SUPREME COURT: APPELLATE TERM
NINTH JUDICIAL DISTRICT
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HUDSON HILLS TENANT CORP.
Lower Court Index
No. LT 4582/2009
Respondent/Landlord,
-against-
REPLY AFFIRMATION PAUL STOVEL, IN FURTHERANCE
OF MOTION SEEKING STAY
RETURN DATE: 7/1/2011
Appellant/Tenant,
______
Paul Golden, being an attorney duly admitted to practice law before the Courts of the State of New York, hereby affirms to the truth of the following under the penalties of perjury:
1. I am a member of the firm of Hagan, Coury and Associates, new counsel for Paul Stovel, the appellant/tenant in this matter, and submit this affirmation in reply to the landlord’s opposition to the motion seeking a stay. A copy of the decision and order being appealed is annexed as Ex. A. The lower court’s decision was extremely unusual; it awarded the Petitioner with summary judgment in a holdover case; the tenant had no right to a trial whatsoever, even though there were crucial disputed issues of fact, including how the exact terms of the lease read. A copy of Mr. Stovel’s affidavit (without exhibits) in opposition to the motion for summary judgment as Ex. B.
2. As a means of clarification, the Order to Show Cause seeks not only to stay the proceeding, but to “stay all proceedings to enforce the... order appealed from pending [the] appeal” pursuant to CPLR 5519(c)(emphasis added). In specific, the landlord should be enjoined not only from being issued or executing the warrant, but also from selling Mr. Stovel’s co-op shares until this court hears and decides the appeal.
3. The landlord’s papers miss the point entirely, by arguing that the tenant is not entitled to a “preliminary injunction” or in other words, has not met the terms of CPLR 6301. Mr. Stovel did not file a motion seeking relief under Article 63 of the CPLR, and thus the irreparable harm and likelihood of success on the merits are totally irrelevant issues.
4. Even if this court were to rule that irreparable harm was a relevant issue, then the appellant has certainly met that standard. If the appellant loses his lease and/or shares, he will be deprived of an interest in real property. Losing real property is considered irreparable harm per se. Analogously, in the case DeCastro v Bhokari, 201 AD2d 382 [1st Dept 1994], the appellate court held that the lower court improperly denied certain injunctive relief: “Irreparable harm would ensue if the cooperative were not restrained from cancelling plaintiffs’ shares [of a co-op].” See also Seitzman v Hudson River Assoc, 126 AD2d 211 [1st Dept 1987](Potential purchasers of co-op office space entitled to injunctive relief in case concerning purchase of co-op shares, holding that monetary damages would not suffice if plaintiffs were denied injunctive relief.)
5. The landlord seems to have misunderstood the case entirely when it argues that the tenant is seeking a claim “premised solely on monetary damages.” That is not the case at all. This matter concerns whether a lease has been terminated, and whether a tenant may be evicted; it is a holdover proceeding. And if the appellate court ultimately rules that the tenant should not be evicted, and that his lease was never terminated, then Mr. Stovel cannot be “recompensed by a monetary award.” This argument simply makes no sense in the context of this case.
6. If this court were to rule that “likelihood of success” were a relevant factor (despite the fact that this language is only contained in Article 63 of the CPLR) then Mr. Stovel would still be entitled to relief.
7. The law generally permits parties to sublease their own apartments. The only exception is (1) if a written signed lease prohibits such subleasing and (2) if that clause has not been waived. In this case, the petitioner never provided a copy of such a signed lease, and Mr. Stovel contests that the unsigned lease Petitioner annexed was the actual lease. And even the unsigned lease that they did provide allowed for the subleasing. A copy of the unsigned lease which the landlord provided in previous motion papers is annexed as Ex. C.
8. For over a decade, Mr. Stovel subleased his apartment with the knowledge of the Board of Directors, and to the degree the lease contained a clause about requiring consent, it was waived. The Board is estopped from claiming that this unsigned version of the lease (which Mr. Stovel contests is the proper lease) now is effective.
