OPINION OF THE COURT

HEELA D. CAPELL, J.

87th Street Realty (petitioner) commenced this non-payment proceeding against Andrew Mulholland (respondent) after service of a notice of petition and petition dated February 14, 2018. The petition seeks rent from the respondent with respect to 511 East 87th Street, apartment 6, New York, New York 10128 at a rent regulated amount of $1,875 per month from December 2017 through February 2018. Both sides are represented by counsel. Respondent, initially unrepresented, filed an answer to the proceeding dated March 5, 2018, which contained a counterclaim for rent overcharge. The answer was amended twice by his attorneys. The second amended answer and counterclaims is dated May 3, 2018, and is the subject matter of petitioner's motion in chief.

In the motion, petitioner seeks to dismiss respondent's first and third affirmative defenses, and second counterclaim, pursuant to CPLR 3211 (b). CPLR 3211 (b) provides, "[a] party may move for judgment dismissing one or more defenses, on the ground that a defense is not stated or has no merit." Furthermore, "[s]tatements in a pleading shall be sufficiently particular to give the court and parties notice of the transactions, occurrences, or series of transactions or occurrences, intended to be proved and the material elements of each cause of action or defense." (CPLR 3013.)

The standard of review on a motion to dismiss an affirmative defense pursuant to CPLR 3211 (b) is akin to that used under CPLR 3211 (a) (7), i.e., whether there is any legal or factual basis for the assertion of the defense. (Matter of Ideal Mut. Ins. Co., 140 A.D.2d 62, 67 [1st Dept 1988].) In moving to dismiss an affirmative defense pursuant to CPLR 3211 (b), the petitioner bears the burden of establishing that the defense is without merit as a matter of law. (534 E. 11th St. Hous. Dev. Fund Corp. v Hendrick, 90 A.D.3d 541, 541 [1st Dept 2011].) Further, the allegations set forth in the answer must be liberally construed and viewed in the light most favorable to the respondent, who is entitled to the benefit of every reasonable inference. (182 Fifth Ave. v Design Dev. Concepts, 300 A.D.2d 198, 199 [1st Dept 2002].) Moreover, "the court should not dismiss a defense where there remain questions of fact requiring a trial." (Granite State Ins. Co. v Transatlantic Reins. Co., 132 A.D.3d 479, 481 [1st Dept 2015], citing 182 Fifth Ave. v Design Dev. Concepts, 300 AD2d at 199.)

Respondent's first affirmative defense simply states that the petition fails to state a cause of action upon which relief may be granted. This conclusory defense does not particularize any details in support. Furthermore, the petition states a cause of action as it asserts that respondent, the tenant of premises, owes rent arrears to the petitioner, the landlord. Accordingly, the first affirmative defense is dismissed pursuant to CPLR 3013 and 3211 (b).

Petitioner also seeks to dismiss the third affirmative defense, which provides that the subject apartment is not currently registered with New York State Homes and Community Renewal (HCR or DHCR). The defense specifies, "the apartment was not registered in 2009; was registered as Temporarily Exempt from 2010 through 2012; and was not registered from 2013 to date." Petitioner does not challenge the factual allegations asserted in the defense, nor that the premises are not currently registered with HCR. Rather, petitioner argues that its failure to properly and timely file annual registration statements solely bars the landlord from collecting rent in excess of the last legal regulated rent amount reflected in the registration statement and does not warrant dismissal of the proceeding.

Administrative Code of City of NY § 26-517 (e) states:

Petitioner's failure to file a current registration statement does not, as a matter of law, preclude petitioner from proceeding with this non-payment action; it merely limits the rental amount petitioner may collect from respondent, if any. (See Jazilek v Abart Holdings, LLC, 2009 NY Slip Op 31847[U], *14-15 [Sup Ct, NY County 2009], affd 72 A.D.3d 529 [1st Dept 2010]; Matter of 226 E. 13th St. Ltd. Partnership v New York State Div. of Hous. & Community Renewal, 215 A.D.2d 277 [1st Dept 1995].) To the extent that the third affirmative defense provides for dismissal of the proceeding based upon petitioner's failure to timely and properly register the premises with HCR, the defense is dismissed. However, respondent is not barred from raising the issue of improper registrations in support of a challenge to the propriety of the rental amount sought in this proceeding, his overcharge counterclaim, nor his request for discovery.

