Court Opinion

ID: 5839166
Source: CourtListenerOpinion
Date Created: 2022-01-12 22:47:55.137649+00
Date Added: 2024-06-11T08:43:42.729599
License: Public Domain

Fein, J. P.,
dissents in a memorandum as follows: Fein, J. P. (dissenting). The facts are fairly stated in the majority opinion. It is undisputed that at the time the parties entered into the leases in issue the landlord had pending before the Conciliation and Appeals Board (CAB) an application for a rent increase and that the landlord failed to disclose this fact to the plaintiffs. Premised on this failure to disclose and the lack of a "meaningful choice” (Williams v Walker-Thomas Furniture Co., 350 F2d 445, 449-450; Blake v Biscardi, 62 AD2d 975, 977), Special Term declared that paragraph 3 of Rider C of the leases is unconscionable, "null and void and without force and effect and unenforceable against the plaintiffs with respect to the order of the New York Conciliation and Appeals Board dated December 15, 1977, during the terms of plaintiffs’ leases which were in effect at the time that order was granted”. The majority of this court is today declaring that the rider is not unconscionable and is a valid and enforceable obligation because the tenants are afforded a "meaningful choice”, in that the rider permits the tenants, within 30 days after receipt of a copy of the CAB order, to cancel their leases upon 60 days’ written notice to the owner, during which period the tenants are permitted to remain as tenants with no increase in rent. Thus the court is ruling that the tenants are obligated to pay the rent increase approved by the CAB. I disagree. In my view the issue is merely one of contract interpretation, subject to resolution without reaching the question of unconscionability, even though that is the only *567issue tendered by the parties. The disputed paragraph 3 of Rider C provides: "That where Landlord has proper cause and ground to apply to the Conciliation and Appeals Board for relief, and where, upon due application, Landlord is found to be entitled to an increase in rent over and above the amount set forth in Par 1 and 2 above, the parties agree: (a) To be bound by the determination of the Conciliation and Appeals Board; (b) That were the Conciliation and Appeals Board has granted an increase in rent, the tenant agrees to pay such increase in the manner set forth by the Conciliation and Appeals Board; (c) Anything contained in this Par. 3(a) and (b) to the contrary notwithstanding, it is distinctly understood and agreed that in the event that an order is issued increasing the stabilization rent because of owner hardship, the tenant may, within thirty (30) days of receipt of a copy of the order by the Conciliation and Appeals Board, cancel his lease on sixty (60) days’ written notice to the Owner. During said period, the cancelling tenant may continue in occupancy at no increase in rent.” The opening sentence of the rider provision plainly speaks of a future application, not a pending application. It states: "That where the Landlord has proper cause and ground to apply to the Conciliation and Appeals Board for relief’ (emphasis supplied). It does not say the landlord has applied, although it is undisputed that the rent increase sought and granted was based upon a prior application. It is equally undisputed that plaintiffs were not apprised of the pending application at the time they signed their leases. They understood they might be required to pay an increase premised upon an application to the CAB subsequent to the execution of their leases. This is in accord with the plain meaning of the rider’s language. The landlord’s undisclosed intention cannot be relied upon to distort the clear language of the rider. If a question of construction is truly raised, the provision must be construed against the landlord who drafted the rider. Nor may the landlord take refuge behind the fact that the terminology was part of the code drafted by the Real Estate Industry Stabilization Association (RSC). It is the responsibility of the court to construe the language as written (Mallad Constr. Corp. v County Fed. Sav. & Loan Assn., 32 NY2d 285). If the landlord and the association intended to cover pending applications, appropriate language to that end should and could have been included. The language used does not import retroactivity. Thus the issue is not whether the plaintiffs were entitled to notice of an application for a rent increase, as the majority suggests, citing Wasservogel v Meyerowitz (300 NY 125); Bedford Bldg. Co. v Beame (38 NY2d 729); Matter of Johnson v Joy (65 AD2d 701, affd 48 NY2d 689). The issue is rather whether the rider subjected plaintiffs to the consequences of an application made prior to the execution of their leases, of which they had no knowledge. It is not without significance that in each of the cited cases the rent increase application was made after the lease was executed. Moreover, in Wasservogel (supra), where the lease contained an escalation clause, it was held to apply only after expiry of the lease and during the period the tenant was in possession as a statutory tenant. The escalation clause was to be strictly construed. Such construction here requires the conclusion that the tenants did not subject themselves to the pending application. The declaratory relief sought by plaintiffs is premised upon allegations that the rider is null and void and unenforceable because it is unconscionable. However, this should not preclude the court from determining and declaring the meaning of the rider without necessarily reaching the question of unconscionability. A declaratory judgment decree should be molded to the necessities of the occasion (First Nat. Stores v Yellowstone Shopping Center, 21 NY2d 630, 637). The *568clear language of the rider requires a declaration that it does not obligate the tenants to pay the rent increase authorized by the CAB premised upon the November 25, 1974 application to the CAB by the defendants. Accordingly, the order of the Supreme Court, New York County, entered July 19, 1979, should be modified, on the law and the facts, by striking the first decretal paragraph thereof and by substituting the following language therefor: "Ordered that plaintiff’s motion for summary judgment is granted only to the extent of declaring that paragraph 3 of Rider C of plaintiffs’ leases does not obligate plaintiffs to pay the rent increases authorized by the order of the New York Conciliation and Appeals Board dated December 15, 1977”, and otherwise affirmed, without costs. [101 Misc 2d 943.]