Matter of Montefusco v New York State Div. of Hous. & Community Renewal

[*1] Matter of Montefusco v New York State Div. of Hous. & Community Renewal 2009 NY Slip Op 50385(U) [22 Misc 3d 1131(A)] Decided on March 4, 2009 Supreme Court, New York County Edmead, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 March 4, 2009
Supreme Court, New York County

In the Matter of the Application of Anthony Montefusco, Petitioner, For judgment under Article 78 of the Civil Practice Law & Rules

against

New York State Division of Housing And Community Renewal, Respondent.



110904/08

Carol R. Edmead, J.

MEMORANDUM DECISION

Petitioner Anthony Montefusco (petitioner"), pro se, moves for an order and judgment, pursuant to Article 78 of the Civil Practice Law and Rules, vacating the determination of respondent New York State Division of Housing and Community Renewal ("DHCR") dated April 10, 2008 (the "Determination") and allowing petitioner to correct the record that served as the basis for the Determination.

In response, DHCR cross moves for a judgment, pursuant to CPLR §3211(a)(7), dismissing the petition against DHCR for failure to state a claim upon which relief can be granted, on the ground that the Determination was not arbitrary and capricious.

Background[FN1]

Nicholas Turturro ("Turturro "), petitioner's grandfather, was the tenant-of-record of Apartment 13J at 90 Gold Street, New York, New York 10038-1833 ("Apartment 13J "). The apartment is part of a State-aided housing project owned by Southbridge Towers, Inc. ("Southbridge"). Petitioner's parents, Anthony Montefusco and Eileen Montefusco, are the tenants-of-record of Apartment 12K in the housing project ("Apartment 12K"). Petitioner's parents submitted a note dated October 18, 1999 to Southbridge stating that they wanted to add their son, petitioner, as a shareholder of Apartment 12K . In furtherance of that request, the petitioner's parents submitted a "Notice of Change and/or Correction Form" to Southbridge. Southbridge approved that request on April 24, 2000 and issued a lease for Apartment 12K dated May 1, 2000, in the names of petitioner and petitioner's parents. [*2]

On April 22, 2002, Turturro and Eileen Montefusco ("petitioner's mother") executed an annual affidavit for Apartment 13J for the 2001 calendar year, listing Turturro and petitioner's mother as the occupants of Apartment 13J. On May 24, 2002, Anthony Montefusco ("petitioner's father") and petitioner executed an annual affidavit for Apartment 12K, listing petitioner and petitioner's father as the occupants of Apartment 12K. In 2006, petitioner sought succession rights to Apartment 13J.

Administrative History[FN2]

In petitioner's application for succession rights, dated August 5, 2006, petitioner stated that he is the grandson of Turturro, and that his move-in date for Apartment 13J was 2002 (see Return Exh. A-12). The application contains an affidavit from Turturro dated August 11, 2006, wherein Turturro purported to relinquish his rights in Apartment 13J to petitioner. In a letter dated June 4, 2007, Southbridge rejected petitioner's claim on the ground that an investigation had led to the conclusion that petitioner had not resided with Turturro in Apartment 13J for the two-year period required by DHCR succession regulations.

On July 8, 2007, petitioner appealed Southbridge's denial of his application to DHCR. Petitioner alleged that while Turturro had purchased property in Florida "in mid-2004," Turturro did not actually relocate until August 2006 (Aff., ¶ 28; Return Exh. A-2). On July 17, 2007, DHCR transmitted the petitioner's appeal to Southbridge, requesting that it submit its response thereto, including supporting documentation and/or evidence, within thirty days. Also, on July 17, 2007, DHCR wrote to petitioner, acknowledging receipt of his appeal and advising him of the procedure that it would follow in processing it.