Petitioner also seeks to dismiss respondent's second counterclaim. The second counterclaim provides that respondent has been charged and paid an illegal rent, and seeks an award of rent overcharge, including treble damages, interest and legal fees. Petitioner maintains that the counterclaim should be dismissed because respondent was never overcharged the rent but rather continuously paid less than the legal regulated rent amount. However, petitioner concedes in its opposition papers that the legal regulated rent for the premises in 2005 should have been less than the amount that was listed on the registration.1 The subsequent registrations are based upon this erroneous figure. Accordingly, petitioner cannot conclusively establish the legal regulated rent for the premises and it is unclear whether respondent paid rent to petitioner in excess of the legal regulated amount. Furthermore, despite pleading in the petition that the premises are subject to rent stabilization, petitioner acknowledges that its agent executed a letter informing respondent the premises were being deregulated, offered respondent deregulated leases, and registered the premises as exempt with DHCR. Accordingly, respondent presents a sufficient claim for overcharge and the second counterclaim is preserved.

In his cross motion, respondent seeks discovery with respect to his rent overcharge counterclaim. Respondent's request includes documents regarding the premises from 2000 to the present in the form of leases, rent bills, rent receipts, documents related to rent calculations for the premises, records of work performed to the premises, and registrations filed with HCR, in addition to a deposition demand. CPLR 213-a provides:

In Matter of Grimm v State of N.Y. Div. of Hous. & Community Renewal Off. of Rent Admin. (15 N.Y.3d 358 [2010]), the Court of Appeals found the Four Year Rule inapplicable because the landlord engaged in a fraudulent scheme to deregulate the apartment, which rendered the rent charged on the base date four years prior to the filing of the overcharge claim unreliable. Namely, the tenant's immediate predecessors were charged an illegal rent for the rent-stabilized premises, not given a rent-stabilized lease rider, nor informed how their monthly rental amount was calculated. Additionally, the landlord failed to register the rents for the apartment with DHCR. Accordingly, the Court of Appeals concluded that DHCR should have examined the rental history beyond the base date four years prior to the overcharge claim to calculate the current rent. (Id.; see also Gersten v 56 7th Ave. LLC, 88 A.D.3d 189 [1st Dept 2011]; Conason v Megan Holding, LLC, 25 N.Y.3d 1 [2015]; Altschuler v Jobman 478/480, LLC., 135 A.D.3d 439, 440 [1st Dept 2016], lv denied 29 N.Y.3d 903 [2017].)

There is no set formula to determine whether a tenant raised an "indicia of fraud" which permits the court to examine the rental history prior to the base date. For example, on its own, an allegation of a fraudulent scheme to deregulate the apartment, or a jump in the rent, "does not trigger a duty to investigate the claim." (Matter of Lowinger v New York State Div. of Hous. & Community Renewal, 161 A.D.3d 550, 551 [1st Dept 2018], citing Matter of Boyd v New York State Div. of Hous. & Community Renewal, 23 N.Y.3d 999 [2014]; see also Grimm.) However, the Supreme Court in Matter of Pehrson v Division of Hous. & Community Renewal of the State of N.Y., following Grimm, identified three factors as determinative of such fraud: "(1) the landlord's possible violations of the Rent Stabilization Law and Code besides charging an illegal rent, (2) a fraudulent deregulation scheme, and (3) an inconsistency between DHCR's rent registration history and the lease history." (Matter of Pehrson v Division of Hous. & Community Renewal of the State of N.Y., 34 Misc.3d 1220[A], 2011 NY Slip Op 52487[U], *3 [Sup Ct, NY County 2011], citing Grimm, 15 NY3d at 366.)

Respondent maintains that the rent registration for the premises supports his request for discovery beyond the four-year period immediately preceding the filing of his overcharge claim. The registration reflects the following:

From 1984-2002 Frederic Camras is listed as the rent-stabilized tenant of the premises; for 2000, the rent is registered as $543.77; from 2001-2002, the rent is registered as $565.52; for 2003, the rent is registered as $599.45, and the apartment listed as vacant; for 2004, William Hook is listed as the rent-stabilized tenant, with a registered legal regulated rent of $1,414.47 and a preferential rent of $1,300. In 2004, the reason for the increase in rent is stated as "PREF RENT VAC/LEASE IMPRVMNT." For 2005, respondent is listed as the rent-stabilized tenant of record with a legal regulated rent of $1,712.86 and preferential rent of $1,375. The reason for the increase in rent that year is listed as "PREF RENT VAC/LEASE." From 2006-2007, respondent is listed as the rent-stabilized tenant of the premises at a registered legal regulated rent of $1,807.07 and a preferential rent of $1,425; for 2008, respondent is listed as the rent-stabilized tenant of the premises at a registered legal regulated rent of $1,883.86 and a preferential rent of $1,860; for 2009, the registration states that the registration is not found for the premises; from 2010-2012, the premises are registered as exempt; and from 2013-2016, the registration states that the registration is not found for the premises. (Petitioner's exhibit 3.)

