A Dog’s World

A Queens cooperative responds too slowly and gets sandbagged by an illegal resident: a Shih Tzu.

May shareholders be permitted to keep their dog, in violation of the cooperative’s proprietary lease, when the dog has been in residence for more than 90 days, even though the shareholders made misrepresentations to the board of directors concerning the status of the dog? That was the question in 2229-13 Apt. Corp. v. Portnov.

The cooperative corporation, 2229-13 Apt. Corp., began a pet holdover proceeding alleging that respondents, Roman Portnov and Valiantsina Portnov, violated Paragraph 15 of the cooperative’s house rules, incorporated into the proprietary lease, by harboring a dog in their apartment since December 25, 2008.

A 30-day notice to cure, dated and mailed on February 3, 2009, directed the removal of the dog no later than March 12, 2009. On March 13, a notice of termination of the proprietary lease was mailed to the shareholders, notifying them that their lease would expire on March 28. Thereafter, on April 6, the co-op began the holdover proceeding.

The shareholders moved for summary judgment dismissing the action and for an award of legal fees. The court explained that the basis for the summary judgment was that the co-op did not start the proceeding within three months of when it learned that the shareholders owned a dog, thus waiving the “no pet” provision of the proprietary lease.

The court discussed section 27-2009.1(b) of the administrative code, known as the pet law, which provided that, “where a tenant in a multiple dwelling openly and notoriously for a period of three months or more following the taking of possession of a unit, harbors or has harbored a household pet or pets, the harboring of which is not prohibited by . . . law . . . and the owner or his agent has knowledge of this fact, and such owner fails within this three month period to commence a summary proceeding or action to enforce a lease provision prohibiting the keeping of such household pets, such lease provision shall be deemed waived.”

The shareholders claimed that they brought their dog – a Shih Tzu – into their apartment in July 2008, that they walked it openly in front of and in full view of the building employees, and that the dog was the subject of discussion at a meeting of all shareholders on September 28, 2008.

The co-op argued that the action should not be dismissed because the shareholders did not walk their dog openly, that they misled the co?op by representing that they had been keeping the dog briefly for family members and no longer had the dog and that a notice was sent as soon as the co-op discovered that the dog was living in the apartment.

The co-op’s managing agent submitted an affidavit that he was aware of the dog in September 2008, but that the shareholders assured the managing agent in November 2008 that they no longer had the dog. In December 2008, the superintendent was in the apartment and discovered the “tea-cup” size dog hidden in a closet. On January 9, 2009, the dog was again observed in the apartment. At a board meeting on January 17, it was determined that the shareholders’ statements that the dog was temporary were not credible and that a holdover summary proceeding should be started.

The court explained that even if it believed everything the co-op said in affidavits, it was “constrained” to conclude that the co-op waived the right to enforce the no pet provisions of the lease.

The court discussed previous cases addressing the pet law. In one, the court described the three main components: the landlord knew there was a pet; the tenant openly and notoriously harbored the pet for three months or more; and the landlord began an action against the tenant concerning the pet within three months of its discovering the pet. The court asked the “classic” question, paraphrased from the Senate Watergate hearings: “What did the landlord know and when did he know it?”

The co-op claimed that the dog was not walked openly where it would have been observed by the building’s employees. However, the co-op admitted that the dog was “tea-cup size.” The court explained that the law does not state that an animal is harbored “openly and notoriously” only when it is displayed throughout the building. Rather, the court had to determine whether steps taken to commence the action when the co-op became aware of the dog in September 2008 met the timeliness standard of the pet law.

The co-op claimed that it took no action in September 2008 because it relied on the shareholders’ representations that the dog was in the apartment temporarily. The co-op did not conclude that the dog was in residence permanently until January 2009.

The court examined when the three-month period under the pet law should commence. It stated that if the calculation were to start on or after the January 23, 2009, board vote to prosecute the shareholders, there would have been no dispute that the action was begun in a timely manner. However, computation did not start from the time the co-op decided to act. The time period had to revert to the date on which the co-op initially obtained knowledge that the illegal dog was present.

