Opinion
151657/2018
04-15-2019
Anna SHEFFIELD, Plaintiff, v. Germana PUCCI aka Germana Pucci Biagi, Artida Arts Inc., and 56 Ludlow Owners, Inc., Defendants.
Defendants: Kishner Miller Himes P.C 420 Lexington Avenue, Suite 300 New York, NY 10170 Plaintiff: Peter E. Sayer 90 Broad Street, Suite 602 New York, NY 10004
Defendants:
Kishner Miller Himes P.C
420 Lexington Avenue, Suite 300
New York, NY 10170
Plaintiff:
Peter E. Sayer
90 Broad Street, Suite 602
New York, NY 10004
Carmen Victoria St. George, J.
In this action seeking, inter alia , declaratory relief and monetary damages arising from a residential sublease, defendants Germana Pucci, Artida Arts Inc., and 56 Ludlow Owners, Inc. (collectively "defendants"), move under CPLR §§ 3211(a)(1) and (7) to dismiss the complaint. Plaintiff Anna Sheffield opposes. The court grants defendants' motion to the extent set forth and the reasons explained below.
Background
Defendant 56 Ludlow Owners Inc. ("56 Ludlow Owners") owns a cooperative building located at 56 Ludlow Street, New York, New York ("the building"). On or about April 1, 2015, plaintiff entered into a one-year residential sublease for Apartment 5W (the "subject apartment") with defendant Artida Arts Inc. ("Artida"), which executed the sublease in its capacity as landlord and overtenant of the building. Plaintiff states that Germana Pucci ("Pucci") executed the lease on behalf of Artida (complaint ¶ 17). Pursuant to the terms of the sublease, plaintiff was required to pay the monthly rent of $ 3,300.00 and to tender a security deposit in the amount of $ 6,600.00. Notably, plaintiff states that the sublease was "subject to an [o]verlease which was never given to, tendered to, shown to, or otherwise disclosed to [her], despite language in the [sublease] stating that [p]laintiff had read and initialed it" (Id. ¶ 30). Plaintiff states that on or about April 1, 2016, she executed a renewal sublease with Artida, which contained the same terms as the initial sublease. The Court notes that the renewal lease was for one year ending on March 31, 2017. Plaintiff alleges that "upon information and belief" Artida and/or Pucci owned, operated, maintained, and managed the building (Id. ¶¶ 18-21).
In the complaint, plaintiff alleges that during the term of her sub-tenancy, her occupancy of the subject apartment was in violation of the building's certificate of occupancy ("CO"). Specifically, plaintiff states that the CO "provides for only one (1) Class ‘A’ apartment as permissible use and occupancy on the fifth floor of the building" (Id. at ¶ 44). However, plaintiff avers that defendants constructed and occupied two additional Class "A" apartments on the fifth floor. Plaintiff concludes that because there were three Class "A" apartments on the fifth floor, the fifth floor was in violation of the CO, plaintiff states. Plaintiff further surmises that the subject apartment was illegal and not permitted by the CO. Plaintiff claims that, as a result, the subleases between plaintiff and defendants violated the Multiple Dwelling Law and were thus invalid. Notably, the complaint does not indicate when plaintiff learned of the certificate of occupancy and its terms.
Plaintiff further alleges that during the term of her occupancy there existed dangerous, hazardous, uninhabitable, and illegal conditions in the subject apartment including:
a) persistent months-long lack of basic services, including but not limited to heat and hot water; b) no cooking gas; c) persistent inability to wash or launder clothing or dishes; (d) persistent and penetrating leaks causing flooding; e) persistent mold in several areas including the bathroom; f) inability to use bathroom tub; g) non-working stove for months at a time; h) continuous electrical problems resulting in the landlord failing Con-Edison inspections on multiple occasions, further preventing the restoration of utilities and other necessary services; i) landlord forcing plaintiff to connect to her neighbor's apartment in order to receive essential services; j) constant inhalation from chimney flue expelling debris, soot, and toxic contaminants into plaintiff's apartment and covering her property; k) landlord's agents and/or contractors entering the premises without notice and during which visits such agents and/or contractors destroyed plaintiff's personal property; l) landlord sending non-licensed and non-qualified agents to premises to diagnose and/or repair serious conditions in plaintiff's apartment requiring repair and/or remediation; m) landlord's requests to have plaintiff perform repairs herself, even though plaintiff is neither a licensed contractor, design professional nor tradesperson; and n) persistent, debilitating plumbing issues of varying nature depriving plaintiff of the ability to use her bathroom and/or kitchen (complaint ¶ 35).
She claims that these conditions persisted throughout her tenancy and prevented her quiet enjoyment of the subject premises. Plaintiff contends that defendants failed to remediate these conditions despite her repeated complaints to Pucci. Notwithstanding these hazardous conditions, plaintiff states that "defendants compelled [her] to pay rent throughout her tenancy, which [she] did under full protest" (Id. ¶ 38). Plaintiff further alleges that she was constructively evicted from the subject premises for extended periods of time due to the above-mentioned conditions. In addition, plaintiff claims that the above-mentioned dangerous conditions constituted defendants' breach of the lease as well as breach of the warranty of habitability.
The complaint asserts six causes of action. Plaintiff's first cause of action seeks a declaration that her occupancy of the subject apartment was illegal under the CO and that the subleases between plaintiff and defendants were in violation of sections 301 and 302 of the Multiple Dwelling Law ("MDL") thus rendering the subleases null and void. On that basis, plaintiff seeks a refund of $ 79,200.00, the amount she paid defendants in rent for the twenty-four months she occupied the apartment from April 2015 to March 2017 (rent @ $ 3,300.00 per month) plus security deposits paid.
The second cause of action, pleaded in the alternative, alleges that "should it be determined that no valid lease existed, then [she] is entitled" to recoup rent payments made to defendants under the theory of unjust enrichment (Id. ¶ 60). Plaintiff appears to be relying on MDL §§ 301 and 302 in her contention that that defendants have been unjustly enriched in the amount of $ 79,200.00 by virtue of their collection of rent in the absence of a valid CO.
