Broadway Flushing Homeowners' Assn., Inc. v Eastern NY Enters., Inc.

[*1] Broadway Flushing Homeowners' Assn., Inc. v Eastern NY Enters., Inc. 2013 NY Slip Op 51243(U) Decided on July 17, 2013 Supreme Court, Queens County Lebowitz, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 July 17, 2013
Supreme Court, Queens County

Broadway Flushing Homeowners' Association, Inc., Plaintiff,

against

Eastern NY Enterprises, Inc., and XUDONG SIAO, Defendants.



27630/10



Counsel for Plaintiff:

Vincent P. Nicolosi, Esq.

111 Plandome Road

Manhasset, NY 11030

Counsel for Defendant:

Simon J. Rothkrug, Esq.

55 Watermill Lane, Ste 200

Great Neck, NY 11021

Jeffrey D. Lebowitz, J.

The facts are essentially not in dispute in this matter where plaintiff, Broadway Flushing

Homeowners Association, Inc. (hereinafter referred to as "BFHA") seeks a permanent injunction against the defendant, EASTERN NY ENTERPRISES, INC. and XUDONG SIAO (hereinafter referred to as the "Defendant"), from sub-dividing his corner lot for purposes of building two single family homes.

The Defendant purchased property on the corner of 163rd Street and 35th Avenue in

August 2010 in the amount of $1,050,000 dollars. The lot is 120 feet in width by 100 feet in length.

This litigation ensued as plaintiffs contend that Defendant's proposed sub-division would

violate the Rickert-Finlay Covenant (hereinafter referred to as the "Covenant"), which requires houses on corner properties to be at least 80 feet wide by 100 feet long, and non-corner single family homes be on lots of at least 60 feet in width and 100 feet in length, thereby leaving defendant's 120 x 100 foot lot twenty feet short of being in compliance with the Covenant. The parties agree that the Defendant's property is subject to the Covenant's jurisdiction. The parties [*2]further agree that the sub-division is in compliance with New York City zoning laws. Defendant claims that the Covenant is not uniformly enforced, and its enforcement in this case creates an inequitable situation in a matter where Plaintiff is requesting equitable relief from the Court.

Defendant further argues that given the particular Covenant restrictions in the area in

question, more then sixty percent of the structures are less then sixty feet in width, and no harm would be created by the building of two properties on lots of sixty feet in width.

There are approximately 1,305 residential households within the BFHA area. Within the boundaries of the BFHA is a smaller area that is subject to the Covenant consisting of approximately 541 properties (See Exhibit 3). It is conceded that the defendant's lot is within this area.

The first witness called was Mel Siegel, past President of the BFHA. At the time of his

Presidency, Mr. Siegel became aware of Defendant's intention to sub-divide his lot by his filings with the Department of Buildings. Defendant intended to establish a new lot, lot 50, to be the corner property, and continue old lot 47 for the interior property. As a result on October 10, 2012, (See Exhibit 6) Mr. Siegel sent a letter to the Defendant, indicating that the planned sub-division would violate the Covenant. While indicating legal action was possible, Defendant was invited to attend the next BFHA General Membership Meeting. The Defendant did not attend this meeting but ultimately met with Mr. Siegel and other representatives of BFHA at his lawyer's office.

Sometime after this meeting, the Defendant went forward with his plans and legal

action was commenced. A preliminary injunction was issued and the subject trial for a permanent injunction ensued.

Upon cross examination, Mr. Siegel conceded that not every "out of compliance

structure" resulted in legal action by the BFHA. He explained that the BFHA had limited financial resources and had to choose which violations most effected the esthetics of the neighborhood as intended by the Covenant. He explained that an out of compliance fence would not result in litigation. But where the esthetics would be affected, and in the opinion of the BFHA would alter the character of the neighborhood, the Board had in the past, as in this case, gone forward with legal action.[FN1]

Further on cross examination, Mr. Seigel conceded that the BFHA Certificate of

Incorporation, which he had never seen (See Defendant's Exhibit A), and the Bylaws of the Association (See Plaintiff's Exhibit 1) did not specifically mention the Covenant by name. Although, Mr. Siegel believed that Article 3, Paragraph 1 of the Association's Bylaws conferred upon the Association the right to enforce the Covenant.

Mr. John Chen, the Defendant's Architect was called to testify. Mr. Chen indicated that

he filed all the necessary papers for Defendant's sub-division with the NYC Department of Building (See Exhibits 7-8-9-10-11-12). Mr. Chen said he was not aware of what he termed "hidden agreements", i.e., the Covenant, but stated that Defendant's proposed construction was within New York City zoning laws, including the updated R1-2A which limited the size of new construction relative to the size of the property. [*3]

Mr. Chen testified that he was not aware of the limitation imposed by the Covenant and

in his application to the Department of Buildings his only concern was that Defendant's property

comply with then New York City zoning laws.