In the seminal case of New York Univ. v Farkas, the court articulated a six pronged test to determine whether discovery is warranted, including whether the pleading states a cause of action, whether the information sought is directly related to the action, whether any prejudice would arise from granting discovery, whether the party seeking discovery established "ample need" for the information, and whether the request was "carefully tailored" to the information sought. (121 Misc.2d 643, 647 [Civ Ct, NY County 1983].)

Here, respondent has demonstrated the requisite "ample need" to examine the rental history beyond the scope of the Four Year Rule pursuant to Grimm. (See also Rent Stabilization Code [9 NYCRR] § 2526.1 [a] [2] [iv].) Respondent alleges that petitioner tried to unlawfully remove the premises from rent regulation, as demonstrated by the letter from petitioner to respondent accompanying an offer to respondent to sign a destabilized lease for the premises. (Respondent's exhibit G.) For two years prior to this lease, petitioner had already begun registering the apartment as exempt, which conflicts with the rent-stabilized leases that were in effect at the time. (Petitioner's exhibit 3.) Notably, the rent for the base date, which is 2014, is not registered. Further, as petitioner acknowledges, the last registered rent amount for the premises is based upon an erroneously registered rent in 2005 and may be unreliable. Respondent has therefore met his burden to demonstrate "ample need" for discovery for the purpose of determining whether petitioner engaged in a fraudulent scheme to deregulate the premises and to establish the legal regulated rent amount for the premises. (See generally Jazilek v Abart Holdings, LLC, 72 A.D.3d 529 [2010]; Grimm at 366.)

Petitioner maintains that the court should limit respondent to examining the rent of the prior tenant only, whose rent was registered in 2004, and should not grant respondent's request for discovery from 2000 to the present. Petitioner argues that respondent has not presented a sufficient challenge to the rents registered prior to 2004, that it cannot supply any documents for that period as the petitioner purchased the property in 2007, and that petitioner "mistakenly applied the Rent Stabilization Code" when it purported to deregulate the premises. (Petitioner's opp ¶ 20; exhibit 5.) The court finds that the facts in this proceeding support respondent's examination of the rent history from 2003 to the present.

First, petitioner's lack of knowledge of the law with respect to an unlawful overcharge does not absolve petitioner of the consequences of committing the overcharge. (Roberts v Tishman Speyer Props., L.P., 13 N.Y.3d 270 [2009].) Moreover, as petitioner concedes in its opposition to respondent's cross motion, certain legal regulated rent amounts listed on the rent registration statements were improperly calculated. That petitioner listed a preferential rent for the premises, and only "charged" respondent a rent of $1,375 is of no moment. This example calls into question the accuracy and legality of the rent registrations for the premises during petitioner's predecessor's ownership of the property, when the rent increased significantly from $599.45 to $1,414.47 in one year. Petitioner's unwarranted attempted deregulation of the premises, coupled with petitioner's predecessor's increase of the rent from 2003-2004 and mistaken calculation of the legal regulated rent in 2005, raises a sufficient challenge to the rent registrations from 2003 to the present to warrant discovery. (See Grimm, 15 NY3d at 366; Matter of Pehrson v Division of Hous. & Community Renewal of the State of N.Y., 34 Misc.3d 1220[A], 2011 NY Slip Op 52487[U] [Sup Ct, NY County 2011]; cf. Matter of Boyd v New York State Div. of Hous. & Community Renewal, 23 N.Y.3d 999 [2014].)2 However, as respondent has not challenged the rent registrations from 2000-2003, discovery will not be awarded for that period.

Accordingly, the cross motion is granted to the extent of marking the proceeding off of the court's calendar for petitioner to provide respondent's counsel with responses to respondent's document demands and produce a witness for a deposition in accordance with this decision and order. Documents must be received within 45 days after service of a copy of this decision and order upon petitioner's counsel, along with notice of entry. Depositions must be arranged within two weeks after production of documents. To the extent that petitioner does not have custody or control of the documents, it shall produce an affidavit from its agent claiming same. Respondent also reserves the right to issue trial subpoenas to petitioner's predecessor(s) in connection with his requests herein. Petitioner's motion is granted to the limited extent provided in this decision and order and otherwise denied.