Hous. Rights Initiative, Inc. v. Elliman

1

2023 NY Slip Op 30039(U)

HOUSING RIGHTS INITIATIVE, INC., Plaintiff, v. DOUGLAS ELLIMAN, MARJORIE TORNATORE, MARYAM DAGHOUMI, DORIAN NASTO, TOY ONG CHEUNG, 109 CONGRESS STREET LLC, 254-125 LLC, COLDWELL BANKER RELIABLE, CHRISTIAN FLOREZ, OXFORD PROPERTY GROUP, MAY AMOS, 750 TENTH AVE REALTY LLC, AAG MANAGEMENT, INC., REMAX EDGE, ELENA LEAL, 9430 RIDGE OWNERS CORP, KEYSTONE REALTY USA, PARESHKUMAR SHAH, GLEN OAKS VILLAGE OWNERS, INC., CENTURY HOMES REALTY GROUP LLC, JANE GAO, STEVEN CORCORAN REAL ESTATE LLC, SHERRIE MORGAN, HOMEMAX REALTY, ERIC ZHAO, 351 MARINE OWNERS CORP, EXP REALTY, GORDANA SKUGOR, NEW YORK CASAS, CHARLAR ACAR, RALPH FRANKEN LLC, MOMENTUM REAL ESTATE, LILY LUU, STANLEY CHEUNG, AVANGUARD REALTY CORP, JENNY VASSILEVA, DAGINATI LLC, SARDELL REALTY LLC, KAREN SARDELL, EDEL FAMILY MANAGEMENT CORP, JHOLEYNI PENA, REAL NEW YORK, EDWARD XU, CUCCIA EDWARD, J., CHRISTY CHOK, L & C REALTY ASSOCIATE, INC., J SIKAR REALTY, NELLY BERNSTEIN, AAA Y.S. REALTY INC, FEI CHEN, NYC MODERN REALTY, INC., HELEN LIN, GUO XIAN KAI, THE COOP CONNECTION LLC, EILEEN MASSONE, SRL MANAGEMENT LLC, VLADISLAV DAVIDOV, BROOKLYN PROPERTIES OF SEVENTH AVENUE, INC., CARLOS ARZE, 685 STERLING ASSOCIATES LLC, REALTEGRITY NY, CARYL SCHIFF, FOLEY'S 8 REAL ESTATE, TIM FOLEY, MONTGOMERY 5 ASSOCIATES LLC, J. WINTER REAL ESTATE, JEFF WINTER, AIDONIS REALTY, MARIA AL DONIS, KELLER WILLIAMS REALTY OF GREATER NASSAU COUNTY, JOHN ARGYROS, JOHN SILVER LLC, MACCABEE 1 REALTY CORP, DAVID NAJAFI, ASMA BEGUM EMRAN, REALTY PLUS GROUP, INC., DAE KIM, YOUNGGIL CORP, COMFORT PROPERTIES, INC., OSAMA GHEITH, AMERICAN REALTY AIJ 214, LLC, FUL TON EX REALTY, EUNICE CHEN, THE PAVILION OWNERS CORP, NEW SPIRIT REALTY, INC., FRANK DESANTIS, APTS 601 79 LLC, HOMETOWN PROPERTIES, JACK CHENG, ABBA REALTY ASSOCIATES, ANAT ELGARISI, MENDEL BOYMELGREEN, RENAISSANCE EQUITY HOLDINGS LLC A, CONTACT REALTY, DAY ANA ZAMORA, B. BELINDA REALTY LLC, BELINDA GILLIS, 863 STERLING LLC, IVEY NORTH LLC, AYANNA BARTON, BATRA GROUP, INC., JOHNATHAN CRUZ, 251 HIMROD LLC, OLAUSSON PARTRIDGE STEFFAN, REBEKAH GIBSON, MANHATTAN FLATS, YAEL DAVID, GUARDIAN REALTY GROUP, DANNY DOUMANIS, 25-4112TH STREET LLC, MAYFLOWER REALTY AND ASSOCIATES, LINDA CHENG, EVA M. DANIELS REALTY, EVA DANIELS, CITI NEST GROUP LLC, MIKE ATIA, 123 PARK LLC, MAXIMILLION REALTY, INC., BORIS BERYLAND, DAVID REYTBLAT, RICHARD CUFFARO, EDWARD ROZENTHAL, NIINA POOLE, PAUL NYLAND Defendants.

No. 154472/2022, Motion Seq. No. 003

Supreme Court, New York County

January 9, 2023

Unpublished Opinion

DECISION + ORDER ON MOTION

MARY V. ROSADO JUDGE

The following e-filed documents, listed by NYSCEF document number (Motion 003) 89, 90, 91, 92, 93, 104, 262, 263, 264, 265 266, 267, 268, 269, 270, 361, 362 were read on this motion to/for DISMISS.

Upon the foregoing documents, and after oral argument on December 13, 2022, where Randolph McLaughlin, Esq. and Casey Pearlman Esq. appeared for Plaintiff Housing Rights Initiative, Inc. ("HRI" or "Plaintiff) and Joel Maxwell, Esq. appeared for Defendants Batra Group Inc. ("Batra") and Johnathan Cruz ("Cruz"), (collectively "the Moving Defendants"), the Moving Defendants' motion to dismiss pursuant to CPLR §§ 3211 (a)(1), (a)(3), (a)(5), and (a)(7) is denied. Plaintiffs cross-motion to amend its Complaint is granted:

I. Factual and Procedural Background

Plaintiff brought this action against real estate agents, brokerage firms, property management companies, and property owners alleging intentional and willful source of income discrimination in violation of the New York State Human Rights Law ("NYSHRL") and New York City Human Rights Law ("NYCHRL") (NYSCEF Doc. 1). Plaintiffs Complaint was filed on May 25, 2022 (id). It is alleged that Defendants have willfully and intentionally refused to rent apartments to individuals who intend to pay rent with CityFHEPS vouchers (id. at ¶¶ 4-5).

