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Belkin Burden Wenig & Goldman, LLP

E D I T O R S

Magda L. Cruz

UPDATE

Aaron Shmulewitz Kara I. Rakowski

AP RIL 2014 | VOL U M E 3 1

L IT IGAT ION UP DAT E

Inside This Issue LITIGATION UPDATES The Importance of Corroborating Testimony in an Odor-Based Nuisance Holdover Proceeding ......1, 2 Emergency Access To A Sealed Apartment ......1, 2, 3 The Certificate Of Conformity – A Trap For The Unwary Litigator .................5 TRANSACTIONAL UPDATE An Update On Maintenance Of Adjacent Building Chimneys ...........................3

THE IMPORTANCE OF CORROBORATING TESTIMONY IN AN ODOR-BASED NUISANCE HOLDOVER PROCEEDING By Brian Y. Epstein A nuisance is a condition that threatens the comfort and safety of others in a building. Moreover, the tenant’s behavior at issue must constitute “a pattern of continuity or recurrence of objectionable conduct.” Successfully proving a nuisance based upon offensive and/or noxious odors, often viewed by the Court as subjective in nature, often turns on

the corroborating testimony of disinterested parties, such as affected neighbors, in addition to testimony from the property owner or persons or contractors employed or retained by the property owner. In an extreme nuisance and odor-based holdover proceeding successfully handled by this Firm, the testimony of an affected neighbor (in addition to owner’s employees and agents), after years of contentious litigation in Supreme Court and Civil Court, was key to obtaining an eviction. Tenant’s continued on page 2

CASES OF NOTE................4 TRANSACTIONS OF NOTE ...........................4

L IT IGAT ION UP DAT E

CO-OP / CONDO CORNER ....................... 6, 7

EMERGENCY ACCESS TO A SEALED APARTMENT

NOTABLE ACHIEVEMENTS ...............7

By Jordi Fernandez, Esq. Many property owners in New York have found themselves in a predicament when an occupant dies in an apartment and the apartment is sealed by the NYPD placing a seal on the door. The police seal indicates that the NYPD

either investigated or is currently investigating a crime scene in the apartment or the cause of death of an occupant who died in an apartment. Often, even after the investigation is closed, the police seal remains on the door for months, sometimes even over a year. Even after the NYPD concludes its investigation, the property owner should never tamper with or break the police seal. continued on page 2

WE’RE GOING GREEN

Effective January 2014, BBWG has discontinued the printed copy of the Newsletter. To continue to receive the electronic version of the Newsletter, please sign up for our mailing list at www.bbwg.com.

Belkin Burden Wenig & Goldman, LLP | 270 Madison Avenue | New York, NY 10016 | Tel 212 .867 .4466 | Fax 212 .867 .0709

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L ITIGATION UPDATE

THE IMPORTANCE OF CORROBORATING TESTIMONY IN AN ODOR-BASED NUISANCE HOLDOVER PROCEEDING continued from page 1

apartment, described by the Court as in “horrific condition,” had extensive roach and fly infestation in all rooms, inside picture frames, along cable wires, inside dressers and in chests of drawers. Tenant kept open food containers and garbage everywhere in the apartment while allowing the dishwasher to remain filled with black, putrid-smelling water. Tenant’s actions exposed neighbors to a constant onslaught of the odors and infestation in the common halls and their neighboring apartments. Tenant’s refusal to provide access and failure to adhere to necessary extermination and cleaning protocols set forth in earlier probationary stipulations and Court Orders resulted in a four (4) day hearing that culminated in tenant’s eviction. Notably, the Court, in permitting owner to move forward with the eviction, found that the vivid

description of the horrific conditions experienced by the affected neighbor for years was so pervasive that tenant’s eviction was immediately warranted. The Court found that the neighbor’s testimony was “particularly credible” in the description of the “horrendous and unhealthy conditions” the neighbor was subjected to in the common areas and within the neighbor’s apartment in the form of odors and infestation. Here, the willingness of the affected neighbor to testify at the hearing was key, credible evidence needed to obtain the eviction. While all odor-based nuisance holdover proceedings may not be as extreme as described above, it is clear that in such cases, Courts will give great weight to the disinterested testimony of persons who do not have a direct financial interest in the recovery of an apartment that is the source of potentially subjective odors. It is

suggested that owners and managing agents document all complaints received from affected neighbors and seek, preferably in advance of the commencement of litigation, the cooperation of neighbors to testify in Court about the conditions while informing them that affidavits or letters to the Court in lieu of live testimony are insufficient and/or inadmissible. The likelihood and availability of disinterested testimony, taken together with the severity of the underlying allegations, will allow owners and managing agents to make better informed decisions at the earliest stages of litigation when weighing the options of entering into a stipulation of settlement or demanding a trial. Using this approach, where applicable, will serve to control costs, placate affected neighbors and eliminate the nuisance in the building. Brian Y. Epstein (bepstein@bbwg.com) is a partner in BBWG’s Litigation Department.

