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Finkelstein and Ferrara's Landlord-Tenant Practice Reporter cited by Appellate Term, N.Y.L.J., .

Notre Dame Leasing L. L. C., Appellant, v. Leonijildo Rosario et al., Respondents. NO. 2000-1058 Q C SUPREME COURT OF NEW YORK, APPELLATE TERM, SECOND DEPARTMENT By Scholnick, P.J.; Patterson And Golia, Jj.

Motion by tenants-respondents granted only to the extent of granting leave to reargue and, upon reargument, original determination adhered to.

On the appeal, we held that the Spiegel Law defense (Social Services Law 143-b[5]) is available to a tenant only in conjunction with a withholding of rent by the Department of Social Services. Tenants now contend that we erred in determining an issue that was not properly before us and that we determined the issue incorrectly. These contentions are rejected.

The issue before this court was whether in moving for summary judgment tenants had established the elements of the Spiegel Law defense. Although it was landlord's claim on appeal only that tenants had failed to establish the element of notice (id., 143-b[5][c]), we were not bound by the parties' understanding of the statute and reviewed the record to determine "if, upon all the papers and proof submitted, the defense [was] established sufficiently to warrant the court as a matter of law" to direct judgment in favor of tenants (CPLR 3212[b]). We see no error therein. A court "must apply the controlling law, whether or not cited or relied upon by either party" (21 CJS, Courts 136, at 157). The "parties cannot compel a court to misconstrue a statute by arguing only incorrect interpretations of it" (id). As the Court of Appeals has stated:"Our duty does not require us to reject a contention sound in its ultimate conclusion because the path that we follow is different from the one marked out for us in the argument of counsel." (Morris Plan Co. v. Globe Indemnity Co., 253 NY 496, 497).

Any prejudice that tenants may have suffered by their lack of an opportunity to brief the issue of whether the Spiegel Law defense was intended to apply only in conjunction with a withholding of rents by social services officials has been cured by the granting of this motion for reargument.

Contrary to tenants' contention, our conclusion was arrived at in the first instance by a careful reading of the statute in its entirety. Legislative intent must be sought first in the words of the statute (Matter of Albano v. Kirby, 36 NY2d 526, 529-530), but a particular provision must be understood in the context of the general scheme of which it is a part (People v. Mobil Oil Corp., 48 NY2d 192, 199; McKinney's Cons Laws of NY, Book 1, Statutes, 97). It is clear from a reading of the statute as a whole that it was intended to authorize social services officials to withhold rent payments where dangerous conditions exist and that the defense was established to implement this withholding of public funds by the official and not to authorize tenants, independently, to withhold their rent payments. The fact, noted by tenants (see also, Lebovits, "Nonpayment Proceedings: The So-Called Spiegel Defense," Finkelstein & Ferrara's Landlord-Tenant Practice Reporter [May 2001]), that at the time the law was enacted the Welfare Department was paying the public- assistance tenant's entire rent merely buttresses our conclusion. Because the Department was at the time paying the entire rent, the Legislature could only have authorized the Department, and not the individual tenant, to withhold rent payments.

Moreover, contrary to tenants' further contention, the legislative history of the statute also supports our conclusion. Thus, the Law's sponsor, Assemblyman Spiegel, made it clear that the purpose of the bill was to "stop the subsidizing of some 'slumlords' by the Department of Welfare" and that the defense was included in the Law so "that the public funds should not be permitted to be used to further the continuance of any building which is substandard, or has dangerous or hazardous violations" (Statement by Samuel A. Spiegel, dated March 31, 1962, Bill Jacket, L 1962, ch 997) (emphasis added). An examination of the remainder of the Bill Jacket documents similarly shows that there was no legislative purpose to grant tenants the right to withhold rents independently of a determination by the Welfare Department to withhold rents. For example, Attorney General Lefkowitz's memorandum described the purpose of the bill as follows:

"This bill seeks to correct the anomalous condition wherein one municipal department seeks to prevent slum and dangerous conditions from being maintained at the same time that another governmental unit is financially indirectly rewarding such maintenance" (Bill Jacket, L 1962, ch 997).

The 1965 addition of subdivision 5(b) to the statute (L 1965, ch 701) does not show a different intention. The sole purpose of the addition of subdivision 5(b) was to overrule certain court decisions which had held that upon the clearing of the violations, a landlord was automatically entitled to recover the rents withheld by the social services official and to "restore to the public welfare official the discretion to differentiate between those landlords who are not guilty of censurable conduct and those who have exploited their tenants for extended periods and who, but for the remedies provided under this statute, would probably have continued to do so" (Memorandum of Legislative Representative of City of New York, 1965 McKinney's Session Laws of NY, at 2079). No legislative intention can be found to grant tenants an independent right to determine whether the existence of violations in the building justified their withholding of rents.

The claim that our decision will leave public assistance tenants without a method of compelling repairs is without merit. These tenants have the same avenues of compelling such relief as do all other tenants, including the maintenance of HP proceedings and the assertion of claims for breach of the warranty of habitability.

We note that, in the instant case, the Civil Court stayed the proceeding until landlord showed proof that the violations had been cleared. There is no basis in the Spiegel Law for this judicially-fashioned procedure. The Law requires that when the defense is made out, the proceeding be dismissed (id. 143-b[5] [b]), and it leaves it to the discretion of the social services official to determine if the withheld rents are to be paid (id. 143-b[6]). Thus, had the defense been made out here that is, had tenants shown that DSS had withheld their rents dismissal would have been required.

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