Blog

On March 10, 2006, in Rolling Realty LLC v. Dubinsky, Civ.Ct. N.Y.Co., Index No. L&T 98864/05 (Schneider, J.), the trial court issued an important decision which recognized limits on the use of an alleged warranty of habitability as an excuse for the nonpayment of rent. Kucker, Marino, Winiarsky, & Bittens, LLP prevailed at trial and defeated the respondent-tenant’s warranty of habitability defense which alleged the landlord had placed noisy tenants in an adjacent apartment and encouraged them to make intolerable noise in an effort to drive the respondent from his apartment. The respondent-tenant was ordered to pay the entire balance of unpaid rent, plus the landlord’s attorneys’ fees and costs.

On January 13, 2006, in South Pierre Associates v. Meyers, Sup.Ct. N.Y.Co., Index No. 105682/05 , the New York Supreme Court rendered a critical decision on the issue of summary judgment in an action based on causes of action including fraud, breach of the employee’s duties of loyalty to his employer and negligence. Kucker, Marino, Winiarsky, & Bittens, LLP had filed a pre-discovery motion for summary judgment in which the firm argued this particular action warranted the imposition of a partial final award of liability in favor of the plaintiffs on all five causes of action alleged in the complaint (including fraud, breach of fiduciary duty, breach of employment, breach of agent-principal relationship and negligence.] Kucker, Marino, Winiarsky, & Bittens argued and the court agreed that summary judgment was appropriate, even on the fraud claim, based on two affidavits by defendant in another action, in which he admitted all of the facts necessary to establish his liability to plaintiffs by having acted contrary to the interests of his employers. Defendant’s efforts to recant his prior sworn statements in the other action were unsuccessful. The trial court transferred the case to the Civil Court for an assessment of damages.

On July 18, 2005, in Rego Estates v. DHCR, 20 AD3d 539, 799 N.Y.S.2d 539 (2nd Dep’t 2005), the Appellate Division rendered a significant decision which held the DHCR erred in denying an owner’s request for establishing a higher rent retroactively, and the error must be corrected by the administrative agency.

On May 24, 2005, in 4 Third Avenue Leasehold, LLC v. Permanent Mission of the United Arab Emirates, 133 Fed.Appx. 768, 2005 U.S. App. LEXIS 9494 (2nd Cir. 2005), the U.S. Court of Appeals rendered an important decision which validated the enforcement of liquidated damages clauses in private contracts. Kucker, Marino, Winiarsky, & Bittens, LLP was victorious in convincing the Second Circuit to overturn the district court’s incorrect ruling which had failed to enforce the liquidated damages clause in a commercial lease agreement. The appellate court ruled this liquidated damages provision was not an unenforceable penalty and had not been waived.

On September 10, 2004, in Water Street Leasehold LLC v. Deloitte & Touche, LLP (Sup.Ct., N.Y. Co.), in response to a motion for reargument by the defendant, the trial court affirmed its prior ruling in favor of the plaintiff represented by Kucker, Marino, Winiarsky, & Bittens, concerning accountant third party liability (see April 19, 2004 decision below).

On April 18, 2005, in In re 127 John Street Associates, 2005 U.S.Dist.LEXIS 6729; 54 Collier Bankr. Cas. 2d (MB) (S.D.N.Y.), the U.S. District Court issued a critical ruling. The court decided the entity which had purchased a commercial building in Manhattan could not appeal from an interim order which required the purchaser to deposit $6.2 million in escrow for the benefit of former commercial tenants who claimed a substantial share of the prior real estate tax refund. In the related earlier ruling, which was not reported (In re 127 John Street Associates, 93-B-46171 (CB) (Bankr. S.D.N.Y., Nov.12, 2004)), the petition of Kucker, Marino, Winiarsky, & Bittens, LLP for the interim order was granted by the bankruptcy court. At Kucker, Marino, Winiarsky, & Bittens’s urging, the bankruptcy court reversed its own prior orders which had been predicated on inaccurate fact representations by the purchaser of property, and the court reopened the chapter 11 case to permit the former tenants to claim a share of the $6.2 million real estate tax refund which had been withheld by the purchaser of property. In addition, the purchaser was ordered to provide explicit notice to the former tenants; the court found the first notice by the purchaser was severely inadequate.

