Matter of Red Hook/Gowanus Chamber of Commerce v New York City Bd. of Stds. & Appeals
Annotate this CaseDecided on April 18, 2006
Supreme Court, Kings County
In the Matter of . Red Hook/Gowanus Chamber of Commerce, Petitioner,
against
New York City Board of Standards and Appeals, THE CITY OF NEW YORK, and 160 IMLAY STREET REAL ESTATE, LLC., Respondents.
2308/04
Yvonne Lewis, J.
On December 24, 2003, the New York City Board of Standards and Appeals (hereinafter, NYCBS&A) granted Imlay Street Real Estate, LLC. (hereinafter, Imlay) a hardship variance with regards to its Red Hook waterfront property. The Petitioner, Red Hook/Gowanus Chamber of Commerce (hereinafter, Coalition) filed an appeal thereof on the thirtieth day of the 30 day statute of limitations afforded by section 25-207 of the New York city Administrative Code, which omitted Imlay. This court, on July 30, 2004, denied the City's motion to dismiss for failure to have included Imlay as a necessary party, and allowed Red Hook to file an amended complaint, adding Imlay as an additional party. On May 9, 2005, the Appellate Division, Second Department, reversed and dismissed the proceeding upon a finding that the applicable statute of limitations had expired.
By its October 25, 2005 decision, the New York Court of Appeals has now remitted the matter sub judice for this court to ascertain if the case can proceed without the respondent, Imlay, which has been deemed [by the said Court of appeals] to be a necessary party joinable only by consent or appearance. To make that determination, this court is required, pursuant to CPLR 1001 (b), to consider, 1. whether the plaintiff has another effective remedy in case the action is dismissed on account of the nonjoinder; 2. the prejudice which may accrue from the nonjoinder to the defendant or to the person not joined; 3. whether and by whom prejudice might have been avoided or may in the future be avoided; 4. the feasibility of a protective provision by order of [*2]the court or in the judgment; and, 5. whether an effective judgment may be rendered in the absence of the person who is not joined. The Court of Appeals pointed out that "[o]f those five factors, no single factor is determinative; and while the court need not separately set forth its reasoning as to each factor, the statute directs it to consider all five. [While highlighting the fact that] [o]ne of the factors a court must consider whether and by whom prejudice might have been avoided (CPLR 1001 [3]) obviously includes inquiry into why a litigant failed to name a necessary party prior to the expiration of the statute of limitations." The majority of the court rejected the dissenting view that "[i]f a party is necessary but was never subject to the court's jurisdiction, then the court should consider the CPLR 1001 (b) factors before issuing a dismissal. When the statute of limitations has expired without an adequate excuse, however, courts need not recite the CPLR 1001 (b) factors in issuing a dismissal." (See Red Hook v. NYC Bd of Stand. & Appeals, et al., 5 NY3d 452, 805 NYS2d 525). In addition, the majority specifically found that Imlay and the municipal respondents are not united in interest. Following the Court of Appeals' remitur, Respondent Imlay moved this court for an order granting a preference in these proceedings pursuant to General City Law §81-c(3) and CPLR 3403 inasmuch as the matter has been pending for approximately two years, the subject building is empty, and it has received no rental income and is suffering significant economic hardship. In addition, Imlay seeks a dismissal as to it since it was not named as a respondent until after the expiration of the applicable statute of limitations, and the New York Court of Appeals has already determined that with an expired statute of limitations, an amended complaint must relate back to the originally petitioned parties or those with whom they are united in interest, which Imlay and the City are not. A reply affirmation was submitted on behalf of Imlay (by one of its managing members) which in pertinent part sought to point out that only four of the six floors of Imlay's building had been granted a variance for residential use; that a new terminal facility had unofficially opened to the west of Imlay's facility; that south of the building is a vacant lot housing no businesses; to the north is a sister building also owned by Imlay which currently has no tenants; and, to the east is a warehouse which may or may not be a member of the petitioner's Coalition.
NYCBS&A and the City of New York [hereinafter the municipal respondents] have moved this court for leave to renew their February 17, 2004 cross-motion to dismiss the petition herein, pursuant to CPLR 3211 ( a )(10), 1001, 1003, and 7804(f), for failure to name a necessary party within the applicable statute of limitations; to vacate this court's July 30, 2004 order which added Imlay as a party; and, to dismiss the within matter. In the event that dismissal is not granted, the City requests that the petition be decided on an expedited basis since two years have already elapsed from the grant of the variance.
