PRIOR PENDING PROCEEDINGS....

Pursuant to Civil Practice Law and Rules §3211(a)(4) an action will be dismissed if there is an action already pending between identical parties, concerning identical causes of action and seeking the identical relief. Despite the clarity of the provision, it is often not clear whether another action falls within those parameters.

In ALH Properties Thirteen Inc. v. Li¹, a holdover summary proceeding, the landlord attempted to recover a rent-stabilized apartment claiming that the tenants did not maintain the premises as their primary residence. The respondents moved to dismiss on the ground that a prior proceeding was pending. The court denied the motion holding that the prior action was predicated upon a different theory. The prior action had been commenced alleging that the respondents had violated a substantial obligation of their lease by utilizing the subject premises for business purposes without the petitioner’s consent. That prior proceeding had been marked “offcalendar”. In the second action, the proceeding was premised upon a non-primary residence allegation. The court conceded that the pleading of the allegations was very similar, however, the court held the theories were, in fact, different and denied respondents’ motion to dismiss.

In ALH Properties, it would appear that the court was right on the money. But what about when the identity of the parties, causes of action and relief sought in the two actions are identical but the index numbers are different and the respondent has made a motion to dismiss the first action claiming lack of subject matter jurisdiction. Should the court dismiss the second action which the petitioner commences because he recognizes his failure to properly serve the respondent in the first action?

The answer is intriguing....

According to Professor David D. Siegel, the cautious petitioner is well within his rights to start the second action and will not be dismissed in the second action on the ground of a prior pending proceeding because the respondent’s position in the first action cuts against him in the second action. After all, if the court doesn’t have subject matter jurisdiction in the first action — well, then it just doesn’t exist, now does it? Or, as Professor Siegel puts it, the respondent “can’t have things both ways.”²

While, such a statement presumes that the court will rule in the respondent’s favor in the first proceeding and dismiss the action, the courts have followed Professor Siegel’s analysis and cite him in refusing to dismiss the second action and, at times, imposing sanctions³. Consequently, until a decision on the first action, the respondent is forced to defend both actions — a result which should seem untenable to any practitioner.

Well, maybe, if the petitioner recognizes its error in failing to properly serve the respondent, the petitioner should voluntarily withdraw its action pursuant to CPLR 3217. That may not be a viable option. According to Professor Siegel, although “it is not clear what impact a CPLR 3211 motion was intended to have on a notice to discontinue”⁴, once a respondent has made a motion to dismiss, the petitioner is precluded from voluntarily withdrawing because a motion to dismiss can be construed to be a “response” to a complaint which should be construed to be the equivalent of an answer pursuant to CPLR 3217(a)(1) thereby terminating petitioner’s right to withdraw the suit by notice. This conclusion seems untenable inasmuch as an answer is defined in the CPLR to be a “pleading” and a motion is not. However, Professor Seigel compares CPLR 3211 to Federal Rule 41(a) for this analysis and believes an answer and a motion comparable, at least for purposes of applying CPLR 3217.

Consequently, while it may seem more efficacious to withdraw a defective petition rather than burden a respondent with a new action to defend, a petitioner may only do so provided no answer or motion to dismiss has been made.

TENANT BREACHES BUT IS ENTITLED TO ATTORNEYS FEES???

In 350 East 62^nd Street Associates v. Vecilla⁵, the landlord brought a summary proceeding seeking to evict the tenants for breaching a substantial element of their lease by making unauthorized alterations to their rent-stabilized apartment. The court dismissed the petition finding that the landlord had waived its right to object and that the alterations could be reversed. The tenants then moved to recover attorneys fees.

The court held that even though the tenants had breached their lease, they were the prevailing party entitled to attorneys’ fees inasmuch as the law did not permit their eviction for that breach.

CANCELED SECURITY CHECK NEGATES CONSIDERATION

In Sherman v. Hallmark⁶, the court was asked to determine whether the revocation of a repudiation of a lease resurrects a landlord/tenant relationship entitling the revoking party to possession of the premises.

The owners of a cooperative apartment agreed to sublet to the defendant. After execution of the sublease, which required cooperative board approval, the defendant had failed to check her telefacsimile machine and was under the impression that cooperative board approval was not forthcoming. Consequently, she sent a letter to the plaintiffs advising that “the deal is off” and stopped payment on her check for the security deposit and first month’s rent. Several days later she checked her telefacsimile machine and found the cooperative board’s letter of approval. Thereafter she changed her mind and decided she wanted to live in the apartment. The petitioners were out of town but she advised one of the petitioner’s neighbors that she was revoking her repudiation of the deal. Thereafter, she went to the apartment, got the doorman to let her in by showing him the sublease and the cooperative board approval of her subtenancy and moved into the apartment. Once in the apartment, she located a telephone number for the petitioner in the apartment and advised them of her revocation.

