In the News: Setback for 50 Murray Rent Stabilization

••• “New York State’s Appellate Division reversed a Supreme Court ruling that granted residents of 50 Murray St. in Lower Manhattan rent stabilization under a state program that provides landlords millions in tax exemptions. The decision comes as a huge win for landlords, but could result in the state’s highest court issuing a final ruling on the contentious legal issue that has split the lower courts, according to the tenants’ attorney.” —Downtown Express

••• “Rights activists for the disabled declared victory on Tuesday in their fight for future subway access near the New York Stock Exchange. Community Board 1 voted to support developer Madison Equities’ proposed deal with the city to pay for construction of two subway elevators in exchange for additional floor area for their super-tall tower, set to rise at 45 Broad Street.” —Tribeca Trib

••• Tribeca Therapy’s Matt Lundquist was quoted in an amusing Wall Street Journal article about the toll bitcoin is taking on relationships where only one member is obsessive about it.

••• “The nation’s highest court has scuttled disgraced pol Sheldon Silver’s bid to dodge a second jury trial on corruption charges stemming from his alleged $4 million quid-pro-quo scheme. The former Assembly Speaker had hoped that the US Supreme Court would abet his legal scheme to avoid a second trial after a lower court upheld his appeal on a technicality, but the lofty legal body gave notice Jan. 16 that they wouldn’t hear Silver’s case.” —Downtown Express

9 Comments

  1. If you read the whole article, you see the tenant’s attorney is disingenuous. This case is not going to the Court of Appeals. Let’s see if the landlord as the prevailing party moves to recover their attorney’s fees from the tenants under the applicable provision of their leases.

    From the bottom of the article –

    Reason one:

    “[T] he Court of Appeals rarely hears cases that don’t feature split decisions between two different Appellate Division courts, which — in the case of 421-g — could never happen because of the geographically narrow reach of the law, which only applies to Lower Manhattan, according to lawyer Louise Barracks, who represented the Real Estate Board of New York, also a party to the 50 Murray St. case.”

    Reason two: an appellant needs special Court permission to appeal a unanimous (5-0) AD decision to the Court of Appeals (as opposed to a narrow 3-2 defeat).

    “If that’s the case, and the Court of Appeals declined to take up the case, the Appellate Division’s unanimous decision favoring landlords is the whole ball game, and the end of tenants’ hopes of lower rents and reparations, according to Barracks.”

    Reason three: this decision is as of now binding on all the other similar cases.

    “’Unless this goes up to the Court of Appeals, this is the law of the land in New York,’ she said. ‘The highest court will have opined on it, and there’s no one else who can decide to the contrary.’”

    • …And yet the Appellate Division granted leave to the Court of Appeals Monday.

      • Actually, Tuesday.

        It is surprising, except for the political nature of the matter. The burden is arguably now on the tenants.

        April 24, 2018

        John Kuzmich, et al.,
        Plaintiffs-Respondents,

        v

        50 Murray Street Acquisistion (sic) LLC,
        Defendant-Appellant.

        – – – – – – – – – – – – – –

        The Real Estate Board of New York
        and The Public Advocate for the City
        Of New York,

        Amici Curiae.

        Plaintiffs-respondents having moved for leave to appeal to the Court of Appeals from the decision and order of this Court, entered on January 18, 2018 (Appeal No. 5479), Now, upon reading and filing the papers with respect to the motion, and due deliberation having been had thereon, It is ordered that the motion for leave to appeal to

        the Court of Appeals is granted, and this Court, pursuant to

        CPLR 5713, certifies that the following question of law, decisive of the correctness of its determination, has arisen, which in its opinion ought to be reviewed by the Court of Appeals:

        “Was the order of the Supreme Court, as reversed by this Court, properly made?” This Court further certifies that its determination was made as a matter of law and not in the exercise of discretion.

        ENTERED: April 24, 2018

        _____________________ CLERK

        Present: Hon. Rolando T. Acosta, Presiding Justice, John W. Sweeny, Jr. Judith J. Gische Richard T. Andrias, Justices

        M-889

        Index No. 155266/16

      • Speaking of the Court of Appeals, here’s today’s landlord-friendly rent-stabilization decision, and it wouldn’t make me optimistic as a tenant about 421-g.