Even if the court had given the co-op every benefit, the co-op’s 30-day notice to cure stated that the dog was present since December 25, 2008. Thus, even if one argued that December 25 was the date from which to measure the 90 days, the co-op’s action on April 6, 2009 was started too late.

Importantly, the court explained that it was required to deny the co-op’s request that the three-month period be tolled because of the shareholders’ alleged deceit and misrepresentation. The pet law did not contain any provisions which would have allowed the three-month period to be tolled. The court noted that the pet law “does not provide for any wiggle room or exceptions to the strict time frame for the commencement of holdover proceedings that are grounded in violation of no pet clauses” in leases.

The court did note, however, that in its opinion, had the parties entered into an agreement when the co-op first learned about the dog where the shareholders acknowledged possession in violation of the proprietary lease and set a date for removal of the pet, a breach of that agreement would have provided the co-op with a basis for reliance and estoppel. This court believed that a holdover brought within three months of the breach of such an agreement would have been considered timely. But the court said that under these facts, the co-op had waived the right to evict the shareholders if they refused to remove the pet.

The court next discussed the shareholders’ request for an award of attorneys’ fees. Paragraph 28 of the proprietary lease allowed the co-op to seek legal fees in the event the shareholders were in default under the lease. Thus, under Real Property Law, Section 234, the shareholders were permitted the reciprocal right to seek legal fees. The court explained that during an off-the-record conference, prior to submission of the motion papers, it indicated that it would award fees to the shareholders. However, the court reconsidered its position and determined that neither side was entitled to an award of attorneys’ fees.

The action did not proceed to trial because the co-op could not establish that the three-month statute of limitations created by the pet law was inapplicable or tolled. Thus, the co?op could not have avoided a waiver of its right to evict the shareholders for their failure to cure their lease violation by harboring the dog without permission. Accordingly, the co-op could not collect attorneys’ fees.

As to the shareholders, the court found that their success was purely procedural and not substantive. Had the co-op served notices immediately after it became aware of the dog’s existence, the waiver provisions of the pet law would not have come into play. Instead, the co-op gave its shareholders the benefit of the doubt.

The court found that the shareholders’ “blatant and knowing disregard” of the proprietary lease should not have resulted in a monetary windfall by having the co?op pay their legal fees. The court was unable to find any justification for the shareholders’ admitted violation of unambiguous provisions of the lease and house rules to warrant the conclusion that they “truly prevailed” in the proceeding. Ultimately, the shareholders were able to keep their dog, but “for the ‘privilege’ of doing so, as a result of their own willful and intentional conduct in violating their proprietary lease,” they were required to pay their own legal fees.

Comment: This case reminds us that the pet law, which is applicable to cooperatives (and to condominiums under certain circumstances), must be strictly followed so that any action to evict the owner of a pet that is being harbored without permission, has to be started within 90 days of the date on which the co-op, its employees, or agents first knew about the pet. In a co-op, it is imperative that the co-op act very quickly and give the shareholder no respite. This is because, before starting an action to evict a shareholder for a violation of the proprietary lease, most leases require that the co-op first serve a 30-day notice to cure and a 5-day notice of termination. When one adds in time allowances for service, correspondence, discussions, negotiations, and the like, the 90-day deadline is a very short time period. We recommend that, even where a shareholder claims the pet is temporary, these notices be promptly served. The co-op can always decide to withdraw them at a later date.

We note that the court provided another alternative to immediate service of notices and the start of an action: entry into an agreement with a date by which the pet must be removed from the premises. While we are in favor of settlement agreements, again, a co-op must watch its time periods so that, if no agreement is signed despite a shareholder’s promises, the co-op has enough time to serve a notice to cure, notice of termination, and notice of petition and petition (or summons and complaint) to meet the stringent requirements of the pet law.

As to attorneys’ fees, the court decided not to reward the shareholders for misleading the co-op. While the court believed it was constrained under the pet law to allow the dog to remain in the apartment, it concluded that there was no determination “on the merits” so that there was no “prevailing party.” In this way, it was able to decline to award legal fees to the shareholders.

Attorneys:
For the Petitioner/Co-op:
Pruzan Law Firm
For the Respondent/Shareholder:
Vernon & Ginsberg