In the third cause of action labeled breach of contract, plaintiff refers to prior allegations in the complaint, and asserts that defendants "are liable to plaintiff for breach of implied warranty of good faith, the warranty of habitability, and breach of other implied or express covenants including but not limited to breach of the covenant of quiet enjoyment" (Id. ¶ 79). Plaintiff also appears to allege defendants' acquiescence in allowing the hazardous conditions to persist constituted a nuisance and caused plaintiff to be constructively evicted. Plaintiff seeks a full abatement of the rent payments she made during her occupancy, in an amount not less than $ 79,200.00.
Plaintiff's third cause of action is pleaded in the alternative to the first cause of action (complaint ¶ 78 ["To the extent this Court finds that a valid, lawful lease existed then in the alternative to the first cause of action herein, plaintiff alleges that defendants have breached said contract"] ).
Based on the way this complaint is styled, the Court notes that it is it is unclear whether plaintiff has asserted separate causes of action for breach of implied warranty of good faith and nuisance.
The fourth cause of action, for fraud, alleges that defendants misrepresented that the subject apartment was lawful and suitable for residential use. Plaintiff is seeking compensatory damages in an amount to be determined at trial, but not less than the amount she paid in rent during her tenancy. In addition, plaintiff seeks attorneys' fees and punitive damages.
In the fifth cause of action, for equitable estoppel, plaintiff states that defendants knowingly concealed the fact that the subject apartment was not permitted by the CO. Plaintiff alleges that she believed in good faith that the subject apartment was suitable for residential occupancy and "suffered substantial prejudice by foregoing other suitable habitation" (complaint ¶ 101). Plaintiff seeks damages in an amount not less than $ 79,200.00.
The sixth cause of action, for violation of New York General Business Law ("GBL") § 349(h), plaintiff alleges that defendant engaged in deceptive practices by the illegal leasing of the subject apartment to tenants including plaintiff and collecting rent in violation of the law. Plaintiff seeks $ 79,200.00 and reasonable attorneys' fees.
Defendants' Motion to Dismiss
Defendants move to dismiss plaintiff's complaint in its entirety based on documentary evidence and for failure to state a cause of action ( CPLR §§ 3211[a][1] and [7] ). Defendants submit the affidavit of defendant Pucci in support of their motion. Pucci states that she is "one of three owners of the cooperative apartment located at 56 Ludlow Street (the "Building"), Apt. 5-F, New York, New York (the "premises") by virtue of [her] joint ownership of [t]wo [t]housand shares of stock along with a proprietary lease for the [p]remises duly executed and issued by 56 Ludlow. The other two owners of the [p]remises are Giancarlo Biagi and Jill Burkee" (Pucci aff, ¶ 2). Pucci further attests that "the only shareholders of Artida are myself, Germana Pucci, as well as Giancarlo Biagi and Jill Burkee" (Id. ¶ 3).
Annexed to Pucci's affidavit are the following exhibits: a letter dated June 24, 1997 from the City of New York, Department of Housing and Preservation ("HPD") to Pucci, Burkee, and Biagi, approving their request to sublet a portion of the fifth floor subject to the following conditions: "1) [a] maximum of 49% of the floor may be sublet; and 2) [t]he sublet may only be to another artist" (defendants' exhibit A "HPD letter"); a letter dated September 15, 1997 from the Board of Directors of 56 Ludlow to HPD confirming the co-op's approval of the subleasing of the fifth floor (defendants' exhibit B) ; the sublease agreement entered into between plaintiff and Artida dated March 3, 2015 (defendants' exhibit C); the renewal sublease agreement entered into between plaintiff and Artida on April 1, 2016 (defendants' exhibit D); and email correspondence between plaintiff and Pucci purporting to show that plaintiff vacated the subject apartment following the expiration of the second sublease (defendants' exhibit E).
The letter is signed by the Board of Directors of 56 Ludlow, including Pucci, as "Treasurer" (defendants' exhibit B). The letter states "[w]e, the Board of Directors of 56 Ludlow Street co-op, approve the subletting of not more than 49% of the fifth floor by the owners of the fifth floor, Giancarlo Biagi, Jill Burkee and Germana Pucci, to another artist" (Id. ).
Defendants also submit what appears to be the corresponding cover letter sent with the Board of Director's approval of the letter. The cover letter is dated October 7, 1997 and is signed by Jill Burkee. The subject line of the letter reads "RE: 56 Ludlow property conveyed to 56 Ludlow Owners., Inc., by New York City Fifth Floor Coop Unit owned by Jill Burkee, Giancarlo Biagi, and Germana Pucci" (Id. ).
First, defendants contend that plaintiff's claims as against Pucci and 56 Ludlow Owners must be dismissed as there is no contractual privity between plaintiff and either Pucci or 56 Ludlow Owners. Defendants emphasize that plaintiff has failed to allege any facts that would extend liability for contractual obligations or otherwise on 56 Ludlow Owners or Pucci, in her individual capacity. Second, defendants assert that plaintiff's first, second, fourth, fifth, and sixth causes of action are based on the misguided allegation that the subleases were invalid, and the occupancy of the premises was illegal under the building's CO. According to defendants, the HPD letter expressly permitted the sublet of the subject premises and thus dismissal of those claims is warranted. Third, defendants maintain that even if the Court does not dismiss plaintiff's causes of action based on documentary evidence, the complaint still fails to state a cause of action under CPLR § 3211 (a)(7).
In opposition, plaintiff submits, among other things, copies of the subleases (plaintiff's exhibits B and C), a printout of the apartment listing (plaintiff's exhibit E), a copy of the CO for 56 Ludlow Street issued by the City of New York, Department of Buildings and dated October 2, 1990 (plaintiff's exhibit F), and a copy of the HPD Building Registration Summary Report (plaintiff's exhibit F). Plaintiff also submits her own affidavit (plaintiff's exhibit G).
The Building Registration Summary Report, which appears to have been downloaded on August 13, 2018, names Steve Bull, Jill Burkee, 56 Ludlow Owners Inc., and Pucci as part of the Premises' organization. Under the category of "owner," the Building Registration Summary Report identifies: nonparty "Steve Bull" as the "Head Officer;" nonparty "Jill Burkee as "officer;" "56 Ludlow Owners Inc.," as "corporation;" and "Pucci as "managing agent" and "shareholder." Under the category of "Apt," the Building Registration Summary lists "5F" for Jill Burkee; "5W" for 56 Ludlow Owners Inc.; and "5F" for Pucci (see plaintiff's exhibit F).