On September 17, 2007, Southbridge responded in Opposition to the petitioner's Appeal ("Opp."). Southbridge first noted that necessary information had not been submitted to verify that Turturro continued to reside in Apartment 13J beyond 2003. In addition, Southbridge submitted a statement from the U.S. Office of Personnel Management ("OPM") Retirement Operations Center indicating Turturro's address as 2200 South Palmetto Ave., Apartment. E2, South Daytona, Florida. Southbridge concluded that Turturro and petitioner could not have resided in Apartment 13J as co-primary residents for the necessary two years beginning April 21, 2004 (Aff., ¶ 32).

On October 4, 2007, DHCR wrote to the petitioner, transmitting Southbridge 's

response to his appeal and requesting that he reply thereto with any supporting documentation and/or evidence within fifteen days (Aff., ¶ 34; Return Exh. A-8). On October 23, 2007,

DHCR wrote to Southbridge requesting that it provide its proof for its Determination that

Turturro vacated apartment 13J in late 2002 (Aff., ¶ 35; Return Exh. A-10). That same day, DHCR also wrote petitioner seeking an explanation for the fact that petitioner had supplied an income affidavit for Apartment 12K in 2002, yet claimed succession rights in Apartment 13J. DHCR's letter further requested proof that Turturro had resided in Apartment 13J from April 23, 2004 to August 11, 2006, and provided a list of documents that petitioner could submit as evidence (Aff., ¶ 36; Return Exh. A-II).

DHCR received Southbridge's response to its request for further evidence on November [*3]13, 2007 (Aff., ¶ 37; Return Exh. A-12). The letter noted a lack of documentation placing Turturro's residence in Apartment 13J (id.). The letter further noted that petitioner's original application for succession rights indicated that Turturro had moved from Apartment 13J at a date prior to 2004 (id.).

Petitioner responded to DHCR's request for further evidence on December 17, 2007 (Aff., ¶ 38; Return Exh. A-13). Attached to petitioner's response was a letter from OPM, dated April 17, 2007, indicating that all of Turturro 's retirement payments were directly deposited at HSBC in Manhattan and that Turturro's address was listed as Apartment 13J through 2005. Petitioner also submitted a copy of his 2005 tax return indicating Apartment 13J as his address. However, Southbridge had requested certified copies (id.). Petitioner also argued that while Turturro had bought property in Florida in 2004, he continued to reside in Apartment 13J until 2006.

DHCR investigated the positions of the parties and found various public documents relevant to the matter (Aff., ¶ 40; Return Exh. A-14). DHCR concluded that the evidence placing Turturro's primary residence in Florida as of 2003 was greater than the evidence that would indicate Apartment 13J was his primary residence during that year. DHCR also found the evidence placing petitioner in Apartment 13J prior to 2004 lacking (Aff., ¶¶ 41-42). Thus, on April 10, 2008, DHCR's Deputy Commissioner for Housing Operations issued the Determination, denying petitioner's appeal and upholding Southbridge's denial of petitioner's request for succession.

On August 8, 2008, petitioner filed the underlying petition challenging the Determination.

Petitioner's Contentions[FN3]

Petitioner argues that the Determination was "arbitrary and capricious." He also contends that the Determination was based on "egregious mistakes of fact and fallacious inferences" and that he has been unsuccessful in his attempts to correct the record. Petitioner alleges, inter alia, that the Determination is based on "unspecified information," which DHCR refuses to disclose to petitioner; that DHCR's statement of relevant facts contains false material references that it refuses to let petitioner correct; and that the Determination "is not supported by any substantial evidence, demonstrates a lack of procedural safeguards, indicates a disinterest in basic tenets of investigation and review of evidence, and seeks to impose the severest of penalties" the eviction of petitioner from his home of many years (Pet., ¶ 4).

