Fatal Defect

The case of 129 East 69th Street Corp. v. Estate of Louise M. Anderson illustrates the importance of proper service on a defendant in a co-op eviction proceeding.

Here, the co-op petitioner claimed in a holdover proceeding that respondents continued in possession of the subject premises, a cooperative apartment, after the lease agreement expired. Respondents answered with 16 affirmative defenses and two counterclaims. The co-op moved to strike respondents' affirmative defenses and counterclaims and, in the alternative to dismissing respondents' ninth affirmative defense, to permit petitioner to join Nadine S. Liebhardt as a respondent in her capacity as executor of the Estate of Louise M. Anderson.

Respondents alleged that the co-op's predicate notices were fatally defective and unamendable. The notice to cure and the termination notice were addressed to the "Estate of Louise M. Anderson (Lessee)" and to the "Estate of Louise M. Anderson c/o Nadine S. Liebhardt, Esq." Respondents contended that neither of those entities was a legally recognizable party. Under EPTL Section 11-3.1, "Any action, other than an action for injury to person or property, may be maintained by and against a personal representative in all cases and in such manner as such action might have been maintained by or against his decedent." To comply with New York's statutory scheme, any proceeding against an estate must be brought in the name of the executor or administrator in his or her representative capacity as respondent.

In the court's view, the co-op's failure to name Leibhardt in her representative capacity as the estate's executor and to serve the predicate notices and the petition and notice of petition on the Estate of Louise Anderson was a non-amendable, fatal defect. The court said that a holdover proceeding may not be maintained without proper predicate notices. Predicate notices "must be clear, unambiguous and unequivocal in order to serve as the catalyst which terminates a leasehold." The right to terminate a tenancy depends on serving an adequate notice. The co-op's papers contradicted themselves on whether Nadine S. Liebhardt was an undertenant, an executor, a licensee, a sublessee, or an assignee.

Liebhardt, the person allegedly served in her capacity as the estate's executor, was identified in the caption as respondent-undertenant. In the body of the predicate notices, by contrast, she was identified as a licensee whose license had been revoked and as the estate's sublessee or assignee. Before beginning a licensee proceeding against her, the co-op would have had to have first "recovered possession of the premises from the licensor or the licensor's estate as the party who is entitled to possession of the property occupied by the licensee."

Only if petitioner had acquired beneficial ownership of standing to bring a summary eviction proceeding under RPAPL 713 (7) would it have been able to have prevailed directly against her as a licensee. Liebhardt would also have had to have been named and served, in her own capacity, as licensee.

The co-op was aware that Liebhardt had acquired the shares to the premises. In their cross-motion, respondent argued that she was actually a tenant, either in her representative or individual capacity. Whatever she was, the court held that she was a necessary party, and she was never joined in her representative or individual capacity. The co-op tried to remedy that problem by relying on CPLR 1001(b), which required the court to order a necessary party joined.

CPLR 1001(b) applies, however, only when a necessary party "is subject to the jurisdiction of the court." Failure to acquire jurisdiction over a necessary party mandates that the petition be dismissed. The court did not have jurisdiction over Leibhardt; therefore, it could not join her in this proceeding.

The co-op argued that the predicate notices were reasonable under the case of Hughes v. Lenox Hill Hosp. The court stated that the standard to determine whether a preliminary notice is sufficient "is one of reasonableness in view of all the attendant circumstances." One issue in Hughes was whether the notice to cure was sufficiently detailed and particularized to survive respondent's challenge that the notice was void for vagueness. In the court's view, that case, however, addressed whether a notice that deviated from a statutorily prescribed directive could survive a challenge.

In this proceeding, EPTL Section 11-3.1 was not ambiguous, and respondents were prejudiced because the improper notices impeded them from answering or defending the allegations. Instead of dismissing respondents' ninth affirmative defense, the co-op asked the court to permit it to join Leibhardt in her capacity as the estate's executor. In addition to dismissing for the lack of jurisdiction over both the estate and Leibhardt, the court dismissed the co-op's motion to amend its petition because its motion papers did not contain a copy of its proposed amendment. The co-op's motion to dismiss respondents' affirmative defenses was denied. The co-op's motion to permit joinder of Nadine S. Leibhardt was also denied. Respondents' first counterclaim was severed without prejudice to raising it anew in a separate proceeding. Respondents' counterclaim, concerning legal fees and costs, was also preserved should there be a determination on the merits. Respondents' cross-motion to dismiss this proceeding was granted on procedural grounds.

Comment: Because the defendant here was not properly identified, the co-op's action to recover possession was dismissed. Service on the executor of the estate of a deceased shareholder was not only ambiguous, but also defective under state law. As a result, the action was delayed and additional legal effort was required.