Plaintiff is a nonprofit housing group (id. at ¶ 9). Plaintiff alleges it has been injured by having to expend resources to investigate and to respond to Defendants' discriminatory practices, which not only diverted Plaintiffs resources, but frustrated Plaintiffs mission (id). Plaintiff utilized testers whose investigations allegedly revealed source of income discrimination perpetuated by Defendants who refused to accept CityFHEPS vouchers for advertised apartments.

To qualify for a CityFHEPS voucher, a household must have a gross income at or below 200% of the federal poverty level. Further, the household must (a) include a veteran who is at risk of homelessness, or (b) the New York City Department of Social Services must determine that a CityFHEPS voucher is required to avoid shelter entry, or (c) the household must be facing eviction and includes someone who lived in a shelter and has an active adult protective services case, or (d) would otherwise be eligible for CityFHEPS if they were in a shelter (NYSCEF Doc. 49). The CityFHEPS voucher is issued to some of New York City's most indigent and vulnerable citizens, helps prevent homelessness, and relieves New York City's overly burdened shelter system. Plaintiff alleges that in 2019, only 20% of New Yorkers with a CityFHEPS voucher were able to secure housing, and that one of the primary reasons for this low percentage is source of income discrimination (NYSCEF Doc. 1 at ¶ 94).

Plaintiff alleges that Defendants must comply with anti-discrimination laws under the NYSHRL and NYCHRL (id. at ¶ 95). Further, Plaintiff allege that the monthly rent charged by all named Defendants at each of the investigated properties did not exceed the CityFHEPS program's maximum allowable rent (id. at ¶ 96). Moreover, Plaintiff alleges that all Defendants, their employees, or their agents, told Plaintiffs testers that Defendants would not accept CityFHEPS as a source of payment for rent at the investigated properties (id. at ¶ 97).

As to Moving Defendants, Plaintiff alleges that on November 2,2021^[1] an HRI tester posing as a prospective tenant text messaged Johnathan Cruz, an employee of Batra Group, regarding an apartment located at 251 Himrod Street Apartment 2R, Brooklyn, New York 11237 (the "Apartment") (NYSCEF Doc. 1 at ¶ 143). Cruz responded the apartment was available (id.). When the HRI tester asked if the Landlord would accept a CityFHEPS voucher for the apartment, Cruz replied with "the landlord does not." It is alleged that Defendant 251 Himrod LLC ("Himrod") owned the Apartment, and that Himrod was utilizing Cruz and Batra's real estate services to rent the apartment (id.). It is further alleged that at the time of the tester's inquiries, Cruz and Batra were acting as authorized agents for Himrod (id.).

Plaintiff filed another action against different defendants in New York County Supreme Court on June 30, 2021 (see Housing Rights Initiative, Inc. v Century 21 Dawns Realty, et al, Index No.: 156195/2021) (the "Century 21 case"). In that case, two defendants moved to dismiss the complaint. By order dated August 16,2022 (the "Century 21 Decision"), Justice William Franc Perry III dismissed the complaint against two of the defendants based on standing, although litigation continues against other defendants. On September 14, 2022, Plaintiff filed a motion to reargue Justice Perry's decision. On November 9, 2022 the New York Attorney General filed an amicus brief in support of Plaintiff s motion to reargue.^[2]

In the case at bar, the Moving Defendants filed this pre-answer motion to dismiss on September 20, 2022 (NYSCEF Doc. 89). Moving Defendants believe that Justice Perry's decision collaterally estops this Court from finding Plaintiff has standing to bring this lawsuit. Moving Defendants' CPLR § 3211(a)(1) argument is tied up with their collateral estoppel argument since they argue Justice Perry's decision is documentary evidence which "utterly refutes" Plaintiffs claims (NYSCEF Doc. 90). Moving Defendants also argue that even if Plaintiff does have standing to maintain this action, they have failed to state a claim under the NYSHRL and NYCHRL (id).

In response, on November 16, 2022, Plaintiff cross-moved to amend its Complaint to specify further the alleged injuries it has suffered because of Defendants' alleged discrimination (NYSCEF Doc. 262). Plaintiff also asserts that collateral estoppel does not apply since dismissal in the Century 21 case was based on standing. Plaintiff further asserts that since organizations like HRI have standing to bring claims based on testing under the Fair Housing Act, and since the NYSHRL and NYCHRL are meant to provide even broader remedial protection than their federal counterparts, then Plaintiff also has standing to bring claims of housing discrimination under both the NYSHRL and NYCHRL (NYSCEF Doc. 270). Plaintiff further argues that it has stated a cause of action under the NYSHRL and NYCHRL by alleging intentional and willful violations by Moving Defendants of applicable sections of the NYSHRL and NYCHRL. Moving Defendants opposed Plaintiffs cross-motion on December 6, 2022 (NYSCEF Doc. 361).

II. Discussion

A. Collateral Estoppel and CPLR § 3211(a)(5)

The Court will first assess whether collateral estoppel binds this Court to the Century 21 Decision. Collateral estoppel applies when "(1) the issues in both proceedings are identical, (2) the issue in the prior proceeding was actually litigated and decided, (3) there was a full and fair opportunity to litigate in the prior proceeding, and (4) the issue previously litigated was necessary to support a valid and final judgment on the merits" (Conason v Megan Holding, LLC, 25 N.Y.3d 1 [2015] [internal quotation marks and citation omitted], rearg denied 25 N.Y.3d 1193 [2015]). Collateral estoppel is an equitable doctrine, grounded in the facts and realities of a particular litigation, and is not to be...