Court Opinion

ID: 5732708
Source: CourtListenerOpinion
Date Created: 2022-01-12 16:27:47.417525+00
Date Added: 2024-06-11T08:40:54.478095
License: Public Domain

Tom, J.E, dissents
in separate memorandum as follows: This is an action for breach of an illegal oral contract to issue plaintiff a rent-stabilized lease and lease renewals, in perpetuity. The complaint filed in April 2004 asserts a right to a renewal lease under a tenancy created by a purported 1992 verbal agreement with defendant landlord’s principal, Mark Perlbinder. Plaintiff allegedly paid $50,000 in consideration of “his understanding and agreement that he would have the right to remain in the apartment for as long as he cared to rent it,” in apparent disre*734gard of whether the apartment was to be used as his primary residence. Defendant alleges that plaintiff maintains his primary residence in Florida.
Defendant previously brought a holdover proceeding on nonprimary residence grounds, which had been pending in Civil Court for two months when plaintiff commenced this action alleging breach of the parol agreement and seeking specific performance and monetary damages of $500,000. Plaintiffs first cause of action seeks specific performance and a permanent injunction against his eviction. The second and third causes of action allege breach of the 1992 oral agreement and seek monetary damages of $500,000 against defendants,1 respectively, for failing to offer plaintiff a renewal lease in January 2004 and for refusing to extend the term of the lease.2 The fourth cause of action seeks recovery of the $50,000 paid by plaintiff in 1992, asserting that such payment constitutes an illegal rent overcharge.
In the pending Civil Court holdover proceeding to recover possession of the subject dwelling unit, defendant alleged that plaintiff does not use the premises as his primary residence and, apparently, never has. However denominated, the present action seeks to impose upon defendant the obligation to continue the statutory tenancy indefinitely. Because the right to lease renewal can be adjudicated in the Civil Court proceeding and because it is dispositive of the asserted breach of contract, the complaint was properly dismissed on the ground that there is another action pending (CPLR 3211 [a] [4]).3
On appeal, plaintiff maintains only that his second and third causes of action should not have been dismissed as untimely under the six-year statute of limitations applicable to breach of contract (CPLR 213) because the breach of the purported parol contract occurred when defendant failed to renew the lease in January 2004. However, because the contract bestows a rent-regulated lease on an individual who is not qualified for rent stabilization protection in exchange for an illegal payment of $50,000, it is unenforceable in the courts as a matter of public policy; thus, what are denominated in the complaint as *735plaintiffs second and third causes of action seek damages that are unrecoverable.4 Accordingly, I dissent and would affirm the order dismissing the complaint.
The parties do not dispute that plaintiff paid $50,000 for a rent-stabilized apartment that plaintiff was not obligated to maintain as his primary residence. Thus, the contract sought to be enforced by plaintiff is in clear violation of the Rent Stabilization Law and Code in two material respects. First, the payment of $50,000 to obtain the lease constitutes excessive rent (see Estro Chem. Co. v Falk, 303 NY 83, 87 [1951] [“The obtaining of excessive rents strikes at the very purpose of the act”]). By waiving the statutory protection against excessive rents, the contract contravenes Rent Stabilization Code (9 NYCRR) § 2520.13, which expressly prohibits a tenant from waiving any benefit bestowed under rent stabilization, rendering it statutorily void and unenforceable as a matter of public policy (see Drucker v Mauro, 30 AD3d 37, 41 [2006], lv dismissed 7 NY3d 844 [2006]). Second, the agreement is calculated to evade requirements for obtaining statutory protection (see 546 W. 156th St. HDFC v Smalls, 43 AD3d 7 [2007]), particularly, that the apartment be used as the tenant’s primary residence (Rent Stabilization Law of 1969 [Administrative Code of City of NY] § 26-504 [a] [1] [f]; NY City Rent and Rehabilitation Law [Administrative Code] § 26-403 [e] [2] [i] [10]; see Friesch-Groningsche Hypotheekbank Realty Credit Corp. v Slabakis, 215 AD2d 154, 155 [1995]).