L ITIGATION UPDATE

EMERGENCY ACCESS TO A SEALED APARTMENT continued from page 1

In order to have the seal removed so that the property owner has legal possession of its property without any obstructions, the Estate of the decedent can often coordinate the legal removal of the police seal with the NYPD along with a surrender of the apartment to the property owner. Sometimes, however, the process of an authorized person being appointed to represent the Estate can be lengthy and the property owner needs to address an emergency condition in the apartment that cannot wait for the affairs of the 2

Estate to be wrapped up. Maybe there is food rotting in the refrigerator or the trash was not removed, or an emergency leak occurs, or the apartment requires immediate extermination. Whatever the emergency might be, the property owner should not have to wait for affairs of the Estate to conclude. What does the property owner do in that situation? Recently, Belkin Burden Wenig & Goldman, LLP received immediate relief from the Supreme Court in this

situation. The property owner required immediate access to address conditions in the apartment. The decedent’s family was embroiled in a battle concerning the probate of the will and the appointment of a representative to the Estate was delayed as a result. BBWG received temporary access from the NYPD. In order to get that temporary access, BBWG sued the NYPD in Supreme Court, seeking a declaratory judgment and injunctive relief. The lawsuit was


L ITIGATION UPDATE

continued from page 2

immediately placed on the Supreme Court’s calendar, based on the conditions that required immediate attention, by filing a request for a temporary restraining order. The NYPD immediately settled with the property owner and permitted access to address the emergency conditions. The apartment was re-sealed

again after the emergency access. The Estate surrendered the premises and had the seal removed as part of the surrender. If you have a similar circumstance that requires immediate access to an apartment that has been sealed by the NYPD or you are trying to obtain a surrender or access

from an Estate, BBWG can help you obtain that relief. Jordi Fernandez (jfernandez@bbwg. com) is an associate in BBWG’s Litigation Department.

TRA NSACTIONAL UP DAT E

AN UPDATE ON MAINTENANCE OF ADJACENT BUILDING CHIMNEYS By Robert Jacobs Sometimes disputes over chimneys extended by owners of taller building many years ago run hotter than the exhaust emanating from the chimneys themselves. One such issue is the duty to maintain the extension. As discussed in an article that appeared in Legal Update last year entitled It’s Flue Season Again—Chimneys and Adjacent Buildings, under the Building Codes dating back to at least 1915, the constructor of a taller building was obligated to extend the chimneys of adjacent pre-existing shorter buildings. This obligation was carried forward into the 1938 and 1968 Buildings Codes. As noted in last year’s article, the 1968 Building Code specifically provides that, in addition to the obligation to extend the chimney of a smaller pre-existing building, the owner of the taller building shall “provide for the maintenance, repair and/ or replacement of such extensions or added equipment.” Significantly, there is no time limit stated for the obligation of the owner

of the taller building to maintain the chimney of the adjacent shorter building. The question that has remained unanswered for years is the obligation of an owner to continue to maintain a chimney that its predecessor in title extended prior to 1968. In 30 E. 33rd St. Realty LLC v. PPF Off Two Park Ave. Owner, LLC, 105 A.D.3d 515, the Appellate Division, 1st Department (which governs appeals in New York County) answered this question in clear and unambiguous language. In that case, an owner of a building had its chimney extended in 1927 by an adjacent building owner when it constructed a building to a greater height. When the current owner of the taller building refused to pay for the maintenance of the chimney extension, the owner of the shorter building commenced an action to compel the adjacent owner to maintain the chimney extended in 1927. After reviewing the history of the applicable law and the language of the 1968 Building Code, the Appellate Division noted that, while prior statutes imposed an obligation to extend the chimneys, the obligation to maintain them only appeared in the 1968 Buildings Code. In the decision,

the Court noted that “it has long been a primary rule of statutory construction that a new statute is to apply prospectively and will not be given retroactive construction unless an intention to make it so can be deduced from its wording.” The Court went on to note that nothing in the 1968 statute indicates an intention that it be given retroactive effect. Accordingly, the Court declined to order that the owner of the taller building maintain the extended chimney and dismissed the action. BBWG routinely counsels owners in resolving chimney disputes and other issues affecting the rights and obligations of adjacent building owners. Oddly, this is one of the few pronouncements from any appellate court in this State with respect to the continuing obligation to maintain chimneys extended under the Building Code. This decision should be helpful in resolving disputes between adjoining buildings where a chimney was extended in the past. Robert Jacobs is a partner in BBWG’s Transactional Department. For more information on disputes or issues involving adjacent buildings, including chimneys, please contact Mr. Jacobs (rjacobs@bbwg.com).

