Chinatown Preserv. HDFC v Yu Hua Chen, 2010 NY Slip Op 50730(U) [27 Misc 3d 1213(A)]

Another exception to enforcing a waiver clause arises if a respondent can demonstrate that a
counterclaim is so inextricably intertwined to the nonpayment proceeding that the counterclaims
"bear directly upon the landlord's right to possession." (Lucas v Florent, Inc., 19 Misc 3d 760, 762-63 [Hous Part, Civ Ct,
NY County 2008].) Counterclaims "inextricably intertwined" with the petitioner's claims will not
be dismissed. (Id.) This is so because "joint resolution of the claims will expedite
disposition of the entire controversy, avoid multiplicity of other lawsuits between the parties to
accomplish the same result, do speedy justice for all and eliminate greater delay and expense.'"
(Ring v Arts Intl, Inc., 7 Misc 3d
869, 881 [Hous Part, Civ Ct, NY County 2005], quoting Haskell v Surita, 109 Misc
2d 409, 414 [Hous Part, Civ Ct, NY County 1981].)

Respondents' counterclaims are for rent overcharge, diminution of services, fraud, and
breach of contract. Although some overcharge counterclaims have been found to be inextricably
intertwined and thus permitted despite contrary lease provisions, this is not always the case.
(E.g., Yanni v Bruce Brandwen Productions, Inc., 160 Misc 2d 109, 112 [Hous
Part, Civ Ct, NY County 1994] [holding that overcharge counterclaim is inextricably intertwined
where administrative review previously established a willful overcharge but failed to compute
the amount owed to respondent].) If the counterclaims for overcharge are for a large amount that
go back several years and the landlord's claim is for a "relatively small amount of rent," then
allowing the counterclaims "would only serve to turn this proceeding from summary to
protracted and bog down its disposition.'" (Lucas v Florent, 19 Misc 3d at 763, quoting