Matter of 1381 Myrtle Ave. Realty Corp. v New York City Dept. of Hous. Preserv. & Dev.

[*1] Matter of 1381 Myrtle Ave. Realty Corp. v New York City Dept. of Hous. Preserv. & Dev. 2005 NY Slip Op 50126(U) Decided on February 7, 2005 Supreme Court, Kings County Harkavy, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on February 7, 2005
Supreme Court, Kings County

In the Matter of the Application of 1381 Myrtle Avenue Realty Corp., Petitioner,

against

New York City Department of Housing Preservation and Development, et ano., Respondents.



23523/04

Ira B. Harkavy, J.

Petitioner 1381 Myrtle Avenue Realty Corp. moves, pursuant to CPLR article 78, for: (1) a writ of mandamus compelling respondents the New York City Department of Housing Preservation and Development (HPD)[FN1] and the New York State Division of Housing and Community Renewal (DHCR) to remove the residential units at petitioner's real property, located at 1318 Myrtle Avenue in Brooklyn (the Property), from its records as a property subject to rent stabilization; and (2) a judgment declaring that petitioner's real property is exempt from the provisions of rent regulation. DHCR cross [*2]moves for an order, pursuant to CPLR 3211 (a) (5) and (7) and CPLR 7804, dismissing the petition.

Facts and Procedural Background

Petitioner commenced this article 78 proceeding seeking to obtain a judgment declaring that the Property is exempt from the provisions of the Rent Stabilization Law (RSL) and/or the Emergency Tenant Protection Act (ETPA) and enjoining respondents from processing any complaints of rent overcharges and/or issuing any judgment in favor of any tenant/occupant of the Property.

As alleged in the petition, prior to 1990, the structure constructed on the Property was a factory. In 1990, petitioner filed plans with the City of New York to rehabilitate the Property, i.e. to convert the structure to a mixed use building consisting of 16 residential units and a store. The renovation work was carried out and a certificate of occupancy was issued in 1990; tenants thereafter moved into the building. Petitioner accordingly concludes that the building is not subject to the provisions of the rent stabilization laws. Nonetheless, petitioner erroneously registered the building with DHCR as a rent stabilized building.[FN2]

Thereafter, the tenant of apartment 5D filed a complaint with DHCR alleging a rent overcharge. That administrative proceeding is currently pending before the agency. By letter dated January 10, 2004, GUMA Construction Corp. advised the Rent Administrator that since the subject tenant took occupancy of a newly constructed housing accommodation subsequent to the ETPA base date, the tenant took occupancy of a non-stabilized apartment, so that the tenant's complaint should be denied and the proceeding should be dismissed.[FN3] When DHCR refused petitioner's request, the instant action was commenced.

The Parties' Contentions

In support of its application, petitioner argues that the Property is not subject to the provisions of the rent stabilization laws, since it was previously utilized as a factory and was completely renovated for use as a multiple dwelling in 1990. Accordingly, since the building is not subject to rent stabilization, DHCR is without jurisdiction to entertain a rent overcharge proceeding.

In opposition, DHCR argues that the petition must be dismissed on the grounds that the court lacks jurisdiction over the matter; the petition fails to state a cause of action; petitioner failed to exhaust its administrative remedies; the remedy of mandamus is [*3]inappropriate; and DHCR, not the court, has the jurisdiction to issue the declaratory judgment sought by petitioner.[FN4]

Discussion

As presented here, the issue to be resolved is whether DHCR or the court should determine if the property is subject to the RSL and/or the ETPA. In addressing the issue of primary jurisdiction, it has been recognized that the doctrine "'is intended to coordinate the relationship between courts and administrative agencies to the end that divergence of opinion between them not render ineffective the statutes with which both are concerned, and to the extent that the matter before the court is within the agency's specialized field, to make available to the court in reaching its judgment the agency's views concerning not only the factual and technical issues involved but also the meaning of the statute administered by the agency' (Capital Tel. Co. v Pattersonville Tel. Co., 56 NY2d 11, 22; see Davis v Waterside Hous. Co., 274 AD2d 318, lv denied 95 NY2d 770). '"While concurrent jurisdiction does exist, where there is an administrative agency which has the necessary expertise to dispose of an issue, in the exercise of discretion, resort to a judicial tribunal should be withheld pending resolution of the administrative proceeding'" (id. at 318-319, quoting Haddad Corp. v Redmond Studio, 102 AD2d 730)."

