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Why Landlords Lose in Housing Court

On May 3, 2017, Michelle Itkowitz gave a talk at the LandlordsNY Symposium at New World Stages entitled "Why Landlords Lose in Housing Court". This was a good one! 



Long excepts from the material are below. But you really need to click through to the pdf of the materials to see the chart containing the study results


II. MICHELLE’S FOUR-MONTH STUDY OF HOUSING COURT CASES IN NEW YORK CITY

A. Study Assumptions

I read every case that was reported between January 1, 2017 and April 30, 2017 in the following three (3) sources (“the Sources”), which were:

1. Westlaw – in both the “Cases” database and the “Trial Court Orders” database;
2. Vendrome’s “Landlord v. Tenant” Resource; and
3. The New York Law Journal.

I created an Excel spreadsheet (“the Chart”). On the Chart, I noted the following for each case I included in the Study:

1. Date of the case or the report on the case
2. The source of my information
3. Case name and legal citation (where available)
4. The county
5. Whether the case was “won” in Housing Court by:
Landlord
Tenant
Neither; in which case I indicated it was a “draw”
6. Whether I was surprised by the result

I only considered Housing Court cases (residential cases, not commercial); not Supreme Court cases, DHCR cases, Loft Board cases, or cases from any other forum. I only considered residential cases. I only considered cases in the five counties of New York City. There was not one case in any source regarding Richmond County. I considered SRO cases and co-op cases in Housing Court.

I excluded consideration of Housing Authority cases. I excluded consideration of cases where tenants were suing sub-tenants.

I only considered matters with final dispositions in Housing Court. If a motion for summary judgment was denied or if discovery was granted for either side, I did not consider the cases. 

I considered both holdovers and nonpayments.

The cases I considered “draws”, i.e. neither landlord not tenant won, were cases where the tenant won on a technicality and the court concluded its decision with a strong suggestion to the landlord on how to re-file the case properly. There were only two such cases.

B. Primary Source Material

I have created one large pdf with copies of all the cases and/or case synopsis I considered. I do not believe that I am allowed to re-publish material from any of these Sources, because it is not my intellectual property. I will, however, email the pdf of the data to anyone who asks for it.

C. Study Results

The chart is available on the last four pages of this booklet. The results surprised me.

The Chart includes 71 cases.
Tenant won 63 of the 71 cases (89% of the time).
Landlord won 6 of the 71 cases (6% of the time).
There were 2 “draws” (3%).

The boroughs broke down as follows:

Bronx  - 26
Kings – 23
Queens – 15
New York - 15

D. Study Flaws

I do not know how the Sources compile cases. The results of the Study so strongly favor tenants that I have to wonder if there is some reason that tenant victories are more widely reported than landlord victories.

In discussing this project with colleagues, someone suggested that “winning” landlord cases settle more. I am unsure why this would be true. I welcome hearing other people’s theories.

Moreover, if a reader has a decision from this time period that was not reported in the Sources used and would like to contribute it to the Study, I would be glad to include it. 

There is an average of 258,540 new landlord and tenant cases filed in the New York City Civil Court every year. [1]  I looked at a four-month period, one-third of a year. If these 71 cases are all the written decisions in that period, that means that only .082% of all cases result in written decisions. If you sit in a Housing Part on any given morning and observe how many cases are quickly settled, perhaps that figure is not incorrect. But as of this writing, I have no way to know. It seems low to me. 

III. WHY DO LANDLORDS LOSE SO FREQUENTLY IN HOUSING COURT?

This section is purely the author’s opinion. There is nothing scientific in this section. If you do not care to hear my opinion, then just skip to the next section.

Over twenty years ago, when I started in this profession, I had a boss who used to bring in Housing Court cases to his small Court Street law firm. He would tell every landlord-client what a great case they had, that the case was a “slam dunk”[2], that he would kick the tenant’s butt. Then I would be assigned the actual work. I would invariably find that the case was not a “slam dunk”  and I would often soon discover that the case was a loser. I asked my boss, “Why do you tell landlords that their case has a higher chance of winning than it obviously does?” This was his answer, “If you do not tell these landlords what they want to hear, then there are 100 other guys on this very block who will and they will get the work, not us.” Right up through today, I have heard associates of landlord-oriented law firms with this same complaint. 

I decided that when I created my own law firm [3] that I would do nothing short of tell prospective-landlord-clients the truth. I have done exactly that. It has not been easy. For one thing, I am a woman in a male-dominated field. When I started giving landlords bad news about the likelihood of Housing Court litigation achieving their goals, certain people openly questioned whether I was “aggressive” enough because of my gender. 

But I kept telling the truth. And it seems to have paid off. 

