Schwartz v. TorrenzanoSchwartz v. Torrenzano
OPINION OF THE COURT
It is ordered that the branch of the motion (No. 003) by defendant for dismissal of the first, second, third, fourth, fifth, and sixth causes of action in plaintiffs third amended verified complaint is denied; and it is further ordered that the branch of the motion by defendant for an award of sanctions against plaintiff is denied; and it is further ordered that the branch of the cross motion (No. 004) by plaintiff for summary judgment on the fourth, fifth, sixth, seventh, eighth, ninth, twelfth, thirteenth, and fourteenth causes of action is denied; and it is further ordered that the branch of the cross motion by plaintiff for an award of sanctions against defendant and his counsel is granted to the extent indicated.
Plaintiff commenced this action seeking a judgment for reimbursement of rental payments, security deposit, late fees, and other expenses incurred regarding a lease she entered into with defendant landlord, Richard Torrenzano, for premises he owns located at 12 Right of Way, Sag Harbor, New York. The third amended complaint alleges violation of Code of the Town of Southampton chapter 270; excessive and usurious late fees; breach of warranty of habitability; breach of contract; unjust enrichment; and also seeks an award of attorney fees. Defendant now moves for dismissal of the first, second, third, fourth, fifth, and sixth causes of action. In support of the motion defendant submits, among other things, his own affidavit, the lease and its extensions, and a rental permit dated September 22, 2014. Plaintiff opposes the motion and cross-moves for summary judgment and an award of sanctions. However, no answer has been served addressed to the third amended complaint, as defendant has moved to dismiss pursuant to CPLR 3211.
The initial lease dated October 30, 2010 called for annual rent in the amount of $35,000 from November 8, 2010 through November 7, 2011. The lease required a security deposit of $3,500 to be held in a segregated account, the landlord to make
Plaintiff commenced this action in New York County in May of 2013. The action was transferred to Suffolk County by order dated July 15, 2013 (Mendez, J.S.C.). By prior order dated February 14, 2014, the then assigned Justice, Hon. Jerry Garguilo, dismissed one cause of action and plaintiff withdrew another cause of action. Subsequently, there was an amended complaint and then a second amended complaint. In August 2014, plaintiff learned that Southampton Town Code chapter 270 requires landlords to obtain a rental permit in order to legally rent property and collect rent in Southampton. Upon ascertaining that the landlord did not possess a permit, plaintiff assisted Southampton’s code enforcement department in charging her landlord. Plaintiff was granted leave from this court on August 13, 2014, by then assigned Justice Jerry Gargüilo, to amend her complaint to allege violations of chapter 270. Before the court is a third amended complaint, dated October 24, 2014, which is the subject of this motion. After the conference with Justice Garguilo, the landlord, apparently without the assistance of counsel, applied for and received a rental permit, dated September 22, 2014. In that application, Torrenzano failed to notify the Town of the pending litigation which included claims of violations of the warranty of habitability and he expressly stated, “I do not have any knowledge of complaints from tenants or others regarding any existing code, safety or health violations at the property which is the subject of this rental permit application.” At the very least, Torrenzano made a “mistake” in failing to notify the Town of Southampton of the pending litigation. It is noted that Torrenzano’s counsel notarized the rental permit application but denied representing or advising the landlord regarding the application.
Pursuant to CPLR 3211 (a) (7), pleadings shall be liberally construed, the facts as alleged accepted as true, and every possible favorable inference given to plaintiff (see Leon v Martinez,
In order to establish a prima facie case of a violation of the Southampton Town Code chapter 270, plaintiff must demonstrate that the Code creates an express or implied private right of action. The Town adopted the code provision since it had “determined that there exists in the Town of Southampton serious conditions arising from the rental of non-owner occupied residential dwelling units” (see Resolution 2007-1184 § 1 [adopting Local Law No. 40 (2007) of Town of Southampton and creating chapter 270]). Pursuant to section 270-2, the local law applies to all rental properties within the unincorporated area of the Town. Section 270-3 (A) states that “[e]ffective January 1, 2008, no owner shall cause, permit or allow the occupancy or use of a dwelling unit as a rental property without
“It goes without saying that not every violation of a statutory provision is actionable by a person aggrieved by the breach” (Gerel Corp. v Prime Eastside Holdings, LLC,
Applying that test here, it is concluded that the plaintiff, as a tenant or “occupant,” is a party the Town intended to benefit in enacting the ordinance. Specifically, “[t]he Town Board recognizes that the renting and occupancy of such dwelling units pose a serious threat to the health, safety and welfare of the occupants and the neighbors” (see Resolution 2007-1184 § 1 [emphasis added] [adopting Local Law No. 40 (2007) of Town of Southampton and creating chapter 270]). While the holding in Liu v Adelbergs focused on the issue of overcrowding, the Town Code also seeks to address the “violation of various State and Town laws” and rental properties that are “substandard” (see id.). Moreover, the Town Board enacted the Local Law “in order to protect the health, safety and welfare of its residents” (see id. § 4). It is clear that plaintiff is part of the class which the Town Code was intended to benefit.
