WM Wellington, LLC v Grafstein Diamond, Inc. (2024)

[*1]WM Wellington, LLC v Grafstein Diamond, Inc.2009 NY Slip Op 50255(U) [22 Misc 3d 1123(A)]Decided on February 10, 2009Civil Court Of The City Of New York, New York CountyCapella, J.Published by New York State Law Reporting Bureaupursuant to Judiciary Law § 431.This opinion is uncorrected and will not bepublished in the printed Official Reports.

Decided on February 10, 2009
Civil Court of the City of New York, New YorkCounty

WM Wellington, LLC,Petitioner-Landlord,

against

Grafstein Diamond, Inc., Respondent-Tenant, BETTY GRAFSTEIN,"JOHN DOE" and/or "JANE DOE," Respondent-Undertenants.

83449/08

Petitioner's Attorney:

Howard W. Kingsley, Esq.

ROSENBERG & ESTIS, P.C.

733 Third Avenue

New York, New York 10017

Respondents' Attorney:

Mitchell S. Zingman, Esq.

STERN & ZINGMAN, LLP

110 East 59th Street

New York, New York 10022

Joseph Capella, J.

According to the predicate non-renewal ("Golub") notice, the petitioner allegesthat the subject premises are not occupied by the corporate tenant, Grafstein Diamond, Inc.("Grafstein Diamond"), as its primary residence. It also alleges, inter alia, that BettyGrafstein ("Betty") is the signatory to the most recent renewal lease on behalf of the corporatetenant, and pursuant to Manocherian v Lenox, (229 AD2d 197 [1st Dept 1997]), thecorporate tenant is not entitled to a renewal lease because there is no particularly designatedindividual on the corporate lease, and this gives rise to an impermissible perpetual tenancy. Bynotice of motion dated December 22, 2008, the respondents seek dismissal pursuant to CPLR3211 and 3212,[FN1] and inthe alternative, discovery pursuant to CPLR § 408. The petitioner opposes and likewisecross moves for discovery.

The subject rent stabilized apartment was initially rented to Albert Grafstein, who died in1991. His wife, Betty, succeeded to the apartment, and received renewal leases in her name in1991, 1993, 1995, 1997 and 1999. In 2001, Grafstein Diamond, was listed as the tenant on therenewal lease. The 2001 renewal lease, and all subsequent renewals, which also listed GrafsteinDiamond as the tenant, were signed by Betty. According to Betty, she never requested the namechange, and said changes were made by the petitioner's predecessor without her consent. Despitethese changes, Betty still appears as the tenant of record on the DHCR registration statementsthrough 2006. Betty's son, Roger Basile ("Roger"), is the Secretary/Treasurer of GrafsteinDiamond, and they both agree that Betty is not a shareholder, director, officer, employee oragent [*2]of Grafstein Diamond, nor is Betty authorized toexecute leases on behalf of the corporation. In direct contradiction, the general manager for thepetitioner's predecessor alleges that Betty and her son, Roger, requested the name change on therenewal leases. The petitioner also produced a letter dated June 27, 2002, from GrafsteinDiamond stating, inter alia, that "a friend of ours will be staying in our apartment." Thepetitioner also produced a 2007 fax from Grafstein Diamond requesting a rent statement.Accepting the petitioner's allegations as true, and construing the evidence in a light mostfavorable to it, (O'Sullivan v Presbyterian, 217 AD2d 98 [1st Dept 1995]), the court issatisfied that given the aforementioned, issues of fact exist, (Esteve v Abad, 271 AD 725[1st Dept 1947]), as to (a) why the tenant on the 2001 renewal lease, and all subsequentrenewals, was changed to reflect Grafstein Diamond (id.); (b) whether there was someform of authority for said change (Hallock v State of New York, 64 NY2d 224 [1984]);and (c) whether Betty relinquished her right to a renewal lease in her name (501 v Ole,NYLJ, May 22, 2002, at 19, col. 2 [Sup Ct, NY Cty], aff'd 304 AD2d 310 [1st Dept2003]). Therefore, that portion of the respondents' motion which seeks summary judgment anddismissal is denied.

