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Raden v W 7879, LLC

Supreme Court of New York, Appellate Division, First Department

August 16, 2018, Decided

No Number in Original

Opinion

Judgment, Supreme Court, New York County (Joan M. Kenney, J.), entered January 25, 2018, awarding plaintiffs damages for rent overcharges, affirmed, without costs. Appeal from order, same court and Justice, entered March 7, 2016, which confirmed the special referee's report, dismissed, without costs, as subsumed in the appeal from the judgment.

In 2010, pursuant to Roberts v Tishman Speyer Props., L.P. (13 NY3d 270, 918 N.E.2d 900, 890 N.Y.S.2d 388 [2009]), defendants determined that plaintiffs' previously rent-stabilized apartment had been improperly deregulated and that plaintiffs were entitled to a rent adjustment and a rent overcharge payment. Defendants calculated the overcharge according to Rent Stabilization Code (9 NYCRR) § 2526.1, which provides that "[t]he legal regulated rent for purposes of determining an overcharge shall be deemed to be the rent charged on the base date, plus in each case any subsequent lawful increases and adjustments" (subd [a] [i]), and that "no determination of an overcharge and no [*2]  award or calculation of an award of the amount of an overcharge may be based upon an overcharge having occurred more than four years before the [overcharge] complaint is filed" (subd [a] ). Defendants chose May 1, 2010, as the date on which plaintiffs would be deemed to have filed a claim for overcharges, in the absence of any such claim having been filed, and then used these 2526.1 (a) standards to fix the base date for determining the overcharge as May 1, 2006, the date four years before they undertook their review. Defendants then reduced plaintiffs' rent and forwarded payment to them for the overcharges so reflected. In June 2010 defendants filed registrations for the years 2006, 2007, 2008 and 2009 in accordance with these recalculations.

Plaintiffs then brought the instant action seeking declaratory relief, additional overcharges, treble damages and attorneys' fees. After denying defendants' motion for summary judgment dismissing the complaint, Supreme Court referred the matter to a special referee to hear and report, directing the referee to calculate the legal rent under the DHCR regulations, calculate the overcharges, determine whether defendants had willfully registered [*3]  an illegal rent, and, in the absence of finding fraud or willfulness, apply the four-year statute of limitations to the overcharge claim.

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2018 N.Y. App. Div. LEXIS 9036 *; 2018 NY Slip Op 05799 **; 164 A.D.3d 440; 84 N.Y.S.3d 30

 [**1]  Joel Raden et al., Appellants, v W 7879, LLC, et al., Respondents.

Notice: THE LEXIS PAGINATION OF THIS DOCUMENT IS SUBJECT TO CHANGE PENDING RELEASE OF THE FINAL PUBLISHED VERSION..

 THIS OPINION IS UNCORRECTED AND SUBJECT TO REVISION BEFORE PUBLICATION IN THE OFFICIAL REPORTS.

Subsequent History:  [*1] As corrected through Wednesday, October 3, 2018

Motion granted by Joel Raden v. W7879, LLC, 34 N.Y.3d 1032, 2019 N.Y. LEXIS 3520, 115 N.Y.S.3d 218, 138 N.E.3d 1100 (Dec. 17, 2019)

Affirmed by Matter of Regina Metro. Co., LLC New York State Div. of Hous. & Community Renewal, 2020 N.Y. LEXIS 779, 2020 NY Slip Op 02127 (N.Y., Apr. 2, 2020)

CORE TERMS

overcharge, rent, stabilized, apartment, calculate, treble damages, four year, deregulated, willfulness, four-year, attorney's fees, special referee, rent-stabilized, recalculation, plaintiffs', confirmed, look-back, regulated, landlord, rental, costs