(Wong v Gouverneur Gardens Hous., 308 AD2d 301, 303-304 [2003]).

It is well settled that "the question of whether a particular space is subject to rent stabilization falls within DHCR's administrative expertise" (Gracecor Realty Co. v Hargrove, 90 NY2d 350, 357 [1997]; accord Davis, 274 AD2d at 319 [in an action in which the plaintiffs-tenants sought a preliminary injunction to prevent defendant cooperative from withdrawing from the Mitchell-Lama program, which plaintiffs feared would cause their apartments to lose rent-stabilized status, the court held that under the doctrine of primary jurisdiction, judicial review of these matters should await exhaustion of administrative remedies, since primary administrative review is particularly important where the matters under consideration are inherently technical and peculiarly within the expertise of the agency]). Of particular significance herein, it has been held that the issue of whether a building is subject to rent regulation by virtue of its completion date is a question routinely within DHCR's area of expertise (see Matter of Ardor Mgt. v DHCR, 104 AD2d 984 [1984]; [*4]see generally Salvati v Eimicke, 72 NY2d 784, 789-790 [1988] [DHCR has jurisdiction to determine whether horizontal multiple dwellings other than "garden-type maisonette complexes" located in the City of New York may properly be held to be subject to rent regulation as class A multiple dwellings containing six or more units pursuant to the RSL and the ETPA]).

Further, it is well settled that a declaratory judgment action is not the proper vehicle to challenge an administrative act, when other remedies, including an article 78, proceeding are available (see e.g. Gaynor v Rockefeller, 15 NY2d 120 [1965]; Greystone Mgt. v Conciliation & Appeals Bd., 94 AD2d 614, 616 [1983], affd 62 NY2d 763 [1984]). Similarly, "'[i]t is hornbook law that one who objects to the act of an administrative agency must exhaust available administrative remedies before being permitted to litigate in a court of law'" (Welch v DHCR, 287 AD2d 725, 726 [2001], quoting Watergate II Apts. v Buffalo Sewer Auth., 46 NY2d 52, 57 [1978]). Further, denial of declaratory relief is appropriate pursuant to the State Administrative Procedure Act § 204 , which also requires dismissal of an action on the ground of failure to seek and exhaust administrative opportunities for relief (see generally Lehigh Portland Cement Co. v New York State Dept. of Envtl. Conservation, 87 NY2d 136, 144 [1995]).[FN5]

Finally, "[i]t is well settled that the remedy of mandamus is available to compel a governmental entity or officer to perform a ministerial duty, but does not lie to compel an act which involves an exercise of judgment or discretion" (Matter of Brusco v Braun, 84 NY2d 674, 679 [1994] [citations omitted]). Further, an article 78 proceeding in the nature of mandamus does not lie unless the act sought to be compelled is premised upon specific statutory authority mandating performance in a specified manner (see e.g. Peirez v Caso, 72 AD2d 797 [1979]). As is also relevant, it is well settled that a body can be directed to act, but not how to act, in a manner as to which it has the right to exercise its judgment (see e.g. Bonanno v Town Bd. of Babylon, 148 AD2d 532, 533 [1989]).

