Montera v. KMR Amsterdam LLC, 193 A.D.3d 102 (2021)

Citation: Montera v. KMR Amsterdam LLC, 193 A.D.3d 102 (2021)
Parent Document: Montera v. KMR Amsterdam LLC, 193 A.D.3d 102 (2021)
Jurisdiction: New York (state)
Effective Date: 2021-02-09
Original Source: https://www.courtlistener.com/opinion/4855109/montera-v-kmr-amsterdam-llc/ ↗

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I disagree with my colleagues to the extent they find that this rent overcharge case presents a possible claim of fraud that should be allowed to proceed on that theory, with attendant discovery. I do not believe there is a colorable claim of fraud. As a result, I would limit plaintiff's claims to rent overcharges predicated on a base date rent in the amount defendant actually charged four years before the filing of the complaint plus allowable increases. This result, I believe, is required by the recent Court of Appeals decision in Matter of Regina Metropolitan Co., LLC v New York State Div. of Hous. & Community Renewal (35 NY3d 332 [2020][Regina]), which presents sweeping analytical changes to the resolution of overcharge cases, like this one, that arose after Roberts v Tishman Speyer Props., L.P. (13 NY3d 270 [2009]). As more fully discussed below, Regina holds that the remedies for Roberts overcharge cases are those provided in the statutory and regulatory provisions applicable to rent stabilization. The Court of Appeals clearly rejected common-law remedies afforded in earlier Appellate Division cases. While the Court acknowledged that there can be a common-law fraud exception in a Roberts overcharge case, as there is in any overcharge claim, Regina makes [*6]it clear that this exception applies only in limited circumstances. Fraud in the context of all rent overcharge cases, including Roberts overcharge cases, is subject to the same rigor as any common-law fraud case, requiring a false representation, scienter, reliance and injury, none of which exists here (see Regina at 356, n 7). The majority reasons that a possible claim of fraud may exist here because defendant failed to register this apartment with the New York State Division of Housing and Community Renewal (DHCR) after it knew, or should have known, that registration was required by Roberts. While the failure to register a rent regulated apartment violates the rent stabilization laws and code, there are statutory remedies for such violations. Failure to register is not in itself a fraud. Nor should it justify access to broad discovery on the issue of fraud.

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