Landlord Can't Raise Claim Again in Overcharge Case After Losing Eviction Case

Landlord previously sued to evict unregulated tenants. Tenants claimed that they were rent stabilized. Landlord argued that, in 1999, prior landlord expanded a previously existing unit to create new apartment for tenant. Therefore, the earlier apartment rent history didn't matter. Prior landlord charged tenant a first rent of $2,500, which was above the $2,000 luxury deregulation threshold in effect at the time.

The court and appeals court ruled against landlord in 2018 because landlord didn't prove that any new apartment was created in 1999.  Tenants then sued landlord for rent overcharge. In response, landlord again claimed that prior landlord had created a new apartment in 1999.

The court and appeals court denied landlord's request to amend its initial answer in order to assert this claim. But, although the claim was now raised for the purpose of establishing a base rent, rather than showing luxury deregulation, landlord couldn't raise this claim because it had already lost the prior case for failing to prove the same allegation. 

Raffelo v. Thompson Assets, LLC: App. No. 12155N, Case No. 2020-00085, 2020 NY Slip Op 06728 (App. Div. 1 Dept.; 11/17/20; Renwick, JP, Kern, Scarpulla, Shulman, JJ)