Landlords appeal from a final judgment of the Civil Court of the City of New York, New York County (Michelle D. Schreiber, J.), entered January 11, 2010, after a nonjury trial, in favor of tenants dismissing the petition in a holdover summary proceeding.

Per Curiam.

Final judgment (Michelle D. Schreiber, J.), entered January 11, 2010, affirmed, with $25 costs.

We agree with Civil Court's determination that landlords failed to meet their burden of proving that the apartment at issue was exempt from rent stabilization under 9 NYCRR § 2520.11(l), which exempts from rent stabilization an apartment "contained in [a] building[] owned as [a] cooperative[] ... on or before June 30, 1974." The trial evidence, including the deed to the subject apartment building, amply supports the court's fact-laden determination that the building was owned and operated by a partnership —- not a cooperative —- on or before June 30, 1974.

Under the particular facts and procedural history underlying this proceeding, Civil Court providently exercised its discretion in denying landlords' mid-trial application to conform the pleadings to the proof to assert an alternative exemption from rent stabilization, to wit, that the apartment is exempt from rent stabilization because it was contained in a building owned and operated by a cooperative after June 30, 1974. As the trial court expressly found, tenants would be prejudiced by this amendment given that landlords' holdover petition and their papers in opposition to tenants' summary judgment motion asserted only the pre-1974 cooperative exemption; landlord's pre-trial motion to amend the petition to assert, among other things, a post-1974 cooperative exemption was withdrawn; and tenants were denied discovery of post-1974 documents and prepared for trial accordingly. Indeed, landlords, who were aware prior to trial that tenants challenged landlords' right to invoke the pre-1974 cooperative exemption, raised their alternative theory for the first time mid-trial, when they could not establish the initially [*2]pleaded exemption (see Paton v Weltman, 23 AD3d 895 [2005]; Torani v First United Methodist Church, 163 AD2d 641 [1990], appeal denied 76 NY2d 713 [1990]; see also Karasik v Bird, 104 AD2d 758 [1984]).

We note, too, that while the post-1974 exemption contained in 9 NYCRR § 2520.11(l) applies to certain cooperatives pursuant to section 352-eeee of the General Business Law (see 9 NYCRR §§ 2520.11[l], 2522.5[h]; Matter of 10 W. 66th St. Corp. v New York State Div. of Hous. & Community Renewal, 184 AD2d 143, 150 [1992]), the trial evidence did not establish that the apartment qualified for the exemption. Nor have landlords established that the premises were converted to a cooperative pursuant to the Attorney General's Cooperative Policy Statement No. 4, since the trial evidence fails to establish that any cooperative conversion plan has been declared effective. We also agree that landlords failed to establish that the "shareholders occupied and maintained the subject premises since ... before tenant took possession as a de facto cooperative" (55th St. Mark's Place Real Estate Holding Co., Inc. v Martin, 21 Misc 3d 144[A], 2008 NY Slip Op 52517[U] [2008]).

We have considered landlords' remaining claims and find them unavailing.

THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
Decision Date: January 14, 2011