As to the second Sheehy factor, a private right of action promotes the legislative purpose of preventing landlords from profiting from the rental of substandard or dangerous housing. The legislative purpose is promoted by holding landlords accountable by allowing tenants to commence civil actions to recover rents from unpermitted rental premises. As noted above, a rental permit is a condition precedent to the collection of rent, under the Town Code.
The third factor permits a finding of an implied private cause of action which is consistent with the legislative scheme. As noted in Sheehy (
Here, town officials are tasked with enforcing the law, but that is not dispositive (see Maimonides Med. Ctr. v First United Am. Life Ins. Co.,
The Gerel Corp. holding is particularly instructive. As with the Attorney General in that case, here, the Town Board could not have intended that the Town Attorney be involved in every landlord/tenant rental agreement throughout the town. Where, as here (see Schwartz aff, Jan. 12, 2015, ¶ 27), it is alleged that the Town does not have sufficient resources to fully enforce the law, an implied private right has been upheld (see Gerel Corp.,
Here, the Town Code provision is directed toward protecting the health, safety, and well-being of a particular class of individuals, and is not primarily designed to provide a mechanism for preventing harm to the public in general (see Henry v Isaac,
At this early stage of the litigation, the court is unwilling, with the limited record before it, to address any alternative argument that the plaintiff is not entitled to recoup rent monies paid, despite the violation of the Town Code. Such an argument is centered on the claim of absence of actual injury. While it is true that the failure of a plaintiff to identify a cognizable injury may prove fatal to his or her claim, here, plaintiff has submitted affidavits and documentation supporting her allegations of damages. While the fact that the plaintiff had the use and enjoyment of the premises, under separate yearly lease agreements, may fall under the common-law understanding that one is not entitled to recoup monies already paid for work or services performed, particularly with regard to the first three rental periods, there are two or three classes of cases to which it will be necessary to refer in order to afford a clear understanding of the questions presented here.
The common-law voluntary payment doctrine, which bars recovery of payments made with full knowledge of the facts, and in the absence of fraud or mistake of material fact or law (see Dillon v U-A Columbia Cablevision of Westchester,
A second line of reasoning that may permit recovery is where a party has a claim in restitution for a performance rendered in return for a promise that is unenforceable on the grounds of public policy if he or she is not equally in the wrong with the promisor (see Smith v Pope,
“To decide, that this action cannot be maintained, would be to secure to the defendants the fruits of an illegal transaction, and would operate as a temptation to all [landlords] to violate the statute, by taking advantage of the unwary, and of those who may have no actual knowledge of the existence of the prohibition of the statute, and who may deal with a [landlord] without any suspicion of the illegality of the transaction on the part of the [landlord].”
Defendant argues that analogous to the situation here is the situation where a landlord violated the Multiple Dwelling Law by failing to obtain a certificate of occupancy. However, Multiple Dwelling Law § 325 (2) expressly holds that where one voluntarily pays rent when one has a right to withhold same, “he shall not thereafter have any claim or cause of action to recover back the rent or installment of rent so paid.” Case law has sought to harmonize that provision with Multiple Dwelling Law § 302 (1) (b) (see Goho Equities v Weiss,
There is another class of cases which hold that a home improvement contractor who is unlicensed in the municipality where the work is performed is barred from recovery in contract or under any contractual or quasi-contractual theory (see Emergency Restoration Servs. Corp. v Corrado,
Case law evolved to permit restitution for payments previously made for work that the unlicensed home improvement contractor failed to perform or for defective work (see O’Malley v Campione,
When viewed in that light and after the examination of the Sheehy factors noted above, coupled with the fact this is not an unlicensed home improvement contractor case, it appears to the court that without the threat of recoupment of rent, aside from the possibility of administrative enforcement, there is no incentive for a landlord to obtain a license, which is an overriding concern of the Town.
Moreover, the plaintiff is not in pari delicto with defendant since plaintiff can rely upon the affirmative representation set forth in the various leases that defendant had “due power and authority” to rent the premises and, as noted above, the obligations regarding the application for, payment of, and renewal of the rental permit solely rests on the landlord (see generally Tracy v Talmage,
Defendant’s motion to dismiss must be decided by accepting plaintiff’s allegation as true that defendant failed to comply with the Town Code at issue (see Leon v Martinez,
The fifth cause of action demands return of the security deposit. Defendant does not cite a legal ground for dismissal, arguing only that the condition of the property upon the landlord’s reentry was not acceptable. Defendant’s motion to dismiss the fifth cause of action is denied.