On January 25, 2005, in Schoberle v. DHCR and 235 West 71st Street LLC, 14 A.D.3d 438, 788 N.Y.S.2d 361 (1st Dep’t 2005), the Appellate Division granted the petition of Kucker, Marino, Winiarsky, & Bittens, LLP, and retroactively applied the “de minimus” rule to dismiss a tenant’s complaint against the landlord (Kucker, Marino, Winiarsky, & Bittens’s client) for alleged removal of a storage area.

On April 19, 2004, in Water Street Leasehold LLC v. Deloitte & Touche, LLP, 2004 NY Slip Op 51260U; 5 Misc. 3d 1008A; 798 N.Y.S.2d 714; 2004 N.Y. Misc. LEXIS 1896 (Sup.Ct., N.Y. Co.) (Lowe, III, J.), the trial court upheld a complex civil complaint which alleged the defendant accountants had third party liability for fraud, negligence and gross negligence in having certified as accurate the financial statements of insurance company which became insolvent and failed to pay a $1.1 million debt under a real estate lease, and also alleged the defendant accountants of gross errors in having failed to make certain the insurance company maintained adequate reserves to cover the policies of insurance which had been issued, rev’d on other grounds, 796 N.Y.S.2d 598 (1st Dep’t June 14, 2005).

On March 22, 2004, in Sted Tenants Owners Corp v. Chumpitaz, et al., 5 A.D.3d 663, 774 N.Y.S.2d 718 (2nd Dep’t 2004), the Appellate Division issued a significant ruling which upheld the integrity of motion practice under the CPLR. The appellate court unanimously reversed the trial court’s decision which had granted summary judgment in favor of a plaintiff property owner because its papers in support of the motion had a fatal flaw — they failed to include copies of the pleadings.

On December 3, 2003, in the Matter of Sabrina Equities Corp., DHCR Adm. Rev. Dckt. No. QH-410014-RP, an administrative proceeding before the New York State Division of Housing and Community Renewal (DHCR), a notable administrative ruling was rendered in favor of the landlord, represented by Kucker, Marino, Winiarsky, & Bittens, LLP. In the tenant’s fair market rent appeal, the DHCR initially ruled for the tenant and set the rent without information concerning comparable apartments. The landlord was ordered to refund $46,000.00. In appealing, the landlord argued the DHCR’s new comparability rules should apply. The DHCR agreed, applied comparability data, and reduced the refund to only $4,000.00. The DHCR agreed, because the landlord had purchased the building at judicial sale and did not obtain complete records, there was good cause for any prior failure to submit comparability data.

On August 18, 2003, in Board of Managers of the Kingsley Condominium v. Villinvestment A.V.V. and Feldman, Index No. 603944/02 (Sup. Ct., New York Co., August 18, 2003) (Tolub, J.), based on a motion filed by Kucker, Marino, Winiarsky, & Bittens, LLP (Kucker, Marino, Winiarsky, & Bittens) the court rendered a significant decision which limits a condominium board’s protection under the “business judgment” rule. The motion filed by Kucker, Marino, Winiarsky, & Bittens sought summary judgment on defendants’ behalf, enabling them to proceed with a proposed condominium unit sale. Among other things, the court held that the plaintiff’s treatment of a proposed offer as bona fide precluded plaintiff from subsequently asserting otherwise. An offer may not be bona fide for some purposes but not for other purposes. Court also held plaintiff was required in its motion papers to include any alleged evidence that proposed purchase price was not bona fide. Evidence presented by the plaintiff for the first time in reply papers on a cross-motion could not be considered for either defendants’ motion or plaintiffs’ cross-motion because defendants had no opportunity to respond to the evidence. The court also held that the Board received notice when its managing agent received notice. While the business judgment rule may protect a Condominium Board in the event of a challenge to its determination of whether or not to exercise a right of first refusal, a failure to act within the time limits set forth in the by-laws has nothing to do with business judgment. Equity will intervene in the event that the party who failed to act will suffer a forfeiture if not permitted to exercise its right of first refusal. However, cases in which such forfeiture is found generally involve parties that have invested considerable sums of money in renovating the subject premises, which they will lose if they cannot exercise the option that they had, whether it was to renew the lease or to purchase the property.]