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CASES OF NOTE In a case of apparent first impression, JOSEPH BURDEN, co-head of BBWG’s Litigation Department, and DAVID BRAND, an associate in that Department, represented a condominium Board in successfully obtaining an award of specific performance in exercising its right of first refusal to match a purchase offer, designating a neighbor of the seller as purchaser, and compelling the unwilling seller to sell the apartment to the neighbor, which resulted in the condominium receiving a significant payment from the purchaser for the license of a hallway area between the two apartments. The decision was reported on law360.com on March 5 and in a front page story in The New York Law Journal on March 6. ROBERT JACOBS, a partner in BBWG’s Transactional Department, represented a condominium sponsor/commercial unit owner in an arbitration proceeding before the American Arbitration Association, which upheld the special (lower) allocation of common charges for the commercial unit against the condominium Board’s challenge. BBWG previously obtained a decision from the Division of Housing and Community Renewal that a West Side apartment building was not part of a “horizontal multiple dwelling” and therefore not subject to rent stabilization. Tenant challenged that decision by commencing an Article 78 proceeding in Supreme Court. BBWG and DHCR prevailed in the court proceeding, successfully defending the agency determination. ORIE SHAPIRO, a partner in BBWG’s Administrative Law Department, and SHERWIN BELKIN, a partner in BBWG’s Administrative Law and Appeals Departments, represented the owner in these and other related administrative and judicial proceedings. Partners, SHERWIN BELKIN and MAGDA L. CRUZ are co-counsel together with Herrick, Feinstein LLP in the action brought on behalf of property owners and real estate industry groups challenging the amendments promulgated in January 2014 by the New York State Division of Housing and Community Renewal to the Rent Stabilization Code and the Emergency Tenant Protection Regulations: Portofino Realty Corp., et al. v. New York State Division of Housing and Community Renewal.

TRANSACTIONS OF NOTE AARON SHMULEWITZ, head of BBWG’s co-op/condo practice, represented an Upper East Side co-op in the sale of a retail co-op unit by its owner (a charitable foundation) to Chanel Inc. for more than $123 million ($31,000/square foot), which is believed to be the highest price (and per-square-foot price) ever paid for a Manhattan co-op unit. The co-op received $4 million in transfer fees from the transaction, which was reported in The Wall Street Journal and in the online editions of The Commercial Observer and The Real Deal on March 3. HOWARD WENIG and CRAIG L. PRICE, partners in BBWG’s Transactional Department, represented a client in the purchase and financing of multiple warehouse properties in the Bronx. MR. PRICE and ALLISON LISSNER, a partner in the Department, also represented the purchaser of a commercial condominium unit in Lower Manhattan, as part of a multi-layered transaction that was part of a 1031 exchange and involved purchase money financing and the negotiation of a long term garage lease. MR. PRICE and NICKI NEIDICH, an associate in the Department, also represented the sponsor of an Upper West Side condominium conversion in the bulk sale of all remaining rent-stabilized units to an investor.

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L ITIGATION UPDATE

THE CERTIFICATE OF CONFORMITY – A TRAP FOR THE UNWARY LITIGATOR By William Rifkin In litigation, it is not uncommon for an attorney to submit an affidavit that has been executed and notarized outside the state of New York. It is also not uncommon that the out-of-state affidavit is accepted by the adversary and by the court without question. However, if a “Certificate of Conformity” is not attached to the affidavit, then the affidavit is a nullity, and can be ignored by the court. Such an omission could render the motion or opposition to the motion ineffectual. This could result in the motion either being granted on default (if the opposition is deemed ineffectual), or denied (if the motion did not have the requisite affidavit). CPLR §2309(c) states that: “An oath or affirmation taken without the state shall be treated as if taken within the state if it is accompanied by such certificate or