DHCR's Contentions

DHCR argues that the petition should be dismissed, because the Determination has a rational basis and is not arbitrary, capricious or in any way improper. DHCR rationally determined that petitioner failed to meet the requirement of occupying Apartment 13J with Turturro as co-primary residents. Petitioner sought succession rights under the Succession

Regulations for State-supervised limited-profit and limited-dividend housing companies organized, respectively, under Article II (also known as the "Mitchell-Lama Law") and Article IV of the Private Housing Finance Law ("PHFL"). Only persons qualified to obtain succession rights may be permitted a "reasonable opportunity" to take possession from the housing company (9 NYCRR § 1727-8.4[c]). [*4]

Pursuant to DHCR's regulations for Mitchell-Lama housing projects, tenants are required to notify housing companies in writing, within 90 days, of any changes to their households, and to report such changes in all subsequent income affidavits (9 NYCRR §1727-3.6). In order to prove succession rights, an applicant must satisfy all of the reporting regulations. Family members who have been listed on such documents, and who have resided in an apartment as their primary residence together with the tenant for the requisite periods of time, are entitled to succeed to the apartment in their own names when the apartment is vacated by the tenant of record (9 NYCRR §1727-8.3(a)).

DHCR also contends that apartments at Southbridge Towers, with their below-market maintenance charges, are highly sought after, as evidenced by the large number of lottery applications received whenever Southbridge opens its waiting lists. These apartments are particularly desirable at this time because Southbridge is in the process of attempting to leave the Mitchell-Lama program to become a private cooperative. If this occurs, tenants who choose to vacate will be able to sell the shares allocated to their units at market rates, whereas under the Mitchell-Lama program the resale price is severely limited by statute. The documentary requirements for seeking succession rights for such apartments are designed to ensure that the succession regulations do not become an easy means of circumventing the waiting list. They are also designed to make the process for determining entitlement to succession rights susceptible to easy resolution, in order to ease the administrative burden involved, screen out illegitimate claims, and avoid delays for the many eligible individuals on a housing company's waiting list.

DHCR contends that the administrative record in the instant proceeding establishes that the petitioner failed to meet succession requirements. The evidence in the record did not support a conclusion that petitioner and Turturro occupied the subject apartment as co-primary residents during the applicable two-year qualification period. Thus, DHCR's conclusion that petitioner is not entitled to obtain succession rights is entirely warranted.

Citing case law, DHCR also argues that petitioner may not expand the record or present evidence to the Court that was not presented to DHCR in the administrative appeal. New (or future) submissions are not properly part of the administrative record in this proceeding, and should be disregarded. DHCR also points out that petitioner had an opportunity to present all of his evidence to DHCR during the appeal process.

Analysis

CPLR §7803 states that a court's review of a determination by an agency, such as DHCR, consists of whether the determination was made in violation of lawful procedure, was affected by an error of law, or was arbitrary and capricious or an abuse of discretion, including abuse of discretion as to the measure or mode of penalty imposed (CPLR §7803(3). See Windsor Place Corp. v New York State DHCR, 161 AD2d 279 [1st Dept 1990]; Mazel v DHCR, 138 AD2d 600 [1st Dept 1988]; Bambeck v DHCR, 129 AD2d 51 [1st Dept 1987], lv. den. 70 NY2d 615 [1988]. An action is arbitrary and capricious, or an abuse of discretion, when the action is taken "without sound basis in reason and . . . without regard to the facts" (Matter of Pell v Board of Education, 34 NY2d 222, 231 [1974]). Rationality is the key to determining whether an action is arbitrary and capricious or an abuse of discretion (id.). The court's function is completed on finding that a rational basis supports an agency's determination (see Howard v Wyman, 28 NY2d 434 [1971]).

Where an agency's interpretation is founded on a rational basis, that interpretation should [*5]be affirmed even if the court might have come to a different conclusion (see Mid-State Management Corp. v New York City Conciliation and Appeals Board, 112 AD2d 72 [1st Dept 1985], aff'd 66 NY2d 1032 [1985] ). Pell is instructive on the basic standard of Article 78 review: In article 78 proceedings, "the doctrine is well settled, that neither the Appellate Division nor the Court of Appeals has power to upset the Determination of an administrative tribunal on a question of fact; the courts have no right to review the facts generally as to weight of evidence, beyond seeing to it that there is "substantial evidence."' . . . . The approach is the same when the issue concerns the exercise of discretion by the administrative tribunals. The courts cannot interfere unless there is no rational basis for the exercise of discretion or the action complained of is arbitrary and capricious.' "(internal citations omitted).