Applicable Law
Under CPLR § 3211(a)(1), a party may move for judgment dismissing a cause of action on the ground that a "defense is founded upon documentary evidence." Dismissal under CPLR § 3211(a)(1) is warranted "only where the documentary evidence utterly refutes plaintiff's factual allegations, conclusively establishing a defense as matter of law," ( Goshen v. Mutual Life Ins., Co., of NY , 98 NY2d 314, 326 [2002] ), and "conclusively disposes of the plaintiff's claim" ( Fortis Fin. Services, LLC v. Fimat Futures USA, Inc. , 290 AD2d 383, 383 [1st Dept 2002] ).
To be considered "documentary," the paper's contents must be unambiguous, of undisputed authenticity, and be "essentially undeniable" and able to support the motion on its own ( Amsterdam Hospitality Group, LLC v. Marshall-Alan Associates, Inc. , 120 AD3d 431, 432 [1st Dept 2014] ). Affidavits are not documentary evidence within the meaning of CPLR § 3211(a)(1) ( Tsimerman v. Janoff , 40 AD3d 242 [1st Dept 2007] ). However, "correspondence may, under appropriate circumstances, qualify as documentary evidence" ( Amsterdam Hospitality Group, LLC, 120 AD3d at 433 ). Likewise, emails can also constitute documentary evidence if they meet "the essentially undeniable test" (Id. ); see also Langer v. Dadabhoy , 44 AD3d 425 [1st Dept 2007] ).
When a court considers a motion to dismiss pursuant to CPLR § 3211(a)(7), the complaint is to be given a liberal construction and "there is a presumption the allegations in the pleading are true and are entitled to the benefit of all favorable inferences that may be made therefrom" ( Morgan Stanley Mtge. Loan Trust 2006-13ARX v. Morgan Stanley Mtge. Capital Holdings LLC , 143 AD3d 1, 7 [1st Dept 2016] ). The Court evaluates not whether the complaint states a cause of action, but whether a claim exists based on the "any reasonable view" of the allegations in the pleading ( Aristy-Farer v. State of New York , 29 NY3d 501, 509 [2017] ). "In deciding such a pre-answer motion, the court is not authorized to assess the relative merits of the complaint's allegation against the defendant's contrary assertions or to determine whether or not plaintiff has produced evidence to support his claims" ( Salles v. Chase Manhattan Bank , 300 AD2d 226, 228 [1st Dept 2002] ). However, "allegations consisting of bare legal conclusions, as well as factual claims flatly contradicted by documentary evidence are not" presumed to be true or accorded every favorable inference ( David v. Hack , 97 AD3d 437, 438 [1st Dept 2012] ), and the criterion becomes "whether the proponent of the pleading has a cause of action, not whether he has stated one" ( Leon v. Martinez , 84 NY2d 83, 88 [1994] ). With these standards in mind, the Court turns to the complaint's causes of action.
1. First Cause of Action — Declaratory Judgment
Plaintiff seeks a judgment declaring her occupancy of the subject apartment was illegal under the CO, that the subleases between plaintiff and defendants were in invalid insofar as they violated MDL §§ 301 and 302, and plaintiff is entitled to recoup the rent she paid during her tenancy.
As an initial matter, the Court finds that the HPD letter submitted by the movants does not flatly contradict the factual and legal conclusions of the complaint. Specifically, the HPD letter does not conclusively refute plaintiff's allegation that the subject apartment was illegal under the CO. Instead, it merely demonstrates that in 1997 HPD approved defendants' request to sublet a portion of the fifth floor of 56 Ludlow Street for a period longer than three years subject to certain conditions. Defendants do not even attempt to argue that that the subject apartment satisfies those requirements or suggest that plaintiff is an artist. Contrary to defendants' assertions, the HPD letter does not definitively dispose of plaintiff's first cause of action or any other cause of action set forth in the complaint. Notwithstanding the foregoing, plaintiff's first cause of action is subject to dismissal pursuant to CPLR § 3211(a)(7) for failure to state a cause of action.
Even affording the complaint the benefit of all reasonable inferences, as the Court must on a motion to dismiss, plaintiff is unable to maintain a claim for reimbursement of rental payments under the Multiple Dwelling Law. As stated above, plaintiff seeks a refund of $ 79,200.00 in rent she paid for the two years she occupied the apartment from 2015 to 2017. Plaintiff contends that without a valid CO for the apartment, defendants were prohibited from collecting rent. Although the MDL § 302 (1)(b) prohibits an owner from collecting rent for a apartment in violation of the certificate of occupancy, the Multiple Dwelling Law does not provide for recovery of back rent voluntarily paid (Goho Equities v. Weiss , 149 Misc 3d 628, 631 [App Term, 1st Dept 1991]["Section 302 of the Multiple Dwelling Law, which is penal in nature and is to be strictly construed, does not by its terms provide for recovery of rent previously paid for use and occupancy. The statute should be harmoniously construed with section 325, which does not allow for the recovery of back rent voluntarily paid in related circumstances where the requisite multiple dwelling statement was not filed"]; Candela v. Fried , 3 Misc 3d 136 [A], 2004 NY Slip Op. 50508[U] [App Term, 2d Dept, 2d & 11th Jud Dists 2004]; Furman v. DeGeorge , 3 Misc 3d 139 [A], 2004 NY Slip Op. 50561[U] [App Term, 2d & 11th Jud Dists 2004] ; Commercial Hotel, Inc. v. White , 194 Misc 2d 26 [App Term, 2d Dept 2002] ; Baer v. Gotham Craftsman, Ltd. , 154 Misc 2d 490 [App Term, 1st Dept 1992] ; MDL § 325[2] ). Moreover, the Multiple Dwelling Law "may not be used as a sword to recoup rents already paid" ( Ovales v. Mayer Garage Corp. , 8 Misc 3d 137[A], 2005 NY Slip Op. 51261[U] [App Term, 1st Dept 2005] ). Thus, the first cause of action is dismissed.