The municipal respondents concede that in considering the CPLR 1001 (b) factors, the petitioner would not have another effective remedy if this proceeding is dismissed on account of non-joinder [factor 1]. However, the municipal respondents assert that this court should be especially mindful of the fact that if the petition is granted, Imlay would be unduly prejudiced [factor 2] in that the variance that the NYCBS&A granted to it vis-a-vis its property development rights would be voided without its participation and, hence, in violation of its due process rights. This prejudice could have been avoided [factor 3] if petitioner had simply included Imlay prior to the expiration of the statute of limitations. What makes Imlay's non-inclusion particularly [*3]egregious is the fact that "[p]etitioner can offer no excuse for failing to name the owner [Imlay] as a party to this proceeding at the time [that] it was commenced, since there can be no question that petitioner knew the identity of the owner and that the owner had the most direct interest in the outcome of the proceeding." The petitioner had appeared at the NYCBS&A variance hearing. The municipal respondents additionally argue that Imlay's interest cannot be protected by any court order or judgment [factor 4] since the validity of the granted variance is the very thing that the petitioner seeks to have voided. Finally, the municipal respondents contend that to determine what "justice requires" in this instance, this court should not overlook the fact that the
". . .petitioner is at fault and the owner is without fault. Through its error, petitioner has itself created the prejudice that will accrue to it if this matter is dismissed, while the owner has in no way caused itself to suffer this prejudice."
The Coalition has submitted two cross-motions. One seeks an order, pursuant to CPLR §2221, to renew and to deem Imlay to have voluntarily intervened by its actions herein, and sets forth the reasons why it should prevail with regards to the CPLR 1001 (b) factors. The other seeks an order striking the aforementioned reply affirmation of Imlay's managing member.
In support of its first request, the Coalition notes that ". . .the Developer, seeking to influence the outcome of this litigation, asked for affirmative relief independent of dismissal as to itself only, namely dismissal of the entire proceeding, plus a preference not only with respect to its order to show cause, but, again, with respect to the entire proceeding. . ." The Coalition then argues that Imlay's said request for a preference as concerns the entire proceeding, ". . .constitutes a New request for Affirmative Relief that would transcend the Developer's dismissal (assuming it was granted), thereby affording the Developer the opportunity to step into' this Proceeding, to influence the manner by which it is litigated, but simultaneously avoiding this Court's jurisdiction." In other words, a party's request for affirmative relief constitutes voluntary participation, warranting a finding of intervention (Citing, USF&G v. Maggiore, 299 AD2d 341 [2d Dept., 2004]; Adam v. Singer, 303 US 59 [1938]; and, American Home Assur. Co., v. Montilius, 234 AD2d 543 [2d Dept., 1996]). With regards to the reply affirmation of Imlay's managing member, the Coalition asserts that it should be disregarded and stricken since it violates the Court of Appeals' decision that the issues presented by the parties should be decided on "the existing record," and its contents are contrary to earlier (documentary and expert) findings in the record and, hence, violative of the law of the case doctrine. Finally, and more in keeping with the Court of Appeals holding, the Coalition argues that continuance in the absence of Imlay should be the course since in the event of dismissal, the proceeding cannot be recommenced in light of the expired statute of limitations, leaving the Coalition with absolutely no remedy [factor 1, a point conceded by the municipal respondents]. As a result, eighty-five (85) businesses [which comprise the Coalition] would be subject to the domino effect of other variances being granted, which could well lead to the termination of approximately three-thousand (3000) generational jobs. The Coalition notified the Developer prior to the expiration of the statute of limitations that these proceedings had been commenced, and the ". . .Developer answered the petition before the city, submitted papers in opposition to every aspect of relief requested, participated in oral argument at all hearings, and otherwise fully participated' at every stage of this litigation." In addition, Imlay never sought a stay of proceedings once it had been joined as a party by this court. Instead it participated then appealed to the Appellate Division. [*4]All that now remains is the issuance of a decision on the merits as to proceedings in which Imlay fully participated and contributed, and its position is fully known. Even if that participation is deemed to have been involuntary, the Coalition maintains that in the event of a remand to the NYCBS&A, Imlay would retain the ability to argue the merits of its variance. Hence, any prejudice to Imaly is at best de minimus [Factor 2]. In this regard, the Coalition also maintains that despite the Court of Appeals' finding that the municipal respondents and Imlay are not united in interest, their interests as to the issues presented by this proceeding do coincide in such a manner as to minimize any prejudice to Imlay (Citing the matter of 27th St. Block Ass'n v. Dormitory Auth. of State of New York, 302 AD2d 155 [1st Dept., 2002]). Furthermore, the Coalition maintains that the loss of potential jobs to it far exceeds any potential prejudice to Imlay's non-participation in on-going proceedings to reconsider its variance. The Coalition also argues that Imlay could have avoided any prejudice [factor 3] by intervening in the case when it was initially filed. (Citing the matter of 27th St. Block Ass'n, supra, 302 AD2d 155). A fortiori, the Coalition maintains that "[t]he necessary party doctrine was not designed to promote gotcha' litigation, affording a calculating litigant [a means by which] to exploit the due process objectives of the CPLR's joinder provisions to deprive another party of its day in court." Insofar as the feasability of a protective order herein [factor 4], the Coalition points to the dictates of 27th St. Block Ass'n, supra, 302 AD2d 155, for the proposition that, as in the within matter, ". . .when the relief sought is remand and not vacatur of the relief previously issued to the property owner, there is no need for a protective provision." Accordingly, Imlay would have no entitlement to any protective order herein. The Coalition further asserts that Imlay's inclusion or exclusion in a remand for further consideration is of no moment since only the municipal respondents can respond thereto. Therefore an effective judgment can be rendered in the absence of Imlay [factor 5].