Pell at 230-31.

Further, the "arbitrary and capricious test chiefly relates to whether a particular action should have been taken or is justified . . . and whether the administrative action is without foundation in fact.' Arbitrary action is without sound basis in reason and is generally taken without regard to the facts" (id. at 231; see also Jackson v New York State Urban Dev Corp., 67 NY2d 400, 417 [1986] [on review of agency action under CPLR Article 78, the courts may not "second guess the agency's choice, which can be annulled only if arbitrary, capricious or unsupported by substantial evidence"]).

Here, this Court is constrained to uphold the Determination denying petitioner's request for succession rights to Apartment 13J, as it appears that there was a "rational basis" for DHCR's decision, and DHCR's decision was not "arbitrary and capricious." There is substantial evidence in the record indicating that petitioner failed to meet the requirements for succession rights. Specifically, petitioner failed to demonstrate that he had occupied Apartment 13J as a co-primary resident with Turturro during the applicable two-year qualification period, as DHCR's succession regulations require (9 NYCRR §1727-8.3(a); Determination ("Det."), p. 5).

In an application dated August 5, 2006, petitioner sought succession rights to Apartment 13J (Det., p. 3). In the Determination, DHCR outlined the rules for succession: To meet the requirements for succession, the Tenant and Applicant had to havelived together in the Apartment as the ir primary residence for the applicable qualificationperiod. In addition, the Regulations provide for the Tenant to have given theHousing Company written notice that the Applicant had taken occupancy of theApartment upon or before the commencement of that period. After that, the Tenanthad to have listed the Applicant's name on the Apartment's required, annual affidavitscovering the balance of the qualification period .

Det., p. 8, citing 9 NYCRR §1727-8.3(a).

The regulations define primary residence as the "housing accommodation in which the person actually resides and maintains a permanent and continuous physical presence" (9 NYCRR §1727-8.2). The regulations go on to list acceptable proofs of primary residency: "the listing of such person on the annual income affidavit and/or the filing of the Notice of Change to Tenant's Family as set forth in section 1727-3.6 of this Part, together with other evidence, such as certified [*6]copies of tax returns, voting records, motor vehicle registration and driver's license, school registration, bank accounts, employment records, insurance policies, and/or other pertinent documentation or facts" (id.).

The record indicates that Turturro was the tenant of record of Apartment 13J and that, as Turturro's grandson, petitioner met the family member requirement (9 NYCRR §1727-8.2(a)(2); Det., pp. 1, 7). Thus, petitioner was required to show that he had occupied Apartment 13J with Turturro for at least two years prior to Turturro's vacating Apartment 13J. Notwithstanding the letter from OPM indicating that Turturro 's retirement payments were directly deposited at HSBC in Manhattan and that Turturro's address was Apartment 13J through 2005, and petitioner's uncertified copy of his 2005 tax return, the Determination that apartment 13J was not Tuturro's primary residence during the approximately two-year period between April 23, 2004 and August 11, 2006 was sufficiently supported by the title to Turturro's Florida condominium and his driver's license.

The Determination goes on to describe all of the documents petitioner offered as proof that Turturro considered Apartment 13J his primary residence between April 23, 2004 and August 11, 2006. It found that petitioner's documents contained discrepancies that cast doubt on their "content and veracity" (id., p. 8). Based on the inadequacy of petitioner's evidence, DHCR concluded: Accordingly, the "traditional indicia" of primary residence support the conclusionthat the Tenant occupied the South Daytona condominium as his primary residencefrom April 23, 2004, the date he took title to that unit. As a result, that date marksthe time the Tenant was no longer a bona fide resident of the Apartment. Therefore, thetwo-year period applicable to the Determination of the Applicant's potential successionrights to the Apartment's tenancy [9 NYCRR 1727-8.3(a)] began April 23, 2002.

