FILED: NEW YORK COUNTY CLERK 01/11/2017 12:05 AM INDEX NO. 152553/2016 NYSCEF DOC. NO. 55 RECEIVED NYSCEF: 01/11/2017 DEFENDANTS MOTON TO STRIKE PLAINTIFF S CAUSE OF ACTION FOR LEASE REFORAMTION IS MISPLACED AND SHOULD BE DENIED The Plaintiff is entitled to the issuance of a rent stabilized Lease if the Current Apartment is found to be rent stabilized, and The existence of an adequate remedy at law does not preclude the Plaintiff from being issued a rent stabilized lease The Defendant argues in its Memorandum of Law that the Plaintiff is not entitled to a new lease that correctly identifies her apartment as rent stabilized because reformation is an equitable remedy to be used as a last resort when a damage award is inadequate. The Defendant cites two treatises to support its position, Equity 86 and Cancellation of Instruments 63, as well as Black v. Mill Road Associates, 86 A.D.2d 621 (2d Dept. 1982). These grounds on which the Defendant relies are completely unavailing; none of these sources has any bearing on this case. The two treatises are addressed to the law of contracts in general, and, therefore, any application to the highly regulated and specialized area of New York City rent stabilized leases must be supported by adequate case law showing that these broad rules of law are applicable here. Here, the Defendant fails to support its contention with relevant case law. The tenant in Black v. Mill Road Associates, the sole case relied upon by the Defendant, sought reformation of his lease because certain payments of additional rent were incorrect and that the true amount thereof was to be 1 of 5
computed by one of two contradictory clauses relating to the base year for computation Id. The reformation sought in that case was a commonplace contract issue. Such an issue is inapposite to the reformation sought in this case, which asks only that the lease be brought into compliance with the Rent Stabilization Law and Code, which require a rent stabilized lease to be identified as such. See 9 NYCRR 2523.5 and Gordon v. 305 Riverside Corp., 93 A.D.3d 590 (1 st Dept. 2012) [... no basis exists to dismiss plaintiffs' claims seeking a declaration that the apartment is rent-stabilized and an order directing that plaintiffs be provided with a rent-stabilized lease. ] The issuance of a rent stabilized lease is not barred by any statute of limitations First, the Court should note that the Plaintiff does not object to the amendment of Defendant s Answer to include a statute of limitations defense. However, such defense is completely ineffective in this case, as elaborated below. In arguing that the issuance of a rent stabilized lease is barred by the statute of limitations, the Defendant is putting the cart before the horse. Matter of Grimm v. State of N.Y. Div. of Hous. & Cmty. Renewal Off. of Rent Admin., 912 N.Y.S.2d 491, 938 N.E.2d 924 (2010) provides a helpful analogy. Though Grimm is not addressed to the statute of limitations under CPLR 213(6) relied on by the Defendant, it analyzes whether a court should be bound by the 4-year 2 of 5
statute of limitations in NYC Administrative Code 26-516, in determining the rent-stabilized status of an apartment. The Court of Appeals affirmed the Appellate Division, First Department s holding in Grimm, that the court should not be bound by a statute of limitations when a landlord sets an illegal rent because "an unscrupulous landlord could register a wholly fictitious, exorbitant rent and, as long as the fraud is not discovered for four years, render that rent unchallengeable. " (citing Thornton v. Baron, 5 N.Y.3d 175, 800 N.Y.S.2d 118, 833 N.E.2d 261 (2005)). The landlord in this case falsely represented to the tenant that the Subject Apartment was not rent-regulated, and thereby improperly profited on the high rent it was able to charge. The Plaintiff relied on these statements of the Defendant over the course of years. The Defendant, as the Court of Appeals held in a very similar situation in Grimm, should not be allowed to profit from its selfserving misstatements. Furthermore, the Defendant relies on a single case with a completely inapposite fact pattern to support its contention that the issuance of a rent stabilized lease is barred by a 6-year statute of limitations. This case, National Amusements, Inc. v. South Bronx Development Corp., 253 A.D. 2d 358 (1 st. Dept. 1998), involved a tenant seeking to reform a provision of its lease regarding a proportional share of taxes. Such a reformation is utterly dissimilar to the relief sought by the Plaintiff. 3 of 5
The Plaintiff is not alleging a mistake in a single clause of the lease, which she wants corrected. Here, the Plaintiff s lease was entirely improper and illegal because it did not reflect the rent stabilized status of the Subject Apartment. No mistake of law or fact is required to warrant the issuance of lease that properly reflects the rent stabilized status of the Subject Apartment The Defendant again argues from inapposite case law to support its contention that a mistake of fact or law is required for the issuance of a rent stabilized lease for an apartment that a court finds to be rent stabilized. The New York City Housing Court as well as the Division of Housing and Community Renewal routinely issue injunctions requiring landlords to issue rent stabilized leases pursuant to 9 NYCRR 2523.5 when they find that a tenant s leasehold should fall under the Rent Stabilization Law and Code. See Gordon v. 305 Riverside Corp., 93 A.D.3d 590 (1 st Dept. 2012) [... no basis exists to dismiss plaintiffs' claims seeking a declaration that the apartment is rent-stabilized and an order directing that plaintiffs be provided with a rent-stabilized lease. ] Once again, the Defendant s reliance on K.I.D.E. Assocs. v. Garage Estates Co., 280 A.D.2d 251 (1 st Dept. 2001) is misplaced because the parties in that case had a disagreement about a specific clause in the lease for a garage space. This fact pattern is so dissimilar to this case, in which the Plaintiff is seeking the issuance of a new lease that conforms broadly to the law, that it can provide no basis on which to deny this relief to the Plaintiff. The complaint does not seek to reform the prior apartment s leases 4 of 5
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