2. Second Cause of Action — Unjust Enrichment
Defendants argue that plaintiff's second cause of action for unjust enrichment should be dismissed as it is duplicative of her breach of contract claim. While plaintiff concedes that her unjust enrichment claim is connected to the subleases, she contends that "defendants remain under an independent legal duty to avoid unjustly enriching themselves at plaintiff's expense" (plaintiff's opp at 17). In particular, plaintiff contends that defendants were unduly enriched at her expense because defendants collected two years of rent from her in violation of MDL § 302. On the other hand, plaintiff maintains that her claim for breach of contract is based on "defendants' breaches of the subleases, including but not limited to their breach of the warranty of habitability." (Id. at 18).
To state a claim for unjust enrichment, a plaintiff must show that (1) the other party was enriched, (2) at that party's expense, and (3) it is against equity and good conscience to permit the other party to retain what is sought to be recovered ( Mandarin Trading Ltd. v. Wildenstein , 16 NY3d 173, 182 [2011] ).
The theory of unjust enrichment is "not a catchall cause of action" when others fail and will not be available "where it simply duplicates, or replaces, a conventional contract or tort claim" ( Corsello v. Verizon NY Inc. , 18 NY3d 777, 791 [2012] ). Unjust enrichment is only available in "unusual situations when, though the defendant has not breached a contract nor committed a recognized tort, circumstances create an equitable obligation running from the defendant to the plaintiff" ( Corsello, 18 NY3d at 791 ). Unjust enrichment is not available when a binding agreement between parties governs the subject of the claim( Allenby, LLC v. Credit Suisse, AG , 134 AD3d 577, 579 [1st Dept 2015], citing Clark-Fitzpatrick, Inc. v. Long Is. R.R. Co. , 70 NY2d 382, 388 [1987] ). Here, a contract or in this case the subleases between plaintiff and Artida govern the subject of the complaint. Therefore, plaintiff failed to adequately plead an unjust enrichment cause of action against Artida.
Defendants Pucci and 56 Ludlow Owners were not parties to the sublease, and thus, the unjust enrichment claims against them cannot be dismissed as duplicative as defendants asserts. Though "privity is not required for an unjust enrichment claim, a claim will not be supported if the connection between the parties is too attenuated" ( Mandarin Trading Ltd. , 16 NY3d at 182 ). With regard to the remaining defendants, plaintiff fails to allege how 56 Ludlow Owners or Pucci, in her individual capacity, were unjustly enriched by plaintiff's rental payments, at plaintiff's expense ( Id. at 183 ["[w]ithout sufficient facts, conclusory allegations that fail to establish that a defendant was unjustly enriched at the expense of a plaintiff warrant dismissal"] ). As such, plaintiff's cause of action for unjust enrichment is dismissed as to 56 Ludlow Owners and Pucci.
Furthermore, to the extent that defendants move to dismiss plaintiff's unjust enrichment claim based upon the HPD letter, the Court has already addressed and rejected this in discussing the first cause of action.
3. Third Cause of Action — Breach of Contract
Plaintiff's claims that defendants are liable for breach of contract are based upon the implied warranty of habitability and the covenant of quiet enjoyment. In the complaint, plaintiff alleges breach of the covenant of quiet enjoyment based on "persistent months-long lack of basic services" and "ongoing violations" (complaint ¶ 35). Plaintiff includes a laundry list of conditions that allegedly deprived her from the use and quiet enjoyment of the premises such as mold, plumbing issues, flooding, electrical problems, and lack of heat and hot water. All of these conditions, according to plaintiff, caused her to be constructively evicted from the subject apartment. Specifically, plaintiff avers that the above-mentioned conditions caused her "to vacate the apartment for extended periods of time, during which time [she] incurred various other costs to let and/or sublet other premises for which [she] had to pay for other basic services and/or utilities owing to defendants' failure to provide same" at the subject apartment (Id. ¶ 40). Plaintiff further asserts that the above-mentioned hazardous conditions constitute defendants' breach of the warranty of habitability and breach of the sublease.
See full list of hazardous conditions alleged in complaint, supra at 2-3.
A. 56 Ludlow Owners and Pucci
Defendants argue that the causes of action alleging breach of warranty and breach of the covenant of quiet enjoyment should be dismissed as against 56 Ludlow Owners and Pucci based on lack of contractual privity. In opposition, plaintiff asserts that liability extends to all defendants. Plaintiff contends that discovery is necessary in order to determine whether the facts of this case warrant piercing of the corporate veil as it applies to Pucci. Similarly, plaintiff argues that discovery may reveal an intent to bind 56 Ludlow Owners (citing MBIA Ins. Corp. v. Royal Bank of Canada , 28 Misc 3d 1225[A], 2010 NY Slip Op. 51490[U] [Sup Ct, Westchester County 2010] ).
To state a claim for piercing the corporate veil, a plaintiff must allege that "(1) the owners exercised complete domination of the corporation in respect to the transaction attacked; and (2) that such domination was used to commit a fraud or wrong against the plaintiff which resulted in plaintiff's injury" ( TIAA Global Invs., LLC v. One Astoria Sq., LLC , 127 AD3d 75, 90 [1st Dept 2015] ). A mere claim of "domination, standing alone, is not enough; some showing of a wrongful or unjust act toward the plaintiff is required" ( Morris v. New York State Dept. of Taxation & Fin. , 82 NY2d 135, 141-142 [1993] ). Likewise, mere conclusory assertions "that the corporation acted as their ‘alter ego,’ without more, will not suffice to support the equitable relief of piercing the corporate veil" ( Damianos Realty Group, LLC v. Fracchia , 35 AD3d 344, 344 [2d Dept 2006] ). Moreover, "the plaintiff cannot rely upon mere ‘buzz words’ or vague or conclusory allegations but must instead set forth facts that truly address the underlying transactions and occurrences and the material elements of the claim" ( East Hampton Union Free School Dist. v. Sandpebble Bldrs, Inc. , 66 AD3d 122, 131 [2d Dept 2009], affd 16 NY3d 775 [2011] ).
Here, the complaint contains no detailed facts as to how Pucci exercised domination and control over Artida, abused the corporate form, or undertook any specific actions which would justify piercing the corporate veil. Nor has plaintiff made any additional evidentiary submissions that would provide a basis for piercing the corporate veil. Among the few specific factual allegations asserted against Pucci are allegations relating to the fact that she signed on behalf of Artida and that she complained to Pucci about the "hazardous conditions" in the apartment. Those allegations alone are insufficient to show or even suggest that Pucci was abusing the corporate form for her own interests. Moreover, "plaintiff's unsubstantiated hope that discovery will help salvage her claims is insufficient to defeat the [motion to dismiss]" ( Freeman v. Brecher , 155 AD3d 453, 454 [1st Dept 2017] ).