The next witness was Mr. Paul Graziano who was qualified by the Court as an expert in

Urban Planning.[FN2]Mr. Graziano testified that there are approximately 1,305 residences within boundaries of the BFHA, and 541 of those properties are encompassed within the Covenant area.

Section 13 of the Covenant, which the parties concede is applicable to the subject property, requires that 3 lots (20 feet each) be required to build an interior single family home. He further testified that a corner lot, as per the Covenant, would require a minimum of 80 x 100 foot piece of property. Mr. Graziano testified that Defendant's parcel has six lots totaling 120 feet in width by 100 feet in length. As a corner property must be at least 80 feet in width, Defendant would need 140 feet in width by 100 feet in length, in total to build a compliant second home.

Section 26 of the Covenant which covers 163rd and 164th Streets , where the subject

property is located, allows for mixed use zoning including single and double family homes, apartment houses, and commercial developments, all of which permitted development on lots less than sixty feet wide.

Mr. Graziano testified that the intention of the Rickert-Finlay Realty Company at the time

of creation, was to create a zone near the Long Island Railroad Station that would allow for commercial activity, as well as mixed working, middle, and upper class enclaves surrounded by more upper class housing. While Mr. Graziano conceded that Section 26 was silent as to the building of two family homes, reading that section in conjunction with Section 16, which he believed definitional in nature, also allowed the building of two family homes within the Section on lots less then sixty feet in width.

Notwithstanding the variety of structures throughout Section 26, Mr. Graziano

testified that none of the corner lots in Section 26 were allowed to be built on lots less than 80 feet in width. Indeed the 80 foot minimum width size applied to corner lots throughout the Covenant area.

Mr. Graziano further testified that a title search, which Mr. Chen testified was ordered,

did show that the Covenant ran with the Defendant's property, and at the initial meeting, which Mr. Graziano attended with Mr. Siegel, the Defendant, and his lawyer, the Covenant restrictions were clearly explained to them.

Mr. Graziano further testified that BFHA made known the restrictive nature of the

Covenant to all perspective home buyers, as it was selling point to those prospective purchasers who were concerned that new developments might change the nature of the area.

Additionally, Mr. Graziano testified that since the creation of the Covenant in 1909,

there were seventeen properties out of compliance, most occurring between the demise of BFHA's predecessor organization and the advent of the present Association in 1964.Since the BFHA came into existence in 1964, only 1.5% of the 541 households covered by the [*4]Covenant were out of compliance.

With regard to Section 26 of the Covenant, which includes both sides of 163rd Street and

164th Street, between 35th and Crocheron Avenues, 5% of the 128 properties contained therein were considered to be out of compliance. Mr. Graziano testified that the last structure out of compliance within the Section 26 area was built in 2003. In that matter, a 100 foot by 100 foot lot was divided into two 50 x 100 foot lots, less than the necessary 60 x 100 foot required area. However, neither was a corner property.

On cross examination, Mr. Graziano testified that the Defendant's property is located

within Sections 13 and 26 of the Covenant, and in an R1-2A zoning district, which Mr. Graziano conceded was the most restrictive residential zoning in the City of New York. He testified that the Section 26 area takes up about 25% of the entire Covenant area, or 128 out of 541 homes. Mr. Graziano reiterated that the purpose of Section 26 was to create a mixed use enclave which was different from other Rickert-Finlay developments. Mr. Graziano conceded that two-family and multi-family developments could be built on lots as narrow as 20 feet, and that multiple dwellings and apartment houses were also permitted in the Section 26 area. He further conceded that there were structures in the Section 26 area that were approved with lots far less in width than 60 feet , however he stressed that they were not single family homes, and though narrow in width, were nonetheless in compliance with Section 26 dictates.

Mr. Graziano further testified that outside the Section 26 area there were no two-family

houses or apartment buildings within the remaining 541 properties subject to the Covenant.

Lastly, the Defendant testified that he purchased the property in August 2010 for

$1,050,00 dollars and was not aware of the Covenant restrictions until after the subject property was purchased by him.

The court turns to the initial question of whether the BFHA has standing to seek injunctive relief. Defendant claims that the plaintiff is without standing to move in this court for the requested relief. He bases this belief on the fact that the incorporation documents explicitly do not confer jurisdiction upon the association to enforce the Covenant, especially where the property in question is otherwise in full compliance with the zoning laws.