The sixth cause of action demands return of late fees denominated as additional rent under the November 2013 lease and additional rent pursuant to a five-day notice. Those fees may not be “collected” pursuant to chapter 270 of the Town Code, as they represent additional rent. Accordingly, the motion to dismiss the sixth cause of action is denied.
Defendant’s motion for an award of sanctions against plaintiff is denied. Under Southampton Town Code chapter 270, a plaintiff may recoup rent based upon the implied private right of action which precludes a landlord from “collection of rent.” Therefore, plaintiff’s legal arguments are not frivolous.
Rather, to the contrary, it is defendant, who has personally attacked plaintiff and her husband. In addition, defendant’s
Turning to plaintiff’s cross motion, summary judgment is requested on the fourth, fifth, sixth, seventh, eighth, ninth, twelfth, thirteenth and fourteenth causes of action. However, as noted above, defendant has yet to answer the third amended complaint. Accelerated judgments are provided for in article 32 of the CPLR. The remedy of summary judgment is available only after the joinder of issue (see CPLR 3212 [a]). It is thus not available against parties in default and the court is powerless to grant such a motion against such a party (see Gaskin v Harris,
Moreover, while this court could consider defendant’s motion to dismiss as one for summary judgment, upon proper notice (see CPLR 3211 [c]), the court declines to do so. The parties have not properly charted a course for summary judgment and, in any event, numerous issues of fact are present in the various submissions by the parties with regard to the causes of action which are the subject of the cross motion. For instance, with regard to the fourth cause of action, as factual issues in equity exist as to unclean hands, unjust enrichment on plaintiff’s behalf and whether defendant committed fraud or perjury in ultimately obtaining the permit, plaintiff has not established her entitlement to summary judgment as to that claim. Moreover, factual issues exist as to whether there was a waiver of the rental permit which preclude summary judgment for the period of time plaintiff resided at the property. The prepaid rent, for the period after plaintiff learned of the rental permit violation and vacated the premises is another matter. Arguments as to equity and waiver do not apply to this time period. In light of all of the above, the court denies the cross motion to the extent asserted against the defendant who has not yet appeared herein by answer, as the remedy of summary judgment is not available against a defendant in default of answering (see CPLR 3212 [b]).
The seventh cause of action seeks return of paid rent for the four year period of the lease under a theory of unjust enrich
The fifth and fourteenth causes of action demand return of plaintiff’s $6,000 security deposit. Issues of fact, including the condition of the premises, preclude summary judgment as to this cause of action.
The eighth cause of action demands return of not less than $400 in late fees on the basis they are punitive, a penalty, excessive, and usurious. Plaintiff has established that $350 was paid on January 11, 2013, as $250 plus $100 pursuant to the late fee provisions of the second lease. Plaintiff has also established that $1,150 was paid in January 2013 and $650 in February 2013 as “late penalty-paid under protest.” In opposition, defendant has established that payment was late in January and February of 2013. Factual issues exist which preclude summary judgment as to whether any late fees were due based upon expenses incurred by plaintiff and as to who was responsible for those expenses.
The ninth cause of action demands return of two months paid rent on the basis of constructive eviction for the landlord’s failure to obtain a rental permit and for failure to provide adequate heat in violation of the warranty of habitability. Thus, factual issues exist that preclude summary judgment as to this cause of action.
The sixth, twelfth, and thirteenth causes of action demand return of $997.63 paid “under protest.” These bills relate to repairs regarding the heating system and may only be charged to the tenant for “fault, neglect, misuse or abuse.” The best evidence of plaintiff’s lack of fault is found in defendant’s expert’s affidavit stating that after multiple visits to the home in January 2014, and March 2014, on May 10, 2014, a “dead spot” in the thermostat was located which may account for the heating system failure, rather than defendant’s counsel’s theory that the ambient temperature in the home “is attributable to the polar vortex, not the heating system.” Thus, issues of fact exist that preclude summary judgment as to each of these causes of action.
Plaintiff has demonstrated deceptive conduct by defendant in the collateral but related matter of his application to the Town of Southampton for a rental permit. His counsel, Irwin J. Cohen, Esq., a member of the Abramson law firm, maintains
In view of the foregoing, at the conclusion of the trial herein, Adina T. Glass and Irwin J. Cohen shall appear for a hearing pursuant to part 130 of the Rules of the Chief Administrator to show cause why sanctions should not be imposed for their alleged frivolous conduct (see Rules of Chief Admin of Cts [22 NYCRR] § 130-1.1 et seq.).
Notes
. No legislative history was provided to the court, aside from the local law which enacted the Town Code provisions (compare Rhodes v Herz,
. CPLR 3005 modifies the common-law rule by providing that “relief shall not be denied merely because the mistake is one of law rather than one of fact.”