The Court further observes that plaintiff as subtenant has no direct claim against 56 Ludlow Owners for breach of warranty of habitability or breach of covenant of quiet enjoyment (see Wright v. Catcendix Corp. , 248 AD2d 186, 186 [1st Dept 1998] [dismissing plaintiff's claims against building owner/cooperative cooperation for breach of the lease agreement, breach of warranty of habitability, constructive eviction, and breach of the covenant of quiet enjoyment because there was neither a contractual agreement nor a landlord-tenant relationship] ).
Accordingly, that branch of defendants' motion to dismiss the third cause of action as against Pucci and 56 Ludlow Owners is granted ( CPLR § 3211[a][7] ).
B. Artida
Defendants argue that plaintiff's claims that Artida breached the covenant of quiet enjoyment and warranty of habitability are conclusory and cannot survive a motion to dismiss.
i. Breach of Covenant of Quiet Enjoyment
Defendants argue that that plaintiff cannot meet the elements of breach of the covenant of quiet enjoyment. They state that although plaintiff alleges that she was constructively evicted from the subject apartment, the documentary evidence contradicts such assertion. Defendants submit the subleases and several emails including an email dated January 9, 2017 from Pucci to plaintiff, wherein Pucci informed plaintiff that she would not be renewing the sublease for a third time. The email states:
"Hi Anna,
As you know, the end of your lease will be coming up. Wanted to let you know that this time I would not be able to renew it due to family reasons. Wanted to give you an advance notice, so you can have extra time to find other accommodations. I'd be happy to write a letter of recommendation for you, to let them know that you have been a good tenant and of your prompt rent payments.
Best,
Germana" (defendants' exhibit E).
On January 11, 2017, plaintiff responded to Pucci's email. The email states:
"Hi Germana
That is definitely bad news. And though I do appreciate your letting me know now, I will need to discuss with you about any flexibility you have around the end date. I have already booked travel to California and South America which will cover all of Feb and March. I was not even remotely expecting to have to move at that time, having only been here not quite 2 years. I would appreciate if we can have a quick conversation. I obviously need time to look for a new apartment, and that will be impossible to do while I am traveling. Also, when I left this am the stove worked, and when I came back tom [sic] make lunch, it is broken. Did anything happen in the building? I can't imagine why it would go from functioning to not in 3 hours time.
Best
Anna" (Id. ).
Defendants do not submit Pucci's response to plaintiff's email. They do, however, attach two subsequent emails from plaintiff to Pucci dated May 12, 2017 and June 2, 2017.
Relying on the above-mentioned email exchange, defendants argue that plaintiff's assertion that she was constructively evicted fails. Defendants contend that the above-mentioned emails conclusively prove that the only time plaintiff vacated the premises was subsequent to the expiration of the second sublease agreement. Defendants add that she did so upon her own volition. Further, defendants emphasize that plaintiff voluntarily paid rent for her entire occupancy and waived any claims of constructive eviction by not withholding rent. Therefore, defendants argue, plaintiff cannot prevail on her breach of the covenant of quiet enjoyment claim.
In opposition, plaintiff contends that she has sufficiently pleaded the elements of breach of the covenant of quiet enjoyment. Plaintiff argues that the emails relied upon by defendants in no way contradicts plaintiff's claim that she was constructively evicted. Plaintiff also points out that said emails fail to rebut her claim that the subject apartment was rife with harmful conditions.
To state a claim for breach of the covenant of quiet enjoyment, a plaintiff must allege actual or constructive eviction ( Jackson v. Westminster House Owners Inc. , 24 AD3d 249, 250 [1st Dept 2005] ). For there "to be an eviction, constructive or actual, there must be a wrongful act by the landlord which deprives the tenant of the beneficial enjoyment or actual possession of the demised premises" ( Barash v. Pennsylvania Terminal Real Estate Corp. , 26 NY2d 77, 82 [1970] ). In addition, the tenant "must have been deprived of something to which he was entitled under or by virtue of the lease" (Id. ). As is relevant here, constructive eviction occurs when the landlord's wrongful acts deprive the tenant of beneficial use and enjoyment of the premises and the tenant abandons possession of the premises, which is claimed here ( Id. at 83 ; see also Dance Magic, Inc. v. Pike Realty, Inc. , 85 AD3d 1083 [2d Dept 2011] ["[w]hether the breach of the covenant [of quiet enjoyment] is alleged as defense to an action for rent due, or is used as a basis for an action for damages, the determining factor, with few exceptions, is whether the tenant as vacated the premises"] ). Alternatively, actual eviction occurs when the landlord wrongfully ousts the tenant from physical possession of the lease premises and there must be physical expulsion ( Barash , 26 NY2d at 82 ). Further, plaintiff correctly points out that the mere payment of rent does not constitute a waiver of constructive eviction ( Balzano v. Lublin , 162 AD2d 252 [1st Dept 1990] ["the payment of all required rent is a condition precedent to the maintenance of such an action [for breach of the covenant of quiet enjoyment]"] citing Dave Herstein Co. v. Columbia Pictures Corp. , 4 NY2d 117, 121 [1958] ). In addition, a contractual agreement or landlord-tenant relationship is required to establish a claim for breach of the covenant of quiet enjoyment ( Wright, 248 AD2d at 186 ).
Here, the documentary evidence which defendants' arguments are based upon is largely in the form of emails. As stated above, emails and other correspondence may be sufficient to satisfy defendants' burden under CPLR 3211 § (a)(1) in certain circumstances (see Kolchins v. Evolution Mkts., Inc. , 128 AD3d 47, 58-59 [1st Dept 2015], aff'd 31 NY3d 100 [2018] ).The movant must show that the emails "negate beyond substantial question" the allegations in the complaint ( Amsterdam Hospitality Group ,120 AD3d at 433 ), and "conclusively establish[ ] a defense to the asserted claims as a matter of law" ( Calpo-Rivera v. Siroka , 144 AD3d 568, 568 [1st Dept 2016] ).