Imlay interposed opposition to striking its managing member's affidavit on the basis that it was submitted in support of both its motions [for a preference and to dismiss] in order to correct "numerous factual inaccuracies in the Coalition's memorandum of law, which was itself not limited to the record." In additional reply, the Coalition reiterated its opposition to the managing member's affidavit, asserted that there is no statutory basis for a preference, but nevertheless consented to the same, and contended that it had a reasonable explanation for not having named Imlay initially. In its reply memorandum of law, Imlay claimed that the Coalition's failure to rebut its request for a preference should be viewed as a concession that the case is entitled to one. Also, since the Court of Appeals specifically found that it was joined after the expiration of the statute of limitations, there can be no basis to deny its request for a dismissal as to it, and that the Coalition's regurgitated appellate arguments, including the assertion that a stay request should have been made to the Appellate Division when it was added to these proceedings, were heretofore found to be and remain meritless. In any event, the fact is that its statute of limitations defense was preserved in its answer. In addition, Imlay asserts that its request for a preference is in connection with its motion to dismiss not any affirmative counterclaim and, hence, does not constitute voluntary participation in these proceedings, sufficient to efface its statute of limitations defense.
In their memorandum of law in further support of their motion (for leave to renew their cross-motion to dismiss the petition for failure to timely name Imlay as a necessary party, and [*5]upon renewal, to vacate the order adding Imlay and dismissing the petition in its entirety), the municipal respondents assert that the Coalition's recent coss-motion request to include Imlay as a respondent is improper ". . .as the Court of Appeals has already ruled that Imlay was outside the jurisdiction of this Court when it was ordered to appear as a party." They assert that
". . .even in the face of Imlay's participation before it, the Court [of Appeals] ruled that Imlay was not a proper party." The municipal respondents additionally argue that the task before this court is not the merits of the underlying petition, but rather whether it is equitable for this matter to proceed in Imlay's absence given the considerations of CPLR 1001 (b), which all weigh in its favor. They argue that Imlay's heretofore improper joinder and unwilling participation in the action cannot be construed as harmless error and doing so would negate the directives of the Court of Appeals. In spite of the fact that the Court of Appeals cited several cases which permitted the continuation of a matter wherein a necessary party had not been included fails to take into account the court's specific pronouncement to the effect that "several of the foregoing cases involve like the present case an omitted landowner, a land-use challenge and a lapsed statute of limitations, leading us to conclude with the obvious lesson: omitting the landowner from the litigation may be fatal."
The municipal respondents also request that this court disregard the non CPLR 1001 (b) arguments advanced by the Coalition for the following reasons, 1. the Coalition has offered no valid explanation for its failure to initially include Imlay in the proceedings; 2. Imlay's requests for a preference of the underlying matter and for dismissal as to it for its non-inclusion as a necessary party are natural extensions/consequences of the Court of Appeals' ruling; 3. the Court of Appeals has already determined that Imlay and the municipal respondents do not share a unity of interest sufficient to protect and advance Imlay's concerns; 4. the merits of the underlying petition are irrelevant to the remitted issue, and the facts stated with regards thereto are false; eg, commercial tenants did not occupy the premises when purchased by Imlay; and, future predictions for the area are speculative, unfounded, and not supported by any credible studies.
Imlay's motion to dismiss (as to it), and the first two branches of the municipal respondents' motion (for renewal of its motion to dismiss and to set aside the order allowing Imlay's inclusion) are redundant inasmuch as the Court of Appeals remitted this matter to this court with those issues firmly decided. Hence, this court is only concerned with whether the matter can proceed in Imlay's absence in the face of the requirements of CPLR 1001(b), and if so, whether a preference is warranted. In addition, this court will consider whether the request by Imlay for a preference in the underlying action constitutes a voluntary appearance, and if so, its impact herein.