Defendant's reliance on corporate documents or compliance with existing zoning regulations are inapposite to the issue of standing. In the seminal case, In The Matter of Douglaston Civic Association, Inc. v. Thomas F. Galvin and the Board of Standard and Appeals of the City of New York, et al, 364 NYS2d 380, Judge Jasen, in a prescient decision, accorded standing to the plaintiffs and in so doing, the Court eliminated the need that the parties be in privity to the contested property. In circumstances not too dissimilar from the instant case, Judge Jasen opined that individual developers usually have the financial resources to effectively change zoning laws given the financial reward such changes may inure to that individual. Against this backdrop, Judge Jasen said an individual property owner "...who stands only to gain (or prevent the loss of) the maintenance of the status quo...cannot be expected, nor should he be required, to assume by himself the burden and expense of challenging the zoning change".

"By granting neighborhood and civic associations standing in such situations the expense can be spread out over a number of property owners putting them on an economic parity with the developer" (Id. at 6,7). Judge Jasen concluded that representative associations, such as the plaintiffs in the Douglaston Civic matter, should have standing to assert rights on behalf of those [*5]individual members most affected by re-zoning, variance or similar change.

Applying the factors set forth in Douglaston, the BFHA clearly should be accorded full standing to enforce the Covenant at issue. Given BFHA's size and composition of over 500 members in the affected area, they should be allowed to take an adversarial position and represent the individually affected homeowners. (See also, Westmoreland Association Inc. v West Cutter Estates Ltd., et al, 174 AD2d 144 [2d Dept 1992]).

In the Westmoreland case, which also involved the Rickert-Finlay Covenant, the Second

Department expanded the Douglaston holding to include enforcement of restrictive covenants, and while in that case the By-Laws provided some general enforcement authority, it was clear that the Westmoreland Court conferred standing upon the litigants given the financial inequities between developers and individual property owners. Again, in rejecting the notions of privity as essential to the issue of standing, the Westmoreland Court emphasized that the association is an instrument by which property owners could advance their common interest. As can also be said about the instant matter, "to force a court to reject such a challenge on the grounds of standing when the group contesting the variance represents that segment of the public which stands to be most severely affected by it is, in our view, an ironic situation which should not be permitted to continue".

Westmoreland reiterated the factors a court should take into account when deciding the issue of standing by civic associations, factor that apply with equal force to the case herein. The ability to assume an adversarial position; the membership reflects a position fairly representative of the community; the affect an adverse decision would have on the group; and whether membership is available to all residences and property owners in the neighborhood. Lastly, the Court in Westmoreland held that conferring standing on the association eliminates the possibility of multiple actions by individual homeowners all alleging the same set of facts.

The Court notes that the same plaintiff, in the matter of Broadway Flushing Homeowners

Association v. Dilluvio (supra), was recognized as an aggrieved party by the Appellate Division in affirming the trial court decision. While Defendant claims, without much proof, that the issue of standing in Dilluvio was not raised, this Court is hard pressed to find that absent standing the Appellate Court would have considered the appeal on the merits.

Having concluded that the Plaintiffs have standing to contest Defendant's development

plans, still leaves open the question whether the facts and equities in this case justify granting plaintiff's requested relief in the form of a permanent injunction.

It is not disputed that the property in question is corner situated. It is also conceded that

Defendant's property is covered by the Covenant.

Section 13 of the Covenant states, "No house shall be erected on the street lots between Broadway (now Northern Boulevard) and Crocheron Avenue and State Street (now 35th Avenue) on a plot less than three inside lots, or a corner lot less than four lots".

The Parties further concede that the property is also covered by the Section 16 of the Covenant which states, "No building of the character known as a two family house, flat, or apartment house shall be erected, except as provided for in Section 26".

Section 26, in relevant part, provides, " Apartment houses may be erected east of the centre line of Blocks 21 and 22 and West of the centre line of Blocks 27 and 28 on the following conditions: ...[*6]

No single apartment house shall be erected having a frontage of less than 20 feet.

No double apartment house shall be erected having a frontage of less than 40 feet. No single or double apartment house shall be erected with less than 10 feet space between it and the nearest adjoining house".[FN3]

Defendant is correct that not every violation of a restrictive agreement entitles an

aggrieved party to equitable relief (See, Forestmann v Joe Ray Holding Company, 244 NY 22).

Indeed in Westmoreland (supra), the Court made clear that the burden was on the plaintiff to establish by clear and definite proof that the Covenant was entered into as part of a general scheme for the improvement or development of the association area. The Court must also view the legitimacy of the restrictive covenant with the understanding that law has long favored the free and unencumbered use of property.

This concept is codified in Real Property and Procedure Law (RPAPL) Section 1951

which precludes enforcement by injunction if no actual and substantial benefit exists to the person seeking its enforcement. In this regard, enforcement will be precluded if the purpose of the restriction has been accomplished or circumstances have changed since it's initial purpose.