Contrary to plaintiff's contention, the emails flatly contradict plaintiff's claims that she was constructively evicted. For one thing, Pucci's comments that plaintiff was a good tenant and paid rent promptly belie plaintiff's contention that she paid rent under protest. The tone and timing of the email exchanges further undermines plaintiff's allegations that she was constructively evicted. Despite plaintiff's current claims that defendants subjected her to such deplorable conditions which allegedly existed in her apartment throughout her tenancy, plaintiff's email reveals that she had no intention of moving and was disappointed that she was unable to renew the sublease for a third time. Indeed, the fact that these emails communications were occurring at the end of plaintiff's sublease term coupled with plaintiff's expressed reluctance to the idea of having to move from the subject apartment leads this Court to reasonably conclude that plaintiff was not constructively evicted prior thereto. Likewise, plaintiff's email in response to Pucci's did not raise any issues but for one occasion when the stove did not work.
Additionally, plaintiff failed to adequately rebut the facts as presented in the documentary submissions. Rather than provide an affidavit detailing the dates and duration of the instances when plaintiff was forced to vacate the apartment, plaintiff merely reiterates the complaint and states that the hazardous conditions "caused [her] to vacate the [s]ubject [apartment] for extended periods of time" (Sheffield Aff, exhibit G ¶ 32). Consequently, defendants' motion to dismiss plaintiff's claim for breach of the covenant of quiet enjoyment as against Artida is granted.
ii. Breach of Warranty of Habitability
Real Property Law § 235-b, provides that:
"In every written or oral lease or rental agreement for residential premises the landlord or lessor shall be deemed to covenant and warrant that the premises so leased or rented and all areas used in connection therewith in common with other tenants or residents are fit for human habitation and for the uses reasonably intended by the parties and that the occupants of such premises shall not be subject to any conditions which would be dangerous, hazardous, or detrimental to their life, health or safety..."
The applicability of the statute requires a contractual agreement or a landlord-tenant relationship ( McCarthy v. Board of Mgrs. of Bromley Condominium , 271 AD2d 247 [1st Dept 2000] ). A tenant may assert her rights under the warranty of habitability in a plenary action or by asserting breach of the warranty as a defense and/or counterclaim in a summary nonpayment proceeding (see Park West Mgmt. Corp. v. Mitchell , 47 NY2d 316, 329 [1979] see also Diamond v. New York Housing Authority , 2019 WL 482496, *7 [Sup Ct, NY County, February 7, 2019, No. 153312/18] ["plaintiffs are correct that they may only raise a warranty of habitability claim defensively in Housing Court. However, plaintiffs may file a breach of contract action in Civil Court"] ). "The award may take the form of a sum of money awarded in a plenary action or a percentage of the contracted-for rent as a set off in a summary nonpayment proceeding in which the tenant counterclaims or pleads as a defense breach by the landlord of his duty to maintain the premises in a habitable condition" ( Park West Mgmt. Corp., 47 NY2d at 329 ). Moreover, "the warranty of habitability may be asserted to obtain a refund of rent already paid" ( 101 Cooper Street LLC v. Beckwith , 55 Misc 3d 145 [A], 2017 NY Slip Op. 50670[U], *1 [App Term, 1st Dept 2017] citing Alp Realty Corp. v. Huttick , 160 Misc 2d 76 [App Term, 1st Dept 1994] ). Regardless of whether the breach is being asserted affirmatively or defensively, "the proper measure of damages for breach of the warranty is the difference between the fair market value of the premises if they had been as warranted, as measured by the rent reserved under the lease, and the value of the premises during the period of the breach" ( Park West Mgmt. Corp. , 47 NY2d at 329 ).
A breach of the warranty of habitability has occurred "[i]f, in the eyes of a reasonable person, defects in the dwelling deprive the tenant of those essential functions which a residence is expected to provide " ( Id. at 328 ). Examples of such conditions can include "insect or rodent infestation, insufficient heat and plumbing facilities, significantly dangerous electrical outlets or wiring, inadequate sanitation or similar services which constitute the essence of the modern dwelling unit" (Id. ). What constitutes unfitness for human habitation or a dangerous, hazardous or detrimental condition must be determined on a case-by-case basis ( Id. at 327 ).
Contrary to plaintiff's claim, defendants did address the portion of plaintiff's third cause of action seeking damages for Artida's breach of the warranty of habitability. Indeed, the movants point out that "plaintiff alleges in conclusory fashion that Artida breached the implied warranty of good faith, the warranty of habitability, and breach of other implied or express covenants including but not limited to breach of the covenant of quiet enjoyment" (defendants' mem. of law at 9-10).
At the outset, the Court notes that plaintiff's claims regarding breach of the warranty of habitability are intertwined with her claim for breach of the covenant of quiet enjoyment. As previously discussed, paragraph 35 of the complaint sets forth a laundry list of hazardous conditions that allegedly existed in the subject apartment and materially deprived plaintiff of the quiet enjoyment of the apartment. Among those conditions are mold, lack of heat and hot water, persistent plumbing problems. Thereafter, in paragraph 42 of the complaint plaintiff alleges "the above conditions constituted breach of the warranty of habitability" (complaint ¶ 42). Moreover, plaintiff alleges that said conditions endangered plaintiff's safety, health, welfare and well-being (Id. ¶ 79). At this stage, plaintiff has adequately pleaded a claim against Artida sounding in breach of the warranty of habitability (see Real Property Law § 235-b ).
See full list of hazardous conditions alleged in complaint, supra at 2-3.
While it would appear that plaintiff is seeking a full abatement of rent for the period of her occupancy, damages for the landlord's breach of the warranty are to be measured by the difference between the fair market value of the premises if they had been as warranted and the value of the premises during the period of the breach, taking into consideration the severity of the violation and its duration, as well as the effectiveness as steps if any, taken by the landlord to abate the conditions ( Park West Mgmt. Corp. , 47 NY2d at 329 ). To the extent plaintiff seeks to recover damages for diminution in value of property, personal injury, or pain and suffering on a claim for breach of the implied warranty of habitability, any claim to that effect must be denied (see Elkman v. Southgate Owners Corp. , 233 AD2d 104, 105 [1st Dept 1996] ["Loss or diminution in value of real personal property as well as personal injuries and pain and suffering are not recoverable under Real Property Law § 235-b"] ).