In the meantime, the plaintiffs, believing the deal dead, had arranged to sublet to a third party and wanted the respondent’s ouster.

The respondent claimed a right to possession because she revoked her repudiation of the lease. The court held that she no longer had the ability once she stopped payment on her check because the “furnishing of a security deposit ‘is a substantial obligation of [a] tenancy.’ [citation omitted].”⁷ The court likened the lease security deposit to the down payment under a contract of sale, holding “the failure to furnish a good security deposit is a material breach” of the sublease. Consequently, having stopped payment on her check the plaintiffs were now in a position to rescind their offer — which they did.

Inasmuch as there was a failure of consideration giving rise to the petitioners’ right to rescind, the respondent was never in a position to revoke a repudiation.

PRO SE LITIGANTS BEWARE!

Often a reluctant defendant or respondent asks the proverbial question: “Can I represent myself?” The pat answer is “Sure. You have every right to act as your own attorney and the court will assist you to some extent in understanding the proceeding — but I wouldn’t recommend it....” At the end of the day, attorneys are perceived by the potential client as simply attempting to retain a legal fee. Then you have cases like Rainbow Construction Co. v. Leibowitz⁸.

Rainbow Construction Co., is a classic example of why a respondent should not go unrepresented by competent counsel.

In Rainbow Construction Co., the petitioner had commenced a summary proceeding seeking rent arrears from long-time rent stabilized tenants, the Leibowitz’. Appearing pro se, the Leibowitz’ filed an answer alleging lack of proper service, lack of repairs and a general denial. The matter was calendared and adjourned and ultimately on December 17, 1998, Mr. Leibowitz appeared in court with a general power of attorney wherein his wife authorized him to act as her agent and, after settlement discussions with petitioner’s counsel, entered into a stipulation of settlement (the “Stipulation”).

The Stipulation provided (i) that the nonpayment proceeding convert into a holdover proceeding;

(ii)

that entry of final judgment of possession be granted in favor of the petitioner; (iii) for issuance of the warrant forthwith with execution thereof stayed through and including May 31, 1999; (iv) that the petitioner (a) waive use and occupancy from January 1 through May 31, 1999;

(b)

waive rent arrears from April 1, 1998 through December 31, 1998, totaling $17,029.02; (c) pay the respondents $10,000; and (d) pay moving costs of up to $2,500, payable directly to the moving company.

“What a deal!”, you say. But is it?

The problem: ultimately, the respondents claimed they were unable to locate an other apartment due to a variety of issues. Consequently, by order to show cause, the respondents sought to have the execution of the warrant stayed and the stipulation vacated. After a lengthy conference on June 3, 1999, the court maintained the Stipulation, directed the respondents to tender use and occupancy for June and stayed the execution of the warrant until July 31, 1999 on condition that the respondents pay use and occupancy for July 1999. During the conference the Leibowitz’ claimed that they had entered into the stipulation of settlement improvidently since they did not have counsel present and that Mr. Leibowitz did not have authority from Mrs. Leibowitz to enter into the stipulation on her behalf.

Citing case law, the court held that stipulations of settlement are favored by the courts and not lightly set aside absent fraud, collusion, mistake or accident. The court disposed of the claim that Mr. Leibowitz lacked authority to act on behalf of his wife inasmuch as the power of attorney, on its face, specifically permitted Mr. Leibowitz to enter into a settlement agreement on the matter. In addition, the court held, the lack of counsel alone is not sufficient to overturn a stipulation of settlement; rather, the lack of counsel must result in a stipulation which is unjust or unfair.

Inasmuch as Mr. Leibowitz (i) discussed the details of the settlement agreement with the court;

(ii) was informed by the court of his legal options; and (iii) made a voluntary, knowing and intelligent decision to enter into the subject settlement agreement, the court denied the Leibowitz’ motion in its entirety.

From the practitioner’s perspective, when faced with a pro se litigant, all stipulations should be “so ordered” after an allocution by the court.

Whether counsel could have made a better deal for the Leibowitz’ is a matter for debate but certainly counsel would have fully advised the Leibowitz’ as to the impact of converting a nonpayment proceeding (where you can pay and stay) into a holdover proceeding (where you have no defenses).