The majority fails to acknowledge the illegality of the agreement, reasoning that because the parties did not seek to rescind or reform the contract,5 the issue is not before us. With respect to enforceability, it is irrelevant that, the parties “freely entered into and acquiesced in [the contract] for more than 10 years,” as the majority asserts. Rather, it is axiomatic that a party cannot seek to recover damages on an agreement that violates public policy and is statutorily prohibited (Drucker, 30 AD3d at 41; see Austin Instrument v Loral Corp., 29 NY2d 124, 130 [1971] [contract voidable for economic duress]; Jones Lang Wootton *736USA v LeBoeuf, Lamb, Greene & MacRae, 243 AD2d 168, 182 [1998], lv dismissed 92 NY2d 962 [1998] [settlement agreement voided as offensive to antisubrogation rule]). However, plaintiff entered into the asserted oral agreement of his own volition and, the record suggests, with the advice of counsel, availing himself of the benefit of his bargain for more than a decade. Thus, he is estopped to contest his willing participation in the arrangement (see Schultz v 400 Coop. Corp., 292 AD2d 16, 20 [2002]).
It is immaterial that neither party previously raised the issue of illegality of the contract. As this Court has noted, “There is a long-standing policy of refusing to assist in the enforcement of agreements that are injurious to the public” (Abright v Shapiro, 214 AD2d 496, 496 [1995]). As we explained in Miltenberg & Samton v Mallor (1 AD2d 458, 461 [1956]): “As has been frequently said, the courts [szc], in refusing to enforce these agreements, does so, not because it desires to relieve one of the parties to such an agreement from the obligation that he assumes, but because of the fact that the making of such an agreement is an injury to the public, and that the only method by which the law can prevent such agreements from being made is to refuse to enforce them. In such a case a court will leave the parties as it found them. It is well-settled law that parties to a fraudulent or illegal transaction who are in pari delicto may not invoke judicial aid to undo the consequences of their illegal acts” (citations and internal quotation marks omitted).
Moreover, plaintiff has not submitted any evidence to prove the terms of his alleged verbal agreement with defendant’s principal (see Cobble Hill Nursing Home v Henry & Warren Corp., 74 NY2d 475, 482 [1989], cert denied 498 US 816 [1990] [definiteness of contract essential to enforcement, and proof of its terms “is particularly significant where specific performance is sought”]). “The party seeking to enforce a contract bears the burden to establish that a binding agreement was made and to prove the terms of the contract” (Allied Sheet Metal Works v Kerby Saunders, Inc., 206 AD2d 166, 169 [1994]; Paz v Singer Co., 151 AD2d 234, 235 [1989]). The only proof of the agreement between the parties is its part performance. However, plaintiff does not explain how such part performance can be distinguished from adherence to statutory requirements governing the rent-stabilized tenancy so as to be deemed “ ‘ “acts of part performance which go along with, relate to, and confirm the agreement” ’ ” (see Eden Temporary Servs. v House of Excellence, 270 AD2d 66, 67 [2000], quoting Bright Radio Labs, v Coastal Commercial Corp., 4 AD2d 491, 494 [1957], affd 4 NY2d *7371021 [1958], quoting Wheeler v Reynolds, 66 NY 227, 232 [1876]). Finally, plaintiff does not allege that the parol agreement contemplates recovery of extraordinary damages beyond the usual and customary remedy of directing the issuance of a renewal lease (see 1009 Second Ave. Assoc, v New York City OffTrack Betting Corp., 248 AD2d 106, 108 [1998], lv dismissed 92 NY2d 947 [1998]).
This action is nothing more than a landlord-tenant dispute involving defendant’s obligation to offer plaintiff a renewal lease, which is an issue governed by the Rent Stabilization Law and Code. The Court of Appeals has made clear that “Civil Court has jurisdiction of landlord tenant disputes (see CCA 204) and when it can decide the dispute, as in this case, it is desirable that it do so” (Post v 120 E. End Ave. Corp., 62 NY2d 19, 28 [1984] [Yellowstone injunction], citing Lun Far Co. v Aylesbury Assoc., 40 AD2d 794 [1972]). As Post notes, “If the tenant is unable to obtain complete relief in Civil Court, then the jurisdiction of Supreme Court is still available” (id., citing Wilen v Harridge House Assoc., 94 AD2d 123 [1983] [Yellowstone injunction]). Neither the parties nor the majority offer any reason why the issues raised by this controversy cannot be resolved in the summary proceeding before Civil Court. Since plaintiff asserts no basis for injunctive or declaratory relief available only in Supreme Court, this action is merely an artifice to prevent the dispute from being decided in the designated forum (Cox v J.D. Realty Assoc., 217 AD2d 179, 180 [1995], citing NY Const, art VI, § 15 [b]; CCA 204, 110).