Therefore, contrary to defendants' contention, plaintiff has set forth a cognizable claim against Artida for breach of the warranty of habitability.
iii. Breach of Duty of Good Faith & Nuisance
As noted above the Court is unable to discern whether plaintiff has asserted separate causes of action for breach of implied warranty of good faith and nuisance. In her third cause of action, plaintiff alleges in conclusory fashion that "defendants' acquiescence and allowance of persistent nuisance conditions endangering plaintiff's safety, health, welfare, and well-being, defendants are liable to plaintiff for breach of the implied warranty of good faith " (complaint ¶ 79). These general allegations are at best conclusory, as plaintiff does not offer any supporting facts. Accordingly, inasmuch as plaintiff asserts separate causes of action for breach of implied warranty of good faith and nuisance, the court dismisses said claims.
4. Fourth Cause of Action — Fraud
Movants argue, inter alia , that plaintiff's fraud claim should be dismissed because it is not pleaded with the requisite particularity under CPLR § 3016(b) and it is duplicative of her breach of contract claim.
To plead fraud, the plaintiff must allege "(1) a material misrepresentation of a fact, (2) knowledge of its falsity, (3) an intent to induce reliance, (4) justifiable reliance by the plaintiff, and (5) damages" ( Eurycleia Partners, LP v. Seward & Kissel, LLP , 12 NY3d 553, 559 [2009] ). Any claim rooted in fraud must be pleaded with the requisite particularity under CPLR § 3016(b). Further, New York law permits a plaintiff to plead a fraud claim, in addition to a contract claim, if the former alleges "a misrepresentation of present fact, unlike a misrepresentation of future intent to perform under the contract..." ( GoSmile, Inc. v. Levine , 81 AD3d 77, 81 [1st Dept 2010] [finding that concurrent causes of action for fraud and breach of contract may be appropriate because "a misrepresentation of present fact, unlike a misrepresentation of future intent to perform under the contract, is collateral to the contract, even though it may have induced the plaintiff to sign it, and therefore involves a separate breach of duty"] ).
Defendants contend that the fraud claim is duplicative of the breach of contract claim because both claims are based on the allegation that the subject apartment was not permissible for occupancy. This Court disagrees. As set forth above, plaintiff's breach of contract claim is predicated on the defendants' breaches of warranty of habitability and covenant of quiet enjoyment. On the other hand, plaintiff's fraud claim is predicated on defendants' alleged misrepresentation that the subject apartment was legal. Nevertheless, dismissal is still warranted as plaintiff's fraud claim fails to satisfy particularity requirements of CPLR § 3016 (b).
Here, plaintiff merely asserts that "by causing to have marketed, and by offering the premises to be let for a term of residential occupancy, defendants falsely represented and warranted that the premises were lawful and suitable for residential occupancy" (complaint ¶ 84). Plaintiff contends that this allegation alone satisfies the first element. This is simply too conclusory without specific details. Though not raised in plaintiff's opposition papers, the complaint states that "Pucci represented to plaintiff that Pucci and/or Artida Arts was authorized to rent the premises for lawful occupancy" and "[p]er the lease, Artida Arts represented to plaintiff that it was authorized to rent the premises to plaintiff" (complaint ¶¶ 26, 27). With respect to Pucci, plaintiff does not allege when this statement was made, or the words used by Pucci ( Gregor v. Rossi , 120 AD3d 447, 447 [1st Dept 2014] [finding the fraud claim was not pleaded with sufficient particularity "because the words used by defendants and date of the alleged false representations are not set forth"] ). As to the sublease, plaintiff fails cite to a to a specific section of the sublease wherein Artida misrepresented that it was authorized to rent the premises "for lawful occupancy." ( National Union Fire Ins. Co. of Pittsburgh, Pa. v. Christopher Assoc. , 257 AD2d 1[1999] ["[a] mere recitation of the elements of fraud is insufficient to state a cause of action"] ). Therefore, plaintiff has not satisfied the particularity requirement of CPLR § 3016(b) in that the complaint fails to sufficiently detail the alleged misrepresentation.
Even assuming arguendo that plaintiff sufficiently pleaded the existence of a material misrepresentation, plaintiff's claim that she justifiably relied on defendants' alleged misrepresentation is without merit. Since the CO is a public record and plaintiff does not allege defendants' exclusive possession of the record, plaintiff's reliance on this misrepresentation is unreasonable (see Jordace Enterprises, Inc. v. Gettinger Assoc. , 176 AD2d 616, 617 [1st Dept 1991] ["plaintiff's reliance upon an alleged misrepresentation by the defendant concerning the existence of a certificate of occupancy was not reasonable where the terms of the occupancy, a public record, were not within the exclusive knowledge of the defendant"] ). Consequently, plaintiff's fourth cause of action for fraud is not pleaded with requisite particularity and is dismissed on that basis.
Insofar as defendants rely on the HPD letter as a basis for dismissing plaintiff's fraud claim, this Court has already stated that said letter does not conclusively refute plaintiff's contention that the subject apartment was unlawful for occupancy. Put another way, the HPD letter on its own does not confirm that the subject apartment was authorized to be leased.
5. Fifth Cause of Action — Equitable Estoppel
Defendants contend that plaintiff's claim for equitable estoppel is insufficiently pleaded and duplicative of all other causes of action including breach of contract. In opposition, plaintiff asserts that she has adequately pleaded the requisite criteria in order to maintain a cause of action for equitable estoppel. For example, plaintiff argues that she satisfied the first element by alleging that "[i]n entering into the [l]ease with plaintiff, defendants concealed the fact that the premises were not suitable for residential occupancy given that no valid certificate of occupancy had been issued declaring the same" (complaint ¶ 97). Further, plaintiff maintains the next two elements are sufficiently set forth in paragraphs 98 and 99 of the complaint. Plaintiff alleges that defendants concealed the illegality of the subject apartment with the intent that she would enter into the sublease thereby allowing defendants to collect rent. With respect to the third element, plaintiff alleges that "defendants were aware of the foregoing facts with which they concealed from plaintiff" (plaintiff's opp at 29).