On September 3, 2003, in 325 Third Street LLC v. Maldonado, Index No. L&T 077865/03 (Civ. Ct. Kings Co., September 3, 2003) (Marton, J.H.C.), at the request of Kucker, Marino, Winiarsky, & Bittens, LLP, the court denied Respondent’s motion to vacate the previously executed “so ordered” stipulation of settlement and the resultant final judgment and held that a government subsidy approval was not a basis for relief, especially where the relief was less than the amount owed.

On June 20, 2003, in 328 West 86th Assoc. v. Wakstein, Index No. L&T 081652/01 (Civ. Ct. New York Co., June 20, 2003) (Lebovits, J.H.C.), an important decision was rendered which recognizes that a party’s right to attend a deposition is not absolute. Based on Kucker, Marino, Winiarsky, & Bittens, LLP’s motion, a party was excluded from attending a deposition. The court held, because CPLR §3103(a) obligated the court to prevent one party from being disadvantaged by the other’s potentially collusive testimony, the court may exclude individual respondents from attending pretrial depositions of other Respondents when the Respondents’ interests were virtually identical and each Respondent was represented by the same attorney.]

On May 2, 2003, in 9394 LLC, et al. v. Kehler, et al., Supreme Court, Westchester County, Index No. 09307/2002 (Nastasi, J.), the New York state court issued a significant decision concerning pretrial disclosure obligations, and rejected a defendants’ arguments that a “consultant” is immune from being deposed. Based on an application which Kucker, Marino, Winiarsky, & Bittens, LLP (Kucker, Marino, Winiarsky, & Bittens) made on behalf of plaintiffs, an order was rendered which directed defendants to comply with plaintiffs’ demands for disclosure, including document demands, and determined that plaintiffs were entitled to depose a non-party witness whom defendants characterized as a “consultant.” Plaintiffs’ underlying civil complaint alleged that defendants unlawfully constructed a large solid concrete block in a tidal wetlands area of the Long Island Sound immediately adjacent to plaintiffs’ residential property, which violated plaintiffs’ riparian rights and caused ecological damage to plaintiffs’ property. In ruling in favor of plaintiffs’ motion to compel disclosure concerning defendants’ so-called “consultant,” the Court agreed with Kucker, Marino, Winiarsky, & Bittens that the documents and reports which defendants claimed were prepared in anticipation of litigation by their purported consultant at maximum were only conditionally privileged, and the burden of proving that such material was prepared solely in anticipation of litigation rested on defendants as the party asserting the privilege and challenging discovery. The Court also agreed with Kucker, Marino, Winiarsky, & Bittens that defendants’ counsel’s affirmation, replete with conclusory assertions, was insufficient to establish the requested documents were immune from disclosure.

On April 9, 2003, in a New York state court proceeding, In the Matter of the Application of Lipper Holdings, LLC, Supreme Court, New York County, Index No. 603653/2002, a notable interim order was rendered in which the state court approved the use of a methodology for distributing plan assets which historically revalued each investor’s capital account month by month. The petitioner had initiated the action seeking an order approving a proposed distribution of assets in connection with the winding up of certain limited partnerships. Justice Karla Moskowitz, of the Commercial Part of the Supreme Court which hears complex civil actions, ruled in favor of Kucker, Marino, Winiarsky, & Bittens, LLP’s client and other investors. By Her Honor’s interim order, the Court approved the suggested asset distribution methodology because it was consistent with proper accounting principles and limited partnership plan documents. The Court rejected the arguments of certain investors who attempted to limit their own loss by forcing the entire revaluation of plan assets (a $400 million adjustment) to be applied in one month only, the final month in which winding up was initiated. Over petitioner’s objection, the court ruled that any negative balances in an investor’s capital accounts must be attributed to the general partner. Based on allegations that he had engaged in misconduct, the general partner was replaced as liquidating trustee.