Wednesday, October 12th 2011
Tenants of one of the city's biggest owners of rent-stabilized apartments have asked a federal judge to reject a proposed deal their lawyers made with their landlord - Pinnacle Group.
"I'm one of the lead plaintiffs and I'm excluded from this settlement along with thousands of others," said tenant leader Andres Mares-Muro of the Mirabal Sisters Community Center.
In court papers filed last week, tenants called the deal "unreasonable, inadequate" and "extremely unfair" to a majority of more than 20,000 Pinnacle tenants.
They want Federal Magistrate Judge Ronald Ellis to delay or reject it when he holds a fairness hearing Oct. 20.
A five-year-old class-action suit alleges Pinnacle systematically engaged in illegal rent overcharges, massive harassment of tenants and "meritless evictions" - all aimed at driving out low-income tenants and sharply increasing rents for newcomers.
Under the proposed deal, all tenant claims would be quickly reviewed by a special court administrator, who would be paid for by Pinnacle. The administrator could award damages to tenants and additional financial penalties to the landlord.
Tenants are angry because the deal exempts the firm and its chief executive, Joel Wiener, from any claims for rent overcharges before 2004.
It also does not extend to overcharges instituted by a prior landlord, but never corrected by Pinnacle when it gobbled up thousands of run-down apartments a decade ago.
Then Pinnacle bought the building, and Moumouni's rent increased steadily until it reached $1,419 in 2010.
By then, Moumouni had fallen behind in rent, and Pinnacle moved to evict him. That was when lawyers from the Northern Manhattan Improvement Corp. discovered the state's registered rent for the apartment back in 2003 had been just $460.
That means Singer overcharged Moumouni nearly $800 per month - and Pinnacle continued the illegal charges for years.
State law requires landlords to verify registered rents when they buy a rent-stabilized building, and it holds them liable for overcharges.
Last month, instead of being evicted, Moumouni won back rent and legal fees against Pinnacle in Housing Court worth nearly $100,000.
Yet the proposed class-action settlement would exclude people like Moumouni from the class of plaintiffs it covers.
"Pinnacle and the defendants shall not be liable for any alleged rent overcharge for any rent set by a prior owner of the building in question," the agreement specifies.
The angry tenants "are simply wrong and don't understand the facts," says Richard Levy, a lawyer for Jenner and Block. Levy filed the original case for the tenants and negotiated the settlement with Pinnacle.
At next week's hearing, Levy said, he and Pinnacle's lawyers will state unequivocally that the firm's tenants will still retain the right to ask the state housing officials to roll back illegal rent overcharges that occurred before 2004.
Matthew Chachere, a new lawyer the tenants asked to intercede for them, insists the deal "cuts out huge swaths of the class-action plaintiffs from any benefits under the settlement."
Next week, the judge will hear from the tenants themselves.