Id., p. 9

DHCR went on to point out that while petitioner contended that he took occupancy of Apartment 13J in 2002, "the record contains no evidence to show that [Turturro or petitioner] gave [Southbridge] written notice that [petitioner] had taken occupancy of the Apartment, as the Regulations provide" (id., citing NYCRR § 1727-3.6). Petitioner's name does not appear on Apartment 13J's annual affidavits for 2001 or 2002. Instead, petitioner's name appears on Apartment 12K's annual affidavit for those years. (Apartment 12K is the unit petitioner shared with his father prior to moving into Apartment 13J.) Thus, petitioner failed to show that he and Turturro occupied Apartment 13J as their primary residence for two years prior to Turturro's vacating Apartment 13J, DHCR concluded (id., p. 10).

DHCR further points out that even if it had based the Determination on the August 2006 date petitioner "finally gave as the time [Turturro] vacated the Apartment, the result in this matter would not change" (id.). Despite DHCR's request, petitioner "failed to provide any documentation to show that [Turturro] occupied the Apartment as his primary residence during the two-year period before that date. Accordingly, [petitioner] failed to show that he co-occupied the Apartment with [Turturro] for that two-year period" (id.).

This Court finds that there was a rational basis for determining that petitioner failed to meet the succession requirements for Apartment 13J. Where, as here, an agency's determination [*7]involves a factual evaluation within an area of the agency's expertise and is amply supported by the record, the determination must be accorded great weight and judicial deference (Flacke v Onondaga Landfill Systems, Inc., 69 NY2d 355, 363, [1987]). Further, courts are required to "resolve [any] reasonable doubts in favor of the administrative findings and decisions" of the responsible agency (see Town of Henrietta v Department of Envtl. Conservation, 76 AD2d 215, 224 [4th Dept 1980]; see also Jackson, 67 NY2d at 417; City of Rome v Department of Health Dept., 65 AD2d, 225 [4th Dept 1978], lv. to app. denied, 46 NY2d 713 [1979]).

This Court also is constrained to deny petitioner's request that he be allowed to correct the record that served as a basis for the Determination. As discussed above, this Court's review in Article 78 proceedings is strictly limited (Matter of Pell v Board of Education, 34 NY2d 222, 231 [1974]["For the purposes of any judicial review of administrative action, the statutes also limit the scope of review in the Supreme Court or in this court to questions of law and the extent of the sanction imposed" (id. at 230, citing CPLR §7803]). Further, "[a] court reviewing an Article 78 proceeding must judge the propriety of an administrative action solely on the reasons cited by the administration. . . . In deciding whether an agency's determination was arbitrary, capricious, or an abuse of discretion, courts are limited to an assessment of whether a rational basis exists for the administrative determination, without disturbing underlying factual determinations'" (Gill v Hernandez, 22 Misc 3d 390 [2008], citing Heintz v Brown, 80 NY2d 998, 1001 [1992]).

Conclusion

Based on the foregoing, it is hereby

ORDERED and ADJUDGED that the application of petitioner Anthony Montefusco for an order, pursuant to Article 78 of the Civil Practice Law and Rules, vacating the Determination of the New York State Division of Housing and Community Renewal and allowing petitioner to correct the record that served as the basis for the Determination is denied, and the petition is hereby dismissed. It is further

ORDERED and ADJUDGED that the cross-motion by respondent New York State Division of Housing and Community Renewal's for a judgment, pursuant to CPLR §3211(a)(7), dismissing the Petition of petitioner Anthony Montefusco for failure to state a claim upon which relief can be granted is granted. It is further

ORDERED that counsel for respondent serve a copy of this order with notice of entry within twenty days of entry on counsel for petitioner.

This constitutes the decision and order of this court.

Dated:March 4, 2009____________________________

Carol Robinson Edmead, J.S.C. Footnotes

Footnote 1:Information taken from DHCR's Return.

Footnote 2:Information taken from DHCR's Return ("Return"), Answering Affidavit ("Aff.") and Memorandum of Law ("MOL").

Footnote 3:Information taken from petition ("Pet.").