Page 15 - WCBA CLE 6-14-2022

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Gridley v Turnbury Vil., 196 AD3d 95 [June 9, 2021][Justice Hinds-Radix, opinion;
Justices Mastro, Brathwaite Nelson, Iannacci concur]:

HOLDING ON APPEAL: Summary judgment dismissing a tenant's complaint for rent
overcharges was properly granted because the landlord acted in good faith in
registering the tenant's apartment as exempt from rent stabilization regulation after
receiving a J-51 tax abatement pursuant to RPTL § 489, the late registration of the
apartment as rent-stabilized after notification by the Department of Housing and
Community Renewal of a change in the law did not indicate a fraudulent scheme under
9 NYCRR 2522.6(b)(2)(iii) to deregulate the apartment, an increase in rent alone was
insufficient to establish a colorable claim of fraud, and the tenant failed to comply with
the requirement of CPLR 3016(b) to plead fraud in detail and since the tenant had no
viable causes of action, the tenant's motion for class action certification was properly
denied as academic.

FACTS: The plaintiff was a tenant of the 95-unit residential apartment building owned
by the landlord since 2015. The plaintiff’s apartment, as well as 25 others in the
building, were registered with the Dept of Housing and Community Renewal (DHCR) as
exempt from rent stabilization regulation on the ground that the rent under rent
stabilization reached the high-rent, vacancy decontrol amount. Pursuant to a directive
from DHCR, the landlord registered each of its rent-stabilized apartments with the
DHCR and offered the plaintiff a rent-stabilized renewal lease, which he accepted.

The plaintiff commenced the action in January 2019 alleging that the landlord’s failure
to register his apartment as rent-stabilized with the DHCR in the years prior to 2016 was
part of a fraudulent scheme to deregulate the apartment. The plaintiff sough class
action certification and moved to dismiss the landlord’s affirmative defenses. The
landlord moved for summary judgment dismissing the complaint insofar as asserted
against it. The Supreme Court granted that motion and denied the plaintiff’s motions.
This Court found that the deregulation of the plaintiff’s apartment was made in good
faith and that the late registration of the apartment after notification by the DHCR of a
change in law does not indicate that the landlord engaged in a fraudulent scheme. The
plaintiff failed to plead each element of fraud and an increase in rent alone is
insufficient to establish a colorable claim of fraud.

CRIMINAL:

People v Mortel, 197 AD3d 196 [July 21, 2021][Justice Miller, opinion; Justices
Chambers, Wooten concur; Justice Connolly, dissent; Justice Rivera, concurs
with the dissent]:

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