certificates as would be required to entitle a deed acknowledged without the state to be recorded within the state if such deed had been acknowledge before the officer who administered the oath or affirmation.” The “Certificate of Conformity” attests that the oath given by the notary was in accordance with the laws of the state in which the affidavit or affirmation was executed, or pursuant to the laws of the State of New York. In addition to the “Certificate of Conformity” the affidavit or affirmation must also have a “Certificate of Authentication” in accordance with Section 312 of the Real Property Law stating that the person who administered the oath had the power to do so under the laws of the foreign jurisdiction. The necessity for a “Certificate of Conformity” was brought home in CitiMortgage, Inc. v. Williamson, (Sup. Ct. Kings Co. 2013), involving a residential mortgage foreclosure action that was decided on December 9, 2013. CitiMortgage,

in support of its motion for summary judgment, annexed an affidavit of merit that was executed in another state. A certificate of conformity was not attached to that affidavit. The court deemed the affidavit defective, and would not consider it. The motion was denied because of a lack of affidavit to merit, as well as CitiMortgage failing to establish that it had standing to commence the action. Although some courts hold that the lack of a “Certificate of Conformity” can be cured or can be ignored if it appears that the affidavit was notarized, being a de minimi error, it is clear that the better practice is to ensure that the affidavit contains a “Certificate of Conformity” and “Certificate of Authentication” to avoid unnecessary litigation expense over a peripheral issue, and avoiding embarrassment to the practitioner in having to explain why the motion was denied or granted on default. William Rifkin (wrifkin@bbwg.com) is a partner in BBWG’s Litigation Department.

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CO-OP | CONDO CORNER By Aaron Shmulewitz Aaron Shmulewitz heads the Firm’s co-op/condo practice, consisting of more than 300 co-op and condo Boards throughout the City, as well as sponsors of condominium conversions, and numerous purchasers and sellers of co-op and condo apartments, buildings, residences and other properties. If you would like to discuss any of the cases in this article or other related matter, you can reach Aaron at 212-867-4466 or (ashmulewitz@bbwg.com).

HOA MEMBER ENTITLED TO PRELIMINARY INJUNCTION TO STOP HOA’S IMPOSITION OF FINES AND SUSPENSION OF PARKING PRIVILEGES FOR HIS GROWING BAMBOO Tucciarone v. Olde Oyster Bay Homeowners Association Supreme Court, Nassau County COMMENT | The Court noted that the HOA had failed to follow its own stated procedures in adopting and imposing fines and the parking prohibition. TRANSFER OF CONDO FROM MOTHER TO SON VOIDED AS BAD FAITH ATTEMPT TO DEFRAUD HER JUDGMENT CREDITOR Sardis v. Frankel Appellate Division, 1st Department COMMENT | The transfer (without real consideration) occurred shortly after a judgment was entered against the mother for stock churning.

REFEREE IN MORTGAGE FORECLOSURE CAN, IN HIS DISCRETION, ORDER SALE OF 19 CONDO UNITS AS ONE LOT INSTEAD OF IN INDIVIDUAL SALES Bethpage FCU v. Northwood Village Supreme Court, Suffolk County COMMENT | The Court noted the wide latitude that referees have. QUESTIONS OF FACT AS TO TIMELINESS OF CO-OP’S NOTICE OF CLAIM TO INSURER PRECLUDE SUMMARY JUDGMENT IN CO-OP’S SUIT OVER DISCLAIMER OF COVERAGE 69 West 9 Owners Corp. v. Admiral Indemnity Company Appellate Division, 1st Department COMMENT | The moral of the story is over-notify, overnotify, over-notify.

CO-OP AWARDED $30,000 IN LEGAL FEES IN DOG EVICTION HOLDOVER CASE AGAINST SHAREHOLDER

CO-OP BOARD MEETING MINUTES NOT DEFAMATORY, DO NOT SUPPORT OTHER CLAIMS BY SELLER IN FAILED SALES

East River Housing Corp. v. Gilbert Civil Court, New York County

Bridgers v. West 82nd Street Owners Corp. Appellate Division, 1st Department

COMMENT | The Court analyzed the law firm’s time records in light of the complexity of the case and the issues involved.

COMMENT | The seller blamed failed sales on Board minute references to his illegal alterations. A ruling in his favor would have been disastrous for co-ops and condos.

STIPULATION ENFORCED IN CONDO MORTGAGE FORECLOSURE ACTION, SALE ORDERED TO PROCEED U.S. Bank v. Lam Supreme Court, New York County COMMENT | A defendant had sought to void the 4-year old stipulation based solely on the passage of time.