Defendant further states that Section 26 is replete with a variety of residences. The Defendant contends there are properties, on the same block as Defendant's property, that are mostly two-family and apartment houses, therefore, it is not offensive to have a single-family house on a 60 x 100 corner lot. Where over sixty percent of the properties are on lots less than 60 feet in width, the Defendant contends that Plaintiff has failed to show any harm would occur by the building of two single family homes on lots 60 feet wide.

Defendant also argues that the Association, in failing to object in 2003 or 2004 (Defendant contends the later date) to the building of two single family homes on 50 foot wide lots across from Defendant's proposed development, constitutes a waiver of any objection to Defendant's actions in this case.

Covenants are not unenforceable just because they are more restrictive than zoning laws. (See, Regan v Tobin, 89 AD2d 586). Parties claiming a Covenant is unenforceable, i.e. the Defendant, has the burden of proof of establishing such unenforceability. Defendant has to establish that the restrictions in question do not remain vital and relevant to the ongoing ambiance and character of the neighborhood.

Corner lots are specifically identified in Section 13 as requiring construction on larger parcels, which the Court finds was to maintain the ambiance and establish open and unobstructed views, or as Mr. Graziano testified to, create a "rural-like setting". Allowing construction on corner lots in Section 26 on less than 80 foot wide parcels would set a precedent for corner lots, not only in the varied Section 26 area, but throughout the Covenant area in which only single family homes exist, resulting in possible wholesale conversions through the entire Covenant area.

The Court accepts the Plaintiff's position that the restrictions continue to serve a legitimate [*7]purpose, especially as it relates to corner lots, to allow for the continued ambiance afforded the community by open and unobstructed views. This purpose remains as compelling today as the day it was created. In fact this open air view is a substantial reason that homeowners are attracted to this area. Therefore, the Plaintiff has met their burden of showing the continued vitality of the Covenant today.

The Court takes judicial notice of the rampant development of "McMansions" (though evidence of this problem and the subsequent zoning relief can be found in the trial testimony) in the County of Queens, which were concededly built in conformity with then existing zoning laws, and which prompted a change to the present, more restrictive, R1-2A. This "McMansion" crisis was not experienced in areas covered by restrictive covenants, and underscores the continued vitality of these covenants to maintain the existing landscape of these respective neighborhoods.

Balancing the interest of the overall community in maintaining the Covenant, against the singular interest of the Defendant, who was at a minimum possessed of constructive notice (as contained within the title report) (c.f., Breakers Motel, Inc. v. Sunbeach Montauk Two, Inc.

224 AD2d 473, [2 Dept.,1996]) of the restriction prior to his purchase, and clearly on notice prior to any significant development or subdivision of the properties, the Court finds the equities clearly favor the plaintiffs (See, Chambers v. Old Stone Hill Road Associates, et al, 1 NY3d 424 [2004]).

There is no proof that the Plaintiffs acted in bad faith or selectively singled out Defendant for enforcement of the Covenant, nor is there any proof that Defendant was duped or mislead into believing his building plans would be approved by the Association. The out of compliance number of homes is relatively insignificant with only 1.5% within the whole BFHA area, and only 5% within the Section 26 area, since the advent of the BFHA in 1964. Perhaps most importantly, there is no evidence that any corner lots within the Covenant area are out of compliance.

Failure to object to the previous de minimis violations does not result in forfeiture of the right to enforce the Covenant in present and future situations. (See, Broadway Flushing Homeowners Association v City of New York , April 1988, NYS Supreme Court [Queens County, Kassoff, J.]).

Defendant having the burden to establish the lack of enforceability of the Covenant, and

having failed, and there being no meaningful alternative remedy available to this Court, a permanent injunction is hereby granted.

Plaintiff is directed to settle Judgment consistent with this Decision,

This Decision is being faxed to counsel for both parties.

DATED: July 17, 2013

______________________________

JEFFREY D. LEBOWITZ, J.S.C. Footnotes

Footnote 1:See, Broadway Flushing Homeowners' Association vs. Anthony Dilluvio, et al, ___AD2d ___(2nd Dept., 2012), app. Den. ____NY3d ___, for the Association's recent litigation involving enforcement of the covenant.

Footnote 2: The Court found unavailing the defendant's attempts to discredit the Graziano testimony as trying to curry favor with Association members as he was presently running for City Council in a district that included the BFHA. In any event, Mr. Graziano did not testify as to opinions, as much as relevant historical data.

Footnote 3: Section 16 and 26, must be read together, to give section 26 and the ensuing development its appropriate intent. As a result, the Court finds the two-family lots on the block in question to be in compliance with the Covenant.