9. To date, the Board has never amended the lease, and in fact never presented any signed version of the lease to the lower court. It also never amended the “House Rules.” 10. The City Court improperly held that collateral estoppel had any effect in this proceeding. In fact, the previous Supreme Court action addressed whether the Board of Directors could adopt a new policy concerning subleasing. That Supreme Court action did not concern whether the lease had been amended, or whether the Board of Directors had the right to amend the lease. Therefore, when the Supreme Court judge in that separate case ruled that the Board of Directors were entitled to create a sublease policy pursuant to the business judgment rule, that had no connection to the issues in this proceeding. This proceeding only concerns whether the lease was actually amended.
11. The only issue for the Civil Court to determine was whether the tenant had violated a term of the lease. But the lease (assuming it is enforceable) permits subleasing (with Board or shareholder consent), and those policies within the lease were never amended. For the sake of argument, the Board of Directors may have had a “policy” against subleasing, but the lower court was not permitted to determine “policy” matters. It only was permitted to determine if the tenant violated the lease. And he did not.
12. The Resolution was not adapted in a manner which could be enforced as a new term of the lease, and the separate Supreme Court action never indicated that the Resolution had the effect of amending the lease. The lease is not modified. There are no new house rules. Perhaps at a later date, the Board of Directors will amend the lease or house rules, but they have not done this so far, and there is no allegation that they have. Notably, the Resolution of the Board of Directors (Ex. D) does not even indicate that (1) the lease is modified, or (2) that the house rules are modified.
13. Even if the Resolution were enforceable, there is nothing in its text which specifies that a person must obtain consent to sublease, or that failure to do would be a breach of the lease. It only indicates new aspects of the application process and approval, such as when such applications will and will not be considered. There is nothing in the policy which specifies that a tenant must obtain consent before subleasing. And without such specific language, the landlord could not claim the tenant was in default of the lease.
14. In addition to the question of the contents of the lease and the interpretation of the new Board of Directors policy, the lower court never determined whether the alleged lease violation was a violation of a material term of the lease. If it was not a material breach, the court should not have held that the lease had been terminated.
15. Even assuming for the sake of argument that the lease had been amended, there was still an open question of fact about whether Petitioner had waived its alleged no sublease policy. Again, the Petitioner did not provide a signed lease containing a “no waiver” clause. Even if the lease does have such a clause, parties may waive a “no-waiver” clause by their conduct. Lee v Wright, 108 AD2d 678 [1st Dept 1985]; see also TSS-Seedman's, Inc. v Elota Realty Co., 72 NY2d 1024 [1988]; Madison Ave. Leasehold, LLC v Madison Bentley Associates LLC, 30 AD3d 1 [1st Dept 2006]. In the very least, the Petitioner’s waiver is a question of fact which prevents the Petitioner from obtaining summary judgment. See 255 Fieldston Buyers Corp. v. Michaels, 196 Misc2d 105 [App Term 1st Dept 2003]. Regardless, the landlord never presented a signed lease to the Civil Court in which Stovel had agreed to a no-waiver provision.
16. The landlord’s arguments about any alleged “financial burden” is not supported by an affidavit from any person with actual knowledge. Ultimately, if the landlord is successful, it may have a lien against the proceeds from the sale of the shares. Alternatively, it may collect the judgment from the tenant himself.
17. But even in the event this court were to rule that the maintenance arrears are posing a burden on the landlord, then the court could simply require the tenant to file an undertaking with the court. One example of such an undertaking would be a requirement that all future rental income from the subtenants would be paid into that fund.
WHEREFORE, it is respectfully requested that the Court grant the motion in its entirety and for such other and further relief as the Court may deem just and proper.
Dated: June 30, 2011
Brooklyn, New York
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Paul Golden
Hagan Coury & Associates
Attorneys for appellant Stovel
908 Fourth Avenue
Brooklyn, NY 11232
718 788 5052