Landlord Tenant Rent Stabilization Succession Although Tenant and Family Members May Have Purposefully Misled the NYC Dep't of Finance for Several Years, That Did Not by Itself Defeat Succession Rights

A landlord commenced a holdover proceeding involving a rent stabilized apartment, on the grounds that the respondents were licensees of the tenant of record, who had died on June 27, 2011. Four respondents appeared and argued that the court lacked subject matter jurisdiction, because the landlord had "failed to serve upon the respondents a notice to quit" and that the petition failed "to state a cause of action," since there was no basis to terminate their tenancy "as they have succession rights."

The court explained that inquiries in succession cases "are narrowly limited to a clearly defined finite time period which is a two-year period immediately preceding the tenant's of record's death" and people claiming succession rights have "the burden of proof to demonstrate by a fair preponderance of the evidence that they are the remaining family member as defined by the statute ." 9 NYCRR Section 25 20.6(n). All people "qualifying in a successor relationship to the tenant of record may assert succession" rights since succession is not limited to one family member. Additionally, "family members seeking succession are under no obligation to notify the landlord of their presence during the lifetime of the tenant of record ."

Here, respondents "A" and "B" "produced tax records, phone records, voting record and banking statements indicating that they resided with the [tenant] two years prior to her death." Although the court found that "A" and "B's" testimony "about their alleged rent payments to the [tenant], or to an aunt," was "disingenuous," the court nevertheless found that "the overall evidence presented at trial, leads the court to conclude that ['A'] and ['B'] have proven their succession claim." The court reasoned that the fact that "the [tenant] and other family members may have purposely mislead the New York City Department of Finance in filling out and qualifying for the SCIRE program, even for several years is not in of itself, sufficient to bar succession ." The court found, however, that respondents "C" and "D's" succession claims had not been "sufficiently proven" and therefore, the court awarded final judgment of possession against "C" and "D".

408 St. John's Place v. Estate of Bartholomew, LT 77312/13, NYLJ 1202788436444, at *1 (Civ., KI, Decided May 12, 2017), H. Cohen, J.

Landlord-Tenant Rent Stabilization Nuisance Apartment Allegedly Maintained in "Filthy, Deplorable and Unsanitary Condition Which Created a Breeding Ground for Bedbugs" Landlord Failed to Establish a "Chronic and Habitual Pattern of Behavior So Dangerous to the Life, Health and Safety of Other Tenants as to Warrant Termination Without an Opportunity to Cure"

A landlord commenced a holdover proceeding to recover possession of a rent stabilized apartment. The landlord's notice of termination (notice) alleged that the tenant was "committing or permitting a nuisance by maintaining her apartment in a filthy, deplorable and unsanitary condition which created a breeding ground for bedbugs" and that the tenant had "failed to provide access to the exterminator, and/or failed to properly prepare the apartment for extermination, and failed to return the landlord's agent's call requesting access." The notice further alleged that the tenant had "constructed unauthorized sheet rock walls in violation of her lease." The landlord contended that pursuant to RSC 2524.3(b), it was not obligated to serve a notice to cure, because of "the serious nature of these allegations."

The tenant moved, inter alia, for a partial summary judgment on the ground that the allegations were improperly pled as "nuisances instead of lease violations."

The court explained that:

The court found that the tenant's conduct failed to meet the nuisance threshold. The court explained that although "a long history of refusing to provide access can constitute a nuisance ," the notice failed to allege such "ongoing behavior." The notice cited "only one instance where [tenant] failed to arrange access with [landlord's] agent and one instance where [tenant] failed to prepare her apartment for treatment." The court also opined that the alleged conduct did "not represent an imminent danger to the other tenants in the building."

The court further noted that although tenants "may not make significant alterations" to their apartments with a landlord's express consent, the alleged "conduct more resembles a breach of lease or breach of a substantial obligation of tenancy than nuisance."

Thus, the court held that the subject allegations did not establish "a chronic and habitual pattern of behavior so dangerous to the life, health and safety of the other tenants as to warrant termination without an opportunity to cure" and dismissed the case.

