Matter of Findley v Vanamerongen

[*1] Matter of Findley v Vanamerongen 2008 NY Slip Op 52545(U) [21 Misc 3d 1148(A)] Decided on December 17, 2008 Supreme Court, Kings County Hinds-Radix, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 December 17, 2008
Supreme Court, Kings County

In the Matter of the Application of Jean Findley, Petitioners, For a Judgment Under Article 78 of the Civil Practice Law and Rules,

against

Deborah Vanamerongen, DIVISION OF HOUSING AND COMMUNITY RENEWAL, , Respondents.



3417/08

Sylvia O. Hinds-Radix, J.

Petitioner Jean Findley seeks judicial review, pursuant to article 78 of the Civil Practice Law and Rules, of an order issued by respondent Division of Housing and Community Renewal (DHCR), which denied petitioner's petition for administrative review (PAR) and affirmed a determination of the Rent Administrator (RA) dismissing petitioner's rent overcharge complaint.

On March 5, 2007, petitioner filed an overcharge complaint with the DHCR wherein she stated that she took occupancy of the subject apartment on February 16, 2005 pursuant to a two-year lease commencing on February 15, 2005 and expiring on February 14, 2007, and believed that her monthly rent of $788 constituted an overcharge because the previous tenant paid $400. Petitioner further stated that in December 2004 she was charged $2,364 for a broker's fee, one month's rent and one month's security. Petitioner also submitted copies of checks, dated May 15, 2005 and June 15, 2005, each in the amount of $788.00, alleged copies of the backs of those checks indicating that they were paid by the bank, a handwritten receipt dated December 29, 2004 stating that the owner received $1,576.00 as "one month rent and one month security" on the apartment, with "[b]alance to be pa[id] on December 31, 2004," and that "[o]n behalf of M.P. Management official receipt will be issued by Mike." Additionally, petitioner submitted a cash receipt by M.P. Management dated August 30, 2005 in the amount of $2,364.00.

In its response, M.P. Management, the owner's managing agent, stated that the only security received was for $788.00 and that the May 15, 2005 and June 15, 2005 checks were [*2]returned for insufficient funds. The owner submitted the initial lease of prior tenant Ricardo Lourensz commencing on April 1, 1982, the most recent two-year renewal lease of Mr. Lourensz for the term May 1, 2003 through April 30, 2005, stating a rent of $475.43, the initial lease of prior tenant Monica Grant for a two-year term commencing June 1, 2004 and ending on May 31, 2006 stating a rent of $660.00, and the initial lease of petitioner for a two-year term commencing February 15, 2005 and ending February 14, 2007 stating a rent of $788.00. Additionally, the owner submitted copies of a rent ledger for the subject apartment and copies of the checks dated May 15, 2005 and June 15, 2005, which appear to be stamped "INSUFFICIENT" on the face of each. In a subsequent letter dated July 23, 2007, the owner detailed how petitioner's rent was calculated.

On August 10, 2007, the RA issued an order denying petitioner's overcharge complaint, finding that the rent charged was the same as the legal regulated rent (LRR). The RA noted that the rent charged on the base date (four years prior to the filing of the complaint) was $475.34, which was paid by a previous tenant (Mr. Lourensz) who resided in the apartment for 23 years prior to vacating, thus entitling the owner to a longevity increase of 13.8 % pursuant to Rent Stabilization Code 2522.8 (a) in addition to the two 20% vacancy increases assessed upon the departure of the previous tenants who occupied the apartment following the base date.

Petitioner filed a PAR on August 16, 2007. On November 28, 2007, the Deputy Commissioner issued an order denying petitioners PAR, stating in part:

Presumably, the petitioner has misread the Order's calculation chart. The calculation chart did list monthly rent payments of $660.00. However, the chart clearly shows that this amount pertained to the prior tenant's rent, not the complainant's. The complainant's monthly rent payments, pursuant to his [sic] vacancy lease commencing on 2/15/2007, were indeed listed in the chart as $788.00. Accordingly, the tenant has not established that an error was made in the Order's determination of his [sic] rent payments.

The instant article 78 proceeding ensued.

Petitioner initially filed a pro se petition, wherein she claimed that the DHCR improperly applied the 20% vacancy increase "twice" in determining the LRR of $778, and that instead the LRR should have been $660 at the start of her lease. Petitioner thereafter retained counsel, who moved for leave to file a supplemental petition pursuant to CPLR 3025 (b).[FN1] In the supplemental petition, petitioner alleges that the DHCR failed to conduct a proper investigation of the owner's records, which would have revealed that "Monica Grant," the tenant alleged to have occupied the apartment prior to petitioner, was fictional and that the DHCR further failed to address petitioner's charge that the owner collected an excessive security deposit, which included a fraudulent "broker's fee."

This court is limited by CPLR article 78 to a review of the record before the DHCR and to the question of whether its determination was arbitrary and capricious (Matter of Windsor Place Corp. v DHCR, 161 AD2d 279, 280 [1990]; Mazel Real Est. v Mirabal, 138 AD2d 600 [1988]; Matter of Bambeck v DHCR, 129 AD2d 51, 55 [1987], lv denied 70 NY2d 615 [1988]; Villas of Forest Hills v Lumberger, 128 AD2d 701, 703 [1987]). If a rational basis exists for its [*3]determination, the decision of the administrative body must be sustained (Matter of Pell v Board of Educ., 34 NY2d 222, 230 [1974]; Matter of Tener v DHCR, 159 AD2d 270 [1990]). Stated simply, this court cannot substitute its judgment for that of the agency, so long as the agency's decision is rationally based in the record (Colton v Berman, 21 NY2d 322 [1967]). "Arbitrary action is without sound basis in reason and is generally taken without regard to the facts" (Pell, 34 NY2d at 231).

With respect to the RA's determination that petitioner's monthly rent of $788.00 was not in excess of the LLR, this court finds that this determination is supported by a rational basis and is in full accord with applicable law. It was not arbitrary or capricious for the RA to accept as authentic the intervening tenancy of Monica Grant based on the lease and rent ledgers submitted by the owner, despite the claims of petitioner as to the owner's fraud which are improperly raised for the first time in this article 78 proceeding (see Weinreb Mgt. v DHCR, 24 AD3d 269 [2005]). Further, the new evidence and arguments submitted by petitioner for the first time do not disprove that there was a prior tenancy from June 1, 2004 to December 31, 2004, and given that this tenancy commenced after April 1, 2004 and terminated prior to April 1, 2005, it would not be reflected in the annual registrations filed by the owner.

Nonetheless, while the RA's finding with respect to the amount of the LRR was not irrational, it appears that the RA neglected to address petitioner's allegation that the owner collected an "excess security deposit." It appears from the owner's own rent ledgers that the amounts reflected in the checks which were alleged to have bounced were improperly added to the outstanding balance of rent arrears (thereby resulting in a double charge for certain months).

As a result, the instant article 78 petition is granted to the extent that this matter is remanded to the DHCR for further proceedings with respect to petitioner's claims of excessive charges and/or collection of an excessive security deposit. The DHCR is directed to accept for filing and consideration a supplemental overcharge complaint outlining these claims, and make a new determination thereon.

The foregoing constitutes the decision and order of the court.

E N T E R,

J. S. C. Footnotes

Footnote 1:Petitioner's motion to amend the petition was granted by order dated October 2, 2008.