Firm News

On August 21, 2007, in Beljakovic v Melohn Properties, Inc., 06-cv-4760 (2nd Cir. 2007), the Second Circuit dismissed the defendant-employer’s appeal for purported lack of appellate jurisdiction in the absence of a final order. The Court in error ignored Kucker, Marino, Winiarsky, & Bittens’s compelling arguments: (i) that the Beljakovic appeal was from an order by the district court which denied a motion to compel arbitration pursuant to 9 U.S.C. §§ 3 and 4, and denied a stay of the court action pending the arbitration; thus, jurisdiction for an immediate appeal is provided by the Federal Arbitration Act (9 U.S.C. §1, et seq.), specifically 9 U.S.C. § 16(a)(1)(A) and (B), and by 28 U.S.C. §1292(a)(1); and (ii) that, on the very same day that the Second Circuit, in Beljakovic, dismissed the appeal for purported lack of a final order, the Second Circuit, in the procedurally indistinguishable Pyett case, already had entertained appellate briefs and was on the eve of hearing oral argument.

On February 1, 2007, in Friscia v Lem Lee 13th Limited Partnership, 2007 N.Y. App. Div. LEXIS 1046 (1st Dep’t 2007), Kucker, Marino, Winiarsky, & Bittens, LLP won a significant victory for a residential landlord, by establishing that the DHCR has primary jurisdiction over rent overcharge complaints and a stabilized tenant cannot circumvent the agency’s jurisdiction by commencing a court proceeding. The tenant had attempted to avoid the 4-year statute of limitations on rent overcharge complaints filed with the DHCR, by commencing a court action for an order “declaring” that he was paying a rent overcharge based on evidence going back beyond four years. Clearly hoping the Court would apply less stringent rules than those applied by the DHCR, the tenant argued that the Court should determine his overcharge complaint. Kucker, Marino, Winiarsky, & Bittens moved to dismiss the action, and the motion was successful. The Appellate Division affirmed. This decision is extremely important to owners of rent stabilized and rent controlled apartments as it requires that a tenant claiming a rent overcharge must first file a complaint with the DHCR. It has been our experience that tenants’ attorneys have been advising tenants to commence court proceedings, instead of filing overcharge complaints with the DHCR, hoping that individual judges will not follow established DHCR rules and precedent, especially with respect to the 4-year statute of limitations. This precedent may convince other judges before whom a rent overcharge complaint is raised to dismiss those claims as well.

On December 13, 2006, in Herma Stribula v. 210 E.86th St. Corp. (Sup.Ct. N.Y.Co. Index No. 118478/06 ), the Supreme Court of the State of New York, County of New York, rendered a significant decision which protected a property owner from a trespass on his land that imperiled the value of his residential apartment building, and exposed the owner to potential future lawsuits by tenants and passersby seeking catastrophic damages; based on the legal papers prepared by Kucker, Marino, Winiarsky, & Bittens, LLP, which were submitted by an expedited motion known as an “order to show cause seeking emergency relief,” the Supreme Court granted the temporary restraining order (TRO) requested by Kucker, Marino, Winiarsky, & Bittens which stopped all work being performed by Consolidated Edison and its subcontractors in their planned installation of two high-voltage electrical transformers into the sidewalk abutting the residential apartment building owned by Kucker, Marino, Winiarsky, & Bittens’s client. Kucker, Marino, Winiarsky, & Bittens, LLP was successful in demonstrating that justice demands the property owner’s rights must be protected from an egregious trespass even if the defendant is a public utility. Kucker, Marino, Winiarsky, & Bittens’s victory in obtaining the TRO is a substantial step toward the recognition of beneficial rights arising from the reciprocal burden placed on landlords concerning sidewalk responsibility.

On August 17, 2006, the New York State Division of Housing and Community Renewal, in Matter of 7005 Shore Road, LLC, DHCR Adm. Rev. Dckt. No. UE-210052-RO, issued an important administrative law ruling in favor of landlords, by determining the landlord could not be assessed with treble damages because it reduced the tenant’s rent pending the outcome of an overcharge proceeding.

On May 24, 2006, in South Pierre Associates v. Meyers, Civ.Ct. N.Y.Co. Index No. 300023 TSN 2006, 2006 NY Slip Op 26208, 2006 N.Y.Misc. LEXIS 1278, the New York court issued a second important decision which should be of great interest to attorneys and non-attorneys. Earlier, the court awarded liability in plaintiffs’ favor on all five causes of action, including fraud, breach of the employee’s duties of loyalty to his employer, and negligence (the first decision, on Jan. 13, 2006, is discussed below). Subsequently, defendant attempted to obtain dismissal of the action by filing a CPLR 3212 motion which argued that a final judgment was not possible because allegedly there were no damages to support the prior liability award. On May 24, the trial court upheld Kucker, Marino, Winiarsky, & Bittens, LLP’s arguments in response and denied defendant’s motion in its entirety. The court ruled that, as a disloyal employee, defendant may be “subject to severe penalties such as the forfeiture of all compensation plaintiffs paid for the period of his disloyalty . . . even if plaintiffs cannot prove any damage or loss arising out of Meyers’ admitted culpable conduct.” In practical terms, this would result in the employee’s disgorgement of the many thousands of dollars in wages he had accepted while acting illicitly in violation of his duties of loyalty to the employers paying those wages. The court also ruled that an award of punitive damages may be available against this employee based on the breach of fiduciary duty claim.

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.