The Grove v. Suquilanda, 51140/17, NYLJ 1202787005216, at *1 (Civ., QU, Decided May 8, 2017), Nembhard, J.

Landlord Tenant Nuisance Holdover Proceeding Landlord Alleged Tenants Created Health and Fire Hazard Based on Clutter and Trash in the Apartment and Their Refusal to Comply With Landlord's Efforts to Exterminate Bed Bugs Tenants Had Ample Opportunities to Cure the Problems, But Failed to Do So

A landlord commenced a nuisance holdover proceeding, alleging that the tenants had created "a health and fire hazard based upon a 'Collyer'-type condition of clutter and trash in the apartment, and that they refused to comply with landlord's efforts to exterminate bedbugs." The Civil Court had appointed a guardian ad litem (GAL) for the tenants. The parties thereafter entered into a stipulation of settlement providing that the "tenants would execute and return certain 'extermination prep sheets' to landlord and prepare the apartment for bedbug extermination on Nov. 9, 2015."

After the tenants failed to comply with the stipulation, the parties entered into two successive stipulations. These stipulations provided for "entry of a judgment of possession , with issuance of the warrant of eviction stayed on the condition of tenants' 'full compliance with all the terms of th[e] agreement, time of the essence, no default de minimus,' including that tenants 'remove all clutter and prepare the premises for proper bedbug extermination' by Jan. 15, 2016." If the tenants failed to comply with the terms of the stipulations, all stays would be vacated and landlord was to have the right to evict the tenants.

Following the tenants' failure to comply with the stipulations, "a warrant of eviction was issued." The trial court denied the tenants' motion to vacate the judgment, "finding that 'despite strenuous efforts of the GAL, the apartment had not been prepared for bedbug extermination' in accordance with the stipulation." No appeal had been taken from that order and execution of the warrant had been stayed through March 31, 2016.

The trial court also denied the tenants' April 2016 motion to vacate the three stipulations. The Appellate Term (court) found that the trial court's denial of the tenants' April 2016 motion to vacate the three stipulations "was a provident exercise of discretion, given the absence of any showing that the stipulations were entered into inadvisedly or that it would be inequitable to hold the parties to the agreements' unambiguous terms ." The court noted that the stipulations provided the tenants with "multiple opportunities to prepare their apartment for bedbug extermination and to preserve their tenancy." The court noted that the GAL had "conscientiously and appropriately represented [tenants] over the course of six months, visiting [tenants'] home , in an effort to help them resolve the issues herein."

The tenants' subsequent July 2016 motion to vacate the judgment and warrant, predicated upon "a belated purported cure of the conditions effectuated by their article 81 guardian," who had been appointed on May 23, 2016, had been denied by the trial court. The Appellate Term found that such denial was proper.

The court explained that "[g]iven the conditions in tenants' apartment that placed at risk the health and safety of other building residents, the 'no breach is de minimus' terms agreed to by the parties, tenants' nearly one year delay in permitting access to landlord's exterminator, and the lack of any evidence that the article 81 guardian would solve the problem of access, it was not an abuse of discretion for the court to enforce the stipulations by their terms ."

The court concluded that since the tenants "failed to remedy the demonstrated nuisance conditions despite ample opportunity to do so during the protracted proceedings below," the tenants were "not entitled to a further stay of execution of the warrant of eviction" in order "to effectuate the cure so long resisted ." Finally, the court took "judicial notice" of certain litigation papers which had "persuasively" indicated that "the nuisance conditions have not abated." Accordingly, the court dismissed the tenants' appeal.

Prospect Union Associates v. DeJesus, 570838/16, NYLJ 1202789745658, at *1 (App. Div., 1st, Decided May 30, 2017). Before: Schoenfeld, J.P., Shulman, Gonzalez, JJ. All concur.

Environmental Case of First Impression No Right to Jury Trial in Toxic Substances Control Act Case

The United States (government) commenced an action on behalf of the Environmental Protection Agency (EPA) against "A," alleging "violations of the Toxic Substances Control Act" (TSCA), 15 U.S.C. 2601 et seq., and "EPA regulations codified at 40 C.F.R. pt. 745, subpart E (the 'Renovation, Repair, and Painting Rule; or the 'RRP rule')."