I don’t lose a lot. Why? I get asked a lot – what is my secret sauce for great results in Housing Court? Am I smarter than other lawyers? NOPE. Do I have a larger team? NOPE. Did I go to an Ivy League School and receive honors? NOPE and NOPE. Do I work harder than other people? (Probably!) But NOPE. Do I have some insider influence? G-d forbid NOPE! There is NOTHING special about me. So, wait for it…

I win more because I refuse to file losing cases, which means I don’t actually file many cases. There it is, now you know.

I am a small firm and I am my own boss, so I simply refuse to file a case if I don’t feel more than 75% sure that I can win. I will not file a case I think is a loser. NO matter who the client or prospective client is, no matter how much of a legal fee I am passing up.

A fellow landlord-and-tenant attorney (not part of my firm) asked me to take a look at a case for him recently. He asked me, “How can I win this, Michelle?” I replied, “You can’t. It’s a loser.” He asked me, “Well how would you win it?” And I said, “I wouldn’t win it, which is why I wouldn’t file it.” And he literally said this to me, “What kind of lawyer are you? GOOD lawyering is about fighting losing battles.” No…it isn’t. Good lawyering, in this author’s humble opinion, is largely about good ANALYSIS. Why would anyone ever willingly choose to spend money on legal fees and time and energy on a litigation to lose? 

You can’t make this stuff up. Last week I had a settlement – a good settlement – on a case where Legal Aid represented a tenant association[4] . My client had worked hard on the settlement, as did Legal Aid. We had consensus and were ready to sign and begin a new chapter in the building’s history. On the eve of settlement, I got an email from a previously-silent partner in Tennessee, that said the following:

"This settlement agreement is ridiculous. You are giving away the store. I am a lawyer, barred in Tennessee. You need to explain to me why we should enter into this terrible stipulation. If you cannot adequately explain this, I want you to immediately begin a nonpayment case against every tenant in the building. I demand an explanation as to why you think we should waive all this rent."

Yawn. If I had a dime for every email I received like that, then I’d be a rich woman. But I digress… There was a time in my career when I would have felt defensive upon receiving such a missive. Those days, fortunately, are behind me. Instead, this is how I answered:

"Here is your explanation. This isn’t Tennessee…It’s Brooklyn."

"I have adequately and repeatedly explained my reasoning for strongly recommending this settlement in the series of Legal Project Management letters that have formed the Project Charter for this matter. I attach them hereto and refer you to them."

"If, after reviewing that material, you, as a lawyer and a business person, feel that my representation is inadequate - that I am too weak, not clever enough, that there is more to the story – then I urge you to shop around and seek other counsel. This is a critical juncture in this matter. If you really want to go to war with this building, then you need to do so with a lawyer that you trust. That does not seem to be me."

"In any event, I am not willing to initiate these eight cases on your behalf. Those eight cases will be what I call, and I chose my words carefully, “bullshit losing cases”. I do not file bullshit losing cases. There are ethical reasons for me refusing to file bullshit losing cases. There are branding reasons for me refusing to do so. When judges, adversaries, and clients see me coming, I want them to think of me as the woman who wins. There are economic reasons for my aversion to the bullshit losing cases, as well. Clients who are gung-ho in the beginning about bullshit losing cases, tire of paying legal fees as the months turn into years and results are not achieved. Let some other lawyer lose these cases for you. I prefer to exit on an up-note!"

"Let me know what you want to do. But if you are moving into a litigation posture on this matter, I can travel no farther with you on this journey." 

You may recall above that I included a column in the study that I call, “Surprise?” I noted how often a case’s outcome surprised me. Case outcomes in this study surprised me 7% of the time. In other words, I like to think that, given the fact patterns set forth in the 63 losers, that I would not have filed more than 4 or 5 of them, had they come across my desk. But, alas, hindsight is always twenty-twenty.

When you are always in an inferior position, when you spend all day losing, you end up beaten and beleaguered. That goes for landlords and their attorneys. When you stop picking fights you can’t win, you create the space in your business life to arrive at whatever clever, out-of-the-box, and/or mutually beneficial solutions might actually exist. Ryan Holiday, in his book, The Obstacle is the Way, says that “Being trapped is just a position, not a fate. You get out of it by addressing and eliminating each part of that position through small, deliberate actions – not by trying (and failing) to push it away with super human strength.”

The balance of this booklet is filled with the small and deliberate actions, that if taken before initiating a landlord and tenant case, could have either alerted the landlords in the 63 losing cases to the weaknesses of their positions, causing them to stand down, and/or could have helped them to ameliorate those problems before going to court with a losing case. In short, Landlords need to educate themselves and be far more discerning and proactive in the Housing Court space. 

Endnotes
[1]  http://www.courts.state.ny.us/COURTS/nyc/civil/statistics.shtml
[2] There is no such thing.
[3] Itkowitz PLLC is MY law firm, I am the 95% owner.
[4] Irrelevant details changed to protect the innocent!

[END OF MATERIALS EXCERPT]

Here is a picture of us at the Symposium!





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