Plaintiffs claim that the oral agreement was breached by the failure to renew (or extend) his lease involves only a single breach of contract. The several alternative remedies of injunction and monetary damages that he seeks all arise from the claim that he is entitled to indefinite renewal of his lease and are not severable (see Matter of Cine-Source, Inc. v Burrows, 180 AD2d 592, 594 [1992]; Goldberg v Eastern Brewing Co., 136 App Div 692, 693 [1910]). Merely because counsel might draft a complaint to restate a single claim under various theories of contract—and even tort—does not serve to create distinct causes of action, as this Court has repeatedly held (see e.g. McMahan & Co. v Bass, 250 AD2d 460, 462 [1998], lv denied and dismissed 92 NY2d 1013 [1998]; Megaris Furs v Gimbel Bros., 172 AD2d 209, 211 [1991]).
Plaintiff may assert his purported contract right to renewal of his lease in defense to the holdover proceeding pending in Civil Court. Because the Housing Part must decide whether defendant is obligated to renew plaintiffs lease, determination of this *738issue will have collateral estoppel effect (Buechel v Bain, 97 NY2d 295, 304 [2001], cert denied 535 US 1096 [2002] [parties bound by prior determination of their contract rights despite their failure to litigate them]; see also Schwartzreich v E.P.C. Carting Co., 246 AD2d 439, 441 [1998] [res judicata]). Permitting multiple actions to go forward predicated on the same breach of contract (failure to offer plaintiff a renewal lease) offends the rule that a cause of action may not be split to advance different theories of recovery or to pursue different forms of relief (see id.; Miller v Vanderlip, 285 NY 116, 125 [1941]) and creates the potential for conflicting rulings on an identical issue (see World Point Trading PTE. v Credito Italiano, 225 AD2d 153, 161 [1996]; Bank of Tokyo-Mitsubishi, Ltd., N.Y. Branch v Kvaerner a.s., 243 AD2d 1, 9 [1998] [arbitration]). As stated in Perry v Dickerson (85 NY 345, 347-348 [1881]), “There can be but one recovery for an injury from a single wrong, however numerous the items of damage may be, and but one action for a single breach of a contract.”
In view of this analysis, it is unnecessary to reach defendant’s argument that this action is barred by the terms of a 1992 written release, in which plaintiff agreed to hold defendant harmless for any adverse consequences resulting from actions taken by him to obtain the subject leasehold. It need only be observed that the existence of this document hardly strengthens plaintiffs case for recovery of damages against defendant.
Accordingly, the order dismissing the complaint should be affirmed.

. Plaintiff does not disclose how damages are calculated.

. The distinction between these purported causes of action is not immediately apparent.

. The “illegal overcharge” alleged in the fourth cause of action, which is not before us, can also be adjudicated in Civil Court. Thus, it was unnecessary for Supreme Court to rule on this issue. The court was correct, however, in stating that the action on the overpayment, alleged by plaintiff to have been made in 1992, is time-barred (CPLR 213-a).

. This presumes that merely asserting a right to monetary damages in the alternative to specific performance serves to create distinct causes of action, the remedy sought in all instances being predicated on the selfsame breach of contract.

. While the complaint does not expressly seek rescission, the fourth cause of action seeks to recover the amount paid as consideration. Granting such relief would effect rescission by placing plaintiff in status quo ante, thereby vitiating the contract (see Curtis Props. Corp. v Greif Cos., 212 AD2d 259, 265 [1995] [“the promises of both parties to a bilateral contract must be supported by consideration”]).