The government asserted that "A" had renovated residential buildings, but had failed "to hire renovators trained and certified in lead-safe renovation practices, seal off work areas to prevent lead contamination, warn building owners and occupants of the risks of lead exposure , or provide the EPA with required records to enable the agency to monitor ['A''s] compliance."

The government sought "an order restraining ['A'] from performing any renovation work until it can demonstrate compliance with the TSCA and the RRP rule," "an injunction compelling ['A'] to comply with the TSCA and the RRP rule," and "an order requiring ['A'] to disgorge all proceeds from its illegal conduct, together with interest." The government had moved to strike "A's" demand that the case be tried before a jury. The court granted the government's motion.

The court explained that this decision involved a case of "first impression." The court stated that "[t]he statute itself is silent on the right to a jury, so if such a right exists, it must be derived from the Seventh Amendment to the United States Constitution." The Seventh Amendment states that "[i]n suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved ." The court noted that "[t]his Amendment protects the fundamental right to a jury trial for actions at law, not actions in equity." The court had to "consider whether the action would have been deemed legal or equitable in 18th-century England before the merger of courts of law and equity," "examine the remedy sought and determine whether it is legal or equitable in nature." The court stated that "[t]he second, functional prong of the test weighs more heavily than the first, historical inquiry."

"Actions under modern statutes often have no precise parallel in 18th-century English law." The court determined "the closest historical antecedent to an action under the TSCA appears to be a suit to abate a public nuisance." During the 18th century, a sovereign could commence "an action in the English courts of equity 'to enjoin' offensive trades and manufactures' that polluted the environment.'"

The court then explained that "the monetary remedy sought by the government disgorgement is equitable in nature." The TSCA vests "district courts with jurisdiction over civil actions 'to restrain any violation of' relevant provisions of the TSCA and related regulations." The court observed that "[w]hen Congress entrusts to an equity court the enforcement of prohibitions contained in a regulatory enactment, it must be taken to have acted cognizant of the historic power of equity to provide complete relief in the light of statutory purposes." Moreover, "[r]elief ancillary to the equitable power to enjoin statutory and regulatory violations includes the remedy of disgorgement." Thus, the court found that "although disgorgement of profits under the TSCA involves the payment of money, it is nevertheless equitable in nature" and therefore, "the Seventh Amendment does not provide for the right to a jury trial."

The court also noted that if the government sought "legal as well as equitable relief , the calculus might be different. The TSCA does provide for the award of civil penalties in an administrative proceeding." The court explained that "whether the jury right attaches turns on the claims asserted in this litigation, where the government seeks only equitable and injunctive remedies." Moreover, "even a party that has once asserted legal claims can avoid a jury trial by abandoning those claims and seeking only equitable relief."

"A" contended that "as a practical matter, the government is seeking extensive monetary relief that can only be characterized as damages or as a civil penalty, thus triggering the right to a jury trial." "A" argued that the government sought "disgorgement not only of those profits attributable to work that might have been done in violation of the TSCA and the RRP rule but also profits from work unrelated to lead hazards, such as installing new cabinets, mirrors, and wood flooring." "A" argued that the government's proposed remedy was "punitive because it improperly understates ['A's] overhead, thereby inflating the profit to be disgorged."

The court found "A's" argument to be "premature" and that "the government's claim for equitable relief only is binding." Thus, the court held that "A" "is not entitled to trial by jury" and "A" "will have the opportunity to challenge the government's proof as to what constitutes the appropriate disgorgement amount, but that will take place at trial." Accordingly, the court granted the government's motion to strike the defendant's jury demand.

Comment: Additionally, the court noted that "the Tenth Circuit held that disgorgement is not a 'civil fine, penalty, or forfeiture' in relation to the statute of limitations for suits seeking such remedies" and "[t]hat case is now under review by the Supreme Court." If the Supreme Court renders "a decision that casts doubt on the reasoning here," the court stated that it "would entertain an application for reconsideration."

USA v. Accolade Construction Group, 15 Civ. 5855, NYLJ 1202787596146, at *1 (SDNY, Decided May 23, 2017), Mag. Judge Francis.