Discussion

In this case, a complaint by a tenant residing in the property had been filed with DHCR before petitioner commenced the instant proceeding and the administrative [*5]proceeding in which that complaint will be resolved was pending. Applying the above principles of law to these facts, it is clear that the proper remedy available to petitioner is to oppose the tenant's complaint in the administrative proceeding and if the issue is determined against it therein, to seek review by the Rent Administrator by filing a Petition for Administrative Review (PAR); if that review is determined against petitioner, petitioner will be free to seek judicial review at that stage of the proceeding. Accordingly, the failure to exhaust administrative remedies by awaiting an administrative determination and filing a PAR requires dismissal of the instant proceeding as against DHCR (see e.g. Koplos v DHCR, 298 AD2d 329, 329-330 [2002]; Matter of Weinreb Mgt. v DHCR, 297 AD2d 221, 223 [2002]; Glendora v DHCR, 216 AD2d 391, 392 [1995]; lv denied 86 NY2d 708 [1995]).

Implicit in this holding is the finding that mandamus is inappropriate herein. In this regard, the court declines to find that the determination of whether the subject property is subject to any rent control regulations is merely a ministerial duty or that the applicable statutory authority mandates compliance in a specific manner. Thus, to the extent that petitioner seeks mandamus to compel performance, the discretionary, rather than ministerial, nature of the agency action defeats such relief (see e.g. Vink v DHCR, 285 AD2d 203, 211 [2001]).

The court also declines to hold that DHCR does not have jurisdiction over petitioner and the tenant complaint pending before it. Significantly, petitioner admits that it registered the property with DHCR as a rent regulated building, although it now argues that the filing was made in error. Nonetheless, by registering with DHCR, petitioner made the initial determination that the building is subject to rent regulation and hence to the jurisdiction of the agency. From this it follows that any attempt to have the registration vacated must be pursued through administrative review proceedings before court intervention may be sought.

Thus, having held that DHCR has jurisdiction and authority to process the tenant's complaint and to determine if the property is subject to rent regulation, DHCR's actions in processing the complaint are not ultra vires (see generally 10 West 66th Street v DHCR, 184 AD2d 143, 148 [1992]). Moreover, "[i]t is well settled that the extraordinary remedy of prohibition is not available to prevent even ultra vires administrative action when the party seeking such relief may pursue other avenues of judicial review without sustaining irreparable injury" (Fleetwood Tenants Assn. v DHCR, 176 AD2d 941, 941 [1991], citing Matter of American Tr. Ins. Co. v Corcoran, 65 NY2d 828 [1985]; Matter of City of Newburgh v Public Empl. Rel. Bd., 63 NY2d 793 [1984]; see generally Randy-The Salon v New York State Div. of Human Rights, 201 AD2d 901 [1994]; E. 163rd St. v DHCR, 4 Misc 3d 169, 176 [2004]). Petitioner herein has failed to make such a showing.

Conclusion

For the above stated reasons, DHCR's cross motion is granted and the petition is dismissed.

The foregoing constitutes the decision and judgment of this court.

Dated: February 7, 2005E N T E R, [*6]

J. S. C.

Footnotes

Footnote 1: By stipulation of discontinuance dated November 1, 2004, the proceeding was discontinued as to respondent HPD. This decision will accordingly address only petitioner's claims as against DHCR.

Footnote 2: The court is not provided with a copy of the registration.

Footnote 3: The court notes that this letter refers to Docket No. RI 210124 R, while the Default Rent Computation annexed to petitioner's moving papers makes reference to Docket No. SA 210108R. It is therefore not clear if both docket numbers pertain to the same tenant or if more than one complaint has been filed against petitioner.

Footnote 4: The court notes that DHCR's reliance upon CPLR 3211 (a) (5) appears to be in error, since there is no allegation that the "cause of action may not be maintained because of arbitration and award, collateral estoppel, discharge in bankruptcy, infancy or other disability of the moving party, payment, release, res judicata, statute of limitations, or statute of frauds."

Footnote 5: As is relevant herein, SAPA § 204 (1) provides that : "On petition of any person, an agency may issue a declaratory ruling with respect to (i) the applicability to any person, property, or state of facts of any rule or statute enforceable by it, or (ii) whether any action by it should be taken pursuant to a rule. Each agency shall prescribe by rule the form for such petitions and the procedure for their submission, consideration and disposition. A declaratory ruling shall be binding upon the agency unless it is altered or set aside by a court."