Weighing the CPLR 1001(b) factors, this court finds that dismissal [factor 1], as conceded by Imlay, would leave the Coalition with no other recourse. It would also mean that the Board's decision would stand without a full blown challenge by the Coalition, a fact that could be emphasized in any future requests for variances in the area, whether by Imlay as to its other property or by any other owner. Hence, the certitude of any domino effect is not at all infallible. Of course, some prejudice to Imlay [factor 2], as a result of non-inclusion, is undeniable and unavoidable since the municipal respondents and Imlay have already been determined by the Court of Appeals to not be united in interest. However, it cannot be gainsaid that, to a large extent, their interests as to the issues presented by this proceeding; i.e., the validity [*6]of the granted variance, and compliance with state and local laws, do not coincide. Thus the potential harm to Imlay's (commercial as opposed to luxury condominium use) rights as a result of the dismissal is minimal compared to the Coalitions'. This prejudice could have been avoided [factor 3] had the Coalition not omitted Imlay. Nevertheless, Imlay, obviously aware of the proceeding, could have avoided any prejudice by seeking intervention, although not required to do so. "Pursuant to CPLR 7802 (d), the court has the authority to permit [Imlay] to intervene, thereby avoiding any prejudice to it. Given the limited focus of petitioners' Article 78 challenge and the fact that no relief is being sought directly against [Imlay], the authority to intervene also disposes of the factor listed in CPLR 1001 (b) (4) dealing with the feasibility of a court ordered protective provision." Accordingly, the effectiveness of any judgment [factor 5] is apparent given that "the relief sought is a remand for further consideration of the variance (alternate uses, etc.) which the Coalition and municipal respondents can adequately address, regardless of Imlay's presence or absence in the proceeding as a party (See 27th St. Block Ass'n, supra, 302 AD2d 155). Hence, under all the attendant circumstances herein, this court finds, pursuant to CPLR 1001 (b), that the factors justifying the continuance of the proceeding in Imlay's absence weigh in favor of the Coalition.
In USF&G v. Maggiore, et al, supra, 299 AD2d 341, 749 NYS2d 555, the Appellate Division, Second Department, took note of the fact that "CPLR 320 (a ) provides that a defendant may appear in an action in one of three ways: (1) by serving an answer, (2) by serving a notice of appearance, or (3) making a motion which has the effect of extending the time to answer. Courts, however, have also recognized that a person who participates in the merits of an action appears informally and confers jurisdiction on the court'." In support of the latter position, the court noted that in that particular case although some insurance companies had been named in the interpleader complaint, but failed to answer, they appeared informally by making a late claim. As an additional example, the Appellate Division cited the matter of In Roslyn B. v. Alfred G., 222 AD2d 581, wherein an appellant was deemed to have conferred jurisdiction on Family Court when he submitted to a blood grouping test and asserted denials of his paternity through his attorney without raising jurisdictional objection. In this instance, the court finds that Imlay's demand for the granting of a preference in these proceedings pursuant to General City Law §81-c(3) and CPLR 3403 (on the basis that the matter has been pending for approximately two years, the subject building is empty, and it has received no rental income and is suffering significant economic hardship) does not constitute the seeking of affirmative relief "on the merits" of this action whereby it submitted to the jurisdiction of this Court. It is clear that in making its concomitant motion to dismiss that Imlay was not only retaining its jurisdictional objection, but merely asking that the court hasten its deliberations with the parties properly before it, especially in light of its continued suffering.
More significantly, this court finds that Imlay' request for an order granting a preference in these proceedings pursuant to General City Law §81-c(3) and CPLR 3403, and the City's request that the petition be decided on an expedited basis since two years have already elapsed from the grant of the variance are warranted in the instant matter. CPLR Rule 3403 (a ) (1) and (3) clearly provide that "[c]ivil cases shall be tried in the order in which notes of issue have been filed, but the following shall be entitled to a preference: . . .an action brought. . .against the state, or board of officers of the state. . . and. . .an action in which the interests of justice will be served [*7]by an early trial."
WHEREFORE, on the basis of all of the foregoing, Imlay's motion for dismissal as to it since it was not named as a respondent until after the expiration of the applicable statute of limitations is granted. NYCBS&A and the City of New York's motion for leave to renew their February 17, 2004 cross-motion to dismiss the petition herein, pursuant to CPLR 3211 ( a )(10), 1001, 1003, and 7804(f), for failure to name a necessary party within the applicable statute of limitations, and to vacate this court's July 30, 2004 order which added Imlay as a party are granted. The Coalition's motion, pursuant to CPLR §2221, to renew and to deem Imlay to have voluntarily intervened by its actions herein is denied. Its additional motion for an order striking the reply affirmation of Imlay's managing member is also denied as moot. Its further request, however, that the matter be permitted to proceed in Imlay's absence on the basis of the CPLR 1001 (b) factors is granted. NYCBS&A and the City of New York's cross-motion for the opposite result is denied. Imlay shall be permitted, pursuant to CPLR 7802 (d), to intervene in these proceedings if it elects to do so. Finally, Imlay and the City's requests that the petition be decided on an expedited are granted pursuant to CPLR 3403 (a ) (1) and (3). This constitutes the decision and order of this Court.
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