        “The state Court of Appeals issued a decision Thursday that gives a huge break to landlords of rent-stabilized buildings by ruling that they don’t have to re-regulate up to 150,000 market-rate apartments.

        “Chief Appeals Court Judge Janet DiFiore overturned a two-year-old ruling in the case of Altman v. 285 West Fourth LLC, which could have given tenants the legal grounds for challenging market-rate rents in formerly stabilized apartments, according to the Commercial Observer.”

        https://nypost.com/2018/04/27/court-rules-in-favor-of-landlords-in-rent-regulation-case/

  2. Thanks James, for your unwavering clarity derived from the REBNY lawyer. If this is the law of the land, and the landlords believed so, they would have moved to evict the tenants. They know, as we do, that there is always a higher court.

    • To respond and clarify:

      1. Nothing the REBNY lawyer said was opinion, but either facts or probabilities.

      What the tenants’ lawyer said is opinion at best: “It needs a higher court decision to give clarity, certainty, and finality.” A higher court decision is not needed here as a matter of law. It is also in large part wishful thinking.

      The Court of Appeals “could” issue a ruling in this matter, but only if it is properly before them. It will not be before the Court of Appeals as of right, nor is it ever likely to be before the Court of Appeals.

      When lower courts within *a single department* of the Appellate Division are split, as we have here, that Appellate Division can resolve the split itself for that department, and with finality where the law in question only applies within a single department. The Court of Appeals (the state’s highest court) resolves conflicting decisions when the conflict is across *different departments* of the Appellate Division. That is not the case here.

      2. Despite what “we know,” there isn’t “always a higher court,” or at least access to it.

      In addition to the above, these tenants lost a unanimous decision and thus cannot appeal to the “higher court” as of right. They must obtain permission (“leave”) to appeal further, either from the very same AD court that just ruled unanimously against the tenants or from the Court of Appeals itself.

      Is the AD likely to give the tenants a second chance, possibly to have the Court of Appeals overrule what the AD just decided regarding a law affecting only its department? Probably not, but there’s always a chance.

      (That said, I bet the tenants’ lawyer would happily charge his clients to write and file a motion to reargue and/or seek leave to appeal. It delays having to explain to the tenants why they may have to pay the landlord’s legal fees in this matter.)

      The Court of Appeals takes only certain cases on, usually if there are constitutional questions, novel or unique issues of law, issues of public importance, a ruling that fails to follow a Court of Appeals precedent, conflicting rulings among the Appellate Divisions, issues that may help to explain or define a recent Court of Appeals ruling, an issue that may draw an important distinction from a Court of Appeals ruling, a recent statute that needs to be interpreted, new or emerging legal issues, or new or emerging technologies.

      421-g dates back to 1995 and is hardly a recent statute. Where is the unique or vital or constitutional issue of law or issue affecting a broad population in this decision that needs interpretation by the Court of Appeals? I guess we will see.

      3. Why would the landlord want to evict tenants paying market-rate rent? The landlord never cross-moved to eject these tenants or asserted any violations of the lease. As I understand it, both sides sought a declaratory judgement as to whose interpretation of the enforceability of the lease as written was correct.

      Landlords do not make money from empty spaces, whether apartments or retail stores, despite what some would have you believe. (One plaintiff’s lease rent cited in the summons and complaint was for $10,295. monthly.)

      More to the point, why would this decision empower the landlord to evict (or eject, here in Supreme Court) a paying, market-rate tenant with an in-force lease? At most they may decide not to renew leases on apartments deemed out from under rent stabilization and/or terminate month-to-month tendencies. That is not an eviction.

  3. That is an amazing decision! I’ve been saying for years that the number of rent stabilized units is a farce because the initial rent is always set too high. But to see that the legislature contemplated the fact that no apartments would qualify as rent stabilized… so brilliant politically! They appeased tenants by calling buildings rent stabilized, they appeased landlords because no buildings actually are.

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