The law regarding corporate rent stabilized tenancies and primary residence is now wellsettled, and only where the lease specifies a particular individual as the occupant (emphasis added) and no perpetual tenancy is possible will a corporate rent stabilized tenant beentitled to a renewal lease. (Manocherian v Lenox, 229 AD2d 197, supra;Avon v Aquarian, 260 AD2d 207 [1st Dept 1999].) The Appellate Division, FirstDepartment, decision in Avon effectively reaffirmed its 1997 holding inManocherian, and eliminated the lower standards set forth in its earlier decisions ofCale v Conciliation, (94 AD2d 229, aff'd 61 NY2d 976 [1984]; renewalpermitted if a designated class of individuals are listed on the lease), and Schwartz vConcilation, (117 AD2d 74 [1986]; renewal permitted if unnamed occupant is the intendedbeneficiary). Without specifying a particular individual occupant, the corporate privilege ofusing the rent stabilized apartment will "last for as long as its unilaterally controlled corporateexistence." (Manocherian v Lenox, 84 NY2d 385, 391 [1994].) On the other hand,specifying a particular individual as the occupant will assure that another employee/officer of thecorporate tenant will not assume occupancy upon removal of the specified individual occupant,(Avon v Aquarian, 260 AD2d, supra, at 209), and thereby obviate the perpetualtenancy concern. Interestingly enough, the facts in this proceeding are somewhat similar to thefacts in Avon, where a religious corporation (i.e., Aquarian) was listed as the tenant onthe lease, and its principal, Rev. Allen Jenne, is the signatory to the lease and the sole residentduring the preceding 17 years. Betty is not identified/designated as the tenant or the intendedoccupant on the instant renewal leases, and given this, the respondents are correct that herresidence is not at issue in this proceeding, and the petitioner is correct that there was noobligation to serve her with the Golub notice. (Katz v Olden, 158 Misc 2d 541 [Civ Ct,NY Cty 1993].) Of course, this still leaves us with the above mentioned issues of fact.

The respondents argue that since commencement of this proceeding in August 2008, theGolub notice, which is dated May 24, 2007, has become stale. Often, where a new proceeding iscommenced prior to the discontinuance of an initial proceeding, reuse of a predicate notice ispermitted. (Arol v Goodie, 83 Misc 2d 477 [Civ Ct, NY Cty 1975], aff'd 84 Misc2d 493 [App Term, 1st Dept 1976], aff'd 52 AD2d 538 [1st Dept 1976].) The petitionercommenced the instant proceeding upon learning of a jurisdictional defect in an identicalnon-primary residence [*3]proceeding that it had initiallycommenced in 2007. Some three months after commencing the instant proceeding, the petitionerwas granted leave by court order dated November 7, 2008, to discontinue its initial proceeding.Therefore, as the petitioner commenced this proceeding (a) during the pendency of the initialproceeding, (b) shortly before permission to discontinue said initial proceeding was granted bythe court, (Hudson v MTP, 8 Misc3d 136(A) [App Term, 1st Dept 2005]), and (c) there being no discernable prejudice to therespondents, (Arol v Goodie, 82 Misc 2d 477 [Civ Ct, NY Cty 1975], aff'd 84Misc 2d 493 [App Term, 1st Dept 1975]), the instant Golub notice is not stale.

Lastly, both sides seek discovery, and as already noted by the court, issues of fact exist as to(a) why the tenant on the 2001 renewal lease, and all subsequent renewals, were changed toreflect Grafstein Diamond; (b) whether there was some form of authority for said changes; and(c) whether Betty relinquished her right to a renewal lease in her name. Both sides havedemonstrated ample need for discovery on these issues. (NYU v Farkas, 121 Misc 2d643 [Civ Ct, NY Cty 1983].) However, the petitioner's discovery demand seeks to ascertain thewhereabouts of Betty and Grafstein Diamond. Assuming that the petitioner is correct, and theonly tenant is Grafstein Diamond, then in such situations the only issue for the court to resolve iswhether the renewal lease specifies a particular individual as the occupant so as to avoid aperpetual tenancy. Therefore, where Betty and Grafstein Diamond primarily reside is irrelevant.As for the respondent's discovery demand, it consists of a demand for "[a]ny and all documents,letters, and/or correspondence pertaining to the switch of names on the renewal lease." It is wellestablished, however, that a demand for the production of documents must specify the itemssought with "reasonable particularity," and the burden of specificity is on the requesting party.(Mendelowitz v Xerox, 169 AD2d 300 [1st Dept 1991].) And more often than not, theutilization of the language "any and all," which is the case here, is an indication of a lack of therequisite specificity. (Id.) To the extent that the respondents lack knowledge of theexistence of specific document(s), then they should make use of a deposition and/or relatedprocedures as provided for in the CPLR so as to ascertain the existence of such documents inorder that they may be designated with specificity in a notice to produce. (City of New Yorkv Friedberg, 62 AD2d 407 [1st Dept 1978].) Based on the aforementioned, both parties'demands for discovery are denied without prejudice to renew upon disclosure that is morecarefully tailored, (NYU v Farkas, 121 Misc 2d 643, supra), to the issues athand.