

            already been determined that plaintiffs’ fourth cause of action is moot, and the remaining causes

            of action are dismissed. Accordingly, plaintiffs’ fifth cause of action seeking attorneys’ fees cannot

            survive on its own. Defendants prevailed and are entitled to legal fees pursuant to the lease dated

            April 22, 2025 (see NYSCEF Doc No. 42, at 4). Therefore, this cause of action is dismissed, and

            defendants’ second counterclaim is granted.

                      Furthermore, defendants established prima facie their entitlement to the damages sought,

            and plaintiffs failed to raise triable issues of fact. Defendants submitted the rent ledger indicating

            an outstanding payment of $46,635.92 as of April 20, 2023, and the affidavit from Bruce Haley, a

            member of defendant 353 West stating the rent ledger is maintained by defendant in its ordinary

            course of its business (see NYSCEF Doc Nos. 40 and 51). “The affidavit sufficiently authenticated

             150038/2022 STEPHANIE HANDLEY ET AL vs. BH PROPERTIES NYC, LLC ET AL                 Page 13 of 15
             Motion No. 003

                                                          13 of 15
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                                                                                                 INDEX NO. 150038/2022
  NYSCEF DOC. NO. 69                                                                       RECEIVED NYSCEF: 03/27/2024

            the rent ledger as a business record” (Epic W14 LLC v Malter, 212 AD3d 575, 576 [1st Dept

            2023]). Based on the foregoing, summary judgment on the third counterclaim is granted.

                      Accordingly, it is

                      ORDERED that defendants’ motion for summary judgment is granted and the second and

            fifth causes of action are dismissed with costs and disbursements to defendants as taxed by the

            Clerk upon the submission of an appropriate bill of costs; and it is further

                      ADJUDGED and DECLARED that the subject unit is legal and not rent stabilized;

                      ORDERED that defendants’ motion for summary judgment with respect to the fourth cause

            of action is moot; and it is further

                      ORDERED that plaintiffs’ attorneys are directed to release the rent and/or use and

            occupancy payments held in escrow to defendants in the amount of $46,635.92 upon entry of this

            order; and it is further

                      ORDERED that the issue of amount of reasonable attorney’s fees, costs, expenses, and/or

            other monies due to defendants based on the non-payment of rent or use and occupancy that

            defendants may recover against plaintiffs is severed and referred to a Special Referee to hear and

            report; and it is further

                      ORDERED that counsel for defendants shall, within 30 days from the date of this order,

            serve a copy of this order with notice of entry, together with a completed Information Sheet, upon

            the Special Referee Clerk in the General Clerk’s Office (Room 119), who is directed to place this

            matter on the calendar for the Special Referee’s Part for the earliest convenient date; and it is

            further

                      ORDERED that such service upon the Special Referee Clerk shall be made in accordance

            with the procedures set forth in the Protocol on Courthouse and County Clerk Procedures for

             150038/2022 STEPHANIE HANDLEY ET AL vs. BH PROPERTIES NYC, LLC ET AL               Page 14 of 15
             Motion No. 003

                                                         14 of 15
[* 14]
                                                                                                   INDEX NO. 150038/2022
  NYSCEF DOC. NO. 69                                                                         RECEIVED NYSCEF: 03/27/2024

            Electronically Filed Cases (accessible at the “E-filing” page on the court’s website at the address

            www.nycourts.gov/supctmanh); and it is further

                    ORDERED that the Clerk is directed to enter judgment accordingly.

                    3/26/2024                                                           $SIG$
                      DATE                                                      RICHARD G. LATIN, J.S.C.
             CHECK ONE:               x   CASE DISPOSED                  NON-FINAL DISPOSITION

                                                                                                  □
                                      X   GRANTED             DENIED     GRANTED IN PART              OTHER

             APPLICATION:                 SETTLE ORDER                   SUBMIT ORDER

                                                                                                  □
             CHECK IF APPROPRIATE:        INCLUDES TRANSFER/REASSIGN     FIDUCIARY APPOINTMENT        REFERENCE

             150038/2022 STEPHANIE HANDLEY ET AL vs. BH PROPERTIES NYC, LLC ET AL                 Page 15 of 15
             Motion No. 003

                                                          15 of 15
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