An equitable estoppel claim requires a party advancing the argument to plead that be party being estopped engaged in: (1) conduct amounting to false representation or concealment of material facts "[w]hich is calculated to convey the impression that the facts are otherwise than and inconsistent with, those which the party subsequently seeks to assert"; (2) an intention or expectation that the relying party will act upon the conduct; and (3) "in some situations, knowledge, actual or constructive, of the real facts" (757 3rd Ave. Assoc., LLC v. Patel , 117 AD3d 451, 453 [1st Dept 2014] ). In addition, the party seeking equitable estoppel must show with respect to herself: (1) a lack of knowledge of the true facts; (2) justifiable reliance upon the conduct of the party estopped; and (3) a prejudicial change in her position ( River Seafoods, Inc. v. JPMorgan Chase Bank , 19 AD3d 120 [1st Dept 2005] ; BWA Corp. v. Altrans Express U.S.A. Inc. , 112 AD2d 850, 853 [1st Dept 1985] ). Equitable estoppel will not apply "where the misrepresentation or act of concealment underlying the estoppel claim is the same act which forms the basis of plaintiff's underlying substantive cause of action" ( Knobel v. Shaw , 90 AD3d 493, 494-495 [1st Dept 2011] ). The affirmative wrongdoing must be separate and apart from the underlying claim (see Bobash, Inc. v. Festinger , 57 AD3d 464 [2d Dept 2008] ).
Under the facts of this case, equitable estoppel does not apply. As defendants correctly point out, plaintiff's equitable estoppel claim appears to arise out of the same factual allegations underlying the plaintiff's other causes of action. The bulk of defendants' argument concerns plaintiff's breach of contract cause of action. Indeed, the handful of cases cited by defendants involve equitable estoppel claims that were dismissed as duplicative of breach of contract causes of action. Perhaps this explains why plaintiff focused only on her breach of contract claim when arguing that her equitable estoppel claim, as pled, was not duplicative. In doing so, plaintiff argues that her breach of contract claim seeks damages based on defendants' myriad of breach of the subleases, including but not limited to their breach of warranty of habitability. Conversely, plaintiff asserts that the "basis of her claim for equitable estoppel is that the [subject apartment] was not suitable for occupancy by virtue of the fact that it is neither reflected in nor authorized by the CO" (plaintiff's opp at 29). Plaintiff insists that her cause of action for equitable estoppel is an "independent cause of action for damages stemming from defendants' concealment of the illegality of the apartment" (Id. at 30).
The way plaintiff has styled this complaint prevents this Court from dismissing the equitable estoppel claim as duplicative of her breach of contract claim. It is evident that the majority of plaintiff's complaint - including her equitable estoppel - is predicated on the defendants' collection of rent when the subject apartment was allegedly not authorized by the CO. Plaintiff does not, however, assert breach of the sublease based on that theory.
Plaintiff alleges that defendants "concealed" the fact that subject apartment was not suitable for residential occupancy and that defendants should be estopped from collecting rent under the subleases. Though not explicitly raised by defendants, this alleged concealment asserted as a basis for equitable estoppel is insufficient for that purpose, since it is part and parcel of the alleged underlying fraud (see Ross v. Louise Wise Servs., Inc. , 8 NY3d 478, 491-492 [2007] ; Duberstein v. National Med. Health Card Sys., Inc. , 37 AD3d 209 [2007] ).
In any event, plaintiff's equitable estoppel claim fails for the same reason that defeated the dismissed fraud claim. As determined above, plaintiff cannot establish justifiable reliance, one of the elements necessary to establish estoppel, by virtue of the CO being a public record (see River Seafoods, Inc. , 19 AD3d at 123 ). The CO that plaintiff relies upon was issued by the City of New York, Department of Buildings on October 2, 1990 and thus discoverable by plaintiff before she entered into the subleases. Accordingly, plaintiff's fifth cause of action is dismissed.
6. Sixth Cause of Action — Violation of New General Business Law § 349[h]
Defendants argue that plaintiff's claims do not fall within the scope of GBL § 349[h] and therefore must be dismissed.
The sixth cause of action asserts that defendants' unlawful deceptive actions and practices violate GBL § 349, a statute that prohibits misleading or deceptive commercial activity aimed at the public at large. However, plaintiff's allegations are asserted only as a private dispute between tenant and landlord "and not consumer-oriented conduct aimed at the public at large as required by the statute" ( Aguaiza v. Vantage Properties, LLC , 69 AD3d 422, 423 [1st Dept 2010], citing City of New York v. Smokes-Spirits.Com, Inc. , 12 NY3d 616, 621 [2009] ). Therefore, the sixth cause of action is dismissed.
The Court has considered the parties' remaining arguments and they do not alter this decision. Accordingly, it is
ORDERED that defendants Germana Pucci, Artida Arts, Inc., and 56 Ludlow Owners, Inc., motion to dismiss is granted in part and the first, second, fourth, fifth, and sixth causes of action are dismissed as against all defendants; and it is further
ORDERED that the third cause of action is dismissed as against Germana Pucci and 56 Ludlow Owners, Inc., and it is further
ORDERED that the third cause of action for breach of the warranty of habitability as against Artida Arts Inc. is severed and shall continue; and it is further
ORDERED that plaintiff's remaining claims asserted under the third cause of action as against Artida Arts Inc. are dismissed; and it is further
ORDERED that the motion is granted to the extent that the complaint is dismissed as against Germana Pucci and 56 Ludlow Owners Inc., and the clerk is direct to enter judgment of dismissal against said defendants; and it is further
ORDERED that the caption is amended to reflect the dismissal of Germana Pucci and 56 Ludlow Owners, Inc., and shall read:
SUPREME COURT OF THE STATE OF NEW YORK
NEW YORK COUNTY: IAS PART 34
X
ANNA SHEFFIELD,
Plaintiff,
Index No. 151657/2018
against
ARTIDA ARTS, INC.,
Defendant.
X
All future papers shall use the amended caption; and it is further
ORDERED that counsel for the defendants shall serve a copy of this order with notice of entry upon the Clerk of the Court (60 Centre Street, Room 141B) and the Clerk of the General Clerk's Office (60 Centre Street, Room 119), who are directed to mark the court's records to reflect the change in caption; and it is further
ORDERED that defendant Artida Arts Inc., is directed to serve an answer to the complaint within 20 days after service of a copy of this order with notice of entry; and it is further
ORDERED that counsel are directed to appear for a preliminary conference in Part 34, 80 Centre Street room 308 on Thursday May 25, 2019 at 2:15 p.m.
This constitutes the decision and order of the court.