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CONDO UNIT OWNER CANNOT SUE CONDO ATTORNEY FOR ALLEGED WILLFUL EXAGGERATION OF LIEN AMOUNTS Suarez v. Jacobs Supreme Court, Rockland County COMMENT | The decision was based on technical grounds; a ringing substantive defense of the good that condo attorneys do would have been welcome.


SPONSOR SUIT AGAINST CONDO FOR REIMBURSEMENT OF REAL ESTATE TAX ABATEMENT EXPENSES DISMISSED Kolanu Partners, LLC v. Wu Supreme Court, New York County COMMENT | For some inexplicable reason, the suit was brought as a special expedited suit “ for money only,” normally reserved for unpaid promissory notes, and plainly inapplicable to a fact-dependent case like this.

CONDO BOARD CAN EXERCISE RIGHT OF FIRST REFUSAL AND HAVE ITS DESIGNEE (A BOARD MEMBER) BUY APARTMENT FROM UNWILLING SELLER The South Tower Residential Board of Managers of Time Warner Center Condominium v. The Ann Holdings, LLC Supreme Court, New York County COMMENT | This case of apparent first impression upheld and greatly broadened the discretionary decision-making rights of a Board under the business judgment rule. BBWG represented this successful condo Board.

NOTABLE ACHIEVEMENTS JEFFREY L. GOLDMAN, co-head of BBWG’s Litigation Department, and NICHOLAS DAVID, an associate in the Department, obtained dismissal of virtually all claims that had been brought by Attorney General Eric Schneiderman against various entities affiliated with long-time firm client Donald Trump. MR. GOLDMAN was also quoted in an article in The Daily News on March 5 reporting on a new suit that Mr. Trump had filed against the Attorney General, seeking $100 million in damages for malicious prosecution of the underlying action. AARON SHMULEWITZ, head of BBWG’s co-op/condo practice, was quoted in an article in The New York Times Sunday Real Estate section on January 24 discussing differing approaches to prospective purchase applications by co-op and condo Boards. CRAIG L. PRICE, a partner in BBWG’s Transactional Department, was quoted in the January 29 edition of dnainfo.com in an article entitled “Hidden Apartment Sales Are On The Rise, Brokers Say,” and in the February 14 edition of Real Estate Weekly in an article entitled “New York Brokers Face Legal Hurdles When Selling Global Real Estate.” MR. PRICE also spoke at a January 29 Downtown REBNY meeting on the effective use of mortgage assignments as a successful negotiating tool in transactions. MR. PRICE also lectured on March 4 at Warburg Realty’s New Broker Training program on the topic of “Working With Your Attorney.” MAGDA L. CRUZ, a partner in BBWG’s Litigation and Appeals Departments, spoke on The Rent Code Amendments of 2014 at a continuing legal education program sponsored by the Rent Stabilization Association of N.Y.C. and the Community Housing Improvement Program at the New York County Lawyers’ Association on March 5, 2014. KARA RAKOWSKI, a partner in BBWG’s Administrative Law Department, was a speaker at a January 30 seminar sponsored by the Community Housing Improvement Program on “Anti-Discrimination Concerns for Multi-Family Properties.” STEVEN KIRKPATRICK, a partner in BBWG’s Litigation Department, was quoted in the January 20 edition of dnainfo.com in an article entitled “Top 10 Tips For Buying A Real Estate Wreck.”

LISA GALLAUDET, an associate in BBWG’s Litigation Department, authored an article that appeared in the February edition of The Mann Report entitled “The New Loft Law Regulations.”

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Belkin Burden Wenig & Goldman, LLP 270 Madison Avenue | New York, NY 10016

www.bbwg.com

New York Office | 270 Madison Avenue | New York, NY 10016 | Tel 212 .867 .4466 | Fax 212 .867 .0709 Connecticut Office | 495 Post Road East, 2nd Floor | Westport, CT 06880 | Tel 203 .227 .1534 | Fax 203 .227 .6044 Please Note: This newsletter is intended for informational purposes only and should not be construed as providing legal advice. This newsletter provides only a brief summary of complex legal issues. The applicability of any or all of the issues described in this newsletter is dependent upon your particular facts and circumstances. Prior results do not guarantee a similar outcome. Accordingly, prior to attempting to utilize or implement any of the suggestions provided in this newsletter, you should consult with your attorney. This newsletter is considered “Attorney Advertising� under New York State court rules.

BBWG April 2014 Newsletter  
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