Tenants Don't Qualify for Class Action

Tenants sued landlords of four buildings that received J-51 tax benefits and sought to make the case a class action. Tenants claimed that landlords inflated rents beyond legal rents, failed to give tenants rent-stabilized leases, and misrepresented the amount of individual apartments improvements (IAIs) performed on apartments.

Landlords claimed the case should be dismissed. They argued that: (a) tenants' General Business Law (GBL) Section 349 claim concerning consumers didn't apply to private disputes between landlords and tenants; (b) tenants' illegality and contract claims should be dismissed because tenants asserted only that leases violated the Rent Stabilization Law and this wasn't a contract claim; (c) a class action wasn't appropriate because the proposed class definition couldn't be determined prior to determination on the merits on any individual claims and wouldn't result in fair or efficient resolution of each tenant's claims; (d) tenants' overcharge claims were inherently technical and should be referred to the DHCR for better resolution; and (e) the claims of some of the tenants were time-barred since they sought to challenge IAI rent increases that occurred more than four years before the complaints were filed.

The court ruled for landlord and dismissed the case. Among other things, the court stated that the DHCR should decide tenants' claims given its expertise in rent regulation. Also, tenants' claims of unlawfully deceptive acts and practices under GBL Section 349 presented only private disputes and not consumer-oriented conduct aimed at the public at large. And tenants' complaint didn't identify any lease provisions that were breached, so the breach of contract claim failed. A class action would be improper since there were two main categories of claims involving different time periods and variations in the fraudulent IAI claims. A class action generally arises from claims involving the same facts and circumstances as the claims of the class members. Tenants' claims also involved IAIs in differing amounts, done at different times, and done by different landlords.

Quinn v. Parkoff Operating Corporation: 59 Misc.3d 1202(A), 2018 NY Slip Op 50349(U) (Sup. Ct. NY; 3/16/18; Reed, J)